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SILVER WHEATON
ACQUIRES 75% OF LIFE OF MINE SILVER PRODUCTION FROM FARALLON RESOURCES'
CAMPO MORADO PROJECT IN MEXICO
Vancouver, British Columbia, May 12, 2008 - Silver Wheaton Corp.
("Silver Wheaton") (TSX, NYSE: SLW) is pleased to announce that
it has agreed to purchase 75% of the life of mine silver produced by
Farallon Resources Ltd. ("Farallon") (TSX: FAN), at its Campo
Morado property in Guerrero State, Mexico. The first deposit on the
Campo Morado property to be developed will be the high-grade G-9
polymetallic deposit, which Farallon is targeting for production during
the third quarter of 2008.
Silver Wheaton will pay Farallon US$80 million in order to acquire 75% of
all silver produced from the Campo Morado property, including the G-9
mine, for the lesser of US$3.90 (subject to a one percent annual
adjustment starting in year four after production commences) or the
prevailing market price per ounce of silver delivered. The upfront
payment will be made on a draw down basis to fund ongoing capital expenditures
at the Campo Morado property. Payment for the transaction will be
drawn from existing credit facilities. Silver Wheaton will also
receive a right of first refusal over any future silver stream involving
Farallon.
The Campo Morado property is located 160 kilometers southwest of Mexico
City and hosts one of the largest volcanogenic massive sulfide systems in
Mexico. Since 1995, Farallon has discovered and/or delineated
several mineral deposits on the property including the high grade G-9
massive sulfide deposit. The Reforma, El Rey, Naranjo and El Largo
deposits are among the many other massive sulfide occurrences also
discovered within the 116 km2 project area.
Construction at G-9 is well underway and Farallon is targeting production
to begin in the third quarter of 2008. It will be an underground
mine employing a drift and fill mining method to feed a flotation mill
with a throughput capacity of 1,500 tonnes per day. According to a news
release dated December 28, 2007, in addition to producing at least 1
million ounces of silver per year, the G-9 Project is expected to produce
120 million pounds of zinc, 15 million pounds of copper, 9,000 ounces of
gold and 6 million pounds of lead per year. Discovered only in
2005, Farallon is still actively drilling the G-9 deposit and expanding
the resource base, as illustrated with recent drill results (see Farallon
news releases dated May 1 and 9, 2008).
"We are very pleased to be partnered with Farallon in their
development of the Campo Morado district", said Peter Barnes,
President and Chief Executive Officer of Silver Wheaton. "The high
grade and still growing G-9 deposit should form the cornerstone for the
development of a world class massive sulfide district. This project
has all the right ingredients - good management, a quality asset, low
political risk, near-term production and rich exploration
potential."
A conference call will be held on Tuesday, May 13, 2008 at 1:00 pm
(Eastern Time) to discuss this transaction. To participate in the live call
use one of the following methods:
Dial toll free from Canada or the US:
1-888-280-8771
Dial from outside Canada or the US:
1-416-641-6124
Dial toll free from parts of Europe:
800-6578-9898
Live audio webcast:
www.silverwheaton.com
Participants should dial in five to ten minutes before the call.
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:
1-800-408-3053
Dial from outside Canada or the US:
1-416-695-5800
Pass
code:
3261328#
Archived audio webcast:
www.silverwheaton.com
Mr. Randy V.J. Smallwood, P.Eng., Silver Wheaton's Executive Vice
President of Corporate Development, who is a "qualified person"
as such term is defined under National Instrument 43-101, has reviewed
and approved the contents of this news release. Production rates
and resources are as reported by Farallon in a technical report dated
March 17, 2008.
Silver Wheaton is the largest public mining company with 100% of its
operating revenue from silver production. Silver Wheaton expects,
based upon its current contracts, to have silver sales of between 13
million and 15 million ounces for the year ending December 31, 2008,
increasing to 19 million ounces in 2009 and 25 million ounces in 2010.
Campo Morado silver resources are as follows:
Notes:
1.
Mineral Resources have been estimated in accordance with the
standards of the Canadian Institute of Mining, Metallurgy and Petroleum
and National Instrument 43-101.
2.
Mineral Resources are reported using a 5.0% zinc only cut off
grade. Appropriate metallurgical recovery rates were applied.
3.
Silver will be produced as a by-product at the operation;
therefore, the economic cut-off applied to the reporting of silver resources
will be influenced by changes in the commodity prices of other metals at
the mine.
4.
Mineral Resources, which are not Mineral Reserves, do not have
demonstrated economic viability.
5.
Mineral Resources for the G-9 deposit are as reported by Farallon
in its Technical Report on the G-9 Deposit, Campo Morado Project, dated
March 17, 2008. The report can be found at www.sedar.com.
6.
Mineral Resources for the El Largo, El Rey, Naranjo and Reforma
deposits are as reported by Farallon in its Technical Report dated
December 13, 2006. The report can be found at www.sedar.com.
7.
This table represents 100% of the current silver resources on the
Campo Morado Project, of which Silver Wheaton's share represents 75% of
the total.
Cautionary
Note Regarding Forward Looking Statements
This news
release contains "forward-looking statements" within the
meaning of the United States Private Securities Litigation Reform Act of
1995 and applicable Canadian securities legislation.
Forward-looking statements include, but are not limited to,
statements with respect to the expected future silver sales by Silver
Wheaton and future production from the Campo Morado project.
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 state
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: risks related
to the integration of acquisitions, the absence of control over mining
operations from which Silver Wheaton purchases silver, such as the Campo
Morado Project, and risks related to these mining operations, including
risks related to international operations, actual results of current
exploration activities, actual results of current reclamation activities,
conclusions of economic evaluations, changes in project parameters as
plans continue to be refined, as well as those factors discussed in the
section entitled "Risk Factors" in Silver Wheaton's Annual
Information Form dated March 28, 2008 . 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 such
statements will prove to be accurate, as actual results and future events
could differ materially from those anticipated in such statements.
Accordingly, readers should not place undue reliance on
forward-looking statements. Silver Wheaton does not undertake to update
any forward-looking statements that are incorporated by reference herein,
except in accordance with applicable securities laws.
CAUTIONARY NOTE TO U.S. INVESTORS
CONCERNING ESTIMATES OF MEASURED AND INDICATED RESOURCES
This news release uses the terms "Measured" and
"Indicated" Resources. U.S. investors are advised that
while such terms are recognized and required by Canadian regulations, the
Securities and Exchange Commission does not recognize them. U.S.
investors are cautioned not to assume that all or any part of Measured or
Indicated Resources will ever be converted into reserves.
For further information, please contact:
David Awram
Director, Investor Relations
Silver Wheaton Corp.
Tel: 1-800-380-8687
Email: info@silverwheaton.com
Website: www.silverwheaton.com
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