Royalty and streaming group Wheaton Precious Metals has added the gold stream on the Cangrejos project of Lumina Gold to its portfolio of assets, the companies announced on Tuesday.
Wheaton will pay TSX-V-listed Lumina $300-million, comprising $48-million of preconstruction funding and $252-million of construction funding.
"This transaction validates the extensive technical work that the Lumina Group has completed on Cangrejos since 2014. It will de-risk the execution of the Cangrejos project and form a significant part of the $1-billion of required construction capital,” commented Lumina founder and largest shareholder, Ross Beaty.
Cangrejos is forecast to be a high-margin mine in the lowest half of the cost curve with a 26-year mine life.
Under the gold stream, Wheaton will purchase 6.6% of the payable gold from the project until 700 000 oz has been delivered, at which point the stream will be reduced to 4.4% of the payable gold production for the life-of-mine (LoM).
Wheaton is expecting attributable production of more than 24 000 oz/y for the first ten years of production and more than 4 500 oz/y for the LoM.
The addition of Cangrejos will increase Wheaton's total estimated proven and probable gold reserves by 0.76-million ounces, measured and indicated gold resources by 0.25-million ounces, and inferred gold resources by 0.16-million ounces.
In addition, Wheaton believes there is strong exploration potential within the Cangrejos property.