Wheaton Precious Metals Corp. press release

Wheaton Precious Metals Announces Solid 2023 Annual Results and Transition to Progressive Dividend Policy

2024-03-14

TSX - Toronto Stock Exchange · Gold · Copper · Silver · Zinc · Palladium · Platinum · Cobalt · Canada

Canada NewsWire

_Designated News Release FOURTH QUARTER AND FULL YEAR FINANCIAL RESULTS _

VANCOUVER, BC , March 14, 2024 /CNW/ - "With a record eight acquisitions totalling just over $1 billion in commitments, we bolstered our growth strategy in 2023, enhancing our production profile and supporting our long-term, growth forecast of approximately 40% over the next five years," said Randy Smallwood , President and Chief Executive Officer of Wheaton Precious Metals. "Our diversified portfolio of long-life, low-cost assets continued to deliver solid operating results, and we are pleased to have met our annual production guidance, achieving approximately 620,000 gold equivalent ounces. Furthermore, we have now recouped over 100% of the value of our initial upfront investments since inception, an accomplishment which is particularly noteworthy given the significant reserve and resource base underpinning our portfolio, supporting decades of forecasted remaining mine life. To reinforce our confidence in the sustainability and growth potential of Wheaton, we are pleased to announce a transition to a new progressive dividend policy, marked by an increase in our 2024 annual dividend. As we embark on what we anticipate being a phase of substantial and meaningful growth, our dedication to deploying capital in a manner that generates value for not only our shareholders, but also our partners and communities, remains unwavering."

Solid Financial Results and Strong Balance Sheet

Fourth quarter of 2023: $313 million in revenue, $242 million in operating cash flow, $168 million in net earnings and $165 million in adjusted net earnings 1 and, paid a quarterly dividend 1 of $0.15 per common share. Full year of 2023: $1,016 million in revenue, $751 million in operating cash flow, $538 million in net earnings and $533 million in adjusted net earnings 1 . Balance Sheet: cash balance of $547 million , no debt, and an undrawn $2 billion revolving credit facility as at December 31, 2023 after making total upfront cash payments of $452 million relative to mineral stream interests in the quarter.

High Quality Asset Base

Streaming and royalty agreements on 18 operating mines and 27 development projects 6 . 93% of attributable production from assets in the lowest half of their respective cost curves 2,4 . Attributable gold equivalent production 3 of 174,200 ounces in the fourth quarter of 2023 and 619,600 for the full year of 2023. Achieved annual production guidance for 2023 of 600,000 to 660,000 GEOs 3 , with sector-leading growth over the next five to ten years. Accretive portfolio growth: On October 24, 2023 , the Company entered into a definitive agreement with Waterton Copper Corp. to acquire a silver stream on the Mineral Park mine for total cash consideration of $115 million . On November 15, 2023 , announced the Company has entered into a definitive agreement with certain entities advised by Orion Resource Partners to acquire existing streams in respect of Ivanhoe Mines' Platreef project and BMC Minerals' Kudz Ze Kayah project, for total cash consideration of up to $455 million . In addition, the Company entered into an agreement for a gold stream in respect of Dalradian Gold's Curraghinalt project, for total cash consideration of $75 million . On November 21, 2023 , the Company and Vale jointly announced the successful completion of the throughput test for the first phase of the Salobo III expansion project in Brazil , with the Salobo complex exceeding an average of 32 Mtpa over a 90-day period. Under the terms of the Salobo precious metals purchase agreement, the Company made a payment to Vale Base Metals totalling $370 million for completion of the first phase of the Salobo III expansion project in December 2023 . On December 13, 2023 , the Company entered into a royalty agreement with Vista Gold Corp. to acquire a royalty in the amount of 1% of gross revenue from the sale or disposition of minerals from the Mt Todd gold project located in Australia for total cash consideration of $20 million .

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. Subsequent to the quarter, Wheaton was recognized 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.

Operational Overview

| (all figures in US dollars unless otherwise noted) | | | Q4 2023 | | | Q4 2022 | | Change | | | 2023 | | | 2022 | | | Change | | Units produced | | | | | | | | | | | | | | | | | | | Gold ounces | | | 113,359 | | | 69,027 | | 64.2 % | | | 374,585 | | | 285,601 | | | 31.2 % | | Silver ounces | | | 4,208 | | | 5,303 | | (20.6) % | | | 17,176 | | | 23,800 | | | (27.8) % | | Palladium ounces | | | 4,209 | | | 3,869 | | 8.8 % | | | 15,800 | | | 15,485 | | | 2.0 % | | Cobalt pounds | | | 215 | | | 128 | | 67.5 % | | | 673 | | | 724 | | | (7.1) % | | Gold equivalent ounces 3 | | | 174,222 | | | 142,887 | | 21.9 % | | | 619,608 | | | 616,755 | | | 0.5 % | | Units sold | | | | | | | | | | | | | | | | | | | Gold ounces | | | 115,011 | | | 68,996 | | 66.7 % | | | 327,336 | | | 293,234 | | | 11.6 % | | Silver ounces | | | 3,175 | | | 4,935 | | (35.7) % | | | 14,326 | | | 21,570 | | | (33.6) % | | Palladium ounces | | | 3,339 | | | 3,396 | | (1.7) % | | | 13,919 | | | 15,076 | | | (7.7) % | | Cobalt pounds | | | 288 | | | 187 | | 54.0 % | | | 1,074 | | | 1,038 | | | 3.5 % | | Gold equivalent ounces 3 | | | 162,360 | | | 138,218 | | 17.5 % | | | 537,608 | | | 598,244 | | | (10.1) % | | Change in PBND and Inventory | | | | | | | | | | | | | | | | | | | Gold equivalent ounces 3 | | | (2,973) | | | (10,191) | | (7,218) | | | 23,674 | | | (40,033) | | | (63,707) | | Revenue | | $ | 313,471 | | $ | 236,051 | | 32.8 % | | $ | 1,016,045 | | $ | 1,065,053 | | | (4.6) % | | Net earnings | | $ | 168,435 | | $ | 166,125 | | 1.4 % | | $ | 537,644 | | $ | 669,126 | | | (19.6) % | | Per share | | $ | 0.372 | | $ | 0.367 | | 1.4 % | | $ | 1.187 | | $ | 1.482 | | | (19.9) % | | Adjusted net earnings 1 | | $ | 164,569 | | $ | 103,744 | | 58.6 % | | $ | 533,051 | | $ | 504,912 | | | 5.6 % | | Per share 1 | | $ | 0.363 | | $ | 0.229 | | 58.5 % | | $ | 1.177 | | $ | 1.118 | | | 5.3 % | | Operating cash flows | | $ | 242,226 | | $ | 172,028 | | 40.8 % | | $ | 750,809 | | $ | 743,424 | | | 1.0 % | | Per share 1 | | $ | 0.535 | | $ | 0.381 | | 40.4 % | | $ | 1.658 | | $ | 1.646 | | | 0.7 % |

| All amounts in thousands except gold, palladium & gold equivalent ounces, and per share amounts. |

Financial Review

_Revenues _Revenue in the fourth quarter of 2023 was $313 million (74% gold, 24% silver, 1% palladium and 1% cobalt), with the $77 million increase relative to the prior period quarter being primarily due to a 17% increase in the number of GEOs³ sold; and a 13% increase in the average realized gold equivalent³ price.

Revenue was $1,016 million in the year ended December 31, 2023 , representing a $49 million decrease from 2022 due primarily to a 10% decrease in the number of GEOs³ sold, resulting from relative changes in the GEOs³ produced but not yet delivered; partially offset by a 6% increase in the average realized gold equivalent³ price.

_Cash Costs and Margin _Average cash costs¹ in the fourth quarter of 2023 were $417 per GEO³ as compared to $447 in the fourth quarter of 2022. This resulted in a cash operating margin¹ of $1,514 per GEO³ sold, an increase of 20% as compared with the fourth quarter of 2022, a result of the higher realized price per ounce coupled with the lower average cash costs.

Average cash costs¹ in 2023 were $424 per GEO³ as compared to $447 in 2022. This resulted in a cash operating margin¹ of $1,466 per GEO³ sold, a 10% increase from 2022.

_Cash Flow from Operations _Operating cash flow in the fourth quarter of 2023 amounted to $242 million , with the $70 million increase due primarily to the higher gross margin.

Operating cash flows in 2023 amounted to $751 million , with the $7 million increase from the comparable period of the previous year being due primarily to higher amounts of interest received during the current year, partially offset by lower sales volumes.

_Balance Sheet __(at December 31, 2023 ) _

Approximately $547 million of cash on hand During the fourth quarter of 2023, the Company made total upfront cash payments of $452 million relative to the mineral stream interests consisting of $35 million payment relative to the Blackwater Silver precious metals purchase agreement ("PMPA"); a $10 million payment relative to the expansion of the Blackwater Gold PMPA; $17 million relative to the Cangrejos PMPA; $20 million relative to the Curraghinalt PMPA; and $370 million relative to the Salobo III expansion payment

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.

Fourth Quarter Operating Asset Highlights

_Salobo: _In the fourth quarter of 2023, Salobo produced 71,800 ounces of attributable gold, an increase of approximately 89% relative to the fourth quarter of 2022, driven by higher throughput, with production from the third concentrator line commencing at the end of 2022, combined with higher grades and recoveries. The prior year was also impacted by changes in maintenance routines. In the fourth quarter of 2023, Salobo reached its highest production level since the fourth quarter of 2019 as the ramp-up of the Salobo III expansion continued to advance.

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 Mtpa over a 90-day period. Under the terms of the agreement, the Company paid Salobo $370 million for the completion of the first phase of the Salobo III expansion project on December 1, 2023 . Salobo III is expected to achieve a sustained throughput capacity of 36 Mtpa in the fourth quarter of 2024.

_Antamina: _In the fourth quarter of 2023, Antamina produced 1.0 million ounces of attributable silver, a decrease of approximately 3% relative to the fourth quarter of 2022. 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 fourth quarter of 2023, Peñasquito produced 1.0 million ounces of attributable silver, a decrease of approximately 41% relative to the fourth quarter of 2022 primarily due to lower throughput resulting from a labour strike which began on June 7, 2023 and ended on October 13, 2023 . Newmont Corporation ("Newmont") reports that operations have since safely ramped up after a resolution was reached with the National Union of Mine and Metal Workers of the Mexican Republic ("the Union") on October 13, 2023 . Newmont has indicated that Peñasquito is expected to deliver higher co-product production in 2024 due to higher silver, lead and zinc content from the Chile Colorado pit.

_Constancia: _In the fourth quarter of 2023, Constancia produced 0.8 million ounces of attributable silver and 22,300 ounces of attributable gold, an increase of approximately 28% and 112%, respectively, relative to the fourth quarter of 2022. Record quarterly gold production combined with strong silver production are a result of significantly higher grades attributable to the mining of high-grade zones of the Pampacancha deposit, combined with higher recoveries. Hudbay Minerals Inc. ("Hudbay") reports that gold production in 2024 is expected to decrease from 2023 levels due to a smoothing of Pampacancha high-grade gold zones over the 2023 to 2025 period as additional high-grade areas were mined in 2023 ahead of schedule, and other high-grade areas were deferred to 2025. Hudbay has indicated that the Pampacancha deposit is now expected to be depleted in the third quarter of 2025, as opposed to mid-2025 as previously reported.

_Sudbury : _In the fourth quarter of 2023, Vale's Sudbury mines produced 6,300 ounces of attributable gold, an increase of approximately 19% relative to the fourth quarter of 2022, due to higher throughput, grade and recoveries.

_Stillwater : _In the fourth quarter of 2023, the Stillwater mines produced 2,300 ounces of attributable gold and 4,200 ounces of attributable palladium, an increase of approximately 7% for gold and 9% for palladium relative to the fourth quarter of 2022, due primarily to higher throughput and grades.

_Voisey's Bay: _In the fourth quarter of 2023, the Voisey's Bay mine produced 215,000 pounds of attributable cobalt, an increase of approximately 67% relative to the fourth quarter of 2022, as the transitional period between the depletion of the Ovoid open-pit and ramp-up to full production of the Voisey's Bay underground extension nears completion. Vale reports that physical completion of the Voisey's Bay underground mine extension was 92% at the end of the fourth quarter, and that the main surface assets are completed and already operating. The electromechanical assembly on the remaining surface assets are well advanced (above 60% physical progress). In the underground portion, the scope in Reid Brook is completed and the project is fully focused on Eastern Deeps. The mine development is concluded and construction is ongoing.

_Other Gold: _In the fourth quarter of 2023, total Other Gold attributable production was 700 ounces, a decrease of approximately 78% relative to the fourth quarter of 2022, primarily due to the closure of the Minto mine in May 2023 .

_Other Silver: _In the fourth quarter of 2023, total Other Silver attributable production was 1.3 million ounces, a decrease of approximately 28% relative to the fourth quarter of 2022, primarily due to the temporary suspension of attributable production from Aljustrel and the disposal of the Yauliyacu PMPA.

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 December 15, 2023 , Artemis announced that it has completed its first draw of $150 million under its $360 million project loan facility announced on March 1, 2023 , reporting that construction of Blackwater remains on track and that the funds will be allocated to continue to fund construction towards completion. On January 30, 2024 , Artemis announced that overall construction was 59% complete. On February 21, 2024 , 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.

_Platreef Project: _On February 26, 2024 , Ivanhoe Mines ("Ivanhoe") reported that while construction activities for the Platreef Phase 1 concentrator are on track for completion in the third quarter of 2024, hot commissioning and ramp-up of production are now anticipated for early 2025 in order to prioritize shaft development. An updated independent feasibility study ("FS") is planned for the second half of 2024 on an optimized development plan for Phase 2. The optimized development plan accelerates the development of Phase 2 at a total processing capacity of 4 Mtpa by equipping Shaft #3 for hoisting. An independent preliminary economic assessment ("PEA") is planned concurrently with the FS on a significantly larger Phase 3 expansion, once the major 8 Mtpa Shaft #2 is available for hoisting. 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 January 23, 2024 , B2Gold Corp., ("B2Gold") provided a construction update highlighting that it is progressing ahead of schedule within the mill and processing buildings, along with preparatory work for peak construction activities in the second and third quarter of 2024, with the project remaining on schedule for first gold pour in the first quarter of 2025.

_Marmato Mine: _On July 12, 2023 , Aris Mining Corporation ("Aris Mining") announced that they have received approval from the Corporación Autónoma Regional del Caldas ("Corpocaldas"), a regional environmental authority in Colombia , of the Environmental Management Plan ("PMA") which now permits the development of the Marmato Lower Mine. On March 6, 2024 , Aris Mining provided an update that construction at the Marmato Lower Mine has ramped up with initial access roads completed, the lead contractor for portal and decline development selected, and tenders for key items for the new processing plant underway. First gold pour is expected in late 2025.

_Curipamba Project: _Adventus Mining Corporation ("Adventus") announced that the El Domo – Curipamba project has been issued a favourable Certificate of No Affect of Water ( October 2, 2023 ) and the environmental license for construction and operation ( January 22, 2024 ) by the Ministry of Environment and Water of the Government of Ecuador . 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"). The start of TSF construction is a key condition precedent to commence installment payments under the precious metals purchase agreement with the Company. Adventus reports that a construction decision is expected in the second quarter of 2024, and gold-rich copper & zinc concentrate production is expected by the first quarter of 2026.

_Marathon Project: _The permitting process for the Marathon project continues to advance, with Generation Mining Limited ("Gen Mining") announcing on November 7, 2023 , that the province of Ontario had accepted and filed the Closure Plan, and on November 21, 2023 , Gen Mining announced that the Ministry of Natural Resources and Forestry of the province of Ontario had issued the permit to remove trees. In addition, on November 21, 2023 , Gen Mining announced the closure of the Cdn$15 million bought deal financing with a lead order of Cdn$5 million from Wheaton.

_Fenix Project: _On December 20, 2023 , Rio2 reported that it had been successful in being granted approval of its Environmental Impact Assessment ("EIA"), allowing Rio2 to advance the Fenix project through statutory permitting, financing, and the currently planned recommencement of construction activities during 2024.

_Copper World Complex: _On September 8, 2023 , Hudbay announced the results of the enhanced pre-feasibility study for Phase I of its 100%-owned Copper World project in Arizona . After receipt of two outstanding permits which are expected in mid-2024, Hudbay intends to complete a minority joint venture partner process prior to commencing a definitive feasibility study. The opportunity to sanction Copper World is not expected until 2025 based on current estimated timelines. With the results from this pre-feasibility study, Wheaton has now incorporated gold in the 2023 mineral reserves and mineral resources statement on our website.

_Cangrejos Project: _On October 18, 2023 , Lumina Gold Corp., ("Lumina") announced that the Cangrejos project is proceeding on schedule. Lumina has been actively executing its 2023 feasibility study drill plan with nine rigs currently at site. Lumina has signed contracts with several engineering companies for the advancement of the feasibility study. The feasibility study is expected to be completed in the first quarter of 2025. On January 18, 2024 , 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 their activities have not been affected by the recent civil disturbances that have impacted other areas in Ecuador .