On track to exceed annual production guidance
VANCOUVER, Nov. 15, 2018 /PRNewswire/ -- Wheaton Precious
Metals™ Corp. ("Wheaton" or the "Company") (TSX: WPM ) (NYSE: WPM)
is pleased to announce its results for the third quarter ended
September 30, 2018. All figures are
presented in United States dollars
unless otherwise noted.
In the third quarter of 2018, Wheaton generated close to
$110 million in operating cash flow,
and completed the acquisition of a gold and palladium stream on the
Stillwater and East Boulder mines
(collectively "Stillwater").
During the third quarter, Wheaton received its first deliveries of
gold and palladium from Stillwater. Through the first nine months of
2018, Wheaton had record gold production and sales volumes, and is
on track to meet annual production guidance, and is currently on
track to exceed annual production guidance.
Operational Overview
|
|
|
Q3 2018
|
|
|
Q3 2017
|
|
Change
|
Ounces
produced
|
|
|
|
|
|
|
|
|
Silver
|
|
|
5,701
|
|
|
7,595
|
|
(24.9)%
|
Gold
|
|
|
101,552
|
|
|
95,216
|
|
6.7 %
|
Palladium
|
|
|
8,817
|
|
|
-
|
|
n.a
|
Ounces
sold
|
|
|
|
|
|
|
|
|
Silver
|
|
|
5,018
|
|
|
5,758
|
|
(12.9)%
|
Gold
|
|
|
89,242
|
|
|
82,548
|
|
8.1 %
|
Palladium
|
|
|
3,668
|
|
|
-
|
|
n.a
|
Sales price per
ounce
|
|
|
|
|
|
|
|
|
Silver
|
|
$
|
14.80
|
|
$
|
16.87
|
|
(12.3)%
|
Gold
|
|
$
|
1,210
|
|
$
|
1,283
|
|
(5.7)%
|
Palladium
|
|
$
|
955
|
|
$
|
n.a.
|
|
n.a
|
Cash costs per
ounce 1
|
|
|
|
|
|
|
|
|
Silver 1
|
|
$
|
5.04
|
|
$
|
4.43
|
|
13.8 %
|
Gold 1
|
|
$
|
418
|
|
$
|
396
|
|
5.6 %
|
Palladium 1
|
|
$
|
169
|
|
$
|
n.a.
|
|
n.a
|
Cash operating
margin per ounce 1
|
|
|
|
|
|
|
|
|
Silver 1
|
|
$
|
9.76
|
|
$
|
12.44
|
|
(21.5)%
|
Gold 1
|
|
$
|
792
|
|
$
|
887
|
|
(10.7)%
|
Palladium 1
|
|
$
|
786
|
|
$
|
n.a.
|
|
n.a
|
Revenue
|
|
$
|
185,769
|
|
$
|
203,034
|
|
(8.5)%
|
Net
earnings
|
|
$
|
34,021
|
|
$
|
66,578
|
|
(48.9)%
|
Per share
|
|
$
|
0.08
|
|
$
|
0.15
|
|
(46.7)%
|
Adjusted net
earnings 1
|
|
$
|
35,132
|
|
$
|
66,578
|
|
(47.2)%
|
Per
share 1
|
|
$
|
0.08
|
|
$
|
0.15
|
|
(47.4)%
|
Operating cash
flows
|
|
$
|
108,413
|
|
$
|
129,121
|
|
(16.0)%
|
Per
share 1
|
|
$
|
0.24
|
|
$
|
0.29
|
|
(17.2)%
|
Dividends
declared 1
|
|
$
|
39,921
|
|
$
|
44,201
|
|
(9.7)%
|
Per share
|
|
$
|
0.09
|
|
$
|
0.10
|
|
(10.0)%
|
All amounts in
thousands except gold and palladium ounces produced and sold, per
ounce amounts and per share amounts.
|
Highlights
- The decrease in attributable silver production for the three
months ended September 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 ("First Majestic PMPA") effective
May 10, 2018, the expiry of the
streaming agreement relative to the Lagunas Norte, Veladero and
Pierina mines on March 31, 2018, and
lower production at Peñasquito due to lower throughput and planned
lower grades from stockpiles during the commissioning of the now
fully constructed Peñasquito Pyrite Leach Project ("PLP").
- The increase in attributable gold production for the three
months ended September 30, 2018, was
primarily due to the entering into of the First Majestic PMPA, the
acquisition of the new gold stream at Stillwater, partially offset by lower
production at both Salobo and Minto.
- The decrease in silver sales volume for the three months ended
September 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
September 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.
- 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 Stillwater effective July 1, 2018.
Reconfirming 2018 Production Guidance
· Wheaton's estimated attributable production in
2018 is on track to exceed its guidance of approximately 355,000
ounces of gold, 22.5 million ounces of silver and 10,400 ounces of
palladium.
Subsequent to the Quarter
· On October 24, 2018,
Vale S.A. ("Vale") announced the approval of the Salobo III mine
expansion, which if completed as proposed, would increase
processing throughput capacity from 24 million tonnes per annum
("Mtpa") to 36 Mtpa once fully ramped up (the "Salobo
Expansion").
"Our robust precious metals business continued to grow in the
third quarter with the first production of gold and palladium from
our latest stream, Stillwater,
exceeding our expectations. With the addition of Stillwater, Wheaton had record gold production
and sales volume in the first nine months of 2018 resulting in
operating cash flow of almost $370
million." said Randy
Smallwood, President and Chief Executive Officer of Wheaton
Precious Metals. "In addition, we believe we are
currently well positioned to exceed our production guidance
for 2018. Finally, we also look forward to Vale pursuing their
announced expansion of the Salobo mine in Brazil. Salobo has proven itself to be an
exceptional mine, delivering metal to both Vale and Wheaton at a
low cost."
Financial Review
Revenues
Revenue was $186 million in the third quarter of 2018, on
sales volume of 5.0 million ounces of silver, 89,200 ounces of gold
and 3,700 ounces of palladium. This represents a 9% decrease from
the $203 million of revenue generated
in the third quarter of 2017 due primarily to (i) a 13% decrease in
the number of silver ounces sold; (ii) a 12% decrease in the
average realized silver price ($14.80
in Q3 2018 compared with $16.87 in Q3
2017); and (iii) a 6% decrease in the average realized gold price
($1,210 in Q3 2018 compared with
$1,283 in Q3 2017); partially offset
by (iv) an 8% increase in the number of gold ounces sold; and (v)
the first sales of palladium.
Costs and Expenses
Average cash costs¹ in the
third quarter of 2018 were $5.04 per
silver ounce sold, $418 per gold
ounce sold and $169 per palladium
ounce sold, as compared with $4.43
per silver ounce and $396 per gold
ounce during the comparable period of 2017. This resulted in a cash
operating margin¹ of $9.76 per silver
ounce sold, $792 per gold ounce sold
and $786 per palladium ounce sold, a
reduction of 22% and 11% for silver and gold, respectively, as
compared with Q3 2017. The decrease in the cash operating margin
was primarily due to a 12% decrease in the average realized silver
price and a 6% decrease in the average realized gold price in Q3
2018 compared with Q3 2017.
Earnings and Operating Cash Flows
Adjusted net
earnings¹ and cash flow from operations in the third quarter of
2018 were $35 million ($0.08 per share) and $108
million ($0.24 per share¹),
compared with $67 million
($0.15 per share) and $129 million ($0.29
per share¹) for the same period in 2017, a decrease of 47% and 16%,
respectively.
Balance Sheet
At September 30, 2018, the Company had approximately
$119 million of cash on hand and
$1.4 billion outstanding under the
Company's $2 billion revolving term
loan (the "Revolving Facility").
Third Quarter Asset Highlights
During the third quarter of 2018, attributable production was
5.7 million ounces of silver, 101,600 ounces of gold and 8,800
ounces of palladium, representing a decrease of 25% and an increase
of 7% for silver and gold, respectively, as compared with the third
quarter of 2017.
Operational highlights for the quarter ended September 30, 2018, based upon counterparties'
reporting, are as follows:
Salobo
In the third quarter of
2018, Salobo produced 68,600 ounces of attributable gold, a
decrease of approximately 6% relative to the third quarter of 2017
due to slightly lower grades as expected due to mine sequencing in
the open pit. As discussed below, subsequent to the quarter, Vale
announced the approval of the Salobo Expansion.
Peñasquito
In the third quarter of
2018, Peñasquito produced 1.0 million ounces of attributable
silver, a decrease of approximately 36% relative to the third
quarter of 2017 due to lower throughput and planned lower grades
from stockpiles during the commissioning of the now fully
constructed PLP. According to Goldcorp Inc.'s ("Goldcorp") third
quarter of 2018 MD&A, lower production was a result of the
planned transition from higher grade ore in the Peñasco pit to
lower grade ore from stockpiles during the first three quarters of
2018. This transition facilitated the stripping campaign in the
Peñasco pit and the pre-stripping campaign in the newly developed
Chile Colorado pit. Goldcorp further notes that production in the
third quarter of 2018 was impacted by a reduction in mill
throughput as much harder low-grade stockpiles were processed
during commissioning of the Carbon Pre-flotation plant, a component
of the PLP.
According to Goldcorp, commissioning of the PLP commenced, with
commercial production expected in the fourth quarter of 2018. In
addition, Goldcorp reports that substantially all of Peñasquito's
production in the fourth quarter will come from higher grade ore
from the main Peñasco pit.
Antamina
In the third quarter of 2018, Antamina
produced 1.5 million ounces of attributable silver, a decrease of
approximately 15% relative to the third quarter of 2017 as expected
due to mine sequencing in the open pit.
San Dimas
In the third quarter of 2018, San
Dimas produced 10,600 ounces of attributable gold. According to
First Majestic Silver Corp.'s ("First Majestic") third quarter of
2018 production report, silver equivalent production in the quarter
increased 90% relative to the prior quarter due to increased
throughput as some of the lower grade stopes that were deemed
uneconomical under the old streaming agreement have now become
economical under the new streaming agreement. First Majestic also
highlighted increased recoveries as a result of an additional
agitator tank being installed in September which increases
retention times.
Sudbury
In the
third quarter of 2018, Vale's Sudbury mines produced 6,000 ounces of
attributable gold, a decrease of approximately 30% relative to the
third quarter of 2017 primarily due to lower throughput caused by a
planned maintenance shutdown in August (planned maintenance in 2017
occurred in June).
Constancia
In the third quarter of 2018,
Constancia produced 0.7 million ounces of attributable silver and
3,300 ounces of attributable gold, an increase of approximately 19%
and 31%, respectively, relative to the third quarter of 2017.
Increased silver and gold production was primarily due to record
mill throughput and higher grades.
Stillwater
In
the third quarter of 2018, Stillwater produced 6,400 ounces of
attributable gold and 8,800 ounces of attributable palladium. On
July 25, 2018, the Company, through
its wholly owned subsidiary Wheaton International, completed the
acquisition from Sibanye-Stillwater of a fixed percentage of gold
and palladium production from Stillwater. As part of the agreement, Wheaton
is entitled to the attributable gold and palladium production for
which an offtaker payment was received after July 1, 2018, resulting in reported production
for the third quarter including some material processed in the
previous quarter. Wheaton's 2018 production guidance for
Stillwater was approximately 5,400
ounces of gold and 10,400 ounces of palladium. For more details on
the acquisition, please refer to Wheaton's news release dated
July 16, 2018.
Other Silver
In the third quarter
of 2018, total Other Silver attributable production was 2.4 million
ounces, a decrease of approximately 4% relative to the third
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, and lower production at
Zinkgruvan, partially offset by the start-up of attributable
production at the Aljustrel mine.
Other Gold
In the third quarter of
2018, total Other Gold attributable production was 6,700 ounces, a
decrease of approximately 41% relative to the third quarter of
2017. The decrease was due primarily to lower production at both
the 777 and Minto mines. As per
Capstone Mining Corp's ("Capstone") news release dated October 11, 2018, the agreement under which
Capstone had agreed to sell its Minto mine to Pembridge Resources plc has been
terminated. In conjunction with this, Capstone has elected to place
the Minto mine on care and
maintenance while Capstone seeks alternatives to preserve and
maximize the value of the Minto
mine.
Produced But Not Yet
Delivered 2
As at
September 30, 2018, payable ounces
attributable to the Company produced but not yet delivered amounted
to 4.5 million payable silver ounces, 77,100 payable gold ounces
and 4,700 payable palladium ounces, representing an increase of 0.2
million payable silver ounces and 100 payable gold ounces during
the three-month period ended September 30,
2018. Payable silver ounces produced but not yet
delivered increased primarily as a result of increases related to
the Peñasquito and Antamina silver interests partially offset by a
decrease related to the Yauliyacu silver interest. Payable gold
ounces produced but not yet delivered increased primarily as a
result of increases related to the Stillwater and Sudbury gold interests partially offset by
decreases related to the Minto 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 both gold and palladium 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.
Subsequent to the Quarter
Salobo Expansion
As per Vale's
third quarter 2018 MD&A, on October 24,
2018, Vale's Board of Directors approved the Salobo
Expansion, a brownfield expansion, which if completed as proposed,
would increase processing throughput capacity to 36 Mtpa. Wheaton
International first entered into a gold purchase agreement with
Vale in respect of the Salobo mine in 2013 and made subsequent
amendments to the agreement in 2015 and 2016 (the "Gold
Agreement"). As part of the Gold Agreement, if actual throughput is
expanded above 28 Mtpa within a predetermined period, and depending
on the grade of material processed, Wheaton will be required to
make an additional payment to Vale based on a set fee schedule. As
proposed, the Salobo Expansion would increase throughput capacity
from 24 Mtpa to 36 Mtpa once fully ramped up. Vale has approved the
investment of US$1.1 billion in the
Salobo Expansion, with a start-up scheduled for the first half of
2022 and an estimated ramp-up of 15 months. Vale has indicated that
the Salobo Expansion will encompass a third concentrator and will
use Salobo's existing infrastructure. As agreed to as part of the
original Gold Agreement and based on Vale's disclosure relating to
size and timing of the Salobo Expansion, the Company estimates that
an expansion payment of between $550
million to $650 million would
be payable. Given Vale's proposed schedule, this payment would
likely be made in 2023.
Dividend
Fourth Quarterly Dividend
The fourth 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 November 30, 2018 and will be distributed on or
about December 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
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 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
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. 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 $119
million of cash and cash equivalents as at September 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 Thursday, November 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:
|
7977429
|
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
November 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:
|
7977429
|
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.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
|
Payable silver, gold
and palladium 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
September 30
|
Nine Months Ended
September 30
|
(US dollars and
shares in thousands, except per share
amounts - unaudited)
|
|
2018
|
2017
|
2018
|
2017
|
Sales
|
|
$
|
185,769
|
$
|
203,034
|
$
|
597,421
|
$
|
600,669
|
Cost of
sales
|
|
|
|
|
|
|
|
|
|
Cost of sales,
excluding depletion
|
|
$
|
63,202
|
$
|
58,234
|
$
|
182,195
|
$
|
173,506
|
Depletion
|
|
|
64,684
|
|
61,852
|
|
184,444
|
|
185,567
|
Total cost of
sales
|
|
$
|
127,886
|
$
|
120,086
|
$
|
366,639
|
$
|
359,073
|
Gross
margin
|
|
$
|
57,883
|
$
|
82,948
|
$
|
230,782
|
$
|
241,596
|
General and
administrative 1
|
|
|
8,779
|
|
8,793
|
|
30,507
|
|
25,760
|
Earnings from
operations
|
|
$
|
49,104
|
$
|
74,155
|
$
|
200,275
|
$
|
215,836
|
Gain on disposal of
mineral stream interest
|
|
|
-
|
|
-
|
|
(245,715)
|
|
-
|
Other (income)
expense
|
|
|
1,301
|
|
74
|
|
1,157
|
|
(2,007)
|
Earnings before
finance costs and income taxes
|
$
|
47,803
|
$
|
74,081
|
$
|
444,833
|
$
|
217,843
|
Finance
costs
|
|
|
12,877
|
|
7,766
|
|
27,351
|
|
23,120
|
Earnings before
income taxes
|
|
$
|
34,926
|
$
|
66,315
|
$
|
417,482
|
$
|
194,723
|
Income tax (expense)
recovery
|
|
|
(905)
|
|
263
|
|
2,805
|
|
691
|
Net
earnings
|
|
$
|
34,021
|
$
|
66,578
|
$
|
420,287
|
$
|
195,414
|
Basic earnings per
share
|
|
$
|
0.08
|
$
|
0.15
|
$
|
0.95
|
$
|
0.44
|
Diluted earnings per
share
|
|
$
|
0.08
|
$
|
0.15
|
$
|
0.95
|
$
|
0.44
|
Weighted average
number of shares outstanding
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
443,634
|
|
442,094
|
|
443,188
|
|
441,790
|
Diluted
|
|
|
444,120
|
|
442,476
|
|
443,727
|
|
442,263
|
1) Equity settled
stock based compensation (a non-cash item)
included in general and administrative expenses.
|
|
$
|
1,402
|
$
|
1,279
|
$
|
4,045
|
$
|
3,748
|
Condensed Interim
Consolidated Balance Sheets
|
|
|
|
|
As at
September 30
|
As at
December 31
|
(US dollars in
thousands - unaudited)
|
2018
|
2017
|
Assets
|
|
|
|
|
Current
assets
|
|
|
|
|
Cash and cash
equivalents
|
$
|
119,373
|
$
|
98,521
|
Accounts
receivable
|
|
1,099
|
|
3,194
|
Other
|
|
2,655
|
|
1,700
|
Total current
assets
|
$
|
123,127
|
$
|
103,415
|
Non-current
assets
|
|
|
|
|
Mineral stream
interests
|
$
|
6,224,128
|
$
|
5,423,277
|
Early deposit mineral
stream interests
|
|
30,244
|
|
21,722
|
Mineral royalty
interest
|
|
9,107
|
|
9,107
|
Long-term equity
investments
|
|
168,427
|
|
95,732
|
Investment in
associates
|
|
2,621
|
|
2,994
|
Convertible note
receivable
|
|
13,560
|
|
15,777
|
Other
|
|
14,804
|
|
11,289
|
Total non-current
assets
|
$
|
6,462,891
|
$
|
5,579,898
|
Total
assets
|
$
|
6,586,018
|
$
|
5,683,313
|
Liabilities
|
|
|
|
|
Current
liabilities
|
|
|
|
|
Accounts payable and
accrued liabilities
|
$
|
13,346
|
$
|
12,118
|
Current portion of
performance share units
|
|
1,951
|
|
-
|
Other
|
|
22
|
|
25
|
Total current
liabilities
|
$
|
15,319
|
$
|
12,143
|
Non-current
liabilities
|
|
|
|
|
Bank debt
|
$
|
1,380,500
|
$
|
770,000
|
Deferred income
taxes
|
|
106
|
|
76
|
Performance share
units
|
|
2,905
|
|
1,430
|
Total non-current
liabilities
|
$
|
1,383,511
|
$
|
771,506
|
Total
liabilities
|
$
|
1,398,830
|
$
|
783,649
|
Shareholders'
equity
|
|
|
|
|
Issued
capital
|
$
|
3,495,739
|
$
|
3,472,029
|
Reserves
|
|
10,734
|
|
77,007
|
Retained
earnings
|
|
1,680,715
|
|
1,350,628
|
Total shareholders'
equity
|
$
|
5,187,188
|
$
|
4,899,664
|
Total liabilities and
shareholders' equity
|
$
|
6,586,018
|
$
|
5,683,313
|
Condensed Interim
Consolidated Statements of Cash Flows
|
|
|
|
|
|
|
|
Three Months
Ended
September 30
|
Nine Months Ended
September 30
|
(US dollars in
thousands - unaudited)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Operating
activities
|
|
|
|
|
|
|
|
|
Net
earnings
|
$
|
34,021
|
$
|
66,578
|
$
|
420,287
|
$
|
195,414
|
Adjustments
for
|
|
|
|
|
|
|
|
|
Depreciation and
depletion
|
|
64,974
|
|
62,096
|
|
185,206
|
|
186,298
|
Gain on disposal of
mineral stream interest
|
|
-
|
|
-
|
|
(245,715)
|
|
-
|
Interest
expense
|
|
11,806
|
|
6,361
|
|
23,055
|
|
19,215
|
Equity settled stock
based compensation
|
|
1,402
|
|
1,279
|
|
4,045
|
|
3,748
|
Performance share
units
|
|
(85)
|
|
(38)
|
|
3,415
|
|
(496)
|
Deferred income tax
expense (recovery)
|
|
881
|
|
(279)
|
|
(2,880)
|
|
(985)
|
Loss on fair value
adjustment of share purchase warrants held
|
|
12
|
|
-
|
|
123
|
|
-
|
Share in losses of
associate
|
|
172
|
|
-
|
|
373
|
|
-
|
Fair value adjustment
on convertible note receivable
|
|
927
|
|
-
|
|
2,217
|
|
-
|
Investment income
recognized in net earnings
|
|
(109)
|
|
(93)
|
|
(611)
|
|
(256)
|
Other
|
|
(1,322)
|
|
(233)
|
|
(809)
|
|
(966)
|
Change in non-cash
working capital
|
|
2,983
|
|
(234)
|
|
(1,911)
|
|
(9,162)
|
Cash generated from
operations before interest paid and received
|
$
|
115,662
|
$
|
135,437
|
$
|
386,795
|
$
|
392,810
|
Interest
paid
|
|
(7,395)
|
|
(6,394)
|
|
(18,450)
|
|
(19,296)
|
Interest
received
|
|
146
|
|
78
|
|
608
|
|
211
|
Cash generated from
operating activities
|
$
|
108,413
|
$
|
129,121
|
$
|
368,953
|
$
|
373,725
|
Financing
activities
|
|
|
|
|
|
|
|
|
Bank debt
repaid
|
$
|
(28,000)
|
$
|
(99,000)
|
$
|
(214,000)
|
$
|
(339,000)
|
Bank debt
drawn
|
|
452,000
|
|
-
|
|
824,500
|
|
-
|
Credit facility
extension fees
|
|
-
|
|
(6)
|
|
(1,205)
|
|
(1,311)
|
Share purchase
options exercised
|
|
-
|
|
-
|
|
1,027
|
|
1,002
|
Dividends
paid
|
|
(33,873)
|
|
(36,663)
|
|
(98,462)
|
|
(88,771)
|
Cash (used for)
generated from financing activities
|
$
|
390,127
|
$
|
(135,669)
|
$
|
511,860
|
$
|
(428,080)
|
Investing
activities
|
|
|
|
|
|
|
|
|
Mineral stream
interests
|
$
|
(506,171)
|
$
|
-
|
$
|
(1,116,406)
|
$
|
-
|
Early deposit mineral
stream interests
|
|
(4,254)
|
|
(5)
|
|
(8,712)
|
|
(899)
|
Net proceeds on
disposal of mineral stream interests 1
|
|
(4,000)
|
|
-
|
|
226,000
|
|
1,022
|
Acquisition of
long-term investments
|
|
(4,847)
|
|
-
|
|
(5,863)
|
|
-
|
Proceeds on disposal
of long-term investments
|
|
47,734
|
|
-
|
|
47,734
|
|
-
|
Dividend income
received
|
|
20
|
|
15
|
|
60
|
|
45
|
Other
|
|
(664)
|
|
(116)
|
|
(3,089)
|
|
(202)
|
Cash used for
investing activities
|
$
|
(472,182)
|
$
|
(106)
|
$
|
(860,276)
|
$
|
(34)
|
Effect of exchange
rate changes on cash and cash equivalents
|
$
|
354
|
$
|
(11)
|
$
|
315
|
$
|
4
|
Increase (decrease)
in cash and cash equivalents
|
$
|
26,712
|
$
|
(6,665)
|
$
|
20,852
|
$
|
(54,385)
|
Cash and cash
equivalents, beginning of period
|
|
92,661
|
|
76,575
|
|
98,521
|
|
124,295
|
Cash and cash
equivalents, end of period
|
$
|
119,373
|
$
|
69,910
|
$
|
119,373
|
$
|
69,910
|
|
|
|
|
|
|
|
|
|
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
2018
|
Q2
2018
|
Q1
2018
|
Q4
2017
|
Q3
2017
|
Q2
2017
|
Q1
2017
|
Q4
2016
|
Silver ounces
produced 2
|
|
|
|
|
|
|
|
|
|
San
Dimas 3
|
-
|
607
|
1,606
|
1,324
|
1,043
|
973
|
623
|
1,429
|
|
Peñasquito
|
1,050
|
1,267
|
1,450
|
1,561
|
1,641
|
1,483
|
1,339
|
1,328
|
|
Antamina
|
1,468
|
1,458
|
1,339
|
1,467
|
1,735
|
1,888
|
1,464
|
1,599
|
|
Constancia
|
737
|
596
|
646
|
670
|
618
|
546
|
540
|
723
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
Los Filos
|
21
|
32
|
29
|
48
|
43
|
42
|
32
|
33
|
|
|
Zinkgruvan
|
530
|
453
|
565
|
619
|
710
|
493
|
538
|
557
|
|
|
Yauliyacu
|
597
|
719
|
550
|
335
|
588
|
607
|
562
|
379
|
|
|
Stratoni
|
165
|
211
|
137
|
131
|
137
|
171
|
166
|
187
|
|
|
Minto 4
|
25
|
30
|
35
|
30
|
43
|
42
|
56
|
100
|
|
|
Neves-Corvo
|
458
|
421
|
405
|
305
|
341
|
316
|
330
|
312
|
|
|
Aljustrel
|
514
|
138
|
-
|
-
|
-
|
-
|
-
|
-
|
|
|
Cozamin 5
|
-
|
-
|
-
|
-
|
-
|
17
|
397
|
265
|
|
|
Lagunas
Norte 6
|
-
|
-
|
217
|
253
|
243
|
218
|
210
|
234
|
|
|
Pierina 6
|
-
|
-
|
107
|
111
|
107
|
114
|
137
|
117
|
|
|
Veladero 6
|
-
|
-
|
265
|
211
|
201
|
144
|
158
|
174
|
|
|
777
|
136
|
152
|
146
|
146
|
145
|
138
|
96
|
152
|
|
Total
Other
|
2,446
|
2,156
|
2,456
|
2,189
|
2,558
|
2,302
|
2,682
|
2,510
|
Total silver ounces
produced
|
5,701
|
6,084
|
7,497
|
7,211
|
7,595
|
7,192
|
6,648
|
7,589
|
Gold ounces produced
²
|
|
|
|
|
|
|
|
|
|
Sudbury 7
|
5,955
|
6,476
|
3,511
|
8,568
|
8,519
|
7,468
|
9,182
|
8,901
|
|
Salobo
|
68,648
|
63,949
|
61,513
|
76,153
|
72,980
|
57,514
|
58,009
|
77,787
|
|
Constancia
|
3,261
|
3,187
|
3,315
|
2,947
|
2,498
|
2,332
|
2,431
|
3,151
|
|
San
Dimas 3
|
10,642
|
5,726
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Stillwater
|
6,376
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
Minto 4
|
2,546
|
2,554
|
2,707
|
3,328
|
6,105
|
6,063
|
9,734
|
10,906
|
|
|
777
|
4,124
|
4,982
|
5,645
|
5,478
|
5,114
|
6,259
|
4,422
|
10,919
|
|
Total
Other
|
6,670
|
7,536
|
8,352
|
8,806
|
11,219
|
12,322
|
14,156
|
21,825
|
Total gold ounces
produced
|
101,552
|
86,874
|
76,691
|
96,474
|
95,216
|
79,636
|
83,778
|
111,664
|
Palladium ounces
produced ²
|
|
|
|
|
|
|
|
|
|
Stillwater
|
8,817
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
SEOs
produced 8
|
14,466
|
12,948
|
13,577
|
14,572
|
14,823
|
13,009
|
12,513
|
15,526
|
GEOs
produced 8
|
179,016
|
163,888
|
171,241
|
190,979
|
195,263
|
178,100
|
178,766
|
218,429
|
Gold / Silver
Ratio 8
|
80.8
|
79.0
|
79.3
|
76.3
|
75.9
|
73.0
|
70.0
|
71.1
|
Palladium / Silver
Ratio 8
|
63.4
|
59.2
|
61.8
|
59.3
|
53.5
|
47.7
|
44.0
|
39.8
|
Gold / Palladium
Ratio 8
|
1.3
|
1.3
|
1.3
|
1.3
|
1.4
|
1.5
|
1.6
|
1.8
|
Average payable
rate 2
|
|
|
|
|
|
|
|
|
|
Silver
|
84.5%
|
87.0%
|
89.8%
|
90.3%
|
90.3%
|
91.1%
|
89.7%
|
91.5%
|
|
Gold
|
95.3%
|
94.7%
|
94.4%
|
94.8%
|
94.8%
|
94.5%
|
94.7%
|
95.4%
|
|
Palladium
|
94.6%
|
n.a.
|
n.a.
|
n.a.
|
n.a.
|
n.a.
|
n.a.
|
n.a.
|
1)
|
All figures in
thousands except gold and palladium ounces produced.
|
2)
|
Ounces produced
represent the quantity of silver, gold and palladium 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, gold or palladium 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 Minto mine was
placed into care and maintenance in October 2018.
|
5)
|
The Cozamin precious
metal purchase agreement expired on April 4, 2017.
|
6)
|
The Lagunas Norte,
Pierina and Veladero precious metal purchase agreements expired on
March 31, 2018.
|
7)
|
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.
|
8)
|
Silver equivalent
ounces (SEOs) and gold equivalent ounces (GEOs), which are provided
to assist the reader, are calculated by converting gold and
palladium (in the case of SEOs) or silver and palladium (in the
case of GEOs) using the ratio of the average price of silver to the
average price of gold and palladium, respectively, and using the
average price of palladium to the average price of gold, with all
figures being as per the London Bullion Metal Exchange during the
period.
|
Summary of Ounces
Sold
|
|
|
|
|
|
|
|
|
|
|
Q3
|
Q2
|
Q1
|
Q4
|
Q3
|
Q2
|
Q1
|
Q4
|
|
2018
|
2018
|
2018
|
2017
|
2017
|
2017
|
2017
|
2016
|
Silver ounces
sold
|
|
|
|
|
|
|
|
|
|
San
Dimas 2
|
-
|
1,070
|
1,372
|
1,299
|
962
|
845
|
796
|
1,571
|
|
Peñasquito
|
1,241
|
1,547
|
1,227
|
1,537
|
1,109
|
1,639
|
860
|
1,270
|
|
Antamina
|
1,333
|
1,422
|
1,413
|
1,769
|
1,537
|
1,453
|
1,170
|
1,488
|
|
Constancia
|
567
|
410
|
574
|
491
|
491
|
559
|
383
|
702
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
Los Filos
|
27
|
35
|
52
|
16
|
43
|
42
|
32
|
33
|
|
|
Zinkgruvan
|
326
|
297
|
391
|
597
|
305
|
398
|
296
|
592
|
|
|
Yauliyacu
|
697
|
521
|
360
|
642
|
364
|
423
|
403
|
671
|
|
|
Stratoni
|
125
|
171
|
148
|
110
|
84
|
123
|
195
|
165
|
|
|
Minto 3
|
-
|
28
|
(1)
|
34
|
43
|
39
|
37
|
102
|
|
|
Cozamin 4
|
-
|
-
|
-
|
-
|
23
|
125
|
232
|
196
|
|
|
Neves-Corvo
|
234
|
178
|
169
|
119
|
117
|
114
|
153
|
147
|
|
|
Aljustrel
|
302
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
|
Lagunas
Norte 5
|
1
|
65
|
236
|
237
|
242
|
204
|
217
|
227
|
|
|
Pierina 5
|
-
|
54
|
88
|
106
|
102
|
136
|
150
|
84
|
|
|
Veladero 5
|
2
|
104
|
161
|
211
|
201
|
144
|
159
|
174
|
|
|
777
|
163
|
70
|
153
|
124
|
135
|
125
|
142
|
84
|
|
Total
Other
|
1,877
|
1,523
|
1,757
|
2,196
|
1,659
|
1,873
|
2,016
|
2,475
|
Total silver ounces
sold
|
5,018
|
5,972
|
6,343
|
7,292
|
5,758
|
6,369
|
5,225
|
7,506
|
Gold ounces
sold
|
|
|
|
|
|
|
|
|
|
Sudbury 6
|
2,560
|
4,400
|
5,186
|
12,059
|
3,237
|
5,822
|
6,887
|
10,183
|
|
Salobo
|
65,139
|
70,734
|
54,645
|
71,683
|
67,198
|
50,478
|
63,007
|
73,646
|
|
Constancia
|
2,980
|
2,172
|
3,247
|
1,965
|
2,206
|
2,356
|
2,315
|
3,343
|
|
San
Dimas 2
|
9,771
|
3,738
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Stillwater
|
2,075
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
Minto 3
|
796
|
2,284
|
1,763
|
2,020
|
4,603
|
6,988
|
9,902
|
15,445
|
|
|
777
|
5,921
|
3,812
|
5,132
|
6,568
|
5,304
|
6,321
|
6,286
|
6,314
|
|
Total
Other
|
6,717
|
6,096
|
6,895
|
8,588
|
9,907
|
13,309
|
16,188
|
21,759
|
Total gold ounces
sold
|
89,242
|
87,140
|
69,973
|
94,295
|
82,548
|
71,965
|
88,397
|
108,931
|
Palladium ounces
sold
|
|
|
|
|
|
|
|
|
|
Stillwater
|
3,668
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
SEOs
sold 7
|
12,462
|
12,855
|
11,892
|
14,488
|
12,024
|
11,625
|
11,412
|
15,249
|
GEOs
sold 7
|
154,222
|
162,715
|
149,987
|
189,882
|
158,401
|
159,161
|
163,032
|
214,529
|
Cumulative payable
silver
ounces
PBND 8
|
4,454
|
4,240
|
4,889
|
4,515
|
5,257
|
4,152
|
3,967
|
3,224
|
Cumulative payable
gold
ounces
PBND 8
|
77,093
|
77,029
|
81,923
|
79,477
|
82,632
|
74,899
|
71,571
|
80,621
|
Cumulative payable
palladium
ounces
PBND 8
|
4,671
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Gold / Silver
Ratio 7
|
80.8
|
79.0
|
79.3
|
76.3
|
75.9
|
73.0
|
70.0
|
71.1
|
Palladium / Silver
Ratio 7
|
63.4
|
59.2
|
61.8
|
59.3
|
53.5
|
47.7
|
44.0
|
39.8
|
Gold / Palladium
Ratio 7
|
1.3
|
1.3
|
1.3
|
1.3
|
1.4
|
1.5
|
1.6
|
1.8
|
1)
|
All figures in
thousands except gold and palladium 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 Minto mine was
placed into care and maintenance in October 2018.
|
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 and
palladium (in the case of SEOs) or silver and palladium (in the
case of GEOs) using the ratio of the average price of silver to the
average price of gold and palladium, respectively, and using the
average price of palladium to the average price of gold, with all
figures being as per the London Bullion Metal Exchange during the
period.
|
8)
|
Payable silver, gold
and palladium 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.
|
|
|
|
|
|
|
|
|
|
|
|
|
Results of
Operations
|
|
The operating results
of the Company's reportable operating segments are summarized in
the tables and commentary below.
|
|
Three Months Ended
September 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
|
Net
Earnings
|
Cash Flow
From
Operations
|
Total
Assets
|
Silver
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Peñasquito
|
1,050
|
1,241
|
$
|
14.94
|
$
|
4.17
|
$
|
2.96
|
$
|
18,544
|
$
|
9,702
|
$
|
13,369
|
$
|
391,385
|
Antamina
|
1,468
|
1,333
|
|
14.98
|
|
2.98
|
|
8.70
|
|
19,956
|
|
4,398
|
|
16,235
|
|
721,388
|
Constancia
|
737
|
567
|
|
15.10
|
|
5.90
|
|
7.14
|
|
8,561
|
|
1,166
|
|
5,216
|
|
250,724
|
Other 4
|
2,446
|
1,877
|
|
14.48
|
|
6.82
|
|
3.00
|
|
27,194
|
|
8,757
|
|
15,191
|
|
506,353
|
|
5,701
|
5,018
|
$
|
14.80
|
$
|
5.04
|
$
|
4.97
|
$
|
74,255
|
$
|
24,023
|
$
|
50,011
|
$
|
1,869,850
|
Gold
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sudbury 5
|
5,955
|
2,560
|
$
|
1,218
|
$
|
400
|
$
|
795
|
$
|
3,117
|
$
|
58
|
$
|
1,948
|
$
|
370,331
|
Salobo
|
68,648
|
65,139
|
|
1,210
|
|
400
|
|
386
|
|
78,815
|
|
27,604
|
|
52,760
|
|
2,735,159
|
Constancia
|
3,261
|
2,980
|
|
1,216
|
|
400
|
|
374
|
|
3,625
|
|
1,318
|
|
2,433
|
|
118,910
|
San Dimas
|
10,642
|
9,771
|
|
1,200
|
|
600
|
|
556
|
|
11,725
|
|
428
|
|
5,862
|
|
212,915
|
Stillwater
|
6,376
|
2,075
|
|
1,205
|
|
217
|
|
526
|
|
2,500
|
|
958
|
|
2,049
|
|
238,033
|
Other 6
|
6,670
|
6,717
|
|
1,225
|
|
402
|
|
480
|
|
8,230
|
|
2,306
|
|
5,390
|
|
23,728
|
|
101,552
|
89,242
|
$
|
1,210
|
$
|
418
|
$
|
426
|
$
|
108,012
|
$
|
32,672
|
$
|
70,442
|
$
|
3,699,076
|
Palladium
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stillwater
|
8,817
|
3,668
|
$
|
955
|
$
|
169
|
$
|
462
|
$
|
3,502
|
$
|
1,188
|
$
|
2,882
|
$
|
261,796
|
Cobalt
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voisey's
Bay
|
-
|
-
|
$
|
n.a.
|
$
|
n.a.
|
$
|
n.a.
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
393,406
|
Operating
results
|
|
|
|
|
|
|
|
$
|
185,769
|
$
|
57,883
|
$
|
123,335
|
$
|
6,224,128
|
Corporate
costs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and
administrative
|
|
|
|
|
|
|
|
|
|
$
|
(8,779)
|
$
|
(4,899)
|
|
|
Finance
costs
|
|
|
|
|
|
|
|
|
|
|
|
(12,877)
|
|
(8,351)
|
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
(1,301)
|
|
(1,672)
|
|
|
Income tax
expense
|
|
|
|
|
|
|
|
|
|
|
(905)
|
|
-
|
|
|
Total corporate
costs
|
|
|
|
|
|
|
|
|
$
|
(23,862)
|
$
|
(14,922)
|
$
|
361,890
|
|
$
|
34,021
|
$
|
108,413
|
$
|
6,586,018
|
1)
|
All figures in
thousands except gold and palladium ounces produced and sold and
per ounce amounts.
|
2)
|
Ounces produced
represent the quantity of silver, gold and palladium 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, gold or
palladium 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)
|
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 and the Minto mine was placed into care
and maintenance in October 2018.
|
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. The Minto mine was placed
into care and maintenance in October 2018.
|
On a silver equivalent and gold equivalent basis, results for
the Company for the three months ended September 30, 2018 were as follows:
Three Months Ended
September 30, 2018
|
|
Ounces
Produced 1, 2
|
Ounces
Sold 2
|
Average
Realized
Price
($'s Per
Ounce)
|
Average
Cash Cost
($'s Per
Ounce) 3
|
Cash
Operating
Margin
($'s Per
Ounce) 4
|
Average
Depletion
($'s Per
Ounce)
|
Gross
Margin
($'s Per
Ounce)
|
Silver equivalent
basis
|
14,466
|
12,462
|
$
|
14.91
|
$
|
5.07
|
$
|
9.84
|
$
|
5.19
|
$
|
4.65
|
Gold equivalent
basis
|
179,016
|
154,222
|
$
|
1,205
|
$
|
410
|
$
|
795
|
$
|
419
|
$
|
376
|
1)
|
Ounces produced
represent the quantity of silver, gold and palladium 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, gold or
palladium 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.
|
2)
|
Silver ounces
produced and sold in thousands.
|
3)
|
Refer to discussion
on non-IFRS measure (iii) at the end of this press
release.
|
4)
|
Refer to discussion
on non-IFRS measure (iv) at the end of this press
release
|
Three Months Ended
September 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
|
1,043
|
962
|
$
|
16.84
|
$
|
4.32
|
$
|
1.46
|
$
|
16,205
|
$
|
10,640
|
$
|
12,049
|
$
|
136,763
|
Peñasquito
|
1,641
|
1,109
|
|
16.67
|
|
4.13
|
|
2.88
|
|
18,491
|
|
10,715
|
|
13,911
|
|
407,679
|
Antamina
|
1,735
|
1,537
|
|
17.01
|
|
3.34
|
|
9.81
|
|
26,147
|
|
5,938
|
|
21,017
|
|
774,993
|
Constancia
|
618
|
491
|
|
17.16
|
|
5.90
|
|
7.36
|
|
8,429
|
|
1,915
|
|
5,531
|
|
265,420
|
Other 5
|
2,558
|
1,659
|
|
16.79
|
|
5.28
|
|
3.77
|
|
27,854
|
|
12,836
|
|
19,109
|
|
759,840
|
|
7,595
|
5,758
|
$
|
16.87
|
$
|
4.43
|
$
|
5.13
|
$
|
97,126
|
$
|
42,044
|
$
|
71,617
|
$
|
2,344,695
|
Gold
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sudbury 6
|
8,519
|
3,237
|
$
|
1,281
|
$
|
400
|
$
|
769
|
$
|
4,147
|
$
|
362
|
$
|
2,852
|
$
|
389,266
|
Salobo
|
72,980
|
67,198
|
|
1,280
|
|
400
|
|
381
|
|
86,030
|
|
33,561
|
|
59,150
|
|
2,836,029
|
Constancia
|
2,498
|
2,206
|
|
1,301
|
|
400
|
|
409
|
|
2,869
|
|
1,083
|
|
1,986
|
|
122,856
|
Other 7
|
11,219
|
9,907
|
|
1,298
|
|
368
|
|
335
|
|
12,862
|
|
5,898
|
|
8,823
|
|
35,924
|
|
95,216
|
82,548
|
$
|
1,283
|
$
|
396
|
$
|
391
|
$
|
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)
|
|
|
Finance
costs
|
|
|
|
|
|
|
|
|
|
|
|
(7,766)
|
|
(8,697)
|
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
(74)
|
|
83
|
|
|
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 (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, 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 Lagunas
Norte, Pierina and Veladero precious metal purchase agreements
expired on March 31, 2018 and the Minto mine was placed into care
and maintenance in October 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. The Minto mine was placed
into care and maintenance in October 2018.
|
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
|
|
Ounces
Produced 1, 2
|
Ounces
Sold 2
|
Average
Realized
Price
($'s Per
Ounce)
|
Average
Cash Cost
($'s Per
Ounce) 3
|
Cash
Operating
Margin
($'s Per
Ounce) 4
|
Average
Depletion
($'s Per
Ounce)
|
Gross
Margin
($'s Per
Ounce)
|
Silver equivalent
basis
|
14,823
|
12,024
|
$
|
16.89
|
$
|
4.84
|
$
|
12.05
|
$
|
5.14
|
$
|
6.91
|
Gold equivalent
basis
|
195,263
|
158,401
|
$
|
1,282
|
$
|
368
|
$
|
914
|
$
|
390
|
$
|
524
|
1)
|
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.
|
2)
|
Silver ounces
produced and sold in thousands.
|
3)
|
Refer to discussion
on non-IFRS measure (iii) at the end of this press
release.
|
4)
|
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, gold and palladium 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 fair value (gains) losses, non-cash share of
losses of associates and other one-time (income) expenses. 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
September 30
|
(in thousands, except
for per share amounts)
|
|
2018
|
|
2017
|
Net
earnings
|
|
$
|
34,021
|
|
$
|
66,578
|
Add back
(deduct):
|
|
|
|
|
|
|
Share in losses of
associate
|
|
|
172
|
|
|
-
|
Loss on fair value
adjustment of Kutcho Convertible Note
|
|
|
927
|
|
|
-
|
Loss on fair value
adjustment of share purchase warrants held
|
|
|
12
|
|
|
-
|
Adjusted net
earnings
|
|
$
|
35,132
|
|
$
|
66,578
|
Divided
by:
|
|
|
|
|
|
|
Basic weighted average
number of shares outstanding
|
|
|
443,634
|
|
|
442,094
|
Diluted weighted
average number of shares outstanding
|
|
|
444,120
|
|
|
442,476
|
Equals:
|
|
|
|
|
|
|
Adjusted earnings per
share - basic
|
|
$
|
0.08
|
|
$
|
0.15
|
Adjusted earnings per
share - diluted
|
|
$
|
0.08
|
|
$
|
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
September 30
|
(in thousands, except
for per share amounts)
|
|
2018
|
|
2017
|
Cash generated by
operating activities
|
|
$
|
108,413
|
|
$
|
129,121
|
Divided
by:
|
|
|
|
|
|
|
Basic weighted average
number of shares outstanding
|
|
|
443,634
|
|
|
442,094
|
Diluted weighted
average number of shares outstanding
|
|
|
444,120
|
|
|
442,476
|
Equals:
|
|
|
|
|
|
|
Operating cash flow
per share - basic
|
|
$
|
0.24
|
|
$
|
0.29
|
Operating cash flow
per share - diluted
|
|
$
|
0.24
|
|
$
|
0.29
|
iii. Average cash cost of silver, gold and palladium 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, gold and palladium on a per ounce basis.
|
Three Months
Ended
September 30
|
(in thousands, except
for gold and palladium ounces sold and per ounce
amounts)
|
|
2018
|
|
2017
|
Cost of
sales
|
|
$
|
127,886
|
|
$
|
120,086
|
Less:
depletion
|
|
|
(64,684)
|
|
|
(61,852)
|
Cash cost of
sales
|
|
$
|
63,202
|
|
$
|
58,234
|
Cash cost of sales is
comprised of:
|
|
|
|
|
|
|
Total cash cost of
silver sold
|
|
$
|
25,295
|
|
$
|
25,529
|
Total cash cost of
gold sold
|
|
|
37,287
|
|
|
32,705
|
Total cash cost of
palladium sold
|
|
|
620
|
|
|
-
|
Total cash cost of
sales
|
|
$
|
63,202
|
|
$
|
58,234
|
Divided
by:
|
|
|
|
|
|
|
Total silver ounces
sold
|
|
|
5,018
|
|
|
5,758
|
Total gold ounces
sold
|
|
|
89,242
|
|
|
82,548
|
Total palladium ounces
sold
|
|
|
3,668
|
|
|
-
|
Equals:
|
|
|
|
|
|
|
Average cash cost of
silver (per ounce)
|
|
$
|
5.04
|
|
$
|
4.43
|
Average cash cost of
gold (per ounce)
|
|
$
|
418
|
|
$
|
396
|
Average cash cost of
palladium (per ounce)
|
|
$
|
169
|
|
$
|
n.a.
|
iv. Cash operating margin is calculated by subtracting the
average cash cost of silver, gold and palladium on a per ounce
basis from the average realized selling price of silver, gold and
palladium 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 and palladium ounces sold and per ounce
amounts)
|
|
2018
|
|
2017
|
Total
sales:
|
|
|
|
|
|
|
Silver
|
|
$
|
74,255
|
|
$
|
97,126
|
Gold
|
|
$
|
108,012
|
|
$
|
105,908
|
Palladium
|
|
$
|
3,502
|
|
$
|
-
|
Divided
by:
|
|
|
|
|
|
|
Total silver ounces
sold
|
|
|
5,018
|
|
|
5,758
|
Total gold ounces
sold
|
|
|
89,242
|
|
|
82,548
|
Total palladium ounces
sold
|
|
|
3,668
|
|
|
-
|
Equals:
|
|
|
|
|
|
|
Average realized price
of silver (per ounce)
|
|
$
|
14.80
|
|
$
|
16.87
|
Average realized price
of gold (per ounce)
|
|
$
|
1,210
|
|
$
|
1,283
|
Average realized price
of palladium (per ounce)
|
|
$
|
955
|
|
$
|
n.a.
|
Less:
|
|
|
|
|
|
|
Average cash cost of
silver 1 (per ounce)
|
|
$
|
(5.04)
|
|
$
|
(4.43)
|
Average cash cost of
gold 1 (per ounce)
|
|
$
|
(418)
|
|
$
|
(396)
|
Average cash cost of
palladium 1 (per ounce)
|
|
$
|
(169)
|
|
$
|
n.a.
|
Equals:
|
|
|
|
|
|
|
Cash operating margin
per silver ounce sold
|
|
$
|
9.76
|
|
$
|
12.44
|
As a percentage of
realized price of silver
|
|
|
66%
|
|
|
74%
|
Cash operating margin
per gold ounce sold
|
|
$
|
792
|
|
$
|
887
|
As a percentage of
realized price of gold
|
|
|
65%
|
|
|
69%
|
Cash operating margin
per palladium ounce sold
|
|
$
|
786
|
|
$
|
n.a.
|
As a percentage of
realized price of palladium
|
|
|
82%
|
|
|
n.a.
|
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:
- estimated future production as a result of the
Salobo Expansion;
- future payment by Wheaton of consideration for the
Salobo Expansion to Vale and the satisfaction of each party's
obligations and conditions in accordance with the terms of the Gold
Agreement;
- the receipt by Wheaton of additional gold
production in respect of the Salobo Expansion;
- the repayment of the Kutcho convertible note;
- the timing of the PLP commercial production in
connection with Peñasquito;
- the ore grade and location of Peñasquito's
production in the fourth quarter of 2018; 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 and Peñasquito 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:
- · Vale does not meet the construction timeline, including
anticipated completion, of the Salobo Expansion;
- · Vale is unable to commence, or the timing of
delivery of additional gold by Vale is delayed or deferred under
the Salobo Expansion;
- · Vale is unable to produce the estimated future
production in connection with the Salobo Expansion;
- · Wheaton does not make the expansion payment to
Vale or each party does not satisfy its obligations and conditions
respect of the Salobo Expansion in accordance with the terms of the
Gold Agreement; and
- · Vale does not deliver any, or delivers
significantly less than anticipated, additional gold under the
Salobo Expansion.
- · Kutcho not being able to make payments under the
Kutcho convertible note;
- · the timing of the PLP commercial production in
connection with Peñasquito will be delayed or will not achieve
completion;
- · the ore grade and location of Peñasquito's
production in the fourth quarter of 2018 will not be as expected;
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:
- · Vale is able to meet the construction timeline,
including anticipated completion, of the Salobo Expansion;
- · Vale is able to commence and meet its timing for
delivery of gold under the Salobo Expansion;
- · Vale is able to produce the estimated future
production as a result of the Salobo Expansion;
- · that Wheaton will make the expansion payment to
Vale and each party will satisfy their obligations and conditions
in respect of the Salobo Expansion in accordance with the Gold
Agreement;
- · Vale will deliver additional gold under the
Salobo Expansion
- · that Kutcho will make all required payments and
not be in default under the Kutcho Convertible Note;
- · that the timing of the PLP commercial production
in connection with Peñasquito with be as announced by
Goldcorp;
- · the ore grade and location of Peñasquito's
production in the fourth quarter of 2018 will be as announced by
Goldcorp; 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.
Patrick Drouin, Senior Vice
President, Investor Relations, Wheaton Precious Metals Corp., Tel:
1-844-288-9878, Email: info@wheatonpm.com, Website:
www.wheatonpm.com