Cassels Brock Represents Silver Wheaton Corp. in its Purchase of Life of Mine Silver and Gold Production from HudBay Minerals' 777 Mine and Constancia Project

Published: 09/18/2012

By Mark T. Bennett, David Budd, Erik Goldsilver, Nia Karabatsos, Shaun Khullar, Charles Newman, France M. Tenaille, Jennifer Wasylyk

On August 8, 2012, Silver Wheaton Corp. announced that it had agreed to acquire 100% of the life of mine silver production from HudBay Minerals Inc.’s flagship 777 Mine in Canada and 100% of the life of mine silver production from its Constancia Project located in southern Peru.

Silver Wheaton has also agreed to acquire 100% of the life of mine gold production from 777 Mine until Constancia satisfies a completion test, or 2016, whichever is later.  At that time, Silver Wheaton's share of gold production for 777 will be reduced to 50% for the remainder of the mine life.

Combined, 777 and Constancia will increase Silver Wheaton's average annual silver equivalent production by approximately 4.9 million ounces.

The total cash consideration for the transaction is $750,000,000, of which, $500,000,000 will be payable to HudBay upon closing and two further payment of $125,000,000 will be paid once the satisfaction of minimal capital expenditures have been incurred at Constancia.  In addition, Silver Wheaton will make ongoing payments of the lesser of US$5.90 per ounce of silver and US$400 per ounce of gold (both subject to an inflationary adjustment) or the prevailing market price per ounce of silver and gold delivered.

Cassels Brock acted as counsel to Silver Wheaton with a team that included Mark Bennett (Mining & Securities), Erik Goldsilver (Mining & Business), France M. Tenaille (Mining & Business), David Budd (Mining & Financial Services), Charles Newman (Financial Services), Nia Karabatsos (Business), Shaun Khullar (Mining & Securities) and Jennifer Wasylyk (Financial Services).