Triple Flag outlines $350 million Peruvian streaming deal
Triple Flag, a new mining financing firm backed by U.S. hedge fund Elliott Management Corp, has said that it would pay $250 million to buy future silver production from a mine in Peru owned by Peruvian miner Compañía Minera Milpo.
In a report by Reuters, Toronto-based Triple Flag, a 7-month-old company founded by former Barrick Gold chief financial officer Shaun Usmar, said it would buy the silver "stream" from Milpo's Cerro Lindo poly-metallic zinc mine. It is Triple Flag's first deal.
In streaming transactions, mining finance companies such as Triple Flag provide miners with funds upfront in exchange for a portion of the future output - often a byproduct - from a mine at a set discounted price.
This type of financing became especially popular during a mining sector downturn in recent years when debt-laden miners did not want to tap the equity markets for finance at a time when their share prices were weak.
Triple Flag said in a statement it would pay 10 percent of the spot silver price for each ounce of silver it got from the mine. Silver delivery would start next month.
Cerro Lindo, a low-cost, long-life mine that started operations in 2007, is one of the world's 10 largest zinc mines.
Milpo is a unit of VM Holdings S.A., the metals and mining business of Votorantim S.A, a large, private Brazilian conglomerate with interests in a variety of sectors including cement, energy and orange juice.
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Vale invests $150mn to extend life of Manitoba operations
Vale has announced a $150mn CAD investment to extend current mining activities in Thompson, Manitoba by 10 years while aggressive exploration drilling of known orebodies holds the promise of mining well past 2040.
Global energy transition is boosting the market for nickel
The Thompson Mine Expansion is a two-phase project. The announcement represents Phase 1 and includes critical infrastructure such as new ventilation raises and fans, increased backfill capacity and additional power distribution. The changes are forecast to improve current production by 30%.
“This is the largest single investment we have made in our Thompson operations in the past two decades,” said Mark Travers, Executive Vice-President for Base Metals with Vale. “It is significant news for our employees, for the Thompson community and for the Province of Manitoba.
“The global movement to electric vehicles, renewable energies and carbon reduction has shone a welcome spotlight on nickel – positioning the metal we mine as a key contributor to a greener future and boosting world demand. We are proud that Thompson can be part of that future and part of the low carbon solution.”
Vale continues drilling program at Manitoba
Coupled with today’s announcement, Vale is continuing an extensive drilling program to further define known orebodies and search for new mineralization.
“This $150mn investment is just one part of our ambitious Thompson turnaround story. It is an indicator of our confidence in a long future for the Thompson operations,” added Dino Otranto, Chief Operating Officer for Vale’s North Atlantic Base Metals operations.
“Active collaboration between our design team, technical services, USW Local 6166, and our entire Thompson workforce has delivered a safe, efficient and fit-for-purpose plan that will enable us to extract the Thompson nickel resources for many years to come.”
The Thompson orebody was first discovered in 1956 by Vale (then known as Inco) following the adoption of new exploration technology and the largest exploration program to-date in the company’s history. Mining of the Thompson orebody began in 1961.
“We see the lighting of a path forward to a sustainable and prosperous future for Vale Base Metals in Manitoba,” said Gary Annett, General Manager of Vale’s Manitoba Operations.