TSX: WPM
NYSE: WPM
VANCOUVER, Aug. 14, 2018 /CNW/ - Wheaton
Precious Metals™ Corp. ("Wheaton" or the "Company") is pleased to
announce its results for the second quarter ended June 30, 2018. All figures are presented in
United States dollars unless
otherwise noted.
In the second quarter of 2018, Wheaton had net earnings of
$318 million, which included a
$246 million gain on the disposal of
the San Dimas silver stream. In
the first half of 2018, Wheaton had record gold production from
Salobo and generated over $260
million in cash flow. During the second quarter, Wheaton
completed the acquisition of a cobalt stream on Vale's Voisey's Bay
mine, and subsequent to the quarter, Wheaton closed a gold and
palladium stream on Sibanye-Stillwater's Stillwater and East Boulder mines.
Operational Overview
|
|
|
Q2 2018
|
|
|
Q2 2017
|
|
Change
|
Ounces
produced
|
|
|
|
|
|
|
|
|
|
Silver
|
|
|
6,091
|
|
|
7,192
|
|
(15.3)%
|
|
Gold
|
|
|
85,292
|
|
|
79,636
|
|
7.1 %
|
Ounces
sold
|
|
|
|
|
|
|
|
|
|
Silver
|
|
|
5,972
|
|
|
6,369
|
|
(6.2)%
|
|
Gold
|
|
|
87,140
|
|
|
71,965
|
|
21.1 %
|
Sales price per
ounce
|
|
|
|
|
|
|
|
|
|
Silver
|
|
$
|
16.52
|
|
$
|
17.09
|
|
(3.3)%
|
|
Gold
|
|
$
|
1,305
|
|
$
|
1,263
|
|
3.3 %
|
Cash costs per
ounce 1
|
|
|
|
|
|
|
|
|
|
Silver
1
|
|
$
|
4.54
|
|
$
|
4.51
|
|
0.7 %
|
|
Gold
1
|
|
$
|
407
|
|
$
|
393
|
|
3.6 %
|
Cash operating
margin per ounce 1
|
|
|
|
|
|
|
|
|
|
Silver
1
|
|
$
|
11.98
|
|
$
|
12.58
|
|
(4.8)%
|
|
Gold
1
|
|
$
|
898
|
|
$
|
870
|
|
3.2 %
|
Revenue
|
|
$
|
212,400
|
|
$
|
199,684
|
|
6.4 %
|
Net
earnings
|
|
$
|
318,142
|
|
$
|
67,612
|
|
370.5 %
|
|
Per share
|
|
$
|
0.72
|
|
$
|
0.15
|
|
380.0 %
|
Adjusted net
earnings 1
|
|
$
|
72,722
|
|
$
|
66,624
|
|
9.2 %
|
|
Per share
1
|
|
$
|
0.16
|
|
$
|
0.15
|
|
8.8 %
|
Operating cash
flows
|
|
$
|
135,200
|
|
$
|
124,681
|
|
8.4 %
|
|
Per share
1
|
|
$
|
0.31
|
|
$
|
0.28
|
|
10.7 %
|
Dividends declared
1
|
|
$
|
39,888
|
|
$
|
30,926
|
|
29.0 %
|
|
Per share
|
|
$
|
0.09
|
|
$
|
0.07
|
|
28.6 %
|
All amounts in
thousands except gold ounces produced and sold, per ounce amounts
and per share amounts.
|
Highlights
- The decrease in attributable silver production and the increase
in attributable gold production for the three months ended
June 30, 2018, was primarily due to
the termination of the San Dimas
silver purchase agreement and the entering into of the new
San Dimas precious metals purchase
agreement effective May 10, 2018,
with the silver production being further impacted by the expiry of
the streaming agreement relative to the Lagunas Norte, Veladero and
Pierina mines on March 31, 2018, and
lower production at Antamina primarily resulting from mine
sequencing.
- The decrease in silver sales volume for the three months ended
June 30, 2018, was due to the lower
production levels, partially offset by positive changes in the
balance of payable silver produced but not yet delivered to
Wheaton.
- The increase in gold sales volume for the three months ended
June 30, 2018, was primarily the
result of increased production levels coupled with positive changes
in the balance of payable gold produced but not yet delivered to
Wheaton.
- Declared quarterly dividend of $0.09 per common share. This represents an
increase of 29% relative to the comparable period in 2017.
- On May 10, 2018, First Majestic
Silver Corp. ("First Majestic") announced that they had closed the
previously announced acquisition of Primero Mining Corp.
("Primero"). In connection with this acquisition, the Company has
terminated the San Dimas silver
purchase agreement and entered into a new San Dimas precious metal purchase agreement
with First Majestic, resulting in a gain on disposal of
$246 million.
- On June 28, 2018, Wheaton
completed the acquisition from Vale S.A. ("Vale") of a fixed
percentage of cobalt production from the Voisey's Bay mine starting
in January 2021.
Subsequent to the Quarter
- On July 25, 2018, the Company,
through its wholly owned subsidiary Wheaton Precious Metals
International Ltd. ("Wheaton International"), completed the
acquisition from Sibanye Gold Limited ("Sibanye-Stillwater") of a
fixed percentage of gold and palladium production from the
Stillwater and East Boulder mines
(collectively "Stillwater") effective July
1, 2018.
- On July 17, 2018, the Company
acquired 9.99% of the common shares of Adventus Zinc Corporation
("Adventus") and acquired a right of first refusal on any new
streaming or royalty transactions on precious metals on the
Adventus existing properties in Ecuador.
Reconfirming Production Guidance
- With the addition of the streams on Voisey's Bay and
Stillwater, Wheaton's estimated
attributable production in 2018 is forecast to be approximately
355,000 ounces of gold, 22.5 million ounces of silver, and 10,400
ounces of palladium.
- Estimated average annual attributable production over the next
five years (including 2018) is anticipated to be approximately
385,000 ounces of gold, 25 million ounces of silver, 27,000 ounces
of palladium, and starting in 2021, 2.1 million pounds of cobalt
per year.
"Wheaton's high-quality portfolio and strong margins generated
over $260 million of operating cash
flow in the first half of 2018," said Randy
Smallwood, President and Chief Executive Officer of Wheaton
Precious Metals. "Since the beginning of the year, Wheaton made two
substantial acquisitions with new streams on Voisey's Bay and
Stillwater. We expect Stillwater to contribute production and cash
flow starting in the third quarter of 2018 and Voisey's Bay
starting in 2021. These additions ideally fit within our existing
portfolio as they are both high-margin and long-life mines with
significant exploration potential. Given our sector-leading cash
flow and revolving credit facility, Wheaton was able to consummate
these transactions on an accretive basis for shareholders without
having to access additional sources of capital. Over the past eight
years, we have only raised $1.6
billion in equity, while at the same time invested over
$6.5 billion into new streams and
paid over $800 million in
dividends."
Financial Review
Revenues
Revenue was $212 million in the second quarter of 2018, on
sales volume of 6.0 million ounces of silver and 87,100 ounces of
gold. This represents a 6% increase from the $200 million of revenue generated in the second
quarter of 2017 due primarily to (i) a 21% increase in the number
of gold ounces sold; (ii) a 3% increase in the average realized
gold price ($1,305 in Q2 2018
compared with $1,263 in Q2 2017);
partially offset by (iii) a 6% decrease in the number of silver
ounces sold; and (iv) a 3% decrease in the average realized silver
price ($16.52 in Q2 2018 compared
with $17.09 in Q2 2017).
Costs and Expenses
Average cash costs¹ in the
second quarter of 2018 were $4.54 per
silver ounce sold and $407 per gold
ounce sold, as compared with $4.51
per silver ounce and $393 per gold
ounce during the comparable period of 2017. This resulted in a cash
operating margin¹ of $11.98 per
silver ounce sold and $898 per gold
ounce sold, a decrease of 5% per silver ounce sold and an increase
of 3% per ounce of gold sold as compared with Q2 2017. The decrease
in the silver cash operating margin was primarily due to a 3%
decrease in the average realized silver price in Q2 2018 compared
with Q2 2017 while the increase in the gold cash operating margin
was primarily due to a 3% increase in the average realized gold
price during the same period.
Earnings and Operating Cash Flows
Adjusted net
earnings¹ and cash flow from operations in the second quarter of
2018 were $73 million ($0.16 per share) and $135
million ($0.31 per share¹),
compared with adjusted net earnings¹ of $67
million ($0.15 per share) and
cash flow from operations of $125
million ($0.28 per share¹) for
the same period in 2017, an increase of 9% and 8%,
respectively.
Balance Sheet
At June
30, 2018, the Company had approximately $93 million of cash on hand and $957 million outstanding under the Company's
$2 billion revolving term loan (the
"Revolving Facility"). Subsequent to June
30, 2018, the Company used its Revolving Facility to fund
the $500 million for the acquisition
of the stream on Stillwater.
Second Quarter Asset Highlights
During the second quarter of 2018, attributable production was
6.1 million ounces of silver and 85,300 ounces of gold,
representing a decrease of 15% and an increase of 7%, as compared
with the second quarter of 2017.
Operational highlights for the quarter ended June 30, 2018, based upon counterparties'
reporting, are as follows:
Salobo
In the second quarter of 2018,
Salobo produced 63,900 ounces of attributable gold, an increase of
approximately 11% relative to the second quarter of 2017 as higher
recovery and throughput were partially offset by lower grades. The
Salobo plant operated at 100% of capacity in the quarter.
Peñasquito
In the second quarter of 2018, Peñasquito produced 1.3 million
ounces of attributable silver, a decrease of approximately 15%
relative to the second quarter of 2017 due to lower production from
the oxide heap leach. According to Goldcorp Inc.'s ("Goldcorp")
second quarter of 2018 MD&A, lower production was a result of
the planned transition from high-grade ore in Phase 5D at the
bottom of the Peñasco pit, to lower grade ore from stockpiles and
the remnants of Phase 5D. Production in Phase 5D was reportedly
completed during the second quarter of 2018, and equipment was
refocused on accelerating stripping activities in Phase 6D and in
the Chile Colorado pit.
According to Goldcorp, construction of the Pyrite Leach Project
("PLP") at Peñasquito has been completed with commissioning further
accelerated to the third quarter of 2018, now two quarters ahead of
schedule. As a result, Goldcorp has modified the production plan
for the third quarter with lower than planned mill throughput and
low mill head grades, exclusively from the surface stockpile, to
accommodate the commissioning of a new major circuit, which is the
preferred material to be processing during the commissioning phase
where lower recoveries are expected. Goldcorp further notes that a
resequencing to higher grades and mill tonnage in the fourth
quarter, subsequent to the commissioning, is expected to allow the
mine to meet its full year gold production objectives.
Antamina
In the second quarter of 2018,
Antamina produced 1.5 million ounces of attributable silver, a
decrease of approximately 23% relative to the second quarter of
2017 as expected due to mine sequencing in the open pit.
San Dimas
In
the second quarter of 2018, San
Dimas produced 5,700 ounces of attributable gold and 0.6
million ounces of attributable silver. On May 10, 2018, First Majestic announced that they
had completed the previously announced acquisition of Primero. In
connection with this acquisition, Wheaton
International terminated the existing San Dimas silver purchase agreement with
Primero (the "Primero SPA") and entered into a new precious metals
purchase agreement with First Majestic relating to the San
Dimas mine (the "San Dimas PMPA"). Attributable silver
production in the quarter was in relation to the Primero SPA, and
attributable gold production was attributable to the San Dimas
PMPA. Under the San Dimas PMPA, Wheaton is entitled to 25% of gold
production plus an additional amount of gold equal to 25% of silver
production converted to gold at a fixed gold to silver exchange
ratio of 70:1 from the San
Dimas mine2, and for each ounce of gold
delivered, Wheaton will pay to First Majestic a delivery
payment equal to the lesser of $600/oz, subject to a 1% annual
inflationary adjustment, and the prevailing market price. First
Majestic has provided a corporate guarantee and security limited
to San Dimas assets. As part of the transaction, in
addition to the new stream, Wheaton received
20,914,590 First Majestic common shares with a fair value of
$151 million. As reflected in the
Company's second quarter financial results, the termination of the
Primero SPA has resulted in a gain on disposal of $246 million to Wheaton.
Sudbury
In the
second quarter of 2018, Vale's Sudbury mines produced 4,900 ounces of
attributable gold, a decrease of approximately 34% relative to the
second quarter of 2017 primarily due to lower grades and
throughput. According to Vale's second quarter of 2018 MD&A,
the Coleman mine was in a maintenance shutdown from November 2017 to April
2018.
Constancia
In the second quarter of 2018,
Constancia produced 0.6 million ounces of attributable silver and
3,200 ounces of attributable gold, an increase of approximately 9%
and 37%, respectively, relative to the second quarter of 2017.
Increased silver and gold production was primarily due to higher
throughput and grades.
Other Silver
In the second quarter of 2018,
total Other Silver attributable production was 2.2 million ounces,
a decrease of approximately 6% relative to the second quarter of
2017. The decrease was driven primarily by the cessation of
attributable production from the Lagunas Norte, Veladero, and
Pierina mines as the silver purchase agreement with Barrick Gold
Corp. ("Barrick") related to these mines expired on
March 31, 2018.
Other Gold
In the second quarter of 2018,
total Other Gold attributable production was 7,500 ounces, a
decrease of approximately 39% relative to the second quarter of
2017. The decrease was due primarily to lower production at both
the Minto and 777 mines.
Produced But Not Yet Delivered
3
As at
June 30, 2018, payable ounces
attributable to the Company produced but not yet delivered³
amounted to 4.3 million payable silver ounces and 75,600 payable
gold ounces, representing a decrease of 0.6 million payable silver
ounces and 6,400 payable gold ounces during the three month period
ended June 30, 2018. Payable
silver ounces produced but not yet delivered decreased primarily as
a result of decreases related to the San
Dimas and Peñasquito silver interests partially offset by an
increase related to the Yauliyacu silver interest. Payable gold
ounces produced but not yet delivered decreased primarily as a
result of a decrease related to the Salobo gold interest partially
offset by increases related to the San
Dimas and 777 gold interests. Payable ounces produced but
not yet delivered to the Wheaton group of companies are expected to
average approximately two months of annualized production for
silver and two to three months for gold 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's consolidated
MD&A in the 'Results of Operations and Operational Review'
section.
Voisey's Bay
On June 28, 2018, the Company
entered into an agreement to acquire from Vale an amount of cobalt
equal to 42.4% of the Voisey's Bay cobalt production until the
delivery of 31 million pounds of cobalt and 21.2% of cobalt
production thereafter for the life of mine at a fixed 93.3% payable
rate for a total upfront cash payment of $390 million. In addition, Wheaton will make
delivery payments of 18% of the Metal Bulletin market price of
cobalt ("cobalt spot price") per pound of cobalt delivered under
the agreement until such time as the upfront cash payment is
reduced to zero, after which the per pound price paid will be 22%
of the cobalt spot price per cobalt pound delivered. Delivery
of cobalt production will commence after January 1, 2021.
Subsequent to the Quarter
Stillwater
On
July 25, 2018, Wheaton International
entered into an agreement to acquire from Sibanye-Stillwater an
amount of gold and palladium equal to a fixed percentage of gold
and palladium production from Stillwater starting on July 1, 2018. Wheaton International has paid a
total upfront cash payment of $500
million and is entitled to an amount of gold equal to 100%
of Stillwater gold production for
the life of mine and an amount of palladium equal to: 4.5% of
Stillwater palladium production
until 375,000 ounces are delivered; thereafter, 2.25% of
Stillwater palladium production
until 550,000 are delivered; and 1% of Stillwater palladium production thereafter for
the life of mine. In addition, Wheaton International will generally
make delivery payments of 18% of spot gold and palladium prices
until such time as the upfront cash payment is reduced to zero,
after which the delivery payments will increase to 22% spot.
Acquisition of Adventus Shares
On July 17, 2018, the Company acquired 7,093,392
common shares of Adventus in a private placement transaction, for a
total purchase price of Cdn$6
million, representing 9.99% of Adventus' issued and
outstanding common shares. Concurrently, the Company acquired a
right of first refusal on any new streaming or royalty transactions
on precious metals on the Adventus existing properties in
Ecuador and a right of first offer
on any subsequently acquired properties in Ecuador.
Dividend
Third Quarterly Dividend
The third quarterly
cash dividend for 2018 of US$0.09
will be paid to holders of record of Wheaton Precious Metals common
shares as of the close of business on August
29, 2018 and will be distributed on or about September 13, 2018.
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 third 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 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://www.canstockta.com/en/InvestorServices/Investor_Information/Issuer_List/IssuerDetail.jsp?companyCode=1501.
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 – Reconfirming Guidance
Wheaton reconfirms its estimated attributable production
forecast for 2018 of approximately 355,000 ounces of gold, 22.5
million ounces of silver, and 10,400 ounces of palladium. Estimated
average annual attributable production over the next five years
(including 2018) is anticipated to be approximately 385,000 ounces
of gold, 25 million ounces of silver, 27,000 ounces of palladium,
and starting in 2021, 2.1 million pounds of cobalt per year. As a
reminder, Wheaton does not include any production from Barrick's
Pascua-Lama project or Hudbay's Rosemont project in its estimated average
five-year production guidance.
From a liquidity perspective, the $93
million of cash and cash equivalents as at June 30, 2018 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 Wednesday, August 15, 2018, 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:
|
8248656
|
Live audio
webcast:
|
www.wheatonpm.com
|
Participants should dial in five to ten minutes before the
call.
The conference call will be recorded and available until
August 22, 2018 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:
|
8248656
|
Archived audio
webcast:
|
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 www.wheatonpm.com and have
been posted on SEDAR at www.sedar.com.
Mr. Wes Carson, Vice President,
Mining Operations 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 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
http://www.wheatonpm.com/Company/corporate-governance/default.aspxhttp://www.silverwheaton.com/company/corporate-governance/default.aspx.
End Notes
_____________________________
1
|
Please refer to
non-IFRS measures at the end of this press release. Dividends
declared in the referenced calendar quarter, relative to the
financial results of the prior quarter.
|
2
|
If the average gold
to silver price ratio decreases to less than 50:1 or increases to
more than 90:1 for a period of 6 months or more, then the "70"
shall be revised to "50" or "90", as the case may be, until such
time as the average gold to silver price ratio is between 50:1 to
90:1 for a period of 6 months or more in which event the "70" shall
be reinstated.
|
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.
|
Condensed Interim Consolidated Statements of Earnings
|
|
Three Months
Ended
June 30
|
Six Months Ended
June 30
|
(US dollars and
shares in thousands, except per share amounts -
unaudited)
|
|
2018
|
2017
|
2018
|
2017
|
Sales
|
|
$
|
212,400
|
$
|
199,684
|
$
|
411,652
|
$
|
397,635
|
Cost of
sales
|
|
|
|
|
|
|
|
|
|
|
Cost of sales,
excluding depletion
|
|
$
|
62,580
|
$
|
56,981
|
$
|
118,994
|
$
|
115,272
|
|
Depletion
|
|
|
62,494
|
|
59,772
|
|
119,759
|
|
123,715
|
Total cost of
sales
|
|
$
|
125,074
|
$
|
116,753
|
$
|
238,753
|
$
|
238,987
|
Gross
margin
|
|
$
|
87,326
|
$
|
82,931
|
$
|
172,899
|
$
|
158,648
|
Other expenses
(income)
|
|
|
|
|
|
|
|
|
|
|
General and
administrative 1
|
|
$
|
11,972
|
$
|
9,069
|
$
|
21,729
|
$
|
16,967
|
|
Gain on disposal of
mineral stream interest
|
|
|
(245,715)
|
|
-
|
|
(245,715)
|
|
-
|
|
Interest
expense
|
|
|
5,659
|
|
6,482
|
|
11,249
|
|
12,854
|
|
Unrealized fair value
losses (gains), net
|
|
|
295
|
|
-
|
|
2,165
|
|
-
|
|
Other
income
|
|
|
(1,538)
|
|
(1,075)
|
|
(2,372)
|
|
(2,173)
|
|
Other
expense
|
|
|
1,709
|
|
1,358
|
|
3,430
|
|
2,507
|
|
Foreign exchange loss
(gain)
|
|
|
26
|
|
41
|
|
(143)
|
|
85
|
|
|
$
|
(227,592)
|
$
|
15,875
|
$
|
(209,657)
|
$
|
30,240
|
Earnings before
income taxes
|
|
$
|
314,918
|
$
|
67,056
|
$
|
382,556
|
$
|
128,408
|
Income tax
recovery
|
|
|
3,224
|
|
556
|
|
3,709
|
|
428
|
Net
earnings
|
|
$
|
318,142
|
$
|
67,612
|
$
|
386,265
|
$
|
128,836
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share
|
|
$
|
0.72
|
$
|
0.15
|
$
|
0.87
|
$
|
0.29
|
Diluted earnings
per share
|
|
$
|
0.72
|
$
|
0.15
|
$
|
0.87
|
$
|
0.29
|
Weighted average
number of shares outstanding
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
443,191
|
|
441,784
|
|
442,961
|
|
441,635
|
|
Diluted
|
|
|
443,770
|
|
442,370
|
|
443,453
|
|
442,168
|
1)
|
Equity settled stock
based compensation (a non-cash item) included in general and
administrative expenses.
|
|
$
|
1,394
|
$
|
1,273
|
$
|
2,643
|
$
|
2,469
|
Condensed Interim Consolidated Balance Sheets
|
As at
June 30
|
As at
December 31
|
(US dollars in
thousands - unaudited)
|
2018
|
2017
|
Assets
|
|
|
|
|
Current
assets
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
92,661
|
$
|
98,521
|
|
Accounts
receivable
|
|
6,875
|
|
3,194
|
|
Other
|
|
3,580
|
|
1,700
|
Total current
assets
|
$
|
103,116
|
$
|
103,415
|
Non-current
assets
|
|
|
|
|
|
Mineral stream
interests
|
$
|
5,785,795
|
$
|
5,423,277
|
|
Early deposit mineral
stream interests
|
|
25,990
|
|
21,722
|
|
Mineral royalty
interest
|
|
9,107
|
|
9,107
|
|
Long-term equity
investments
|
|
261,172
|
|
95,732
|
|
Investment in
associates
|
|
2,793
|
|
2,994
|
|
Convertible note
receivable
|
|
13,723
|
|
15,777
|
|
Other
|
|
14,416
|
|
11,289
|
Total non-current
assets
|
$
|
6,112,996
|
$
|
5,579,898
|
Total
assets
|
$
|
6,216,112
|
$
|
5,683,313
|
Liabilities
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
Accounts payable and
accrued liabilities
|
$
|
20,008
|
$
|
12,118
|
|
Current portion of
performance share units
|
|
1,638
|
|
-
|
|
Other
|
|
22
|
|
25
|
Total current
liabilities
|
$
|
21,668
|
$
|
12,143
|
Non-current
liabilities
|
|
|
|
|
|
Bank debt
|
$
|
956,500
|
$
|
770,000
|
|
Deferred income
taxes
|
|
96
|
|
76
|
|
Performance share
units
|
|
3,233
|
|
1,430
|
Total non-current
liabilities
|
$
|
959,829
|
$
|
771,506
|
Total
liabilities
|
$
|
981,497
|
$
|
783,649
|
Shareholders'
equity
|
|
|
|
|
Issued
capital
|
$
|
3,489,643
|
$
|
3,472,029
|
Reserves
|
|
87,819
|
|
77,007
|
Retained
earnings
|
|
1,657,153
|
|
1,350,628
|
Total shareholders'
equity
|
$
|
5,234,615
|
$
|
4,899,664
|
Total liabilities and
shareholders' equity
|
$
|
6,216,112
|
$
|
5,683,313
|
Condensed Interim Consolidated Statements of Cash
Flows
|
Three Months
Ended
June 30
|
Six Months Ended
June 30
|
(US dollars in
thousands - unaudited)
|
2018
|
2017
|
2018
|
2017
|
Operating
activities
|
|
|
|
|
|
|
|
|
Net
earnings
|
$
|
318,142
|
$
|
67,612
|
$
|
386,265
|
$
|
128,836
|
Adjustments
for
|
|
|
|
|
|
|
|
|
|
Depreciation and
depletion
|
|
62,727
|
|
60,016
|
|
120,232
|
|
124,202
|
|
Gain on disposal of
mineral stream interest
|
|
(245,715)
|
|
-
|
|
(245,715)
|
|
-
|
|
Interest
expense
|
|
5,659
|
|
6,482
|
|
11,249
|
|
12,854
|
|
Equity settled stock
based compensation
|
|
1,394
|
|
1,273
|
|
2,643
|
|
2,469
|
|
Performance share
units
|
|
3,316
|
|
(23)
|
|
3,500
|
|
(457)
|
|
Deferred income tax
expense (recovery)
|
|
(3,253)
|
|
(820)
|
|
(3,760)
|
|
(705)
|
|
Loss on fair value
adjustment of share purchase warrants held
|
|
12
|
|
-
|
|
111
|
|
-
|
|
Share in losses of
associate
|
|
-
|
|
-
|
|
201
|
|
-
|
|
Fair value adjustment
on convertible note receivable
|
|
283
|
|
-
|
|
2,054
|
|
-
|
|
Investment income
recognized in net earnings
|
|
(681)
|
|
(87)
|
|
(1,266)
|
|
(163)
|
|
Other
|
|
287
|
|
135
|
|
513
|
|
(734)
|
Change in non-cash
working capital
|
|
(1,791)
|
|
(3,466)
|
|
(4,894)
|
|
(8,929)
|
Cash generated from
operations before interest paid and received
|
$
|
140,380
|
$
|
131,122
|
$
|
271,133
|
$
|
257,373
|
Interest
paid
|
|
(5,459)
|
|
(6,513)
|
|
(11,055)
|
|
(12,902)
|
Interest
received
|
|
279
|
|
72
|
|
462
|
|
133
|
Cash generated from
operating activities
|
$
|
135,200
|
$
|
124,681
|
$
|
260,540
|
$
|
244,604
|
Financing
activities
|
|
|
|
|
|
|
|
|
Bank debt
repaid
|
$
|
(79,000)
|
$
|
(111,000)
|
$
|
(186,000)
|
$
|
(240,000)
|
Bank debt
drawn
|
|
372,500
|
|
-
|
|
372,500
|
|
-
|
Credit facility
extension fees
|
|
(5)
|
|
(5)
|
|
(1,205)
|
|
(1,305)
|
Share purchase
options exercised
|
|
878
|
|
280
|
|
1,027
|
|
1,002
|
Dividends
paid
|
|
(64,589)
|
|
(52,108)
|
|
(64,589)
|
|
(52,108)
|
Cash (used for)
generated from financing activities
|
$
|
229,784
|
$
|
(162,833)
|
$
|
121,733
|
$
|
(292,411)
|
Investing
activities
|
|
|
|
|
|
|
|
|
Mineral stream
interests
|
$
|
(610,235)
|
$
|
-
|
$
|
(610,235)
|
$
|
-
|
Early deposit mineral
stream interests
|
|
(4,255)
|
|
(15)
|
|
(4,458)
|
|
(894)
|
Proceeds on disposal
of mineral stream interests 1
|
|
230,000
|
|
-
|
|
230,000
|
|
1,022
|
Acquisition of
long-term investments
|
|
(1,016)
|
|
-
|
|
(1,016)
|
|
-
|
Dividend income
received
|
|
20
|
|
15
|
|
40
|
|
30
|
Other
|
|
(2,384)
|
|
(32)
|
|
(2,425)
|
|
(86)
|
Cash used for
investing activities
|
$
|
(387,870)
|
$
|
(32)
|
$
|
(388,094)
|
$
|
72
|
Effect of exchange
rate changes on cash and cash equivalents
|
$
|
(21)
|
$
|
10
|
$
|
(39)
|
$
|
15
|
Decrease in cash and
cash equivalents
|
$
|
(22,907)
|
$
|
(38,174)
|
$
|
(5,860)
|
$
|
(47,720)
|
Cash and cash
equivalents, beginning of period
|
|
115,568
|
|
114,749
|
|
98,521
|
|
124,295
|
Cash and cash
equivalents, end of period
|
$
|
92,661
|
$
|
76,575
|
$
|
92,661
|
$
|
76,575
|
|
|
|
|
|
|
|
|
|
|
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
|
Q2
2018
|
Q1
2018
|
Q4
2017
|
Q3
2017
|
Q2
2017
|
Q1
2017
|
Q4
2016
|
Q3
2016
|
Silver ounces
produced 2
|
|
|
|
|
|
|
|
|
|
San Dimas
3
|
607
|
1,606
|
1,324
|
1,043
|
973
|
623
|
1,429
|
1,264
|
|
Peñasquito
|
1,267
|
1,450
|
1,561
|
1,641
|
1,483
|
1,339
|
1,328
|
1,487
|
|
Antamina
|
1,458
|
1,339
|
1,467
|
1,735
|
1,888
|
1,464
|
1,599
|
1,469
|
|
Constancia
|
596
|
646
|
670
|
618
|
546
|
540
|
723
|
749
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
Los Filos
|
39
|
34
|
48
|
43
|
42
|
32
|
33
|
44
|
|
|
Zinkgruvan
|
453
|
565
|
619
|
710
|
493
|
538
|
557
|
449
|
|
|
Yauliyacu
|
719
|
550
|
335
|
588
|
607
|
562
|
379
|
721
|
|
|
Stratoni
|
211
|
137
|
131
|
137
|
171
|
166
|
187
|
206
|
|
|
Minto
|
30
|
35
|
30
|
43
|
42
|
56
|
100
|
153
|
|
|
Neves-Corvo
|
421
|
405
|
305
|
341
|
316
|
330
|
312
|
279
|
|
|
Aljustrel
|
138
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
|
Cozamin
4
|
-
|
-
|
-
|
-
|
17
|
397
|
265
|
239
|
|
|
Lagunas Norte
5
|
-
|
217
|
253
|
243
|
218
|
210
|
234
|
215
|
|
|
Pierina
5
|
-
|
107
|
111
|
107
|
114
|
137
|
117
|
50
|
|
|
Veladero
5
|
-
|
265
|
211
|
201
|
144
|
158
|
174
|
160
|
|
|
777
|
152
|
146
|
146
|
145
|
138
|
96
|
152
|
166
|
|
Total
Other
|
2,163
|
2,461
|
2,189
|
2,558
|
2,302
|
2,682
|
2,510
|
2,682
|
Total silver ounces
produced
|
6,091
|
7,502
|
7,211
|
7,595
|
7,192
|
6,648
|
7,589
|
7,651
|
Gold ounces produced
²
|
|
|
|
|
|
|
|
|
|
Sudbury
6
|
4,894
|
3,511
|
8,568
|
8,519
|
7,468
|
9,182
|
8,901
|
10,779
|
|
Salobo
|
63,949
|
61,513
|
76,153
|
72,980
|
57,514
|
58,009
|
77,787
|
70,776
|
|
Constancia
|
3,187
|
3,315
|
2,947
|
2,498
|
2,332
|
2,431
|
3,151
|
3,737
|
|
San Dimas
3
|
5,726
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
Minto
|
2,554
|
2,707
|
3,328
|
6,105
|
6,063
|
9,734
|
10,906
|
20,184
|
|
|
777
|
4,982
|
5,645
|
5,478
|
5,114
|
6,259
|
4,422
|
10,919
|
10,140
|
|
Total
Other
|
7,536
|
8,352
|
8,806
|
11,219
|
12,322
|
14,156
|
21,825
|
30,324
|
Total gold ounces
produced
|
85,292
|
76,691
|
96,474
|
95,216
|
79,636
|
83,778
|
111,664
|
115,616
|
SEOs produced
7
|
12,829
|
13,583
|
14,572
|
14,823
|
13,009
|
12,513
|
15,526
|
15,521
|
GEOs produced
7
|
162,388
|
171,310
|
190,979
|
195,263
|
178,100
|
178,766
|
218,429
|
228,001
|
Gold / Silver Ratio
8
|
79.0
|
79.3
|
76.3
|
75.9
|
73.0
|
70.0
|
71.1
|
68.1
|
Average payable rate
- silver 2
|
87.0%
|
89.8%
|
90.3%
|
90.3%
|
91.1%
|
89.7%
|
91.5%
|
91.0%
|
Average payable rate
- gold 2
|
94.7%
|
94.4%
|
94.8%
|
94.8%
|
94.5%
|
94.7%
|
95.4%
|
95.0%
|
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 and average payable rates 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)
|
On May 10, 2018 the
Company terminated the San Dimas silver purchase agreement and
concurrently entered into the San Dimas precious metal purchase
agreement.
|
4)
|
The Cozamin precious
metal purchase agreement expired on April 4, 2017.
|
5)
|
The Lagunas Norte,
Pierina and Veladero precious metal purchase agreements expired on
March 31, 2018.
|
6)
|
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.
|
7)
|
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.
|
8)
|
The gold / silver
ratio is the ratio of the average price of gold to the average
price of silver per the London Bullion Metal Exchange during the
period.
|
Summary of Ounces Sold
|
Q2
2018
|
Q1
2018
|
Q4
2017
|
Q3
2017
|
Q2
2017
|
Q1
2017
|
Q4
2016
|
Q3
2016
|
Silver ounces
sold
|
|
|
|
|
|
|
|
|
|
San Dimas
2
|
1,070
|
1,372
|
1,299
|
962
|
845
|
796
|
1,571
|
1,065
|
|
Peñasquito
|
1,547
|
1,227
|
1,537
|
1,109
|
1,639
|
860
|
1,270
|
1,078
|
|
Antamina
|
1,422
|
1,413
|
1,769
|
1,537
|
1,453
|
1,170
|
1,488
|
1,598
|
|
Constancia
|
410
|
574
|
491
|
491
|
559
|
383
|
702
|
536
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
Los Filos
|
35
|
52
|
16
|
43
|
42
|
32
|
33
|
44
|
|
|
Zinkgruvan
|
297
|
391
|
597
|
305
|
398
|
296
|
592
|
340
|
|
|
Yauliyacu
|
521
|
360
|
642
|
364
|
423
|
403
|
671
|
342
|
|
|
Stratoni
|
171
|
148
|
110
|
84
|
123
|
195
|
165
|
203
|
|
|
Minto
|
28
|
(1)
|
34
|
43
|
39
|
37
|
102
|
96
|
|
|
Cozamin
3
|
-
|
-
|
-
|
23
|
125
|
232
|
196
|
207
|
|
|
Neves-Corvo
|
178
|
169
|
119
|
117
|
114
|
153
|
147
|
88
|
|
|
Lagunas Norte
4
|
65
|
236
|
237
|
242
|
204
|
217
|
227
|
237
|
|
|
Pierina
4
|
54
|
88
|
106
|
102
|
136
|
150
|
84
|
32
|
|
|
Veladero
4
|
104
|
161
|
211
|
201
|
144
|
159
|
174
|
160
|
|
|
777
|
70
|
153
|
124
|
135
|
125
|
142
|
84
|
96
|
|
Total
Other
|
1,523
|
1,757
|
2,196
|
1,659
|
1,873
|
2,016
|
2,475
|
1,845
|
Total silver ounces
sold
|
5,972
|
6,343
|
7,292
|
5,758
|
6,369
|
5,225
|
7,506
|
6,122
|
Gold ounces
sold
|
|
|
|
|
|
|
|
|
|
Sudbury
5
|
4,400
|
5,186
|
12,059
|
3,237
|
5,822
|
6,887
|
10,183
|
12,294
|
|
Salobo
|
70,734
|
54,645
|
71,683
|
67,198
|
50,478
|
63,007
|
73,646
|
50,043
|
|
Constancia
|
2,172
|
3,247
|
1,965
|
2,206
|
2,356
|
2,315
|
3,343
|
3,396
|
|
San Dimas
2
|
3,738
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
Minto
|
2,284
|
1,763
|
2,020
|
4,603
|
6,988
|
9,902
|
15,445
|
11,110
|
|
|
777
|
3,812
|
5,132
|
6,568
|
5,304
|
6,321
|
6,286
|
6,314
|
8,220
|
|
Total
Other
|
6,096
|
6,895
|
8,588
|
9,907
|
13,309
|
16,188
|
21,759
|
19,330
|
Total gold ounces
sold
|
87,140
|
69,973
|
94,295
|
82,548
|
71,965
|
88,397
|
108,931
|
85,063
|
SEOs sold
6
|
12,855
|
11,892
|
14,488
|
12,024
|
11,625
|
11,412
|
15,249
|
11,913
|
GEOs sold
6
|
162,715
|
149,987
|
189,882
|
158,401
|
159,161
|
163,032
|
214,529
|
175,008
|
Cumulative payable
silver ounces PBND 7
|
4,252
|
4,894
|
4,515
|
5,257
|
4,152
|
3,967
|
3,224
|
3,783
|
Cumulative payable
gold ounces PBND 7
|
75,557
|
81,923
|
79,477
|
82,632
|
74,899
|
71,571
|
80,621
|
82,775
|
Gold / Silver Ratio
8
|
79.0
|
79.3
|
76.3
|
75.9
|
73.0
|
70.0
|
71.1
|
68.1
|
1)
|
All figures in
thousands except gold ounces sold.
|
2)
|
On May 10, 2018 the
Company terminated the San Dimas silver purchase agreement and
concurrently entered into the San Dimas precious metal purchase
agreement.
|
3)
|
The Cozamin precious
metal purchase agreement expired on April 4, 2017.
|
4)
|
The Lagunas Norte,
Pierina and Veladero precious metal purchase agreements expired on
March 31, 2018.
|
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)
|
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.
|
8)
|
The gold / silver
ratio is the ratio of the average price of gold to the average
price of silver per the London Bullion Metal Exchange during the
period.
|
Results of Operations
The operating results of the Company's reportable operating
segments are summarized in the tables and commentary below.
|
|
Three Months Ended
June 30, 2018
|
|
|
Ounces
Produced²
|
Ounces
Sold
|
Average
Realized
Price
($'s Per Ounce)
|
Average
Cash Cost
($'s Per
Ounce)3
|
Average
Depletion
($'s Per
Ounce)
|
Sales
|
Gross
Margin
|
Gain on
Disposal
|
Net
Earnings
|
Cash Flow
From
Operations
|
Total
Assets
|
Silver
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
San Dimas
4
|
|
607
|
1,070
|
$
|
16.52
|
$
|
4.32
|
$
|
1.46
|
$
|
17,673
|
$
|
11,484
|
$
|
245,715
|
$
|
257,199
|
$
|
13,051
|
$
|
-
|
|
Peñasquito
|
|
1,267
|
1,547
|
|
16.36
|
|
4.17
|
|
2.96
|
|
25,315
|
|
14,291
|
|
-
|
|
14,291
|
|
18,863
|
|
395,052
|
|
Antamina
|
|
1,458
|
1,422
|
|
16.69
|
|
3.29
|
|
8.70
|
|
23,736
|
|
6,691
|
|
-
|
|
6,691
|
|
19,060
|
|
732,979
|
|
Constancia
|
|
596
|
410
|
|
16.66
|
|
5.90
|
|
7.14
|
|
6,826
|
|
1,481
|
|
-
|
|
1,481
|
|
4,409
|
|
254,773
|
|
Other
5
|
|
2,163
|
1,523
|
|
16.49
|
|
5.87
|
|
3.47
|
|
25,097
|
|
10,879
|
|
-
|
|
10,879
|
|
16,014
|
|
511,851
|
|
|
6,091
|
5,972
|
$
|
16.52
|
$
|
4.54
|
$
|
4.47
|
$
|
98,647
|
$
|
44,826
|
$
|
245,715
|
$
|
290,541
|
$
|
71,397
|
$
|
1,894,655
|
Gold
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sudbury
6
|
|
4,894
|
4,400
|
$
|
1,313
|
$
|
400
|
$
|
795
|
$
|
5,778
|
$
|
520
|
$
|
-
|
$
|
520
|
$
|
4,020
|
$
|
372,366
|
|
Salobo
|
|
63,949
|
70,734
|
|
1,305
|
|
400
|
|
386
|
|
92,327
|
|
36,717
|
|
-
|
|
36,717
|
|
64,033
|
|
2,760,314
|
|
Constancia
|
|
3,187
|
2,172
|
|
1,316
|
|
400
|
|
374
|
|
2,857
|
|
1,176
|
|
-
|
|
1,176
|
|
1,989
|
|
120,025
|
|
San Dimas
4
|
|
5,726
|
3,738
|
|
1,266
|
|
600
|
|
556
|
|
4,733
|
|
411
|
|
-
|
|
411
|
|
2,490
|
|
218,158
|
|
Other
7
|
|
7,536
|
6,096
|
|
1,322
|
|
379
|
|
340
|
|
8,058
|
|
3,676
|
|
-
|
|
3,676
|
|
5,850
|
|
26,950
|
|
|
85,292
|
87,140
|
$
|
1,305
|
$
|
407
|
$
|
411
|
$
|
113,753
|
$
|
42,500
|
$
|
-
|
$
|
42,500
|
$
|
78,382
|
$
|
3,497,813
|
Cobalt
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voisey's
Bay
|
|
-
|
-
|
$
|
n.a.
|
$
|
n.a.
|
$
|
n.a.
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
393,327
|
Operating
results
|
|
|
|
|
|
|
|
|
|
$
|
212,400
|
$
|
87,326
|
$
|
245,715
|
$
|
333,041
|
$
|
149,779
|
$
|
5,785,795
|
Corporate
costs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and
administrative
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(11,972)
|
$
|
(7,627)
|
|
|
|
Interest
expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(5,659)
|
|
(5,459)
|
|
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(492)
|
|
(1,493)
|
|
|
|
Income tax
recovery
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,224
|
|
-
|
|
|
Total corporate
costs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(14,899)
|
$
|
(14,579)
|
$
|
430,317
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
318,142
|
$
|
135,200
|
$
|
6,216,112
|
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 (iii) at the end of this press
release.
|
4)
|
On May 10, 2018 the
Company terminated the San Dimas silver purchase agreement and
concurrently entered into the San Dimas precious metal purchase
agreement.
|
5)
|
Comprised of the
operating Los Filos, Zinkgruvan, Yauliyacu, Stratoni, Minto,
Neves-Corvo, Aljustrel, Lagunas Norte, Pierina, Veladero and 777
silver interests as well as the non-operating Keno Hill, Loma de La
Plata, Pascua-Lama and Rosemont silver interests. The Lagunas
Norte, Pierina and Veladero precious metal purchase agreements
expired on March 31, 2018.
|
6)
|
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.
|
7)
|
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 June
30, 2018 were as follows:
Three Months Ended
June 30, 2018
|
|
Gold / Silver
Ratio 1
|
Ounces
Produced 2, 3
|
Ounces
Sold 3
|
Average
Realized
Price
($'s Per
Ounce)
|
Average
Cash Cost
($'s Per
Ounce) 4
|
Cash
Operating
Margin
($'s Per
Ounce) 5
|
Average
Depletion
($'s Per
Ounce)
|
Gross
Margin
($'s Per
Ounce)
|
Silver equivalent
basis
|
79.0
|
12,829
|
12,855
|
$
16.52
|
$
4.87
|
$
11.65
|
$
4.86
|
$
6.79
|
Gold equivalent
basis
|
79.0
|
162,388
|
162,715
|
$
1,305
|
$
385
|
$
920
|
$
384
|
$
536
|
|
|
|
|
|
|
|
|
|
1)
|
The gold / silver
ratio is the ratio of the average price of gold to the average
price of silver 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 (iii) at the end of this press
release.
|
5)
|
Refer to discussion
on non-IFRS measure (iv) at the end of this press
release
|
Three Months Ended
June 30, 2017
|
|
Ounces
Produced²
|
Ounces
Sold
|
Average
Realized
Price
($'s Per Ounce)
|
Average
Cash Cost
($'s Per
Ounce)3
|
Average
Depletion
($'s Per
Ounce)
|
Sales
|
Net
Earnings
|
Cash Flow
From
Operations
|
Total
Assets
|
Silver
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
San Dimas
4
|
973
|
845
|
$
|
16.92
|
$
|
4.28
|
$
|
1.46
|
$
|
14,298
|
$
|
9,443
|
$
|
10,680
|
$
|
138,173
|
|
Peñasquito
|
1,483
|
1,639
|
|
17.40
|
|
4.13
|
|
2.88
|
|
28,519
|
|
17,026
|
|
21,750
|
|
410,876
|
|
Antamina
|
1,888
|
1,453
|
|
17.12
|
|
3.50
|
|
9.81
|
|
24,873
|
|
5,529
|
|
15,729
|
|
790,072
|
|
Constancia
|
546
|
559
|
|
17.29
|
|
5.90
|
|
7.36
|
|
9,659
|
|
2,250
|
|
6,363
|
|
269,036
|
|
Other
5
|
2,302
|
1,873
|
|
16.80
|
|
5.31
|
|
3.64
|
|
31,465
|
|
14,702
|
|
21,216
|
|
766,091
|
|
7,192
|
6,369
|
$
|
17.09
|
$
|
4.51
|
$
|
4.89
|
$
|
108,814
|
$
|
48,950
|
$
|
75,738
|
$
|
2,374,248
|
Gold
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sudbury
6
|
7,468
|
5,822
|
$
|
1,248
|
$
|
400
|
$
|
769
|
$
|
7,264
|
$
|
455
|
$
|
4,930
|
$
|
391,757
|
|
Salobo
|
57,514
|
50,478
|
|
1,259
|
|
400
|
|
381
|
|
63,577
|
|
24,163
|
|
43,386
|
|
2,861,619
|
|
Constancia
|
2,332
|
2,356
|
|
1,252
|
|
400
|
|
409
|
|
2,949
|
|
1,043
|
|
2,007
|
|
123,758
|
|
Other
7
|
12,322
|
13,309
|
|
1,283
|
|
361
|
|
297
|
|
17,080
|
|
8,320
|
|
12,192
|
|
39,240
|
|
79,636
|
71,965
|
$
|
1,263
|
$
|
393
|
$
|
398
|
$
|
90,870
|
$
|
33,981
|
$
|
62,515
|
$
|
3,416,374
|
Operating
results
|
|
|
|
|
|
|
|
|
$
|
199,684
|
$
|
82,931
|
$
|
138,253
|
$
|
5,790,622
|
Corporate
costs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and
administrative
|
|
|
|
|
|
|
|
|
|
|
$
|
(9,069)
|
$
|
(6,869)
|
|
|
|
Interest
expense
|
|
|
|
|
|
|
|
|
|
|
|
(6,482)
|
|
(6,513)
|
|
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
(324)
|
|
(190)
|
|
|
|
Income tax
recovery
|
|
|
|
|
|
|
|
|
|
|
|
556
|
|
-
|
|
|
Total corporate
costs
|
|
|
|
|
|
|
|
|
|
|
$
|
(15,319)
|
$
|
(13,572)
|
$
|
205,388
|
|
|
|
|
|
|
|
|
|
|
|
$
|
67,612
|
$
|
124,681
|
$
|
5,996,010
|
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 (iii) at the end of this press
release.
|
4)
|
On May 10, 2018 the
Company terminated the San Dimas silver purchase agreement and
concurrently entered into the San Dimas precious metal purchase
agreement.
|
5)
|
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
while the Lagunas Norte, Pierina and Veladero precious metal
purchase agreements expired on March 31, 2018.
|
6)
|
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.
|
7)
|
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 June
30, 2017 were as follows:
Three Months Ended
June 30, 2017
|
|
Gold /
Silver
Ratio 1
|
Ounces
Produced 2, 3
|
Ounces
Sold 3
|
Average
Realized
Price
($'s Per Ounce)
|
Average
Cash Cost
($'s Per
Ounce) 4
|
Cash
Operating
Margin
($'s Per Ounce) 5
|
Average
Depletion
($'s Per
Ounce)
|
Gross
Margin
($'s Per
Ounce)
|
Silver equivalent
basis
|
73.0
|
13,009
|
11,625
|
$
17.18
|
$
4.90
|
$
12.28
|
$
5.14
|
$
7.14
|
Gold equivalent
basis
|
73.0
|
178,100
|
159,161
|
$
1,255
|
$
358
|
$
897
|
$
376
|
$
521
|
1)
|
The gold / silver
ratio is the ratio of the average price of gold to the average
price of silver 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 (iii) at the end of this press
release.
|
5)
|
Refer to discussion
on non-IFRS measure (iv) 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) adjusted net
earnings and adjusted net earnings per share; (ii) operating cash
flow per share (basic and diluted); (iii) average cash costs of
silver and gold on a per ounce basis and; (iv) cash operating
margin.
i. Adjusted net earnings and adjusted net earnings per
share are calculated by removing the effects of the non-cash
impairment charges, non-cash derivative (gains) losses, non-cash
share of losses of associates and other one-time (income) fees. The
Company believes that, in addition to conventional measures
prepared in accordance with IFRS, management and certain investors
use this information to evaluate the Company's performance.
The following table provides a reconciliation of adjusted net
earnings and adjusted net earnings per share (basic and
diluted).
|
Three Months
Ended
June 30
|
(in thousands, except
for per share amounts)
|
|
2018
|
|
2017
|
Net
earnings
|
|
$
|
318,142
|
|
$
|
67,612
|
Add back
(deduct):
|
|
|
|
|
|
|
|
Gain on disposal of
San Dimas SPA
|
|
|
(245,715)
|
|
|
-
|
|
|
|
|
|
|
|
|
Loss on fair value
adjustment of Kutcho Convertible Note
|
|
|
283
|
|
|
-
|
|
Loss on fair value
adjustment of share purchase warrants held
|
|
|
12
|
|
|
-
|
|
Fees for contract
amendments and reconciliations
|
|
|
-
|
|
|
(988)
|
Adjusted net
earnings
|
|
$
|
72,722
|
|
$
|
66,624
|
Divided
by:
|
|
|
|
|
|
|
|
Basic weighted
average number of shares outstanding
|
|
|
443,191
|
|
|
441,784
|
|
Diluted weighted
average number of shares outstanding
|
|
|
443,770
|
|
|
442,370
|
Equals:
|
|
|
|
|
|
|
|
Adjusted earnings per
share - basic
|
|
$
|
0.16
|
|
$
|
0.15
|
|
Adjusted earnings per
share - diluted
|
|
$
|
0.16
|
|
$
|
0.15
|
ii. 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
June 30
|
(in thousands, except
for per share amounts)
|
|
2018
|
|
2017
|
Cash generated by
operating activities
|
|
$
|
135,200
|
|
$
|
124,681
|
Divided
by:
|
|
|
|
|
|
|
|
Basic weighted
average number of shares outstanding
|
|
|
443,191
|
|
|
441,784
|
|
Diluted weighted
average number of shares outstanding
|
|
|
443,770
|
|
|
442,370
|
Equals:
|
|
|
|
|
|
|
|
Operating cash flow
per share - basic
|
|
$
|
0.31
|
|
$
|
0.28
|
|
Operating cash flow
per share - diluted
|
|
$
|
0.30
|
|
$
|
0.28
|
iii. 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
June 30
|
(in thousands, except
for gold ounces sold and per ounce amounts)
|
|
2018
|
|
2017
|
Cost of
sales
|
|
$
|
125,074
|
|
$
|
116,753
|
Less:
depletion
|
|
|
(62,494)
|
|
|
(59,772)
|
Cash cost of
sales
|
|
$
|
62,580
|
|
$
|
56,981
|
Cash cost of sales is
comprised of:
|
|
|
|
|
|
|
|
Total cash cost of
silver sold
|
|
$
|
27,107
|
|
$
|
28,711
|
|
Total cash cost of
gold sold
|
|
|
35,473
|
|
|
28,270
|
|
Total cash cost of
sales
|
|
$
|
62,580
|
|
$
|
56,981
|
Divided
by:
|
|
|
|
|
|
|
|
Total silver ounces
sold
|
|
|
5,972
|
|
|
6,369
|
|
Total gold ounces
sold
|
|
|
87,140
|
|
|
71,965
|
Equals:
|
|
|
|
|
|
|
|
Average cash cost of
silver (per ounce)
|
|
$
|
4.54
|
|
$
|
4.51
|
|
Average cash cost of
gold (per ounce)
|
|
$
|
407
|
|
$
|
393
|
iv. 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
June 30
|
(in thousands, except
for gold ounces sold and per ounce amounts)
|
|
2018
|
|
2017
|
Total
sales:
|
|
|
|
|
|
|
|
Silver
|
|
$
|
98,647
|
|
$
|
108,814
|
|
Gold
|
|
$
|
113,753
|
|
$
|
90,870
|
Divided
by:
|
|
|
|
|
|
|
|
Total silver ounces
sold
|
|
|
5,972
|
|
|
6,369
|
|
Total gold ounces
sold
|
|
|
87,140
|
|
|
71,965
|
Equals:
|
|
|
|
|
|
|
|
Average realized
price of silver (per ounce)
|
|
$
|
16.52
|
|
$
|
17.09
|
|
Average realized
price of gold (per ounce)
|
|
$
|
1,305
|
|
$
|
1,263
|
Less:
|
|
|
|
|
|
|
|
Average cash cost of
silver 1 (per ounce)
|
|
$
|
(4.54)
|
|
$
|
(4.51)
|
|
Average cash cost of
gold 1 (per ounce)
|
|
$
|
(407)
|
|
$
|
(393)
|
Equals:
|
|
|
|
|
|
|
|
Cash operating margin
per silver ounce sold
|
|
$
|
11.98
|
|
$
|
12.58
|
|
As a percentage of
realized price of silver
|
|
|
73%
|
|
|
74%
|
|
Cash operating margin
per gold ounce sold
|
|
$
|
898
|
|
$
|
870
|
|
As a percentage of
realized price of gold
|
|
|
69%
|
|
|
69%
|
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 www.wheatonpm.com and posted
on SEDAR at 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:
- the timing of delivery of palladium by Sibanye-Stillwater under
the Precious Metals Stream;
- the receipt of by Wheaton of palladium production in respect of
Stillwater;
- the demand, uses and supply of palladium;
- the construction timeline, including completion, of the mine
expansion, including the underground mines, at Voisey's Bay by
Vale;
- the commencement and timing of delivery of cobalt by Vale under
the cobalt streaming transaction;
- the receipt of cobalt by Wheaton of cobalt production in
respect of Voisey's Bay;
- Vale's obligations under the development agreement with the
Government of Newfoundland and
Labrador and the impacts and
benefits agreements with the Innu Nation and the Nunatsiavut
government;
- the demand, uses and supply of cobalt;
- the effect of the SAT legal claim on the business, financial
condition, results of operations and cash flows for 2010-2014 and
2015-2019 in respect of the San
Dimas mine;
- the proposed acquisition of the Minto mine;
- the repayment of the Kutcho convertible note;
- the ability of Barrick to advance the Pascua-Lama project as an
underground mine;
- 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's production and cash flow
profile;
- the expansion and exploration potential at the Salobo,
Peñasquito and other mines;
- projected changes to Wheaton's production mix;
- anticipated increases in total throughput;
- 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
2018 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
actions.
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:
- that each party does not satisfy its obligations in accordance
with the terms of the Precious Metals Stream;
- Sibanye-Stillwater is unable to commence, or the timing of
delivery of palladium by Sibanye-Stillwater is delayed or deferred
under the Precious Metals Stream or Wheaton is unable to sell its
palladium production delivered under the Precious Metals Stream at
acceptable prices or at all;
- the decrease in demand for palladium, the decrease in uses for
palladium or the discovery of new supplies of palladium, any or all
of which could result in a decrease to the price of palladium or a
decrease in the ability to sell palladium;
- that each party does not satisfy its obligations in accordance
with the terms of the cobalt streaming transaction;
- Vale does not meet the construction timeline, including
anticipated completion, of the mine expansion, including the
underground mines, at Voisey's Bay;
- Vale is unable to commence, or the timing of delivery of cobalt
by Vale is delayed or deferred under the cobalt streaming
transaction or Wheaton is unable to sell its cobalt production
delivered under the cobalt streaming transaction at acceptable
prices or at all;
- Vale does not meet its obligations under the development
agreement with the Government of Newfoundland and Labrador or the impacts and benefits
agreements with the Innu Nation and the Nunatsiavut
government;
- the decrease in demand for cobalt, the decrease in uses for
cobalt or the discovery of new supplies of cobalt, any or all of
which could result in a decrease to the price of cobalt or a
decrease in the ability to sell cobalt;
- First Majestic not being 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 having an adverse impact on
the business, financial condition or results of operation in
respect of the San Dimas
mine;
- Kutcho not being able to make payments under the Kutcho
convertible note;
- the acquisition of the Minto
mine not being completed as proposed or at all;
- Barrick not being able to advance the Pascua-Lama project as an
underground mine;
- risks related to the satisfaction of each party's obligations
in accordance with the terms of Wheaton's 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 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;
- 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 owners and operators of the Mining
Operations as the basis for its analyses, forecasts and assessments
relating to its own business;
- differences in the interpretation or application of tax laws
and regulations or accounting policies and rules;
- Wheaton's interpretation of, or compliance with, tax laws and
regulations or accounting policies and rules, being found to be
incorrect or the tax impact to the Company's business operations
being materially different than currently contemplated;
- any challenge 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;
- the Company's business or ability to enter into precious metal
purchase agreements being 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 not being 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;
- indebtedness and guarantees risks;
- mine operator concentration risks;
- hedging risk;
- competition in the mining industry;
- risks related to Wheaton's acquisition strategy;
- risks related to the market price of the common shares of
Wheaton;
- equity price risks related to Wheaton's holding of long‑term
investments in other exploration and mining companies;
- risks related to interest rates;
- risks related to the declaration, timing and payment of
dividends;
- the ability of Wheaton 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
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 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
Wheaton 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 and the Mining Operations to obtain and
maintain necessary licenses, permits, approvals and rulings;
- the ability of Wheaton 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;
- fluctuations in the commodity prices other than silver or
gold;
- the ability of Wheaton and the Mining Operations to obtain
adequate financing;
- the ability of the 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's Annual Information Form
available on SEDAR at www.sedar.com, and in Wheaton's Form 40-F for
the year ended December 31, 2017 and
Form 6-K filed March 21, 2018 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:
- Sibanye-Stillwater is able to commence and meet its timing for
delivery of palladium under the Precious Metals Stream and Wheaton
is able to sell palladium production delivered under the Precious
Metals Stream at acceptable prices;
- the demand and uses for palladium will not significantly
decrease and the supply of palladium will not significantly
increase;
- Vale is able to meet the construction timeline, including
anticipated completion, of the mine expansion, including the
underground mines, at Voisey's Bay;
- Vale is able to commence and meet its timing for delivery of
cobalt under the cobalt streaming transaction and Wheaton is able
to sell cobalt production delivered under the cobalt streaming
transaction at acceptable prices;
- Vale meets its obligations under the development agreement with
the Government of Newfoundland and
Labrador and the impacts and
benefits agreements with the Innu Nation and the Nunatsiavut
government;
- the demand and uses for cobalt will not significantly decrease
and the supply of cobalt will not significantly increase;
- that Kutcho will make all required payments and not be in
default under the Kutcho Convertible Note;
- that the acquisition of the Minto mine will be completed as proposed;
- that Barrick will be able to advance the Pascua-Lama project as
an underground mine or that Wheaton will be able to terminate the
Pascua-Lama precious metal purchase agreement in accordance with
its terms;
- that Wheaton will be able to terminate the Pascua-Lama precious
metal purchase agreement in accordance with its terms;
- that each party will satisfy their obligations in accordance
with the precious metal purchase agreements;
- 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 Wheaton will continue to be able to fund or obtain funding
for outstanding commitments;
- that Wheaton will be able 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;
- that Wheaton will be successful in challenging any reassessment
by the CRA;
- that Wheaton has properly considered the application of
Canadian tax law to its structure and operations;
- that Wheaton will continue to be permitted to post security for
amounts sought by the CRA under notices of reassessment;
- that Wheaton has filed its tax returns and paid applicable
taxes in compliance with Canadian tax law;
- that Wheaton will not change its business as a result of any
CRA reassessment;
- that Wheaton's 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;
- that any foreign subsidiary income, if taxable in Canada, would be subject to the same or
similar tax calculations as Wheaton's 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
while the deposit is outstanding, and the cash cost
thereafter;
- 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 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. 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'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. Wheaton 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 more generally, readers should refer to
Wheaton's Annual Information Form for the year ended December 31, 2017 and other continuous disclosure
documents filed by Wheaton since January 1,
2018, available on SEDAR at www.sedar.com. Wheaton's 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's 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's Form 40-F, a copy of which may
be obtained from Wheaton 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.
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SOURCE Wheaton Precious Metals Corp.