Vancouver-based Farallon Resources Ltd. (TSX:FAN) and its wholly owned subsidiaries have entered into an arrangement to sell up to 75% of the silver production from the Campo Morado project in Mexico to a subsidiary company of Vancouver's Silver Wheaton Corp. (TSX:SLW).
As part of the deal, Silver Wheaton will pay $80 million in cash to Farallon for the rights to the silver. It will also pay either $3.90 or the spot price at the time of the sale, whichever is lower, for each ounce of silver delivered.
Farallon said it plans to use the funds to help develop its Campo Morado property. The junior mining company plans to open the mine by July 2008.
Silver Wheaton is the world's largest pure silver mining company.
Farallon's share price range during the past week: around $0.74; 52-week high: $0.92; 52-week low: $0.54.
Silver Wheaton's share price range during the past week: between $13.34 and $13.99; 52-week high: $19.30; 52-week low: $10.45.