why on earth would barrick management be floating a value of $25 silver in the pascua lama silver when they have sold a lot of it for pennies on the $$$... Methinks the puebla viejo silver is what barrick could realistically value at $25 per oz... If randy can get us $25 we're laughing but he goes into any negotiations with barricks valuation of $25 an oz in his corner...
Silver Purchase Agreement
On September 8, 2009, Silver Wheaton entered into a silver purchase agreement with Barrick to acquire 25% of the life of mine silver production from Barrick’s Pascua-Lama project, as well as 100% of the silver production from their Lagunas Norte, Pierina and Veladero mines until the end of 2013. Silver Wheaton will make total cash payments of US$625 million over 3 years, of which US$212.5 million was paid upon closing, with three further payments of US$137.5 million due on the first, second and third anniversaries. Silver Wheaton will also make ongoing production payments of the lesser of US$3.90 (subject to a one percent annual adjustment starting in the fourth year after the achievement of specific operating targets) and the prevailing market price, for each ounce of silver delivered under the agreement. Silver Wheaton will not share in any ongoing capital or exploration expenditures at the various mines.
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 Lagunas Norte, Pierina and Veladero mines to the extent of any production shortfall at Pascua-Lama, until Barrick satisfies the completion guarantee. If Barrick fails to satisfy the requirements of the completion guarantee, the agreement may be terminated by Silver Wheaton. In such an event, Silver Wheaton would be entitled to the return of the upfront cash consideration of US$625 million less a credit for silver delivered up to the date of that event.
Barrick has granted Silver Wheaton a five year right of first refusal on any further metal stream sales in connection with Pascua-Lama, where more than 50% of the value is from silver.
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