Wheaton Precious Metals to buy gold, silver stream on Australian project

Wheaton Precious Metals Corp (LSE:WPM, TSX:WPM, NYSE:WPM) said it volition get a golden and metallic streaming involvement successful the Jervois Project successful Australia from KGL Resources for $275 million, successful a woody Jefferies analysts picture arsenic highly attractive.

The transaction, structured successful staged payments, volition spot Wheaton acquisition 75% of the golden and metallic produced until cumulative deliveries scope 45,000 ounces of golden and 4.3 cardinal ounces of silver. The watercourse percent past drops to 37.5% and aboriginal 25% for the beingness of the mine. Wheaton volition wage 20% of spot prices for the deliveries.

Jefferies said the woody offers a imaginable interior complaint of instrumentality of astir 14% based connected existent golden and metallic prices, with further upside imaginable from excavation beingness extension. The Jervois project, a high-grade copper improvement successful Australia’s Northern Territory, is afloat permitted and is expected to commencement operation soon, with archetypal accumulation targeted for the 2nd fractional of 2027.

Wheaton expects to money the acquisition with operating currency flows arsenic operation advances, according to the company. Over the archetypal 5 years, the watercourse is projected to adhd an mean of 5,800 ounces of golden and 770,000 ounces of metallic annually to Wheaton’s accumulation profile. Over the beingness of the mine, it would lend astir 5,300 ounces of golden and 590,000 ounces of metallic per year.

“Recent drilling and assets updates crossed the Rockface, Reward, and Bellbird deposits person materially expanded the assets basal and item imaginable to widen excavation beingness beyond the existent plan,” Jefferies analysts wrote.

Jefferies rates Wheaton arsenic a “Buy” with a terms people of $182, representing astir 33% upside from existent levels.

The Jervois task program contemplates some open-pit and underground operations producing astir 30,000 tonnes per twelvemonth of copper successful concentrate, with meaningful golden and metallic byproduct credits.