Wheaton Precious Metals, Cobalt 27 acquire cobalt stream from Vale for US$690M
Wheaton Precious Metals and Cobalt 27 will acquire a fixed percentage of cobalt production from Vale's Voisey's Bay mine for US$690 million.
Both companies will make a combined purchase of finished cobalt equal to 75% of Voisey's Bay cobalt production commencing January 1, 2021.
Wheaton will be entitled to receive from Vale an amount of cobalt equal to 42.4% of the Voisey's Bay mine cobalt production until the delivery of 31 million pounds of cobalt and an amount of cobalt equal to 21.2% of cobalt production thereafter for the life of mine. Cobalt 27 will receive an amount of finished cobalt equal to 32.6% of the cobalt production from Voisey's Bay until an aggregate of approximately 10.8kt (23.8mmlb) has been delivered and 16.3% of cobalt production thereafter.
“Cobalt 27 is very excited to partner with Vale to advance future development of Voisey's Bay," said Anthony Milewski, Chairman and CEO of Cobalt 27 in a news release.
"Following our recent investment in Ramu, this transaction builds on our commitment to add high quality streams and royalties and represents a strong step forward in diversifying our portfolio with the Voisey's Bay mine, a world-class, low-cost and long-life nickel/copper/cobalt asset located in a low political-risk jurisdiction.
"Further, Voisey's Bay has significant infrastructure including a state-of-the-art nickel/copper/cobalt refinery to support the planned VBME. We believe the enhanced exposure to cobalt, will yield significant returns to our investors as electric vehicles begin to change our society in the coming years."
The CEO of Wheaton noted similarities with silver and cobalt.
"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" said Randy Smallwood, Wheaton's President and Chief Executive Officer.
"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."