VANCOUVER (Reuters) - Silver Wheaton Corp SLW.TO said on Monday that it would pay $900 million for the right to buy an additional 25 percent of future gold production from Vale SA’s VALE5.SA Salobo mine in Brazil, boosting its 2015 gold output to 230,000 ounces.
The deal means the Vancouver-based company can now buy half of all gold produced at the copper mine over its lifetime for the lesser of $400 per ounce, adjusted for inflation after 2017, or the market price at the time of production.
Gold is currently trading at about $1,206 per ounce.
Silver Wheaton, which pays a lump sum up front to secure future precious metal production, spent $1.33 billion in 2013 for its initial 25 percent gold stream at Salobo.
The company now expects to produce 43.5 million silver equivalent ounces in 2015, including the new output from Salobo.
Silver Wheaton separately said it would raise at least $800 million by issuing some 39 million shares at @20.55 each to a financing syndicate led by Scotiabank. Under the deal, the syndicate would have the option to sell an additional 5.8 million shares.
The share offering will close on March 17. Silver Wheaton’s shares closed down 1.48 percent at C$26.60 on Monday on the Toronto Stock Exchange.
Reporting by Julie Gordon; Editing by Steve Orlofsky