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Wheaton Precious Metals has signed a precious metal purchase agreement with Capstone Mining pertaining to the Santo Domingo project in the Atacama Region, Chile.

Chile’s only fully permitted greenfield project, the Santo Domingo copper-iron-gold project is located about 50km southwest of Codelco’s El Salvador copper mine and 130km north-northeast of Copiapó, near the town of Diego de Almagro in Region III, Chile.

Wheaton Precious Metals’ subsidiary Wheaton Precious Metals International will purchase 100% of the payable gold production until 285 thousand ounces have been delivered from the mine.

Thereafter, the firm will receive 67% of payable gold production for the life of the mine.

Wheaton will provide an upfront deposit of $30m to Capstone. The balance of the $290m consideration will be paid during the development and construction of the Santo Domingo Project.

Wheaton president and CEO Randy Smallwood said: “Santo Domingo is an exceptional project that provides Wheaton with an additional near-term growth opportunity. The project is forecast to be a first-quartile copper producer with a long mine life, making it an ideal fit for Wheaton’s existing high-quality portfolio.

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“We are very excited to further build our partnership with Capstone and look forward to seeing Santo Domingo developed into a top-tier copper mine.”

Separately, Capstone has signed an agreement with Korea Chile Mining – a unit of Korea Resources (collectively KORES) to buy KORES’ 30% ownership stake in the Santo Domingo project in Region III, Chile, for $120m.

Capstone also entered into a framework agreement with Puerto Ventanas subsidiary Puerto Abierto, whereby the latter will assume the responsibility for financing, constructing and operating the proposed port component of the Santo Domingo project.

Capstone CEO president Darren Pylot said: “The gold stream and port agreements are key steps in our reduced capital strategy which aims to decrease the capital required by a target of $700m.

“The consolidation of 100% ownership of the project allows Capstone to efficiently engage in discussions with potential strategic partners.”