/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR
DISSEMINATION IN THE UNITED
STATES/
TSX: WPM
NYSE: WPM
VANCOUVER, Dec. 11, 2017 /CNW/ - Wheaton Precious Metals
Corp. ("Wheaton" or the "Company"), announced today that it
acquired 6,153,846 subscription receipts (the "Subscription
Receipts") of Desert Star Holdings Corp., a wholly owned subsidiary
of Desert Star Resources Ltd. ("Desert Star"), at a price of
C$0.65 per Subscription Receipt, for
total consideration of C$3,999,999.90
(the "Subscription Amount"), pursuant to a private placement
offering of 22,498,807 Subscription Receipts (the "Private
Placement").
The Subscription Receipts will automatically convert upon
satisfaction of certain escrow release conditions (the "Escrow
Release Conditions"). The Escrow Release Conditions include, but
are not limited to: (i) the completion of all conditions precedent
to the acquisition by Desert Star of the Kutcho Project in
northwest British Columbia, Canada
(the "Kutcho Project") from Capstone Mining Corp. (the "Kutcho
Acquisition"), (ii) Desert Star entering into a subordinated
secured convertible term debt loan agreement (the "Convertible
Note") with Wheaton, as lender, in the initial principal amount of
C$20,000,000 (the principal amount
outstanding from time to time, the "Principal Amount"), and (iii)
Desert Star and Wheaton entering into a definitive Early Deposit
Precious Metals Purchase Agreement ("PMPA") under which Wheaton
will, among other things, pay Desert Star over time cash
consideration totaling US$65 million
for up to 100% of the payable silver production and up to 100% of
the payable gold production from the Kutcho Project.
Prior to the completion of the Private Placement, Wheaton held
no securities of Desert Star. Immediately following the Private
Placement, Wheaton acquired 6,153,846 Subscription Receipts which,
upon satisfaction of the Escrow Release Conditions and following a
series of transactions, will be automatically converted into units
of Desert Star ("Units") comprising: (i) 6,153,846 common shares of
Desert Star ("Common Shares"), representing approximately 14.8% of
Desert Star's Common Shares currently issued and outstanding on
such undiluted basis (assuming conversion of all Subscription
Receipts), and (ii) Common Share purchase warrants entitling
Wheaton to purchase a further 3,076,923 Common Shares (the
"Warrants") at a price per Common Share of C$1.00 for a period of 36 months following the
date of the closing of the Private Placement. In the event that the
Warrants are exercised in full by Wheaton, it will have acquired
9,230,769 Common Shares in connection with the Private Placement,
representing approximately 20.7% of Desert Star's Common Shares
currently issued and outstanding on such partially diluted basis
(assuming conversion of all Subscription Receipts).
The Subscription Receipts purchased by Wheaton were purchased
and are presently being held only for investment purposes. Wheaton
may from time to time in the future increase or decrease its
ownership, control or direction over the Common Shares or other
securities of Desert Star, through market transactions, private
agreements or otherwise. In the event that the Escrow Release
Conditions are not satisfied within the prescribed timeframe, the
Subscription Amount will be returned to Wheaton, the Subscription
Receipts will terminate, and no Units will be issued.
Upon the satisfaction of the Escrow Release Conditions, Wheaton
will hold the Convertible Note. Under the terms of the Convertible
Note, the Principal Amount is convertible into Common Shares at the
option of Wheaton at any time and from time to time prior to the
maturity of the Convertible Note and otherwise in accordance with
its terms, at a conversion price equal to C$0.8125 of Principal Amount per Common Share
(and at the then-prevailing market price per Common Share for any
portion of the Principal Amount which represents interest in
accordance with the terms of the Convertible Note). Wheaton will
have the right, but not the obligation, to acquire approximately
24,615,384 Common Shares in connection with the exercise of the
above-described conversion right. After giving effect to the
automatic conversion of the Subscription Receipts and the exercise
of all Warrants received by Wheaton in connection therewith, and
assuming the conversion of the entire initial Principal Amount of
the Convertible Note to Common Shares (with no portion of the
Principal Amount consisting of converted interest), Wheaton would
hold, in aggregate, approximately 49% of Desert Star's Common
Shares currently issued and outstanding on such partially diluted
basis (approximately 40% on a fully diluted basis).
The details of the Kutcho Acquisition, PMPA, Convertible Note
and Private Placement are disclosed in press releases of Desert
Star dated June 15, 2017,
August 10, 2017, October 31, 2017, November
2, 2017, and December 8, 2017,
copies of which have been electronically filed by Desert Star with
applicable Canadian securities regulators and are available for
viewing on the SEDAR profile of Desert Star at www.sedar.com.
Wheaton is continued under the laws of Ontario and Wheaton's head office is located
at 3500 – 1021 West Hastings Street, Vancouver, British Columbia, V6E 0C3 and its
registered office is located at Suite 2100, 40 King Street West,
Toronto, Ontario, M5H 3C2. Desert
Star's head office is located at 717, 1030 West Georgia Street,
Vancouver, British Columbia, V6E
2Y3.
A copy of the Early Warning Report to which this press release
relates can be obtained from Wheaton, at 1-844-288-9878 or
info@wheatonpm.com or on the SEDAR profile of Desert Star at
www.sedar.com.
CAUTIONARY NOTE REGARDING FORWARD LOOKING-STATEMENTS
The information contained herein contains "forward-looking
statements" within the meaning of the United States Private
Securities Litigation Reform Act of 1995 and "forward-looking
information" within the meaning of applicable Canadian securities
legislation. Forward-looking statements, which are all statements
other than statements of historical fact, include, but are not
limited to the satisfaction of the Escrow Release Conditions, the
automatic conversion of the Subscription Receipts, the concurrent
closing of the transactions referenced herein and payments to be
made by Wheaton to Desert Star under the PMPA.
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", "projects", "intends", "anticipates" or
"does not anticipate", "believes", "potential", or variations of
such words and phrases or statements 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 the Company to be materially different from those
expressed or implied by such forward-looking statements.
Forward-looking statements are based on assumptions management
currently believes to be reasonable, including but not limited to,
the satisfaction of the Escrow Release Conditions, the automatic
conversion of the Subscription Receipts, the concurrent closing of
the transactions referenced herein and the payments by Wheaton to
Desert Star in accordance with the PMPA.
Although the Company has attempted to identify important factors
that could cause actual results, level of activity, performance or
achievements to differ materially from those contained in
forward-looking statements, there may be other factors that cause
results, level of activity, performance or achievements not to be
as anticipated, estimated or intended. There can be no assurance
that forward-looking statements will prove to be accurate and even
if events or results described in the forward-looking statements
are realized or substantially realized, there can be no assurance
that they will have the expected consequences to, or effects on,
the Company. Accordingly, readers should not place undue reliance
on forward-looking statements and are cautioned that actual
outcomes may vary. The forward-looking statements included herein
are for the purpose of providing investors with information to
assist them in understanding the Company's expected financial and
operational performance and may not be appropriate for other
purposes. Any forward looking statement speaks only as of the date
on which it is made. The Company does not undertake to update any
forward-looking statements that are included or incorporated by
reference herein, except in accordance with applicable securities
laws.
SOURCE Wheaton Precious Metals Corp.