Wheaton Precious Metals Announces Acquisition of a Gold and Silver Stream on the Jervois Project Through a Partnership with KGL Resources

Executive Summary

• Wheaton Precious Metals Corp. (via subsidiary WPMI) has entered into a definitive Precious Metals Purchase Agreement with KGL Resources Limited to acquire a gold and silver stream on the Jervois Project in Australia.
• The transaction involves a total upfront cash consideration of US$275 million, structured as early deposit payments and construction-phase installments, with funding expected from operating cash flows.
• The stream includes tiered payback percentages (starting at 75% and reducing to 25% over time) and provides WPMI with significant incremental reserves and resources, while granting KGL crucial construction financing.

Key Details

• Transaction Structure: Definitive Precious Metals Purchase Agreement (PMPA) between Wheaton Precious Metals International Ltd. (WPMI) and a wholly-owned subsidiary of KGL Resources Limited.
• Upfront Consideration: Total of US$275 million.
  • Early Deposits: Two installments of US$16 million each (total US$32 million), payable in the second and third calendar quarters of 2026 upon satisfaction of conditions.
  • Construction Payments: Remaining balance of US$243 million paid in four equal installments over the construction period as conditions are satisfied.
• Stream Terms (Gold):
  • WPMI purchases 75% of payable gold until 45,000 ounces (Koz) are delivered.
  • Reduces to 37.5% until an additional 15,000 Koz are delivered.
  • Reduces to 25% for the life of mine thereafter.
  • Payable gold calculated using a fixed payability factor of 90%.
• Stream Terms (Silver):
  • WPMI purchases 75% of payable silver until ~4.3 million ounces (Moz) are delivered.
  • Reduces to 37.5% until an additional 1.7 Moz are delivered.
  • Reduces to 25% for the life of mine thereafter.
  • Payable silver calculated using a fixed payability factor of 90%.
• Production Payments: Ongoing payments equal to 20% of the spot price of gold and silver for delivered ounces.
• Production Profile:
  • First production expected in the second half of 2027.
  • Forecast average production for first five full years: ~5.8 Koz gold and ~0.77 Moz silver per annum.
  • Life-of-mine average production: ~5.3 Koz gold and ~0.59 Moz silver per annum.
  • Projected mine life: 10 years (with exploration potential to extend).
• Incremental Reserves & Resources (Jervois Project):
  • Proven & Probable Reserves: +92 Koz Gold, +9.2 Moz Silver.
  • Measured & Indicated Resources: +15 Koz Gold, +1.3 Moz Silver.
  • Inferred Resources: +21 Koz Gold, +2.1 Moz Silver.
• Additional Considerations:
  • Cost Overrun Facility (COF Stream): WPMI may provide up to US$25 million before the fifth anniversary. If exercised, the initial silver stream percentage increases from 75% to 90%.
  • Equity Participation: Wheaton committed to participate in a future KGL equity financing for the lesser of AU$35 million or 20% of shares offered, capped at a 9.9% ownership interest in KGL.
  • Right of First Refusal: WPMI obtains ROFR on future streams/royalties for Jervois.
  • Change of Control: If KGL undergoes a change of control prior to Dec 31, 2029, KGL may buy back one-third of the stream at a pre-determined rate of return.
  • Security: KGL provides corporate guarantees and first-priority security interests on the Project and corporate assets.
• Funding: Wheaton expects to fund the majority of the upfront payment from operating cash flows as construction advances throughout 2027.

Notable Quotes

• Haytham Hodaly, President and CEO, Wheaton Precious Metals: "The Jervois project represents an important milestone for Wheaton as our first streaming transaction in Australia, one of the world's leading mining jurisdictions... we look forward to supporting the KGL team with a precious metals stream which will provide construction funding as they advance the Jervois Project into production."
• Jeff Gerard, Executive Chairman, KGL Resources: "We are delighted to secure this significant capital commitment from a leading global precious metals streaming company as a major cornerstone partner in our financing strategy for the Jervois Project. The immediate availability of the early deposit payments ensures we can maintain our schedule... we are now on the cusp of breaking ground on Australia's next major copper mine."