KEY POINTS
- Wheaton secures 6.7% of Kurmuk’s gold production.
- $175 million upfront payment will support Ethiopia’s Kurmuk project development.
- The Kurmuk project is set to become Ethiopia’s first commercial gold mine.
Wheaton Precious Metals International Ltd. (WPMI), a subsidiary of Wheaton Precious Metals Corp., has entered into a streaming agreement with Allied Gold Corporation for the development of the Kurmuk Gold Project in Ethiopia. This landmark deal, valued at $175 million, grants Wheaton a 6.7% stake in the mine’s gold production, further solidifying its position as a leader in the precious metals streaming market.
According to mining weekly, the funds will be disbursed in four equal installments during the development of the Kurmuk project. Wheaton’s investment is expected to fast-track the construction and operational rollout of the site, which is located in Ethiopia’s Benishangul-Gumuz region.
This move highlights Wheaton’s strategic efforts to expand its portfolio in Africa, where mining operations are growing in importance due to rising demand for gold in global markets.
Gold streaming deal secures 6.7% share of kurmuk production
As part of the agreement, Wheaton Precious Metals will receive 6.7% of Kurmuk’s payable gold production until 220,000 ounces are delivered. Beyond that point, Wheaton’s share will decrease to 4.8% for the lifetime of the mine, according to yahoo finance.
In addition to the upfront payment, Wheaton will pay ongoing cash delivery payments equal to 15% of the spot price for every ounce of gold received. This arrangement provides a stable cash flow for Wheaton while ensuring Allied Gold has the necessary capital to bring the Kurmuk project into production.
The Kurmuk Gold Project is viewed as a high-potential development due to Ethiopia’s untapped mining reserves. Industry analysts project that once operational, the Kurmuk mine could play a pivotal role in Ethiopia’s mining sector, which has historically been underexplored.
Ethiopia’s Kurmuk project poised to become first commercial gold mine
The Kurmuk Gold Project is poised to become Ethiopia’s first commercial gold mine, a significant milestone for the country’s growing mining sector. Ethiopia is aiming to diversify its economy, which has traditionally relied on agriculture. With the successful development of Kurmuk, Ethiopia hopes to establish itself as a key player in the African mining industry.
Allied Gold Corporation, a key player in African gold production, will oversee the development of the mine. The company operates other major gold mines in Mali and Côte d’Ivoire, making the Kurmuk project a key addition to its expanding portfolio.
The strategic partnership with Wheaton Precious Metals gives Allied Gold access to much-needed capital to expedite construction. This deal also reflects the growing interest of international mining giants in Ethiopia’s mineral sector, where gold deposits are seen as a valuable resource to drive the country’s economic diversification.
CEO of Wheaton Precious Metals, Randy Smallwood, emphasized the company’s excitement about the project, stating that the deal aligns with their mission to support long-life, low-cost mining assets. The company plans to continue exploring similar deals in Africa, Latin America, and other emerging markets with rich mining potential.
As Ethiopia continues to prioritize mining reforms and create a more business-friendly environment for foreign investors, deals like this could become more frequent. The success of the Kurmuk project is expected to create jobs, generate foreign exchange earnings, and solidify Ethiopia’s position in Africa’s growing gold mining landscape.
