Silver Wheaton Corp. (SLW.TO) Tuesday said it closed the previously announced purchase from Barrick Gold Corp. of the equivalent of 25% of the life of mine silver production from its Pascua-Lama project, as well as the equivalent of 100% of the silver production from its Lagunas Norte, Pierina and Veladero mines until the end of 2013.
As per the deal, Silver Wheaton would pay a total upfront cash deposit of US$625 million, of which US$212.5 million was paid, with three further deposits of US$137.5 million due on the first, second and third years.
An ongoing cash payment will also be made by Silver Wheaton for each ounce of silver delivered under the agreement equal to the lesser of US$3.90 and the prevailing market price.
The company also noted that the initial upfront cash of US$212.5 million was paid using cash on hand and funds temporarily drawn against revolving debt facility.
Upon closing a recently announced US$250 million bought deal equity financing, expected by September 30, 2009, the revolving debt facility is anticipated to be repaid in full by the company, while expecting to have about US$140 million cash on hand.
The remaining US$137.5 million is projected to be financed by operating cash flows with no debt drawdown anticipated per year, for the next three years.
SLW.TO closed Tuesday's regular trading at $13.76, down $0.28 or 2.08%, on a volume of 1.78 million shares.
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