Wheaton Precious Metals Corp. (WPM:TSX; WPM:NYSE) recently announced the completion of an acquisition of a cobalt stream from a subsidiary of Vale S.A. Under the agreement, Wheaton has the right to receive an amount of finished cobalt equal to a fixed percentage of cobalt production from the Voisey's Bay mine.
Wheaton paid US $390 million to Vale and will make payments of 18% of the Metal Bulletin market price per cobalt pound delivered. In conjunction with the completion of the Wheaton deal, Vale has also finalized a different streaming arrangement with Cobalt 27 Capital Corp. Vale has been provided with an aggregate of US $690 million in funding by Wheaton and Cobalt 27. This separate deal is for for the combined purchase of cobalt equal to 75% of Voisey's Bay cobalt production effective January 1, 2021.
As of this future date, Wheaton has the right to receive from Vale an amount of cobalt equal to 42.4% of the Voisey's Bay mine cobalt production until the delivery of 31 million pounds of cobalt and an amount of cobalt equal to 21.2% of cobalt production after that for the life of the mine.
Voisey's Bay is located in Newfoundland and Labrador, Canada. It is one of the highest-margin nickel mines in the world.
Wheaton Precious Metals has streaming agreements for 17 operating mines and 10 development stage projects.
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1) Jake Richardson compiled this article for Streetwise Reports LLC and provides services to Streetwise reports as an independent contractor. He or members of his household own securities of the following companies mentioned in the article: None. He or members of his household are paid by the following companies mentioned in this article: None.
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