Silver Wheaton acquires gold streams from Vale’s Salobo and Sudbury mines

PR Newswire

VANCOUVER, Feb. 5, 2013

TSX: SLW
NYSE: SLW

VANCOUVER, Feb. 5, 2013 /PRNewswire/ – Silver Wheaton Corp. (“Silver Wheaton” or the “Company”) (TSX, NYSE:SLW)
is pleased to announce that it has entered into a binding term sheet to
acquire from a subsidiary of Vale S.A. (“Vale”) (NYSE:VALE) an amount
of gold equal to 25% of the life of mine gold production from its
Salobo Mine, located in Brazil, as well as 70% of the gold production,
for a 20-year term, from certain of its Sudbury Mines located in
Canada.

The Company will pay Vale total cash consideration of US$1.90 billion,
plus 10 million Silver Wheaton warrants with a strike price of US$65
and a term of 10 years¹. US$1.33 billion will be paid for 25% of the gold production from
Salobo, while US$570 million will be paid for 70% of the Sudbury gold
production. In addition, Silver Wheaton will make ongoing payments of
the lesser of US$400 (subject to a 1% annual inflation adjustment from
2016 for Salobo) and the prevailing market price, for each ounce of
gold delivered under the agreement.

TRANSACTION HIGHLIGHTS

Provides immediate cash flow and enhances Silver Wheaton’s growth
profile

Silver Wheaton will receive 25% of the gold production from Vale’s newly
constructed and currently expanding Salobo mine, and 70% of the gold
production from certain of its Sudbury mines;
This immediately increases Silver Wheaton’s production and cash flow
profile by adding expected average gold production of 110 thousand
ounces per year over the next 20 years (5.9 million silver equivalent
ounces²), which includes approximately 60 thousand ounces per year from Salobo
and approximately 50 thousand ounces per year from Sudbury.
Excellent expansion and exploration potential exist for both Salobo,
which currently has an extensive reserve base and good depth and strike
potential, and Sudbury, which currently has the Totten mine in start-up
and the Victor development project.

Significantly increases Silver Wheaton’s exposure to gold

The addition of the Vale streams will increase Silver Wheaton’s
percentage of revenue generated from gold production over the next five
years from an average of 12% to a peak of around 25%.

Adds another world-class partner and further endorses the
competitiveness of Silver Wheaton’s streaming model

Vale is the world’s largest producer of iron ore and one of the largest
mining companies in the world, having a market capitalization of over
$100 billion.
The use of precious metal streaming by Vale further validates the
benefits of streaming in unlocking the value of by-product precious
metals production.

Increases Silver Wheaton’s organic growth profile

With the addition of these streams, Silver Wheaton is also pleased to
announce its updated production guidance. In 2013, Silver Wheaton
forecasts 33.5 million ounces of silver equivalent production² (including 145 thousand ounces of gold). In 2017, the Company forecasts
53 million ounces of silver equivalent production² (including 180 thousand ounces of gold), which represents an increase
of over 80% from 2012.

________________________________________
¹ The issue of the warrants is subject to receipt of all requisite
regulatory approvals including the Toronto Stock Exchange and the New
York Stock Exchange.
² Silver equivalent production forecast assumes a gold/silver ratio of
53.3:1

“Partnering with Vale on two new gold streams represents a significant
step forward for Silver Wheaton and for the streaming model as a
whole. Not only does Silver Wheaton gain accretive gold ounces to
further grow and diversify our company, but the precious metals
streaming model has now been further endorsed by another one of the
world’s preeminent mining companies,” said Randy Smallwood, Silver
Wheaton’s President and Chief Executive Officer. “Silver Wheaton is a
proud Canadian company, and we are also excited to be adding another
asset based here in Canada, our second one in less than a year.”

“While we have traditionally focused on silver, we have never been
averse to strategically adding ‘the right’ gold streams to our
portfolio. The world-class nature of the Sudbury operations and the
Salobo mine, with its exciting expansion and exploration potential,
along with the quality of Vale as an operating partner, convinced us
that these assets would be ideal additions to Silver Wheaton’s
portfolio. Consistent with the mines underlying our existing streaming
portfolio, the precious metal coming from both of these assets is
produced as a byproduct and represents only a small fraction of the
overall economics of the mining operations. While we will continue to
believe there are a significant number of streaming opportunities in
the silver space, we are also open to layering more high-quality gold
streams into our portfolio.”

“Vale has a history of mining success spanning decades, and we are
confident that Salobo and Sudbury will deliver substantial long-term
value to both companies’ shareholders. These gold streams will
significantly increase Silver Wheaton’s overall growth profile, which,
given our unique dividend policy, should also translate directly into
dividend growth.”

TRANSACTION TERMS

Silver Wheaton has agreed to acquire from a subsidiary of Vale 70% of
the gold production from certain of Vale’s Sudbury mines for a term of
20 years, and, through Silver Wheaton’s wholly owned subsidiary Silver
Wheaton (Caymans) Ltd., 25% of the life of mine gold production from
Vale’s Salobo mine. Production will accrue retroactively to Silver
Wheaton as of January 1, 2013.

The term sheet remains subject to negotiation and execution of
definitive agreements consistent with the terms of the term sheet, and
to approval by the Vale S.A. board of directors. Vale S.A. has obtained
approval of its Executive Committee of the Board and all other
necessary internal committee approvals.

Upon closing, Silver Wheaton will pay Vale total cash consideration of
US$1.90 billion, plus warrants to purchase 10 million shares of Silver
Wheaton common stock at a strike price of US$65, and a 10 year term. In
addition, the Company will make ongoing payments of the lesser of
US$400 (plus an annual inflation adjustment starting in 2016 for the
Salobo stream) and the prevailing market price, for each ounce of gold
delivered under the agreement.

Vale is in the process of expanding the mill throughput at the Salobo
mine to 24 million tonnes per annum (Mtpa) from its current 12 Mtpa.If
the expansion to 24Mtpa is not completed by the end 2016, Silver
Wheaton would be entitled to a gross up (a temporary increased
percentage of gold production) based on the pro-rata achievement of the
target production. If throughput capacity is expanded above 28Mtpa
within a predetermined period, Silver Wheaton will be required to make
an additional payment to Vale based on a set fee schedule ranging from
US$67 million up to US$400 million, dependent on timing and scale.

FINANCING THE ACQUISITION

Silver Wheaton has entered into an agreement with Scotiabank and BMO
Capital Markets as Joint Lead Arrangers and Co-Bookrunners securing a
commitment to underwrite two new credit facilities: (1) a US$1 billion
revolving credit facility having a 5 year term; and (2) a US$1.5
billion bridge financing facility having a 1 year term. These
facilities will replace the existing US$400 million revolving credit
facility. Combined with cash on hand, the additional credit capacity
offered by these new credit facilities provides Silver Wheaton with
sufficient access to capital to fund the upfront payment while
continuing its pursuit of additional accretive growth opportunities.

ABOUT THE SALOBO MINE

Vale’s Salobo mine, located in the Pará state of Brazil, is the largest
copper deposit ever found in Brazil. This newly constructed, low-cost
copper-gold mine began operating in May 2012 with a design throughput
capacity of 12Mtpa. Vale has subsequently begun a second phase of
construction to expand the mine to 24Mtpa of mill capacity by the end
of 2015. During the ramp up to 24Mtpa, the mine is expected to average
45 thousand ounces attributable gold production. Salobo has reserves of
over one billion tonnes with gold and copper grades of 0.43 g/t¹ and 0.69² percent respectively, and, along with additional resources also has
substantial exploration and expansion potential. The mine is well
positioned relative to infrastructure and is connected to the national
power grid with ample capacity for current production and future
expansion.

________________________________________
¹ Silver Wheaton will file a technical report for the Salobo mine within
45 days of this press release. For further details of the Salobo
mineral reserves, see the tables appended to this news release.
² Source is Vale’s 2011 20-F filing with the SEC available on EDGAR (www.edgarfiling.sec.gov).

ABOUT THE SUDBURY MINES

Vale’s Sudbury mines, located in Ontario, Canada, have an operating
history going back to 1885. Sudbury is one of the largest nickel
producing areas globally, and Vale’s operations in Sudbury are among
the largest in the world. The Sudbury gold stream covers six producing
mines (the Coleman, Copper Cliff, Creighton, Garson, Stobie, and Totten
mines) and one development stage project (the Victor project). From
2013 to 2015, the Sudbury mines are expected to average attributable
production of approximately 30 thousand ounces as the Totten mine
gradually reaches full production. Gold production is expected to peak
once the high grade Victor deposit begins production. All ore bodies
contain a mix of nickel, copper, platinum group metals, cobalt, gold
and silver. In Sudbury, Vale also has a central concentrator, smelter
and refinery, making this one of the largest integrated mining
operations in the world. The combined mine life is estimated to well
beyond the end of the 20 year term, based on current mineral reserves
and mineral resources.

SILVER WHEATON ANNOUNCES NEW PRODUCTION GUIDANCE

With the addition of two new gold metal streams, Silver Wheaton is also
pleased to present its updated one and five-year production guidance.
In 2013 attributable silver equivalent production is forecast to be
33.5 million silver equivalent ounces, including 145 thousand ounces of
gold¹. In 2017, annual attributable production is anticipated to increase
over 80% compared to 2012 levels, growing to approximately 53 million
silver equivalent ounces, including 180 thousand ounces of gold¹.

The addition of Sudbury and Salobo to our portfolio more than offsets
the anticipated reduction in attributable production from some of the
other assets in Silver Wheaton’s current streaming portfolio in 2017.
Hudbay Minerals’ Constancia mine is expected to meet the completion
test well before 2016, resulting in gold production from the 777 mine
attributable to Silver Wheaton dropping from 100% to 50%. In addition,
the 10-year term contract on Capstone Mining’s Cozamin mine, acquired
with Silver Wheaton’s 2009 acquisition of Silverstone, expires in April
2017.

Mr. Neil Burns, Silver Wheaton’s Vice President, Technical Services, is
a “qualified person” as such term is defined under National Instrument
43-101, and has reviewed and approved the technical disclosure in this
news release.

____________________________
¹ Silver equivalent production forecast assumes a gold/silver ratio of
53.3:1

CONFERENCE CALL

A conference call, along with an interactive presentation, will be held
on Wednesday February 6, starting at 11:00am (Eastern Time) to discuss
this transaction.

To participate in the live call please use one of the following methods:

Dial toll free from Canada or the US:			1-888-390-0546
Dial from outside Canada or the US:			1-416-764-8688
Pass code:			60136108
Live audio webcast:			www.silverwheaton.com

Participants should dial in five to ten minutes before the call.

A copy of the presentation can be accessed via the live webcast or can
be found approximately one hour before the call on www.silverwheaton.com.

The conference call will be recorded and you can listen to an archive of
the call by one of the following methods:

Dial toll free from Canada or the US:			1-888-390-0541
Dial from outside Canada or the US:			1-416-764-8677
Pass code:			136108
Archived audio webcast:			www.silverwheaton.com

ABOUT SILVER WHEATON

Silver Wheaton is the largest precious metals streaming company in the
world. Based upon its current agreements, forecast 2013 attributable
production is approximately 33.5 million silver equivalent ounces,
including 145 thousand ounces of gold¹. By 2017, annual attributable production is anticipated to increase
significantly to approximately 53 million silver equivalent ounces,
including 180 thousand ounces of gold¹. This growth is driven by the Company’s portfolio of low-cost and
long-life assets, including silver and precious metal streams on
Barrick’s Pascua-Lama project, Hudbay’s Constancia project, and Vale’s
Sudbury and Salobo mines.

____________________________
¹ Silver equivalent production forecast assumes a gold/silver ratio of
53.3:1

Silver Wheaton’s Reserves and Resources for Sudbury and Salobo Mines are
as follows:

ATTRIBUTABLE RESERVES & RESOURCES ATTRIBUTAL TO SILVER WHEATON ^{(1,2,3,4,5,6,8,11)}


		Tonnage	Grade	Contained	Process Recovery⁽⁷⁾
Mine	Category	Mt	Au g/t	Au Moz	%
Salobo (25%)⁽⁹⁾	Proven	142.1	0.45	2.06
Sudbury (70%)⁽¹⁰⁾	Reserves	34.8	0.29	0.33
Salobo (25%)⁽⁹⁾	Probable	135.9	0.40	1.75
Sudbury (70%)⁽¹⁰⁾	Reserves	26.5	0.49	0.42
Salobo (25%)⁽⁹⁾	Proven &	278.0	0.43	3.80	66%
Sudbury (70%)⁽¹⁰⁾	Probable	61.3	0.38	0.75	81%
Total	Reserves			4.55
Sudbury (70%)⁽¹⁰⁾	Indicated Resources	23.3	0.33	0.25
Salobo (25%)⁽⁹⁾		13.7	0.29	0.13
Sudbury (70%)⁽¹⁰⁾	Inferred Resources	18.9	0.67	0.40
Total				0.53

Notes:

1.	All Mineral Reserves and Mineral Resources have been calculated in accordance with the CIM Standards and NI 43-101, or the AusIMM JORC equivalent.
2.	Mineral Reserves and Mineral Resources are reported above in millions of metric tonnes (“Mt”), grams per metric tonne (“g/t”) and millions of ounces (“Moz”).
3.	Individual qualified persons (“QPs”), as defined by the NI 43-101, for the technical information contained in this document (including the Mineral Reserve and Mineral Resource estimates) for the following operations are as follows:
	a.	Salobo – A technical report is being prepared, and will be filed by the Company on Sedar (www.Sedar.com) within 45 days of this news release.
	b.	Sudbury – Neil Burns, M.Sc., P.Geo. (Vice President, Technical Services); Samuel Mah, M.A.Sc., P.Eng. (Senior Director, Project Evaluations), both employees of the Company (the “Company’s QPs”).
4.	The Mineral Resources reported in the above tables are exclusive of Mineral Reserves.
5.	Mineral Resources which are not Mineral Reserves do not have demonstrated economic viability.
6.	Mineral Reserves and Mineral Resources are reported as of December 31, 2011 based on information available to the Company as of the date of this document, and therefore will not reflect updates, if any, after such date.
7.	Process recoveries are the average percentage of gold in a saleable product (dor or concentrate) recovered from mined ore at the applicable site process plants as reported by the operators.
8.	Mineral Reserves and Resources are estimated using appropriate process recovery rates and commodity prices including $975 per ounce gold.
9.	A technical report for Salobo will be filed within 45 days of this news release. Inferred resources have been estimated by the Company and are contained within the current Reserve pit shell.
10.	The Company’s attributable Resources and Reserves for Sudbury have been constrained to the production expected for the 20 year term.
11.	Gold is produced as a by-product metal; therefore, the economic cut-off applied to the reporting of gold Resources and Reserves will be influenced by changes in the commodity prices of other metals at the time.

Full Reserve and Resource tables are available on the Company’s website,
www.silverwheaton.com. Updates Reserves and Resources incorporating year-end 2012 estimates
will be included in the Company’s 2012 AIF.

Mr. Neil Burns, Vice President of Technical Services, is a “qualified
person” as such term is defined under National Instrument 43-101, and
has reviewed and approved the information on mineral reserves and
mineral resources disclosed in this news release.

CAUTIONARY NOTE REGARDING FORWARD LOOKING-STATEMENTS

The information contained herein contains “forward-looking statements”
within the meaning of the United States Private Securities Litigation
Reform Act of 1995 and “forward-looking information” within the meaning
of applicable Canadian securities legislation. Forward-looking
statements, which are all statements other than statements of
historical fact, include, but are not limited to, statements with
respect to the future price of silver and gold, the estimation of
mineral reserves and resources, the realization of mineral reserve
estimates, the timing and amount of estimated future production, costs
of production, reserve determination, reserve conversion rates and
statements as to any future dividends. Generally, these forward-looking
statements can be identified by the use of forward-looking terminology
such as “plans”, “expects” or “does not expect”, “is expected”,
“budget”, “scheduled”, “estimates”, “forecasts”, “intends”,
“anticipates” or “does not anticipate”, or “believes”, or variations of
such words and phrases or statements that certain actions, events or
results “may”, “could”, “would”, “might” or “will be taken”, “occur” or
“be achieved”. Forward-looking statements are subject to known and
unknown risks, uncertainties and other factors that may cause the
actual results, level of activity, performance or achievements of
Silver Wheaton to be materially different from those expressed or
implied by such forward-looking statements, including but not limited
to: fluctuations in the price of silver and gold; the absence of
control over mining operations from which Silver Wheaton purchases
silver or gold and risks related to these mining operations including
risks related to fluctuations in the price of the primary commodities
mined at such operations, actual results of mining and exploration
activities, economic and political risks of the jurisdictions in which
the mining operations are located and changes in project parameters as
plans continue to be refined; and differences in the interpretation or
application of tax laws and regulations; as well as those factors
discussed in the section entitled “Description of the Business – Risk
Factors” in Silver Wheaton’s Annual Information Form available on SEDAR
at www.sedar.com and in Silver Wheaton’s Form 40-F on file with the U.S. Securities and
Exchange Commission in Washington, D.C. Forward-looking statements are
based on assumptions management believes to be reasonable, including
but not limited to: the continued operation of the mining operations
from which Silver Wheaton purchases silver or gold, no material adverse
change in the market price of commodities, that the mining operations
will operate and the mining projects will be completed in accordance
with their public statements and achieve their stated production
outcomes, and such other assumptions and factors as set out herein.
Although Silver Wheaton has attempted to identify important factors
that could cause actual results to differ materially from those
contained in forward-looking statements, there may be other factors
that cause results not to be as anticipated, estimated or intended.
There can be no assurance that forward-looking statements will prove to
be accurate. Accordingly, readers should not place undue reliance on
forward-looking statements. Silver Wheaton does not undertake to update
any forward-looking statements that are included or incorporated by
reference herein, except in accordance with applicable securities laws.

CAUTIONARY LANGUAGE REGARDING RESERVES AND RESOURCES

For further information on Mineral Reserves and Mineral Resources and on
Silver Wheaton more generally, readers should refer to Silver Wheaton’s
Annual Information Form for the year ended December 31, 2011, and other
continuous disclosure documents filed by Silver Wheaton since January
1, 2012, available on SEDAR at www.sedar.com. Silver Wheaton’s Mineral Reserves and Mineral Resources are subject to
the qualifications and notes set forth therein. Mineral Resources which
are not Mineral Reserves do not have demonstrated economic viability.

Cautionary Note to United States Investors Concerning Estimates of
Measured, Indicated and Inferred Mineral Resources: The information contained herein uses the terms “Measured”, “Indicated”
and “Inferred” Mineral Resources. United States investors are advised
that while such terms are recognized and required by Canadian
regulations, the United States Securities and Exchange Commission does
not recognize them and expressly prohibits U.S. registered companies
from including such terms in their filings with the SEC. “Inferred
Mineral Resources” have a great amount of uncertainty as to their
existence, and as to their economic and legal feasibility. It cannot be
assumed that all or any part of an Inferred Mineral Resource will ever
be upgraded to a higher category. Under Canadian rules, estimates of
Inferred Mineral Resources may not form the basis of feasibility or
other economic studies. United States investors are cautioned not to
assume that all or any part of Measured or Indicated Mineral Resources
will ever be converted into Mineral Reserves or that any exploration
potential will ever be converted to any category of Mineral Reserves or
Mineral Resources. United States investors are also cautioned not to
assume that all or any part of an Inferred Mineral Resource exists, or
is economically or legally mineable. United States investors are urged
to consider closely the disclosure in Silver Wheaton’s Form 40-F, a
copy of which may be obtained from Silver Wheaton or from http://www.sec.gov/edgar.shtml.