Third Quarter Results
November 4, 2021 TSX | NYSE | LSE: WPM
Vancouver, British Columbia
Designated News Release
THIRD quarter 2021 financial results
WHEATON PRECIOUS METALS Announces record revenue, Earnings and cash flow for the first nine months of 2021
"Wheaton's diversified portfolio of high-quality, long-life assets continues to deliver strong results, including record revenue, earnings and cash flow in the first nine months of 2021. In addition, the Company declared a dividend of $0.15 per common share, a 25% increase relative to the prior year," said Randy Smallwood, President and Chief Executive Officer of Wheaton Precious Metals. "Strong year to date production, particularly driven by silver, has led the Company to narrow its annual guidance to 735,000 to 765,000 gold equivalent ounces, consistent with the previous midpoint of guidance."
Third Quarter 2021 Highlights:
· Over $200 million in operating cash flow during the third quarter and a record $650 million in the first nine months of 2021.
· $269 million in revenue during the third quarter and a record $923 million in the first nine months of 2021.
· $137 million in adjusted net earnings during the third quarter and a record $460 million in the first nine months of 2021.
· Signed a non-binding term sheet with Rio2 Limited to enter into a precious metals purchase agreement in connection with the Fenix Gold project located in Chile.
· Strong financial position with approximately $372 million in cash on hand and $2 billion of additional capacity through the revolving credit facility as of September 30, 2021.
· Declared quarterly dividend 1 of $0.15 per common share.
Operational Overview
|
(all figures in US dollars unless otherwise noted) |
|
|
Q3 2021 |
|
|
Q3 2020 |
|
Change |
|
Units produced |
|
|
|
|
|
|
|
|
|
Gold ounces |
|
|
85,941 |
|
|
90,500 |
|
(5.0)% |
|
Silver ounces |
|
|
6,394 |
|
|
6,028 |
|
6.1 % |
|
Palladium ounces |
|
|
5,105 |
|
|
5,444 |
|
(6.2)% |
|
Cobalt pounds |
|
|
370,522 |
|
|
- |
|
n.a. |
|
Gold equivalent ounces 2 |
|
|
184,918 |
|
|
181,184 |
|
2.1 % |
|
Units sold |
|
|
|
|
|
|
|
|
|
Gold ounces |
|
|
67,649 |
|
|
90,101 |
|
(24.9)% |
|
Silver ounces |
|
|
5,487 |
|
|
4,999 |
|
9.8 % |
|
Palladium ounces |
|
|
5,703 |
|
|
5,546 |
|
2.8 % |
|
Cobalt pounds |
|
|
131,174 |
|
|
- |
|
n.a. |
|
Gold equivalent ounces 2 |
|
|
152,432 |
|
|
166,611 |
|
(8.5)% |
|
Revenue |
|
$ |
268,957 |
|
$ |
307,268 |
|
(12.5)% |
|
Net earnings |
|
$ |
134,937 |
|
$ |
149,875 |
|
(10.0)% |
|
Per share |
|
$ |
0.300 |
|
$ |
0.334 |
|
(10.2)% |
|
Adjusted net earnings 1 |
|
$ |
137,087 |
|
$ |
152,007 |
|
(9.8)% |
|
Per share 1 |
|
$ |
0.304 |
|
$ |
0.338 |
|
(10.1)% |
|
Operating cash flows |
|
$ |
201,287 |
|
$ |
228,099 |
|
(11.8)% |
|
Per share 1 |
|
$ |
0.447 |
|
$ |
0.508 |
|
(12.0)% |
All amounts in thousands except gold, palladium & gold equivalent ounces and cobalt pounds produced & sold, per ounce/pound amounts & per share amounts [1] [2]
Reiterating Gold Equivalent Production Guidance
Wheaton's estimated attributable production in 2021 is now forecast to be approximately 735,000 to 765,000 gold equivalent ounces2 ("GEOs") in line with previous guidance of 720,000 to 780,000 GEOs. However, given strong performances at Peñasquito, Antamina and Voisey's Bay, coupled with production being lower than expected at Salobo, Wheaton is adjusting the production mix by metal as per the table below. Longer term guidance remains unchanged at an average production of 810,000 GEOs for the five-year period ending 2025 and 830,000 GEOs for the ten-year period ending in 2030[3].
|
|
Updated Guidance |
Original Guidance |
|
Gold Ounces |
330,000 to 345,000 |
370,000 to 400,000 |
|
Silver Ounces ('000s) |
25,500 to 26,500 |
22,500 to 24,000 |
|
Other Metals 2 (GEOs) |
45,000 to 55,000 |
40,000 to 45,000 |
|
Total GEOs 2 |
735,000 to 765,000 |
720,000 to 780,000 |
Corporate Development
Fenix Gold Project: On July 20, 2021, the Company signed a non-binding term sheet with Rio2 Limited ("Rio2") to enter into a precious metals purchase agreement ("PMPA") in connection with the Fenix Gold project located in Chile. Under the terms of the proposed Fenix PMPA, the Company will acquire 6% of the gold production until 90,000 ounces have been delivered and 4% of the gold production until 140,000 ounces have been delivered, after which the stream drops to 3.5% for the life of mine. In addition, under the proposed Fenix PMPA, the Company will pay a total upfront cash consideration of $50 million, $25 million of which is payable upon closing, subject to certain conditions, and $25 million payable subject to Rio2's receipt of its Environmental Impact Assessment for the Fenix Gold project, and certain other conditions. In addition, the Company will make ongoing delivery payments equal to approximately 18% of the spot price until the value of gold delivered less the production payment is equal to the upfront consideration of $50 million, at which point the production payment will increase to 22% of the spot gold price. The entering into of the Fenix PMPA is subject to, among other matters, the negotiation and completion of definitive documentation.
Financial Review
Revenues
Revenue was $269 million in the third quarter of 2021 representing a 12% decrease from the third quarter of 2020 due primarily to a 9% decrease in the number of gold equivalent² ounces sold, primarily the result of a large build-up of payable ounces produced but not yet delivered ("PBND") at Salobo; and a 4% decrease in the average realized gold equivalent² price.
Cash Costs and Margin
Average cash costs¹ in the third quarter of 2021 were $410 per gold equivalent² ounce as compared to $421 in third quarter of 2020. This resulted in a cash operating margin¹ of $1,354 per gold equivalent² ounce sold, a decrease of 5% as compared with the third quarter of 2020.
Balance Sheet (at September 30, 2021 )
· Approximately $372 million of cash on hand.
· The Company's $2 billion revolving term loan (the "Revolving Facility") remains fully repaid.
Third Quarter Asset Highlights
Salobo: In the third quarter of 2021, Salobo produced 55,200 ounces of attributable gold, a decrease of approximately 13% relative to the third quarter of 2020 due to lower throughput and grade. On October 22, 2021, Vale S.A. ("Vale") announced the resumption of conveyor belt operations at Salobo, that was halted for 18 days due to a fire. Other activities, including mine and maintenance operations, continued as usual during this period but concentrate production was interrupted. Concentrate production resumed on October 22, 2021 and ramped up over a three day period. Vale further reports that physical completion of the Salobo III mine expansion was 81% at the end of the third quarter and is on track for start-up in the second half of 2022.
Peñasquito: In the third quarter of 2021, Peñasquito produced 2.2 million ounces of attributable silver, an increase of approximately 9% relative to the third quarter of 2020, with throughput, grades and recoveries all being higher.
Antamina: In the third quarter of 2021, Antamina produced 1.5 million ounces of attributable silver, an increase of approximately 2% relative to the third quarter of 2020, primarily due to higher recoveries . Subsequent to the quarter, as per Compaña Minera Antamina S.A.'s (the operating company of Antamina) news release dated October 31, 2021, operations at Antamina have been temporarily suspended to ensure the health and safety of its workforce and other stakeholders following recent protests in Peru.
Constancia: In the third quarter of 2021, Constancia produced 0.5 million ounces of attributable silver and 8,500 ounces of attributable gold, an increase of approximately 21% and 126%, respectively, relative to the third quarter of 2020. Silver production was higher primarily as a result of higher grades. The increase in gold production was primarily due to higher grades resulting from the commencement of ore production from the Pampacancha satellite deposit and the increase in fixed recoveries from 55% to 70%, partially offset by the receipt of 2,005 ounces in the third quarter of 2020 related to delays in accessing the Pampacancha deposit while no delay payment was received in 2021.
Sudbury: In the third quarter of 2021, Vale's Sudbury mines produced 500 ounces of attributable gold, a decrease of approximately 88% relative to the third quarter of 2020, which was primarily due to lower throughput, as operations at the mine were suspended due to a labour dispute, which lasted from June 1, 2021 to August 9, 2021. Vale announced on August 3, 2021 that a new five-year collective bargaining agreement had been ratified with mine workers. The Sudbury PMPA had an effective date of February 28, 2013 with a term of 20 years. Under the provisions of the Sudbury PMPA, should the facilities at Sudbury be shut down for 60 or more cumulative days, exclusive of scheduled maintenance or shutdowns for periods of 20 days or less, the term of the Sudbury PMPA shall be extended for the same duration. As a result, the term of the agreement was extended by 69 days.
Stillwater: In the third quarter of 2021, the Stillwater mines produced 2,900 ounces of attributable gold and 5,100 ounces of attributable palladium, a decrease of approximately 7% for gold and 6% for palladium relative to the third quarter of 2020 due to lower grades.
San Dimas: In the third quarter of 2021, San Dimas produced 11,900 ounces of attributable gold, an increase of approximately 29% relative to the third quarter of 2020 , primarily due to higher throughput coupled with the impact of changing the silver to gold conversion ratio from 70:1 to 90:1 from April 1, 2020 to October 15, 2020, at which time it reverted to 70:1.
Voisey's Bay: In the third quarter of 2021, the Voisey's Bay mine produced 371,000 pounds of attributable cobalt. As at the end of the third quarter 2021, approximately 488,000 pounds of cobalt were held in inventory by Wheaton and 638,000 pounds were produced but not yet delivered. As per Vale's Third Quarter 2021 Performance Report, physical completion of the Voisey's Bay underground mine extension, which includes developing two underground mines - Reid Brook and Eastern Deeps - was 70% at the end of the third quarter.
Rosemont: Hudbay announced on September 22, 2021, the intersection of additional high-grade copper sulphide and oxide mineralization on its wholly-owned patented mining claims located within close proximity of its Rosemont copper project in Arizona ("Copper World"). To date, seven deposits have been identified at Copper World with a combined strike length of over seven kilometres. As of June 30, 2021, approximately 166 holes were completed totaling over 91,000 feet of drilling. Hudbay expects to publish an initial inferred mineral resource estimate for Copper World before the end of 2021, and these mineral resource estimates will form the basis for a preliminary economic assessment ("PEA") expected to be released by Hudbay in the first half of 2022. The Copper World discovery is included in Wheaton's area of interest under the PMPA.
Produced But Not Yet Delivered[4]
As at September 30, 2021 , payable ounces and pounds attributable to the Company produced but not yet delivered amounted to:
· 81,200 payable gold ounces, an increase of 15,000 ounces during Q3 2021 , primarily due to an increase during the period at the Salobo mine.
· 4.1 million payable silver ounces, virtually unchanged during Q3 2021, as decreases during the period at the Peñasquito mine were offset by an increase at the Yauliyacu mine.
· 5,600 payable palladium ounces, a decrease of 1,200 ounces during Q3 2021.
· 638,000 payable cobalt pounds, a decrease of 139,300 pounds during Q3 2021.
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.
Sustainability
COVID-19 Community Support and Response Fund: In the second quarter of 2020, Wheaton announced the launch of a $5 million Community Support and Response Fund (the "CSR Fund") to support global efforts to combat the social and economic impact of the COVID-19 pandemic. The CSR Fund is designed to meet the immediate needs of the communities in which Wheaton and its mining partners operate. This fund is incremental to Wheaton's already active Community Investment Program that currently provides support to over 50 programs in multiple communities around the world. As of September 30, 2021, the Company has made donations totaling approximately $4 million through the CSR Fund.
ESG Ratings: Following recent rating updates, Wheaton's Sustainalytics[5] score further improved from 9.2 to 7.9 indicating reduced risk exposure and maintained its AA rating from MSCI 5 demonstrating Wheaton's continued leadership in ESG practices. Wheaton is currently ranked in the Global Top 50 out of more than 14,000 companies and #1 for precious metals out of 122 companies by Sustainalytics5.
Partner CSR Program: Wheaton continues to support a wide range of programs with mining partners including Vale, Glencore, Hudbay and First Majestic Silver focused on education, health, entrepreneurial support, and community engagement opportunities in the communities near the mines from which Wheaton receives precious metals. In the third quarter of 2021, a solar panel installation project was completed at a Knowledge Station run by the Vale Foundation in the community of Marabá, Brazil.
Webcast and Conference Call Details
A conference call and webcast will be held on Friday, November 5, 2021 starting at 8:00am PT / 11:00 am ET to discuss these results. To participate in the live call please use one of the following methods:
Dial toll free from Canada or the US: 1-888-664-6383
Dial from outside Canada or the US:
1-416-764-8650
Pass code:
61024959
Live audio webcast: Webcast URL
Participants should dial in five to ten minutes before the call.
The accompanying slideshow will also be available in PDF format on the 'Presentations' page of the Wheaton Precious Metals website before the conference call.
The conference call will be recorded and available until November 12, 2021 at 11:59 pm ET. The webcast will be available for one year. You can listen to an archive of the call by one of the following methods:
Dial toll free from Canada or the US: 1-888-390-0541
Dial from outside Canada or the US: 1-416-764-8677
Pass code:
024959#
Archived audio webcast: Webcast URL
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.sedar.com.
Mr. Wes Carson, P.Eng., Vice President, Mining Operations, is a "qualified person" as such term is defined under National Instrument 43-101 and has reviewed and approved the technical information disclosed in this news release.
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 .
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 2021 is forecast to be 330,000 to 345,000 ounces of gold, 25.5 to 26.5 million ounces of silver, and 45,000 to 55,000 GEOs of other metals, resulting in production of approximately 735,000 to 765,000 GEOs, in line with previous guidance. For the five-year period ending in 2025, the Company estimates that average production will amount to 810,000 GEOs3. For the ten-year period ending in 2030, the Company estimates that average annual production will amount to 830,000 GEOs3.
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.
Condensed InterimConsolidated Statements of Earnings
|
| Three Months Ended | Nine Months Ended | |||||||
(US dollars and shares in thousands, except per share amounts - unaudited) |
| 2021 | 2020 | 2021 | 2020 | |||||
Sales |
| $ | 268,957 | $ | 307,268 | $ | 923,468 | $ | 810,012 | |
Cost of sales |
|
|
|
|
|
|
|
|
| |
Cost of sales, excluding depletion |
| $ | 62,529 | $ | 70,119 | $ | 219,757 | $ | 202,238 | |
Depletion |
|
| 54,976 |
| 60,601 |
| 195,458 |
| 184,104 | |
Total cost of sales |
| $ | 117,505 | $ | 130,720 | $ | 415,215 | $ | 386,342 | |
Gross margin |
| $ | 151,452 | $ | 176,548 | $ | 508,253 | $ | 423,670 | |
General and administrative expenses |
|
| 13,595 |
| 21,326 |
| 44,030 |
| 56,307 | |
Earnings from operations |
| $ | 137,857 | $ | 155,222 | $ | 464,223 | $ | 367,363 | |
Other (income) expense |
|
| 1,108 |
| 2,624 |
| (2,194) |
| (1,340) | |
Earnings before finance costs and income taxes | $ | 136,749 | $ | 152,598 | $ | 466,417 | $ | 368,703 | ||
Finance costs |
|
| 1,379 |
| 2,766 |
| 4,309 |
| 14,519 | |
Earnings before income taxes |
| $ | 135,370 | $ | 149,832 | $ | 462,108 | $ | 354,184 | |
Income tax (expense) recovery |
|
| (433) |
| 43 |
| 955 |
| (3,601) | |
Net earnings |
| $ | 134,937 | $ | 149,875 | $ | 463,063 | $ | 350,583 | |
Basic earnings per share |
| $ | 0.300 | $ | 0.334 | $ | 1.029 | $ | 0.782 | |
Diluted earnings per share |
| $ | 0.299 | $ | 0.332 | $ | 1.026 | $ | 0.779 | |
Weighted average number of shares outstanding |
|
|
|
|
|
|
|
|
| |
Basic |
|
| 450,326 |
| 449,125 |
| 449,977 |
| 448,484 | |
Diluted |
|
| 451,717 |
| 451,999 |
| 451,369 |
| 449,892 | |
Condensed InterimConsolidated Balance Sheets
| As at | As at | ||
(US dollars in thousands - unaudited) | 2021 | 2020 | ||
Assets |
|
|
|
|
Current assets |
|
|
|
|
Cash and cash equivalents | $ | 372,450 | $ | 192,683 |
Accounts receivable |
| 10,392 |
| 5,883 |
Other |
| 9,874 |
| 3,265 |
Total current assets | $ | 392,716 | $ | 201,831 |
Non-current assets |
|
|
|
|
Mineral stream interests | $ | 5,505,663 | $ | 5,488,391 |
Early deposit mineral stream interests |
| 34,741 |
| 33,241 |
Mineral royalty interest |
| 6,606 |
| 3,047 |
Long-term equity investments |
| 71,741 |
| 199,878 |
Convertible notes receivable |
| 15,489 |
| 11,353 |
Property, plant and equipment |
| 5,790 |
| 6,289 |
Other |
| 13,994 |
| 13,242 |
Total non-current assets | $ | 5,654,024 | $ | 5,755,441 |
Total assets | $ | 6,046,740 | $ | 5,957,272 |
Liabilities |
|
|
|
|
Current liabilities |
|
|
|
|
Accounts payable and accrued liabilities | $ | 14,514 | $ | 13,023 |
Current portion of performance share units |
| 13,348 |
| 17,297 |
Current portion of lease liabilities |
| 801 |
| 773 |
Other |
| 154 |
| 76 |
Total current liabilities | $ | 28,817 | $ | 31,169 |
Non-current liabilities |
|
|
|
|
Bank debt | $ | - | $ | 195,000 |
Lease liabilities |
| 2,258 |
| 2,864 |
Deferred income taxes |
| 276 |
| 214 |
Performance share units |
| 8,667 |
| 11,784 |
Pension liability |
| 2,369 |
| 1,670 |
Total non-current liabilities | $ | 13,570 | $ | 211,532 |
Total liabilities | $ | 42,387 | $ | 242,701 |
Shareholders' equity |
|
|
|
|
Issued capital | $ | 3,685,032 | $ | 3,646,291 |
Reserves |
| 50,769 |
| 126,882 |
Retained earnings |
| 2,268,552 |
| 1,941,398 |
Total shareholders' equity | $ | 6,004,353 | $ | 5,714,571 |
Total liabilities and shareholders' equity | $ | 6,046,740 | $ | 5,957,272 |
Condensed InterimConsolidated Statements of Cash Flows
|
| Three Months Ended | Nine Months Ended | ||||||
(US dollars in thousands - unaudited) |
| 2021 | 2020 | 2021 | 2020 | ||||
Operating activities |
|
|
|
|
|
|
|
|
|
Net earnings |
| $ | 134,937 | $ | 149,875 | $ | 463,063 | $ | 350,583 |
Adjustments for |
|
|
|
|
|
|
|
|
|
Depreciation and depletion |
|
| 55,445 |
| 61,050 |
| 196,869 |
| 185,542 |
Interest expense |
|
| 30 |
| 1,795 |
| 324 |
| 11,289 |
Equity settled stock based compensation |
|
| 1,315 |
| 1,319 |
| 3,946 |
| 4,127 |
Performance share units |
|
| 2,824 |
| 9,325 |
| (7,128) |
| 11,734 |
Pension expense |
|
| 294 |
| 265 |
| 710 |
| 533 |
Income tax expense (recovery) |
|
| 433 |
| (43) |
| (955) |
| 3,601 |
Loss (gain) on fair value adjustment of share purchase warrants held |
|
| 1,246 |
| 1,107 |
| 2,392 |
| 845 |
Fair value (gain) loss on convertible note receivable |
|
| 490 |
| 1,095 |
| (4,136) |
| (1,382) |
Investment income recognized in net earnings |
|
| (178) |
| (23) |
| (275) |
| (178) |
Other |
|
| (9) |
| 567 |
| 685 |
| 513 |
Change in non-cash working capital |
|
| 4,434 |
| 3,656 |
| (5,341) |
| 2,771 |
Cash generated from operations before income taxes and interest |
| $ | 201,261 | $ | 229,988 | $ | 650,154 | $ | 569,978 |
Income taxes recovered (paid) |
|
| - |
| - |
| (51) |
| 70 |
Interest paid |
|
| (31) |
| (1,912) |
| (401) |
| (12,745) |
Interest received |
|
| 57 |
| 23 |
| 154 |
| 177 |
Cash generated from operating activities |
| $ | 201,287 | $ | 228,099 | $ | 649,856 | $ | 557,480 |
Financing activities |
|
|
|
|
|
|
|
|
|
Bank debt repaid |
| $ | - | $ | (153,000) | $ | (195,000) | $ | (387,000) |
Credit facility extension fees |
|
| (54) |
| (6) |
| (1,727) |
| (1,373) |
Share purchase options exercised |
|
| 183 |
| 2,763 |
| 5,719 |
| 20,779 |
Lease payments |
|
| (196) |
| (132) |
| (583) |
| (438) |
Dividends paid |
|
| (57,235) |
| (37,309) |
| (160,784) |
| (120,312) |
Cash (used for) generated from financing activities |
| $ | (57,302) | $ | (187,684) | $ | (352,375) | $ | (488,344) |
Investing activities |
|
|
|
|
|
|
|
|
|
Mineral stream interests |
| $ | (1,055) | $ | (40) | $ | (216,845) | $ | (40) |
Early deposit mineral stream interests |
|
| (750) |
| (750) |
| (1,500) |
| (1,500) |
Mineral royalty interest |
|
| - |
| - |
| (3,571) |
| - |
Acquisition of long-term investments |
|
| (5,076) |
| (10,671) |
| (7,453) |
| (10,671) |
Proceeds on disposal of long-term investments |
|
| - |
| 49,454 |
| 112,188 |
| 49,577 |
Dividends received |
|
| 110 |
| - |
| 110 |
| - |
Other |
|
| (171) |
| (363) |
| (691) |
| (691) |
Cash generated from (used for) investing activities |
| $ | (6,942) | $ | 37,630 | $ | (117,762) | $ | 36,675 |
Effect of exchange rate changes on cash and cash equivalents |
| $ | (39) | $ | 25 | $ | 48 | $ | 37 |
Increase in cash and cash equivalents |
| $ | 137,004 | $ | 78,070 | $ | 179,767 | $ | 105,848 |
Cash and cash equivalents, beginning of period |
|
| 235,446 |
| 131,764 |
| 192,683 |
| 103,986 |
Cash and cash equivalents, end of period |
| $ | 372,450 | $ | 209,834 | $ | 372,450 | $ | 209,834 |
Summary of Units Produced
| Q3 2021 | Q2 2021 | Q1 2021 | Q4 2020 | Q3 2020 | Q2 2020 | Q1 2020 | Q4 2019 |
Gold ounces produced ² |
|
|
|
|
|
|
|
|
Salobo | 55,205 | 55,590 | 46,622 | 62,854 | 63,408 | 59,104 | 62,575 | 74,716 |
Sudbury 3 | 465 | 4,563 | 7,004 | 6,659 | 3,798 | 9,257 | 7,795 | 6,468 |
Constancia 8 | 8,533 | 5,519 | 2,453 | 3,929 | 3,780 | 3,470 | 3,681 | 4,757 |
San Dimas 4, 8 | 11,936 | 11,478 | 10,491 | 11,652 | 9,228 | 6,074 | 11,318 | 11,352 |
Stillwater 5 | 2,949 | 2,962 | 3,041 | 3,290 | 3,176 | 3,222 | 2,955 | 3,585 |
Other |
|
|
|
|
|
|
|
|
Minto 6 | 1,703 | 3,206 | 2,638 | 789 | 1,832 | 2,928 | 2,124 | 2,189 |
777 9 | 4,717 | 5,035 | 6,280 | 2,866 | 5,278 | 4,728 | 4,551 | 3,987 |
Marmato | 433 | 1,713 | - | - | - | - | - | - |
Total Other | 6,853 | 9,954 | 8,918 | 3,655 | 7,110 | 7,656 | 6,675 | 6,176 |
Total gold ounces produced | 85,941 | 90,066 | 78,529 | 92,039 | 90,500 | 88,783 | 94,999 | 107,054 |
Silver ounces produced 2 |
|
|
|
|
|
|
|
|
Peñasquito 8 | 2,180 | 2,026 | 2,202 | 2,014 | 1,992 | 967 | 2,658 | 1,895 |
Antamina 8 | 1,548 | 1,558 | 1,577 | 1,930 | 1,516 | 612 | 1,311 | 1,342 |
Constancia 8 | 521 | 468 | 406 | 478 | 430 | 254 | 461 | 632 |
Other |
|
|
|
|
|
|
|
|
Los Filos 8 | 12 | 26 | 31 | 6 | 17 | 14 | 29 | 55 |
Zinkgruvan | 658 | 457 | 420 | 515 | 498 | 389 | 662 | 670 |
Yauliyacu 8 | 432 | 821 | 737 | 454 | 679 | 273 | 557 | 358 |
Stratoni | 8 | 164 | 165 | 185 | 156 | 148 | 183 | 147 |
Minto 6 | 25 | 33 | 21 | 16 | 15 | 19 | 18 | 18 |
Neves-Corvo | 362 | 408 | 345 | 420 | 281 | 479 | 377 | 385 |
Aljustrel | 314 | 400 | 474 | 440 | 348 | 388 | 352 | 325 |
Cozamin | 199 | 183 | 230 | - | - | - | - | - |
Marmato | 10 | 39 | - | - | - | - | - | - |
Keno Hill | 44 | 55 | 27 | - | - | - | - | - |
777 9 | 81 | 83 | 130 | 51 | 96 | 108 | 96 | 81 |
Total Other | 2,145 | 2,669 | 2,580 | 2,087 | 2,090 | 1,818 | 2,274 | 2,039 |
Total silver ounces produced | 6,394 | 6,721 | 6,765 | 6,509 | 6,028 | 3,651 | 6,704 | 5,908 |
Palladium ounces produced ² |
|
|
|
|
|
|
|
|
Stillwater 5 | 5,105 | 5,301 | 5,769 | 5,672 | 5,444 | 5,759 | 5,312 | 6,057 |
Cobalt pounds produced ² |
|
|
|
|
|
|
|
|
Voisey's Bay | 370,522 | 379,757 | 1,162,243 ¹ | - | - | - | - | - |
GEOs produced 7 | 184,918 | 193,927 | 191,308 | 189,682 | 181,184 | 146,857 | 194,901 | 196,850 |
SEOs produced 7 | 13,314 | 13,963 | 13,774 | 13,657 | 13,045 | 10,574 | 14,033 | 14,173 |
Average payable rate 2 |
|
|
|
|
|
|
|
|
Gold | 96.2% | 95.8% | 95.0% | 95.2% | 95.3% | 94.7% | 95.1% | 95.6% |
Silver | 86.6% | 87.0% | 86.6% | 86.3% | 86.1% | 81.9% | 85.6% | 85.3% |
Palladium | 94.5% | 95.0% | 91.6% | 93.6% | 94.0% | 90.8% | 91.0% | 92.2% |
Cobalt | 93.3% | 93.3% | 93.3% | n.a. | n.a. | n.a. | n.a. | n.a. |
GEO 7 | 91.2% | 91.7% | 90.4% | 91.1% | 91.1% | 89.8% | 90.4% | 91.5% |
1) All figures in thousands except cobalt pounds and 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. Effective April 1, 2020, the fixed gold to silver exchange ratio was revised to 90:1, with the 70:1 ratio being reinstated on October 15, 2020. For reference, attributable silver production from prior periods is as follows: Q3-2021 - 472,000 ounces; Q2-2021 - 467,000 ounces; Q1-2021 - 429,000 ounces; Q4-2020 - 485,000 ounces; Q3-2020 - 420,000 ounces; Q2-2020 - 276,000 ounces; Q1-2020 - 419,000 ounces; Q4-2019 - 415,000 ounces.
5) Comprised of the Stillwater and East Boulder gold and palladium interests.
6) The Minto mine was placed into care and maintenance from October 2018 to October 2019.
7) GEOs and SEOs, which are provided to assist the reader, are based on the following commodity price assumptions: $1,800 per ounce gold; $25.00 per ounce silver; $2,300 per ounce palladium; and $17.75 per pound cobalt; consistent with those used in estimating the Company's production guidance for 2021.
8) Operations at these mines had been temporarily suspended during the second quarter of 2020 as a result of the COVID-19 pandemic. During the second half of 2020, all of the operations were restarted. Additionally, operations at Los Filos were suspended from September 3, 2020 to December 23, 2020 as the result of an illegal road blockade by members of the nearby Carrizalillo community and had been 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.
9) Operations at 777 were temporarily suspended from October 11, 2020 to November 25, 2020 as a result of an incident that occurred on October 9th during routine maintenance of the hoist rope and skip.
10) Effective January 1, 2021, the Company was entitled to cobalt production from the Voisey's Bay mine. As per the Voisey's Bay PMPA with Vale, Wheaton is entitled to any cobalt processed at the Long Harbour Processing Plant as of January 1, 2021, resulting in reported production in the first quarter of 2021 including some material produced at the Voisey's Bay mine in the previous quarter.
Summary of Units Sold
| Q3 2021 | Q2 2021 | Q1 2021 | Q4 2020 | Q3 2020 | Q2 2020 | Q1 2020 | Q4 2019 |
Gold ounces sold |
|
|
|
|
|
|
|
|
Salobo | 35,185 | 57,296 | 51,423 | 53,197 | 59,584 | 68,487 | 74,944 | 58,137 |
Sudbury 2 | 1,915 | 6,945 | 3,691 | 7,620 | 7,858 | 7,414 | 4,822 | 7,394 |
Constancia 7 | 8,159 | 2,321 | 1,676 | 3,853 | 4,112 | 3,024 | 3,331 | 5,108 |
San Dimas 7 | 11,346 | 11,214 | 10,273 | 11,529 | 9,687 | 6,030 | 11,358 | 11,499 |
Stillwater 3 | 2,820 | 2,574 | 3,074 | 3,069 | 3,015 | 3,066 | 3,510 | 2,925 |
Other |
|
|
|
|
|
|
|
|
Minto 4 | 1,907 | 2,359 | 2,390 | 1,540 | - | - | - | - |
777 | 5,879 | 5,694 | 2,577 | 5,435 | 5,845 | 4,783 | 2,440 | 4,160 |
Marmato | 438 | 1,687 | - | - | - | - | - | - |
Total Other | 8,224 | 9,740 | 4,967 | 6,975 | 5,845 | 4,783 | 2,440 | 4,160 |
Total gold ounces sold | 67,649 | 90,090 | 75,104 | 86,243 | 90,101 | 92,804 | 100,405 | 89,223 |
Silver ounces sold |
|
|
|
|
|
|
|
|
Peñasquito 7 | 2,210 | 1,844 | 2,174 | 1,417 | 1,799 | 1,917 | 2,310 | 1,268 |
Antamina 7 | 1,502 | 1,499 | 1,930 | 1,669 | 1,090 | 788 | 1,244 | 1,227 |
Constancia 7 | 484 | 295 | 346 | 442 | 415 | 254 | 350 | 672 |
Other |
|
|
|
|
|
|
|
|
Los Filos 7 | 12 | 42 | 27 | - | 19 | 25 | 37 | 26 |
Zinkgruvan | 354 | 355 | 293 | 326 | 492 | 376 | 447 | 473 |
Yauliyacu 7 | 182 | 601 | 1,014 | 15 | 580 | 704 | 9 | 561 |
Stratoni | 41 | 167 | 117 | 169 | 134 | 77 | 163 | 120 |
Minto 4 | 24 | 29 | 26 | 20 | - | - | - | - |
Neves-Corvo | 193 | 215 | 239 | 145 | 201 | 236 | 204 | 154 |
Aljustrel | 155 | 208 | 257 | 280 | 148 | 252 | 123 | 121 |
Cozamin | 170 | 168 | 173 | - | - | - | - | - |
Marmato | 10 | 35 | - | - | - | - | - | - |
Keno Hill | 51 | 33 | 12 | - | - | - | - | - |
777 | 99 | 109 | 49 | 93 | 121 | 100 | 41 | 62 |
Total Other | 1,291 | 1,962 | 2,207 | 1,048 | 1,695 | 1,770 | 1,024 | 1,517 |
Total silver ounces sold | 5,487 | 5,600 | 6,657 | 4,576 | 4,999 | 4,729 | 4,928 | 4,684 |
Palladium ounces sold |
|
|
|
|
|
|
|
|
Stillwater 3 | 5,703 | 3,869 | 5,131 | 4,591 | 5,546 | 4,976 | 4,938 | 5,312 |
Cobalt pounds sold |
|
|
|
|
|
|
|
|
Voisey's Bay | 131,174 | 394,623 | 132,277 | - | - | - | - | - |
GEOs sold 5 | 152,432 | 176,700 | 175,419 | 155,665 | 166,611 | 164,844 | 175,154 | 161,066 |
SEOs sold 5 | 10,975 | 12,722 | 12,630 | 11,208 | 11,996 | 11,869 | 12,611 | 11,597 |
Cumulative payable units PBND 6 |
|
|
|
|
|
|
|
|
Gold ounces | 81,246 | 66,250 | 70,072 | 70,555 | 75,750 | 79,632 | 88,383 | 98,475 |
Silver ounces | 4,056 | 3,975 | 3,738 | 4,486 | 3,437 | 3,222 | 4,961 | 4,142 |
Palladium ounces | 5,619 | 6,822 | 5,373 | 5,597 | 4,616 | 4,883 | 4,875 | 4,872 |
Cobalt pounds | 637,986 | 777,304 | 819,819 | - | - | - | - | - |
GEO 5 | 151,056 | 137,835 | 136,933 | 140,008 | 129,391 | 130,623 | 163,521 | 162,225 |
SEO 5 | 10,423 | 9,372 | 9,277 | 10,081 | 9,316 | 9,405 | 11,774 | 11,680 |
Inventory on hand |
|
|
|
|
|
|
|
|
Cobalt pounds | 488,324 | 134,482 | 132,277 | - | - | - | - | - |
1) All figures in thousands except cobalt pounds and 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) The Minto mine was placed into care and maintenance from October 2018 to October 2019.
5) GEOs and SEOs, which are provided to assist the reader, are based on the following commodity price assumptions: $1,800 per ounce gold; $25.00 per ounce silver; $2,300 per ounce palladium; and $17.75 per pound cobalt; consistent with those used in estimating the Company's production guidance for 2021.
6) 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.
7) Operations at these mines had been temporarily suspended during the second quarter of 2020 as a result of the COVID-19 pandemic. During the second half of 2020, all of the operations were restarted.
Results of Operations
The operating results of the Company's reportable operating segments are summarized in the tables and commentary below.
Three Months Ended September 30, 2021 | ||||||||||||||||
| Units Produced² | Units | Average | Average | Average | Sales | Net | Cash Flow | Total | |||||||
Gold |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salobo | 55,205 | 35,185 | $ | 1,795 | $ | 412 | $ | 374 | $ | 63,154 | $ | 35,504 | $ | 50,404 | $ | 2,455,567 |
Sudbury 4 | 465 | 1,915 |
| 1,794 |
| 400 |
| 1,024 |
| 3,436 |
| 708 |
| 2,242 |
| 308,158 |
Constancia | 8,533 | 8,159 |
| 1,795 |
| 411 |
| 315 |
| 14,645 |
| 8,723 |
| 11,487 |
| 101,741 |
San Dimas | 11,936 | 11,346 |
| 1,795 |
| 618 |
| 322 |
| 20,365 |
| 9,693 |
| 13,351 |
| 171,617 |
Stillwater | 2,949 | 2,820 |
| 1,795 |
| 326 |
| 397 |
| 5,061 |
| 3,024 |
| 4,144 |
| 220,949 |
Other 5 | 6,853 | 8,224 |
| 1,794 |
| 590 |
| 38 |
| 14,755 |
| 9,586 |
| 9,887 |
| 64,985 |
| 85,941 | 67,649 | $ | 1,795 | $ | 464 | $ | 337 | $ | 121,416 | $ | 67,238 | $ | 91,515 | $ | 3,323,017 |
Silver |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Peñasquito | 2,180 | 2,210 | $ | 24.09 | $ | 4.29 | $ | 3.55 | $ | 53,259 | $ | 35,932 | $ | 43,776 | $ | 328,470 |
Antamina | 1,548 | 1,502 |
| 23.99 |
| 4.80 |
| 7.53 |
| 36,000 |
| 17,503 |
| 28,993 |
| 589,816 |
Constancia | 521 | 484 |
| 24.09 |
| 6.05 |
| 7.56 |
| 11,668 |
| 5,076 |
| 9,033 |
| 208,537 |
Other 6 | 2,145 | 1,291 |
| 22.97 |
| 6.33 |
| 4.49 |
| 29,660 |
| 15,686 |
| 24,011 |
| 602,796 |
| 6,394 | 5,487 | $ | 23.80 | $ | 5.06 | $ | 5.21 | $ | 130,587 | $ | 74,197 | $ | 105,813 | $ | 1,729,619 |
Palladium |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stillwater | 5,105 | 5,703 | $ | 2,426 | $ | 468 | $ | 442 | $ | 13,834 | $ | 8,644 | $ | 11,168 | $ | 234,883 |
Cobalt |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voisey's Bay | 370,522 | 131,174 | $ | 23.78 | $ | 5.15 | $ | 8.17 | $ | 3,120 | $ | 1,373 | $ | 159 | $ | 218,144 |
Operating results |
|
|
|
|
|
|
| $ | 268,957 | $ | 151,452 | $ | 208,655 | $ | 5,505,663 | |
Other |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
General and administrative |
|
|
|
|
|
|
|
|
| $ | (13,595) | $ | (6,432) |
|
| |
Finance costs |
|
|
|
|
|
|
|
|
|
|
| (1,379) |
| (1,039) |
|
|
Other |
|
|
|
|
|
|
|
|
|
| (1,108) |
| 103 |
|
| |
Income tax |
|
|
|
|
|
|
|
|
|
|
| (433) |
| - |
|
|
Total other |
|
|
|
|
|
|
|
| $ | (16,515) | $ | (7,368) | $ | 541,077 | ||
|
|
|
|
|
|
|
|
|
|
| $ | 134,937 | $ | 201,287 | $ | 6,046,740 |
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 cobalt pounds produced and sold, 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 and the non-operating Stobie and Victor gold interests.
5) Comprised of the operating 777, Minto and Marmato gold interests as well as the non-operating Rosemont and Santo Domingo gold interests.
6) Comprised of the operating Los Filos, Zinkgruvan, Yauliyacu, Stratoni, Neves-Corvo, Aljustrel, Minto, Keno Hill, Cozamin, Marmato and 777 silver interests as well as the non-operating Loma de La Plata, Pascua-Lama and Rosemont silver interests.
On a gold equivalent and silver equivalent basis, results for the Company for the three months ended September 30, 2021 were as follows:
Three Months Ended September 30, 2021 | |||||||
| Ounces | Ounces | Average | Average | Cash Operating Margin | Average | Gross |
Gold equivalent basis 5 | 184,918 | 152,432 | $ 1,764 | $ 410 | $ 1,354 | $ 361 | $ 993 |
Silver equivalent basis 5 | 13,314 | 10,975 | $ 24.51 | $ 5.70 | $ 18.81 | $ 5.01 | $ 13.80 |
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 and SEOs, which are provided to assist the reader, are based on the following commodity price assumptions: $1,800 per ounce gold; $25.00 per ounce silver; $2,300 per ounce palladium; and $17.75 per pound cobalt; consistent with those used in estimating the Company's production guidance for 2021.
Three Months Ended September 30, 2020 | ||||||||||||||||
| Units Produced² | Units | Average | Average | Average | Sales | Net | Cash Flow | Total | |||||||
Gold |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salobo | 63,408 | 59,584 | $ | 1,902 | $ | 408 | $ | 374 | $ | 113,319 | $ | 66,700 | $ | 91,917 | $ | 2,529,258 |
Sudbury 4 | 3,798 | 7,858 |
| 1,929 |
| 400 |
| 831 |
| 15,161 |
| 5,485 |
| 12,018 |
| 327,352 |
Constancia | 3,780 | 4,112 |
| 1,902 |
| 407 |
| 338 |
| 7,819 |
| 4,758 |
| 6,147 |
| 106,870 |
San Dimas | 9,228 | 9,687 |
| 1,902 |
| 612 |
| 315 |
| 18,423 |
| 9,442 |
| 14,309 |
| 185,835 |
Stillwater | 3,176 | 3,015 |
| 1,902 |
| 345 |
| 449 |
| 5,734 |
| 3,341 |
| 4,695 |
| 225,688 |
Other 5 | 7,110 | 5,845 |
| 1,929 |
| 423 |
| 305 |
| 11,278 |
| 7,022 |
| 8,804 |
| 9,184 |
| 90,500 | 90,101 | $ | 1,906 | $ | 428 | $ | 404 | $ | 171,734 | $ | 96,748 | $ | 137,890 | $ | 3,384,187 |
Silver |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Peñasquito | 1,992 | 1,799 | $ | 24.55 | $ | 4.26 | $ | 3.24 | $ | 44,154 | $ | 30,660 | $ | 36,492 | $ | 355,167 |
Antamina | 1,516 | 1,090 |
| 24.55 |
| 4.67 |
| 8.74 |
| 26,758 |
| 12,139 |
| 21,666 |
| 641,521 |
Constancia | 430 | 415 |
| 24.55 |
| 5.99 |
| 7.63 |
| 10,190 |
| 4,538 |
| 7,704 |
| 220,417 |
Other 6 | 2,090 | 1,695 |
| 24.98 |
| 8.37 |
| 1.94 |
| 42,332 |
| 24,859 |
| 24,333 |
| 475,613 |
| 6,028 | 4,999 | $ | 24.69 | $ | 5.89 | $ | 4.36 | $ | 123,434 | $ | 72,196 | $ | 90,195 | $ | 1,692,718 |
Palladium |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stillwater | 5,444 | 5,546 | $ | 2,182 | $ | 383 | $ | 428 | $ | 12,100 | $ | 7,604 | $ | 9,977 | $ | 243,354 |
Cobalt |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voisey's Bay | - | - | $ | n.a. | $ | n.a. | $ | n.a. | $ | - | $ | - | $ | - | $ | 227,510 |
Operating results |
|
|
|
|
|
|
| $ | 307,268 | $ | 176,548 | $ | 238,062 | $ | 5,547,769 | |
Other |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
General and administrative |
|
|
|
|
|
|
|
|
| $ | (21,326) | $ | (7,239) |
|
| |
Finance costs |
|
|
|
|
|
|
|
|
|
|
| (2,766) |
| (2,820) |
|
|
Other |
|
|
|
|
|
|
|
|
|
| (2,624) |
| 96 |
|
| |
Income tax |
|
|
|
|
|
|
|
|
|
|
| 43 |
| - |
|
|
Total other |
|
|
|
|
|
|
|
| $ | (26,673) | $ | (9,963) | $ | 543,418 | ||
|
|
|
|
|
|
|
|
|
|
| $ | 149,875 | $ | 228,099 | $ | 6,091,187 |
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 cobalt pounds produced and sold, 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 and 777 gold interests as well as the non-operating Rosemont gold interest.
6) Comprised of the operating Los Filos, Zinkgruvan, Yauliyacu, Stratoni, Neves-Corvo, Aljustrel, Minto and 777 silver interests as well as the non-operating Keno Hill, Loma de La Plata, Pascua-Lama and Rosemont silver interests.
On a gold equivalent and silver equivalent basis, results for the Company for the three months ended September 30, 2020 were as follows:
Three Months Ended September 30, 2020 | |||||||
| Ounces | Ounces | Average | Average | Cash Operating Margin | Average | Gross |
Gold equivalent basis 5 | 181,184 | 166,611 | $ 1,844 | $ 421 | $ 1,423 | $ 364 | $ 1,059 |
Silver equivalent basis 5 | 13,045 | 11,996 | $ 25.61 | $ 5.85 | $ 19.76 | $ 5.05 | $ 14.71 |
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 and SEOs, which are provided to assist the reader, are based on the following commodity price assumptions: $1,800 per ounce gold; $25.00 per ounce silver; $2,300 per ounce palladium; and $17.75 per pound cobalt; consistent with those used in estimating the Company's production guidance for 2021.
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, with the Company receiving its first deliveries of cobalt from Voisey's Bay during the first quarter of 2021; and (iv) cash operating margin. The Company has removed the non-IFRS measure associated with net debt as Wheaton fully repaid its debt during the first quarter of 2021.
i. Adjusted net earnings and adjusted net earnings per share are calculated by removing the effects of non-cash impairment charges, 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 | |||||
(in thousands, except for per share amounts) |
| 2021 |
| 2020 | ||
Net earnings |
| $ | 134,937 |
| $ | 149,875 |
Add back (deduct): |
|
|
|
|
|
|
(Gain) loss on fair value adjustment of share purchase warrants held |
|
| 1,246 |
|
| 1,107 |
(Gain) loss on fair value adjustment of convertible notes receivable |
|
| 490 |
|
| 1,095 |
Income tax expense (recovery) recognized in the Statement of Shareholders' Equity |
|
| (269) |
|
| (92) |
Income tax expense (recovery) recognized in the Statement of OCI |
|
| 627 |
|
| (9) |
Other |
|
| 56 |
|
| 31 |
Adjusted net earnings |
| $ | 137,087 |
| $ | 152,007 |
Divided by: |
|
|
|
|
|
|
Basic weighted average number of shares outstanding |
|
| 450,326 |
|
| 449,125 |
Diluted weighted average number of shares outstanding |
|
| 451,717 |
|
| 451,999 |
Equals: |
|
|
|
|
|
|
Adjusted earnings per share - basic |
| $ | 0.304 |
| $ | 0.338 |
Adjusted earnings per share - diluted |
| $ | 0.303 |
| $ | 0.336 |
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 | |||||
(in thousands, except for per share amounts) |
| 2021 |
| 2020 | ||
Cash generated by operating activities |
| $ | 201,287 |
| $ | 228,099 |
Divided by: |
|
|
|
|
|
|
Basic weighted average number of shares outstanding |
|
| 450,326 |
|
| 449,125 |
Diluted weighted average number of shares outstanding |
|
| 451,717 |
|
| 451,999 |
Equals: |
|
|
|
|
|
|
Operating cash flow per share - basic |
| $ | 0.447 |
| $ | 0.508 |
Operating cash flow per share - diluted |
| $ | 0.446 |
| $ | 0.505 |
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 | |||||
(in thousands, except for gold and palladium ounces sold, cobalt pounds sold and per unit amounts) |
| 2021 |
| 2020 | ||
Cost of sales |
| $ | 117,505 |
| $ | 130,720 |
Less: depletion |
|
| (54,976) |
|
| (60,601) |
Cash cost of sales |
| $ | 62,529 |
| $ | 70,119 |
Cash cost of sales is comprised of: |
|
|
|
|
|
|
Total cash cost of gold sold |
| $ | 31,405 |
| $ | 38,570 |
Total cash cost of silver sold |
|
| 27,782 |
|
| 29,426 |
Total cash cost of palladium sold |
|
| 2,667 |
|
| 2,123 |
Total cash cost of cobalt sold |
|
| 675 |
|
| - |
Total cash cost of sales |
| $ | 62,529 |
| $ | 70,119 |
Divided by: |
|
|
|
|
|
|
Total gold ounces sold |
|
| 67,649 |
|
| 90,101 |
Total silver ounces sold |
|
| 5,487 |
|
| 4,999 |
Total palladium ounces sold |
|
| 5,703 |
|
| 5,546 |
Total cobalt pounds sold |
|
| 131,174 |
|
| - |
Equals: |
|
|
|
|
|
|
Average cash cost of gold (per ounce) |
| $ | 464 |
| $ | 428 |
Average cash cost of silver (per ounce) |
| $ | 5.06 |
| $ | 5.89 |
Average cash cost of palladium (per ounce) |
| $ | 468 |
| $ | 383 |
Average cash cost of cobalt (per pound) |
| $ | 5.15 |
| $ | n.a. |
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 | |||||
(in thousands, except for cobalt pounds sold, gold and palladium ounces sold and per unit amounts) |
| 2021 |
| 2020 | ||
Total sales: |
|
|
|
|
|
|
Gold |
| $ | 121,416 |
| $ | 171,734 |
Silver |
| $ | 130,587 |
| $ | 123,434 |
Palladium |
| $ | 13,834 |
| $ | 12,100 |
Cobalt |
| $ | 3,120 |
| $ | - |
Divided by: |
|
|
|
|
|
|
Total gold ounces sold |
|
| 67,649 |
|
| 90,101 |
Total silver ounces sold |
|
| 5,487 |
|
| 4,999 |
Total palladium ounces sold |
|
| 5,703 |
|
| 5,546 |
Total cobalt pounds sold |
|
| 131,174 |
|
| - |
Equals: |
|
|
|
|
|
|
Average realized price of gold (per ounce) |
| $ | 1,795 |
| $ | 1,906 |
Average realized price of silver (per ounce) |
| $ | 23.80 |
| $ | 24.69 |
Average realized price of palladium (per ounce) |
| $ | 2,426 |
| $ | 2,182 |
Average realized price of cobalt (per pound) |
| $ | 23.78 |
| $ | n.a. |
Less: |
|
|
|
|
|
|
Average cash cost of gold 1 (per ounce) |
| $ | (464) |
| $ | (428) |
Average cash cost of silver 1 (per ounce) |
| $ | (5.06) |
| $ | (5.89) |
Average cash cost of palladium 1 (per ounce) |
| $ | (468) |
| $ | (383) |
Average cash cost of cobalt 1 (per pound) |
| $ | (5.15) |
| $ | n.a. |
Equals: |
|
|
|
|
|
|
Cash operating margin per gold ounce sold |
| $ | 1,331 |
| $ | 1,478 |
As a percentage of realized price of gold |
|
| 74% |
|
| 78% |
Cash operating margin per silver ounce sold |
| $ | 18.74 |
| $ | 18.80 |
As a percentage of realized price of silver |
|
| 79% |
|
| 76% |
Cash operating margin per palladium ounce sold |
| $ | 1,958 |
| $ | 1,799 |
As a percentage of realized price of palladium |
|
| 81% |
|
| 82% |
Cash operating margin per cobalt pound sold |
| $ | 18.63 |
| $ | n.a. |
As a percentage of realized price of cobalt |
|
| 78% |
|
| n.a. |
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.sedar.com.
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 to the successful negotiation and entering into of definitive documentation by Wheaton International with Rio2, payment by Wheaton International of US$50 million to Rio2 and the satisfaction of each party's obligations in accordance with the Fenix PMPA, the receipt by Wheaton International of gold production in respect of the Fenix Gold project, statements with respect to the future price of commodities, the impact of epidemics (including the COVID-19 virus pandemic), including the potential heightening of other risks, 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 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, the costs of future production, the estimation of produced but not yet delivered ounces, the impact of the 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, future payments by the Company in accordance with 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 for years subsequent to 2010, possible audits for taxation years subsequent to 2015, 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, and assessments of the impact and resolution of various legal and tax matters, including but not limited to outstanding class action and 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 specific risks relating to the completion of documentation and diligence for the Fenix PMPA with Rio2, the satisfaction of each party's obligations in accordance with the terms of the Fenix PMPA with Rio2, 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 of significant impacts on Wheaton or the Mining Operations as a result of an epidemic (including the COVID-19 virus pandemic), 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, 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 for years subsequent to 2010 (including whether there will be any material change in the Company's facts or change in law or jurisprudence), potential implementation of a 15% global minimum tax, 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 and 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 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, Wheaton and the Mining Operations ability to obtain adequate financing, the Mining Operations ability to complete permitting, construction, development and expansion, global financial conditions, 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.sedar.com, Wheaton's Form 40-F for the year ended December 31, 2020 and Form 6-K filed March 11, 2021 both 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): the completion of documentation and diligence in respect of the Fenix PMPA with Rio2, the payment of US$50 million to Rio2 and the satisfaction of each party's obligations in accordance with the terms of the Fenix PMPA with Rio2, that there will be no material adverse change in the market price of commodities, that neither Wheaton nor the Mining Operations will suffer significant impacts as a result of an epidemic (including the COVID-19 virus pandemic), 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 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 class action litigation and 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 for years subsequent to 2010 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 for years subsequent to 2010), 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.
For further information, please contact:
Patrick Drouin or Emma Murray
Investor Relations
Wheaton Precious Metals Corp.
Tel: 1-844-288-9878
Email: info@wheatonpm.com
Website: www.wheatonpm.com
End Notes
[1] 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.
[2] Commodity price assumptions for the gold equivalent production and sales in 2021 and long-term forecasts are $1,800 / ounce gold, $25 / ounce silver, and $2,300 / ounce palladium and $17.75 / pound cobalt. Other metal includes palladium and cobalt.
[3] Gold equivalent guidance based on the commodity prices outlined in note 2 above. Five- and ten-year guidance do not include optionality production from Pascua Lama, Navidad, Cotabambas, or additional expansions at Salobo outside of project currently in construction. In addition, five-year guidance also does not include any production from Rosemont, Toroparu, Kutcho, or the Victor project at Sudbury.
[4] Payable gold, silver and palladium ounces and cobalt pounds produced but not yet delivered are based on management estimates only and rely upon information provided by the owners and operators of mining operations and may be revised and updated in future periods as additional information is received.
[5] Rating current as of October 7, 2021, for Sustainalytics and as of September 23, 2021, for MSCI.
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