LONDON: Wheaton Precious Metals Corp. has announced that its subsidiary, Wheaton Precious Metals International Ltd., has entered into a definitive agreement with Montage Gold Corp. for the Koné Gold Project in Côte d’Ivoire.
This agreement, known as the Gold Stream, involves Wheaton providing a total upfront cash consideration of $625 million in four equal installments during construction.
Randy Smallwood, President and CEO of Wheaton, praised the partnership, highlighting the Koné Project’s potential as one of Africa’s premier gold assets. He emphasized that strong shareholder backing from the Lundin Group and Zijin Mining will boost Wheaton’s near-term gold production and growth trajectory.
Montage CEO, Martino De Ciccio, expressed excitement about the collaboration, stating that the Koné Project is set to become West Africa’s next significant, low-cost gold mine. Both companies share a commitment to delivering social and economic benefits to host countries.
Key terms of the transaction include Wheaton purchasing 19.5% of the payable gold until 400,000 ounces are delivered, with adjustments for delivery delays. Wheaton will then purchase 10.8% of payable gold until an additional 130,000 ounces are delivered, and 5.4% of payable gold for the life of the mine. Wheaton will make ongoing payments equal to 20% of the spot price of gold, with a price adjustment mechanism in place for the first five years.
Wheaton has also provided Montage with a secured debt facility of up to $75 million for project costs. The addition of the Koné Project is expected to increase Wheaton’s gold reserves and resources significantly.
Montage’s Koné Gold Project, located in Côte d’Ivoire, is fully permitted and ranks as one of the highest quality gold projects in Africa, with a 16-year mine life and substantial annual production. Montage aims to leverage its experience in Africa to advance the project towards construction, creating significant value for stakeholders.