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UPDATE 1-Brazil's Vale signs $800 mln streaming deal with Silver Wheaton

Published 2016-08-02, 09:35 a/m
© Reuters.  UPDATE 1-Brazil's Vale signs $800 mln streaming deal with Silver Wheaton
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(Adds details of deal, gold price)

BRASILIA/RIO DE JANEIRO, Aug 2 (Reuters) - Brazil's Vale VALE5.SA said on Tuesday it will receive $800 million in a gold streaming deal with Silver Wheaton Corp SLW.TO , as the world's largest producer of iron ore attempts to raise cash to pay down debt.

Vale said the deal is an add-on to a contract first signed in 2013, with Silver Wheaton now entitled to 75 percent of the gold produced as a by-product from Vale's Salobo copper mine over its lifetime.

A previous add-on, signed last year, had already taken Silver Wheaton's share to 50 percent, from 25 percent.

Vale said the deal was part of a strategy to shore up its balance sheet, and the funds will be used to pay down debt. The company is aiming to sell $10 billion worth of assets by next year.

Under the agreement, Silver Wheaton will pay Vale either $400 per ounce of gold from the mine or the market spot price, whichever is lower. The current spot price XAU= is $1,363 per ounce.

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