Wheaton Precious Metals Corp. press release
Wheaton Precious Metals Announces First Quarter 2024 Results
TSX - Toronto Stock Exchange · Gold · Copper · Silver · Zinc · Palladium · Platinum · Cobalt · Canada
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Designated News Release FIRST QUARTER FINANCIAL RESULTS
VANCOUVER, BC , May 9, 2024 /CNW/ - "Wheaton delivered a robust quarter to start the year, generating over $219 million in operating cash flows, and underscoring the effectiveness of our business model in leveraging rising commodity prices while maintaining strong cash operating margins," said Randy Smallwood , President and Chief Executive Officer of Wheaton Precious Metals. "Looking ahead, we continue to forecast peer-leading production growth of 40% by 2028, buoyed by several development projects in our portfolio, many of which achieved significant milestones during the quarter. Building on the momentum from a record eight acquisitions in 2023, our corporate development team remains actively engaged in evaluating new opportunities and as always, Wheaton remains committed to ensuring that our growth is both accretive and sustainable for all stakeholders. We believe that strong commodity price trends and our sector leading growth profile provide Wheaton shareholders with one of the best vehicles for investing into the gold and precious metals space."
Solid Financial Results and Strong Balance Sheet
First quarter of 2024: $297 million in revenue, $219 million in operating cash flow, $164 million in net earnings and $164 million in adjusted net earnings 1 and, declared a quarterly dividend 1 of $0.155 per common share. Balance Sheet: cash balance of $306 million , no debt, and an undrawn $2 billion revolving credit facility as at March 31, 2024 , after making total upfront cash payments of $462 million relative to mineral stream and royalty interests in the quarter.
High-Quality Asset Base
Streaming and royalty agreements on 18 operating mines and 27 development projects 5 . 93% of attributable production from assets in the lowest half of their respective cost curves 2,4 . Attributable gold equivalent production 3 of 160,100 ounces in the first quarter of 2024, an increase of 19% relative to the comparable period of the prior year due primarily to the mill throughput expansion at Salobo and higher production at Constancia due to the mining of the high-grade zones of the Pampacancha deposit. Forecasting annual production of over 800,000 gold equivalent ounces ("GEOs") by 2028, with average annual attributable production growing to over 850,000 GEOs 3 in years 2029 to 2033. Accretive portfolio growth: On February 27, 2024 , the Company closed the previously announced agreement with certain entities advised by Orion Resource Partners to acquire existing PMPAs in respect of Ivanhoe Mines' Platreef project and BMC Minerals' Kudz Ze Kayah project. On February 20, 2024 , the Company acquired a 1.5% Net Smelter Royalty from Integra Resources Corporation on the DeLamar and Florida Mountain project.
Leadership in Sustainability
Top Rankings: Ranked in the Global Top 50 out of over 15,000 multi-sector companies by Sustainalytics, AA rated by MSCI, and Prime rated by ISS. Recognized among Corporate Knights' 2024 100 most sustainable corporations in the world. Peer-leading community investment program that supports social and environmental initiatives alongside Wheaton's mining partners.
Operational Overview
| (all figures in US dollars unless otherwise noted) | | | Q1 2024 | | | Q1 2023 | | Change | | Units produced | | | | | | | | | | Gold ounces | | | 93,370 | | | 73,019 | | 27.9 % | | Silver ounces | | | 5,476 | | | 5,134 | | 6.7 % | | Palladium ounces | | | 4,463 | | | 3,705 | | 20.5 % | | Cobalt pounds | | | 240 | | | 124 | | 93.1 % | | Gold equivalent ounces 3 | | | 160,133 | | | 134,730 | | 18.9 % | | Units sold | | | | | | | | | | Gold ounces | | | 92,019 | | | 62,605 | | 47.0 % | | Silver ounces | | | 4,067 | | | 3,749 | | 8.5 % | | Palladium ounces | | | 4,774 | | | 2,946 | | 62.1 % | | Cobalt pounds | | | 309 | | | 323 | | (4.3) % | | Gold equivalent ounces 3 | | | 143,184 | | | 109,293 | | 31.0 % | | Change in PBND and Inventory | | | | | | | | | | Gold equivalent ounces 3 | | | 2,102 | | | 11,756 | | 9,654 | | Revenue | | $ | 296,806 | | $ | 214,465 | | 38.4 % | | Net earnings | | $ | 164,041 | | $ | 111,391 | | 47.3 % | | Per share | | $ | 0.362 | | $ | 0.246 | | 47.2 % | | Adjusted net earnings 1 | | $ | 163,589 | | $ | 104,431 | | 56.6 % | | Per share 1 | | $ | 0.361 | | $ | 0.231 | | 56.3 % | | Operating cash flows | | $ | 219,380 | | $ | 135,104 | | 62.4 % | | Per share 1 | | $ | 0.484 | | $ | 0.299 | | 61.9 % |
| All amounts in thousands except gold, palladium & gold equivalent ounces, and per share amounts. |
Financial Review
_Revenues _Revenue in the first quarter of 2024 was $297 million (64% gold, 32% silver, 2% palladium and 2% cobalt), with the $82 million increase relative to the prior period quarter being primarily due to a 31% increase in the number of GEOs³ sold; and a 6% increase in the average realized gold equivalent³ price.
_Cash Costs and Margin _Average cash costs¹ in the first quarter of 2024 were $430 per GEO³ as compared to $475 in the first quarter of 2023. This resulted in a cash operating margin¹ of $1,643 per GEO³ sold, an increase of 10% as compared with the first quarter of 2023, a result of the higher realized price per ounce coupled with the lower average cash costs.
_Cash Flow from Operations _Operating cash flow in the first quarter of 2024 amounted to $219 million , with the $84 million increase due primarily to the higher gross margin.
Balance Sheet (at March 31, 2024 )
Approximately $306 million of cash on hand During the first quarter of 2024, the Company made total upfront cash payments of $462 million relative to the mineral stream and royalty interests consisting of: $450 million relative to the Platreef and Kudz Ze Kayah precious metals purchase agreements ("PMPAs") $7 million relative to the Mt Todd Royalty; and $5 million relative to the DeLamar Royalty
Subsequent to the quarter, the Company disposed of its investment in Hecla Mining Company for gross proceeds of $177 million . With the existing cash on hand coupled with the fully undrawn $2 billion revolving credit facility, the Company believes it is well positioned to fund all outstanding commitments and known contingencies as well as providing flexibility to acquire additional accretive mineral stream interests.
Global Minimum Tax
The Company is within the scope of global minimum tax ("GMT") under the OECD Pillar Two model rules ("Pillar Two"), under which large multinational entities will be subject to a 15% GMT. On May 2, 2024 , the Canadian Federal Government introduced the Federal budget bill, C-69, into parliament which contains the Global Minimum Tax Act ("GMTA") reflecting application of GMT to in-scope companies for fiscal years commencing on or after December 31, 2023 . However, as of the date of this press release, the legislation related to the GMTA has not been enacted. As the legislation was not enacted as of the Balance Sheet date, for the three months ended March 31, 2024 , the Company has recorded no current tax expense associated with GMT, although the Company's wholly-owned foreign subsidiaries which reside in jurisdictions where the GMT is expected to apply had net earnings of $165 million with 15% of such amounting to $25 million .
The Company will recognize the tax expense associated with the GMT in its consolidated financial statements in the appropriate period relative to when the legislation is enacted. If enacted as drafted, Company's wholly-owned foreign subsidiaries which reside in jurisdictions where the GMT is expected to apply would be subject to the proposed Canadian rules in the GMTA retroactively to January 1, 2024 .
First Quarter Operating Asset Highlights 2
_Salobo: _In the first quarter of 2024, Salobo produced 61,600 ounces of attributable gold, an increase of approximately 41% relative to the first quarter of 2023, driven by higher throughput, with production from the third concentrator line commencing at the end of 2022, partially offset by lower grades which was expected as per the mine development plan. As reported by Vale S.A. ("Vale"), Salobo 3 reached ~90% average throughput in the first quarter as the ramp-up continues. Salobo 1 & 2 plants also posted strong performance in the quarter, with 14% higher throughput rate, 10% productivity and 3% higher asset availability relative to the first quarter of 2023.
On November 21, 2023 , Vale reported the successful completion of the throughput test for the first phase of the Salobo III project, with the Salobo complex exceeding an average of 32 million tonnes per annum ("Mtpa") over a 90-day period. Under the terms of the agreement, the Company paid Vale $370 million for the completion of the first phase of the Salobo III expansion project on December 1, 2023 . The remaining balance of the expansion payment is dependent on the timing of completion and will be triggered once Vale expands actual throughput above 35 Mtpa for a period of 90 days.
_Antamina: _In the first quarter of 2024, Antamina produced 0.8 million ounces of attributable silver, a decrease of approximately 8% relative to the first quarter of 2023 primarily due to lower grades. On February 15, 2024 , Peru's National Environmental Certification Service for Sustainable Investments approved, after a detailed evaluation process, the Modification of the Environmental Impact Study, which will allow for the extension of Antamina's mine life from 2028 to 2036.
_Peñasquito: _In the first quarter of 2024, Peñasquito produced 2.6 million ounces of attributable silver, an increase of approximately 27% relative to the first quarter of 2023 primarily due to higher grades.
_Constancia: _In the first quarter of 2024, Constancia produced 0.6 million ounces of attributable silver and 13,900 ounces of attributable gold, an increase of approximately 16% and 101%, respectively, relative to the first quarter of 2023, with the increases being primarily the result of significantly higher gold grades attributable to the mining of high-grade zones of the Pampacancha deposit, combined with higher recoveries.
On March 28, 2024 , Hudbay Minerals Inc., ("Hudbay") reported that Constancia's expected mine life has been extended by three years to 2041 as a result of the successful conversion of mineral resources to mineral reserves with the addition of a further mining phase at the Constancia pit following positive geotechnical drilling and studies in 2023. There remains potential for future mine life extensions based on the mineral resources that have not yet been converted to mineral reserves.
_Sudbury : _In the first quarter of 2024, Vale's Sudbury mines produced 7,000 ounces of attributable gold, an increase of approximately 14% relative to the first quarter of 2023, due to higher throughput.
_Stillwater : _In the first quarter of 2024, the Stillwater mines produced 2,600 ounces of attributable gold and 4,500 ounces of attributable palladium, an increase of approximately 35% for gold and 20% for palladium relative to the first quarter of 2023, due primarily to higher throughput and grades.
_Voisey's Bay: _In the first quarter of 2024, the Voisey's Bay mine produced 240,000 pounds of attributable cobalt, an increase of approximately 93% relative to the first quarter of 2023, as the transitional period between the depletion of the Ovoid open-pit and ramp-up to full production of the Voisey's Bay underground mine nears completion. Vale reports that physical completion of the Voisey's Bay underground mine extension was 94% at the end of the first quarter, and that the main surface assets are completed and already operating. In the underground portion, the scope in Reid Brook is completed and the mine development at Eastern Deeps is concluded. Construction of the Bulk Material Handling system, dewatering and support facilities is ongoing. The full mine assets at Eastern Deeps are expected to be in operation by the end of 2024.
_Other Gold: _In the first quarter of 2024, total Other Gold attributable production was 600 ounces, a decrease of approximately 82% relative to the first quarter of 2023, primarily due to the closure of the Minto mine in May 2023 .
_Other Silver: _In the first quarter of 2024, total Other Silver attributable production was 1.4 million ounces, a decrease of approximately 15% relative to the first quarter of 2023, primarily due to the temporary suspension of attributable production from Aljustrel.
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.
Recent Development Asset Updates
_Blackwater Project: _On February 21, 2024 , Artemis Gold Inc. ("Artemis") announced the results of an expansion study to optimize the timing of mine expansion through the advancing of Phase 2. A decision on the acceleration of the Phase 2 expansion is expected to be considered in the second half of 2024. On April 24, 2024 , Artemis announced that overall construction was approximately 73% complete and that construction of major site water management facilities, including the water management pond, the central diversion system, and the Davidson Creek diversion, have been completed along with work on the tailings storage facility which is progressing well. Artemis also states that the project remains on schedule for first gold pour in the second half of 2024.
_Platreef Project: _On April 30, 2024 , Ivanhoe Mines Ltd. ("Ivanhoe") reported that construction activities for the Platreef Phase 1 concentrator are on schedule at almost 90% complete and on track for cold commissioning in the third quarter of 2024. An updated independent feasibility study on an optimized development plan for the acceleration of Phase 2 is planned to be completed and published in the fourth quarter of 2024. As a result of the planned acceleration of Phase 2, first feed and ramp-up of production will be deferred until mid-2025. In addition, a preliminary economic assessment on a Phase 3 expansion is expected to be completed at the same time, increasing Platreef's processing capacity up to approximately 10 Mtpa. A Phase 3 expansion to 10 Mtpa processing capacity is expected to rank Platreef as one of the world's largest platinum-group metal, nickel, copper and gold producers.
_Goose Project: _On May 7, 2024 , B2Gold Corp., ("B2Gold") announced the successful completion of the 2024 winter ice road ("WIR") campaign, delivering all necessary materials to complete the construction of the Goose project. B2Gold reports that while mill construction remains on schedule, development of the open pit and underground is slightly behind schedule due to equipment availability, adverse weather conditions and prioritization of critical path construction activities. As a result, B2Gold reports that first gold pour is now expected in the second quarter of 2025 with ramp up to full production in the third quarter of 2025, one quarter later than previous estimates.
_Marmato Mine: _On April 15, 2024 , Aris Mining Corporation ("Aris") provided an update that at the Marmato Lower Mine expansion project, the access road to the new processing facility area is now complete and earthworks in the plant area will commence soon. The contractor for the new portal and decline is fully mobilized and cutting of the portal face has commenced.
_Curipamba Project: _On January 22, 2024 , Adventus Mining Corporation ("Adventus") announced that the Ministry of Environment, Water and Energy Transition of the Government of Ecuador has granted the environmental license for the construction and operation of the El Domo – Curipamba project (the "Curipamba project"). On January 30, 2024 , Adventus announced that the Ministry of Energy and Mines of Ecuador has issued a permit which grants approval for the design, construction, operation, and maintenance of the tailings storage facility ("TSF") for the Curipamba project. The start of TSF construction is a key condition precedent for the Company to make additional upfront cash payments under the Curipamba PMPA.
On April 26, 2024 , Adventus announced that Silvercorp Metals Inc. ("Silvercorp") has entered into a definitive arrangement agreement with Adventus pursuant to which Silvercorp has agreed to acquire all of the issued and outstanding common shares of Adventus. As reported by Silvercorp, the existing stream with Wheaton, combined with Silvercorp's existing cash and cash equivalents of approximately $200 million , is more than sufficient to fully fund the Curipamba project through construction.
_Fenix Project: _On April 8, 2024 , Rio2 Limited ("Rio2") announced that its Chilean subsidiary has received the formal Environmental Qualification Resolution ("RCA") for the Fenix gold project. The receipt of the RCA now allows Rio2 to advance permitting activities for the Fenix project. Rio2 has noted that there are four principal Sectorial Permits required before construction can commence at the Project: 1) Mining Methods; 2) Process Plant; 3) Waste Dumps & Stockpiles; and 4) Closure Plan and that work on these permits is well underway. Rio2 notes that the current timing for receipt of these principal permits is by the end of July 2024 .
_Cangrejos Project: _On January 18, 2024 , Lumina Gold Corp. ("Lumina") announced results from the phase 1 mining resource conversion drilling campaign in support of the ongoing feasibility study at Cangrejos. Lumina noted that the assays from the resource infill program continue to demonstrate the exceptional continuity of grade at Cangrejos. Lumina also noted that it is operating normally at the Cangrejos project and to date their activities have not been affected by the recent civil disturbances that have impacted other areas in Ecuador .
_Curraghinalt Project: _Subsequent to the quarter, the Planning Appeals Commission & Water Appeals Commission ("the commission") in Northern Ireland concluded that the water abstraction and impoundment licenses ("water licenses") relative to the Curraghinalt Project have been rescinded and that license applications would need to be resubmitted and subsequent public inquiry referrals held. The commission noted that it has suspended arrangements for the current inquiry timetable until it is in receipt of the expected water license applications, at which time it will move to set directions and new dates for the submission of statements of case, rebuttals, and for the opening of the re-scheduled hearing sessions in due course.
Corporate Development
DeLamar Royalty On February 20, 2024 , the Company purchased a 1.5% net smelter return royalty interest ("DeLamar Royalty") in the DeLamar and Florida mountain project located in Idaho , United States (the "DeLamar project") from a subsidiary of Integra Resources Corporation ("Integra") for $9.75 million to be paid in two equal installments, the first of which was paid in the first quarter of 2024, with the balance expected to be paid in July 2024 subject to customary conditions. Under the DeLamar Royalty, if completion is not achieved by January 1, 2029 , the DeLamar Royalty will increase annually by 0.15% of net smelter returns to a maximum of 2.7% of net smelter returns. The Company had previously acquired a right of first refusal on any precious metals streaming, royalty, pre-pay or other similar transaction on the DeLamar project.
Sustainability
Ratings & Awards:
On January 17, 2024 , the Company announced its ranking among Corporate Knights' 2024 100 Most Sustainable Corporations in the world. The Company will be included in the Global 100 Index, which represents a benchmark for sustainability excellence.
Community Investment Program:
On March 1, 2024 , Wheaton International commenced a new program with the Vale Foundation to support an ambitious three-year initiative in Brazil that aims to improve the primary health care being offered in the municipalities near the Salobo mine and along the Carajas railroad. The program will be carried out in 8 municipalities of Pará State, impacting approximately 550,000 individuals and in 24 municipalities of Maranhão State, impacting approximately 1.3 million individuals. Wheaton International and the Vale Foundation each committed BRL$17 million. The total contribution of Wheaton and the Vale Foundation of BRL$34 million is being matched by the Brazilian Development Bank, magnifying the impact of the contribution being made by Wheaton International. The Pacific Salmon Foundation's Vancouver Gala presented by Wheaton raised CA$0.5 million in support of advancing critical marine science research and conservation work. The Daffodil Ball presented by Wheaton raised over CA$4.4 million for the Canadian Cancer Society.