Lumina Gold sells Cangrejos gold project to Wheaton for $300M

Wheaton Precious Metals has announced that its wholly-owned subsidiary has entered into a definitive precious metal purchase agreement with Lumina Gold in respect to its 100% owned Cangrejos gold-copper project located in Ecuador.

Wheaton said that under the agreement, the company’s subsidiary Wheaton Precious Metals International will purchase 6.6% of the payable gold from the project until 700,000 ounces of gold has been delivered, at which point the stream will be reduced to 4.4% of the payable gold production for the life of the mine.

Wheaton noted that Cangrejos, Ecuador’s largest primary gold deposit, is forecast to be a high-margin mine in the lowest half of the cost curve with a 26-year mine life, adding that attributable production is forecast to average over 24,000 ounces of gold per year for the first ten years of production and over 24,500 ounces of gold per year for the life of mine. 

According to a company statement, Wheaton Precious Metals International will pay Lumina total upfront cash consideration of $300 million, $48 million of which is available pre-construction, and the remaining $252 million will be payable in staged equal installments during construction, subject to various customary conditions being satisfied.

President and CEO Randy Smallwood commented, “The Cangrejos project is an excellent addition to Wheaton’s existing portfolio of high-quality, low-cost assets as it should provide accretive, long-term growth as well as significant exploration potential.

“We welcome the opportunity to work with the team at Lumina who have done an outstanding job at working to de-risk the project and advancing it towards construction. As with any transaction Wheaton enters into, responsible and sustainable mining practices are paramount, and Wheaton looks forward to supporting Lumina both financially as they construct Cangrejos and with their ongoing comprehensive community engagement efforts.”

Wheaton Precious Metals is one of the largest precious metals streaming companies in the world. Wheaton currently has streaming agreements for 21 operating mines and 13 development stage projects.

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