BHP partners with Wheaton for $4.3 billion silver streaming agreement

BHP has entered into a long-term silver streaming agreement with Wheaton Precious Metals International in a significant stride towards enhancing the global miner's financial flexibility and capital management,

The transaction, the most lucrative streaming deal to date based on upfront payment, will see BHP receive an upfront payment of $4.3 billion. In exchange, BHP will deliver silver calculated from its share of production at the Antamina mine in Peru.

The agreement reflects BHP's focus on maximising shareholder value, while capitalising on buoyant silver market conditions. The transaction allows the mining giant to unlock capital from a non-core commodity. Significantly, the proceeds from this deal can be reallocated to high-return growth projects, and further shareholder returns, aligned with BHP's established capital allocation framework, JSE, London, Australia and New York listed group said.

BHP's CEO Mike Henry said: “BHP’s investment in Antamina has delivered value to investors through strong copper production performance, and this agreement further unlocks additional value from the asset in an innovative and disciplined way.”

This agreement is of significance as it promises no increase to BHP’s debt levels. It facilitates the realisation of silver as a by-product at Antamina, while enabling BHP to retain full exposure to copper, zinc, and lead production derived from its 33.75% stake in the large-scale mine.

BHP’s CFO Vandita Pant said: “Today’s announcement is a further example of our active capital management in action, and focus on strategically unlocking value from our portfolio. The upfront consideration compares favourably with the consensus estimates of our entire share of Antamina.

”She said the combined potential cash unlock from this agreement and a recent transaction with Global Infrastructure Group could exceed $6bn, strengthening BHP’s balance sheet and enhancing long-term shareholder value.

The key terms of the agreement include that Wheaton will not only disburse the upfront consideration, but will also provide 20% of the spot silver price at the time of delivery for each ounce of silver delivered. Initially, BHP will deliver 33.75% of the silver produced by Antamina, tapering to 22.5% after the delivery of 100 million ounces of silver.

Wheaton Precious Metals boasts a leading position in the precious metals streaming sector, focusing on gold and silver agreements across high-quality mining operations globally.

Antamina, situated 270 kilometres north of Lima, Peru, is one of the world's major copper and zinc mines. 

BUSINESS REPORT