On 16 July, Wheaton Precious Metals Corp (NYSE:WPM) announced it had entered into an agreement with Sibanye (NYSE:SBGL) to acquire 100% of the Gold production plus a percentage of the Palladium production from the Stillwater and East Boulder mines for an upfront cash consideration of US$500m. On an underlying basis, we expect the transaction to add 4.0c (or c 5.0%) to WPM’s basic EPS per year over the 10 years from FY21 to FY30.
Equivalent to a stream of 34koz AuE or 1.9Moz AgE
Effective 1 July 2018, WPM will be immediately entitled to receive an amount of gold equal to 100% of Stillwater’s gold production plus 4.5% of its palladium production for ongoing payments of 18% of the spot price of gold and palladium. At the top line, this stream is approximately equivalent to a gold stream of c 34koz pa, falling to c 24koz pa after FY31, or a silver stream of c 1.9Moz pa, falling to c 1.4Moz after FY31 (albeit with a larger margin than is typically the case for gold and silver streams).
To read the entire report Please click on the pdf File Below: