Our Global Operations

Silver Streaming

Silver stream or silver purchase agreements allow Silver Wheaton to purchase, in exchange for an up-front payment, the by-product silver production of a mine that it does not own or operate. The price that Silver Wheaton pays for future silver production is pre-determined in the agreements, typically US$3.90 per ounce with a small inflationary adjustment, which ensures costs are fixed. This allows Silver Wheaton to avoid variations in operating costs, reducing downside risk, while providing the upside of significant leverage to increases in the price of silver. As well, other than the initial up-front payment, no additional capital expenditures or exploration costs are required; yet, Silver Wheaton benefits from the production and exploration growth of its partners. This often translates into significant value creation for our shareholders. Since approximately 70% of all silver production occurs as a by-product of base or precious metals production, there are numerous potential opportunities for further growth with this business model. 

A silver stream allows a mine operator that produces silver as a by-product, such as a base metal company, to immediately monetize the value of their non-core silver production. Mine operators typically receive the upfront payment in the form of cash which can be used to continue growing their company, either through exploration, capital or production expansions, or by making acquisitions. Alternatively, the proceeds can be used to strengthen their capital structure by paying down debt. In short, Silver Wheaton helps mining companies grow their businesses by offering a very attractive financing alternative over traditional sources of capital such as debt or equity. 

Current Silver Purchase Agreements

The company’s strategy is to diversify its agreements to the extent that it maximizes opportunities for growth. Silver Wheaton does  this by identifying the best acquisition opportunities internationally and with a variety of high-quality base and precious metal mines, and structuring silver stream agreements with these mine operators. It pursues acquisitions that are accretive and are low-risk in terms of asset quality and political jurisdiction. To this end, Silver Wheaton currently has seventeen silver purchase agreements with nine operating partners, and these are set out in the table below. 
 

1. Commenced October 15, 2004.
2. To a maximum of 4.75 million ounces per annum.  In the event that silver produced at Yauliyacu in any year totals less than 4.75 million  ounces, the amount sold to Silver Wheaton in subsequent years will be increased to  make up for the shortfall, so long as production  allows.        
3. Commenced March 23, 2006.      
4. 95% owned by European Goldfields Ltd.      
5. The agreement commenced December 1, 2008.  If production from the Minto mine exceeds 50,000 ounces of gold per year in the first two years of the agreement, or 30,000 ounces of gold per year thereafter, the Company is entitled to purchase 50% of the amount in excess of  those thresholds.      
6. Commenced April 4, 2007.      
7. Barrick has provided Silver Wheaton with a completion guarantee, requiring them to complete Pascua-Lama to at least 75% of design capacity by December 31, 2015.  During 2014 and 2015, Silver Wheaton will be entitled to the silver production from the currently producing mines to the extent of any production shortfall at Pascua-Lama, until Barrick satisfies the completion guarantee.      
8. Silver Wheaton's attributable silver production is subject to a maximum of 8% of the silver contained in the ore mined at Veladero during the period.      
9. 80% owned by Aurcana Corporation.      
10. With a nominal term of 50 years, which commenced June 5, 2007.      
11. On February 25, 2010, the company elected to convert its debenture with Pan American Silver into an agreement to acquire an amount equal to 12.5% of the life of mine silver production from the Loma de La Plata zone of the Navidad project. Silver Wheaton and Pan American expect to finalize the definitive terms of the silver purchase agreement by the end of 2010.