Silver Wheaton to pay $80M to Farallon for silver

By Associated Press May 13, 2008 Comments (0)

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Canada-based Silver Wheaton Corp. said Tuesday it will pay $80 million to Farallon Resources Ltd. to buy a majority of the silver produced at its Campo Morado site in Mexico.

The purchase price lets Farallon buy the silver for the lesser of either the market price or $3.90 per ounce, subject to annual adjustments. Silver for July delivery closed Monday at $17.25 an ounce on the Nymex.

The mining company will finance the deal with funds from existing credit agreements and will have the right of first refusal on future Farallon silver.

The site's first deposit will be a high-grade G-9 polymetallic deposit, which is scheduled for third-quarter production.

Silver Wheaton's stock declined 53 cents, or 3.9 percent, to $13.44 in morning trading.

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