The Peñasquito mine (“Peñasquito”), owned and operated by Goldcorp Inc. (“Goldcorp”), is Mexico’s largest open pit mine and is host to the world-class gold-silver-lead-zinc Peñasquito deposit. The mine is located in the northeastern portion of the State of Zacatecas and consists of two open pits – Peñasco and Chile Colorado. In April 2007, Silver Wheaton agreed to purchase 25% of all the silver produced from Peñasquito, over its entire mine life. Since completion of the agreement, silver reserves at the mine have increased 92% and attributable silver production to Silver Wheaton has increased by 73% or 67 million ounces, to a total of 159 million ounces. This does not take into account the potential for underground mine production, which is only just beginning to be recognized and is likely to result in significant additional silver production in the years ahead.
After a ramp-up period, Peñasquito is forecast to produce an average of approximately 28 million ounces of silver annually over an initial 22 year mine life, of which Silver Wheaton is to receive 25% or approximately seven million ounces of silver annually.
The site consists of two 50,000 tonne per day capacity sulphide processing lines and a 30,000 tonne per day capacity high pressure grinding roll (HPGR) circuit. Processing capacity of 150,000 tonnes per day is expected in 2013. The sulphide ore is processed through a conventional crushing, milling and flotation facility that produces lead and zinc concentrates.
Exploration continues to expand the high-grade manto deposits beneath the Peñasquito pit. Assay results have demonstrated significant potential for concurrent, high-grade production from mantos below the current pits, later in the life of the mine.
Silver Purchase Agreement
On July 24, 2007, Silver Wheaton entered into an agreement with Goldcorp to purchase 25% of the silver produced from the Peñasquito mine over its entire mine life, for an upfront cash payment of US$485 million, plus a payment equal to the lesser of US$3.90 per ounce of delivered silver (subject to an annual inflationary adjustment three years after commercial production commences) and the then prevailing market price per ounce of silver. Silver Wheaton will not be required to fund any capital or exploration expenditures at Peñasquito, nor will it be required to fund any expansion scenarios.
To view the December 2010 Peñasquito Project Technical Report please click here or visit www.sedar.com. For more information about Peñasquito, please visit Goldcorp’s website at www.goldcorp.com.
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