06:59 AM EDT, 10/24/2024 (MT Newswires) -- Wheaton Precious Metals ( WPM ) late on Wednesday said its subsidiary, Wheaton Precious Metals International, signed a precious metals purchase deal with Montage Gold ( MAUTF ) for the Kone gold project in Cote d'Ivoire.

Under the agreement, Wheaton will pay Montage US$625 million in cash in four equal installments during construction, subject to customary conditions.

Wheaton will purchase 19.5% of the payable gold until a total of 400,000 ounces of gold has been delivered. Afterwards, Wheaton will purchase 10.8% of the payable gold until an additional 130,000 ounces has been delivered, at which point Wheaton will buy 5.4% of payable gold for the life of the mine.

The project is forecast to have a 16-year mine life, with first production expected in early 2027.

Wheaton will make ongoing payments for the gold ounces delivered equal to 20% of the spot price of gold. A price adjustment mechanism will be in place for the first five years of the agreement if spot prices are less than US$2,100/ounce or greater than US$2,700/ounce.

Wheaton has also provided Montage with a secured debt facility of up to US$75 million for project costs.

The addition of the Kone project will increase Wheaton's total estimated proven and probable mineral gold reserves by 0.62 million ounces, measured and indicated mineral gold resources by 0.05 million ounces and inferred gold resources by 0.02 million ounces.

Separately, Zijin Mining agreed to provide Montage with US$125 million of funding for the Kone project. The package is composed of a US$50 million loan facility and a US$75 million fully redeemable subordinated gold stream.

The first and second buyback option dates for the Zijin gold stream is expected to occur at the end of 2029 and 2030, respectively.

Wheaton's share price at last look gained 0.7% to US$67.91 in U.S. pre-market trading on Thursday.