By The Associated Press
Tuesday, September 22, 2009
Barrick Gold Corp., the world's biggest gold producer, said Tuesday that it has completed the sale of silver production from four of its mines to Silver Wheaton Corp. for $625 million.
Barrick has sold 25 percent of silver production from the Pascua-Lama mining project for the life of the mine. Pascua-Lama straddles Chile and Argentina and is the third-largest silver deposit in the world. Silver Wheaton expects its share of the production will be nine million ounces a year for the first five years. Pascua-Lama will start production in 2013.
Barrick also sold all of the silver production from the Lagunas Norte and Pierina mines in Peru, and the Veladero mine in Argentina until the end of 2013.
The deal gives Barrick funds for the construction of the Pascua-Lama mining project and significantly boosts the size of Silver Wheaton. Barrick said Silver Wheaton has already made an initial payment of $212.5 million, and will make a payment of $137.5 million each year for the next three years.
Silver Wheaton also will make additional cash payments for each ounce of silver delivered by Barrick, equal to $3.90 per ounce or market price, whichever is lower.
U.S.-listed shares of Toronto-based Barrick were up 99 cents to $37.50 on Tuesday while Silver Wheaton, based in Vancouver, British Columbia, rose by 37 cents to $12.89.