Under the agreement, First Majestic First Mining will pay a total of $22.5 million in cash and shares on three payments for the flow of money that covers the life of the project. Streaming allows Wheaton to typically purchase by-products of precious metals or cobalt from a mine it does not own or operate in exchange for a down payment plus an additional payment on delivery of each ounce or pound. The operating costs wheaton supports for future production are pre-defined in agreements with a small inflation adjustment in most contracts. This amount offsets the typical costs of our partners for the production of silver, gold, palladium or cobalt. If the mining company has agreed to sell a fixed percentage of the product in streaming, the investor may receive a gale if the mining company`s production is higher than expected or if new discoveries are made. However, as a precautionary measure, mining companies may attempt to limit the volume of the product to which the investor is entitled. Electricity is purchased by the investor who makes a prepayment (or a number of payments) to the producer against an agreed fixed price (plus inflation) per unit of production for the life of the mine or a specified and probably long period. Prepayment is often structured as a down payment. Indeed, the streaming agreement allows a mining company to monetize its future production before the start of production. Sean Roosen, President and CEO of Osisko, commented, „We are pleased to announce this transaction and further improve one of our high-end Canadian precious metals plants, while continuing our strong partnership with Taseko.
Our agreement with Taseko increases Osisko`s operating margin on Silver Stream from 80% to 100% and provides Taseko with general support for labour capital, which contributes to its strong pro Forma cash position of approximately $58.5 million. Gibraltar is a sustainable asset with a proven operator, and as such, this investment continues to enable Osisko shareholders to choose the price of money over several cycles. First Mining stated that the money raised in the agreement will be used for the development of its De Springpole project in Northern Ontario. Although something similar, streaming and royalty agreements can be distinguished. Streaming involves the sale of physical products by the mining company, while the investor has the right, under licensing agreements, to participate in the future revenues of the producer`s project.