By Danielle Bochove
(Bloomberg) — Glencore Plc sold a share of its future silver output from a mine in Peru, in a deal that includes a $900 million upfront payment, as miners seek new funding sources in the worst commodity slump in a generation.
The deal also includes Silver Wheaton Corp. paying 20 percent of spot price per ounce delivered from the Antamina mine, the Vancouver-based company said in a statement Tuesday.
The agreement by Baar, Switzerland-based Glencore follows a similar arrangement by Teck Resources Ltd. to sell its share of silver at Antamina to Franco-Nevada Corp. Surging credit costs and volatile stock markets have made so-called streaming deals attractive to miners seeking to contain debt as slumping prices squeeze margins.
Read also: Tip of the iceberg: Does Glencores canary threaten global growth?Â
Under terms of the deal announced Tuesday, Silver Wheaton will receive from Glencore an amount equal to 33.75 percent of Antamina’s silver production until the delivery of 140 million ounces and 22.5 percent of silver production thereafter.
Silver Wheaton said it expects the stream to boost its silver production to 55 million equivalent ounces a year by 2019, from 44.5 million this year. The stream will add 5.1 million ounces next year and in 2017, it said.
