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Barrick Gold Corp. (NYSE:ABX) has announced that it has entered into an agreement with Silver Wheaton Corp. (TSE:SLW) to sell 25% of the silver production from the Pascua-Lama project and 100% of silver production from the Lagunas Norte, Pierina and Veladero mines.



Barrick will receive a cash deposit of $625 million payable over three years as well as ongoing payments for each ounce of silver delivered under the agreement.

SLW shall make an immediate cash deposit of US$212.5 million and 3 further deposits of US$137.5 million on the1st, 2nd & 3rd anniversaries of the concluding transaction, which is anticipated to occur on 22nd September,
2009.

SLW shall also make ongoing production payments in cash of the lesser of $3.90 per ounce and the prevailing market price, for each ounce of silver delivered under the agreement. The Pascua-Lama project, on the border of Chile and Argentina, is expected to become one of the gold industries largest and lowest cost mines.

Pascua-Lama is anticipated to have a mine life of over 25 years based on proven and probable reserves of 17.8 million ounces of gold and 718 million ounces of silver contained within gold reserves. Pre-production capital costs for the project are projected to be US$2.8-US$3.0 billion.

Annual production is anticipated to be 750,000 to 800,000 ounces of gold and 35 million ounces of silver in the 1st full five years and 600,000 to 700,000 ounces of gold and 20-25 million ounces of silver on a life-of-mine basis.

ABX is currently trading at 40.04 at New York Stock Exchange. SLW closed at 12.65 at Toronto Stock Exchange on Friday while it touched a 52-week high of 12.65 and low of 3.07.

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