PR Newswire
TSX | NYSE | LSE: WPM
Designated News Release
FIRST QUARTER 2022 FINANCIAL RESULTS
VANCOUVER, BC
,
May 5, 2022
/PRNewswire/ – “Wheaton once again had a solid start to the year, generating over
$210 million
in operating cash flow and continuing to return value to our shareholders through our competitive dividend,” said
Randy Smallwood
, President and Chief Executive Officer of Wheaton Precious Metals. “In the first three months of 2022, we added two new streams and increased our interest in a pre-existing stream. In addition, we took a significant step in strengthening our environmental, social and governance strategy by formalizing our climate change policy, including setting a goal of reaching net zero carbon emissions by 2050. The year is off to a good start, and I look forward to advancing on all of our initiatives throughout the year in order to continue building a strong, sustainable business, that delivers value and growth to all of our stakeholders.”
First Quarter 2022 Highlights:
-
Over
$305 million
in revenue and
$210 million
in operating cash flow during the quarter, resulting in a net cash balance of
$376 million
as at
March 31, 2022
. -
$158 million
in adjusted net earnings
1
during the first quarter of 2022. - Announced a new precious metal purchase agreement (“PMPA”) on Adventus Mining Corporation’s Curipamba Project in respect of gold and silver production.
-
Announced PMPA on
Sabina Gold
& Silver Corp.’s Goose Project in respect of gold production. - Amended the PMPA on Aris Gold Corp.’s Marmato Mine, increasing the gold stream in exchange for additional upfront consideration.
- Adopted a climate change policy and commitment to net zero carbon emissions by 2050.
-
Declared quarterly dividend
1
of
$0.15
per common share, an increase of 7% relative to the comparable period in 2021.
Operational Overview
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Financial Review
Revenues
Revenue was
$307 million
in the first quarter of 2022 representing a 5% decrease from the first quarter of 2021 due primarily to a 4% decrease in the number of GEOs² sold.
Cash Costs and Margin
Average cash costs¹ in the first quarter of 2022 were
$421
per GEO² as compared to
$457
in the first quarter of 2021. This resulted in a cash operating margin¹ of
$1,429
per GEO² sold, virtually unchanged as compared with the first quarter of 2021.
Balance Sheet
(at
March 31, 2022
)
-
Approximately
$376 million
of cash on hand. -
The Company’s
$2 billion
revolving term loan (the “Revolving Facility”) remains fully undrawn. - The Company is well positioned to fund all outstanding commitments as well as providing flexibility to acquire additional accretive mineral stream interests.
First
Quarter Asset Highlights
Salobo:
In the first quarter of 2022, Salobo produced 44,900 ounces of attributable gold, a decrease of approximately 4% relative to the first quarter of 2021. According to Vale S.A. (“Vale”), during the quarter, Salobo operations were impacted by both planned and corrective maintenance in the mill liners. In addition, above average seasonal rain level in the region during the fourth quarter of 2021 impacted mine plans in the first quarter of 2022; however, Vale does not anticipate any impact to the overall 2022 production.
As per Vale’s First Quarter 2022 Performance Report, on
January 6, 2022
, heavy rainfall in the region of the Salobo III mine expansion caused a landslide that damaged part of a conveyor belt and blocked access to the project site. Vale reports that remediation work on the conveyor is ongoing and is expected to be completed in May. Furthermore, Vale does not foresee the impacts of this event modifying the project delivery date beyond the fourth quarter of 2022. Vale reports that physical completion of the Salobo III mine expansion was 90% at the end of the first quarter.
Antamina
:
In the first quarter of 2022, Antamina produced 1.3 million ounces of attributable silver, a decrease of approximately 20% relative to the first quarter of 2021, primarily due to lower grades as per the mine plan.
Constancia
:
In the first quarter of 2022, Constancia produced 0.5 million ounces of attributable silver and 6,300 ounces of attributable gold, an increase of approximately 25% and 157%, respectively, relative to the first quarter of 2021. Silver production increased primarily due to higher throughput and 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%.
Sudbury
:
In the first quarter of 2022, Vale’s
Sudbury
mines produced 6,400 ounces of attributable gold, a decrease of approximately 9% relative to the first quarter of 2021 primarily due to lower throughput as a result of the temporary closure of the Totten mine. As per Vale, on
September 26, 2021
, a large piece of equipment, called a bucket scoop, blocked and damaged the mine shaft resulting in its temporary closure. Vale has reported that production at the Totten mine, which accounts for approximately 15% to 20% of the Company’s attributable gold production from
Sudbury
, resumed in the first quarter of 2022 and that operations at the
Sudbury
mines are expected to normalize in the second quarter of 2022.
Stillwater
:
In the first quarter of 2022, the
Stillwater
mines produced 2,500 ounces of attributable gold and 4,500 ounces of attributable palladium, a decrease of approximately 18% for gold and 22% for palladium relative to the first quarter of 2021. The decrease was due to lower throughput and grades, partially offset by higher recoveries.
San Dimas
:
In the first quarter of 2022,
San Dimas
produced 10,500 ounces of attributable gold, virtually unchanged relative to the first quarter of 2021. First Majestic Silver Corp. (“First Majestic”) reports that production in the first quarter of 2022 was impacted due to high absenteeism in the months of January and February caused by an increase in COVID-19 infections within the
Tayoltita
community.
Other Gold
:
In the first quarter of 2022, total Other Gold attributable production was 8,500 ounces, a decrease of approximately 4% relative to the first quarter of 2021, primarily due to the mining of lower grade material at 777, which is scheduled to close in
June 2022
.
Other Silver:
In the first quarter of 2022, total Other Silver attributable production was 2.2 million ounces, a decrease of approximately 14% relative to the first quarter of 2021, primarily due to lower grades at Aljustrel and the placement of Stratoni into care and maintenance.
Voisey’s Bay:
In the first quarter of 2022, the Voisey’s Bay mine produced 234 thousand pounds of attributable cobalt, a decrease of approximately 80% relative to the first quarter of 2021. The apparent significant decrease relative to the first quarter of 2021 was primarily attributed to Wheaton being contractually 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 from prior periods. As per Vale’s First Quarter 2022 Performance Report, physical completion of the Voisey’s Bay underground mine extension was 70% at the end of the first quarter.
Produced But Not Yet Delivered
3
and Inventory
As at
March 31, 2022
, payable ounces and pounds attributable to the Company produced but not yet delivered amounted to:
-
82,400 payable gold ounces, a decrease of 2,600 ounces during Q1 2022, primarily due to decreases at the Constancia and 777 mines partially offset by an increase at the
Sudbury
mines. - 3.9 million payable silver ounces, a decrease of 0.3 million ounces during Q1 2022.
- 5,500 payable palladium ounces, virtually unchanged during Q1 2022.
- 550 thousand payable cobalt pounds, virtually unchanged during Q1 2022.
As of
March 31, 2022
, approximately 410 thousand pounds of cobalt were held in inventory by Wheaton, a decrease of 247 pounds during Q1 2022.
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.
Corporate Development
Curipamba PMPA
:
On
January 17, 2022
, the Company entered into a PMPA with Adventus Mining Corporation (“Adventus”) in respect of the Curipamba Project (“Curipamba”) located in
Ecuador
. Under the Curipamba PMPA, Wheaton will purchase 50% of the payable gold production until 145,000 ounces have been delivered, thereafter dropping to 33% of payable gold production for the life of the mine and 75% of the payable silver production until 4.6 million ounces have been delivered, thereafter dropping to 50% for the life of mine. Under the terms of the agreement, the Company is committed to pay Adventus total upfront cash consideration of
$175.5 million
,
$13 million
of which is available pre-construction and
$500,000
of which will be paid to support certain local community development initiatives around Curipamba. The remainder will be payable in four staged installments during construction, subject to various customary conditions being satisfied. In addition, Wheaton will make ongoing production payments for the gold and silver ounces delivered equal to 18% of the spot prices until the value of gold and silver delivered, net of the production payment, is equal to the upfront consideration of
$175.5 million
, at which point the production payment will increase to 22% of the spot prices.
Marathon
PMPA
:
On
January 26, 2022
, the Company entered into the previously announced PMPA with Generation Mining Limited (“Gen Mining”) in respect of the Marathon Project located in
Ontario, Canada
. Under the Marathon PMPA, Wheaton will purchase 100% of the payable gold production until 150,000 ounces have been delivered, thereafter dropping to 67% of payable gold production for the life of the mine and 22% of the payable platinum production until 120,000 ounces have been delivered, thereafter dropping to 15% for the life of mine. Under the terms of the agreement, the Company has committed to pay Gen Mining total upfront cash consideration of
C$240 million
,
C$40 million
of which will be paid prior to construction and to be used for the development of the Marathon Project, with the remainder payable in four staged installments during construction, subject to various customary conditions being satisfied and pre-determined completion tests. Of this amount,
$16 million
(
C$20 million
) was paid on
March 31, 2022
. In addition, Wheaton will make ongoing production payments for the gold and platinum ounces delivered equal to 18% of the spot prices until the value of gold and platinum delivered, net of the production payment, is equal to the upfront consideration of
C$240 million
, at which point the production payment will increase to 22% of the spot prices.
Goose PMPA
:
On
February 8, 2022
, the Company announced that it had entered into a PMPA with
Sabina Gold
& Silver Corp. (“Sabina”) in respect of the Goose Project, part of Sabina’s Back River Gold District located in
Nunavut, Canada
. Under the Goose PMPA, Wheaton will purchase 4.15% of the payable gold production until 130,000 ounces have been delivered, thereafter dropping to 2.15% until 200,000 ounces have been delivered, thereafter dropping to 1.5% of the payable gold production. Under the terms of the agreement, the Company has committed to pay Sabina an upfront payment of
$125 million
in four equal installments during construction of the Goose Project, subject to customary conditions. In addition, Wheaton will make ongoing production payments for the gold ounces delivered equal to 18% of the spot gold price until the value of gold, net of the production payment is equal to the upfront consideration of
$125 million
, at which point the production payment will increase to 22% of the spot gold price.
Amendment to the Marmato PMPA:
On
March 21, 2022
, the Company amended its PMPA with Aris Gold Corporation (“Aris Gold”) in respect of the Marmato mines. Under the amended terms, Wheaton will purchase 10.5% of the gold production and 100% of the silver production from the Marmato Upper and Lower mines until 310,000 ounces of gold and 2.15 million ounces of silver have been delivered, after which the stream drops to 5.25% of the gold production and 50% of the silver production for the life of mine. This increases the gold stream from the original Marmato PMPA under which Wheaton was entitled to purchase 6.5% of the gold production until 190,000 ounces were delivered, after which the stream was to drop to 3.25% of the gold production. The silver stream is unchanged. Under the terms of the amended Marmato PMPA, the Company is committed to pay
Aris Gold
total upfront cash payments of
$175 million
(
$65 million
relating to the increase in the gold stream). Of this amount,
$53 million
(
$15 million
relating to the increase in the gold stream) has been paid and the remaining amount is payable during the construction of the Marmato Lower Mine, subject to customary conditions.
Sustainability
Climate Change Commitments:
On
February 9, 2022
, Wheaton announced the adoption of a Climate Change and Environmental Policy and commitment to net zero carbon emissions by 2050[4]. As part of this policy, Wheaton plans to establish targets across both Scope 2 and Scope 3 attributable emissions to support a 1.5° C trajectory. The Company has also committed an initial
$4M
to support our mining partners’ efforts to move to renewable energy sources and reduce emissions at the mines in which we have an interest.
San Dimas Receives Recognition for Sustainability Efforts:
The Mexican Center for Philanthropy (CEMEFI) and the Alliance for Corporate Social Responsibility (AliaRSE) has awarded First Majestic Silver Corp.’s (“First Majestic”)
San Dimas
mining unit the Socially Responsible Business Distinction for 2022 (Distintivo Empressa Socialmente Responsible 2022). This distinction from within the Mexican community recognizes excellence in environmental and social responsibility and ethical management.
Partner Community Investment 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 first quarter of 2022, all Partner Community Investment programs continued to operate as planned such as the continued enrollment of existing schoolteachers and administrators into the Enseña
Peru
training program, aimed at improving the academic performance for students living close to the Antamina mine. During the quarter, the Wheaton team focused on engaging with partners on identifying and selecting programs and initiatives to be supported by Wheaton for 2022 and beyond.
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 2022 is forecast to be 350,000 to 380,000 ounces of gold, 23.0 to 25.0 million ounces of silver, and 44,000 to 48,000 GEOs
2
of other metals, resulting in production of approximately 700,000 to 760,000 GEOs
2
, unchanged from previous guidance. For the five-year period ending in 2026, the Company estimates that average production will amount to 850,000 GEOs
2
, while for the ten-year period ending in 2031, the Company estimates that average annual production will amount to 910,000 GEOs
2
, also unchanged from previous guidance.
Webcast and Conference Call Details
A conference call and webcast will be held on
Friday, May 6, 2022
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: 78834538
Live 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
May 13, 2022
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: 834538 #
Archived 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 have 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.
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.
End Notes
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Condensed Interim
Consolidated Statements of Earnings
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Condensed Interim
Consolidated Balance Sheets
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Condensed Interim
Consolidated Statements of Cash Flows
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Summary of Units Produced
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Summary of Units Sold
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Results of Operations
The operating results of the Company’s reportable operating segments are summarized in the tables and commentary below.
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On a gold equivalent and silver equivalent basis, results for the Company for the three months ended
March 31, 2022
were as follows:
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On a gold equivalent and silver equivalent basis, results for the Company for the three months ended
March 31, 2021
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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 future price of commodities, the estimation of future production from Mining Operations (including in the estimation of production, mill throughput, grades, recoveries and exploration potential), the estimation of mineral reserves and mineral resources (including the estimation of reserve conversion rates) and the realization of such estimations, the commencement, timing and achievement of construction, expansion or improvement projects by Wheaton’s PMPA counterparties at mineral stream interests owned by Wheaton (the “Mining Operations”), the payment of upfront cash consideration to counterparties under PMPAs, the satisfaction of each party’s obligations in accordance with PMPAs and royalty arrangements and the receipt by the Company of precious metals and cobalt production in respect of the applicable Mining Operations under PMPAs or other payments under royalty arrangements, the ability of Wheaton’s PMPA counterparties to comply with the terms of a PMPA (including as a result of the business, mining operations and performance of Wheaton’s PMPA counterparties) and the potential impacts of such on Wheaton, future payments by the Company in accordance with PMPAs, the costs of future production, the estimation of produced but not yet delivered ounces, the impact of epidemics (including the COVID-19 virus pandemic), including the potential heightening of other risks, future sales of common shares under the ATM program, continued listing of the Company’s common shares, any statements as to future dividends, the ability to fund outstanding commitments and the ability to continue to acquire accretive PMPAs, including any acceleration of payments, projected increases to Wheaton’s production and cash flow profile, projected changes to Wheaton’s production mix, the ability of Wheaton’s PMPA counterparties to comply with the terms of any other obligations under agreements with the Company, the ability to sell precious metals and cobalt production, confidence in the Company’s business structure, the Company’s assessment of taxes payable and the impact of the CRA Settlement for years subsequent to 2010, possible domestic audits for taxation years subsequent to 2016 and international audits, the Company’s assessment of the impact of any tax reassessments, the Company’s intention to file future tax returns in a manner consistent with the CRA Settlement, the Company’s climate change and environmental commitments, and assessments of the impact and resolution of various legal and tax matters, including but not limited to audits. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “projects”, “intends”, “anticipates” or “does not anticipate”, or “believes”, “potential”, or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved”. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Wheaton to be materially different from those expressed or implied by such forward-looking statements, including but not limited to the satisfaction of each party’s obligations in accordance with the terms of the Company’s PMPAs or royalty arrangements, risks associated with fluctuations in the price of commodities (including Wheaton’s ability to sell its precious metals or cobalt production at acceptable prices or at all), risks 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, climate change, Wheaton and the Mining Operations ability to obtain and maintain necessary licenses, permits, approvals and rulings, Wheaton and the Mining Operations ability to comply with applicable laws, regulations and permitting requirements, lack of suitable supplies, infrastructure and employees to support the Mining Operations, inability to replace and expand mineral reserves, including anticipated timing of the commencement of production by certain Mining Operations (including increases in production, estimated grades and recoveries), uncertainties of title and indigenous rights with respect to the Mining Operations, environmental, social and governance matters, Wheaton and the Mining Operations ability to obtain adequate financing, the Mining Operations ability to complete permitting, construction, development and expansion, global financial conditions, Wheaton’s acquisition strategy and other risks discussed in the section entitled “Description of the Business – Risk Factors” in Wheaton’s Annual Information Form available on SEDAR at
www.sedar.com
, Wheaton’s Form 40-F for the year ended
December 31, 2021
and Form 6-K filed
March 31, 2022
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): that there will be no material adverse change in the market price of commodities, that the Mining Operations will continue to operate and the mining projects will be completed in accordance with public statements and achieve their stated production estimates, that the mineral reserves and mineral resource estimates from Mining Operations (including reserve conversion rates) are accurate, that each party will satisfy their obligations in accordance with the PMPAs, that Wheaton will continue to be able to fund or obtain funding for outstanding commitments, that Wheaton will be able to source and obtain accretive PMPAs, that neither Wheaton nor the Mining Operations will suffer significant impacts as a result of an epidemic (including the COVID-19 virus pandemic), that any outbreak or threat of an outbreak of a virus or other contagions or epidemic disease will be adequately responded to locally, nationally, regionally and internationally, without such response requiring any prolonged closure of the Mining Operations or having other material adverse effects on the Company and counterparties to its PMPAs, that the trading of the Company’s common shares will not be adversely affected by the differences in liquidity, settlement and clearing systems as a result of multiple listings of the Common Shares on the LSE, the TSX and the NYSE, that the trading of the Company’s common shares will not be suspended, and that the net proceeds of sales of common shares, if any, will be used as anticipated, that expectations regarding the resolution of legal and tax matters will be achieved (including ongoing CRA audits involving the Company), that Wheaton has properly considered the interpretation and application of Canadian tax law to its structure and operations, that Wheaton has filed its tax returns and paid applicable taxes in compliance with Canadian tax law, that Wheaton’s application of the CRA Settlement 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.
View original content:
https://www.prnewswire.com/news-releases/wheaton-precious-metals-announces-solid-start-to-2022-301541344.html
SOURCE Wheaton Precious Metals Corp.
