Under the agreement, Wheaton will pay Capstone upfront $150 million in cash for 50% of silver production from Cozamin until 10 million ounces have been delivered, thereafter dropping to 33% of silver production for the life of the mine. Wheaton will make ongoing payments for silver ounces delivered equal to 10% of the spot silver price.

"Wheaton has a long history with Capstone and Cozamin and welcomes the opportunity to bring back this first quartile mine into our portfolio of low-cost, long-life assets," said Wheaton Precious Metals president and CEO Randy Smallwood.

"Over the past few years, Capstone has conducted an extensive and successful exploration and drill program, which has significantly increased Cozamin's mine life."

The underground Cozamin copper-silver-lead-zinc mine was commissioned in 2006 and has undergone two successful expansions. It has a proven and probable reserve of 10.2 million tonnes grading 1.79% copper, containing 1.82 million pounds, and 13.53Moz of silver at 36 grams per tonne.

Capstone is completing a pre-feasibility study on an underground paste backfill system for Cozamin which could potentially increase the extraction ratio as mining pillars are currently excluded in the existing mine plan.

Shares in Capstone Mining are trading at C$2.08, valuing the company at $798 million.