#Canada #Vancouver #Wheaton Precious Metals #Allied Gold #Kurmuk Project

Wheaton Precious Metals Secures Gold Stream Agreement

Introduction
In a strategic move to enhance its portfolio, Wheaton Precious Metals™ Corp. recently announced the signing of a valuable Precious Metals Purchase Agreement with Allied Gold Corporation, marking a significant milestone in the gold mining landscape of Ethiopia. This partnership will facilitate the construction of the Kurmuk Project, anticipated to become Ethiopia's first commercial gold mine.

Details of the Agreement
Wheaton's wholly-owned subsidiary, Wheaton Precious Metals International Ltd. (WPMI), is set to invest a total of $175 million in four installments throughout the construction phase. Under this agreement, WPMI will acquire 6.7% of the payable gold until 220,000 ounces are delivered, subsequently reducing to 4.8% for the mine's operational lifespan. This innovative financing model not only strengthens Wheaton's presence in the precious metals market but also supports Allied Gold's commitment to sustainable mining practices.

Comments from Leadership
Randy Smallwood, President and CEO of Wheaton Precious Metals, expressed satisfaction about this partnership. He stated, “This fully permitted, high-quality development project offers significant exploration potential, supported by a team at Allied with a proven operating track record.” This reflects Wheaton's dedication to fostering growth within emerging mining sectors while empowering local communities.

Allied Gold's CEO, Peter Marrone, emphasized the importance of this partnership, noting, “...it was a delight to see Wheaton not only support our sustainability programs but provide suggested improvements.” This echoes the commitment both companies have towards responsible mining practices and enhancing community benefits.

Kurmuk Project Insights
The Kurmuk Project, located in the Benishangul-Gumuz region of Ethiopia, is poised to deliver an average annual output of approximately 270,000 ounces of gold over its initial five years, with an all-in sustaining cost projected at $1,000 per ounce. This project encompasses a comprehensive two-phase development plan with an estimated total capital investment of around $500 million.

Construction is progressing adequately, with expectations to commence production by mid-2026. The current reserves include a mix of proven and probable mineral reserves, totaling 0.18 million ounces, promising further exploration potential in the 1,450 km² area designated for gold resource evaluation.

Financial and Operational Projections
Wheaton is well-prepared for this investment, boasting $694 million in cash reserves as of September 30, 2024. Coupled with credit liquidity from a $2 billion revolving term loan, Wheaton is strategically positioned to support the development of the Kurmuk Project while navigating potential market fluctuations.

The gold streaming agreement serves to not only bolster Wheaton's mineral stream portfolio but also aligns with its long-term goals of sustainable investment and responsible resource management. The production from the Kurmuk Project is projected to average over 16,000 ounces annually during the initial decade, significantly enhancing Wheaton's production profile and cash flow dynamics.

Sustainability Commitment
Both companies are committed to environmental, social, and governance (ESG) principles, with Allied being expected to align its operations with the International Finance Corporation’s Performance Standards. This aspect highlights Wheaton’s emphasis on sustainability and its desire to forge partnerships that resonate with local community development and ecological preservation.

Conclusion
The collaboration between Wheaton Precious Metals and Allied Gold Corporation on the Kurmuk Project underscores a pivotal moment for gold mining in Ethiopia, promising significant benefits for local communities and enhanced production capabilities for Wheaton. As the project progresses towards its operational stage, the anticipated economic impact on the region and stakeholders involved could be substantial. The future of mining in Ethiopia seems promising, and Wheaton’s role in it is expected to be instrumental in shaping a sustainable mining framework.