Vancouver-based metals-streaming giant Silver Wheaton (TSX:SLW) has acquired 50% of the gold production at Hudbay Minerals' (TSX:HBM) Constancia project for US$135 million.
Silver Wheaton already owns 100% of the silver production at Constancia.
According to a Silver Wheaton press release, the company has the option to pay Hudbay in either cash or shares, calculated at the time of payment.
Gold production at Constancia – an open-pit copper, molybdenum, silver and gold mine in southern Peru slated for production in the second half of 2014 – is forecasted to be 35,000 ounces of gold for the first five years and 18,000 ounces per year afterward. Constancia has an anticipated 16-year mine life.
The remaining 50% of the gold produced at Contsancia remains the property of Hudbay.
Silver Wheaton's 2013 silver equivalent production is expected to exceed 33.5 million ounces of silver and 145,000 ounces of gold.
"Hudbay has proven to be a strong partner both in Canada and Peru, where we believe they are setting the standard for building strong social license in South America," said Randy Smallwood, Silver Wheaton president and chief executive officer.
"This gold stream, our second precious metals stream on Constancia, clearly demonstrates the win-win nature of our agreements and further endorses the competitiveness of Silver Wheaton's streaming model."
Silver Wheaton is a precious metals streaming company. For an upfront payment, the company purchases the rights to silver and gold produced at mines worldwide.
