By The Associated Press
Tuesday, September 8, 2009
VANCOUVER, British Columbia (AP) — Silver Wheaton Corp. said Tuesday it sold 22.5 million shares of common stock to a group of underwriters for $250 million in gross proceeds to help finance its purchase of silver from Barrick Gold Corp.
The agreement, on a bought deal basis, calls for the syndicate of underwriters to pay $11.10 per share.
Silver Wheaton has given the underwriters an option to purchase up to an additional 3.4 million common shares at a price of $11.10 per share until the date that is 30 days following the closing of the offering.
The company said it would receive gross proceeds of $287.5 million if the full option is exercised.
A portion of the money will be used to help finance the purchase of silver production from four Barrick Gold Corp. mines.
Silver Wheaton has agreed to pay $625 million in cash over three years. It also will make ongoing production payments in cash for each ounce of delivered silver. The payment will be either the prevailing market price or $3.90 per ounce, whichever is the lesser amount.
Silver Wheaton said it will use $70 million in cash and money from the proceeds of the offering in securities to finance the initial $212.5 million payment.
In return, it will receive 25 percent of the silver production over the life of the Pascua-Lama project on the border between Argentina and Chile.
It also will receive 100 percent production from two mines in north-central Peru and a third in the San Juan province of Argentina until the end of 2013 when production is expected to begin at Pascua-Lama.
Shares of Silver Wheaton rose 33 cents, or 2.8 percent, to $11.92 in afternoon trading, having earlier hit a fresh 52-week high of $12.10.
