Wheaton Precious Metals Corp. press release
Wheaton Precious Metals Announces Second Quarter 2024 Results and Record Operating Cash Flow for the First Half of 2024
TSX - Toronto Stock Exchange · Gold · Copper · Silver · Zinc · Palladium · Platinum · Cobalt · Canada
Canada NewsWire
Designated News Release SECOND QUARTER FINANCIAL RESULTS
VANCOUVER, BC , Aug. 7, 2024 /CNW/ - "Wheaton once again delivered strong results in the second quarter, generating $234 million in operating cash flow, resulting in record cash flows of over $450 million for the first half of the year. With year-to-date gold equivalent production of approximately 305,000 ounces, we are well on track to achieve our 2024 production guidance of 550,000 to 620,000 gold equivalent ounces," said Randy Smallwood , President and Chief Executive Officer of Wheaton Precious Metals." In addition, we were ranked among the top 10 companies on Corporate Knights' annual list of the Best 50 Corporate Citizens in Canada and published our annual sustainability and climate change reports. Corporate Knights' recognition highlights our leadership in sustainability and commitment to creating value for all stakeholders. Our performance in the first half of 2024 supports our belief that the strength of our organic growth profile and high-quality, long-life portfolio, combined with favorable commodity price trends, firmly positions Wheaton as a premier choice for precious metals exposure."
Solid Financial Results and Strong Balance Sheet
Second quarter of 2024: $299 million in revenue, $234 million in operating cash flow, $122 million in net earnings and $150 million in adjusted net earnings 1 and, declared a quarterly dividend 1 of $0.155 per common share. Balance Sheet: cash balance of $540 million , no debt, and an undrawn $2 billion revolving credit facility as at June 30, 2024 after making total upfront cash payments of $45 million relative to mineral stream and royalty interests in the quarter. Undrawn $2 billion revolving credit facility extended by an additional year with the facility now maturing on June 25, 2029 .
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 ("GEOs") of 147,100 ounces in the second quarter of 2024 and 305,800 for the first six months of 2024, with year-to-date production representing an increase of 13% relative to the comparable period of the prior year due primarily to the mill throughput expansion at Salobo. Average annual forecast production guidance for 2024 of 550,000 to 620,000 GEOs 3 maintained, with forecasted sector-leading growth of over 800,000 GEOs 3 by 2028, and average annual forecast attributable production growing to over 850,000 GEOs 3 in years 2029 to 2033. Further de-risked forecast growth profile as construction activities advanced at the Blackwater, Goose, Platreef, Mineral Park and Marmato Lower Mine Projects, all of which are expected to be producing within the next 16 months.
Leadership in Sustainability
Recognized among Corporate Knights' 2024 100 Most Sustainable Corporations in the World, and Best 50 Corporate Citizens in Canada . Top Rankings: One of the top-rated companies by Sustainalytics, AA rated by MSCI and Prime rated by ISS. Published our second annual Climate Change Report detailing how Wheaton is addressing climate change risks and opportunities, as well as potential climate-related impacts. Published our fifth annual Sustainability Report highlighting our commitment to responsible business practices and providing a comprehensive review of Wheaton's performance in environmental, social and governance topics.
Operational Overview
| (all figures in US dollars unless otherwise noted) | | | Q2 2024 | | | Q2 2023 | | Change | | | YTD 2024 | | | YTD 2023 | | | Change | | Units produced | | | | | | | | | | | | | | | | | | | Gold ounces | | | 84,993 | | | 83,180 | | 2.2 % | | | 176,932 | | | 156,199 | | | 13.3 % | | Silver ounces | | | 5,062 | | | 4,441 | | 14.0 % | | | 10,538 | | | 9,575 | | | 10.1 % | | Palladium ounces | | | 4,338 | | | 3,880 | | 11.8 % | | | 8,801 | | | 7,585 | | | 16.0 % | | Cobalt pounds | | | 259 | | | 152 | | 70.8 % | | | 499 | | | 276 | | | 80.8 % | | Gold equivalent ounces 3 | | | 147,059 | | | 137,176 | | 7.2 % | | | 305,761 | | | 271,906 | | | 12.5 % | | Units sold | | | | | | | | | | | | | | | | | | | Gold ounces | | | 77,326 | | | 75,294 | | 2.7 % | | | 169,345 | | | 137,899 | | | 22.8 % | | Silver ounces | | | 3,823 | | | 4,437 | | (13.8) % | | | 7,890 | | | 8,186 | | | (3.6) % | | Palladium ounces | | | 4,301 | | | 3,392 | | 26.8 % | | | 9,075 | | | 6,338 | | | 43.2 % | | Cobalt pounds | | | 88 | | | 265 | | (66.8) % | | | 397 | | | 588 | | | (32.5) % | | Gold equivalent ounces 3 | | | 124,009 | | | 129,734 | | (4.4) % | | | 267,193 | | | 239,027 | | | 11.8 % | | Change in PBND and Inventory | | | | | | | | | | | | | | | | | | | Gold equivalent ounces 3 | | | 9,615 | | | (13,750) | | (23,365) | | | 10,289 | | | (1,994) | | | (12,283) | | Revenue | | $ | 299,064 | | $ | 264,972 | | 12.9 % | | $ | 595,870 | | $ | 479,437 | | | 24.3 % | | Net earnings | | $ | 122,317 | | $ | 141,448 | | (13.5) % | | $ | 286,358 | | $ | 252,839 | | | 13.3 % | | Per share | | $ | 0.270 | | $ | 0.312 | | (13.5) % | | $ | 0.632 | | $ | 0.559 | | | 13.1 % | | Adjusted net earnings 1 | | $ | 149,565 | | $ | 142,584 | | 4.9 % | | $ | 288,398 | | $ | 247,015 | | | 16.8 % | | Per share 1 | | $ | 0.330 | | $ | 0.315 | | 4.8 % | | $ | 0.636 | | $ | 0.546 | | | 16.5 % | | Operating cash flows | | $ | 234,393 | | $ | 202,376 | | 15.8 % | | $ | 453,773 | | $ | 337,482 | | | 34.5 % | | Per share 1 | | $ | 0.517 | | $ | 0.447 | | 15.7 % | | $ | 1.001 | | $ | 0.746 | | | 34.2 % |
| All amounts in thousands except gold, palladium & gold equivalent ounces, and per share amounts. |
Financial Review
Revenues
Revenue in the second quarter of 2024 was $299 million (61% gold, 37% silver, 1% palladium and 1% cobalt), with the $34 million increase relative to the prior period quarter being primarily due to an 18% increase in the average realized gold equivalent³ price; partially offset by a 4% decrease in the number of GEOs³ sold.
Revenue was $596 million in the six months ended June 30, 2024 , representing a $116 million increase from the comparable period of the previous year due primarily to an 11% increase in the average realized gold equivalent³ price, resulting from relative changes in the GEOs³ produced but not yet delivered; and a 12% increase in the number of GEOs³ sold.
Cash Costs and Margin
Average cash costs¹ in the second quarter of 2024 were $436 per GEO³ as compared to $452 in the second quarter of 2023. This resulted in a cash operating margin¹ of $1,976 per GEO³ sold, an increase of 24% as compared with the second quarter of 2023, a result of the higher realized price per ounce coupled with the lower average cash costs.
Average cash costs¹ for the six months ended June 30, 2024 were $433 per GEO³ as compared to $463 in the comparable period of the previous year. This resulted in a cash operating margin¹ of $1,797 per GEO³ sold, a 16% increase from the comparable period of the previous year.
Cash Flow from Operations
Operating cash flow in the second quarter of 2024 amounted to $234 million , with the $32 million increase due primarily to the higher gross margin.
Operating cash flows for the six months ended June 30, 2024 amounted to $454 million , with the $116 million increase from the comparable period of the previous year being due primarily to the higher gross margin.
Balance Sheet (at June 30, 2024 )
Approximately $540 million of cash on hand The Company extended its existing undrawn $2 billion revolving term loan (the "Revolving Facility") with its maturity date now June 25, 2029 . During the second quarter of 2024, the Company made total upfront cash payments of $45 million relative to the mineral stream and royalty interests consisting of: $10 million relative to the Cangrejos PMPA; $25 million relative to the Mineral Park PMPA; and $10 million relative to the Mt Todd Royalty.
During the second quarter of 2024, 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 June 20, 2024 , Canada's Global Minimum Tax Act ("GMTA"), received royal assent. The GMTA enacts the OECD Pillar Two model rules where in scope companies will be subject to a 15% GMT for fiscal years commencing on or after December 31, 2023 . With the enactment of the GMTA on June 20, 2024 , the income of the Company's subsidiaries which operate in jurisdictions with a statutory tax rate of 0% is impacted by the GMTA and an amount of $51 million current tax expense associated with GMT was recorded for the period from January 1, 2024 to June 30, 2024 . GMT accrued to December 31, 2024 , is payable on or before June 30, 2026 (18 months following year-end).
Second Quarter Operating Asset Highlights
_Salobo: _In the second quarter of 2024, Salobo produced 63,200 ounces of attributable gold, an increase of approximately 15% relative to the second quarter of 2023, driven by higher throughput, with production from the third concentrator line commencing at the end of 2022. On April 24, 2024 , Vale S.A. ("Vale") reported the continued ramp-up at Salobo III, which reached 90% average throughput in the first quarter, as well as improved year over year operational performance at Salobo I and II. On July 25, 2024 , Vale also reported that the Salobo III processing plant operations resumed in July, after being halted for 31 days due to a fire on a conveyor belt. Vale confirmed that 2024 copper production guidance of 320-355 kt has been maintained.
_Peñasquito : _In the second quarter of 2024, Peñasquito produced 2.3 million ounces of attributable silver, an increase of approximately 30% relative to the second quarter of 2023 primarily due to higher throughput, partially offset by lower grades.
_Constancia : _In the second quarter of 2024, Constancia produced 0.5 million ounces of attributable silver and 6,100 ounces of attributable gold, an increase of approximately 7% for silver production and a decrease of approximately 18% for gold production relative to the second quarter of 2023. The decrease in gold production was primarily the result of lower gold grades due largely to the planned stripping activity in the Pampacancha pit, which commenced in the second quarter and is expected to continue through the third quarter. As a result of the stripping activity, ore feed was supplemented with stockpiles during the second quarter, as per the original mine plan. Mill ore feed has now reverted to the typical blend of approximately one-third from Pampacancha and two-thirds from Constancia, which is expected to continue throughout 2024. The increase in silver production is primarily due to higher throughput and grades, partially offset by lower recoveries.
_Stillwater : _In the second quarter of 2024, the Stillwater mines produced 2,100 ounces of attributable gold and 4,300 ounces of attributable palladium, an increase of approximately 4% for gold and 12% for palladium relative to the second quarter of 2023, due primarily to higher throughput and grades.
_Voisey's Bay: _In the second quarter of 2024, the Voisey's Bay mine produced 259,000 pounds of attributable cobalt, an increase of approximately 71% relative to the second 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 96% at the end of the second quarter, and that the main surface assets are completed and in operation. In the underground portion, Reid Brook activities are largely complete, with the powerhouse planned to be fully commissioned and linked to the grid by Q3 2024. The mine development at Eastern Deeps is now concluded, and 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 second quarter of 2024, total Other Gold attributable production was 600 ounces, a decrease of approximately 70% relative to the second quarter of 2023, primarily due to the closure of the Minto mine in May 2023 .
_Other Silver: _In the second quarter of 2024, total Other Silver attributable production was 1.4 million ounces, an increase of approximately 5% relative to the second quarter of 2023. The increase from the comparable period of the prior year is primarily due to an 87% increase in production at Zinkgruvan as a result of higher throughput and grades, largely offset by the cessation of attributable ore mined at 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 July 30, 2024 , Artemis Gold Inc. ("Artemis") announced that overall construction was approximately 87% complete and that construction of the water management pond, excavation of the cutoff trench, and the earthworks and lining of the central water management pond were completed. Work on the tailings storage facility continues to progress well with increased productivity and material movements through the quarter. Equipment installation was a key focus area as well as installation of structural steel, conveyors, platework, pipework, and electrical infrastructure. Early pre-commissioning activities in the crushing area of the process facility are underway. Artemis also stated that the project remains on schedule for first gold pour in Q4 2024.
On July 22, 2024 , Artemis announced that it had responded to a wildfire evacuation order by proactively removing all non-essential staff and contractors as of July 21, 2024 . On July 26, 2024 , Artemis announced the evacuation order has been lifted and began an expedient, staged return of employees and contractors to site. The mine site was not impacted by any wildfires.
_Platreef Project: _On July 31, 2024 , Ivanhoe Mines Ltd. ("Ivanhoe") reported that construction of Platreef's Phase 1 concentrator was completed on schedule subsequent to the quarter. Cold commissioning has started, with water being fed through the concentrator, and construction of Platreef's Shaft 2 headgear is approximately 60% complete. Work is well underway on the updated feasibility study to accelerate Platreef's Phase 2 expansion, as well as the preliminary economic assessment of the previously announced Phase 3 expansion. Both studies are expected to be completed in the fourth quarter. 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 on the Marmato Lower Mine expansion project, including the completion of the access road to the new processing facility area. Earthworks in the plant area will reportedly commence soon, and the contractor for the new portal and decline is fully mobilized and cutting of the portal face has commenced. On May 14, 2024 , Aris reported that most of the mechanical equipment has been ordered and the access road has reached the portal level. On July 16, 2024 , Aris further reported that the Lower Mine project is on track for first gold pour by the end of 2025, followed by an approximate six-month ramp-up period.
_Curipamba Project: _On June 17, 2024 , Adventus Mining Corporation ("Adventus") announced that the Ministry of Environment, Water and Energy Transition of the Government of Ecuador has granted Administrative Authorization over Public Hydric Domain for the Curipamba project. This key permit allows the Curipamba project to carry out planned construction activities in accordance with the technical requirements stipulated in the Water Resources Law. With this approval, Adventus noted that the last main step prior to the start of construction is the receipt of the final document outlining the transition from the medium scale exploration to exploitation phase.
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. On July 2, 2024 , the Ontario Superior Court of Justice granted a final order approving the arrangement. The acquisition closed on July 31, 2024 .
On August 6, 2024 , Silvercorp announced a key milestone that the Ministry of Energy and Mines of the Government of Ecuador ("MEM") has issued a Resolution of Change of Phase for the Curipamba project. The Resolution of Change of Phase advances the legal status of the project from the economic evaluation phase to the exploitation phase and allows for the start of construction and subsequent operation of the mine. The Change of Phase for a medium-scale project is equivalent to the Exploitation Agreement for large-scale mines in Ecuador .
_Marathon Project: _On July 31, 2024 , Generation Mining Limited ("Gen Mining") reported that the federal government has approved amendments to Schedule 2 of the Metal and Diamond Mining Effluent Regulations ("Schedule 2") which will allow for the construction of specific water management structures and operation of key infrastructure for the Marathon Project. Gen Mining also states that receipt of the few remaining provincial and federal approvals and permits required for construction is expected in the coming months.
On August 7, 2024 , Gen Mining announced a key milestone with the receipt of the Fisheries Act Authorization ("FAA") for the Marathon project. The FAA, issued by Fisheries and Oceans Canada, approves Gen Mining's plan to avoid, mitigate and offset impacts to fish and fish habitat related to the development of the project. This authorization represents the final federal approval required to commence construction of the tailings storage facility and water management structures. The Marathon project requires three remaining provincial approvals to be issued by the Ministry of the Environment, Conservation and Parks and the Ministry of Natural Resources. These are expected in the coming months. Following which, the Marathon project will have all of the key government permits and approvals required for construction.
_Santo Domingo : _On July 31, 2024 , Capstone Copper Corp. ("Capstone") published the results of an updated feasibility study for the Santo Domingo project, outlining an optimized mine plan, updated capital and operating cost estimates, and a 19-year mine life supported by higher mineral reserve estimates. The report indicates that total gold production is expected to average 35,000 ounces per year for the first seven years of production, an increase from the 30,000 ounces per year estimate outlined in the 2020 feasibility study, and 22,000 ounces per year for the life of mine, up from 17,000 ounces per year. Capstone has reported that with construction completed at the Mantoverde project, a deposit situated 35 kilometers northeast of the Santo Domingo project, Capstone plans to advance several value enhancement initiatives within the Mantoverde-Santo Domingo district that are not yet included in the 2024 feasibility study. The first of these initiatives is a newly announced two-year, $25 million exploration program at Mantoverde, aimed at supporting the two future processing centers between Mantoverde and Santo Domingo .