BHP has entered a long-term silver financing agreement with Wheaton Precious Metals tied to its share of production at the Antamina mine in Peru. The deal will see BHP receive $US4.3 billion ($6.1 billion) upfront, marking what it claims is the largest streaming deal to date by upfront value. BHP is a leading global resources company, extracting and processing minerals, oil, and gas from production operations primarily in Australia and the Americas. Wheaton Precious Metals is a precious metals streaming company, that purchases metal production from mining companies and sells it on the open market.
Under the agreement, BHP will deliver silver equivalent to 33.75 per cent of Antamina’s output, reflecting its ownership stake, subject to a 90 per cent payable rate. Once 100 million ounces are delivered, the stream will decrease to 22.5 per cent for the remaining life of the mine. Wheaton will also pay 20 per cent of the spot silver price for each ounce delivered.
The effective date of the deal is April 1, with completion expected around the same time, and is not subject to regulatory approvals. Settlement will occur via metal credits, with no physical delivery required. This arrangement streamlines the transaction process.
BHP stated the transaction unlocks value from silver as a byproduct while allowing them to retain full exposure to copper, zinc, and lead at Antamina. Furthermore, BHP does not anticipate the transaction to increase its reported debt. The agreement reflects a strategic move to optimise asset value and financial flexibility.
