Antamina (Peru)

Operator: Glencore
Location: Peru
Term of Stream: Life of Mine
Stream Parameters: 100% payable on Glencore's 33.75% of total silver produced, reduced to 22.5% after receiving 140 Moz
Upfront Consideration: US$900M
Cost Quartile: 1st
Primary Metal: Copper

Project Overview

The Antamina mine is one of the largest, lowest-cost copper mines in the world. It is located in the Peruvian Andes mountain range at an average elevation of 4,200 metres. The mine began producing in 2001 and is operated by Compania Miñera Antamina S.A. (“CMA”), a company jointly owned by subsidiaries of Glencore plc (“Glencore”), BHP Billiton Plc, Teck Resources Limited, and Mitsubishi Corporation.

The mine is an open pit, truck/shovel operation. The ore is crushed in-pit and conveyed through a 2.7 kilometre tunnel to the coarse ore stockpiles at the mill. The mill produces separate copper, zinc, molybdenum, and lead-bismuth concentrates, with silver predominantly contained within the copper concentrates, and additional silver contained with the lead-bismuth concentrate. Concentrates are pumped via a 302 kilometre pipeline to the Huarmey Port on the Pacific Coastline for shipment to smelters through port facilities which are wholly owned and operated by CMA.

Antamina is a polymetallic (copper, zinc, and molybdenum predominate) skarn deposit resulting from complex multiple intrusive events. Copper mineralization occurs mainly as chalcopyrite. Zinc mineralization generally occurs as sphalerite. Other significant sulphide minerals include molybdenite and pyrite. Ore reserves are limited to the current operation tailings dam capacity. Potential sites for future tailings dams are currently being investigated.

Silver Wheaton is expected to receive on average approximately 4.7 million ounces of silver per year from Antamina for the first 20 years. In addition, significant exploration potential exists both below the current pit design as well as regionally given that CMA holds a total of 169 concessions covering over 700 square kilometres.

Precious Metal Purchase Agreement

On November 2015, Silver Wheaton entered into an agreement with Glencore to acquire an amount of silver equal to 33.75% of the silver production from the Antamina mine until delivery of 140 million ounces of silver and 22.5% of the silver production thereafter for the life of mine. Silver Wheaton is expected to receive on average approximately 4.7 million ounces of silver per year from Antamina for the first 20 years.

Silver Wheaton paid Glencore cash consideration of US$900 million for the silver stream. In addition, Silver Wheaton will make ongoing payments of 20% of spot price per silver ounce delivered.

More Information

For further information about the Antamina mine, please visit the Glencore website at www.glencore.com. Cost quartile information is sourced from Wood Mackenzie byproduct cost curves for gold, zinc/lead, copper, nickel, and silver mines.

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