VANCOUVER, November 9, 2017 /PRNewswire/ --
- All $ are US
TSX: WPM
NYSE: WPM
Wheaton Precious Metals™ Corp. ("Wheaton" or the
"Company") is pleased to announce its results for the third quarter
ended September 30, 2017. All figures
are presented in United States
dollars unless otherwise noted.
In the third quarter of 2017, Wheaton Precious Metals continued
to generate strong cash flow and remains on track to meet 2017
production guidance.
Operational Overview
Q3 2017 Q3 2016 Change
Ounces produced
Silver 7,595 7,651 (0.7)%
Gold 95,897 113,008 (15.1)%
Ounces sold
Silver 5,758 6,122 (5.9)%
Gold 82,548 85,063 (3.0)%
Sales price per
ounce
Silver $ 16.87 $ 19.53 (13.6)%
Gold $ 1,283 $ 1,336 (4.0)%
Cash costs per ounce
[1]
Silver [1] $ 4.43 $ 4.51 (1.8)%
Gold [1] $ 396 $ 390 1.5 %
Cash operating
margin per ounce [1]
Silver [1] $ 12.44 $ 15.02 (17.2)%
Gold [1] $ 887 $ 946 (6.2)%
Revenue $ 203,034 $ 233,204 (12.9)%
Net earnings $ 66,578 $ 82,986 (19.8)%
Per share $ 0.15 $ 0.19 (21.1)%
Operating cash flows $ 129,121 $ 161,577 (20.1)%
Per share
[1] $ 0.29 $ 0.37 (21.6)%
Dividends paid $ 44,201 $ 22,049 100.5%
Per share $ 0.10 $ 0.05 100.0%
All amounts in thousands except gold ounces produced and sold, per
ounce amounts and per share amounts.
Third Quarter Highlights
- Attributable silver production for the three months ended
September 30, 2017, decreased 1%
relative to the comparable period in 2016, with lower production
from San Dimas and Constancia
being largely offset by increased production from Antamina and
Peñasquito.
- Attributable gold production for the three months ended
September 30, 2017, decreased 15%
relative to the comparable period in 2016, with the decrease being
in line with expectations and primarily due to lower attributable
production from 777 and Minto.
- On a silver equivalent ounce[2] ("SEO")
basis and gold equivalent ounce[2] ("GEO")
basis:
- Attributable production in Q3 2017 was 14.9 million SEOs or
195,900 GEOs, compared with 15.3 million SEOs or 225,400 GEOs in Q3
2016, a decrease of 3% and 13%, respectively.
- Sales volume in Q3 2017 was 12.0 million SEOs or 158,400 GEOs,
compared with 11.9 million SEOs or 175,000 GEOs in Q3 2016, an
increase of 1% and a decrease of 9%, respectively.
- As at September 30, 2017, payable
ounces attributable to the Company produced but not yet delivered³
amounted to 5.3 million payable silver ounces and 57,200 payable
gold ounces, representing an increase of 1.1 million payable silver
ounces and 8,200 payable gold ounces during the three month period
ended September 30, 2017.
- Declared quarterly dividend of $0.09 per common share. This represents an
increase of 50% relative to the comparable period in 2016.
- The Company is reiterating its production guidance for
2017.
"Wheaton Precious Metals continues to generate strong operating
margins from its portfolio of low-cost assets and remains on track
to meet full year production guidance," said Randy Smallwood, President and Chief Executive
Officer of Wheaton Precious Metals. "We continue to work diligently
not only to strengthen our current portfolio, the source of our
sector leading cash flows and dividend yield, but also to pursue
additional accretive opportunities."
Financial Review
Revenues
Revenue was $203 million in the third
quarter of 2017, on sales volume of 5.8 million ounces of silver
and 82,500 ounces of gold. This represents a 13% decrease from the
$233 million of revenue generated in
the third quarter of 2016 due primarily to (i) a 6% decrease in the
number of silver ounces sold; (ii) a 3% decrease in the number of
gold ounces sold; (iii) a 14% decrease in the average realized
silver price ($16.87 in Q3 2017
compared with $19.53 in Q3 2016); and
(iv) a 4% decrease in the average realized gold price ($1,283 in Q3 2017 compared with $1,336 in Q3 2016).
Costs and Expenses
Average cash costs¹ in the third quarter of 2017 were $4.43 per silver ounce sold and $396 per gold ounce sold, as compared with
$4.51 per silver ounce and
$390 per gold ounce during the
comparable period of 2016. This resulted in a cash operating
margin¹ of $12.44 per silver ounce
sold and $887 per gold ounce sold, a
reduction of 17% and 6% as compared with Q3 2016. The decrease in
the cash operating margin was primarily due to a 14% decrease in
the average realized silver price and a 4% decrease in the average
realized gold price in Q3 2017 compared with Q3 2016.
Earnings and Operating Cash Flows
Net earnings and cash flow from operations in the third quarter of
2017 were $67 million ($0.15 per share) and $129
million ($0.29 per share¹),
compared with $83 million
($0.19 per share) and $162 million ($0.37
per share¹) for the same period in 2016, both a decrease of
20%.
Balance Sheet
At September 30, 2017, the Company
had approximately $70 million of cash
on hand and $854 million outstanding
under the Company's $2 billion
revolving term loan (the "Revolving Facility").
Third Quarter Asset Highlights
During the third quarter of 2017, attributable production was
7.6 million ounces of silver and 95,900 ounces of gold,
representing a decrease of 1% and 15%, respectively, compared with
the third quarter of 2016.
Operational highlights for the quarter ended September 30, 2017, based upon counterparties'
reporting, are as follows:
Salobo
In the third quarter of 2017, Salobo produced 73,000 ounces of
attributable gold, an increase of approximately 7% relative to the
third quarter of 2016. According to Vale S.A.'s ("Vale") third
quarter of 2017 production report, production was positively
impacted mainly due to higher feed grades and stronger plant
performance in the third quarter. The Salobo plant operated above
nameplate capacity on average in the third quarter of 2017.
Peñasquito
In the third quarter of 2017, Peñasquito produced 1.6 million
ounces of attributable silver, an increase of approximately 10%
relative to the third quarter of 2016 primarily due to higher metal
recoveries and grades. According to Goldcorp Inc.'s ("Goldcorp")
third quarter of 2017 MD&A, throughput at Peñasquito is
expected to increase in the fourth quarter of 2017 as a result of
improved mill efficiencies. Pre-stripping of the Chile Colorado pit
is reportedly ahead of schedule and will contribute to mill feed
starting in 2018.
According to Goldcorp, the Pyrite Leach Project ("PLP") at
Peñasquito is 40% complete and expected to commence commissioning
in the fourth quarter of 2018, three months ahead of schedule. The
PLP is reportedly expected to recover approximately 40% of the gold
and 48% of the silver currently reporting to the tailings, and is
expected to add production of approximately 1 million ounces of
gold and 44 million ounces of silver over the current life of the
mine. As a reminder, Wheaton Precious Metals is entitled to 25% of
the silver produced at Peñasquito for the life of mine, or 11
million of the additional 44 million silver ounces.
Antamina
In the third quarter of 2017, Antamina produced 1.7 million ounces
of attributable silver, an increase of approximately 18% relative
to the third quarter of 2016 primarily due to increased grades and
throughput, partially offset by lower recovery.
San Dimas
In the third quarter of 2017, San
Dimas produced 1.0 million ounces of attributable silver, a
decrease of approximately 17% relative to the third quarter of 2016
primarily due to a decrease in throughput, which was partially
offset by better grades. According to Primero Mining Corp.'s
("Primero") news release dated September 21,
2017, the expected ramp-up in production at San Dimas following a work stoppage in the
second quarter of 2017 was significantly delayed due to persistent
issues with underground equipment reliability, which has impacted
development rates and underground stoping activities. As a
result of these issues, Primero reduced the upper end of its 2017
silver production guidance range from 4.5-5.5 million ounces to
4.5-5.0 million ounces. As a reminder, Wheaton's full year 2017
guidance is based on attributable production from San Dimas of 4.0 million ounces of silver.
Wheaton continues to work closely with Primero as they work
through their strategic review process. As per Primero's
announcement on March 24, 2017,
Wheaton provided significant support for the strategic review
process by providing a guarantee to the lenders under Primero's
existing revolving credit facility, which resulted in an extension
of the maturity date by six months to November 23, 2017. The intent of this guarantee
is to provide Primero with time to complete its strategic review
process, which was first announced on February 27, 2017. Wheaton has been encouraged by
Primero's ability through this process to reduce general and
administrative costs and divest of non-core operations. Also, as
noted in Primero's second quarter of 2017 MD&A, Primero has
received a number of proposals from interested parties regarding a
potential acquisition of the San
Dimas operation. The process is ongoing but there can be no
certainty that these discussions will result in a resolution
acceptable to all stakeholders, including the
Company.[4]
Sudbury
In the third quarter of 2017, Vale's Sudbury mines produced 8,400 ounces of
attributable gold, a decrease of approximately 22% relative to the
third quarter of 2016 primarily due to lower throughput. According
to Vale's third quarter of 2017 production report, the decrease in
production was primarily due to the full operation of two furnaces
in Q3 2016, while in Q3 2017 Sudbury transitioned to a single
furnace operation. According to Vale, the transition has gone very
well with the newly designed furnace already exceeding its
nameplate capacity. Vale further reports that while nickel
production was down in the quarter, with the transition to the new
single furnace flowsheet, Sudbury
achieved record quarterly copper concentrate production.
Constancia
In the third quarter of 2017, Constancia produced 0.6 million
ounces of attributable silver and 2,500 ounces of attributable
gold, a decrease of approximately 18% and 33%, respectively,
relative to the third quarter of 2016. The decrease in production
was primarily the result of the processing of lower grade ore as
expected in Hudbay Mineral Inc.'s ("Hudbay") mine plan as well as
lower recovery, partially offset by record high throughput.
Other Gold
In the third quarter of 2017, total Other Gold attributable
production was 12,000 ounces, a decrease of approximately 60%
relative to the third quarter of 2016. The decrease was relatively
in line with expectations and primarily due to the anticipated
reduction of the Company's share of the gold production at the 777
mine from 100% to 50% effective January 1,
2017, coupled with reduced production at the Minto mine due to mine sequencing changes to
support the mine life extension as previously announced by Capstone
Mining Corp. ("Capstone").
Subsequent to the quarter, in October
2017, the Company agreed to amend the Minto precious metal purchase agreement in
order to incentivize Capstone to extend the mine life of
Minto. The primary modification is
to increase the production payment per ounce of gold delivered to
Wheaton Precious Metals over the current fixed price in periods
where the market price of copper is lower than $2.50 per pound. In consideration for this
contract amendment and certain other agreements made between the
Company and Capstone, the Company received shares of Capstone with
a value of $8 million.
Other Silver
In the third quarter of 2017, total Other Silver attributable
production was 2.6 million ounces, a decrease of approximately 5%
relative to the third quarter of 2016. The decrease was driven
primarily by the cessation of production from Cozamin as the
Cozamin silver purchase agreement with Capstone expired on
April 4, 2017, as well as lower
grades at Yauliyacu. Lower attributable production from Cozamin and
Yauliyacu was partially offset by stronger production from
Zinkgruvan.
Produced But Not Yet Delivered
[3]
As at September 30, 2017, payable
ounces attributable to the Company produced but not yet delivered³
amounted to 5.3 million payable silver ounces and 57,200 payable
gold ounces, representing an increase of 1.1 million payable silver
ounces and 8,200 payable gold ounces during the three month period
ended September 30, 2017. Payable
silver ounces produced but not yet delivered increased primarily as
a result of increases related to the Peñasquito, Zinkgruvan,
Yauliyacu, and Antamina silver interests. Payable gold ounces
produced but not yet delivered increased primarily as a result of
increases related to the Sudbury
and Salobo gold interests. Payable ounces produced but not yet
delivered to the Wheaton Precious Metals group of companies are
expected to average approximately two months of annualized
production but may vary from quarter to quarter due to a number of
mining operation factors including mine ramp-up and timing of
shipments.
Detailed mine-by-mine production and sales figures can be found
in the Appendix to this press release and in Wheaton Precious
Metals' consolidated MD&A in the 'Results of Operations and
Operational Review' section.
Events Subsequent to the Quarter
Kutcho
Pending completion of the Kutcho Early Deposit Agreement, the
Company has entered into a non-binding term sheet with Desert Star
Resources Ltd. to provide assistance in the form of an up to
Cdn$20 million subordinated secured
convertible debt loan at an interest rate of 10% per annum over a
7-year term (the "Desert Star Loan"). There can be no assurance
that the Desert Star Loan will be completed on the terms set out in
the non-binding term sheet or at all.
Dividend
Fourth Quarterly Dividend
The fourth quarterly cash dividend of US$0.09 will be paid to holders of record of
Wheaton Precious Metals common shares as of the close of business
on November 27, 2017, and will be
distributed on or about December 7,
2017.
Under the Company's dividend policy, the quarterly dividend per
common share will be equal to 30% of the average cash generated by
operating activities in the previous four quarters divided by the
Company's then outstanding common shares, all rounded to the
nearest cent.
The declaration, timing, amount and payment of future dividends
remain at the discretion of the Board of Directors. This dividend
qualifies as an 'eligible dividend' for Canadian income tax
purposes.
Dividend Reinvestment Plan
The Company has previously implemented a Dividend Reinvestment Plan
("DRIP"). Participation in the DRIP is optional. For the purposes
of this fourth quarterly dividend, the Company has elected to issue
common shares under the DRIP through treasury at a 3% discount to
the Average Market Price, as defined in the DRIP. However, the
Company may, from time to time, in its discretion, change or
eliminate the discount applicable to Treasury Acquisitions, as
defined in the DRIP, or direct that such common shares be purchased
in Market Acquisitions, as defined in the DRIP, at
the prevailing market price, any of which would be publicly
announced.
The DRIP and enrollment forms are available for download on the
Company's website at http://www.wheatonpm.com, accessible by quick
links directly from the home page, and can also be found in the
'investors' section, under the 'dividends' tab.
Registered shareholders may also enroll in the DRIP online
through the plan agent's self-service web portal at:
https://ca.astfinancial.com/InvestorServices/Search-Issuers?lang=en
Beneficial shareholders should contact their financial
intermediary to arrange enrollment. All shareholders considering
enrollment in the DRIP should carefully review the terms of the
DRIP and consult with their advisors as to the implications of
enrollment in the DRIP.
This press release is not an offer to sell or a solicitation of
an offer of securities. A registration statement relating to the
DRIP has been filed with the U.S. Securities and Exchange
Commission and may be obtained under the Company's profile on the
U.S. Securities and Exchange Commission's website at
http://www.sec.gov. A written copy of the prospectus included in
the registration statement may be obtained by contacting the
Corporate Secretary of the Company at 1021 West Hastings Street,
Suite 3500, Vancouver, British
Columbia, Canada V6E 0C3.
Outlook
Wheaton Precious Metals' estimated attributable silver and gold
production in 2017 is forecast to be 28 million silver ounces and
340,000 gold ounces. Estimated average annual attributable silver
and gold production over the next five years (including 2017) is
anticipated to be approximately 29 million silver ounces and
340,000 gold ounces per year. As a reminder, Wheaton Precious
Metals does not include any production in its guidance from streams
on development assets, such as Barrick's Pascua-Lama project or
Hudbay's Rosemont project.
From a liquidity perspective, the $70
million of cash and cash equivalents as at September 30, 2017 combined with the liquidity
provided by the available credit under the $2 billion Revolving Facility and ongoing
operating cash flows positions the Company well to fund all
outstanding commitments and known contingencies as well as
providing flexibility to acquire additional accretive precious
metal stream interests.
Webcast and Conference Call Details
A conference call and webcast will be held Friday, November 10, 2017, starting at
11:00 am (Eastern Time) 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: 888-231-8191
Dial from outside Canada or the US: 647-427-7450
Pass code: 94521962
Live audio webcast: http://www.wheatonpm.com
Participants should dial in five to ten minutes before the
call.
The conference call will be recorded and available until
November 17, 2017 at 11:59 pm (Eastern Time). 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 855-859-2056
Dial from outside Canada or the US: 416-849-0833
Pass code: 94521962
Archived audio webcast: http://www.wheatonpm.com
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 http://www.wheatonpm.com and
have been posted on SEDAR at http://www.sedar.com.
Mr. Neil Burns, Vice President,
Technical Services for Wheaton Precious Metals, is a "qualified
person" as such term is defined under National Instrument 43-101,
and has reviewed and approved the technical information including
information on mineral reserves and mineral resources disclosed in
this news release.
Wheaton Precious Metals believes that there are no significant
differences between its corporate governance practices and
those required to be followed by United
States domestic issuers under the NYSE listing standards.
This confirmation is located on the Wheaton Precious Metals website
at
https://ca.astfinancial.com/InvestorServices/Search-Issuers?lang=en.
End Notes
1.
Please refer to non-IFRS measures at the end of this press release.
2.
Silver equivalent ounces (SEOs) and gold equivalent ounces (GEOs), which are
provided to assist the reader, are calculated by converting gold (in the case of
SEOs) or silver (in the case of GEOs) using the ratio of the average price of silver
to the average price of gold per the London Bullion Metal Exchange during the
period. The silver / gold ratio is the ratio of the average price of silver to the
average price of gold per the London Bullion Metal Exchange during the period.
3.
Payable silver and gold ounces produced but not yet delivered are based on
management estimates, and may be updated in future periods as additional information
is received.
4 Please refer to Wheaton Precious Metals Q3 2017 Management's Discussion and Analysis("MD&A") for a more detailed description of the status and risks associated with the
San Dimas Silver Interest. Please also see "Cautionary Note Regarding Forward
Looking Statements" in the Company's MD&A for material risks, assumptions, and
important disclosure associated with San Dimas and Primero.
Condensed Interim Consolidated Statements of
Earnings
Three Months Ended Nine Months Ended
September 30 September 30
(US dollars and shares in
thousands, except per share
amounts - unaudited) 2017 2016 2017 2016
Sales $ 203,034 $ 233,204 $ 600,669 $ 633,066
Cost of sales
Cost of sales,
excluding
depletion $ 58,234 $ 60,776 $ 173,506 $ 177,620
Depletion 61,852 73,919 185,567 220,336
Total cost of sales $ 120,086 $ 134,695 $ 359,073 $ 397,956
Gross margin $ 82,948 $ 98,509 $ 241,596 $ 235,110
Expenses
General and
administrative
[1] $ 8,793 $ 9,513 $ 25,760 $ 30,316
Interest
expense 6,360 6,007 19,214 17,529
Other income (93) (19) (2,266) (105)
Other expense 1,410 1,377 3,917 3,632
Foreign
exchange loss 163 22 248 611
$ 16,633 $ 16,900 $ 46,873 $ 51,983
Earnings before income taxes $ 66,315 $ 81,609 $ 194,723 $ 183,127
Income tax recovery 263 1,377 691 1,144
Net earnings $ 66,578 $ 82,986 $ 195,414 $ 184,271
Basic earnings per share $ 0.15 $ 0.19 $ 0.44 $ 0.43
Diluted earnings per share $ 0.15 $ 0.19 $ 0.44 $ 0.43
Weighted average number of
shares outstanding
Basic 442,094 440,635 441,790 426,737
Diluted 442,476 441,917 442,263 427,094
1) Equity settled stock based
compensation (a non-cash
item)
included in general and
administrative expenses. $ 1,279 $ 1,220 $ 3,748 $ 3,822
Condensed Interim Consolidated Balance Sheets
As at As at
September 30 December 31
(US dollars in thousands - unaudited) 2017 2016
Assets
Current assets
Cash and cash
equivalents $ 69,910 $ 124,295
Accounts receivable 5,895 2,316
Other 2,678 1,481
Total current assets $ 78,483 $ 128,092
Non-current assets
Silver and gold
interests $ 5,728,770 $ 5,919,272
Early deposit - silver
and gold interests 20,709 20,064
Royalty interest 9,107 9,107
Long-term investments 86,265 64,621
Other 12,352 12,163
Total non-current assets $ 5,857,203 $ 6,025,227
Total assets $ 5,935,686 $ 6,153,319
Liabilities
Current liabilities
Accounts payable and
accrued liabilities $ 13,522 $ 18,829
Current portion of
performance share units - 228
Total current liabilities $ 13,522 $ 19,057
Non-current liabilities
Bank debt $ 854,000 $ 1,193,000
Deferred income taxes 61 262
Performance share units 798 1,012
Total non-current liabilities $ 854,859 $ 1,194,274
Total liabilities $ 868,381 $ 1,213,331
Shareholders' equity
Issued capital $ 3,464,856 $ 3,445,914
Reserves 74,295 55,301
Retained earnings 1,528,154 1,438,773
Total shareholders' equity $ 5,067,305 $ 4,939,988
Total liabilities and shareholders' equity $ 5,935,686 $ 6,153,319
Condensed Interim Consolidated Statements of Cash
Flows
Three Months Ended Nine Months Ended
September 30 September 30
(US dollars in thousands - unaudited) 2017 2016 2017 2016
Operating activities
Net earnings $ 66,578 $ 82,986 $ 195,414 $ 184,271
Adjustments for
Depreciation and depletion 62,096 74,149 186,298 221,032
Amortization of credit facility
origination fees:
Interest expense 167 190 551 596
Amortization of credit
facility origination
fees - undrawn facilities 201 177 541 498
Interest expense 6,194 5,817 18,664 16,933
Equity settled stock based
compensation 1,279 1,220 3,748 3,822
Performance share units (38) 565 (496) 744
Deferred income tax (recovery)
expense (279) (1,404) (985) (1,170)
Investment income recognized in
net earnings (93) (19) (256) (105)
Other (434) (308) (1,507) (220)
Change in non-cash working capital (234) 3,397 (9,162) (401)
Cash generated from operations
before
interest paid and received $ 135,437 $ 166,770 $ 392,810 $ 426,000
Interest paid - expensed (6,394) (5,204) (19,296) (16,478)
Interest received 78 11 211 76
Cash generated from operating
activities $ 129,121 $ 161,577 $ 373,725 $ 409,598
Financing activities
Bank debt repaid $ (99,000) $ (141,000) $ (339,000) $ (901,000)
Bank debt drawn - 780,000 - 780,000
Credit facility origination fees (6) - (1,311) (1,300)
Shares issued - - - 632,547
Share issue costs - (162) - (25,996)
Repurchase of share capital - - - (33,126)
Share purchase options exercised - 20,284 1,002 20,883
Dividends paid (36,663) (19,310) (88,771) (56,050)
Cash (used for) generated from
financing
activities $ (135,669) $ 639,812 $ (428,080) $ 415,958
Investing activities
Silver and gold interests $ - $ (800,013) $ - $ (800,297)
Interest paid - capitalized to
silver interests - - - (615)
Early deposit - silver and gold interests (5) - (899) (2,042)
Proceeds on disposal of silver interest 1 - - 1,022 -
Dividend income received 15 8 45 28
Other (116) (115) (202) (222)
Cash used for investing activities $ (106) $ (800,120) $ (34) $ (803,148)
Effect of exchange rate changes on
cash and cash equivalents $ (11) $ (214) $ 4 $ (160)
(Decrease) increase in cash and
cash equivalents $ (6,665) $ 1,055 $ (54,385) $ 22,248
Cash and cash equivalents,
beginning of period 76,575 124,490 124,295 103,297
Cash and cash equivalents, end of
period $ 69,910 $ 125,545 $ 69,910 $ 125,545
1)
During the three months ended March 31, 2017, the Company received an additional $1
million settlement related to the November 4, 2014 bankruptcy of Mercator Minerals
Ltd. ("Mercator") with whom Wheaton Precious Metals had a silver purchase agreement
relative to Mercator's Mineral Park mine in the United States.
Summary of Ounces Produced
Q3 2017 Q2 2017 Q1 2017 Q4 2016
Silver ounces produced [2]
San Dimas 1,043 973 623 1,429
Peñasquito 1,641 1,483 1,339 1,328
Antamina 1,735 1,888 1,464 1,599
Constancia 618 546 540 723
Other
Los Filos 43 42 32 33
Zinkgruvan 710 493 538 557
Yauliyacu 588 607 562 379
Stratoni 137 171 166 187
Minto 43 42 56 100
Neves-Corvo
[3] 341 316 330 312
Cozamin [4] - 17 397 265
Lagunas
Norte 243 218 210 234
Pierina 107 114 137 117
Veladero 201 144 158 174
777 145 138 96 152
Total Other 2,558 2,302 2,682 2,510
Total silver ounces produced 7,595 7,192 6,648 7,589
Gold ounces produced squared
Sudbury [5] 8,401 7,468 9,182 8,901
Salobo 72,980 57,514 53,193 71,328
Constancia 2,498 2,332 2,431 3,151
Other
Minto 6,904 6,063 9,734 10,906
777 5,114 6,259 4,422 10,919
Total Other 12,018 12,322 14,156 21,825
Total gold ounces produced 95,897 79,636 78,962 105,205
SEOs produced [6] 14,874 13,009 12,176 15,067
GEOs produced [6] 195,944 178,100 173,949 211,970
Silver / Gold Ratio [7] 75.9 73.0 70.0 71.1
Table continues...
Summary of Ounces Produced
Q3 2016 Q2 2016 Q1 2016 Q4 2015
Silver ounces produced [2]
San Dimas 1,264 1,596 923 2,317
Peñasquito 1,487 867 1,352 1,766
Antamina 1,469 1,707 2,021 2,403
Constancia 749 778 509 637
Other
Los Filos 44 56 40 45
Zinkgruvan 449 495 659 729
Yauliyacu 721 686 657 749
Stratoni 206 222 136 178
Minto 153 60 43 53
Neves-Corvo
[3] 279 331 319 269
Cozamin [4] 239 253 277 400
Lagunas
Norte 215 233 273 291
Pierina 50 31 35 54
Veladero 160 193 182 281
777 166 99 106 112
Total Other 2,682 2,659 2,727 3,161
Total silver ounces produced 7,651 7,607 7,532 10,284
Gold ounces produced squared
Sudbury [5] 10,779 15,054 7,895 13,678
Salobo 68,168 35,627 38,474 39,395
Constancia 3,737 4,622 3,435 4,617
Other
Minto 20,184 6,985 3,779 5,237
777 10,140 8,900 8,274 9,439
Total Other 30,324 15,885 12,053 14,676
Total gold ounces produced 113,008 71,188 61,857 72,366
SEOs produced [6] 15,343 12,947 12,453 15,699
GEOs produced [6] 225,393 172,566 156,513 209,783
Silver / Gold Ratio [7] 68.1 75.0 79.6 74.8
1) All figures in thousands except gold ounces produced.
2)
Ounces produced represent the quantity of silver and gold contained in concentrate
or doré prior to smelting or refining deductions.
Production figures are based on
information provided by the operators of the mining operations to which the silver
or gold interests relate or management estimates in those situations where other
information is not available.
Certain production figures may be updated in future
periods as additional information is received.
3)
As per Lundin Mining Corporation's ("Lundin") MD&A for the three months ended
September 30, 2017,
the Mining Industry Workers Union organized a strike at the
Neves-Corvo mine from October 3-7, 2017. Lundin states that they have been advised
that the union intends to undertake another strike during a five-day period
commencing November 6, 2017 and it may repeat this action a third time in the month
of December, resulting in their decision to revise production guidance downward to
reflect anticipated lost production
from the labour actions. Lundin has engaged in
dialogue with the unions, who are looking for changes to work schedules and other
factors that have also been demanded of other industries as part of a nation-wide
union initiative. These labour issues at Neves-Corvo have not impacted Wheaton
Precious Metals' production guidance for 2017.
4) The Cozamin precious metal purchase agreement expired on April 4, 2017.
5)
Comprised of the Coleman, Copper Cliff, Garson, Stobie, Creighton and Totten gold
interests. The Stobie gold interest was placed into care and maintenance as of May
2017.
6)
Silver equivalent ounces (SEOs) and gold equivalent ounces (GEOs), which are
provided to assist the reader, are calculated by converting gold (in the case of
SEOs) or silver (in the case of GEOs) using the ratio of the average price of
silver to the average price of gold per the London Bullion Metal Exchange during
the period.
7)
The silver / gold ratio is the ratio of the average price of silver to the average
price of gold per the London Bullion Metal Exchange during the period.
Summary of Ounces Sold
Q3 2017 Q2 2017 Q1 2017 Q4 2016
Silver ounces sold
San Dimas 962 845 796 1,571
Peñasquito 1,109 1,639 860 1,270
Antamina 1,537 1,453 1,170 1,488
Constancia 491 559 383 702
Other
Los Filos 43 42 32 33
Zinkgruvan 305 398 296 592
Yauliyacu 364 423 403 671
Stratoni 84 123 195 165
Campo
Morado [2] - - - -
Minto 43 39 37 102
Cozamin [3] 23 125 232 196
Neves-Corvo 117 114 153 147
Lagunas
Norte 242 204 217 227
Pierina 102 136 150 84
Veladero 201 144 159 174
777 135 125 142 84
Total Other 1,659 1,873 2,016 2,475
Total silver ounces sold 5,758 6,369 5,225 7,506
Gold ounces sold
Sudbury [4] 3,237 5,822 6,887 10,183
Salobo 67,198 50,478 63,007 73,646
Constancia 2,206 2,356 2,315 3,343
Other
Minto 4,603 6,988 9,902 15,445
777 5,304 6,321 6,286 6,314
Total Other 9,907 13,309 16,188 21,759
Total gold ounces sold 82,548 71,965 88,397 108,931
SEOs sold [5] 12,024 11,625 11,412 15,249
GEOs sold [5] 158,401 159,161 163,032 214,529
Cumulative payable silver
ounces PBND [6] 5,257 4,152 3,967 3,224
Cumulative payable gold
ounces PBND [6] 57,205 48,997 45,669 59,536
Silver / Gold Ratio [7] 75.9 73.0 70.0 71.1
Table continues...
Summary of Ounces Sold
Q3 2016 Q2 2016 Q1 2016 Q4 2015
Silver ounces sold
San Dimas 1,065 1,426 1,345 2,097
Peñasquito 1,078 886 949 2,086
Antamina 1,598 2,202 1,879 1,340
Constancia 536 520 666 511
Other
Los Filos 44 55 39 45
Zinkgruvan 340 369 812 507
Yauliyacu 342 578 603 987
Stratoni 203 129 148 39
Campo
Morado [2] - - 4 9
Minto 96 26 53 13
Cozamin [3] 207 219 300 317
Neves-Corvo 88 158 142 153
Lagunas
Norte 237 224 299 252
Pierina 32 27 46 36
Veladero 160 193 182 281
777 96 130 85 78
Total Other 1,845 2,108 2,713 2,717
Total silver ounces sold 6,122 7,142 7,552 8,751
Gold ounces sold
Sudbury [4] 12,294 11,351 9,007 6,256
Salobo 50,043 45,396 35,366 44,491
Constancia 3,396 3,610 4,933 4,473
Other
Minto 11,110 19 8,815 3,317
777 8,220 10,381 7,137 6,362
Total Other 19,330 10,400 15,952 9,679
Total gold ounces sold 85,063 70,757 65,258 64,899
SEOs sold [5] 11,913 12,451 12,745 13,607
GEOs sold [5] 175,008 165,945 160,180 181,838
Cumulative payable silver
ounces PBND [6] 3,783 2,999 3,230 3,872
Cumulative payable gold
ounces PBND [6] 68,148 44,780 49,679 56,867
Silver / Gold Ratio [7] 68.1 75.0 79.6 74.8
1) All figures in thousands except gold ounces sold.
2) The Campo Morado silver interest was disposed of on December 31, 2014.
3) The Cozamin precious metal purchase agreement expired on April 4, 2017.
4)
Comprised of the Coleman, Copper Cliff, Garson, Stobie, Creighton and Totten gold
interests.The Stobie gold interest was placed into care and maintenance as of May
2017.
5)
Silver equivalent ounces (SEOs) and gold equivalent ounces (GEOs), which are
provided to assist the reader, are calculated by converting gold (in the case of
SEOs) or silver (in the case of GEOs) using the ratio of the average price of
silver to the average price of gold per the London Bullion Metal Exchange during
the period.
6)
Payable silver and gold ounces produced but not yet delivered ("PBND") are based on
management estimates.These figures may be updated in future periods as additional
information is received.
7)
The silver / gold ratio is the ratio of the average price of silver to the average
price of gold per the London Bullion Metal Exchange during the period.
Results of Operations
The Company currently has eight reportable operating segments:
the silver produced by the San
Dimas, Peñasquito and Antamina mines, the gold produced by
the Sudbury and Salobo mines, the
silver and gold produced by the Constancia mine and the Other
mines, and corporate operations.
Three Months Ended September 30, 2017
Average Average
Ounces Realized Cash Average
Produc Price Cost Depletion
edsqua Ounces ($'s Per ($'s Per ($'s Per
red Sold Ounce) Ounce)3 Ounce)
Silver
San Dimas 1,043 962 $ 16.84 $ 4.32 $ 1.46
Peñasquito 1,641 1,109 16.67 4.13 2.88
Antamina 1,735 1,537 17.01 3.34 9.81
Constancia 618 491 17.16 5.90 7.36
Other [4] 2,558 1,659 16.79 5.28 3.77
7,595 5,758 $ 16.87 $ 4.43 $ 5.13
Gold
Sudbury [5] 8,401 3,237 $ 1,281 $ 400 $ 769
Salobo 72,980 67,198 1,280 400 381
Constancia 2,498 2,206 1,301 400 409
Other [6] 12,018 9,907 1,298 368 335
95,897 82,548 $ 1,283 $ 396 $ 391
Table continues...
Three Months Ended September 30, 2017
Cash Flow
Net From Total
Sales Earnings Operations Assets
Silver
San Dimas $ 16,205 $ 10,640 $ 12,049 $ 136,763
Peñasquito 18,491 10,715 13,911 407,679
Antamina 26,147 5,938 21,017 774,993
Constancia 8,429 1,915 5,531 265,420
Other [4] 27,854 12,836 19,109 759,840
$ 97,126 $ 42,044 $ 71,617 $ 2,344,695
Gold
Sudbury [5] $ 4,147 $ 362 $ 2,852 $ 389,266
Salobo 86,030 33,561 59,150 2,836,029
Constancia 2,869 1,083 1,986 122,856
Other [6] 12,862 5,898 8,823 35,924
$ 105,908 $ 40,904 $ 72,811 $ 3,384,075
Operating results $ 203,034 $ 82,948 $ 144,428 $ 5,728,770
Corporate costs
General and administrative $ (8,793) $ (6,693)
Interest expense (6,360) (6,394)
Other (1,480) (2,220)
Income tax recovery 263 -
Total corporate costs $ (16,370) $ (15,307) $ 206,916
$ 66,578 $ 129,121 $ 5,935,686
1)
All figures in thousands except gold ounces produced and sold and per ounce
amounts.
2)
Ounces produced represent the quantity of silver and gold contained in concentrate
or doré prior to smelting or refining deductions. Production figures are based on
information provided by the operators of the mining operations to which the silver
or gold interests relate or management estimates in those situations where other
information is not available. Certain production figures may be updated in future
periods as additional information is received.
3) Refer to discussion on non-IFRS measure (ii) at the end of this press release.
4)
Comprised of the operating Los Filos, Zinkgruvan, Yauliyacu, Stratoni, Minto,
Cozamin, Neves-Corvo, Lagunas Norte, Pierina, Veladero and 777 silver interests as
well as the non-operating Keno Hill, Aljustrel, Loma de La Plata, Pascua-Lama and
Rosemont silver interests. The Cozamin precious metal purchase agreement expired on
April 4, 2017.
5)
Comprised of the operating Coleman, Copper Cliff, Garson, Creighton and Totten gold
interests, the non-operating Victor gold interest and the Stobie gold interest
which was placed into care and maintenance during the second quarter of 2017.
6)
Comprised of the operating Minto and 777 gold interests in addition to the
non-operating Rosemont gold interest.
On a silver equivalent and gold equivalent basis, results for
the Company for the three months ended September 30, 2017 were as follows:
Three Months Ended September 30, 2017
Average
Cash Cash
Average Cost Operating Gross
Silver Realized ($'s Margin Average Margin
/ Gold Ounces Ounces Price Per ($'s Per Depletion ($'s
Ratio Produced Sold ($'s Per Ounce) Ounce) ($'s Per Per
[1] [2],[3] [3] Ounce) [4] [5] Ounce) Ounce)
Silver
equivalent
basis 75.9 14,874 12,024 $ 16.89 $ 4.84 $ 12.05 $ 5.14 $ 6.91
Gold
equivalent
basis 75.9 195,944 158,401 $ 1,282 $ 368 $ 914 $ 390 $ 524
1)
The silver / gold ratio is the ratio of the average price of silver to the average
price of gold per the London Bullion Metal Exchange during the period.
2)
Ounces produced represent the quantity of silver and gold contained in concentrate
or doré prior to smelting or refining deductions. Production figures are based on
information provided by the operators of the mining operations to which the silver
or gold interests relate or management estimates in those situations where other
information is not available. Certain production figures may be updated in future
periods as additional information is received.
3) Silver ounces produced and sold in thousands.
4) Refer to discussion on non-IFRS measure (ii) at the end of this press release.
5) Refer to discussion on non-IFRS measure (iii) at the end of this press release
Three Months Ended September 30, 2016
Average
Ounces Realized Average Average
Produced Price Cash Cost Depletion
squared Ounces ($'s Per ($'s Per ($'s Per
Sold Ounce) Ounce)[3] Ounce)
Silver
San Dimas 1,264 1,065 $ 19.75 $ 4.28 $ 1.11
Peñasquito 1,487 1,078 19.73 4.09 3.05
Antamina 1,469 1,598 19.67 3.84 9.94
Constancia 749 536 19.38 5.90 7.41
Other [4] 2,682 1,845 19.20 5.08 4.90
7,651 6,122 $ 19.53 $ 4.51 $ 5.45
Gold
Sudbury [5] 10,779 12,294 $ 1,332 $ 400 $ 787
Salobo 68,168 50,043 1,339 400 382
Constancia 3,737 3,396 1,338 400 409
Other [6] 30,324 19,330 1,329 354 537
113,008 85,063 $ 1,336 $ 390 $ 477
Table continues...
Three Months Ended September 30, 2016
Net From Total
Sales Earnings Operations Assets
Silver
San Dimas $ 21,037 $ 15,300 $ 16,478 $ 142,312
Peñasquito 21,276 13,574 16,866 421,955
Antamina 31,437 9,424 25,305 830,594
Constancia 10,379 3,250 7,219 281,170
Other [4] 35,444 17,028 28,037 799,465
$ 119,573 $ 58,576 $ 93,905 $ 2,475,496
Gold
Sudbury [5] $ 16,382 $ 1,787 $ 11,463 $ 480,550
Salobo 67,008 27,875 46,991 2,932,959
Constancia 4,544 1,795 3,186 127,038
Other [6] 25,697 8,476 19,016 62,586
$ 113,631 $ 39,933 $ 80,656 $ 3,603,133
Operating results $ 233,204 $ 98,509 $ 174,561 $ 6,078,629
Corporate costs
General and administrative $ (9,513) $ (6,881)
Interest expense (6,007) (5,204)
Other (1,380) (899)
Income tax recovery 1,377 -
Total corporate costs $ (15,523) $ (12,984) $ 247,403
$ 82,986 $ 161,577 $ 6,326,032
1)
All figures in thousands except gold ounces produced and sold and per ounce
amounts.
2)
Ounces produced represent the quantity of silver and gold contained in concentrate
or doré prior to smelting or refining deductions. Production figures are based on
information provided by the operators of the mining operations to which the silver
or gold interests relate or management estimates in those situations where other
information is not available. Certain production figures may be updated in future
periods as additional information is received.
3) Refer to discussion on non-IFRS measure (ii) at the end of this press release.
4)
Comprised of the operating Los Filos, Zinkgruvan, Yauliyacu, Stratoni, Minto,
Cozamin, Neves-Corvo, Lagunas Norte, Pierina, Veladero and 777 silver interests as
well as the non-operating Keno Hill, Aljustrel, Loma de La Plata, Pascua-Lama and
Rosemont silver interests. The Cozamin precious metal purchase agreement expired on
April 4, 2017.
5)
Comprised of the operating Coleman, Copper Cliff, Garson, Creighton and Totten gold
interests, the non-operating Victor gold interest and the Stobie gold interest
which was placed into care and maintenance during the second quarter of 2017.
6)Comprised of the operating Minto and 777 gold interests in addition to the
non-operating Rosemont gold interest.
On a silver equivalent and gold equivalent basis, results for
the Company for the three months ended September 30, 2016 were as follows:
Three Months Ended September 30, 2016
Cash
Average Operating
Average Cash Cost Margin Gross
Realized ($'s ($'s Average Margin
Silver/ Gold Ounces Ounces Price Per Per Depletion ($'s
Ratio Produced Sold ($'s Per Ounce) Ounce) ($'s Per Per
[1] [2],[3] [3] Ounce) [4] [5] Ounce) Ounce)
Silver
equivalent
basis 68.1 15,343 11,913 $ 19.57 $ 5.10 $ 14.47 $ 6.20 $ 8.27
Gold
equivalent
basis 68.1 225,393 175,008 $ 1,333 $ 347 $ 986 $ 422 $ 564
1)
The silver / gold ratio is the ratio of the average price of silver to the average
price of gold per the London Bullion Metal Exchange during the period.
2)
Ounces produced represent the quantity of silver and gold contained in concentrate
or doré prior to smelting or refining deductions. Production figures are based on
information provided by the operators of the mining operations to which the silver
or gold interests relate or management estimates in those situations where other
information is not available. Certain production figures may be updated in future
periods as additional information is received.
3) Silver ounces produced and sold in thousands.
4) Refer to discussion on non-IFRS measure (ii) at the end of this press release.
5) Refer to discussion on non-IFRS measure (iii) at the end of this press release.
Non-IFRS Measures
Wheaton Precious Metals has included, throughout this document,
certain non-IFRS performance measures, including (i) operating cash
flow per share (basic and diluted); (ii) average cash costs of
silver and gold on a per ounce basis and; (iii) cash operating
margin.
i. Operating cash flow per share (basic and diluted) is calculated by dividing cash
generated by operating activities by the weighted average number of shares
outstanding (basic and diluted). The Company presents operating cash flow per share as management and certain investors use this information to evaluate the
Company's performance in comparison to other companies in the precious metal
mining industry who present results on a similar basis.
The following table provides a reconciliation of operating cash flow per share
(basic and diluted).
Three Months Ended
September 30
(in thousands, except for per share amounts) 2017 2016
Cash generated by operating activities $ 129,121 $ 161,577
Divided by:
Basic weighted average
number of shares
outstanding 442,094 440,635
Diluted weighted
average number of
shares outstanding 442,476 441,917
Equals:
Operating cash flow per
share - basic $ 0.29 $ 0.37
Operating cash flow per
share - diluted $ 0.29 $ 0.37
ii.
Average cash cost of silver and gold on a per ounce basis is calculated by
dividing the total cost of sales, less depletion, by the ounces sold. In the
precious metal mining industry, this is a common performance measure but does not
have any standardized meaning. In addition to conventional measures prepared in
accordance with IFRS, management and certain investors use this information to
evaluate the Company's performance and ability to generate cash flow.
The following table provides a reconciliation of average cash cost of silver and
gold on a per ounce basis.
Three Months Ended
September 30
(in thousands, except for gold
ounces sold and per ounce amounts) 2017 2016
Cost of sales $ 120,086 $ 134,695
Less: depletion (61,852) (73,919)
Cash cost of sales $ 58,234 $ 60,776
Cash cost of sales is
comprised of:
Total cash cost of silver sold $ 25,529 $ 27,637
Total cash cost of gold sold 32,705 33,139
Total cash cost of sales $ 58,234 $ 60,776
Divided by:
Total silver ounces sold 5,758 6,122
Total gold ounces sold 82,548 85,063
Equals:
Average cash cost of silver (per
ounce) $ 4.43 $ 4.51
Average cash cost of gold (per
ounce) $ 396 $ 390
iii.
Cash operating margin is calculated by subtracting the average cash cost of
silver and gold on a per ounce basis from the average realized selling price
of silver and gold on a per ounce basis. The Company presents cash operating
margin as management and certain investors use this information to evaluate
the Company's performance in comparison to other companies in the precious
metal mining industry who present results on a similar basis as well as to
evaluate the Company's ability to generate cash flow.
The following table provides a reconciliation of cash operating margin.
Three Months Ended
September 30
(in thousands, except for gold ounces sold and per
ounce amounts) 2017 2016
Total sales:
Silver $ 97,126 $ 119,573
Gold $ 105,908 $ 113,631
Divided by:
Total silver ounces sold 5,758 6,122
Total gold ounces sold 82,548 85,063
Equals:
Average realized price of silver
(per ounce) $ 16.87 $ 19.53
Average realized price of gold
(per ounce) $ 1,283 $ 1,336
Less:
Average cash cost of silver [1]
(per ounce) $ (4.43) $ (4.51)
Average cash cost of gold [1]
(per ounce) $ (396) $ (390)
Equals:
Cash operating margin per silver
ounce sold $ 12.44 $ 15.02
As a percentage of
realized price of silver 74% 77%
Cash operating margin per gold
ounce sold $ 887 $ 946
As a percentage of
realized price of gold 69% 71%
1) Please refer to non-IFRS measure (ii), above.
These non-IFRS measures do not have any standardized meaning
prescribed by IFRS, and other companies may calculate these
measures differently. The presentation of these non-IFRS
measures is intended to provide additional information and should
not be considered in isolation or as a substitute for measures of
performance prepared in accordance with IFRS. For more detailed
information, please refer to Wheaton Precious Metals' MD&A
available on the Company's website at http://www.wheatonpm.com and
posted on SEDAR at http://www.sedar.com.
CAUTIONARY NOTE REGARDING FORWARD
LOOKING-STATEMENTS
The information contained herein 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. Forward-looking statements, which are all statements
other than statements of historical fact, include, but are not
limited to, statements with respect to:
- statements with respect to the proposed entering into, and
advance, by the Company of up to Cdn$20
million subordinated secured convertible debenture term debt
loan to Desert Star;
- statements with respect to the successful negotiation and
entering into of a definitive documentation by the Company with
Desert Star, payment by the Company of US$65
million to Desert Star and the satisfaction of each party's
obligations in accordance with the Kutcho Early Deposit
Agreement;
- the receipt by the Company of silver and gold production in
respect of the Kutcho project;
- future payments by the Company in accordance with precious
metal purchase agreements, including any acceleration of payments,
estimated throughput and exploration potential;
- projected increases to Wheaton Precious Metals' production and
cash flow profile;
- the expansion and exploration potential at the Salobo and
San Dimas mines;
- projected changes to Wheaton Precious Metals' production
mix;
- anticipated increases in total throughput;
- the effect of the SAT legal claim on Primero's business,
financial condition, results of operations and cash flows for
2010-2014 and 2015-2019;
- the impact on Primero of the unionized employee strike at the
San Dimas mine which concluded in
April 2017 and any other labour
disruptions;
- the ability of Primero to continue as a going concern;
- the ability of Primero to determine that it is uneconomic to
continue mining operations at the San
Dimas mine;
- the ability of Primero to achieve expected production
levels;
- the Guarantee of the Primero Facility;
- possible amendments to the San
Dimas silver purchase agreement as a result of any strategic
process or discussions with Primero;
- the estimated future production;
- the future price of commodities;
- the estimation of mineral reserves and mineral resources;
- the realization of mineral reserve estimates;
- the timing and amount of estimated future production (including
2017 and average attributable annual production over the next five
years);
- the costs of future production;
- reserve determination;
- estimated reserve conversion rates and produced but not yet
delivered ounces;
- any statements as to future dividends, the ability to fund
outstanding commitments and the ability to continue to acquire
accretive precious metal stream interests;
- confidence in the Company's business structure;
- the Company's position relating to any dispute with the CRA and
the Company's intention to defend reassessments issued by the CRA;
the impact of potential taxes, penalties and interest payable to
the CRA; possible audits for taxation years subsequent to 2015;
estimates as to amounts that may be reassessed by the CRA in
respect of taxation years subsequent to 2010; amounts that may be
payable in respect of penalties and interest; the Company's
intention to file future tax returns in a manner consistent with
previous filings; that the CRA will continue to accept the Company
posting security for amounts sought by the CRA under notices of
reassessment for the 2005-2010 taxation years or will accept
posting security for any other amounts that may be sought by the
CRA under other notices of reassessment; the length of time it
would take to resolve any dispute with the CRA or an objection to a
reassessment; and assessments of the impact and resolution of
various tax matters, including outstanding audits, proceedings with
the CRA and proceedings before the courts; and
- assessments of the impact and resolution of various legal and
tax matters, including but not limited to outstanding class action
litigation.
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 Precious Metals to be materially different
from those expressed or implied by such forward-looking statements,
including but not limited to:
- specific risks relating to the entering into and advancing of
amounts under the subordinated secured convertible debenture term
debt loan;
- Desert Star not being able to make payments under the
subordinated secured convertible debenture term debt loan;
- any specific risks relating to the completion of documentation
and diligence for the Kutcho Early Deposit Agreement;
- the satisfaction of each party's obligations in accordance with
the terms of the Kutcho Early Deposit Agreement;
- risks related to the satisfaction of each party's obligations
in accordance with the terms of the precious metal purchase
agreements, including any acceleration of payments, estimated
throughput and exploration potential;
- fluctuations in the price of commodities;
- risks related to the mining operations from which Wheaton
Precious Metals purchases silver or gold (the "Mining Operations")
including risks related to fluctuations in the price of the primary
commodities mined at such operations, actual results of mining and
exploration activities, environmental, economic and political risks
of the jurisdictions in which the Mining Operations are located,
and changes in project parameters as plans continue to
be refined;
- the absence of control over Mining Operations and having to
rely on the accuracy of the public disclosure and other information
Wheaton Precious Metals receives from the owners and operators of
the Mining Operations as the basis for its analyses, forecasts and
assessments relating to its own business;
- Primero is not able to defend the validity of the 2012 APA, is
unable to pay taxes in Mexico
based on realized silver prices or the SAT proceedings or actions
otherwise have an adverse impact on the business, financial
condition or results of operation of Primero;
- Primero not being able to profitably operate the San Dimas mine due to the impact of the strike
or other labour disruptions;
- Primero not being able to continue as a going concern;
- Primero determining that it is uneconomic to continue mining
operations at the San Dimas mine
and ceasing such mining operations;
- Primero not being able to achieve expected production
levels;
- Primero not being able to secure additional funding, resume
San Dimas mine operations to
normal operating capacity, reduce cash outflows or have a
successful outcome to a strategic review process;
- Primero failing to make required payments or otherwise
defaulting under its credit facility and the Company having to meet
its guarantee obligations under the Guarantee;
- amendments to the San Dimas
silver purchase agreement have a material adverse effect on the
Company's business, financial condition, results of operation or
cash flows;
- differences in the interpretation or application of tax laws
and regulations or accounting policies and rules; and Wheaton
Precious Metals' interpretation of, or compliance with, tax laws
and regulations or accounting policies and rules, is found to
be incorrect or the tax impact to the Company's business
operations is materially different than currently
contemplated;
- any challenge by the CRA of the Company's tax filings is
successful and the potential negative impact to the Company's
previous and future tax filings;
- the Company's business or ability to enter into precious metal
purchase agreements is materially impacted as a result of any CRA
reassessment;
- any reassessment of the Company's tax filings and the
continuation or timing of any such process is outside the Company's
control;
- any requirement to pay reassessed tax, and the amount of any
tax, interest and penalties that may be payable changing due to
currency fluctuations;
- the Company is not assessed taxes on its foreign subsidiary's
income on the same basis that the Company pays taxes on its
Canadian income, if taxable in Canada;
- interest and penalties associated with a CRA reassessment
having an adverse impact on the Company's financial position;
- litigation risk associated with a challenge to the Company's
tax filings;
- credit and liquidity risks;
- hedging risk;
- competition in the mining industry;
- risks related to Wheaton Precious Metals' acquisition
strategy;
- risks related to the market price of the common shares of
Wheaton Precious Metals;
- equity price risks related to Wheaton Precious Metals' holding
of long-term investments in other exploration and mining
companies;
- ·risks related to the declaration, timing and payment of
dividends;
- the ability of Wheaton Precious Metals and the Mining
Operations to retain key management employees or procure the
services of skilled and experienced personnel;
- litigation risk associated with outstanding legal matters;
- risks related to claims and legal proceedings against Wheaton
Precious Metals or the Mining Operations;
- risks relating to unknown defects and impairments;
- risks relating to security over underlying assets;
- risks related to ensuring the security and safety of
information systems, including cyber security risks;
- risks related to the adequacy of internal control over
financial reporting;
- risks related to governmental regulations;
- risks related to international operations of Wheaton Precious
Metals and the Mining Operations;
- risks relating to exploration, development and operations at
the Mining Operations;
- risks related to the ability of the companies with which the
Company has precious metal purchase agreements to perform their
obligations under those precious metal purchase agreements in the
event of a material adverse effect on the results of operations,
financial condition, cash flows or business of such companies;
- risks related to environmental regulations and climate
change;
- the ability of Wheaton Precious Metals and the Mining
Operations to obtain and maintain necessary licenses, permits,
approvals and rulings;
- the ability of Wheaton Precious Metals and the Mining
Operations to comply with applicable laws, regulations and
permitting requirements;
- lack of suitable infrastructure and employees to support the
Mining Operations;
- uncertainty in the accuracy of mineral reserve and mineral
resource estimates;
- inability to replace and expand mineral reserves;
- risks relating to production estimates from Mining Operations,
including anticipated timing of the commencement of production by
certain Mining Operations;
- uncertainties related to title and indigenous rights with
respect to the mineral properties of the Mining Operations;
- fluctuation in the commodity prices other than silver or
gold;
- the ability of Wheaton Precious Metals and the Mining
Operations to obtain adequate financing;
- the ability of Mining Operations to complete permitting,
construction, development and expansion;
- challenges related to global financial conditions;
- risks relating to future sales or the issuance of equity
securities; and
- other risks discussed in the section entitled "Description of
the Business - Risk Factors" in Wheaton Precious Metals' Annual
Information Form available on SEDAR at http://www.sedar.com, and in
Wheaton Precious Metals' Form 40-F filed March 31, 2017 and Form 6-K filed March 21, 2017 both on file with the U.S.
Securities and Exchange Commission in Washington, D.C. (the "Disclosure").
Forward-looking statements are based on assumptions management
currently believes to be reasonable, including but not limited
to:
- the completion of documentation and receipt of all necessary
approvals in respect of the subordinated secured convertible
debenture term debt loan with Desert Star;
- that Desert Star will make all required payments and not be in
default under the subordinated secured convertible debenture term
debt loan;
- the completion of documentation and diligence in respect of the
Kutcho Early Deposit Agreement;
- the payment of US$65 million to
Desert Star and the satisfaction of each party's obligations in
accordance with the terms of the Kutcho Early Deposit
Agreement;
- the satisfaction of each party's obligations in accordance with
the precious metal purchase agreements;
- 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;
- the continuing ability to fund or obtain funding for
outstanding commitments;
- that the impact on Primero of the unionized employee strike or
other labour disruptions at the San
Dimas mine will not be significant;
- that Primero is able to continue as a going concern;
- that Primero will not determine that it is uneconomic to
continue mining operations at the San
Dimas mine;
- that Primero is able to achieve expected production
levels;
- that Primero will make all required payments and not be in
default under the Primero Facility;
- that any amendments to the San
Dimas silver purchase agreement will not have a material
adverse effect on the Company's business, financial condition,
results of operation or cash flows;
- Wheaton Precious Metals' ability to source and obtain accretive
precious metal stream interests;
- expectations regarding the resolution of legal and tax matters,
including the ongoing class action litigation and CRA audit
involving the Company;
- Wheaton Precious Metals will be successful in challenging any
reassessment by the CRA;
- Wheaton Precious Metals has properly considered the application
of Canadian tax law to its structure and operations;
- Wheaton Precious Metals will continue to be permitted to post
security for amounts sought by the CRA under notices of
reassessment;
- Wheaton Precious Metals has filed its tax returns and paid
applicable taxes in compliance with Canadian tax law;
- Wheaton Precious Metals will not change its business as a
result of any CRA reassessment;
- Wheaton Precious Metals' ability to enter into new precious
metal purchase agreements will not be impacted by any CRA
reassessment;
- expectations and assumptions concerning prevailing tax laws and
the potential amount that could be reassessed as additional tax,
penalties and interest by the CRA;
- any foreign subsidiary income, if taxable in Canada, would be subject to the same or
similar tax calculations as Wheaton Precious Metals' Canadian
income, including the Company's position, in respect of precious
metal purchase agreements with upfront payments paid in the form of
a deposit, that the estimates of income subject to tax is based on
the cost of precious metal acquired under such precious metal
purchase agreements being equal to the market value of such
precious metal.
- the estimate of the recoverable amount for any precious metal
purchase agreement with an indicator of impairment; and
- such other assumptions and factors as set out in the
Disclosure.
Although Wheaton Precious Metals 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. 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 Precious Metals.
Accordingly, 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 investors with information to assist them
in understanding Wheaton Precious Metals' 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. Wheaton Precious Metals does not undertake to
update any forward-looking statements that are included or
incorporated by reference herein, except in accordance with
applicable securities laws.
Cautionary Language Regarding Reserves And
Resources
For further information on Mineral Reserves and Mineral
Resources and on Wheaton Precious Metals more generally, readers
should refer to Wheaton Precious Metals' Annual Information Form
for the year ended December 31, 2016
and other continuous disclosure documents filed by Wheaton Precious
Metals since January 1, 2017,
available on SEDAR at http://www.sedar.com. Wheaton Precious
Metals' Mineral Reserves and Mineral Resources are subject to the
qualifications and notes set forth therein. Mineral Resources which
are not Mineral Reserves do not have demonstrated economic
viability.
Cautionary Note to United States Investors Concerning
Estimates of Measured, Indicated and Inferred Resources: The
information contained herein has been prepared in accordance with
the requirements of the securities laws in effect in Canada, which differ from the requirements of
United States securities laws. The
terms "mineral reserve", "proven mineral reserve" and "probable
mineral reserve" are Canadian mining terms defined in accordance
with Canadian National Instrument 43-101 - Standards of Disclosure
for Mineral Projects ("NI 43-101") and the Canadian Institute of
Mining, Metallurgy and Petroleum (the "CIM") - CIM Definition
Standards on Mineral Resources and Mineral Reserves, adopted by the
CIM Council, as amended (the "CIM Standards"). These definitions
differ from the definitions in Industry Guide 7 ("SEC Industry
Guide 7") under the U.S. Securities Act of 1933, as amended (the
"U.S. Securities Act"). Under U.S. standards, mineralization may
not be classified as a "reserve" unless the determination has been
made that the mineralization could be economically and legally
produced or extracted at the time the reserve determination is
made. Also, under SEC Industry Guide 7 standards, a "final" or
"bankable" feasibility study is required to report reserves, the
three-year historical average price is used in any reserve or cash
flow analysis to designate reserves and the primary environmental
analysis or report must be filed with the appropriate governmental
authority. In addition, the terms "mineral resource", "measured
mineral resource", "indicated mineral resource" and "inferred
mineral resource" are defined in and required to be disclosed by NI
43-101; however, these terms are not defined terms under SEC
Industry Guide 7 and are normally not permitted to be used in
reports and registration statements filed with the SEC. Investors
are cautioned not to assume that any part or all of the mineral
deposits in these categories will ever be converted into reserves.
"Inferred mineral resources" have a great amount of uncertainty as
to their existence and as to their economic and legal feasibility.
It cannot be assumed that all or any part of an inferred mineral
resource will ever be upgraded to a higher category. Under Canadian
rules, estimates of inferred mineral resources may not form the
basis of feasibility or pre-feasibility studies, except in rare
cases. Investors are cautioned not to assume that all or any part
of an inferred mineral resource exists or is economically or
legally mineable. Mineral resources that are not mineral reserves
do not have demonstrated economic viability. Disclosure of
"contained ounces" in a resource is permitted disclosure under
Canadian regulations; however, the SEC normally only permits
issuers to report mineralization that does not constitute
"reserves" by SEC standards as in place tonnage and grade without
reference to unit measures. Accordingly, information contained
herein that describes Wheaton Precious Metals' mineral deposits may
not be comparable to similar information made public by U.S.
companies subject to reporting and disclosure requirements under
the United States federal
securities laws and the rules and regulations thereunder.
United States investors are urged
to consider closely the disclosure in Wheaton Precious Metals' Form
40-F, a copy of which may be obtained from Wheaton Precious Metals
or from http://www.sec.gov/edgar.shtml.
In accordance with the Company's MD&A and financial
statements, reference to the Company includes the Company's wholly
owned subsidiaries.
Patrick Drouin, Senior Vice
President, Investor Relations, Wheaton Precious Metals Corp., Tel:
+1-844-288-9878, E-mail: info@wheatonpm.com, Website:
http://www.wheatonpm.com