Australia's KGL Resources inks $300 million streaming deal with Wheaton Precious Metals

April 2 (Reuters) - Australian miner KGL Resources KGL.AX said on Thursday it had entered into a $300 million precious metals streaming deal with a unit of Canada's Wheaton Precious Metals WPM.TO for a part of the gold and silver produced at its Jervois copper project.

Shares of KGL rose as much as 61.9% to A$0.340, logging their best day since July, 2014.

The stock also hit its highest level since May 22, 2022.

Under the deal, Wheaton Precious Metals International will provide up to $275 million in upfront funding, along with an optional $25 million cost‑overrun facility, KGL said in a statement.

The upfront funding includes two $16 million installments available before construction begins, subject to conditions including regulatory approvals, with the remaining $243 million payable in four equal tranches tied to construction milestones.

In return, Wheaton will purchase a portion of silver and gold produced from the project, making ongoing payments equal to 20% of prevailing spot prices.

The streaming arrangement starts with 75% of payable silver and gold production, before stepping down to lower percentages once certain delivery thresholds are met.

The agreement includes protections against construction delays, requiring additional metal deliveries if timelines slip, as well as security over project and corporate assets, KGL said.

With key development and mining permits in place, KGL said the financing marked a major step towards developing the Jervois project and positioning the company as an Australian copper producer.

The transaction represents Wheaton’s first precious metals streaming deal in Australia, following its entry into a streaming agreement covering BHP’s share of Peru’s Antamina mine announced in February.

Wheaton is one of the world's largest precious metals streaming firms, focusing on gold and silver.