Silver Wheaton (SLW) to Pay Vale (VALE) $1.9B in 10 Business Days for Salobo Mine Acquisition

February 28, 2013 5:05 PM EST Send to a Friend
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Silver Wheaton Corp. (NYSE: SLW) is pleased to announce that, further to the press release dated February 5, 2013, Silver Wheaton has entered into a definitive agreement to acquire from a subsidiary of Vale S.A. (NYSE: VALE) an amount of gold equal to 25% of the life of mine gold production from its Salobo Mine, located in Brazil, as well as 70% of the gold production, for a 20-year term, from certain of its Sudbury Mines located in Canada. The transaction is no longer subject to Vale board approval, which has now been obtained.

The Company will pay Vale, within 10 business days of this press release, total cash consideration of US$1.90 billion, and has issued to Vale 10 million Silver Wheaton warrants with a strike price of US$65 and a term of 10 years. US$1.33 billion will be paid for 25% of the gold production from Salobo, while US$570 million, plus the 10 million Silver Wheaton warrants issued to Vale, will be the consideration for 70% of the Sudbury gold production. Silver Wheaton will make ongoing payments of the lesser of US$400 (subject to a 1% annual inflation adjustment from 2016 for Salobo) and the prevailing market price, for each ounce of gold delivered under the agreement.

In addition, Silver Wheaton has finalized the terms and entered into two new unsecured credit facilities, comprised of (1) a $1 billion revolving credit facility having a 5 year term (the "Revolving Facility"); and (2) a $1.5 billion bridge financing facility having a 1 year term (the "Bridge Facility").�The Revolving Facility and Bridge Facility replaced the $400 million Revolver Loan and the Term Loan, with the latter being repaid in full on February 22, 2013.�For the Revolving Facility, Scotiabank and BMO Capital Markets acted as Co-Lead Arrangers and Joint Bookrunners, Canadian Imperial Bank of Commerce, Royal Bank of Canada and The Toronto Dominion Bank acted as Co-Documentation Agents and Bank of Tokyo-Mitsubishi UFJ (Canada), HSBC Bank Canada and Export Development Canada acted as Senior Managers. For the Bridge Facility, Scotiabank and BMO Capital Markets acted as Co-Lead Arrangers and Joint Bookrunners, Canadian Imperial Bank of Commerce and Royal Bank of Canada acted as Co-Documentation Agents and The Toronto Dominion Bank and Export Development Canada acted as Senior Managers. Combined with cash on hand, the additional credit capacity offered by these new credit facilities provides Silver Wheaton with sufficient access to capital to fund the upfront payment to Vale, while continuing its pursuit of additional accretive growth opportunities.


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