Zinkgruvan (Sweden)

Project Overview

The Zinkgruvan mine (“Zinkgruvan”) is an underground zinc-lead-silver mine, owned and operated by Lundin Mining Corporation (“Lundin Mining”), and located approximately 200 km southwest of Stockholm, Sweden. The mine has been producing on a continuous basis since 1857 and has consistently ranked in the lowest cost quartile among zinc mines in the world.

Historically, Zinkgruvan has been very successful at converting inferred resources into measured and indicated resources and subsequently into mineral reserves. Between 1982 and 2009, total proven and probable mineral reserves have remained almost constant despite a gradual increase in throughput over that period. In addition, in 2008, Zinkgruvan reported its first copper reserve and production from a new copper orebody is anticipated in 2010. This expansion offers additional silver production upside.

Zinkgruvan employs a conventional underground crushing, grinding and flotation milling process producing zinc and lead concentrates which are transported via ship to smelters in Europe. Nominal production capacity of zinc-rich ores is currently 1,000,000 tonnes of ore throughput per annum. The installation of a new copper circuit is underway and the aim is to ramp up copper-rich ore processing to 300,000 tonnes per annum from 2010 through 2012.

Excellent opportunities for reserve and resource expansion exist at Zinkgruvan. In 2008, significant mineralized zinc-lead-silver intersections were drilled in the Dalby zone providing strong encouragement towards expansion of the resource into this area. Follow-up drilling is planned for 2010. In addition, deep intersections of ore grade material at the same stratigraphic position as the main Zinkgruvan ore horizon strongly suggest continuation to depth of the main ore zones in three areas. In 2009, drilling activities were focused on converting resources to reserves.

As of December 31, 2009, the Zinkgruvan mine has delivered nearly nine million ounces of silver to Silver Wheaton, generating cumulative operating cash flows of US$73 million.

Silver Purchase Agreements

Silver Wheaton entered into a silver purchase agreement with Lundin Mining to purchase 100% of the life of mine payable silver produced at the Zinkgruvan mine for an upfront cash payment of US$50 million in cash, 6 million Common Shares and 30 million Silver Wheaton Common Share Purchase Warrants, plus a payment equal to the lesser of US$3.90 per ounce of delivered silver (subject to an inflationary price adjustment) and the then prevailing market price per ounce of silver.

Reserves and Resources

Proven & Probable Reserves Attributable to Silver Wheaton ^{(1,2,3,8,15,16)}
As of December 31, 2009 unless otherwise noted ⁽⁶⁾	Proven			Probable			Proven & Probable
	Tonnage	Grade	Contained	Tonnage	Grade	Contained	Tonnage	Grade	Contained	Process Recovery⁽⁷⁾
	Mt	g/t	M oz	Mt	g/t	M oz	Mt	g/t	M oz	%
SILVER
Zinkgruvan
Zinc	8.7	102.0	28.4	2.4	56.0	4.4	11.1	92.0	32.7	70
Copper	2.8	30.0	2.7	0.1	30.0	0.1	2.9	30.0	2.8	78

Measured & Indicated Resources Attributable to Silver Wheaton ^{(1,2,3,4,5,9,15,16)}
As of December 31, 2009 unless otherwise noted ⁽⁶⁾	Measured			Indicated				Measured & indicated
	Tonnage	Grade	Contained	Tonnage	Grade	Contained		Tonnage		Grade	Contained
	Mt	g/t	M oz	Mt	g/t	M oz		Mt		g/t	M oz
SILVER
Zinkgruvan
Zinc	1.6	91.6	4.7	2.7	126.5	10.9	4.3		113.5		15.6
Copper	1.4	27.2	1.2	0.1	23.6	0.1	1.5		26.9		1.3

Inferred Resources Attributable to Silver Wheaton ^{(1,2,3,4,5,9,15,16)}
As of December 31, 2009 unless otherwise noted ⁽⁶⁾	INFERRED
	Tonnage	Grade	Contained
	Mt	g/t	M oz
SILVER
Zinkgruvan
Zinc	4.3	67.0	9.3
Copper	1.2	30.0	1.1

(See Reserves and Resources page for footnotes and for the complete Silver Wheaton Reserves and Resources table.)

More Information

For more information about the Zinkgruvan mine, please visit Lundin Mining’s website at www.lundinmining.com.

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