TORONTO (miningweekly.com) – Vancouver-based Silver Wheaton has snapped up another silver stream, with an agreement to buy 25% of the payable silver produced at Alexco Resource Corp's Keno Hill project, in Canada's Yukon Territory.

Silver Wheaton will pay $50-million upfront, and the lesser of $3,90/oz or the prevailing market price, on delivery of the silver, the company said in a statement on Friday.

The $50-million will be paid in several tranches, with a total of $15-million to be used by Alexco to fund ongoing underground development, while the remaining $35-million payment, to fund mill construction and mine development costs, will be made on a drawdown basis, upon the satisfaction of certain additional requirements, including the receipt of operating permits.

The historic Keno Hill district is “one of the richest silver belts in the world”, said Silver Wheaton president and CEO Peter Barnes.

Alexco owns 240 km² of property, which includes a number of historical mines.

The company has identified the Bellekeno deposit as a priority, and completed a preliminary economic assessment on the prospect in July this year, which forecast first production from the mine in 2010,"with hopefully several more to follow thereafter", Barnes said in a conference call on Friday.

The mine is expected to produce 3,3-million ounces of silver, 30,1-million pounds of lead and 24,5-million pounds of zinc a year, over an initial five-year life-of-mine.

“The Keno Hill district boasts a 75-year production history with unparalleled silver grades and we are excited to participate in the resumption of silver production in the area,” Barnes commented.

“With more than 30 historic mines in the region, and numerous high quality exploration targets, we expect a long and prosperous partnership with Alexco."

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