Vale S.A. :Vale to sell

Wed Feb 6, 2013 2:31pm EST

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Vale to sell a portion of the gold by-product stream from some of its

copper and nickel mines

Rio de Janeiro, February 5, 2013 - Vale S.A. (Vale) informs that it has entered into an agreement
with

Silver Wheaton Corp. (SLW), a Canadian company traded on the TSX and NYSE, to sell 25% of the

payable gold by-product stream from the Salobo copper mine for the life of the mine and 70% of the

payable gold by-product stream from its Sudbury nickel mines - Coleman, Copper Cliff, Creighton,

Garson, Stobie, Totten and Victor - for 20 years.

The transaction

Vale will receive an initial cash payment of US$ 1.9 billion plus 10 million warrants of SLW with
a strike

price of US$ 65 and a 10-year term, valued at US$ 100 million. US$ 1.33 billion will be paid for
25% of

the gold by-product stream from Salobo while US$ 570 million plus 10 million SLW warrants will be
paid

for 70% of the Sudbury gold by-product stream.

In addition, Vale will also receive future cash payments for each ounce (oz) of gold delivered to
SLW

under the agreement, equal to the lesser of US$ 400 per oz (plus a 1% annual inflation adjustment
from

2016 in the case of Salobo) and the prevailing market price.

Vale may also receive an additional cash payment contingent on its decision to expand the capacity
to

process Salobo copper ores to more than 28 Mtpy before 2031. Salobo I, which is ramping up, and

Salobo II, coming on stream in 1H14, will have a total capacity to process 24 Mtpy of run-of-mine
(ROM).

The additional amount would range from US$ 67 million to US$ 400 million depending on timing and
size

of the expansion.

There is no firm commitment from Vale to quantities of gold delivered - SLW is entitled not to
specific

volumes but to a percentage of the gold by-product stream from Salobo and Sudbury and thus bears
the

production risk, both on the upside and on the downside. As for the risk of price volatility, Vale
is subject

to gold price risk for the SLWs deliveries only if the price of gold drops below the US$ 400/oz
trailing

payment.

The transaction is still subject to the settlement of definitive agreements and the approval of
our Board of

Directors. Scotiabank acted as the sole financial advisor to Vale.

The strategic background and value creation

The deal unlocks substantial value from our high quality base metals operations as it values the
Salobo

payable gold stream at US$ 5.32 billion plus payments of US$ 400 per oz upon delivery, given that
no

additional costs will be incurred by Vale to extract gold from copper concentrates produced by
Salobo.

The estimated capex for Salobo - Salobo I and Salobo II - with a nominal capacity to deliver
200,000 tpy

2

of copper in concentrates plus gold by-product is US$ 4.2 billion, of which US$ 3.05 billion was
spent until

Dec 31, 2012. Salobo I is currently ramping up as planned while Salobo II will come on stream in
1H14.

Our base metals business is undergoing changes in order to achieve significant performance

improvement and to deliver shareholder value on a sustainable basis. Alongside the efforts to
unlock

value from its operations such as the gold streaming transaction and the potential divestiture of
non-core

assets, Vale is pursuing lower costs and higher productivity arising from the simplification of
its flowsheet,

the idling of loss making operations, the feeding of smelters only with high value concentrates
resulting

from the optimization of mining plans and the use of technological innovation, such as the
implementation

of the CORe (Challenging Ore Recovery) project at the Clarabelle mill and the fully integrated

hydrometallurgical flowsheet of Long Harbour, coming on stream in 2H13.

The execution of our strategic plan leads us to remain strongly confident on the potential of our
worldclass

base metals assets to create sizeable shareholder value through the cycles.

For further information, please contact:

+55-21-3814-4540

Roberto Castello Branco: roberto.castello.branco@vale.com

Viktor Moszkowicz: viktor.moszkowicz@vale.com

Carla Albano Miller: carla.albano@vale.com

Andrea Gutman: andrea.gutman@vale.com

Christian Perlingiere: christian.perlingiere@vale.com

Marcelo Correa : marcelo.correa@vale.com

Marcio Loures Penna: marcio.penna@vale.com

Samantha Pons: samantha.pons@vale.com

This press release may include statements that present Vale's expectations about future events or
results. All statements, when based upon

expectations about the future and not on historical facts, involve various risks and
uncertainties. Vale cannot guarantee that such statements will prove

correct. These risks and uncertainties include factors related to the following: (a) the countries
where we operate, especially Brazil and Canada; (b) the

global economy; (c) the capital markets; (d) the mining and metals prices and their dependence on
global industrial production, which is cyclical by

nature; and (e) global competition in the markets in which Vale operates. To obtain further
information on factors that may lead to results different from

those forecast by Vale, please consult the reports Vale files with the U.S. Securities and
Exchange Commission (SEC), the Brazilian Comissão de

Valores Mobiliários (CVM), the French Autorité des Marchés Financiers (AMF), and The Stock
Exchange of Hong Kong Limited, and in particular the

factors discussed under "Forward-Looking Statements" and "Risk Factors" in Vale's annual report on
Form 20-F.

Vale to sell http://hugin.info/144918/R/1676197/546234.pdf 


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Source: Vale S.A. via Thomson Reuters ONE


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