Wheaton Precious Metals Announces Acquisition of a GOLD and Platinum Stream from Generation Mining’S Marathon Project
December 22, 2021 TSX | NYSE | LSE: WPM
Vancouver, British Columbia
WHEATON PRECIOUS METALS ANNOUNCES ACQUISITION OF A GOLD AND
PLATINUM STREAM FROM GENERATION MINING’S MARATHON PROJECT
Wheaton Precious Metals™ Corp. (“Wheaton” or the “Company”) is pleased to announce
that it has entered into a binding arrangement with Generation Mining Limited (“Gen Mining”)
(TSX: GENM) for a Precious Metal Purchase Agreement (the “Marathon PMPA”) in respect
to the Marathon Project located in Ontario, Canada (the “Marathon Project”).
“The Marathon Project provides Wheaton with accretive, near-term growth that further
diversifies our existing portfolio and preserves our focus on precious metals,” said Randy
Smallwood, Wheaton’s President and Chief Executive Officer. “Wheaton is proud to support
Gen Mining in the responsible development of the Marathon Project, recently projected to
have one of the lowest operational carbon footprints of any mine in the world, once producing.
While Wheaton will be streaming the byproduct platinum and gold from the mine, the primary
metals the Marathon Project is forecast to produce are palladium and copper, which are
crucial for the global transition to a low-carbon economy.”
MARATHON PMPA TRANSACTION DETAILS
Under the Marathon PMPA, Wheaton will purchase 100% of the payable gold
production until 150 thousand ounces (“koz”) have been delivered, thereafter
dropping to 67% of payable gold production for the life of the mine and 22% of the
payable platinum production until 120 koz have been delivered, thereafter dropping
to 15% for the life of mine.
Wheaton will pay Gen Mining a total upfront cash consideration of C$240 million,
C$40 million of which will be paid on an early deposit basis prior to construction to be
used for development of the Marathon Project, with the remainder payable in four
staged installments during construction, subject to various customary conditions
being satisfied and pre-determined completion tests1.
Wheaton will make ongoing payments for the gold and platinum ounces delivered
equal to 18% of the spot prices (“Production Payment”) until the value of gold and
platinum delivered less the Production Payment is equal to the upfront consideration
of C$240 million, at which point the Production Payment will increase to 22% of the
spot prices.
Gen Mining and certain of its subsidiaries, including the owner of the Marathon
Project, will provide Wheaton with corporate guarantees and other security over their
assets.
Completion of the Marathon PMPA is subject to the closing of Gen Mining’s
acquisition of the remaining 16.5% interest in the Marathon Project from Sibanye
Stillwater Limited, as announced by Gen Mining on December 8, 2021.
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The first advance of the early deposit under the Marathon PMPA is expected to occur
early in 2022, subject to the completion of certain corporate matters and customary
conditions.
MARATHON PROJECT OVERVIEW
The Marathon Project is forecast to be high-margin palladium mine with a 13-year
mine life2.
Attributable production once the mine and mill are fully ramped up is forecast to
average over 16 koz of gold and 14 koz of platinum per year for the first five years of
production, and approximately 15 koz of gold and 11 koz of platinum per year for the
first ten full years2
Gen Mining anticipates construction activities to begin in 2022, with production
commencing in 2024.
Significant exploration potential exists within Gen Mining’s strategic land package
which covers over 220 km 2, including the 25 kms of strike length along the Eastern
Gabbro series that hosts the Marathon and Sally deposits and multiple prospects
including Biiwobik, Four Dams, Skipper, Boyer and Redstone. Gen Mining’s
exploration potential also includes the Geordie deposit which is part of the Trans
Coldwell Group and is hosted within the center of the Complex3.
Subsequent to the closing of this acquisition, the Marathon Project will add to
Wheaton’s estimated Proven and Probable gold reserves by 0.26 Moz and platinum
by 0.17 Moz, Measured and Indicated gold resources by 0.18 Moz and platinum by
0.10 Moz, and Inferred gold resources by 0.04 Moz and platinum by 0.02 Moz.
FINANCING THE TRANSACTION
As at September 30, 2021, the Company had approximately US$372 million of cash on hand,
which when combined with the liquidity provided by the available credit under the $2 billion
revolving term loan and ongoing operating cash flows, positions the Company well to fund all
outstanding commitments and known contingencies, including the recently announced
acquisition of silver and gold streams in respect of the Blackwater project, and provides
flexibility to acquire additional accretive mineral stream interests.
ABOUT GENERATION MINING AND THE MARATHON PROJECT
Gen Mining’s focus is the development of the Marathon Project, a large undeveloped
platinum group metals deposit in Northwestern Ontario. Gen Mining released the results of
its Feasibility Study on March 3, 2021 and published the NI43-101 Technical Report dated
March 25, 2021. On December 13, 2021, an independent report prepared by Skarn
Associates estimated the Marathon Project, once producing, to be ranked as having one of
the lowest operational carbon footprints for a mine in both Canada and the world per tonne
of copper-equivalent produced. The Marathon property covers a land package of
approximately 22,000 hectares, or 220 square kilometres. Gen Mining has announced that it
has entered into a binding arrangement to acquire the remaining 16.5% interest in the
Marathon Project held by a subsidiary of Sibanye Stillwater Limited, which will increase Gen
Mining’s interest in the Marathon Project to 100%.
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Attributable Gold Mineral Reserves and Mineral Resources – Marathon Project
Category Tonnage
Mt
Grade
Au g/t
Contained
Au Moz
Proven 85.1 0.07 0.19
Probable 32.6 0.06 0.06
P&P 117.7 0.07 0.26
Measured 19.4 0.08 0.05
Indicated 66.6 0.06 0.13
M&I 86.0 0.07 0.18
Inferred 22.7 0.05 0.04
Attributable Platinum Mineral Reserves and Mineral Resources – Marathon Project
Category Tonnage
Mt
Grade
Pt g/t
Contained
Pt Moz
Proven 18.7 0.2 0.13
Probable 7.2 0.2 0.04
P&P 25.9 0.2 0.17
Measured 4.4 0.2 0.03
Indicated 15.0 0.1 0.07
M&I 19.4 0.2 0.10
Inferred 5.1 0.1 0.02
Notes on Mineral Reserves & Mineral Resources:
1. All Mineral Reserves and Mineral Resources ha ve been estimated in accordance with the 2014
Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Standards for Mineral Resources and
Mineral Reserves and National Instrument 43-101 – Standards for Disclosure for Mineral Projects
(“NI 43-101”).
2. Mineral Reserves and Mineral Resources are re ported above in millions of metric tonnes (“Mt”),
grams per metric tonne (“g/t”) and millions of ounces (“Moz”).
3. Qualified persons (“QPs”), as defined by the NI 43 -101, for the technical information contained in this
document (including the Mineral Reserve and Mineral Resource estimates) are:
a. Neil Burns, M.Sc., P.Geo. (Vice President, Technical Services); and
b. Ryan Ulansky, M.A.Sc., P.Eng. (Vice President, Engineering),
both employees of the Company (the “Company’s QPs”).
4. The Mineral Resources reported in the above tabl es are exclusive of Mineral Reserves. Generation
report Mineral Resources inclusive of Mineral Reserves. The Company’s QPs have made the
exclusive Mineral Resource estimates for the mine based on average mine recoveries and dilution.
5. Mineral Resources, wh ich are not Mineral Reserves, do not have demonstrated economic viability.
6. Marathon Project Mineral Reserves are reporte d as of September 15, 2020 and Mineral Resources
as of June 30, 2020.
7. Marathon Project Mineral Reserves are reported above an NSR cut-offs ranging from of CAD$18.00
per tonne to CAD$21.33 per tonne assuming US$1,500 per ounce palladium, US$900 per ounce
platinum, US$2.75 per pound copper, US$1,300 per ounce gold and US$16.00 per ounce silver.
8. Marathon Project Mineral Resources are repo rted above an NSR cut-off of CAD$13.00 per tonne
assuming US$1,600 per ounce palladium, US$900 per ounce platinum, US$3.00 per pound copper,
US$1,500 per ounce gold and US$18.00 per ounce silver.
9. The Marathon PMPA provides that Generation will deliver 100% of the gold production until 150
thousand ounces are delivered and 67% thereafter for the life of the mine and 22% of the platinum
production until 120 thousand ounces are delivered and 15% thereafter for the life of the mine.
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Attributable reserves and resources have been calculated on the 100% / 67% basis for gold and
22% / 15% basis for platinum.
Neil Burns, P.Geo., Vice President, Technical Services for Wheaton Precious Metals and
Ryan Ulansky, P.Eng., Vice President, Engineering, are a “qualified person” as such term is
defined under National Instrument 43-101, and have reviewed and approved the technical
information disclosed in this news release (specifically Mr. Burns has reviewed mineral
resource estimates and Mr. Ulansky has reviewed the mineral reserve estimates).
For further information, please contact:
Patrick Drouin
Investor Relations
Wheaton Precious Metals Corp.
Tel: 1-844-288-9878
Email: [email protected]
Website: www.wheatonpm.com
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1) All amounts will be paid in US$ calculated in reference to the C$ amounts set out above.
2) Based on report entitled “Feasibility Study: Marathon Palladium & Copper Project, Ontario, Canada” with an
effective date of March 3, 2021. Production forecast s contain forward looking information and readers are
cautioned that actual outcomes may vary. Please see “Cautionary Note Regarding Forward Looking-Statements”
at the end of this news release for material risks, a ssumptions, and important disclosure associated with this
information.
3) The Marathon PMPA area of interest includes the strategic land package until certain thresholds are reached, after
which the area of interest is reduced to the current Marathon leases.
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This press release contains "forward-looking statements" within the meaning of the United States
Private Securities Litigation Re form Act of 1995 and "forward-look ing information" within the
meaning of applicable Canadian securities legisl ation concerning the bu siness, operations and
financial performance of Wheaton and, in some in stances, the business, mining operations and
performance of Wheaton’s preci ous metals purchase agreement (“PMPA”) counterparties.
Forward-looking statements, whic h are all statements other than st atements of historical fact,
include, but are not limited to , payment by Wheaton of C $240 million to Gen Mining and the
satisfaction of each party's obligations in accordance with the Marathon PMPA, the future price
of commodities, the estimation of future prod uction from mineral stream interests owned by
Wheaton (the “Mining Operations”) (including in the estimation of production, mill throughput,
grades, recoveries and exploration potential), t he estimation of mineral reserves and mineral
resources (including the estimati on of reserve conversion rates) and the realization of such
estimations and the commencement, timing and ac hievement of construc tion, expansion or
improvement projects by Wheaton’s PMPA counterparties at Mining Operations. Generally, these
forward-looking statements can be identified by t he use of forward-looking terminology such as
"plans", "expects" or "does not expect", "is expected", " budget", "scheduled", "estimates",
"forecasts", "projects", "intends", "anticipates" or "does not anticipate", or "believes", "potential",
or variations of such words and phrases or stat ements that certain acti ons, events or results
"may", "could", "would", "might" or "will be taken" , "occur" or "be achiev ed". Forward-looking
statements are subject to know n and unknown risks, uncertainties and other factors that may
cause the actual results, le vel of activity, performance or achievements of Wheaton to be
materially different from those expressed or implied by such forward-looking statements, including
but not limited to risks associated with any specific risks relating to the satisfaction of each party's
obligations in accordance with the terms of the Marathon PMPA , fluctuations in the price of
commodities (including Wheaton’s ability to sell its precious metals or cobalt production at
acceptable prices or at all), the Mining Operations (including fluctuations in the price of the primary
or other commodities mined at such operations , regulatory, political and other risks of the
jurisdictions in which the Mining Operations are located, actual results of mining, risks associated
with the exploration, development, operating, expansion and improvem ent of the Mining
Operations, environmental and economic risks of the Mining Operations, and changes in project
parameters as plans continue to be refined), and other risks discussed in the section entitled
"Description of the Business – Risk Factors" in Wheaton's Annual Information Form available on
SEDAR at www.sedar.com, and in Wheaton's Form 40-F for the year ended December 31, 2020
and Form 6-K filed March 11, 202 1 both available on EDGAR at www.sec.gov, as well as the
risks set out in Wheaton’s management’s discussions and analysis for the period ended
December 31, 2020 available on SEDAR and EDGA R (together, the “Disclosure”). Forward-
looking statements are based on assumptions management currently believes to be reasonable,
including (without limitation): the payment of C$240 million to Gen Mining and the satisfaction of
each party's obligations in accordance with the terms of the Marathon PMPA, that there will be
no material adverse change in the market price of commodities, t hat the Mining Operations will
continue to operate and the mini ng projects will be complet ed in accordance with public
statements and achieve their st ated production estimates, that the mineral reserve and mineral
resource estimates from Mining Operations (inc luding reserve conversion rates) are accurate,
and such other assumptions and factors as set out in the Disclosure. There can be no assurance
that forward-looking statements will prove to be accurate and even if events or results described
in the forward-looking statements are realized or substantially realized, there can be no assurance
that they will have t he expected consequences to , or effects on, Wheaton. Readers should not
place undue reliance on forward-looking statements and are cautioned that actual outcomes may
vary. The forward-looking statements included herei n are for the purpose of providing readers
with information to assist them in underst anding Wheaton's expected financial and operational
performance and may not be appropriate for other purposes. Any forward-looking statement
speaks only as of the date on which it is made, reflects Wheaton’s management’s current beliefs
based on current information and will not be updated except in accordance with applicable
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securities laws. Although Wheaton has attempted to identify important fact ors that could cause
actual results, level of activi ty, performance or achievements to differ materially from those
contained in forward-looking statem ents, there may be other factors that cause results, level of
activity, performance or achievements not to be as anticipated, estimated or intended.