After entering into an August 2012 US$750 million precious metals transaction with Silver Wheaton to fund the development and construction of its Constance copper mine in Peru, HudBay Minerals announced Monday that it has entered into an amended precious metals stream agreement in which HudBay will receive an additional US$135 million.

In the original precious metals stream transaction with Silver Wheaton, HudBay agreed to receive aggregate upfront deposit payments of $750 against delivery of 100% payable gold and silver from HudBay’s flagship 777 mine until the end of 2016 and satisfaction of a completion test at Constancia, and delivery of 50% of payable gold and silver from the Constancia project.

HudBay is entitled to receive the $135 million deposit amount once HudBay has incurred and paid $1.35 billion in capital expenditures at Constancia and satisfied other customary conditions precedent.

“This stream transaction provides us with additional, non-dilutive capital as we continue development of the Constancia and Lalor projects,” said HudBay CEO David Garofalo. “Silver Wheaton’s participation in this second precious metals stream at Constancia speaks to the significant progress our team has made at the project and we value them as a strategic partner.”

Located in the province of Chumbivilcas in southern Peru, Constancia is forecast to be large, low-cost and long-life open pit mine producing copper, molybdenum, silver and gold. Initial production at Constancia is anticipated late in 2014 with full production anticipated during the second quarter of 2015. It is expected to yield 90,000 tonnes of copper in concentrate annually over the life of the mine. Forecast average annual attributable gold production is expected to be 18,000 ounces annually over a 16-year mine life.

“We are very encouraged by Constancia’s development and the inclusion of Pampacancha into the mine plan,’ said Silver Wheaton CEO Randy Smallwood. “Given the higher gold grades present in the Pampacancha deposit, we see this gold stream as an economic opportunity for both parties.”

“HudBay has proven to be a strong partner in both Canada and in Peru, where we believe they are setting the standard for building strong social license in South America,” Smallwood noted. “This gold stream, our second precious metals stream on Constancia, clearly demonstrates the win-win nature of our agreements and further endorses the competitiveness of Silver Wheaton’s streaming model.”

Located in the Flin Flon-Snow Lake Region of Manitoba, Lalor is expected to become HudBay’s next major underground mine, producing gold, zinc, copper and silver. The operation achieved commercial production this year.

As a result of Monday’s transaction, Silver Wheaton has revised its 2017 guidance to be 42.5 million silver equivalent ounces including 210,000 ounces of gold. This year’s silver equivalent production is still expected to exceed 33.5 million ounces including 145,000 ounces of gold.