Silver Wheaton Acquires Rosemont’s Silver and Gold Production

 

VANCOUVER, BC - Silver Wheaton Corp. reported that it has agreed to acquire an amount equal to 100% of the life of mine silver and gold production from Augusta Resource Corporation's Rosemont Copper Project located in Pima County, Arizona. Rosemont is forecast to be a low-cost, long-life and large-scale copper-molybdenum-silver project that could account for approximately 10% of US copper output once in production, projected by 2012.

Silver Wheaton will pay Augusta upfront cash payments totaling US$230 million to acquire an amount equal to 100% of all payable silver and gold produced from Rosemont, for the lesser of US$3.90 per ounce of silver and US$450 per ounce of gold (both subject to an inflationary adjustment) or the prevailing market price per ounce of silver and gold delivered. The upfront payments will be made on an installment basis to partially fund construction of the mine and will commence once certain milestones are achieved, including the receipt of key permits and securing the necessary financing to complete construction of Rosemont. Augusta anticipates that key operating permits will be received in the fourth quarter of 2010 allowing mine construction to commence shortly thereafter. Silver Wheaton is not required to contribute to further capital or exploration expenditures and Augusta has provided a completion guarantee with certain minimum production criteria required to be met by specific dates. "We are very pleased to be participating in the development of another low-cost, long-life and high-quality mining project," said Peter Barnes, Chief Executive Officer of Silver Wheaton. "The Rosemont Copper Project is forecast to increase Silver Wheaton's long term annual production by approximately 2.4 million ounces of silver, plus any gold production, estimated by Augusta to average up to 15,000 ounces per annum. Importantly, our upfront payments will be made only after Augusta has received all the necessary permits to construct and operate the Rosemont mine."

The Rosemont Copper Project is a copper-molybdenum-silver porphyry deposit located in Pima County, Arizona. Based on a positive Feasibility Study released in August 2007 and updated in January 2009, Augusta approved the project for development as a 75,000 ton per day low-cost open-pit mine with a sulfide concentrator and SX/EW plant to treat sulfide and oxide ore. The proposed Rosemont mine is expected to produce annually an average of 221 million pounds of copper, 4.7 million pounds of molybdenum, 2.4 million ounces of silver and up to 15 thousand ounces of gold over a greater than 20 year mine life. Concentrate production is forecast to commence in 2012. Based on the updated Feasibility Study released in January 2009, Rosemont demonstrates robust project economics at a variety of metal prices and is forecast to be a low-cost producer of copper. Cash costs, net of byproduct credits, are estimated at US$0.62 per pound of copper.

Current proven and probable reserves at Rosemont contain 62.9 million ounces of silver, measured and indicated resources contain a further 9.7 million ounces of silver and inferred resources contain 11.2 million ounces of silver. In addition, there is potential for continued reserve and resource expansion adjacent to the proposed open pit. The precious metals purchase agreement also encompasses all of the prospective exploration targets within the Rosemont Project area, where surface mapping and historical drilling have uncovered several promising areas of mineralization. Currently, there are no reported gold reserves and resources at Rosemont as drill cores were not consistently assayed for gold. However, metallurgical testing completed by Augusta has indicated that, in addition to silver, gold is present in the copper concentrates in the form of a saleable byproduct credit. Augusta forecasts that up to 15 thousand ounces of gold may be produced annually.

The company’s address is 666 Burrard Street, Suite 3150, Vancouver, BC V6C 2X8, 604-684-9648, fax: 604-684-3123, email: [email protected].