Silver Wheaton (Caymans) (SWC) has signed an agreement to purchase silver produced at Peru’s Antamina mine from Glencore’s wholly owned subsidiary Anani Investments for $900m.
SWC said it will pay 20% of spot price per silver ounce delivered under the streaming agreement.
According to the agreement, SWC will gain an amount equal to 33.75% of the Antamina silver production from Glencore until the delivery of 140 million ounces, and 22.5% of output after then for the rest of mine life at a fixed 100% payable rate.
SWC president and CEO Randy Smallwood said: "Antamina has both the quality and the scale to make it an ideal addition to this portfolio, as it is not only the eighth largest copper mine in the world, but it is also one of the lowest cost.
"This transaction not only further strengthens our relationship with Glencore, but also provides almost immediate production and operating cash-flow from a proven and well-established asset."
The transaction is expected to close before the end of November and forms part of Glencore’s debt reduction plans announced in September.
Antamina is a copper and zinc mine in the Andes mountain range, 270km north of Lima, Peru, and began production in 2001.
The mine is operated by Compania Miñera Antamina (CMA), which is jointly owned by subsidiaries of Glencore (33.75%), BHP Billiton (33.75%), Teck Resources (22.5%), and Mitsubishi (10%).
The open-pit mine produces separate copper, zinc, molybdenum and lead/bismuth concentrates.
Image: The tailings pond of the Antamina Tailings Dam at the Atamina Dam in Peru. Photo: courtesy of Xtremizta / Flickr / Wikipedia.