Silver Streaming Agreement

by admin on December 17th, 2020

Diversification – By entering into streaming agreements with several exploration and mining companies, streaming companies are able to provide different revenue streams and reduce their risk. For example, if an agreement is not reached, the streaming company will have many more that can be relied upon. Conversely, streaming agreements are essentially agreements for the purchase and sale of metals in which the streaming company (the buyer) pays the purchase price in advance to the mining company (the operator), either as a down payment or in several tranches, in exchange for the right to acquire a certain amount or percentage of the production of a given long-term refined metal (over 20 years) , or even during the life of the mine.3 As has already been explained. , the idea of streaming agreements stemmed from the concept that mining companies did not have enough value – or no value at all – for non-nuclear products. Therefore, in virtually all of these agreements, the streaming metal is a by-product obtained from an operator`s base metal mine project (i.e. gold or silver from copper processing). In addition to the fact that an otherwise unvalued or undervalued asset generates added value, streaming agreements on by-products allow the operator to combine these operations with other types of financing for their primary metal production, without affecting their credit capacity. As its previous name suggests, Wheaton Precious Metals originally focused on streaming money; Since then, however, it has extended to precious metals as a whole. In addition, other similar companies have entered the space in the years since the outbreak. As a general rule, in guaranteeing this future production, the exploration or mining company agrees that the streaming company charges a low fixed price. The streaming group can then sell the metal profitably. Nevertheless, streaming offerings are popular with exploration and mining companies, and many large miners such as Barrick Gold (TSX:ABX,NYSE:ABX), Glencore (LSE:GLEN), Teck Resources (TSX:TECK).

B,NYSE:TECK) and Vale (BVMF:VALE5) have sold all streams in recent years. Streaming agreements usually contain the following agreements. In advance, a cash deposit of $150 million to Capstone after the completion of the Stream agreement, expected in January 2021. Wheaton will make current payments of 10% of the cash price at the time of delivery for each ounce delivered to wheaton. Capstone will provide 50% of my lifespan to Cozamin until 10 million ounces have been delivered, and then electricity will be reduced to 33%. The “Stream” agreement will come into force on December 1, 2020. The closing of the transaction is subject to the conclusion of certain social affairs and normal conditions. Because they do not operate mines or projects themselves, streaming companies are not exposed to the risks to which operators are exposed, such as the complications of work or equipment. Among the most recent streaming deals is the agreement, Anani Investments Limited (a wholly-based subsidiary of Glencore) with Silver Wheaton (Caymans) Ltd (a wholly-based subsidiary of Silver Wheaton Group) closed in 2015, saying Silver Wheaton agreed to pay $900 million to Anani Investments, in addition to paying 20% of the spot price per silver money. In exchange, Silver Wheaton receives 33.75% of the money produced up to the delivery of 140 million ounces and 22.50% of the silver production for the life of the mine.

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