Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Wheaton Precious Metals agreed to end its so-called silver “streaming” deal with Glencore Plc on Peru’s Yauliyacu mine for $150 million, the Canadian company said on Thursday, so that Glencore could divest the mine.
Pioneered by Wheaton, the streaming model is a type of alternative financing in the mining industry in which funds are provided upfront to a miner in exchange for the sale of a fixed amount of future production, usually by-product, at a discounted price.
Glencore had entered the Yauliyacu silver streaming transaction with Wheaton in 2006 for an upfront payment of $285 million. Wheaton has since earned over $485 million in cash flow from the stream, it said on Thursday.
Glencore currently owns and operates the Yauliyacu mine, which has been producing minerals for over 100 years. The ending of the silver stream is contingent on the global mining and trading giant selling the mine by the end of this year.
It still has a streaming agreement with Wheaton on its stake in the Antamina mine in Peru.
(By Ruhi Soni; Editing by Shailesh Kuber)
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