We'll see. I can't imagine that SLW didn't put a provision in their agreement with ABX that would provide for a return of their capital investment in the event the project never came to fruition. If I had to guess, the news will be about at least a partial return of capital to SLW by ABX to compensate Silver Wheaton for the inability to mine silver in the future timeframe anticipated. This would thus be a liquidity event for SLW, and could be seen as a short-term positive even if it means that long-term revenues from silver production at Pascua-Lama were delayed or eliminated.
On September 8, 2009, Silver Wheaton entered into a silver purchase agreement with Barrick to acquire 25% of the life of mine silver production from Barrick’s Pascua-Lama project, as well as 100% of the silver production from their Lagunas Norte, Pierina and Veladero mines until the end of 2013. Silver Wheaton will make a total upfront cash payment of US$625 million to Barrick, of which US$487.5 million has been paid to date. The remaining US$137.5 million is due on the third anniversary of the transaction. Silver Wheaton will also make ongoing production payments of the lesser of US$3.90 (subject to an annual inflationary adjustment starting three years after achieving project completion at Pascua-Lama) and the prevailing market price, for each ounce of silver delivered under the agreement. Silver Wheaton will not share in any ongoing capital or exploration expenditures at the various mines.
Barrick has provided Silver Wheaton with a completion guarantee, requiring them to complete Pascua-Lama to at least 75% of design capacity by December 31, 2015. During 2014 and 2015, Silver Wheaton will be entitled to the silver production from the Lagunas Norte, Pierina and Veladero mines to the extent of any production shortfall at Pascua-Lama, until Barrick satisfies the completion guarantee. If Barrick fails to satisfy the requirements of the completion guarantee, the agreement may be terminated by Silver Wheaton. In such an event, Silver Wheaton would be entitled to the return of the upfront cash consideration of US$625 million less a credit for silver delivered up to the date of that event.
Barrick has granted Silver Wheaton a five year right of first refusal on any further metal stream sales in connection with Pascua-Lama, where more than 50% of the value is from silver.