TSX: WPM
NYSE: WPM
VANCOUVER, Nov. 14, 2019 /CNW/ - Wheaton Precious Metals™
Corp. ("Wheaton" or the "Company") is pleased to announce its
results for the third quarter ended September 30, 2019. All figures are presented in
United States dollars unless
otherwise noted.
In the third quarter of 2019, Wheaton generated over
$140 million in operating cash flow
resulting in adjusted net earnings of over $70 million, an increase of 31% and 107%,
respectively. In addition, Wheaton had attributable gold production
of over 100,000 ounces and remains on track for record annual gold
production in 2019.
Operational Overview
|
|
|
Q3 2019
|
|
|
Q3 2018
|
|
Change
|
Ounces
produced
|
|
|
|
|
|
|
|
|
Gold
|
|
|
104,175
|
|
|
106,255
|
|
(2.0)%
|
Silver
|
|
|
6,095
|
|
|
5,584
|
|
9.2 %
|
Palladium
|
|
|
5,471
|
|
|
8,817
|
|
(37.9)%
|
Gold
equivalent2
|
|
|
184,868
|
|
|
184,139
|
|
0.4%
|
Ounces
sold
|
|
|
|
|
|
|
|
|
Gold
|
|
|
94,766
|
|
|
89,242
|
|
6.2 %
|
Silver
|
|
|
4,484
|
|
|
5,018
|
|
(10.6)%
|
Palladium
|
|
|
4,907
|
|
|
3,668
|
|
33.8 %
|
Gold
equivalent2
|
|
|
155,049
|
|
|
154,815
|
|
0.2%
|
Sales price per
ounce
|
|
|
|
|
|
|
|
|
Gold
|
|
$
|
1,471
|
|
$
|
1,210
|
|
21.6 %
|
Silver
|
|
$
|
17.09
|
|
$
|
14.80
|
|
15.5 %
|
Palladium
|
|
$
|
1,535
|
|
$
|
955
|
|
60.7%
|
Cash costs per
ounce 1
|
|
|
|
|
|
|
|
|
Gold
1
|
|
$
|
424
|
|
$
|
418
|
|
1.4 %
|
Silver
1
|
|
$
|
5.16
|
|
$
|
5.04
|
|
2.4 %
|
Palladium
1
|
|
$
|
271
|
|
$
|
169
|
|
60.2 %
|
Cash operating
margin per ounce 1
|
|
|
|
|
|
|
|
|
Gold
1
|
|
$
|
1,047
|
|
$
|
792
|
|
32.2 %
|
Silver
1
|
|
$
|
11.93
|
|
$
|
9.76
|
|
22.2 %
|
Palladium
1
|
|
$
|
1,264
|
|
$
|
786
|
|
60.8 %
|
Revenue
|
|
$
|
223,595
|
|
$
|
185,769
|
|
20.4 %
|
Net
earnings
|
|
$
|
75,960
|
|
$
|
34,021
|
|
123.3 %
|
Per share
|
|
$
|
0.17
|
|
$
|
0.08
|
|
112.5 %
|
Adjusted net
earnings 1
|
|
$
|
72,692
|
|
$
|
35,132
|
|
106.9 %
|
Per share
1
|
|
$
|
0.16
|
|
$
|
0.08
|
|
105.4 %
|
Operating cash
flows
|
|
$
|
142,300
|
|
$
|
108,413
|
|
31.3 %
|
Per share
1
|
|
$
|
0.32
|
|
$
|
0.24
|
|
33.3 %
|
Dividends declared
1
|
|
$
|
40,197
|
|
$
|
39,921
|
|
0.7 %
|
Per share
|
|
$
|
0.09
|
|
$
|
0.09
|
|
0.0 %
|
All amounts in
thousands except gold, palladium and gold equivalent ounces
produced and sold, per ounce amounts and per share
amounts.
|
Highlights
- Wheaton generated $142 million in
operating cash flow in the third quarter of 2019, leading to a
reduction in net debt of $146
million.
- Attributable gold production was relatively unchanged primarily
due to higher production at Salobo and San Dimas being offset by lower production at
the Stillwater mines due to
reported production for the third quarter of 2018 including some
material processed in prior periods.
- The increase in attributable silver production was primarily
due to higher grades at Peñasquito.
- The decrease in attributable palladium production was due to
lower production at the Stillwater
mines due to reported production for the third quarter of 2018
including some material processed in prior periods.
- The increase in gold sales volume was due to positive changes
in the balance of payable gold produced but not yet delivered to
Wheaton, partially offset by lower production levels.
- The decrease in silver sales volume was due to negative changes
in the balance of payable silver produced but not yet delivered to
Wheaton at Peñasquito, partially offset by the higher production
levels.
- The increase in adjusted net earnings was primarily due to
higher margins resulting from increased realized prices for gold,
silver and palladium sales of 22%, 15% and 61%, respectively.
- Declared quarterly dividend of $0.09 per common share in accordance with
Wheaton's setting of a minimum quarterly dividend of $0.09 per common share for the duration of 2019,
subject to the discretion of the Board of Directors.
- In September, Wheaton joined the United Nations Global Compact
and announced its endorsement of the World Gold Council's
Responsible Gold Mining Principles, demonstrating the company's
continued commitment to corporate sustainability.
Updating Production Guidance
- Wheaton is updating production guidance for 2019, with
estimated attributable gold production being increased to
approximately 390,000 ounces due to continued outperformance
primarily from the Salobo mine, while estimated attributable silver
production has been adjusted to approximately 21 million ounces to
reflect production interruptions at the Peñasquito mine. Forecast
palladium production in 2019 remains unchanged at approximately
22,000 ounces.
- For the five-year period ending in 2023, the Company continues
to estimate that average annual gold equivalent
production2 will amount to 750,000 ounces.
"Wheaton's portfolio of high-quality, long-life assets continues
to deliver strong results with over $140
million in operating cash flow generated in the third
quarter of 2019," said Randy
Smallwood, President and Chief Executive Officer of Wheaton
Precious Metals. "Gold and silver prices increased on average
approximately 17% over the previous year, while our cash flow and
net earnings increased by over 30% and 100%, respectively. These
solid results once again demonstrate the strength of Wheaton's
business model, which focuses on reducing risk while providing
significant leverage to higher commodity prices."
Financial Review
Revenues
Revenue was $224 million in the third quarter of 2019, on
sales volume of 94,800 ounces of gold, 4.5 million ounces of silver
and 4,900 ounces of palladium. This represents a 20% increase from
the $186 million of revenue generated
in the third quarter of 2018 due primarily to (i) a 22% increase in
the average realized gold price ($1,471 in Q3 2019 compared with $1,210 in Q3 2018); (ii) a 15% increase in the
average realized silver price ($17.09
in Q3 2019 compared with $14.80 in Q3
2018); and (iii) a 6% increase in the number of gold ounces sold;
partially offset by (iv) an 11% decrease in the number of silver
ounces sold.
Costs and Expenses
Average cash costs¹ in the
third quarter of 2019 were $424 per
gold ounce sold, $5.16 per silver
ounce sold and $271 per palladium
ounce sold, as compared with $418 per
gold ounce, $5.04 per silver ounce
and $169 per palladium ounce during
the comparable period of 2018. This resulted in a cash operating
margin¹ of $1,047 per gold ounce
sold, $11.93 per silver ounce sold
and $1,264 per palladium ounce sold,
an increase of 32%, 22% and 61%, respectively, as compared with Q3
2018. The increase in the cash operating margin was
primarily due to a 22%, 15% and 61% increase in the average
realized gold, silver and palladium price, respectively, during Q3
2019 compared with Q3 2018.
Adjusted Net Earnings and Operating Cash
Flows
Adjusted net earnings¹ and cash flow from
operations in the third quarter of 2019 were $73 million ($0.16
per share) and $142 million
($0.32 per share¹), compared with
adjusted net earnings¹ of $35 million
($0.08 per share) and cash flow from
operations of $108 million
($0.24 per share¹) for the same
period in 2018, an increase of 107% and 31%, respectively.
Balance Sheet
At September 30, 2019, the Company had approximately
$152 million of cash on hand and
$1.0 billion outstanding under the
Company's $2 billion revolving term
loan (the "Revolving Facility"). The Company uses excess cash to
pay down the Revolving Facility, and during the three-month period
ended September 30, 2019, the Company
has repaid $82 million under the
Revolving Facility. The average effective interest rate for the
third quarter of 2019 was 4.02%.
Third Quarter Asset Highlights
Operational highlights for the quarter ended September 30, 2019, are as follows:
Salobo
In the third quarter of 2019,
Salobo produced 73,600 ounces of attributable gold, virtually
unchanged relative to the third quarter of 2018 as higher
throughput was almost completely offset by lower grades and
recovery. In Vale S.A.'s ("Vale") Third Quarter 2019 Performance
Report, Vale reports that in July, Salobo achieved all-time monthly
production records for copper and gold. Vale also noted that
physical completion of the expansion at Salobo is now 27%,
including the completion of the concrete foundations for the mill
and primary crusher bases and the arrival to site of the first
loads related to the long-distance conveyor belt.
Peñasquito
In the third
quarter of 2019, Peñasquito produced 2.0 million ounces of
attributable silver, an increase of approximately 93% relative to
the third quarter of 2018 primarily due to higher grades. As per
Newmont Goldcorp Corporation's ("Newmont") third quarter MD&A,
production at Peñasquito was impacted by the operation being placed
into care and maintenance for 17 days in the third quarter of 2019
due to a blockade. The blockade was lifted in early October 2019; a gradual ramp up of operations
started in late October while government-sponsored negotiations
continue. Based on Newmont's disclosure, the impact of the
illegal blockade on Wheaton's third quarter attributable production
was approximately 0.4 million silver ounces.
Sudbury
In the
third quarter of 2019, Vale's Sudbury mines produced 6,600 ounces of
attributable gold, an increase of approximately 2% relative to the
third quarter of 2018 primarily due to higher grades. Throughput at
the Sudbury mines is typically
lower in the third quarter as a result of planned maintenance
shutdowns occurring in the summer months. This was consistent in
2018 and 2019.
Constancia
In
the third quarter of 2019, Constancia produced 0.7 million ounces of
attributable silver and 5,200 ounces of attributable gold, an
increase of approximately 1% and 42%, respectively, relative to the
third quarter of 2018. As per Wheaton's precious metals purchase
agreement with Hudbay Minerals Inc. ("Hudbay") relating to
Constancia (the "Constancia
PMPA"), should Hudbay fail to achieve a minimum level of throughput
at the Pampacancha satellite deposit during 2018, 2019 and 2020,
Wheaton will be entitled to an increased portion of gold from
Hudbay. As per Hudbay's MD&A for the first quarter of 2019,
mining of the Pampacancha deposit is not expected to begin until
later in 2020. Assuming ore production does not begin until 2020,
the Company will be entitled to receive an additional 8,020 ounces
of gold in 2019 and 2020 relative to the Constancia PMPA, with the
deliveries to be made in quarterly installments, of which 2,005
ounces were received during the third quarter of 2019 and reported
as production.
Stillwater
In
the third quarter of 2019, the Stillwater mines produced 3,200 ounces of
attributable gold and 5,500 ounces of attributable palladium, a
decrease of approximately 49% for gold and 38% for palladium
relative to the third quarter of 2018. The decreases relative to
the third quarter of 2019 was largely due to reported production
for the third quarter of 2018 including some material processed in
prior periods. As part of the agreement, Wheaton was entitled to
the attributable gold and palladium production for which an
offtaker payment was received after July 1,
2018.
Other Gold
In the third quarter of 2019, total
Other Gold attributable production was 4,300 ounces, a decrease of
approximately 36% relative to the third quarter of 2018. The
decrease was due primarily to the cessation of production at the
Minto mine which was placed on
care and maintenance in the fourth quarter of 2018. According to
Pembridge Resources plc's news release dated October 16, 2019, mining has restarted at
Minto in October with milling
operations recommencing on October 10,
2019. Wheaton does not currently include any additional
production from Minto in its 2019
or five-year guidance.
Other Silver
In the third quarter of 2019,
total Other Silver attributable production was 2.2 million ounces,
a decrease of approximately 12% relative to the third quarter of
2018. The decrease was driven primarily by lower production from
the Aljustrel mine partially offset by higher production from
Zinkgruvan.
Development Update – Rosemont
On August 1, 2019, Hudbay announced that the U.S.
District Court for the District of Arizona ("Court") issued a ruling in the
lawsuits challenging the U.S. Forest
Service's issuance of the Final Record of Decision ("FROD")
for the Rosemont project in
Arizona. The Court ruled to vacate
and remand the FROD such that Rosemont cannot proceed with construction at
this time. Hudbay stated that they believe that the Court has
misinterpreted federal mining laws and Forest Service regulations as they apply to
Rosemont. As such, Hudbay is
working to appeal the Court's decision to the U.S. Ninth Circuit
Court of Appeals as they evaluate next steps for the project. As
announced in August, Hudbay has suspended most of its early works
activities at Rosemont and has
deferred the previously announced process to identify a joint
venture partner for Rosemont.
Wheaton has not made any upfront payments to date relative to
Rosemont nor included any
production from Rosemont in its
five-year guidance.
Produced But Not Yet Delivered
3
As at September
30, 2019, payable ounces attributable to the Company
produced but not yet delivered amounted to 85,500 payable gold
ounces, 4.2 million payable silver ounces and 4,200 payable
palladium ounces, an increase of 4,300 payable gold ounces and 0.7
million payable silver ounces and a decrease of 300 payable
palladium ounces during the three month period ended September 30, 2019. Payable gold ounces
produced but not yet delivered increased primarily as a result of
an increase related to the Salobo gold interest partially offset by
a decrease at Sudbury. Payable
silver ounces produced but not yet delivered increased slightly
primarily as a result of increases related to the Peñasquito and
Antamina silver interests. Payable ounces produced but not yet
delivered to Wheaton 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.
Dividend
Fourth Quarterly Dividend
The
fourth quarterly cash dividend for 2019 of US$0.09 will be paid to holders of record of
Wheaton Precious Metals common shares as of the close of business
on December 4, 2019 and will be
distributed on or about December 16,
2019.
Under the Company's dividend policy, the quarterly dividend per
common share is targeted to equal approximately 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. To minimize volatility in
quarterly dividends, the Company has set a minimum quarterly
dividend of $0.09 per common share
for the duration of 2019.
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, including direct deposit, 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 is updating production guidance for 2019. Estimated
attributable gold production has been increased to approximately
390,000 ounces, up from 385,000 ounces previously forecast due to
continued outperformance primarily from the Salobo mine. Estimated
attributable silver production has been adjusted to approximately
21 million ounces from 22.5 million ounces to reflect production
interruptions at the Peñasquito mine. Forecast production of
palladium in 2019 remains unchanged at approximately 22,000 ounces.
For the five-year period ending in 2023, the Company estimates that
average annual gold equivalent production2 will
amount to 750,000 ounces. As a reminder, Wheaton does not currently
include any production from Hudbay's Rosemont project nor the announced expansion
at Salobo in its estimated average five-year production
guidance4.
From a liquidity perspective, the $152
million of cash and cash equivalents as at September 30, 2019, combined with the liquidity
provided by the available credit under the $2 billion Revolving Facility and ongoing
operating cash flows positions the Company well to fund all
outstanding commitments and known contingencies as well as
providing flexibility to acquire additional accretive precious
metal stream interests.
Webcast and Conference Call Details
A conference call and webcast will be held Friday, November 15, 2019, 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:
|
6890657
|
Live audio
webcast:
|
Click here
|
Participants should dial in five to ten minutes before the
call.
The conference call will be recorded and available until
November 22, 2019 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:
|
6890657
|
Archived audio
webcast:
|
Click here
|
This earnings release should be read in conjunction with Wheaton
Precious Metals' MD&A and Financial Statements, which are
available on the Company's website at www.wheatonpm.com and
have been posted on SEDAR at www.sedar.com.
Mr. Wes Carson, P. Eng., Vice
President, Mining Operations is a "qualified person" as such term
is defined under National Instrument 43-101 and 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
Commodity price assumptions for the gold equivalent production and
sales, including forecasts for 2019 and the five-year average
are
unchanged since the original forecasts at $1,300 / ounce gold, $16
/ ounce silver, $1,350 / ounce palladium, and $21
/ pound of cobalt.
|
3 Payable gold, silver 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.
|
4 In
preparing the long-term production forecast, Wheaton has considered
the impact of Vale's announced approval
of the Salobo III copper project, a brownfield expansion, which if
completed as proposed, would increase processing
throughput capacity from 24 Mtpa to 36 Mtpa once fully ramped up
(the "Salobo Expansion"). However, readers are
cautioned that Vale has not finalized its mine plan and as such,
Wheaton has not included any production growth as
a result of the Salobo Expansion.
|
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)
|
|
2019
|
2018
|
2019
|
2018
|
Sales
|
|
$
|
223,595
|
$
|
185,769
|
$
|
638,110
|
$
|
597,421
|
Cost of
sales
|
|
|
|
|
|
|
|
|
|
Cost of sales,
excluding depletion
|
|
$
|
64,624
|
$
|
63,202
|
$
|
194,796
|
$
|
182,195
|
Depletion
|
|
|
63,396
|
|
64,684
|
|
193,180
|
|
184,444
|
Total cost of
sales
|
|
$
|
128,020
|
$
|
127,886
|
$
|
387,976
|
$
|
366,639
|
Gross
margin
|
|
$
|
95,575
|
$
|
57,883
|
$
|
250,134
|
$
|
230,782
|
General and
administrative
|
|
|
14,028
|
|
8,779
|
|
42,811
|
|
30,507
|
Impairment
charges
|
|
|
-
|
|
-
|
|
165,912
|
|
-
|
Earnings from
operations
|
|
$
|
81,547
|
$
|
49,104
|
$
|
41,411
|
$
|
200,275
|
Gain on disposal of
mineral stream interest
|
|
|
-
|
|
-
|
|
-
|
|
(245,715)
|
Other (income)
expense
|
|
|
(3,533)
|
|
1,301
|
|
(709)
|
|
1,157
|
Earnings before
finance costs and income taxes
|
$
|
85,080
|
$
|
47,803
|
$
|
42,120
|
$
|
444,833
|
Finance
costs
|
|
|
11,871
|
|
12,877
|
|
39,123
|
|
27,351
|
Earnings before
income taxes
|
|
$
|
73,209
|
$
|
34,926
|
$
|
2,997
|
$
|
417,482
|
Income tax recovery
(expense)
|
|
|
2,751
|
|
(905)
|
|
5,618
|
|
2,805
|
Net
earnings
|
|
$
|
75,960
|
$
|
34,021
|
$
|
8,615
|
$
|
420,287
|
Basic earnings per
share
|
|
$
|
0.17
|
$
|
0.08
|
$
|
0.02
|
$
|
0.95
|
Diluted earnings per
share
|
|
$
|
0.17
|
$
|
0.08
|
$
|
0.02
|
$
|
0.95
|
Weighted average
number of shares outstanding
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
446,802
|
|
443,634
|
|
445,598
|
|
443,188
|
Diluted
|
|
|
447,849
|
|
444,120
|
|
446,467
|
|
443,727
|
Condensed Interim Consolidated Balance Sheets
|
As at
September 30
|
As at
December 31
|
(US dollars in
thousands - unaudited)
|
2019
|
2018
|
Assets
|
|
|
|
|
Current
assets
|
|
|
|
|
Cash and cash
equivalents
|
$
|
151,626
|
$
|
75,767
|
Accounts
receivable
|
|
3,613
|
|
2,186
|
Current taxes
receivable
|
|
100
|
|
210
|
Other
|
|
2,067
|
|
1,541
|
Total current
assets
|
$
|
157,406
|
$
|
79,704
|
Non-current
assets
|
|
|
|
|
Mineral stream
interests
|
$
|
5,797,752
|
$
|
6,156,839
|
Early deposit mineral
stream interests
|
|
31,741
|
|
30,241
|
Mineral royalty
interest
|
|
3,036
|
|
9,107
|
Long-term equity
investments
|
|
234,838
|
|
164,753
|
Investment in
associates
|
|
935
|
|
2,562
|
Convertible note
receivable
|
|
12,222
|
|
12,899
|
Property, plant and
equipment
|
|
7,513
|
|
3,626
|
Other
|
|
13,416
|
|
10,315
|
Total non-current
assets
|
$
|
6,101,453
|
$
|
6,390,342
|
Total
assets
|
$
|
6,258,859
|
$
|
6,470,046
|
Liabilities
|
|
|
|
|
Current
liabilities
|
|
|
|
|
Accounts payable and
accrued liabilities
|
$
|
23,491
|
$
|
19,883
|
Current taxes
payable
|
|
-
|
|
3,361
|
Current portion of
performance share units
|
|
9,513
|
|
5,578
|
Current portion of
lease liabilities
|
|
657
|
|
-
|
Other
|
|
16
|
|
19
|
Total current
liabilities
|
$
|
33,677
|
$
|
28,841
|
Non-current
liabilities
|
|
|
|
|
Bank debt
|
$
|
1,013,500
|
$
|
1,264,000
|
Lease
liabilities
|
|
3,632
|
|
-
|
Deferred income
taxes
|
|
134
|
|
111
|
Performance share
units
|
|
6,472
|
|
5,178
|
Total non-current
liabilities
|
$
|
1,023,738
|
$
|
1,269,289
|
Total
liabilities
|
$
|
1,057,415
|
$
|
1,298,130
|
Shareholders'
equity
|
|
|
|
|
Issued
capital
|
$
|
3,583,654
|
$
|
3,516,437
|
Reserves
|
|
87,758
|
|
7,893
|
Retained
earnings
|
|
1,530,032
|
|
1,647,586
|
Total shareholders'
equity
|
$
|
5,201,444
|
$
|
5,171,916
|
Total liabilities and
shareholders' equity
|
$
|
6,258,859
|
$
|
6,470,046
|
Condensed Interim Consolidated Statements of Cash
Flows
|
|
Three Months
Ended
September 30
|
Nine Months Ended
September 30
|
(US dollars in
thousands - unaudited)
|
|
2019
|
2018
|
2019
|
2018
|
Operating
activities
|
|
|
|
|
|
|
|
|
|
Net
earnings
|
|
$
|
75,960
|
$
|
34,021
|
$
|
8,615
|
$
|
420,287
|
Adjustments
for
|
|
|
|
|
|
|
|
|
|
Depreciation and
depletion
|
|
|
63,845
|
|
64,974
|
|
194,590
|
|
185,206
|
Gain on disposal of
mineral stream interest
|
|
|
-
|
|
-
|
|
-
|
|
(245,715)
|
Gain on disposal of
mineral royalty interest
|
|
|
(2,929)
|
|
-
|
|
(2,929)
|
|
-
|
Impairment
charges
|
|
|
-
|
|
-
|
|
167,561
|
|
-
|
Interest
expense
|
|
|
10,885
|
|
11,806
|
|
36,473
|
|
23,055
|
Equity settled stock
based compensation
|
|
|
1,447
|
|
1,402
|
|
4,259
|
|
4,045
|
Performance share
units
|
|
|
4,803
|
|
(85)
|
|
5,004
|
|
3,415
|
Income tax expense
(recovery)
|
|
|
(2,751)
|
|
905
|
|
(5,618)
|
|
(2,805)
|
(Gain) loss on fair
value adjustment of share purchase
|
|
|
|
|
|
|
|
|
|
warrants
held
|
|
|
(2)
|
|
12
|
|
5
|
|
123
|
Share in losses of
associate
|
|
|
49
|
|
172
|
|
111
|
|
373
|
Fair value (gain) loss
on convertible note receivable
|
|
|
(386)
|
|
927
|
|
677
|
|
2,217
|
Investment income
recognized in net (loss) earnings
|
|
|
(205)
|
|
(109)
|
|
(745)
|
|
(611)
|
Other
|
|
|
(540)
|
|
(1,322)
|
|
130
|
|
(809)
|
Change in non-cash
working capital
|
|
|
2,093
|
|
3,701
|
|
(421)
|
|
(1,142)
|
Cash generated from
operations before income taxes and interest
|
|
$
|
152,269
|
$
|
116,404
|
$
|
407,712
|
$
|
387,639
|
Income taxes
paid
|
|
|
(1,751)
|
|
(742)
|
|
(5,334)
|
|
(844)
|
Interest
paid
|
|
|
(8,404)
|
|
(7,395)
|
|
(33,311)
|
|
(18,450)
|
Interest
received
|
|
|
186
|
|
146
|
|
686
|
|
608
|
Cash generated from
operating activities
|
|
$
|
142,300
|
$
|
108,413
|
$
|
369,753
|
$
|
368,953
|
Financing
activities
|
|
|
|
|
|
|
|
|
|
Bank debt
repaid
|
|
$
|
(82,000)
|
$
|
(28,000)
|
$
|
(250,500)
|
$
|
(214,000)
|
Bank debt
drawn
|
|
|
-
|
|
452,000
|
|
-
|
|
824,500
|
Credit facility
extension fees
|
|
|
(3)
|
|
-
|
|
(1,103)
|
|
(1,205)
|
Share purchase
options exercised
|
|
|
12,662
|
|
-
|
|
33,055
|
|
1,027
|
Lease
payments
|
|
|
(156)
|
|
-
|
|
(479)
|
|
-
|
Dividends
paid
|
|
|
(32,609)
|
|
(33,873)
|
|
(96,124)
|
|
(98,462)
|
Cash (used for)
generated from financing activities
|
|
$
|
(102,106)
|
$
|
390,127
|
$
|
(315,151)
|
$
|
511,860
|
Investing
activities
|
|
|
|
|
|
|
|
|
|
Mineral stream
interests
|
|
$
|
(9)
|
$
|
(506,171)
|
$
|
(183)
|
$
|
(1,116,406)
|
Early deposit mineral
stream interests
|
|
|
(750)
|
|
(4,254)
|
|
(1,500)
|
|
(8,712)
|
Proceeds on disposal
of mineral royalty interest
|
|
|
9,000
|
|
-
|
|
9,000
|
|
-
|
Net proceeds on
disposal of mineral stream interests
|
|
|
-
|
|
(4,000)
|
|
-
|
|
226,000
|
Acquisition of
long-term investments
|
|
|
-
|
|
(4,847)
|
|
(909)
|
|
(5,863)
|
Investment in
associate
|
|
|
-
|
|
-
|
|
(132)
|
|
-
|
Proceeds on disposal
of long-term investments
|
|
|
16,307
|
|
47,734
|
|
16,307
|
|
47,734
|
Dividend income
received
|
|
|
20
|
|
20
|
|
59
|
|
60
|
Other
|
|
|
(313)
|
|
(664)
|
|
(1,520)
|
|
(3,089)
|
Cash used for
investing activities
|
|
$
|
24,255
|
$
|
(472,182)
|
$
|
21,122
|
$
|
(860,276)
|
Effect of exchange
rate changes on cash and cash equivalents
|
|
$
|
(5)
|
$
|
354
|
$
|
135
|
$
|
315
|
Increase in cash and
cash equivalents
|
|
$
|
64,444
|
$
|
26,712
|
$
|
75,859
|
$
|
20,852
|
Cash and cash
equivalents, beginning of period
|
|
87,182
|
|
92,661
|
|
75,767
|
|
98,521
|
Cash and cash
equivalents, end of period
|
|
$
|
151,626
|
$
|
119,373
|
$
|
151,626
|
$
|
119,373
|
Summary of Ounces Produced
|
Q3
2019
|
Q2
2019
|
Q1
2019
|
Q4
2018
|
Q3
2018
|
Q2
2018
|
Q1
2018
|
Q4
2017
|
Gold ounces produced
²
|
|
|
|
|
|
|
|
|
|
Salobo
|
73,615
|
67,056
|
60,846
|
76,995
|
72,423
|
67,466
|
64,896
|
80,341
|
|
Sudbury
3
|
6,633
|
9,029
|
11,374
|
6,646
|
6,510
|
6,476
|
3,511
|
8,568
|
|
Constancia
|
5,172
|
4,533
|
4,826
|
4,266
|
3,634
|
3,281
|
3,315
|
2,947
|
|
San Dimas
4
|
11,239
|
11,496
|
10,290
|
10,092
|
10,642
|
5,726
|
-
|
-
|
|
Stillwater
|
3,238
|
3,675
|
3,137
|
3,472
|
6,376
|
-
|
-
|
-
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
Minto
5
|
-
|
-
|
-
|
1,441
|
2,546
|
2,554
|
2,707
|
3,328
|
|
|
777
|
4,278
|
4,788
|
4,445
|
4,248
|
4,124
|
4,982
|
5,645
|
5,478
|
|
Total
Other
|
4,278
|
4,788
|
4,445
|
5,689
|
6,670
|
7,536
|
8,352
|
8,806
|
Total gold ounces
produced
|
104,175
|
100,577
|
94,918
|
107,160
|
106,255
|
90,485
|
80,074
|
100,662
|
Silver ounces
produced 2
|
|
|
|
|
|
|
|
|
|
San Dimas
4
|
-
|
-
|
-
|
-
|
-
|
607
|
1,606
|
1,324
|
|
Peñasquito
|
2,031
|
702
|
1,595
|
1,455
|
1,050
|
1,267
|
1,450
|
1,561
|
|
Antamina
|
1,224
|
1,343
|
1,180
|
1,225
|
1,406
|
1,394
|
1,304
|
1,434
|
|
Constancia
|
686
|
552
|
635
|
695
|
682
|
552
|
598
|
621
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
Los Filos
|
40
|
37
|
38
|
29
|
21
|
33
|
29
|
48
|
|
|
Zinkgruvan
|
630
|
631
|
479
|
608
|
530
|
453
|
565
|
619
|
|
|
Yauliyacu
|
620
|
627
|
528
|
233
|
597
|
719
|
550
|
335
|
|
|
Stratoni
|
131
|
172
|
143
|
149
|
165
|
211
|
137
|
131
|
|
|
Minto
5
|
-
|
-
|
-
|
8
|
25
|
30
|
35
|
30
|
|
|
Neves-Corvo
|
431
|
392
|
498
|
509
|
458
|
421
|
405
|
305
|
|
|
Aljustrel
|
240
|
322
|
470
|
475
|
514
|
138
|
-
|
-
|
|
|
Lagunas Norte
6
|
-
|
-
|
-
|
-
|
-
|
-
|
217
|
253
|
|
|
Pierina
6
|
-
|
-
|
-
|
-
|
-
|
-
|
107
|
111
|
|
|
Veladero
6
|
-
|
-
|
-
|
-
|
-
|
-
|
265
|
211
|
|
|
777
|
62
|
93
|
95
|
113
|
136
|
152
|
146
|
146
|
|
Total
Other
|
2,154
|
2,274
|
2,251
|
2,124
|
2,446
|
2,157
|
2,456
|
2,189
|
Total silver ounces
produced
|
6,095
|
4,871
|
5,661
|
5,499
|
5,584
|
5,977
|
7,414
|
7,129
|
Palladium ounces
produced ²
|
|
|
|
|
|
|
|
|
|
Stillwater
|
5,471
|
5,736
|
4,729
|
5,869
|
8,817
|
-
|
-
|
-
|
GEOs produced
7
|
184,868
|
166,483
|
169,506
|
180,936
|
184,139
|
164,043
|
171,328
|
188,408
|
SEOs produced
7
|
15,020
|
13,527
|
13,772
|
14,701
|
14,961
|
13,329
|
13,920
|
15,308
|
Average payable rate
2
|
|
|
|
|
|
|
|
|
|
Gold
|
95.1%
|
95.3%
|
95.6%
|
95.5%
|
95.4%
|
94.9%
|
94.7%
|
95.0%
|
|
Silver
|
85.2%
|
83.4%
|
83.0%
|
83.1%
|
83.5%
|
86.8%
|
89.7%
|
90.1%
|
|
Palladium
|
83.5%
|
87.6%
|
98.5%
|
96.4%
|
94.6%
|
n.a.
|
n.a.
|
n.a.
|
|
|
1)
|
All figures in
thousands except gold and palladium ounces produced
|
2)
|
Ounces produced
represent the quantity of gold, silver 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 mineral stream
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)
|
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
|
4)
|
Pursuant to the San
Dimas SPA with Primero, the Company acquired 100% of the payable
silver produced at San Dimas up to 6 million ounces annually, and
50%
of any excess for the life of the mine. The San Dimas SPA was
terminated on May 10, 2018 and concurrently the Company entered
into the new San Dimas PMPA
|
5)
|
The Minto mine was
placed into care and maintenance in October 2018
|
6)
|
In accordance with
the Pascua-Lama precious metal purchase agreement, all deliveries
from Lagunas Norte, Pierina and Veladero ceased effective March 31,
2018
|
7)
|
GEOs and SEOs, which
are provided to assist the reader, are based on the following
commodity price assumptions: $1,300 per ounce gold; $16.00 per
ounce silver;
and $1,350 per ounce palladium, consistent with those used in
estimating the Company's production guidance for 2019. Previously,
GEOs and SEOs were
calculated by referencing the average LBMA price during the period.
This revised methodology of calculating GEOs and SEOs has been
applied to all periods
presented
|
Summary of Ounces Sold
|
Q3
2019
|
Q2
2019
|
Q1 2019
|
Q4 2018
|
Q3 2018
|
Q2 2018
|
Q1 2018
|
Q4 2017
|
Gold ounces
sold
|
|
|
|
|
|
|
|
|
|
Salobo
|
63,064
|
57,715
|
84,160
|
75,351
|
65,139
|
70,734
|
54,645
|
71,683
|
|
Sudbury
2
|
7,600
|
8,309
|
4,061
|
4,864
|
2,560
|
4,400
|
5,186
|
12,059
|
|
Constancia
|
4,742
|
4,409
|
5,512
|
3,645
|
2,980
|
2,172
|
3,247
|
1,965
|
|
San Dimas
3
|
11,374
|
10,284
|
11,510
|
8,453
|
9,771
|
3,738
|
-
|
-
|
|
Stillwater
|
3,314
|
3,301
|
2,856
|
3,473
|
2,075
|
-
|
-
|
-
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
Minto
4
|
-
|
765
|
3,307
|
2,674
|
796
|
2,284
|
1,763
|
2,020
|
|
|
777
|
4,672
|
5,294
|
3,614
|
4,353
|
5,921
|
3,812
|
5,132
|
6,568
|
|
Total
Other
|
4,672
|
6,059
|
6,921
|
7,027
|
6,717
|
6,096
|
6,895
|
8,588
|
Total gold ounces
sold
|
94,766
|
90,077
|
115,020
|
102,813
|
89,242
|
87,140
|
69,973
|
94,295
|
Silver ounces
sold
|
|
|
|
|
|
|
|
|
|
San Dimas
3
|
-
|
-
|
-
|
-
|
-
|
1,070
|
1,372
|
1,299
|
|
Peñasquito
|
1,233
|
912
|
1,164
|
901
|
1,241
|
1,547
|
1,227
|
1,537
|
|
Antamina
|
1,059
|
1,186
|
1,255
|
1,300
|
1,333
|
1,422
|
1,413
|
1,769
|
|
Constancia
|
521
|
478
|
735
|
629
|
567
|
410
|
574
|
491
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
Los Filos
|
44
|
26
|
38
|
15
|
27
|
35
|
52
|
16
|
|
|
Zinkgruvan
|
459
|
337
|
232
|
543
|
326
|
297
|
391
|
597
|
|
|
Yauliyacu
|
574
|
542
|
15
|
317
|
697
|
521
|
360
|
642
|
|
|
Stratoni
|
126
|
240
|
80
|
78
|
125
|
171
|
148
|
110
|
|
|
Minto
4
|
-
|
2
|
30
|
22
|
-
|
28
|
(1)
|
34
|
|
|
Neves-Corvo
|
243
|
194
|
265
|
240
|
234
|
178
|
169
|
119
|
|
|
Aljustrel
|
139
|
216
|
381
|
226
|
302
|
-
|
-
|
-
|
|
|
Lagunas Norte
5
|
-
|
-
|
-
|
-
|
1
|
65
|
236
|
237
|
|
|
Pierina
5
|
-
|
-
|
-
|
-
|
-
|
54
|
88
|
106
|
|
|
Veladero
5
|
-
|
-
|
-
|
-
|
2
|
104
|
161
|
211
|
|
|
777
|
86
|
108
|
99
|
129
|
163
|
70
|
153
|
124
|
|
Total
Other
|
1,671
|
1,665
|
1,140
|
1,570
|
1,877
|
1,523
|
1,757
|
2,196
|
Total silver ounces
sold
|
4,484
|
4,241
|
4,294
|
4,400
|
5,018
|
5,972
|
6,343
|
7,292
|
Palladium ounces
sold
|
|
|
|
|
|
|
|
|
|
Stillwater
|
4,907
|
5,273
|
5,189
|
5,049
|
3,668
|
-
|
-
|
-
|
GEOs sold
6
|
155,049
|
147,755
|
173,255
|
162,205
|
154,815
|
160,627
|
148,055
|
184,061
|
SEOs sold
6
|
12,598
|
12,005
|
14,077
|
13,179
|
12,579
|
13,051
|
12,029
|
14,955
|
Cumulative payable
gold ounces PBND 7
|
85,468
|
81,161
|
75,236
|
99,474
|
99,987
|
88,547
|
89,839
|
84,010
|
Cumulative payable
silver ounces PBND 7
|
4,165
|
3,418
|
3,591
|
3,184
|
3,015
|
3,375
|
4,126
|
3,828
|
Cumulative payable
palladium ounces PBND 7
|
4,163
|
4,504
|
4,754
|
5,282
|
4,671
|
-
|
-
|
-
|
|
|
1)
|
All figures in
thousands except gold and palladium ounces sold.
|
2)
|
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.
|
3)
|
Pursuant to the San
Dimas SPA with Primero, the Company acquired 100% of the payable
silver produced at San Dimas up to 6 million ounces annually, and
50%
of any excess for the life of the mine. The San Dimas SPA was
terminated on May 10, 2018 and concurrently the Company entered
into the new San Dimas PMPA.
|
4)
|
The Minto mine was
placed into care and maintenance in October 2018.
|
5)
|
In accordance with
the Pascua-Lama precious metal purchase agreement, all deliveries
from Lagunas Norte, Pierina and Veladero ceased effective March 31,
2018.
|
6)
|
GEOs and SEOs, which
are provided to assist the reader, are based on the following
commodity price assumptions: $1,300 per ounce gold; $16.00 per
ounce silver;|
and $1,350 per ounce palladium, consistent with those used in
estimating the Company's production guidance for 2019. Previously,
GEOs and SEOs were
calculated by referencing the average LBMA price during the period.
This revised methodology of calculating GEOs and SEOs has been
applied to all periods
presented.
|
7)
|
Payable gold, silver
and palladium ounces produced but not yet delivered ("PBND") are
based on management estimates. These figures may be updated in
future
periods as additional information is received.
|
Results of Operations
The operating results of the Company's reportable operating
segments are summarized in the tables and commentary below.
Three Months Ended
September 30, 2019
|
|
Ounces
Produced²
|
Ounces
Sold
|
Average
Realized
Price
($'s Per
Ounce)
|
Average
Cash Cost
($'s Per
Ounce)3
|
Average
Depletion
($'s Per
Ounce)
|
Sales
|
Net
Earnings
|
Cash Flow
From
Operations
|
Total
Assets
|
Gold
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salobo
|
73,615
|
63,064
|
$
|
1,471
|
$
|
404
|
$
|
383
|
$
|
92,796
|
$
|
43,155
|
$
|
68,949
|
$
|
2,627,534
|
Sudbury
4
|
6,633
|
7,600
|
|
1,470
|
|
400
|
|
819
|
|
11,176
|
|
1,908
|
|
7,828
|
|
350,101
|
Constancia
|
5,172
|
4,742
|
|
1,471
|
|
404
|
|
361
|
|
6,978
|
|
3,351
|
|
5,234
|
|
112,252
|
San Dimas
|
11,239
|
11,374
|
|
1,471
|
|
606
|
|
310
|
|
16,737
|
|
6,323
|
|
9,571
|
|
197,927
|
Stillwater
|
3,238
|
3,314
|
|
1,471
|
|
263
|
|
519
|
|
4,876
|
|
2,285
|
|
4,005
|
|
231,512
|
Other
5
|
4,278
|
4,672
|
|
1,470
|
|
419
|
|
462
|
|
6,870
|
|
2,754
|
|
4,912
|
|
15,089
|
|
104,175
|
94,766
|
$
|
1,471
|
$
|
424
|
$
|
417
|
$
|
139,433
|
$
|
59,776
|
$
|
100,499
|
$
|
3,534,415
|
Silver
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Peñasquito
|
2,031
|
1,233
|
$
|
16.81
|
$
|
4.21
|
$
|
3.06
|
$
|
20,721
|
$
|
11,755
|
$
|
15,531
|
$
|
378,587
|
Antamina
|
1,224
|
1,059
|
|
16.80
|
|
3.46
|
|
8.73
|
|
17,792
|
|
4,885
|
|
14,420
|
|
679,521
|
Constancia
|
686
|
521
|
|
16.81
|
|
5.95
|
|
7.50
|
|
8,764
|
|
1,752
|
|
6,953
|
|
233,225
|
Other
6
|
2,154
|
1,671
|
|
17.57
|
|
6.70
|
|
2.79
|
|
29,354
|
|
13,510
|
|
16,895
|
|
492,029
|
|
6,095
|
4,484
|
$
|
17.09
|
$
|
5.16
|
$
|
4.81
|
$
|
76,631
|
$
|
31,902
|
$
|
53,799
|
$
|
1,783,362
|
Palladium
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stillwater
|
5,471
|
4,907
|
$
|
1,535
|
$
|
271
|
$
|
470
|
$
|
7,531
|
$
|
3,897
|
$
|
6,203
|
$
|
252,465
|
Cobalt
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voisey's
Bay
|
-
|
-
|
$
|
n.a.
|
$
|
n.a.
|
$
|
n.a.
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
227,510
|
Operating
results
|
|
|
|
|
|
|
|
$
|
223,595
|
$
|
95,575
|
$
|
160,501
|
$
|
5,797,752
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and
administrative
|
|
|
|
|
|
|
|
|
|
$
|
(14,028)
|
$
|
(6,823)
|
|
|
Finance
costs
|
|
|
|
|
|
|
|
|
|
|
|
(11,871)
|
|
(9,122)
|
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
3,533
|
|
(505)
|
|
|
Income tax
recovery
|
|
|
|
|
|
|
|
|
|
|
2,751
|
|
(1,751)
|
|
|
Total
Other
|
|
|
|
|
|
|
|
|
$
|
(19,615)
|
$
|
(18,201)
|
$
|
461,107
|
|
|
|
|
|
|
|
|
|
|
|
$
|
75,960
|
$
|
142,300
|
$
|
6,258,859
|
|
|
1)
|
All figures in
thousands except gold and palladium ounces produced and sold and
per ounce amounts.
|
2)
|
Ounces produced
represent the quantity of gold, silver 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 mineral stream 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)
|
Please refer to page
3 of this press release for more information.
|
5)
|
Comprised of the
operating Coleman, Copper Cliff, Garson, Creighton and Totten gold
interests as well as the non-operating Stobie and Victor gold
interests.
|
6)
|
Comprised of the
operating 777 gold interest in addition to the non-operating
Rosemont and Minto gold interests..
|
7)
|
Comprised of the
operating Los Filos, Zinkgruvan, Yauliyacu, Stratoni, Neves-Corvo,
Aljustrel and 777 silver interests as well as the non-operating
Keno Hill, Minto,
Loma de La Plata, Pascua-Lama and Rosemont silver
interests.
|
On a gold equivalent and silver equivalent basis, results for
the Company for the three months ended September 30, 2019 were as follows:
Three Months Ended
September 30, 2019
|
|
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)
|
Gold equivalent basis
5
|
184,868
|
155,049
|
$
1,442
|
$
417
|
$
1,025
|
$
409
|
$
616
|
Silver equivalent
basis 5
|
15,020
|
12,598
|
$
17.75
|
$
5.13
|
$
12.62
|
$
5.03
|
$
7.59
|
|
|
1)
|
Ounces produced
represent the quantity of gold, silver 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 mineral stream 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.
|
5)
|
GEOs and SEOs, which
are provided to assist the reader, are based on the following
commodity price assumptions: $1,300 per ounce gold; $16.00 per
ounce silver; and $1,350 per ounce palladium, consistent with those
used in estimating the Company's production guidance for 2019.
Previously, GEOs and SEOs were calculated by referencing the
average LBMA price during the period. This revised methodology of
calculating GEOs and SEOs has been applied to all periods
presented
|
|
|
Three Months Ended
September 30, 2018
|
|
Ounces
Produced²
|
Ounces
Sold
|
Average
Realized
Price
($'s Per
Ounce)
|
Average
Cash Cost
($'s Per
Ounce)3
|
Average
Depletion
($'s Per
Ounce)
|
Sales
|
Net
Earnings
|
Cash Flow
From
Operations
|
Total
Assets
|
Gold
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salobo
|
72,423
|
65,139
|
$
|
1,210
|
$
|
400
|
$
|
386
|
$
|
78,815
|
$
|
27,604
|
$
|
52,760
|
$
|
2,735,159
|
Sudbury
4
|
6,510
|
2,560
|
|
1,218
|
|
400
|
|
795
|
|
3,117
|
|
58
|
|
1,948
|
|
370,331
|
Constancia
|
3,634
|
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
5
|
6,670
|
6,717
|
|
1,225
|
|
402
|
|
480
|
|
8,230
|
|
2,306
|
|
5,390
|
|
23,728
|
|
106,255
|
89,242
|
$
|
1,210
|
$
|
418
|
$
|
426
|
$
|
108,012
|
$
|
32,672
|
$
|
70,442
|
$
|
3,699,076
|
Silver
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Peñasquito
|
1,050
|
1,241
|
$
|
14.94
|
$
|
4.17
|
$
|
2.96
|
$
|
18,544
|
$
|
9,702
|
$
|
13,369
|
$
|
391,385
|
Antamina
|
1,406
|
1,333
|
|
14.98
|
|
2.98
|
|
8.70
|
|
19,956
|
|
4,398
|
|
16,235
|
|
721,388
|
Constancia
|
682
|
567
|
|
15.10
|
|
5.90
|
|
7.14
|
|
8,561
|
|
1,166
|
|
5,216
|
|
250,724
|
Other
6
|
2,446
|
1,877
|
|
14.48
|
|
6.82
|
|
3.00
|
|
27,194
|
|
8,757
|
|
15,191
|
|
506,353
|
|
5,584
|
5,018
|
$
|
14.80
|
$
|
5.04
|
$
|
4.97
|
$
|
74,255
|
$
|
24,023
|
$
|
50,011
|
$
|
1,869,850
|
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
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and
administrative
|
|
|
|
|
|
|
|
|
|
$
|
(8,779)
|
$
|
(5,464)
|
|
|
Finance
costs
|
|
|
|
|
|
|
|
|
|
|
|
(12,877)
|
|
(8,351)
|
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
(1,301)
|
|
(365)
|
|
|
Income tax
expense
|
|
|
|
|
|
|
|
|
|
|
(905)
|
|
(742)
|
|
|
Total
other
|
|
|
|
|
|
|
|
|
$
|
(23,862)
|
$
|
(14,922)
|
$
|
361,890
|
|
|
|
|
|
|
|
|
|
|
|
$
|
34,021
|
$
|
108,413
|
$
|
6,586,018
|
|
|
1)
|
All figures in
thousands except gold ounces produced and sold and per ounce
amounts.
|
2)
|
Ounces produced
represent the quantity of gold and silver 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 mineral stream 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 Coleman, Copper Cliff, Garson, Creighton and Totten gold
interests, the non-operating Stobie and Victor gold
interests.
|
5)
|
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.
|
6)
|
Comprised of the
operating Los Filos, Zinkgruvan, Yauliyacu, Stratoni, Minto,
Neves-Corvo and 777 silver interests as well as the non-operating
Keno Hill, Aljustrel,
Loma de La Plata, Pascua-Lama and Rosemont silver interests. The
Minto mine was placed into care and maintenance in October
2018.
|
On a gold equivalent and silver 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)
|
Gold equivalent basis
5
|
184,139
|
154,815
|
$
1,200
|
$
408
|
$
792
|
$
418
|
$
374
|
Silver equivalent
basis 5
|
14,961
|
12,579
|
$
14.77
|
$
5.02
|
$
9.75
|
$
5.14
|
$
4.61
|
|
|
1)
|
Ounces produced
represent the quantity of gold and silver 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 mineral stream 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.
|
5)
|
GEOs and SEOs, which
are provided to assist the reader, are based on the following
commodity price assumptions: $1,300 per ounce gold; $16.00 per
ounce silver; and $1,350 per ounce palladium, consistent with those
used in estimating the Company's production guidance for 2019.
Previously, GEOs and SEOs were calculated by referencing the
average LBMA price during the period. This revised methodology of
calculating GEOs and SEOs has been applied to all periods
presented
|
Non-IFRS Measures
Wheaton 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 gold, silver 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)
|
|
2019
|
|
2018
|
Net
earnings
|
|
$
|
75,960
|
|
$
|
34,021
|
Add back
(deduct):
|
|
|
|
|
|
|
Share in losses of
associate
|
|
|
49
|
|
|
172
|
(Gain) loss on fair
value adjustment of share purchase
|
|
|
|
|
|
|
warrants
held
|
|
|
(2)
|
|
|
12
|
(Gain) loss on fair
value adjustment of Kutcho
|
|
|
|
|
|
|
Convertible
Note
|
|
|
(386)
|
|
|
927
|
Gain on disposal of
mineral royalty interest
|
|
|
(2,929)
|
|
|
-
|
Adjusted net
earnings
|
|
$
|
72,692
|
|
$
|
35,132
|
Divided
by:
|
|
|
|
|
|
|
Basic weighted average
number of shares outstanding
|
|
|
446,802
|
|
|
443,634
|
Diluted weighted
average number of shares outstanding
|
|
|
447,849
|
|
|
444,120
|
Equals:
|
|
|
|
|
|
|
Adjusted earnings per
share - basic
|
|
$
|
0.16
|
|
$
|
0.08
|
Adjusted earnings per
share - diluted
|
|
$
|
0.16
|
|
$
|
0.08
|
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)
|
|
2019
|
|
2018
|
Cash generated by
operating activities
|
|
$
|
142,300
|
|
$
|
108,413
|
Divided
by:
|
|
|
|
|
|
|
Basic weighted average
number of shares outstanding
|
|
|
446,802
|
|
|
443,634
|
Diluted weighted
average number of shares outstanding
|
|
|
447,849
|
|
|
444,120
|
Equals:
|
|
|
|
|
|
|
Operating cash flow
per share - basic
|
|
$
|
0.32
|
|
$
|
0.24
|
Operating cash flow
per share - diluted
|
|
$
|
0.32
|
|
$
|
0.24
|
iii. Average cash cost of gold, silver 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 gold, silver 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)
|
|
2019
|
|
2018
|
Cost of
sales
|
|
$
|
128,020
|
|
$
|
127,886
|
Less: depletion
|
|
|
(63,396)
|
|
|
(64,684)
|
Cash cost of
sales
|
|
$
|
64,624
|
|
$
|
63,202
|
Cash cost of sales is
comprised of:
|
|
|
|
|
|
|
Total cash cost of
gold sold
|
|
$
|
40,154
|
|
$
|
37,287
|
Total cash cost of
silver sold
|
|
|
23,142
|
|
|
25,295
|
Total cash cost of
palladium sold
|
|
|
1,328
|
|
|
620
|
Total cash cost of
sales
|
|
$
|
64,624
|
|
$
|
63,202
|
Divided
by:
|
|
|
|
|
|
|
Total gold ounces
sold
|
|
|
94,766
|
|
|
89,242
|
Total silver ounces
sold
|
|
|
4,484
|
|
|
5,018
|
Total palladium ounces
sold
|
|
|
4,907
|
|
|
3,668
|
Equals:
|
|
|
|
|
|
|
Average cash cost of
gold (per ounce)
|
|
$
|
424
|
|
$
|
418
|
Average cash cost of
silver (per ounce)
|
|
$
|
5.16
|
|
$
|
5.04
|
Average cash cost of
palladium (per ounce)
|
|
$
|
271
|
|
$
|
169
|
iv. Cash operating margin is calculated by subtracting the
average cash cost of gold, silver and palladium on a per ounce
basis from the average realized selling price of gold, silver 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)
|
|
2019
|
|
2018
|
Total
sales:
|
|
|
|
|
|
|
Gold
|
|
$
|
139,433
|
|
$
|
108,012
|
Silver
|
|
$
|
76,631
|
|
$
|
74,255
|
Palladium
|
|
$
|
7,531
|
|
$
|
3,502
|
Divided
by:
|
|
|
|
|
|
|
Total gold ounces
sold
|
|
|
94,766
|
|
|
89,242
|
Total silver ounces
sold
|
|
|
4,484
|
|
|
5,018
|
Total palladium ounces
sold
|
|
|
4,907
|
|
|
3,668
|
Equals:
|
|
|
|
|
|
|
Average realized price
of gold (per ounce)
|
|
$
|
1,471
|
|
$
|
1,210
|
Average realized price
of silver (per ounce)
|
|
$
|
17.09
|
|
$
|
14.80
|
Average realized price
of palladium (per ounce)
|
|
$
|
1,535
|
|
$
|
955
|
Less:
|
|
|
|
|
|
|
Average cash cost of
gold 1 (per ounce)
|
|
$
|
(424)
|
|
$
|
(418)
|
Average cash cost of
silver 1 (per ounce)
|
|
$
|
(5.16)
|
|
$
|
(5.04)
|
Average cash cost of
palladium 1 (per ounce)
|
|
$
|
(271)
|
|
$
|
(169)
|
Equals:
|
|
|
|
|
|
|
Cash operating margin
per gold ounce sold
|
|
$
|
1,047
|
|
$
|
792
|
As a percentage of
realized price of gold
|
|
|
71%
|
|
|
65%
|
Cash operating margin
per silver ounce sold
|
|
$
|
11.93
|
|
$
|
9.76
|
As a percentage of
realized price of silver
|
|
|
70%
|
|
|
66%
|
Cash operating margin
per palladium ounce sold
|
|
$
|
1,264
|
|
$
|
786
|
As a percentage of
realized price of palladium
|
|
|
82%
|
|
|
82%
|
1) Please refer to
non-IFRS measure (iii), 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's 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;
- the commencement and timing of delivery of cobalt by Vale under
the Voisey's Bay cobalt purchase agreement;
- the status of necessary permits for, and the commencement of
production at, the Rosemont
project;
- the effect of the Servicio de Administraciόn Tributaria ("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 repayment of the Kutcho convertible note;
- the development and commencement of mining of the Pampacancha
deposit at the Constancia
mine;
- proposed improvements at mining operations;
- 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;
- projected changes to Wheaton's production mix;
- anticipated increases in total throughput;
- the estimated future production (including increases in
production, estimated grades and recoveries);
- 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
2019 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 assessment of the impact of the CRA Settlement
for years subsequent to 2010;
- possible audits for taxation years subsequent to 2015;
- the Company's intention to file future tax returns in a manner
consistent with the CRA Settlement; 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 is unable to produce the estimated future production in
connection with the Salobo Expansion;
- Wheaton is unable to sell its cobalt production delivered under
the Voisey's Bay cobalt purchase agreement at acceptable prices or
at all or there is a 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;
- Hudbay is unable to obtain, maintain and defend all necessary
permits and decisions needed for the Rosemont project;
- First Majestic 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;
- Hudbay will not commence development and /or mining of the
Pampacancha deposit at the Constancia mine;
- proposed improvements at mining operations will not be
achieved;
- that each party does not satisfy its obligations in accordance
with the terms of the precious metal purchase agreements;
- risks related to the satisfaction of each party's obligations
in accordance with the terms of the Company's precious metal
purchase agreements, including the ability of the companies with
which the Company has precious metal purchase agreements to perform
their obligations under those precious metal purchase agreements in
the event of a material adverse effect on the results of
operations, financial condition, cash flows or business of such
companies, 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;
- any reassessment of the Company's tax filings and the
continuation or timing of any such process being 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;
- risks in assessing the impact of the CRA Settlement for years
subsequent to 2010, including whether there will be any material
change in the Company's facts or change in law or
jurisprudence;
- credit and liquidity risks;
- indebtedness and guarantees risks;
- mine operator concentration risks;
- hedging risk;
- competition in the streaming industry;
- risks related to Wheaton's acquisition strategy;
- risks related to the market price of the common shares of
Wheaton (the "Common Shares");
- equity price risks related to Wheaton's holding of long‑term
investments in other 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 activist shareholders;
- risks relating to reputational damage;
- 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 fluctuations in commodity prices of metals
produced from the mining operations other than precious metals or
cobalt;
- 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 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 (including increases in production,
estimated grades and recoveries);
- uncertainties related to title and indigenous rights with
respect to the mineral properties of the mining operations;
- 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, 2018 and
Form 6-K filed March 20, 2019 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 produce the estimated future production as a
result of the Salobo Expansion;
- Wheaton is able to sell cobalt production delivered under the
Voisey's Bay cobalt purchase agreement at acceptable prices;
- Hudbay is able to obtain, maintain and defend all necessary
permits and decisions needed for the Rosemont project;
- that Kutcho will make all required payments and not be in
default under the Kutcho Convertible Note;
- that Wheaton will be able to terminate the Pascua-Lama precious
metal purchase agreement in accordance with its terms;
- Hudbay will commence development and /or mining of the
Pampacancha deposit at the Constancia mine or will deliver a delay
payment in accordance with the precious metals purchase
agreement;
- proposed improvements at mining operations will be
achieved;
- 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 audits
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 has filed its tax returns and paid applicable
taxes in compliance with Canadian tax law;
- 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 Wheaton's assessment of the impact of the CRA Settlement
for years subsequent to 2010 are accurate, including the Company's
assessment that there will be no material change in the Company's
facts or change in law or jurisprudence for years subsequent to
2010;
- 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, 2018 and other continuous disclosure
documents filed by Wheaton since January 1,
2019, 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.