Vancouver's Silver Wheaton Corp. (TSX:SLW) plans to acquire all the silver and gold production from Augusta Resource Corp.'s Rosemont copper project in Arizona.
Silver Wheaton will make a cash payment of US$230 million, the proceeds of which will be used by Augusta to develop the Rosemont mine once certain milestones are achieved including the receipt of key permits and securing the rest of the project's financing.
Augusta expects to receive Rosemont's key operating permits by the fourth quarter of 2010. The mine is forecast to be a low-cost, long-life and large scale copper, molybdenum and silver project that could account for approximately 10% of U.S. copper output.
Silver Wheaton said the mine, once operational, will add to the company's long-term annual production by approximately 2.4 million ounces of silver, plus up to 15,000 ounces of gold.
Augusta's share price jumped 15.6% to $2.66 in late day trading after the deal was announced. Silver Wheaton's shares rose 2.8% to $15.71.
Augusta's share price range during the past week: between $2.30 and $2.41; 52-week high: $3.78; 52-week low: $0.51.
Silver Wheaton's share price range during the past week: between $14.53 and $15.34; 52-week high: $18.36; 52-week low: $7.26.