Wheaton Precious Metals (TSX: WPM) has secured a foothold in the Australian mining sector, entering into a $275 million deal with KGL Resources to acquire a gold and silver stream from the Jervois Project. The agreement provides Wheaton with a long-term interest in the precious metals produced by the asset, while offering KGL the necessary capital to advance the project toward construction.
Under the terms of the agreement, Wheaton will pay upfront cash consideration of $275 million. The initial phase includes two early deposit payments of $16 million scheduled for the second and third quarters of 2026, with the remaining $243 million to be paid in four installments as construction milestones are met.
The Jervois Project, primarily a copper-focused site, fits into the broader industry trend of securing critical metals in stable jurisdictions. Wheaton CEO Haytham Hodaly noted that the transaction marks a significant milestone for the company’s portfolio, emphasizing the project’s location in Australia and its role in the global transition to a low-carbon economy.
“This is a fully permitted copper project, with significant exploration potential, that is positioned to commence construction imminently,” commented Hodaly.
Wheaton is entitled to purchase 75% of the payable gold and silver until 45,000 ounces of gold and 4.3 million ounces of silver are delivered. Once the project meets these benchmarks, the stream will drop to 37.5% until a further 15,000 ounces of gold and 1.7 million ounces of silver are delivered, before eventually settling at 25% for the remainder of the mine’s life.
Wheaton will pay 20% of the prevailing spot price for all delivered ounces.
KGL Resources expects first production in the second half of 2027. The project currently has an estimated 10-year mine life, though executives from both firms highlighted significant exploration potential that could extend operations. The mine is expected to produce 5,800 ounces of gold and 0.77 million ounces of silver annually over the first five years of production.
Other consideration under the transaction include a cost overrun stream of up to $25 million that is being provided by Wheaton, and a right of first refusal on any future precious metals streams. Wheaton has also committed to invest up to A$35 million in future equity financings.
For KGL, the deal serves as a cornerstone of its financing strategy. Executive Chairman Jeff Gerard indicated that the availability of early payments ensures the development schedule remains on track. As construction nears, the partnership allows KGL to retain exposure to its primary copper production while leveraging its secondary precious metals to fund the build.
Wheaton Precious Metals last traded at $190.12 on the TSX.
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