REG - Wheaton Precious Met - Wheaton Second Quarter Results
11/08/2023 07:00
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RNS Number : 0066J Wheaton Precious Metals Corp. 11 August 2023
August 11, 2023
Vancouver, British Columbia
Designated News Release
SECOND QUARTER FINANCIAL results
Wheaton Precious Metals Announces Solid Second Quarter Results for 2023
"Wheaton delivered solid operational results during the quarter, generating
over $200 million of operating cash flow, primarily driven by significant
sequential improvement at the recently commissioned expansion at our largest
asset, Salobo. Furthermore, we continued to see momentum on the corporate
development front with the addition of a new gold stream on Lumina Gold's
Cangrejos project and the expansion of our existing gold stream on Artemis
Gold's Blackwater project," said Randy Smallwood, President and Chief
Executive Officer of Wheaton Precious Metals. "Despite operations at
Peñasquito being suspended in early June, we achieved quarter-over-quarter
gold equivalent production growth. As such, we are reiterating our 2023
production guidance, which we now expect to have a slightly higher weighting
toward gold, highlighting the resilience of our high-quality, diversified
portfolio. Lastly, we are proud to have published our 2022 Sustainability
Report and inaugural 2022 Climate Change Report, demonstrating our continued
commitment to sustainability and focus on delivering value to all of our
stakeholders."
Solid Financial Results and Strong Balance Sheet
· Second quarter of 2023: $265 million in revenue, $202 million in
operating cash flow, $141 million in net earnings and $143 million in adjusted
net earnings 1 (#_edn1)
· A cash balance of $829 million and no debt as at June 30, 2023, after
making total upfront cash payments of $89 million relative to mineral stream
interests in the quarter
· Undrawn $2 billion revolving credit facility extended by an additional
year with the facility now maturing on June 22, 2028
· Declared a quarterly dividend(1) of $0.15 per common share
High Quality Asset Base
· Streaming agreements on 19 operating mines and 13 development projects
· 93% of attributable production from assets in the lowest half of their
respective cost curves 2 (#_edn2) (, 3 (#_edn3) )
· 30 years of mine life based on Proven and Probable Mineral Reserves and
potential additional mine life from mineral resource conversion and
exploration(2)(, 4 (#_edn4) )
· Accretive portfolio growth:
o Acquired a 6.6% gold stream on Lumina Gold Corp.'s ("Lumina") Cangrejos
Project ("Cangrejos")
o Expanded the gold stream on Artemis Gold Inc.'s Blackwater Project
("Blackwater")
· Further de-risked growth profile: the Goose Project was acquired by
B2Gold Corp ("B2Gold"). and Aris Mining Corporation ("Aris Mining") received
approval of the Environmental Management Plan which now permits the
development of the Marmato Lower Mine
· Second quarter production amounted to 147,700 gold equivalent ounces(3)
("GEOs"), underscored by significant progress at the recently commissioned
expansion at Salobo
· Average annual production guidance for 2023 of 600,000 to 660,000
GEOs(2,3) maintained, with sector-leading growth resulting in five and
ten-year average annual production guidance of approximately 810,000 and
850,000 GEOs(2,3), respectively
Leadership in Sustainability
· Top Rankings: #1 out of 117 precious metals companies and ranked in the
Global Top 50 companies by Sustainalytics, AA rated by MSCI, and Prime rated
by ISS
· Published inaugural Climate Change Report, detailing progress towards
Net-Zero Carbon Emissions by 2050 and covering all material emissions
including Scope 3
· Published fourth annual Sustainability Report highlighting our
commitment to progress and providing a comprehensive review of Wheaton's
performance in environmental, social and governance topics
Operational Overview
(all figures in US dollars unless otherwise noted) Q2 2023 Q2 2022 Change YTD 2023 YTD 2022 Change
Units produced
Gold ounces 85,083 66,442 28.1 % 158,102 144,496 9.4 %
Silver ounces 4,417 6,500 (32.0)% 9,513 12,675 (24.9)%
Palladium ounces 3,880 3,899 (0.5)% 7,585 8,387 (9.6)%
Cobalt pounds 152 136 11.3 % 276 371 (25.6)%
Gold equivalent ounces(3) 147,699 155,932 (5.3)% 291,700 320,843 (9.1)%
Units sold
Gold ounces 75,294 84,337 (10.7)% 137,899 162,238 (15.0)%
Silver ounces 4,437 5,848 (24.1)% 8,186 11,401 (28.2)%
Palladium ounces 3,392 3,378 0.4 % 6,338 7,453 (15.0)%
Cobalt pounds 265 225 17.8 % 588 736 (20.1)%
Gold equivalent ounces(3) 138,835 165,766 (16.2)% 256,218 324,847 (21.1)%
Change in PBND and Inventory
Gold equivalent ounces(3) (4,872) (25,675) (20,803) 6,392 (36,737) (43,129)
Revenue $ 264,972 $ 302,922 (12.5)% $ 479,437 $ 610,166 (21.4)%
Net earnings $ 141,448 $ 149,074 (5.1)% $ 252,839 $ 306,542 (17.5)%
Per share $ 0.312 $ 0.330 (5.5)% $ 0.559 $ 0.679 (17.7)%
Adjusted net earnings (1) $ 142,584 $ 149,285 (4.5)% $ 247,015 $ 307,292 (19.6)%
Per share (1) $ 0.315 $ 0.331 (4.8)% $ 0.546 $ 0.681 (19.8)%
Operating cash flows $ 202,376 $ 206,359 (1.9)% $ 337,482 $ 416,899 (19.0)%
Per share (1) $ 0.447 $ 0.457 (2.2)% $ 0.746 $ 0.924 (19.3)%
All amounts in thousands except gold, palladium & gold equivalent ounces,
and per share amounts.
Financial Review
Revenues
Revenue in the second quarter of 2023 was $265 million (56% gold, 41% silver,
2% palladium and 1% cobalt), with the $38 million decrease relative to the
prior period quarter being primarily due to relative changes in the GEOs(3)
produced but not yet delivered partially offset by a 4% increase in realized
commodity prices.
Revenue was $479 million in the six months ended June 30, 2023, representing a
$131 million decrease from the comparable period of the previous year due
primarily to a 21% decrease in the number of GEOs³ sold, resulting from lower
production and relative changes in the GEOs(3) produced but not yet delivered.
Cash Costs and Margin
Average cash costs¹ in the second quarter of 2023 were $422 per GEO³ as
compared to $452 in the second quarter of 2022. This resulted in a cash
operating margin¹ of $1,487 per GEO³ sold, an increase of 8% as compared
with the second quarter of 2022, a result of the higher realized price per
ounce.
Average cash costs¹ for the six months ended June 30, 2023 were $432 per
GEO³ as compared to $446 in the comparable period of the previous year. This
resulted in a cash operating margin¹ of $1,439 per GEO³ sold, virtually
unchanged from the comparable period of the previous year.
Cash Flow from Operations
Operating cash flow in the second quarter of 2023 amounted to $202 million,
with the $4 million decrease due primarily to the lower sales volumes,
partially offset by higher amounts of interest received in the second quarter
of 2023 coupled with the timing of the payout of the Company's performance
share units ("PSUs"), with the PSUs being paid out in the second quarter of
2022 while in 2023, they were paid out in the first quarter.
Operating cash flows for the six months ended June 30, 2023 amounted to $337
million, with the $79 million decrease from the comparable period of the
previous year being due primarily to the lower sales volumes, partially offset
by higher amounts of interest received during the current year.
Balance Sheet (at June 30, 2023)
· Approximately $829 million of cash on hand
· The Company extended its existing undrawn $2 billion revolving term
loan (the "Revolving Facility") with its maturity date now June 22, 2028
· During the second quarter of 2023, the Company made total upfront cash
payments of $89 million relative to the mineral stream interests consisting of
- a $31 million payment relative to the Goose Project precious metals
purchase agreement ("PMPA")
- a $35 million payment relative to the Blackwater Silver PMPA
- a $10 million payment relative to the expansion of the Blackwater Gold
PMPA
- a $12 million payment relative to the Cangrejos PMPA
· With the existing cash on hand coupled with the fully undrawn $2
billion revolving credit facility, the Company is well positioned to fund all
outstanding commitments and known contingencies as well as providing
flexibility to acquire additional accretive mineral stream interests.
Second Quarter Operating Asset Highlights
Salobo: In the second quarter of 2023, Salobo produced 54,800 ounces of
attributable gold, an increase of approximately 61% relative to the second
quarter of 2022, driven by higher throughput and grades. According to Vale
S.A. ("Vale"), production in the second quarter was driven by a
better-than-expected ramp up of Salobo III partially offset by planned
maintenance activities and additional work on the crushers at Salobo I and II.
Vale reports that planned maintenance activities will continue in the second
half of 2023, and that the ramp up of Salobo III is expected to be fully
completed in 2024.
Antamina: In the second quarter of 2023, Antamina produced 1.0 million ounces
of attributable silver, a decrease of approximately 28% relative to the second
quarter of 2022, primarily due to lower grades as per the mine plan.
Peñasquito: In the second quarter of 2023, Peñasquito produced 1.7 million
ounces of attributable silver, a decrease of approximately 17% relative to the
second quarter of 2022 due to lower throughput.
On June 8, 2023, Newmont Corporation ("Newmont") reported that it had
suspended operations at the Peñasquito mine due to a labour dispute. To date,
Newmont has indicated that it is in ongoing discussions with the leadership
for the National Union of Mine and Metal Workers of the Mexican Republic and
remains focused on finding a sustainable resolution to the dispute.
Constancia: In the second quarter of 2023, Constancia produced 0.4 million
ounces of attributable silver and 7,400 ounces of attributable gold, a
decrease of approximately 28% and 7%, respectively, relative to the second
quarter of 2022, with the decrease in both metals being primarily due to lower
throughput and grades. As per Hudbay, full mining activities resumed in the
Pampacancha pit in February and the period of higher planned stripping
activities in the Pampacancha pit was completed in June, with
higher-than-expected production forecast for the second half of the year.
Sudbury: In the second quarter of 2023, Vale's Sudbury mines produced 7,700
ounces of attributable gold, an increase of approximately 46% relative to the
second quarter of 2022. As per Vale, the increase in production from Sudbury
was driven primarily due to lower production in the second quarter of 2022 due
to a 28-day maintenance shutdown at the Sudbury smelter and refiner.
Stillwater: In the second quarter of 2023, the Stillwater mines produced 2,000
ounces of attributable gold and 3,900 ounces of attributable palladium, a
decrease of approximately 7% for gold relative to the second quarter of 2022
while palladium production was virtually unchanged. As reported by
Sibanye-Stillwater Limited, production in the quarter was impacted due to an
incident in March at Stillwater West involving the shaft headgear, winder
house and winder rope. As a result, production from the Stillwater West mine
below the 50 level was suspended for approximately five weeks but recommenced
on April 16, 2023.
San Dimas: In the second quarter of 2023, San Dimas produced 11,200 ounces of
attributable gold, an increase of approximately 11% relative to the second
quarter of 2022. First Majestic Silver Corp. reported that exploration drill
holes at the San Dimas property intersected significant gold and silver
mineralization in three separate veins: the Sinaloa North-Elia vein, the Santa
Teresa vein and the Perez vein.
Other Gold: In the second quarter of 2023, total Other Gold attributable
production was 1,900 ounces, a decrease of approximately 71% relative to the
second quarter of 2022, primarily due to the closure of the 777 mine in June
2022 and the suspension of operations at the Minto mine in May 2023.
Other Silver: In the second quarter of 2023, total Other Silver attributable
production was 1.3 million ounces, a decrease of approximately 48% relative to
the second quarter of 2022, primarily due to the closure of the 777 mine and
the termination of the Keno Hill and Yauliyacu PMPAs.
Voisey's Bay: In the second quarter of 2023, the Voisey's Bay mine produced
152,000 pounds of attributable cobalt, an increase of approximately 11%
relative to the second quarter of 2022, primarily due to mining lower grade
material during the ongoing transitional period between the depletion of the
Ovoid open-pit mine and ramp-up to full production of the Voisey's Bay
underground project. Production in the second quarter was also impacted as the
annual maintenance schedule at the Long Harbour refinery (from May to July)
was planned longer than the previous year. Vale reports that physical
completion of the Voisey's Bay underground mine extension was 85% at the end
of the second quarter, with Reid Brook's bulk material handling system
expected to be delivered in the third quarter of 2023, and lateral development
advancing on the Eastern Deeps. Vale achieved the first ore production from
the Reid Brook deposit, the first of two underground mines to be developed in
the project, in the second quarter of 2021. Eastern Deeps, the second deposit,
has started to extract development ore from the deposit and is scheduled to
start the main production ramp-up in the second half of 2023.
Detailed mine-by-mine production and sales figures can be found in the
Appendix to this press release and in Wheaton's consolidated MD&A in the
'Results of Operations and Operational Review' section.
Second Quarter Development Asset Highlights
Blackwater Project: On June 14, 2023, the Company amended the Blackwater Gold
PMPA. Under the terms of the amended agreement, the Company is entitled to
purchase an amount of gold equal to 8% of the payable gold production until
464,000 ounces have been delivered (previously 279,908 ounces), with this
threshold to increase should there be a delay in the anticipated timing of
deliveries. Once the threshold has been achieved, the Company's attributable
gold production will drop to 4% of payable gold production for the life of the
mine. In exchange for the amendment, the Company is committed to pay
additional upfront cash consideration of $40 million, payable in four
installments, with the first payment of $10 million having been paid on June
15, 2023. In conjunction with this amendment, Artemis announced that they were
committing additional investment as part of its Phase 1 development in order
to facilitate the potential fast-tracking of the Phase 2 expansion.
In addition, on July 4, 2023, Artemis announced receipt of the Fisheries Act
Authorization for development of Blackwater, which will facilitate the
commencement of construction of water diversion structures and dams in the
Davidson Creek valley which runs through the basin of the Blackwater tailings
storage facility.
Marmato Mine: On July 12, 2023, Aris Mining announced that they have received
approval from the Corporación Autónoma Regional del Caldas, a regional
environmental authority in Colombia, of the Environmental Management Plan
which now permits the development of the Marmato Lower Mine.
Copper World Complex: On April 5, 2023, Hudbay announced the receipt of
confirmation from the Army Corps of Engineers ("ACOE") that Hudbay's previous
surrender of the Section 404 Clean Water Act permit for the former Rosemont
project was formally accepted and revoked as requested. The ACOE also
reaffirmed the validity of the March 2021 approved jurisdictional
determinations whereby the ACOE determined there are no waters of the U.S. on
the property, and therefore, a 404 Permit is not required. Hudbay continues to
expect to receive the two remaining state permits required (an Aquifer
Protection Permit and an Air Quality Permit) in the second half of 2023.
Clearing and grading work to prepare for the Copper World site, including the
construction of roads and other facilities, continues to be underway. As per
Hudbay, pre-feasibility activities for the private land Phase I of the Copper
World project are well-advanced and a pre-feasibility study is expected to be
released in the third quarter of 2023.
Goose Project: On April 19, 2023, B2Gold acquired Sabina Gold & Silver
Corp ("Sabina"), the owners of the Goose Project. Subsequent to closing,
B2Gold exercised the option to acquire 33% of the stream under the Goose PMPA
in exchange for a cash payment in the amount of $46 million, resulting in a
gain on partial disposal of the Goose PMPA in the amount of $5 million. B2Gold
continues to advance construction of the Goose Project, moving toward
commencement of production in 2025 and initiating an exploration program to
further define untapped potential and unlock further opportunities for growth.
Curipamba Project: On August 2, 2023, Adventus Mining Corp. provided an update
that the Constitutional Court of Ecuador (the "Constitutional Court") has
admitted for processing an unconstitutionality claim filed by the indigenous
group CONAIE and other complainants against Presidential Decree 754 (the
"Decree") that regulates environmental consultation for all public and private
industries and sectors in Ecuador. Adventus also notes that the
Constitutional Court ordered the provisional suspension of the Decree until
the same Constitutional Court resolves the claim filed. Adventus indicates
that the immediate effect of the provisional suspension of the Decree is that
no medium or high impact projects, from any sector or industry in the country,
including the Curipamba project, shall be able to obtain an environmental
license until the Constitutional Court resolves this issue. Adventus reports
that the Government of Ecuador has stated that it will employ all measures at
its disposal to respond to the Constitutional Court.
Corporate Development
Cangrejos PMPA: On May 16, 2023, the Company entered into a PMPA with Lumina
in respect of its 100% owned Cangrejos gold-copper project located in El Oro
Province, Ecuador. Under the terms of the agreement, Wheaton will purchase
6.6% of the payable gold production until 700,000 ounces of gold have been
delivered, at which point the stream will be reduced to 4.4% of the payable
gold production for the life of the mine. Under the terms of the Cangrejos
PMPA, the Company is committed to pay Lumina total upfront cash payments of
$300 million, $48 million of which is available pre-construction, with the
remainder to be paid in staged equal installments during construction of the
mine, subject to various customary conditions being satisfied. As it relates
to the $48 million, payments will be made in four installments, including (i)
$12 million which was paid on closing; (ii) $10 million to be paid six months
after closing; (iii) $15 million to be paid 12 months after closing; and (iv)
$11 million that can be drawn upon for committed acquisition of surface
rights.
Sustainability
Annual Sustainability Report
· Wheaton published its fourth annual Sustainability Report on May 15,
2023, highlighting its commitment to progress and providing a comprehensive
review of Wheaton's performance in environmental, social and governance topics
including:
o Strategy and Governance: Established a sustainability linked element in
connection with the revolving credit facility
o Diversity, Equity and Inclusion: Achieved target of 30% female Board
members two years early
o Investment Decisions and Due Diligence: 100% of new streaming agreements
in 2022 screened for ESG issues and risks, and 85% of Wheaton's mining
partners are committed to implementing one or more industry sustainability
standards, representing 89% of attributable 2022 production
o Recognition: 'ESG Industry Top-Rated' in precious metals and 'ESG Global
50 Top Rated' out of over 15,000 multi-sector companies by Sustainalytics,
'AA' rated by MSCI and 'Prime' rated by ISS
Inaugural Climate Change Report:
· Wheaton published its inaugural Climate Change Report on June 15,
2023, highlighting:
o Details on climate-related governance, strategy, risk management, and
metrics and performance
o Expanded information on the pathway to achieve net-zero carbon emissions
by 2050 and progress to date on this topic
o Identification of climate risks and opportunities and management
strategies.
o Commitment to support our partners' decarbonization and climate solutions
efforts
o 68% of 2021 Scope 3 financed emissions covered by emissions reductions
targets aligned to 2°C or less
o Limited assurance over Scope 2 and Scope 3 finance emissions
· On April 27, 2023, Hudbay announced the signing of a new 10-year power
purchase agreement with ENGIE Energía Perú for access to a 100% renewable
energy supply to Hudbay's Constancia operations in Peru. As reported by
Hudbay, Hudbay's Scope 1 and Scope 2 greenhouse gas emissions are expected to
significantly decline as a result of the new Constancia renewable energy
supply agreement, which should reduce Wheaton's attributable scope 3 emissions
from the Constancia mine and help advance the Company's Net Zero targets.
Community Investment Program:
· During the quarter, Wheaton confirmed its support for a new Vale
initiative aimed at reducing extreme poverty in the communities surrounding
the Salobo mine. The program builds upon the success of previous initiatives
supported by both Wheaton and the Vale Foundation aimed at promoting social
and economic development.
· During the quarter, the Wheaton Walk Through Time was completed at
the University of British Columbia. Funded by Wheaton, the outdoor exhibit
links the Pacific Museum of Earth and the Beaty Biodiversity Museum with an
objective to garner interest among children and youth in earth sciences. It
includes a Timeline of the geological and biological history of the earth
since its formation 4.5 billion years ago in combination with a Tree of Life
showing the evolutionary relationship between all living things.
· The 2023 Courage to Come Back Awards Presented by Wheaton celebrated
its 25th anniversary, attracting over 1,700 guests and raising over C$2.7
million for Coast Mental Health.
About Wheaton Precious Metals Corp. and Outlook
Wheaton is the world's premier precious metals streaming company with the
highest-quality portfolio of long-life, low-cost assets. Its business model
offers investors commodity price leverage and exploration upside but with a
much lower risk profile than a traditional mining company. Wheaton delivers
amongst the highest cash operating margins in the mining industry, allowing it
to pay a competitive dividend and continue to grow through accretive
acquisitions. As a result, Wheaton has consistently outperformed gold and
silver, as well as other mining investments. Wheaton is committed to strong
ESG practices and giving back to the communities where Wheaton and its mining
partners operate. Wheaton creates sustainable value through streaming for all
of its stakeholders.
Wheaton's estimated attributable production in 2023 is forecast to be 320,000
to 350,000 ounces of gold, 20.0 to 22.0 million ounces of silver, and 22,000
to 25,000 GEOs of other metals, resulting in production of approximately
600,000 to 660,000 GEOs, unchanged from previous guidance(2)(,)(3). Due to the
suspension of the Peñasquito mine as a result of the ongoing labour dispute,
and the Company's inability to forecast when it will be resolved, Wheaton now
expects its full-year production to have a slightly higher weighting toward
gold. Assuming the dispute is resolved and operations resume by the end of the
third quarter of 2023, the Company expects to achieve its total GEO(2,3)
guidance of approximately 600,000 to 660,000 GEOs. For the five-year period
ending in 2027, the Company estimates that average production will amount to
810,000 GEOs, while for the ten-year period ending in 2032, the Company
estimates that average annual production will amount to 850,000 GEOs, also
unchanged from previous guidance(2)(,)(3).
In accordance with Wheaton Precious Metals™ Corp.'s ("Wheaton Precious
Metals", "Wheaton" or the "Company") MD&A and Financial Statements,
reference to the Company and Wheaton includes the Company's wholly owned
subsidiaries.
Webcast and Conference Call Details
A conference call will be held on Friday, August 11, 2023, starting at 11:00
am (Eastern Time) to discuss these results. To participate in the live call
please use one of the following methods:
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This earnings release should be read in conjunction with Wheaton Precious
Metals' MD&A and Financial Statements, which are available on the
Company's website at www.wheatonpm.com and have been posted on SEDAR+ at
www.sedarplus.ca.
Mr. Wes Carson, P.Eng., Vice President, Mining Operations, Neil Burns, P.Geo.,
Vice President, Technical Services for Wheaton Precious Metals and Ryan
Ulansky, P.Eng., Vice President, Engineering, are a "qualified person" as such
term is defined under National Instrument 43-101, and have reviewed and
approved the technical information disclosed in this news release
(specifically Mr. Carson has reviewed production figures, Mr. Burns has
reviewed mineral resource estimates and Mr. Ulansky has reviewed the mineral
reserve estimates).
Wheaton Precious Metals believes that there are no significant differences
between its corporate governance practices and those required to be followed
by United States domestic issuers under the NYSE listing standards. This
confirmation is located on the Wheaton Precious Metals website at
http://www.wheatonpm.com/Company/corporate-governance/default.aspx
(http://www.wheatonpm.com/Company/corporate-governance/default.aspx)
(http://www.silverwheaton.com/company/corporate-governance/default.aspx) .
End Notes
Condensed Interim Consolidated Statements of Earnings
Three Months Ended Six Months Ended
June 30
June 30
(US dollars and shares in thousands, except per share amounts - unaudited) 2023 2022 2023 2022
Sales $ 264,972 $ 302,922 $ 479,437 $ 610,166
Cost of sales
Cost of sales, excluding depletion $ 58,642 $ 74,943 $ 110,606 $ 144,936
Depletion 54,474 65,682 99,473 123,084
Total cost of sales $ 113,116 $ 140,625 $ 210,079 $ 268,020
Gross margin $ 151,856 $ 162,297 $ 269,358 $ 342,146
General and administrative expenses 10,216 9,685 20,315 19,089
Share based compensation 4,484 1,608 11,881 11,509
Donations and community investments 1,940 1,160 3,318 1,973
Earnings from operations $ 135,216 $ 149,844 $ 233,844 $ 309,575
Gain on disposal of mineral stream interest (5,027) - (5,027) -
Other (income) expense (8,692) (820) (16,254) (650)
Earnings before finance costs and income taxes $ 148,935 $ 150,664 $ 255,125 $ 310,225
Finance costs 1,352 1,389 2,731 2,811
Earnings before income taxes $ 147,583 $ 149,275 $ 252,394 $ 307,414
Income tax (expense) recovery (6,135) (201) 445 (872)
Net earnings $ 141,448 $ 149,074 $ 252,839 $ 306,542
Basic earnings per share $ 0.312 $ 0.330 $ 0.559 $ 0.679
Diluted earnings per share $ 0.312 $ 0.330 $ 0.558 $ 0.678
Weighted average number of shares outstanding
Basic 452,892 451,524 452,633 451,221
Diluted 453,575 452,359 453,368 452,123
Condensed Interim Consolidated Balance Sheets
As at As at
June 30
December 31
(US dollars in thousands - unaudited) 2023 2022
Assets
Current assets
Cash and cash equivalents $ 828,837 $ 696,089
Accounts receivable 6,971 10,187
Cobalt inventory 4,956 10,530
Taxes receivable 4,217 -
Other 4,466 3,287
Total current assets $ 849,447 $ 720,093
Non-current assets
Mineral stream interests $ 5,691,166 $ 5,707,019
Early deposit mineral stream interests 46,843 46,092
Long-term equity investments 255,534 256,095
Property, plant and equipment 8,458 4,210
Other 28,457 26,397
Total non-current assets $ 6,030,458 $ 6,039,813
Total assets $ 6,879,905 $ 6,759,906
Liabilities
Current liabilities
Accounts payable and accrued liabilities $ 9,578 $ 12,570
Current taxes payable - 2,763
Current portion of performance share units 8,692 14,566
Current portion of lease liabilities 609 818
Total current liabilities $ 18,879 $ 30,717
Non-current liabilities
Performance share units $ 4,549 $ 6,673
Lease liabilities 5,925 1,152
Deferred income taxes 190 165
Pension liability 3,949 3,524
Total non-current liabilities $ 14,613 $ 11,514
Total liabilities $ 33,492 $ 42,231
Shareholders' equity
Issued capital $ 3,773,227 $ 3,752,662
Reserves (26,189) 66,547
Retained earnings 3,099,375 2,898,466
Total shareholders' equity $ 6,846,413 $ 6,717,675
Total liabilities and shareholders' equity $ 6,879,905 $ 6,759,906
Condensed Interim Consolidated Statements of Cash Flows
Three Months Ended Six Months Ended
June 30
June 30
(US dollars in thousands - unaudited) 2023 2022 2023 2022
Operating activities
Net earnings $ 141,448 $ 149,074 $ 252,839 $ 306,542
Adjustments for
Depreciation and depletion 54,857 66,080 100,247 123,875
Gain on disposal of mineral stream interest (5,027) - (5,027) -
Interest expense 36 24 53 50
Equity settled stock based compensation 1,859 1,498 3,402 2,839
Performance share units - expense 2,625 110 8,479 8,670
Performance share units - paid - (18,247) (16,675) (18,247)
Pension expense 291 271 458 429
Pension paid (20) - (116) -
Income tax expense (recovery) 6,135 201 (445) 872
Loss (gain) on fair value adjustment of share purchase warrants held 280 154 105 897
Investment income recognized in net earnings (8,880) (549) (16,028) (743)
Other 418 42 499 (92)
Change in non-cash working capital 1,685 7,365 (387) (8,553)
Cash generated from operations before income taxes and interest $ 195,707 $ 206,023 $ 327,404 $ 416,539
Income taxes paid (988) (80) (4,332) (112)
Interest paid (15) (25) (33) (51)
Interest received 7,672 441 14,443 523
Cash generated from operating activities $ 202,376 $ 206,359 $ 337,482 $ 416,899
Financing activities
Credit facility extension fees $ (846) $ (2) $ (846) $ (2)
Share purchase options exercised 1,134 1,777 10,510 7,549
Lease payments (177) (202) (379) (402)
Dividends paid (131,091) (117,117) (131,091) (117,117)
Cash used for financing activities $ (130,980) $ (115,544) $ (121,806) $ (109,972)
Investing activities
Mineral stream interests $ (88,710) $ (15,549) $ (120,234) $ (60,801)
Early deposit mineral stream interests - - (750) (750)
Net proceeds on disposal of mineral stream interests 46,400 - 46,400 -
Acquisition of long-term investments (31) (2,633) (8,175) (22,768)
Proceeds on disposal of long-term investments 202 - 202 -
Dividends received 917 108 917 220
Other (1,209) (89) (1,770) (125)
Cash used for investing activities $ (42,431) $ (18,163) $ (83,410) $ (84,224)
Effect of exchange rate changes on cash and cash equivalents $ 175 $ (189) $ 482 $ (122)
Increase in cash and cash equivalents $ 29,140 $ 72,463 $ 132,748 $ 222,581
Cash and cash equivalents, beginning of period 799,697 376,163 696,089 226,045
Cash and cash equivalents, end of period $ 828,837 $ 448,626 $ 828,837 $ 448,626
Summary of Units Produced
Q2 2023 Q1 2023 Q4 2022 Q3 2022 Q2 2022 Q1 2022 Q4 2021 Q3 2021
Gold ounces produced ²
Salobo 54,804 43,677 37,939 44,212 34,129 44,883 48,235 55,205
Sudbury (3) 7,721 6,203 5,270 3,437 5,289 5,362 4,379 148
Constancia 7,444 6,905 10,496 7,196 8,042 6,311 9,857 8,533
San Dimas (4) 11,166 10,754 10,037 11,808 10,044 10,461 13,714 11,936
Stillwater (5) 2,017 1,960 2,185 1,833 2,171 2,497 2,664 2,949
Other
Marmato 639 457 533 542 778 477 479 433
777 (6) - - - - 3,509 4,003 4,462 4,717
Minto 1,292 3,063 2,567 3,050 2,480 4,060 3,506 1,703
Total Other 1,931 3,520 3,100 3,592 6,767 8,540 8,447 6,853
Total gold ounces produced 85,083 73,019 69,027 72,078 66,442 78,054 87,296 85,624
Silver ounces produced (2)
Peñasquito 1,744 2,076 1,761 2,017 2,089 2,219 2,145 2,180
Antamina 960 851 1,067 1,327 1,330 1,210 1,309 1,475
Constancia 420 552 655 564 584 506 578 521
Other
Los Filos (7) 28 28 14 21 35 42 37 17
Zinkgruvan 374 632 664 642 739 577 482 658
Neves-Corvo 407 436 369 323 345 344 522 362
Aljustrel 279 343 313 246 292 287 325 314
Cozamin 184 141 157 179 169 186 213 199
Marmato 7 8 9 7 7 11 7 10
Yauliyacu (8) - - 261 463 756 637 382 372
Stratoni (9) - - - - - - 129 18
Minto 14 29 33 33 26 45 44 25
Keno Hill (10) - - - - 48 20 30 44
777 (6) - - - - 80 91 96 81
Total Other 1,293 1,617 1,820 1,914 2,497 2,240 2,267 2,100
Total silver ounces produced 4,417 5,096 5,303 5,822 6,500 6,175 6,299 6,276
Palladium ounces produced ²
Stillwater (5) 3,880 3,705 3,869 3,229 3,899 4,488 4,733 5,105
Cobalt pounds produced ²
Voisey's Bay 152 124 128 226 136 234 381 370
GEOs produced (11) 147,699 144,000 142,887 153,025 155,932 164,911 177,490 175,767
Average payable rate (2)
Gold 95.1% 95.1% 94.9% 95.1% 95.1% 95.2% 96.0% 96.0%
Silver 82.8% 82.0% 83.4% 85.5% 85.7% 86.0% 85.9% 86.4%
Palladium 94.1% 96.0% 91.7% 95.0% 94.6% 92.7% 92.2% 94.5%
Cobalt 93.3% 93.3% 93.3% 93.3% 93.3% 93.3% 93.3% 93.3%
GEO (11) 90.4% 89.1% 89.2% 90.3% 90.2% 90.5% 91.3% 91.3%
1) All figures in thousands except gold and palladium ounces produced.
2) Quantity produced represent the amount of gold, silver, palladium and
cobalt contained in concentrate or doré prior to smelting or refining
deductions. Production figures and payable rates are based on information
provided by the operators of the mining operations to which the mineral stream
interests relate or management estimates in those situations where other
information is not available. Certain production figures and payable rates may
be updated in future periods as additional information is received.
3) Comprised of the Coleman, Copper Cliff, Garson, Creighton and Totten
gold interests. Operations at the Sudbury mines were suspended from June 1,
2021 to August 9, 2021 as a result of a labour disruption by unionized
employees.
4) Under the terms of the San Dimas PMPA, the Company is entitled to an
amount equal to 25% of the payable gold production plus an additional amount
of gold equal to 25% of the payable silver production converted to gold at a
fixed gold to silver exchange ratio of 70:1 from the San Dimas mine. If the
average gold to silver price ratio decreases to less than 50:1 or increases to
more than 90:1 for a period of 6 months or more, then the "70" shall be
revised to "50" or "90", as the case may be, until such time as the average
gold to silver price ratio is between 50:1 to 90:1 for a period of 6 months or
more in which event the "70" shall be reinstated. For reference, attributable
silver production from prior periods is as follows: Q2 2023 - 423,000 ounces;
Q1 2023 - 401,000 ounces; Q4 2022 - 348,000 ounces; Q3 2022 - 412,000 ounces;
Q2 2022 - 382,000 ounces; Q1 2022 - 408,000 ounces; Q4 2021 - 544,000 ounces;
Q3 2021 - 472,000 ounces.
5) Comprised of the Stillwater and East Boulder gold and palladium
interests.
6) On June 22, 2022, Hudbay announced that mining activities at 777 have
concluded and closure activities have commenced.
7) Operations at Los Filos were temporarily suspended from June 22, 2021
to July 26, 2021 as the result of illegal blockades by a group of unionized
employees and members of the Xochipala community.
8) On December 14, 2022 the Company terminated the Yauliyacu PMPA in
exchange for a cash payment of $132 million.
9) The Stratoni mine was placed into care and maintenance during Q4-2021.
10) On September 7, 2022, the Company
terminated the Keno Hill PMPA in exchange for $141 million of Hecla common
stock.
11) GEOs, which are provided to assist the
reader, are based on the following commodity price assumptions: $1,850 per
ounce gold; $24.00 per ounce silver; $1,800 per ounce palladium; and $18.75
per pound cobalt; consistent with those used in estimating the Company's
production guidance for 2023.
Summary of Units Sold
Q2 2023 Q1 2023 Q4 2022 Q3 2022 Q2 2022 Q1 2022 Q4 2021 Q3 2021
Gold ounces sold
Salobo 46,030 35,966 41,029 31,818 48,515 42,513 47,171 35,185
Sudbury (2) 4,775 4,368 4,988 5,147 7,916 3,712 965 1,915
Constancia 9,619 6,579 6,013 6,336 7,431 10,494 6,196 8,159
San Dimas 11,354 10,651 10,943 10,196 10,633 10,070 15,182 11,346
Stillwater (3) 2,195 2,094 1,783 2,127 2,626 2,628 2,933 2,820
Other
Marmato 467 480 473 719 781 401 423 438
777 153 126 785 3,098 3,629 4,388 4,290 5,879
Minto 701 2,341 2,982 2,559 2,806 3,695 2,462 1,907
Total Other 1,321 2,947 4,240 6,376 7,216 8,484 7,175 8,224
Total gold ounces sold 75,294 62,605 68,996 62,000 84,337 77,901 79,622 67,649
Silver ounces sold
Peñasquito 1,913 1,483 2,066 1,599 2,096 2,188 1,818 2,210
Antamina 963 814 1,114 1,155 1,177 1,468 1,297 1,502
Constancia 674 366 403 498 494 644 351 484
Other
Los Filos 37 34 16 24 41 42 17 12
Zinkgruvan 370 520 547 376 650 355 346 354
Neves-Corvo 132 171 80 105 167 204 259 193
Aljustrel 182 205 156 185 123 145 133 155
Cozamin 150 119 150 154 148 177 174 170
Marmato 7 7 7 8 11 8 8 10
Yauliyacu - - 337 1,005 817 44 551 182
Stratoni - - - - (2) 133 42 41
Minto 7 29 23 22 21 31 27 24
Keno Hill - 1 1 30 30 27 24 51
777 2 - 35 73 75 87 69 99
Total Other 887 1,086 1,352 1,982 2,081 1,253 1,650 1,291
Total silver ounces sold 4,437 3,749 4,935 5,234 5,848 5,553 5,116 5,487
Palladium ounces sold
Stillwater (3) 3,392 2,946 3,396 4,227 3,378 4,075 4,641 5,703
Cobalt pounds sold
Voisey's Bay 265 323 187 115 225 511 228 131
GEOs sold (4) 138,835 117,383 138,218 135,179 165,766 159,082 152,826 145,704
Cumulative payable units PBND (5)
Gold ounces 75,291 69,479 62,602 65,978 59,331 81,365 84,989 80,819
Silver ounces 1,267 2,023 1,572 2,243 2,400 2,659 2,997 2,698
Palladium ounces 6,122 5,751 5,098 5,041 6,267 5,535 5,629 5,619
Cobalt pounds 250 285 257 402 280 550 596 637
GEO (4) 100,226 104,204 90,560 104,062 99,403 126,820 135,380 127,739
Inventory on hand
Cobalt pounds 310 398 633 556 582 410 657 488
1) All figures in thousands except gold and palladium ounces sold.
2) Comprised of the Coleman, Copper Cliff, Garson, Creighton and Totten
gold interests.
3) Comprised of the Stillwater and East Boulder gold and palladium
interests.
4) GEOs, which are provided to assist the reader, are based on the
following commodity price assumptions: $1,850 per ounce gold; $24.00 per ounce
silver; $1,800 per ounce palladium; and $18.75 per pound cobalt; consistent
with those used in estimating the Company's production guidance for 2023.
5) Payable gold, silver and palladium ounces as well as cobalt pounds
produced but not yet delivered ("PBND") are based on management estimates.
These figures may be updated in future periods as additional information is
received.
Results of Operations
The operating results of the Company's reportable operating segments are
summarized in the tables and commentary below.
Three Months Ended June 30, 2023
Units Produced² Units Average Average Average Sales Gain on Disposal (4) Net Cash Flow Total
Sold
Realized
Cash Cost
Depletion
Earnings
From
Assets
Price
($'s Per
($'s Per
Operations
($'s
Unit) (3)
Unit)
Per Unit)
Gold
Salobo 54,804 46,030 $ 1,985 $ 420 $ 330 $ 91,350 $ - $ 56,790 $ 71,999 $ 2,356,169
Sudbury (5) 7,721 4,775 2,000 400 1,025 9,549 - 2,747 7,579 274,048
Constancia 7,444 9,619 1,985 416 316 19,090 - 12,049 15,085 90,469
San Dimas 11,166 11,354 1,985 628 260 22,532 - 12,454 15,401 150,154
Stillwater 2,017 2,195 1,985 357 510 4,356 - 2,451 3,571 213,663
Other (6) 1,931 1,321 1,994 1,131 186 2,634 - 894 1,252 537,197
85,083 75,294 $ 1,986 $ 461 $ 365 $ 149,511 $ - $ 87,385 $ 114,887 $ 3,621,700
Silver
Peñasquito 1,744 1,913 $ 24.20 $ 4.43 $ 4.06 $ 46,291 $ - $ 30,041 $ 37,816 $ 279,872
Antamina 960 963 24.20 4.70 7.06 23,302 - 11,985 18,780 532,828
Constancia 420 674 24.20 6.14 6.24 16,322 - 7,968 12,180 186,452
Other (7) 1,293 887 23.88 5.75 3.46 21,166 5,027 18,031 15,878 482,572
4,417 4,437 $ 24.13 $ 5.01 $ 4.92 $ 107,081 $ 5,027 $ 68,025 $ 84,654 $ 1,481,724
Palladium
Stillwater 3,880 3,392 $ 1,438 $ 261 $ 445 $ 4,879 $ - $ 2,482 $ 3,993 $ 224,099
Platinum
Marathon - - $ n.a. $ n.a. $ n.a. $ - $ - $ - $ - $ 9,448
Cobalt
Voisey's Bay 152 265 $ 13.23 $ 3.20 ⁸ $ 13.85 $ 3,501 $ - $ (1,009) $ 4,335 $ 354,195
Operating results $ 264,972 $ 5,027 $ 156,883 $ 207,869 $ 5,691,166
Other
General and administrative $ (10,216) $ (9,544)
Share based compensation (4,484) -
Donations and community investments (1,940) (1,738)
Finance costs (1,352) (999)
Other 8,692 7,776
Income tax (6,135) (988)
Total other $ (15,435) $ (5,493) $ 1,188,739
$ 141,448 $ 202,376 $ 6,879,905
1) Units of gold, silver and palladium produced and sold are reported in
ounces, while cobalt is reported in pounds. All figures in thousands except
gold and palladium ounces produced and sold and per unit amounts.
2) Quantity produced represent the amount of gold, silver, palladium and
cobalt contained in concentrate or doré prior to smelting or refining
deductions. Production figures are based on information provided by the
operators of the mining operations to which the mineral stream interests
relate or management estimates in those situations where other information is
not available. Certain production figures may be updated in future periods as
additional information is received.
3) Refer to discussion on non-IFRS measure (iii) at the end of this press
release.
4) The gain on disposal of Other silver interests relates to the gain on
the buyback of 33% of the Goose PMPA.
5) Comprised of the operating Coleman, Copper Cliff, Garson, Creighton and
Totten gold interests and the non-operating Stobie and Victor gold interests.
6) Comprised of the operating Marmato gold interests as well as the
non-operating Minto, 777, Copper World Complex, Santo Domingo, Blackwater,
Fenix, Goose, Marathon, Curipamba and Cangrejos gold interests. On June 22,
2022, Hudbay announced that mining activities at 777 have concluded and
closure activities have commenced. On May 13, 2023, Minto announced the
suspension of operations at the Minto mine.
7) Comprised of the operating Los Filos, Zinkgruvan, Neves-Corvo,
Aljustrel, Cozamin and Marmato silver interests and the non-operating Minto,
777, Loma de La Plata, Stratoni, Pascua-Lama, Copper World Complex, Blackwater
and Curipamba silver interests. On June 22, 2022, Hudbay announced that mining
activities at 777 have concluded and closure activities have commenced. On May
13, 2023, Minto announced the suspension of operations at the Minto mine.
8) Cash cost per pound of cobalt sold during the second quarter of 2023
was net of a previously recorded inventory write-down of $0.5 million,
resulting in a decrease of $1.81 per pound of cobalt sold. The Company
reflects the cobalt inventory at the lower of cost and net realizable value,
and will continue to monitor the market price of cobalt relative to the
carrying of the inventory at each reporting period.
On a gold equivalent and silver equivalent basis, results for the Company for
the three months ended June 30, 2023 were as follows:
Three Months Ended June 30, 2023
Ounces Ounces Average Average Cash Operating Margin Average Gross
Produced (1)
Sold
Realized
Cash Cost
($'s Per Ounce) (3)
Depletion
Margin
Price
($'s Per
($'s Per
($'s Per
($'s Per
Ounce) (2)
Ounce)
Ounce)
Ounce)
Gold equivalent basis (4) 147,699 138,835 $ 1,909 $ 422 $ 1,487 $ 392 $ 1,095
1) Quantity produced represent the amount of gold, silver, palladium and
cobalt contained in concentrate or doré prior to smelting or refining
deductions. Production figures are based on information provided by the
operators of the mining operations to which the mineral stream interests
relate or management estimates in those situations where other information is
not available. Certain production figures may be updated in future periods as
additional information is received.
2) Refer to discussion on non-IFRS measure (iii) at the end of this press
release.
3) Refer to discussion on non-IFRS measure (iv) at the end of this press
release.
4) GEOs, which are provided to assist the reader, are based on the
following commodity price assumptions: $1,850 per ounce gold; $24.00 per ounce
silver; $1,800 per ounce palladium; and $18.75 per pound cobalt; consistent
with those used in estimating the Company's production guidance for 2023.
Three Months Ended June 30, 2022
Units Produced² Units Average Average Average Sales Net Cash Flow Total
Sold
Realized
Cash Cost
Depletion
Earnings
From
Assets
Price
($'s Per
($'s Per
Operations
($'s
Unit) (3)
Unit)
Per Unit)
Gold
Salobo 34,129 48,515 $ 1,872 $ 416 $ 334 $ 90,842 $ 54,462 $ 70,649 $ 2,407,579
Sudbury (4) 5,289 7,916 1,867 400 1,090 14,780 2,983 11,613 294,485
Constancia 8,042 7,431 1,872 412 271 13,915 8,838 10,686 98,930
San Dimas 10,044 10,633 1,872 624 260 19,910 10,520 13,280 161,350
Stillwater 2,171 2,626 1,872 340 429 4,917 2,897 4,024 217,530
Other (5) 6,767 7,216 1,868 727 57 13,478 7,823 8,529 419,696
66,442 84,337 $ 1,872 $ 465 $ 369 $ 157,842 $ 87,523 $ 118,781 $ 3,599,570
Silver
Peñasquito 2,089 2,096 $ 22.47 $ 4.36 $ 3.57 $ 47,102 $ 30,488 $ 37,963 $ 306,742
Antamina 1,330 1,177 22.47 4.42 7.06 26,448 12,934 21,242 561,383
Constancia 584 494 22.47 6.08 6.35 11,101 4,958 7,784 198,672
Other (6) 2,497 2,081 21.91 7.44 5.74 45,577 18,148 30,198 577,944
6,500 5,848 $ 22.27 $ 5.61 $ 5.28 $ 130,228 $ 66,528 $ 97,187 $ 1,644,741
Palladium
Stillwater 3,899 3,378 $ 2,132 $ 408 $ 399 $ 7,203 $ 4,477 $ 5,825 $ 229,855
Platinum
Marathon - - $ n.a. $ n.a. $ n.a. $ - $ - $ - $ 4,852
Cobalt
Voisey's Bay 136 225 $ 34.01 $ 6.86 $ 10.40 $ 7,649 $ 3,769 $ 13,797 $ 362,460
Operating results $ 302,922 $ 162,297 $ 235,590 $ 5,841,478
Other
General and administrative $ (9,685) $ (8,546)
Share based compensation (1,608) (18,247)
Donations and community investments (1,160) (1,152)
Finance costs (1,389) (1,011)
Other 820 (195)
Income tax (201) (80)
Total other $ (13,223) $ (29,231) $ 607,217
$ 149,074 $ 206,359 $ 6,448,695
1) Units of gold, silver and palladium produced and sold are reported in
ounces, while cobalt is reported in pounds. All figures in thousands except
gold and palladium ounces produced and sold and per unit amounts.
2) Quantity produced represent the amount of gold, silver, palladium and
cobalt contained in concentrate or doré prior to smelting or refining
deductions. Production figures are based on information provided by the
operators of the mining operations to which the mineral stream interests
relate or management estimates in those situations where other information is
not available. Certain production figures may be updated in future periods as
additional information is received.
3) Refer to discussion on non-IFRS measure (iii) at the end of this press
release.
4) Comprised of the operating Coleman, Copper Cliff, Garson, Creighton and
Totten gold interests as well as the non-operating Stobie and Victor gold
interests.
5) Comprised of the operating Minto, 777 and Marmato gold interests as
well as the non-operating Copper World Complex, Santo Domingo, Blackwater,
Fenix, Goose, Marathon and Curipamba gold interests. On June 22, 2022, Hudbay
announced that mining activities at 777 have concluded and closure activities
have commenced. On May 13, 2023, Minto announced the suspension of operations
at the Minto mine.
6) Comprised of the operating Los Filos, Zinkgruvan, Neves-Corvo,
Aljustrel, Minto, 777, Marmato and Cozamin silver interests, the non-operating
Stratoni, Loma de La Plata, Copper World Complex, Pascua-Lama, Blackwater and
Curipamba silver interests and the previously owned Keno Hill and Yauliyacu
silver interests. On June 22, 2022, Hudbay announced that mining activities at
777 have concluded and closure activities have commenced. On September 7,
2022, the Keno Hill PMPA was terminated in exchange for $141 million of Hecla
common stock. On December 14, 2022 the Yauliyacu PMPA was terminated in
exchange for a cash payment of $132 million. On May 13, 2023, Minto announced
the suspension of operations at the Minto mine.
On a gold equivalent and silver equivalent basis, results for the Company for
the three months ended June 30, 2022 were as follows:
Three Months Ended June 30, 2022
Ounces Ounces Average Average Cash Operating Margin Average Gross
Produced (1)
Sold
Realized
Cash Cost
($'s Per Ounce) (3)
Depletion
Margin
Price
($'s Per
($'s Per
($'s Per
($'s Per
Ounce) (2)
Ounce)
Ounce)
Ounce)
Gold equivalent basis (4) 155,932 165,766 $ 1,827 $ 452 $ 1,375 $ 396 $ 979
1) Quantity produced represent the amount of gold, silver, palladium and
cobalt contained in concentrate or doré prior to smelting or refining
deductions. Production figures are based on information provided by the
operators of the mining operations to which the mineral stream interests
relate or management estimates in those situations where other information is
not available. Certain production figures may be updated in future periods as
additional information is received.
2) Refer to discussion on non-IFRS measure (iii) at the end of this press
release.
3) Refer to discussion on non-IFRS measure (iv) at the end of this press
release.
4) GEOs, which are provided to assist the reader, are based on the
following commodity price assumptions: $1,850 per ounce gold; $24.00 per ounce
silver; $1,800 per ounce palladium; and $18.75 per pound cobalt; consistent
with those used in estimating the Company's production guidance for 2023.
Six Months Ended June 30, 2023
Units Produced² Units Average Average Average Sales Gain on Disposal 4 Net Cash Flow Total
Sold
Realized
Cash Cost
Depletion
Earnings
From
Assets
Price
($'s Per
($'s Per
Operations
($'s
Unit) (3)
Unit)
Per Unit)
Gold
Salobo 98,481 81,996 $ 1,949 $ 420 $ 330 $ 159,825 $ - $ 98,261 $ 125,353 $ 2,356,169
Sudbury (5) 13,924 9,143 1,954 400 1,025 17,866 - 4,841 13,925 274,048
Constancia 14,349 16,198 1,952 416 316 31,615 - 19,759 24,873 90,469
San Dimas 21,920 22,005 1,946 626 260 42,812 - 23,319 29,030 150,154
Stillwater 3,977 4,289 1,945 346 510 8,343 - 4,671 6,860 213,663
Other (6) 5,451 4,268 1,932 1,306 117 8,247 - 2,173 2,407 537,197
158,102 137,899 $ 1,949 $ 477 $ 362 $ 268,708 $ - $ 153,024 $ 202,448 $ 3,621,700
Silver
Peñasquito 3,820 3,396 $ 23.61 $ 4.43 $ 4.06 $ 80,162 $ - $ 51,317 $ 65,119 $ 279,872
Antamina 1,811 1,777 23.58 4.63 7.06 41,897 - 21,128 33,668 532,828
Constancia 972 1,040 23.72 6.14 6.24 24,674 - 11,792 18,288 186,452
Other (7) 2,910 1,973 23.33 5.86 2.95 46,025 5,027 33,668 35,925 482,572
9,513 8,186 $ 23.55 $ 5.04 $ 4.72 $ 192,758 $ 5,027 $ 117,905 $ 153,000 $ 1,481,724
Palladium
Stillwater 7,585 6,338 $ 1,517 $ 277 $ 428 $ 9,614 $ - $ 5,149 $ 7,862 $ 224,099
Platinum
Marathon - - $ n.a. $ n.a. $ n.a. $ - $ - $ - $ - $ 9,448
Cobalt
Voisey's Bay 276 588 $ 14.22 $ 3.25 ⁸ $ 13.85 $ 8,357 $ - $ (1,693) $ 8,820 $ 354,195
Operating results $ 479,437 $ 5,027 $ 274,385 $ 372,130 $ 5,691,166
Other
General and administrative $ (20,315) $ (23,384)
Share based compensation (11,881) (16,675)
Donations and community investments (3,318) (3,146)
Finance costs (2,731) (2,066)
Other 16,254 14,955
Income tax 445 (4,332)
Total other $ (21,546) $ (34,648) $ 1,188,739
$ 252,839 $ 337,482 $ 6,879,905
1) Units of gold, silver and palladium produced and sold are reported in
ounces, while cobalt is reported in pounds. All figures in thousands except
gold and palladium ounces produced and sold and per unit amounts.
2) Quantity produced represent the amount of gold, silver, palladium and
cobalt contained in concentrate or doré prior to smelting or refining
deductions. Production figures are based on information provided by the
operators of the mining operations to which the mineral stream interests
relate or management estimates in those situations where other information is
not available. Certain production figures may be updated in future periods as
additional information is received.
3) Refer to discussion on non-IFRS measure (iii) at the end of this press
release.
4) The gain on disposal of Other silver interests relates to the gain on
the buyback of 33% of the Goose PMPA.
5) Comprised of the operating Coleman, Copper Cliff, Garson, Creighton and
Totten gold interests and the non-operating Stobie and Victor gold interests.
6) Comprised of the operating Marmato gold interests as well as the
non-operating Minto, 777, Copper World Complex, Santo Domingo, Blackwater,
Fenix, Goose, Marathon, Curipamba and Cangrejos gold interests. On June 22,
2022, Hudbay announced that mining activities at 777 have concluded and
closure activities have commenced. On May 13, 2023, Minto announced the
suspension of operations at the Minto mine.
7) Comprised of the operating Los Filos, Zinkgruvan, Neves-Corvo,
Aljustrel, Cozamin and Marmato silver interests and the non-operating Minto,
777, Loma de La Plata, Stratoni, Pascua-Lama, Copper World Complex, Blackwater
and Curipamba silver interests. On June 22, 2022, Hudbay announced that mining
activities at 777 have concluded and closure activities have commenced. On May
13, 2023, Minto announced the suspension of operations at the Minto mine.
8) Cash cost per pound of cobalt sold during the six months ended June 30,
2023 was net of a previously recorded inventory write-down of $1.5 million,
resulting in a decrease of $2.57 per pound of cobalt sold. The Company
reflects the cobalt inventory at the lower of cost and net realizable value,
and will continue to monitor the market price of cobalt relative to the
carrying of the inventory at each reporting period.
On a gold equivalent and silver equivalent basis, results for the Company for
the six months ended June 30, 2023 were as follows:
Six Months Ended June 30, 2023
Ounces Ounces Average Average Cash Operating Margin Average Gross
Produced (1)
Sold
Realized
Cash Cost
($'s Per Ounce) (3)
Depletion
Margin
Price
($'s Per
($'s Per
($'s Per
($'s Per
Ounce) (2)
Ounce)
Ounce)
Ounce)
Gold equivalent basis (4) 291,700 256,218 $ 1,871 $ 432 $ 1,439 $ 388 $ 1,051
1) Quantity produced represent the amount of gold, silver, palladium and
cobalt contained in concentrate or doré prior to smelting or refining
deductions. Production figures are based on information provided by the
operators of the mining operations to which the mineral stream interests
relate or management estimates in those situations where other information is
not available. Certain production figures may be updated in future periods as
additional information is received.
2) Refer to discussion on non-IFRS measure (iii) at the end of this press
release.
3) Refer to discussion on non-IFRS measure (iv) at the end of this press
release.
4) GEOs, which are provided to assist the reader, are based on the
following commodity price assumptions: $1,850 per ounce gold; $24.00 per ounce
silver; $1,800 per ounce palladium; and $18.75 per pound cobalt; consistent
with those used in estimating the Company's production guidance for 2023.
Six Months Ended June 30, 2022
Units Produced² Units Average Average Average Sales Net Cash Flow Total
Sold
Realized
Cash Cost
Depletion
Earnings
From
Assets
Price
($'s Per
($'s Per
Operations
($'s
Unit) (3)
Unit)
Per Unit)
Gold
Salobo 79,012 91,028 $ 1,872 $ 416 $ 334 $ 170,407 $ 102,147 $ 132,517 $ 2,407,579
Sudbury (4) 10,651 11,628 1,865 400 1,091 21,689 4,354 17,038 294,485
Constancia 14,353 17,925 1,872 412 271 33,555 21,308 26,168 98,930
San Dimas 20,505 20,703 1,872 621 260 38,756 20,528 25,901 161,350
Stillwater 4,668 5,254 1,872 335 429 9,835 5,823 8,078 217,530
Other (5) 15,307 15,700 1,865 750 40 29,275 16,871 17,351 419,696
144,496 162,238 $ 1,871 $ 470 $ 346 $ 303,517 $ 171,031 $ 227,053 $ 3,599,570
Silver
Peñasquito 4,308 4,284 $ 23.30 $ 4.36 $ 3.57 $ 99,829 $ 65,874 $ 81,151 $ 306,742
Antamina 2,540 2,645 23.37 4.71 7.06 61,806 30,680 49,001 561,383
Constancia 1,090 1,138 23.39 6.08 6.34 26,614 12,484 19,697 198,672
Other (6) 4,737 3,334 22.89 6.93 4.88 76,311 36,946 54,073 577,944
12,675 11,401 $ 23.21 $ 5.36 $ 5.04 $ 264,560 $ 145,984 $ 203,922 $ 1,644,741
Palladium
Stillwater 8,387 7,453 $ 2,246 $ 400 $ 399 $ 16,736 $ 10,781 $ 13,755 $ 229,855
Platinum
Marathon - - $ n.a $ n.a $ n.a $ - $ - $ - $ 4,852
Cobalt
Voisey's Bay 371 736 $ 34.43 $ 6.09 $ 8.85 $ 25,353 $ 14,350 $ 17,060 $ 362,460
Operating results $ 610,166 $ 342,146 $ 461,790 $ 5,841,478
Other
General and administrative $ (19,089) $ (23,365)
Share based compensation (11,509) (18,247)
Donations and community investments (1,973) (1,567)
Finance costs (2,811) (2,088)
Other 650 488
Income tax (872) (112)
Total other $ (35,604) $ (44,891) $ 607,217
$ 306,542 $ 416,899 $ 6,448,695
1) Units of gold, silver and palladium produced and sold are reported in
ounces, while cobalt is reported in pounds. All figures in thousands except
gold and palladium ounces produced and sold and per unit amounts.
2) Quantity produced represent the amount of gold, silver, palladium and
cobalt contained in concentrate or doré prior to smelting or refining
deductions. Production figures are based on information provided by the
operators of the mining operations to which the mineral stream interests
relate or management estimates in those situations where other information is
not available. Certain production figures may be updated in future periods as
additional information is received.
3) Refer to discussion on non-IFRS measure (iii) at the end of this press
release.
4) Comprised of the operating Coleman, Copper Cliff, Garson, Creighton and
Totten gold interests as well as the non-operating Stobie and Victor gold
interests.
5) Comprised of the operating Minto, 777 and Marmato gold interests as
well as the non-operating Copper World Complex, Santo Domingo, Blackwater,
Fenix, Goose, Marathon and Curipamba gold interests. On June 22, 2022, Hudbay
announced that mining activities at 777 have concluded and closure activities
have commenced. On May 13, 2023, Minto announced the suspension of operations
at the Minto mine.
6) Comprised the operating Los Filos, Zinkgruvan, Neves-Corvo, Aljustrel,
Minto, 777, Marmato and Cozamin silver interests, the non-operating Stratoni,
Loma de La Plata, Copper World Complex, Pascua-Lama, Blackwater and Curipamba
silver interests and the previously owned Keno Hill and Yauliyacu silver
interests. On June 22, 2022, Hudbay announced that mining activities at 777
have concluded and closure activities have commenced. On September 7, 2022,
the Keno Hill PMPA was terminated in exchange for $141 million of Hecla common
stock. On December 14, 2022 the Yauliyacu PMPA was terminated in exchange for
a cash payment of $132 million. On May 13, 2023, Minto announced the
suspension of operations at the Minto mine.
On a gold equivalent and silver equivalent basis, results for the Company for
the six months ended June 30, 2022 were as follows:
Six Months Ended June 30, 2022
Ounces Ounces Average Average Cash Operating Margin Average Gross
Produced (1)
Sold
Realized
Cash Cost
($'s Per Ounce) (3)
Depletion
Margin
Price
($'s Per
($'s Per
($'s Per
($'s Per
Ounce) (2)
Ounce)
Ounce)
Ounce)
Gold equivalent basis (4) 320,843 324,847 $ 1,878 $ 446 $ 1,432 $ 379 $ 1,053
1) Quantity produced represent the amount of gold, silver, palladium and
cobalt contained in concentrate or doré prior to smelting or refining
deductions. Production figures are based on information provided by the
operators of the mining operations to which the mineral stream interests
relate or management estimates in those situations where other information is
not available. Certain production figures may be updated in future periods as
additional information is received.
2) Silver ounces produced and sold in thousands.
3) Refer to discussion on non-IFRS measure (iii) at the end of this press
release.
4) Refer to discussion on non-IFRS measure (iv) at the end of this press
release.
5) GEOs, which are provided to assist the reader, are based on the
following commodity price assumptions: $1,850 per ounce gold; $24.00 per ounce
silver; $1,800 per ounce palladium; and $18.75 per pound cobalt; consistent
with those used in estimating the Company's production guidance for 2023.
Non-IFRS Measures
Wheaton has included, throughout this document, certain non-IFRS performance
measures, including (i) adjusted net earnings and adjusted net earnings per
share; (ii) operating cash flow per share (basic and diluted); (iii) average
cash costs of gold, silver and palladium on a per ounce basis and cobalt on a
per pound basis; and (iv) cash operating margin.
i. Adjusted net earnings and adjusted net earnings per share are
calculated by removing the effects of non-cash impairment charges
(reversals) (if any), non-cash fair value (gains) losses and other one-time
(income) expenses as well as the reversal of non-cash income tax expense
(recovery) which is offset by income tax expense (recovery) recognized in the
Statements of Shareholders' Equity and OCI, respectively. The Company believes
that, in addition to conventional measures prepared in accordance with IFRS,
management and certain investors use this information to evaluate the
Company's performance.
The following table provides a reconciliation of adjusted net earnings and
adjusted net earnings per share (basic and diluted).
Three Months Ended Six Months Ended
June 30
June 30
(in thousands, except for per share amounts) 2023 2022 2023 2022
Net earnings $ 141,448 $ 149,074 $ 252,839 $ 306,542
Add back (deduct):
Gain on disposal of Mineral Stream Interest (5,027) - (5,027) -
(Gain) loss on fair value adjustment of share purchase warrants held 280 154 105 897
Income tax (expense) recovery recognized in the Statement of Shareholders' - (292) - 500
Equity
Income tax (expense) recovery recognized in the Statement of OCI 6,044 349 2,090 155
Income tax recovery related to prior year disposal of Mineral Stream Interest - - (2,672) -
Other (161) - (320) (802)
Adjusted net earnings $ 142,584 $ 149,285 $ 247,015 $ 307,292
Divided by:
Basic weighted average number of shares outstanding 452,892 451,524 452,633 451,221
Diluted weighted average number of shares outstanding 453,575 452,359 453,368 452,123
Equals:
Adjusted earnings per share - basic $ 0.315 $ 0.331 $ 0.546 $ 0.681
Adjusted earnings per share - diluted $ 0.314 $ 0.330 $ 0.545 $ 0.680
ii. Operating cash flow per share (basic and diluted) is calculated by
dividing cash generated by operating activities by the weighted average number
of shares outstanding (basic and diluted). The Company presents operating cash
flow per share as management and certain investors use this information to
evaluate the Company's performance in comparison to other companies in the
precious metal mining industry who present results on a similar basis.
The following table provides a reconciliation of operating cash flow per share
(basic and diluted).
Three Months Ended Six Months Ended
June 30
June 30
(in thousands, except for per share amounts) 2023 2022 2023 2022
Cash generated by operating activities $ 202,376 $ 206,359 $ 337,482 $ 416,899
Divided by:
Basic weighted average number of shares outstanding 452,892 451,524 452,633 451,221
Diluted weighted average number of shares outstanding 453,575 452,359 453,368 452,123
Equals:
Operating cash flow per share - basic $ 0.447 $ 0.457 $ 0.746 $ 0.924
Operating cash flow per share - diluted $ 0.446 $ 0.456 $ 0.744 $ 0.922
iii. Average cash cost of gold, silver and palladium on a per ounce basis
and cobalt on a per pound basis is calculated by dividing the total cost of
sales, less depletion, by the ounces or pounds sold. In the precious metal
mining industry, this is a common performance measure but does not have any
standardized meaning prescribed by IFRS. In addition to conventional measures
prepared in accordance with IFRS, management and certain investors use this
information to evaluate the Company's performance and ability to generate cash
flow.
The following table provides a calculation of average cash cost of gold,
silver and palladium on a per ounce basis and cobalt on a per pound basis.
Three Months Ended Six Months Ended
June 30
June 30
(in thousands, except for gold and palladium ounces sold and per unit amounts) 2023 2022 2023 2022
Cost of sales $ 113,116 $ 140,625 $ 210,079 $ 268,020
Less: depletion (54,474) (65,682) (99,473) (123,084)
Cash cost of sales $ 58,642 $ 74,943 $ 110,606 $ 144,936
Cash cost of sales is comprised of:
Total cash cost of gold sold $ 34,675 $ 39,189 $ 65,711 $ 76,321
Total cash cost of silver sold 22,234 32,834 41,231 61,149
Total cash cost of palladium sold 887 1,378 1,752 2,980
Total cash cost of cobalt sold 846 1,542 1,912 4,486
Total cash cost of sales $ 58,642 $ 74,943 $ 110,606 $ 144,936
Divided by:
Total gold ounces sold 75,294 84,337 137,899 162,238
Total silver ounces sold 4,437 5,848 8,186 11,401
Total palladium ounces sold 3,392 3,378 6,338 7,453
Total cobalt pounds sold 265 225 588 736
Equals:
Average cash cost of gold (per ounce) $ 461 $ 465 $ 477 $ 470
Average cash cost of silver (per ounce) $ 5.01 $ 5.61 $ 5.04 $ 5.36
Average cash cost of palladium (per ounce) $ 261 $ 408 $ 277 $ 400
Average cash cost of cobalt (per pound) $ 3.20 $ 6.86 $ 3.25 $ 6.09
iv. Cash operating margin is calculated by subtracting the average cash
cost of gold, silver and palladium on a per ounce basis and cobalt on a per
pound basis from the average realized selling price of gold, silver and
palladium on a per ounce basis and cobalt on a per pound basis. The Company
presents cash operating margin as management and certain investors use this
information to evaluate the Company's performance in comparison to other
companies in the precious metal mining industry who present results on a
similar basis as well as to evaluate the Company's ability to generate cash
flow.
The following table provides a reconciliation of cash operating margin.
Three Months Ended Six Months Ended
June 30
June 30
(in thousands, except for gold and palladium ounces sold and per unit amounts) 2023 2022 2023 2022
Total sales:
Gold $ 149,511 $ 157,842 $ 268,708 $ 303,517
Silver $ 107,081 $ 130,228 $ 192,758 $ 264,560
Palladium $ 4,879 $ 7,203 $ 9,614 $ 16,736
Cobalt $ 3,501 $ 7,649 $ 8,357 $ 25,353
Divided by:
Total gold ounces sold 75,294 84,337 137,899 162,238
Total silver ounces sold 4,437 5,848 8,186 11,401
Total palladium ounces sold 3,392 3,378 6,338 7,453
Total cobalt pounds sold 265 225 588 736
Equals:
Average realized price of gold (per ounce) $ 1,986 $ 1,872 $ 1,949 $ 1,871
Average realized price of silver (per ounce) $ 24.13 $ 22.27 $ 23.55 $ 23.21
Average realized price of palladium (per ounce) $ 1,438 $ 2,132 $ 1,517 $ 2,246
Average realized price of cobalt (per pound) $ 13.23 $ 34.01 $ 14.22 $ 34.43
Less:
Average cash cost of gold (1) (per ounce) $ (461) $ (465) $ (477) $ (470)
Average cash cost of silver (1) (per ounce) $ (5.01) $ (5.61) $ (5.04) $ (5.36)
Average cash cost of palladium (1) (per ounce) $ (261) $ (408) $ (277) $ (400)
Average cash cost of cobalt (1) (per pound) $ (3.20) $ (6.86) $ (3.25) $ (6.09)
Equals:
Cash operating margin per gold ounce sold $ 1,525 $ 1,407 $ 1,472 $ 1,401
As a percentage of realized price of gold 77% 75% 76% 75%
Cash operating margin per silver ounce sold $ 19.12 $ 16.66 $ 18.51 $ 17.85
As a percentage of realized price of silver 79% 75% 79% 77%
Cash operating margin per palladium ounce sold $ 1,177 $ 1,724 $ 1,240 $ 1,846
As a percentage of realized price of palladium 82% 81% 82% 82%
Cash operating margin per cobalt pound sold $ 10.03 $ 27.15 $ 10.97 $ 28.34
As a percentage of realized price of cobalt 76% 80% 77% 82%
1) Please refer to non-IFRS measure (iii), above.
These non-IFRS measures do not have any standardized meaning prescribed by
IFRS, and other companies may calculate these measures differently. The
presentation of these non-IFRS measures is intended to provide additional
information and should not be considered in isolation or as a substitute for
measures of performance prepared in accordance with IFRS. For more detailed
information, please refer to Wheaton's MD&A available on the Company's
website at www.wheatonpm.com and posted on SEDAR+ at www.sedarplus.ca.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This press release contains "forward-looking statements" within the meaning of
the United States Private Securities Litigation Reform Act of 1995 and
"forward-looking information" within the meaning of applicable Canadian
securities legislation concerning the business, operations and financial
performance of Wheaton and, in some instances, the business, mining operations
and performance of Wheaton's PMPA counterparties. Forward-looking statements,
which are all statements other than statements of historical fact, include,
but are not limited to, statements with respect the resolution of the labour
dispute and resumption of operations at Peñasquito, to the future price of
commodities, the estimation of future production from Mining Operations
(including in the estimation of production, mill throughput, grades,
recoveries and exploration potential), the estimation of mineral reserves and
mineral resources (including the estimation of reserve conversion rates) and
the realization of such estimations, the commencement, timing and achievement
of construction, expansion or improvement projects by Wheaton's PMPA
counterparties at mineral stream interests owned by Wheaton (the "Mining
Operations"), the payment of upfront cash consideration to counterparties
under PMPAs, the satisfaction of each party's obligations in accordance with
PMPAs and royalty arrangements and the receipt by the Company of precious
metals and cobalt production in respect of the applicable Mining Operations
under PMPAs or other payments under royalty arrangements, the ability of
Wheaton's PMPA counterparties to comply with the terms of a PMPA (including as
a result of the business, mining operations and performance of Wheaton's PMPA
counterparties) and the potential impacts of such on Wheaton, future payments
by the Company in accordance with PMPAs, the costs of future production, the
estimation of produced but not yet delivered ounces, the impact of epidemics
(including the COVID-19 virus pandemic), including the potential heightening
of other risks, future sales of common shares under the ATM program, continued
listing of the Company's common shares, any statements as to future dividends,
the ability to fund outstanding commitments and the ability to continue to
acquire accretive PMPAs, including any acceleration of payments, projected
increases to Wheaton's production and cash flow profile, projected changes to
Wheaton's production mix, the ability of Wheaton's PMPA counterparties to
comply with the terms of any other obligations under agreements with the
Company, the ability to sell precious metals and cobalt production, confidence
in the Company's business structure, the Company's assessment of taxes payable
and the impact of the CRA Settlement, possible domestic audits for taxation
years subsequent to 2016 and international audits, the Company's assessment of
the impact of any tax reassessments, the Company's intention to file future
tax returns in a manner consistent with the CRA Settlement, the Company's
climate change and environmental commitments, and assessments of the impact
and resolution of various legal and tax matters, including but not limited to
audits. Generally, these forward-looking statements can be identified by the
use of forward-looking terminology such as "plans", "expects" or "does not
expect", "is expected", "budget", "scheduled", "estimates", "forecasts",
"projects", "intends", "anticipates" or "does not anticipate", or "believes",
"potential", or variations of such words and phrases or statements that
certain actions, events or results "may", "could", "would", "might" or "will
be taken", "occur" or "be achieved". Forward-looking statements are subject to
known and unknown risks, uncertainties and other factors that may cause the
actual results, level of activity, performance or achievements of Wheaton to
be materially different from those expressed or implied by such
forward-looking statements, including but not limited to risks related to the
ongoing labour dispute and suspension of operations at Peñasquito, risks
relating to the satisfaction of each party's obligations in accordance with
the terms of the Company's PMPAs or royalty arrangements, risks associated
with fluctuations in the price of commodities (including Wheaton's ability to
sell its precious metals or cobalt production at acceptable prices or at all),
risks related to the Mining Operations (including fluctuations in the price of
the primary or other commodities mined at such operations, regulatory,
political and other risks of the jurisdictions in which the Mining Operations
are located, actual results of mining, risks associated with the exploration,
development, operating, expansion and improvement of the Mining Operations,
environmental and economic risks of the Mining Operations, and changes in
project parameters as plans continue to be refined), the absence of control
over the Mining Operations and having to rely on the accuracy of the public
disclosure and other information Wheaton receives from the Mining Operations,
uncertainty in the estimation of production from Mining Operations,
uncertainty in the accuracy of mineral reserve and mineral resource
estimation, risks of significant impacts on Wheaton or the Mining Operations
as a result of an epidemic (including the COVID-19 virus pandemic), the
ability of each party to satisfy their obligations in accordance with the
terms of the PMPAs, the estimation of future production from Mining
Operations, Wheaton's interpretation of, compliance with or application of,
tax laws and regulations or accounting policies and rules being found to be
incorrect, any challenge or reassessment by the CRA of the Company's tax
filings being successful and the potential negative impact to the Company's
previous and future tax filings, assessing the impact of the CRA Settlement
(including whether there will be any material change in the Company's facts or
change in law or jurisprudence), potential amendments to Canada's transfer
pricing rules under the Income Tax Act (Canada) that may result from the
Department of Finance's consultation paper released June 6, 2023, potential
implementation of a 15% global minimum tax, including the draft legislation
issued for consultation by the Canadian Federal Government on August 4, 2023
that would apply to the income of the Company's non-Canadian subsidiaries;
counterparty credit and liquidity, mine operator concentration, indebtedness
and guarantees, hedging, competition, claims and legal proceedings against
Wheaton or the Mining Operations, security over underlying assets,
governmental regulations, international operations of Wheaton and the Mining
Operations, exploration, development, operations, expansions and improvements
at the Mining Operations, environmental regulations, climate change, Wheaton
and the Mining Operations ability to obtain and maintain necessary licenses,
permits, approvals and rulings, Wheaton and the Mining Operations ability to
comply with applicable laws, regulations and permitting requirements, lack of
suitable supplies, infrastructure and employees to support the Mining
Operations, inability to replace and expand mineral reserves, including
anticipated timing of the commencement of production by certain Mining
Operations (including increases in production, estimated grades and
recoveries), uncertainties of title and indigenous rights with respect to the
Mining Operations, environmental, social and governance matters, Wheaton and
the Mining Operations ability to obtain adequate financing, the Mining
Operations ability to complete permitting, construction, development and
expansion, global financial conditions, Wheaton's acquisition strategy and
other risks discussed in the section entitled "Description of the Business -
Risk Factors" in Wheaton's Annual Information Form available on SEDAR+ at
www.sedarplus.ca (http://www.sedarplus.ca) and Wheaton's Form 40-F for the
year ended December 31, 2022 on file with the U.S. Securities and Exchange
Commission on EDGAR (the "Disclosure"). Forward-looking statements are based
on assumptions management currently believes to be reasonable, including
(without limitation): that the labour dispute at Peñasquito will resolve and
operations will resume by the end of the third quarter of 2023, that there
will be no material adverse change in the market price of commodities, that
the Mining Operations will continue to operate and the mining projects will be
completed in accordance with public statements and achieve their stated
production estimates, that the mineral reserves and mineral resource estimates
from Mining Operations (including reserve conversion rates) are accurate, that
each party will satisfy their obligations in accordance with the PMPAs, that
Wheaton will continue to be able to fund or obtain funding for outstanding
commitments, that Wheaton will be able to source and obtain accretive PMPAs,
that neither Wheaton nor the Mining Operations will suffer significant impacts
as a result of an epidemic (including the COVID-19 virus pandemic), that any
outbreak or threat of an outbreak of a virus or other contagions or epidemic
disease will be adequately responded to locally, nationally, regionally and
internationally, without such response requiring any prolonged closure of the
Mining Operations or having other material adverse effects on the Company and
counterparties to its PMPAs, that the trading of the Company's common shares
will not be adversely affected by the differences in liquidity, settlement and
clearing systems as a result of multiple listings of the Common Shares on the
LSE, the TSX and the NYSE, that the trading of the Company's common shares
will not be suspended, and that the net proceeds of sales of common shares, if
any, will be used as anticipated, that expectations regarding the resolution
of legal and tax matters will be achieved (including ongoing CRA audits
involving the Company), that Wheaton has properly considered the
interpretation and application of Canadian tax law to its structure and
operations, that Wheaton has filed its tax returns and paid applicable taxes
in compliance with Canadian tax law, that Wheaton's application of the CRA
Settlement is accurate (including the Company's assessment that there will be
no material change in the Company's facts or change in law or jurisprudence),
and such other assumptions and factors as set out in the Disclosure. There can
be no assurance that forward-looking statements will prove to be accurate and
even if events or results described in the forward-looking statements are
realized or substantially realized, there can be no assurance that they will
have the expected consequences to, or effects on, Wheaton. Readers should not
place undue reliance on forward-looking statements and are cautioned that
actual outcomes may vary. The forward-looking statements included herein are
for the purpose of providing readers with information to assist them in
understanding Wheaton's expected financial and operational performance and may
not be appropriate for other purposes. Any forward-looking statement speaks
only as of the date on which it is made, reflects Wheaton's management's
current beliefs based on current information and will not be updated except in
accordance with applicable securities laws. Although Wheaton has attempted to
identify important factors that could cause actual results, level of activity,
performance or achievements to differ materially from those contained in
forward‑looking statements, there may be other factors that cause results,
level of activity, performance or achievements not to be as anticipated,
estimated or intended.
Cautionary Language Regarding Reserves And Resources
For further information on Mineral Reserves and Mineral Resources and on
Wheaton more generally, readers should refer to Wheaton's Annual Information
Form for the year ended December 31, 2022, which was filed on March 31, 2023
and other continuous disclosure documents filed by Wheaton since January 1,
2023, available on SEDAR+ at www.sedarplus.ca. Wheaton's Mineral Reserves and
Mineral Resources are subject to the qualifications and notes set forth
therein. Mineral Resources which are not Mineral Reserves do not have
demonstrated economic viability.
Cautionary Note to United States Investors Concerning Estimates of Measured,
Indicated and Inferred Resources: The information contained herein has been
prepared in accordance with the requirements of the securities laws in effect
in Canada, which differ from the requirements of United States securities
laws. The Company reports information regarding mineral properties,
mineralization and estimates of mineral reserves and mineral resources in
accordance with Canadian reporting requirements which are governed by, and
utilize definitions required by, Canadian National Instrument 43-101 -
Standards of Disclosure for Mineral Projects ("NI 43-101") and the Canadian
Institute of Mining, Metallurgy and Petroleum (the "CIM") - CIM Definition
Standards on Mineral Resources and Mineral Reserves, adopted by the CIM
Council, as amended (the "CIM Standards"). These definitions differ from the
definitions adopted by the United States Securities and Exchange Commission
("SEC") under the United States Securities Act of 1933, as amended (the
"Securities Act") which are applicable to U.S. companies. Accordingly, there
is no assurance any mineral reserves or mineral resources that the Company may
report as "proven mineral reserves", "probable mineral reserves", "measured
mineral resources", "indicated mineral resources" and "inferred mineral
resources" under NI 43-101 would be the same had the Company prepared the
reserve or resource estimates under the standards adopted by the SEC.
Accordingly, information contained herein that describes Wheaton's mineral
deposits may not be comparable to similar information made public by U.S.
companies subject to reporting and disclosure requirements under the United
States federal securities laws and the rules and regulations thereunder.
United States investors are urged to consider closely the disclosure in
Wheaton's Form 40-F, a copy of which may be obtained from Wheaton or from
https://www.sec.gov/edgar.shtml (https://www.sec.gov/edgar.shtml) .
For further information, please contact:
Patrick Drouin or Emma Murray
Wheaton Precious Metals Corp.
info@wheatonpm.com | 1-844-288-9878
1 (#_ednref1) Please refer to non-IFRS measures at the end of this press
release. Dividends declared in the referenced calendar quarter, relative to
the financial results of the prior quarter. Details of the dividend can be
found in the Wheaton's news release date August 10, 2023, titled "Wheaton
Precious Metals Declares Quarterly Dividend."
2 (#_ednref2) Statements made in this section contain forward-looking
information with respect to forecast production, funding outstanding
commitments and continuing to acquire accretive mineral stream interests and
readers are cautioned that actual outcomes may vary. Please see "Cautionary
Note Regarding Forward-Looking Statements" for material risks, assumptions and
important disclosure associated with this information.
3 (#_ednref3) Company reports & S and P Capital IQ est. of 2022
byproduct cost curves for gold, zinc/lead, copper, PGM, nickel & silver
mines. GEOs relating to production and guidance, which are provided to assist
the reader, are based on the following commodity price assumptions: gold
$1,850/oz, silver $24/oz, palladium $1,800/oz, platinum $1,100/oz and cobalt
$18.75/lb. 2023 Guidance assumes the resumption of production at Peñasquito
before the end of Q3 2023. Five-year and ten-year guidance does not include
any production from Pascua-Lama, Navidad, Cotabambas, Metates or additional
expansions at Salobo outside of the Salobo III expansion. In addition,
five-year guidance also does not include any production from Kutcho, or the
Victor project at Sudbury. Ounces produced represent the quantity of silver,
gold, palladium and cobalt contained in concentrate or doré prior to smelting
or refining deductions.
4 (#_ednref4) Portfolio mine life based on recoverable reserves and
resources as of Dec 31, 2022 and 2022 actual mill throughput and is weighted
by individual reserve and resource category.
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