Precious metals streaming company Wheaton Precious Metals Corp. (NYSE: WPM) recently revealed that its subsidiary, Wheaton Precious Metals International Ltd., has entered into a definitive agreement to acquire Alliance Metals International’s Curipamba Project in Ecuador for $175 million. Alliance Metals is a subsidiary of Adventus Mining Corporation.
Details of the Transaction
Under the terms of the agreement, Wheaton will pay a total upfront cash payment of $175.5 million to Adventus — $13 million of which is to be made available pre-construction and $500,000 to be paid to support certain local community development initiatives around Curipamba. The remaining balance will be paid in four installments during construction.
Wheaton will financ the deal through cash in hand of $372 million and a revolving loan of $2 billion.
This buyout by Wheaton is a strategic one with the Curipamba Project expected to be a high-margin mine in the lowest half of the copper cost curve with a 10-year open-pit mine life and the potential to transition into an underground mine subsequent to the open pit.
The CEO of Wheaton, Randy Smallwood, said, “Wheaton has had a successful long-term partnership with Adventus and welcomes the opportunity to support the development of a project the caliber of Curipamba. Forecasted to be a high quality, low-cost mine with significant exploration potential, Curipamba’s profile aligns well with Wheaton’s accretive growth strategy.”
Wall Street’s Top Analysts have awarded Wheaton a Strong Buy consensus rating based on 9 Buys and 1 Hold. The average Wheaton price target of $50.42 implies upside potential of 27.1% from current levels. Shares have declined 1.5% over the past year.
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