Alexco Resource has announced an amended silver stream agreement (the “Amended Agreement“) with Silver Wheaton. The Amended Agreement is innovative, allowing all stakeholders to benefit from both the current mine plan and future exploration success at the highly prospective Keno Hill Silver District in Canada’s Yukon Territory.
Under the terms of the Amended Agreement, Alexco will continue to deliver 25% of payable silver to Silver Wheaton, however the production payment from Silver Wheaton for these ounces has been amended. The payment to Alexco moves from a fixed payment of US$3.90 per ounce to a more flexible payment that increases with lower mill silver head grades and silver prices, and decreases with higher mill silver head grades and silver prices.
The increased production payment in a lower silver price and/or lower silver grade environment increases the flexibility of Alexco to process lower grade ore and sustain mining operations during periods of lower silver prices and does so without unduly limiting the upside opportunity of either Alexco or Silver Wheaton in a higher price and/or grade environment.
Fort Capital Partners acted as financial advisor to Alexco in connection with the negotiation and restructuring of the silver stream agreement.