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Wheaton Precious Metals closes Vale Voisey's Bay cobalt streaming agreement

A precious metals company, with an expanding portfolio of streaming agreements from all around the world, has added another lucrative streaming deal to its belt.

Wheaton Precious Metals has announced in a statement this week that it had officially closed a cobalt streaming agreement for the Vale owned Voisey’s Bay Mine.

Announced earlier this month, Wheaton has paid an upfront cash consideration to Vale of around US$390 million and will make ongoing payments of 18% of the cobalt spot price per cobalt pound delivered.

The deal coincides with Vale also entering a separate streaming agreement with Cobalt 27 Capital Corp. The two deals combined will see an aggregate of around $690 million in funding for the purchase of cobalt from Vale equal to 75% of Voisey’s Bay cobalt production, effective January 2021.

Voisey’s Bay is forecast to have a total production of, on average ,2.6 million pounds per year for the first 10 years and 2.4 million pounds for the life of mine.

"While our focus has been, and always will be on precious metal streaming, we welcomed the opportunity to invest in another low-cost, long-life asset with a partner of Vale's calibre. Wheaton has built a portfolio of streams on high-quality mines, and Voisey's Bay has both the quality and the scale to make it an accretive addition to this portfolio," said Randy Smallwood, Wheaton's President and Chief Executive Officer.

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"We see numerous similarities between cobalt and silver, as both are primarily produced as by-products and both are integral to sustainable clean energy and electronics. In addition, given cobalt supply is concentrated in high political risk jurisdictions, Voisey's Bay is particularly attractive for cobalt production as it is located in Canada."