VANCOUVER, BRITISH COLUMBIA, Nov. 6, 2009 (Marketwire) --
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 11/06/09 -- Gold Wheaton Gold Corp. (TSX VENTURE: GLW) ("GWC") is pleased to announce that Gold Wheaton (Barbados) Corporation ("Gold Wheaton"), a wholly-owned subsidiary of GWC, has signed a definitive agreement with First Uranium Corporation (TSX: FIU)(JSE: FUM) ("First Uranium") and its subsidiary Ezulwini Mining Company (Proprietary) Limited ("EMC"). Gold Wheaton will purchase seven percent of the life of mine gold production from EMC's mining right over the Ezulwini Mine (the "Transaction") and which covers an area of approximately 3,718 hectares, located approximately 40 kilometres from Johannesburg, in the Province of Gauteng, in the Western portion of the Witwatersrand basin, South Africa.
The Transaction is expected to close in late November 2009.
Under the terms of the Transaction, Gold Wheaton will pay First Uranium US$50 million on closing and will make an ongoing payment equal to the lesser of US$400 per delivered ounce and the prevailing spot price of gold, subject to an annual inflation adjustment of one percent, starting on the fourth anniversary of closing. Gold Wheaton will not be required to contribute to any capital or exploration expenditures in respect of the Ezulwini Mine.
EMC has redeveloped the old North Section of the Western Areas gold mine (in operation since the early 1960s) with a new mining area being opened up and a new gold and uranium processing plant recently constructed and commissioned. The operation has extensive existing infrastructure, relatively shallow mining operations and by-product uranium credits. The mining and processing operations are currently ramping up to design production levels.
"With this new gold stream from Ezulwini, one of First Uranium's two South African operations, we add an average of approximately 25,000 ounces per year over the life of the operation to our existing annual production. The long life gold and uranium mine should be at the lower end of the production cost curve and has significant potential upside for additional production from its large resource base. The transaction will be financed from cash on hand, leaving us well funded to continue to grow," commented David Cohen, Chairman and CEO of GWC. "As the mine is currently ramping up production, we expect to receive immediate additional production from the transaction, a guaranteed minimum delivery of 16,500 ounces in 2010 and 19,500 ounces in 2011 and an average annual delivery of approximately 26,000 ounces thereafter.
