A Voisey’s Bay cobalt production agreement is finalized.
Wheaton Precious Metals Corp. (WPM:TSX; WPM:NYSE) recently announced the completion of an acquisition of a cobalt stream from a subsidiary of Vale S.A. Under the agreement, Wheaton has the right to receive an amount of finished cobalt equal to a fixed percentage of cobalt production from the Voisey’s Bay mine.
Wheaton paid US $390 million to Vale and will make payments of 18% of the Metal Bulletin market price per cobalt pound delivered. In conjunction with the completion of the Wheaton deal, Vale has also finalized a different streaming arrangement with Cobalt 27 Capital Corp. Vale has been provided with an aggregate of US $690 million in funding by Wheaton and Cobalt 27. This separate deal is for for the combined purchase of cobalt equal to 75% of Voisey’s Bay cobalt production effective January 1, 2021.
As of this future date, Wheaton has the right to receive from Vale an amount of cobalt equal to 42.4% of the Voisey’s Bay mine cobalt production until the delivery of 31 million pounds of cobalt and an amount of cobalt equal to 21.2% of cobalt production after that for the life of the mine.
Voisey’s Bay is located in Newfoundland and Labrador, Canada. It is one of the highest-margin nickel mines in the world.
Wheaton Precious Metals has streaming agreements for 17 operating mines and 10 development stage projects.
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