Silver Wheaton (SLW) agrees to acquire from Vale (VALE) an amount of gold equal to 25% of the...

Silver Wheaton (SLW) agrees to acquire from Vale (VALE) an amount of gold equal to 25% of the life of mine gold production from its Salobo Mine in Brazil, and 70% of the gold production for a 20-year term from some of its Sudbury Mines in Canada. SLW will pay $1.9B in cash, 10M warrants and ongoing payments of the lesser of $400 or the prevailing market price for each ounce of gold delivered under the agreement.

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Comments (7)
  • Paulo Santos
    , contributor
    Comments (36177) | Send Message
    Weird deal ... very weird deal. What does SLW gain from it?
    5 Feb 2013, 05:29 PM Reply Like
  • Blutopaz
    , contributor
    Comments (144) | Send Message
    ...They get to re-process the tailings....lot of $$s to recover.
    6 Feb 2013, 07:55 AM Reply Like
  • SafisKusai
    , contributor
    Comments (258) | Send Message
    10 million warrants is equal to like 2.8% of the entire number of shares... would be interesting to see the terms of these warrants. And that is a lot of cash. Wonder how much gold is expected to be pulled form this mine.
    5 Feb 2013, 05:34 PM Reply Like
  • SafisKusai
    , contributor
    Comments (258) | Send Message
    accounting for no growth in the mine, number of gold ozs is 110,000 per year for the next 20 years. At a price of $1500 per ounce of gold (being conservative for next 20 years) - the cost of acquiring the gold $400 that means that in total they would get $2.42 billion. I'm not seeing a huge benefit. They better hope gold stays high and the mines grow in size.
    5 Feb 2013, 05:41 PM Reply Like
  • youngman442002
    , contributor
    Comments (5123) | Send Message
    What do they get...GOLD...real gold...not the paper gold you can buy today with GLD....and this is the future..the people with the real gold wins
    6 Feb 2013, 02:06 AM Reply Like
  • vfr750
    , contributor
    Comments (4) | Send Message
    they are expecting higher gold prices as well as higher production. Plus the new credit lines and continued cash flow will allow them sufficent cash for new deals. They have probably 750M in cash now, and 2.5bn in new lines. 2013 will give 900m+ in new cash.
    6 Feb 2013, 04:24 AM Reply Like
  • SafisKusai
    , contributor
    Comments (258) | Send Message
    i'm bullish on gold & silver but i feel this deal leaves very little room for error and when the cost is amortized it seems to me that the return they are able to get is quite slim.
    6 Feb 2013, 05:26 AM Reply Like
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