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Vale Enters Into Cobalt Streaming Deals with Wheaton Precious Metals, Cobalt 27

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Vale S.A. (NYSE: VALE) has agreed to streaming deals for cobalt from its Voisey’s Bay nickel mine in order to finance an expansion. News reports describe this as the world’s biggest cobalt stream ever. Streaming companies upfront money in exchange for a share of future production. Wheaton Precious Metals (NYSE, TSX: WPM) and Cobalt 27 Capital Corp. will provide Vale a combined $690 million in funding for the combined purchase of cobalt equal to 75% of Voisey's Bay cobalt production effective Jan. 1, 2021. Wheaton says it will pay Vale upfront $390 million upon closing. In addition, Wheaton will make ongoing payments of 18% of the Metal Bulletin market price per cobalt pound delivered. Wheaton will be entitled to receive from Vale 42.4% of the Voisey’s Bay mine cobalt production until the delivery of 31 million pounds of cobalt, then 21.2% of cobalt production thereafter for the life of mine. Wheaton says Voisey’s Bay is one of the lowest-cost, highest-margin nickel mines globally, ranking in the bottom half of the nickel cost curve.

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