August 2, 2016 / 1:39 PM / in 2 years

UPDATE 1-Brazil's Vale signs $800 mln streaming deal with Silver Wheaton

(Adds details of deal, gold price)

BRASILIA/RIO DE JANEIRO, Aug 2 (Reuters) - Brazil’s Vale said on Tuesday it will receive $800 million in a gold streaming deal with Silver Wheaton Corp, as the world’s largest producer of iron ore attempts to raise cash to pay down debt.

Vale said the deal is an add-on to a contract first signed in 2013, with Silver Wheaton now entitled to 75 percent of the gold produced as a by-product from Vale’s Salobo copper mine over its lifetime.

A previous add-on, signed last year, had already taken Silver Wheaton’s share to 50 percent, from 25 percent.

Vale said the deal was part of a strategy to shore up its balance sheet, and the funds will be used to pay down debt. The company is aiming to sell $10 billion worth of assets by next year.

Under the agreement, Silver Wheaton will pay Vale either $400 per ounce of gold from the mine or the market spot price, whichever is lower. The current spot price is $1,363 per ounce. (Reporting by Alonso Soto and Stephen Eisenhammer; Editing by Jeffrey Benkoe)

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