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Wheaton Acquires Montana Gold, Palladium Stream From Sibanye

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(Kitco News) - Wheaton Precious Metals Corp. (TSX, NYSE: WPM) has entered into an agreement with Sibanye Gold Ltd. (JSE: SGL; NYSE: SBGL) to purchase a stream of gold and palladium from the Stillwater and East Boulder mines in Montana for $500 million, Wheaton announced on Monday.

Wheaton is a streaming company that receives a portion of a mine’s metal in return for up-front cash that can be used to develop or improve mines.

In addition to providing cash, Wheaton also will make ongoing payments equal to specified percentages of the spot gold and palladium prices. The precious-metals stream is effective back to July 1.

Meanwhile, Wheaton will receive all of the gold production for the life of the mines, as well as 4.5% of palladium production, decreasing to 2.25% and then 1%, based on defined delivery thresholds.

Wheaton said that after closing, its estimated proven and probable gold reserves will increase by 410,000 ounces and inferred gold resources would increase by 920,000. For the first time, Wheaton will have estimated proven and probable palladium reserves totaling 610,000 ounces and inferred palladium resources of 430,000.

For the next decade starting in 2019, Wheaton’s production from the deal is forecast to average approximately 14,500 ounces of gold and 29,000 ounces of palladium annually, or approximately 37,000 gold-equivalent ounces per year, the company said. For the 20 years starting in 2019, production is forecast to average approximately 14,700 ounces of gold and 24,000 ounces of palladium per year, or approximately 33,000 gold-equivalent ounces annually.

Already-declared reserves mean mining at Stillwater should continue until 2041, although Wheaton said this could be extended should inferred resources be upgraded.
Randy Smallwood, Wheaton's president and chief executive officer, said the agreement should provide his company with both production and cash flow for “decades to come.”

"What mainly attracted us to this opportunity was the quality and size of the J-M Reef deposit, coupled with the ongoing expansion at the Blitz project,” Smallwood said. “There are over 12 kilometers of undeveloped mineralization associated with the J-M Reef between the two currently producing mines. With a mine life extending well into the foreseeable future, we believe Stillwater will be one of Wheaton's foundational assets for many years to come.”

The acquisition will be funded through Wheaton’s current revolving credit facility, the CEO added.

tin’s hand, before the media were ushered out. The two men were to meet alone apart from interpreters before a working lunch with aides. Trump said they would talk about a range of subjects, listing trade, the military, nuclear weapons and China.

But, at least in his public remarks at the outset, he mentioned none of the issues that have lately brought U.S.-Russian relations to the lowest point since the Cold War: Moscow’s annexation of territory from Ukraine, its support for Syria’s Bashar al-Assad, as well as Western accusations that it poisoned a spy in England and meddled in elections.

Instead, Trump saved his public criticism for his own country, tweeting before the summit: “Our relationship with Russia has NEVER been worse thanks to many years of U.S. foolishness and stupidity and now, the Rigged Witch Hunt!”

The Russian foreign ministry “liked” his tweet.

The Kremlin has played down expectations. It said before the summit it did not expect much from the meeting but hoped it would be a “first step” to resolving a crisis in ties.

“Presidents Trump and Putin respect each other and they get along well,” Kremlin spokesman Dmitry Peskov said. “There is no clear agenda. It will be determined by the heads of state themselves as they go along.”

While Trump has been abroad since last week, the special prosecutor investigating allegations that Russia interfered to help him win the 2016 presidential election indicted 12 Russians on Friday for stealing Democratic Party documents.

Critics and Trump’s own advisers have urged Trump to use the summit to press Putin hard about “malign” activities.


Trump’s foes at home have been scathing about his apparent refusal to criticize Putin. His 2016 opponent Hillary Clinton tweeted: “Great World Cup. Question for President Trump as he meets Putin: Do you know which team you play for?”

Russia denies interfering in the U.S. presidential election. The state RIA news agency quoted a Russian source as saying Moscow was “ready to discuss, ready to undertake mutual obligations of non-intervention into internal matters”.

Trump has said he will raise the election meddling but does not expect to get anywhere. He has repeatedly noted that Putin denies it, while also saying that it is alleged to have taken place before he became president.

For Putin, that the summit is even happening despite Russia’s semi-pariah status among some Americans and U.S. allies is a geopolitical win.

The summit caps a trip abroad during which Trump sternly criticized NATO allies for failing to spend enough on their militaries and embarrassed British Prime Minister Theresa May by saying she refused to take his advice about how to negotiate Britain’s exit from the EU. He referred to the European Union itself as a “foe” in trade, and repeatedly criticized it.

In some of the strongest words yet reflecting the unease of Washington’s traditional allies, Germany’s foreign minister said on Monday Europe could not rely on Trump.

“We can no longer completely rely on the White House,” Heiko Maas told the Funke newspaper group. “To maintain our partnership with the USA we must readjust it. The first clear consequence can only be that we need to align ourselves even more closely in Europe.”

Trump has predicted he will be accused of being too soft on Putin no matter how the summit goes.

“If I was given the great city of Moscow as retribution for all of the sins and evils committed by Russia...I would return to criticism that it wasn’t good enough – that I should have gotten Saint Petersburg in addition!” he tweeted on Sunday.

Additonal reporting by Steve Holland in Helsinki and by Christian Lowe and Polina Devitt in Moscow; Writing by Andrew Osborn and Peter Graff; Editing by Angus MacSwan

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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