Peñasquito (Mexico)

Operator: Goldcorp
Location: Mexico
Term of Stream: Life of Mine
Stream Parameters: 25% of silver production
Upfront Consideration: US$485M
Cost Quartile: 1st
Primary Metal: Gold

Project Overview

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. The site consists of two sulphide processing lines and a high pressure grinding roll circuit with a combined nameplate capacity of 130,000 tonnes per day. The sulphide ore is processed through a conventional crushing, milling and flotation facility that produces zinc and lead concentrates. In addition, oxide ore is processed by heap leaching and silver containing doré is produced.

Two diatreme pipes, Peñasco and Brecha Azul, are the principal hosts for gold–silver–zinc–lead mineralization at Peñasquito. The pipes flare upward, and are filled with breccia clasts in a milled matrix of similar lithological composition. The diatremes are surrounded by coalesced halos of lower grade, disseminated sphalerite, galena, and sulphosalts containing gold and silver. Garnet skarn-hosted polymetallic mineralization has been identified at depth between the Peñasco and Brecha Azul diatremes. The skarn has horizontal dimensions of approximately 1,000 metres by 1,200 metres and is open at depth.

The Pyrite Leach Plant ("PLP") project at Peñasquito envisages leaching a pyrite concentrate from the zinc flotation circuit tails to recover gold and silver. The PLP is expected to recover approximately 40% of the gold and 48% of the silver currently reporting to the tailings. PLP is expected to add annual incremental production of approximately 4.0–6.0 million silver ounces total. Silver Wheaton will be entitled to 25% of this incremental production. Commercial production is expected in the first quarter of 2019.

Precious Metal 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.

More Information

To view the March 2016 Peñasquito Technical Report please click here or visit www.sedar.com. For more information about Peñasquito including cost quartile, please visit Goldcorp’s website at www.goldcorp.com.

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