Wheaton Precious Metals has partnered with Caldas Gold to enter into a $110m streaming agreement for the Marmato project located in Colombia.

The proceeds from the streaming agreement will be used to fund the expansion of the Caldas Gold’s mining operations in the Deeps Zone (MDZ) at its Marmato project.

The project comprises the existing producing underground gold and silver mine in the Upper Zone and the MDZ development.

Besides, the Marmato project includes an existing 1,200 tonnes per day processing plant.

Wheaton Precious Metals president and chief executive officer Randy Smallwood said: “Wheaton is excited to partner with Caldas Gold in developing the Marmato Project. The strength and potential upside of this project was especially apparent during our onsite due diligence trip, prior to travel restrictions being put into place.

“We remain unwavering in our focus on delivering the highest quality portfolio of precious metals production to our shareholders through our top tier asset base, strong organic growth profile and acquisition of accretive growth opportunities such as Marmato.

“As can be seen, Wheaton continues to be very active on the corporate development front despite limitations resulting from the current global COVID-19 pandemic.”

Wheaton International to buy 6.5% of gold production and 100% of silver production from the project

Under the streaming agreement, Wheaton Precious Metals International, a wholly-owned subsidiary of Wheaton, will purchase 6.5% of the gold production and 100% of the silver production until the delivery of 190,000 ounces of gold and 2.15 million ounces.

Following that, the stream will fall to 3.25% of the gold production and 50% of the silver production for the life of mine.

Under the metal purchase agreement, Wheaton International will pay a total cash consideration of $110m, $38 million of which will be paid upon closing.

The company will pay the remaining portion during the construction of the MDZ project, subject to receipt of required permits and licenses, and securing the financing required to cover total expected capital expenditures.