TSX: WPM
NYSE: WPM
LSE: WPM
THIRD QUARTER AND NINE MONTHS FINANCIAL
RESULTS
VANCOUVER, BC, Nov. 9, 2020 /CNW/ - Designated News Release -
"Wheaton's high-quality portfolio of assets generated nearly
$230 million in operating cash flow
in the third quarter alone, resulting in a record of over
$555 million in the first nine months
of 2020. Given Wheaton's unique dividend policy, the strong cash
flow in the quarter resulted in a 20% increase in our dividend,"
said Randy Smallwood, President and
Chief Executive Officer of Wheaton Precious Metals. "In addition,
production in the third quarter rebounded strongly following
temporary suspensions of some operations as a result of the
COVID-19 pandemic in the prior quarter, and the Company is on track
to meet the higher end of our guidance."
"Wheaton continues to focus on delivering value to all of its
stakeholders. To our partners and our communities, we have now
deployed approximately $3 million of
our COVID-19 response fund to support various programs globally. To
our current shareholders, we substantially increased our dividend
and continued to advance numerous new streaming opportunities that
would add accretive growth to Wheaton's portfolio. And finally, to
those investors that do not own our shares yet, we hope that our
recently announced listing on the London Stock Exchange provides
another point of entry and makes it easier to invest in
Wheaton."
Third Quarter Highlights:
- Over $228 million in operating
cash flow in the quarter, an increase of 60% relative to Q3
2019.
- Net debt1 reduced by $231
million resulting in a net debt position of $278 million.
- Attributable gold equivalent2 production was 171,900
ounces in the quarter with the slight reduction relative to Q3 2019
primarily due to the mining of lower grade material at Salobo.
- Declared quarterly dividend1 of $0.12 per common share, a 20% increase from Q2
2020.
- Donated $3 million of the
$5 million CSR Fund dedicated to
combat COVID-19.
Operational Overview
(all figures in US
dollars unless otherwise noted)
|
|
Q3 2020
|
|
Q3 2019
|
Change
|
Ounces
produced
|
|
|
|
|
|
Gold
|
|
91,770
|
|
103,624
|
(11.4)%
|
Silver
|
|
6,028
|
|
6,039
|
(0.2)%
|
Palladium
|
|
5,444
|
|
5,471
|
(0.5)%
|
Gold equivalent
2
|
|
171,370
|
|
183,394
|
(6.6)%
|
Ounces
sold
|
|
|
|
|
|
Gold
|
|
90,101
|
|
94,766
|
(4.9)%
|
Silver
|
|
4,999
|
|
4,484
|
11.5 %
|
Palladium
|
|
5,546
|
|
4,907
|
13.0 %
|
Gold equivalent
2
|
|
157,478
|
|
155,116
|
1.5 %
|
Revenue
|
$
|
307,268
|
$
|
223,595
|
37.4 %
|
Net
earnings
|
$
|
149,875
|
$
|
75,960
|
97 %
|
Per share
|
$
|
0.334
|
$
|
0.170
|
96.5 %
|
Adjusted net
earnings 1
|
$
|
152,007
|
$
|
69,914
|
117.4 %
|
Per share
1
|
$
|
0.338
|
$
|
0.156
|
116.3 %
|
Operating cash
flows
|
$
|
228,099
|
$
|
142,300
|
60.3 %
|
Per share
1
|
$
|
0.508
|
$
|
0.318
|
59.7 %
|
|
|
|
|
|
|
All amounts in
thousands except gold, palladium and gold equivalent ounces
produced and sold, per ounce amounts and per share
amounts.
|
Listing on the London Stock Exchange
On October 28, 2020, the Company's common shares
were admitted to the Standard Segment of the Official List of the
UK Financial Conduct Authority ("FCA") and commenced trading on the
Main Market of the London Stock Exchange under the ticker symbol
WPM.
Corporate Development – Marmato Project
On
November 5, 2020, the Company
announced that it had entered into the previously disclosed
precious metals purchase agreement ("PMPA") with Caldas Gold Corp.
("Caldas Gold") (TSX-V: CGC) for the Marmato Project located in
Colombia. Under the terms of the PMPA3, the Company
will acquire 6.5% of the gold production and 100% of the silver
production until 190,000 ounces of gold and 2.15 million ounces of
silver have been delivered, after which the stream drops to 3.25%
of the gold production and 50% of the silver production for the
life of mine.
Financial Review
Revenues
Revenue was $307 million in the third quarter of 2020
representing a 37% increase from the third quarter of 2019 due
primarily to a 35% increase in the average realized gold
equivalent² price; and a 2% increase in the number of gold
equivalent² ounces sold.
Costs and Expenses
Average cash costs¹ in the
third quarter of 2020 were $445 per
gold equivalent² ounce as compared to $417 in Q3 2019. This resulted in a cash
operating margin¹ of $1,506 per gold
equivalent² ounce sold, an increase of 47% as compared with Q3
2019.
Balance Sheet (at September 30, 2020)
- Approximately $210 million of
cash on hand.
- $488 million outstanding under
the Company's $2 billion revolving
term loan (the "Revolving Facility").
- During Q3 2020, the Company has repaid $153 million under the Revolving Facility.
- During Q3 2020, the net debt¹ was reduced by $231 million to $278
million.
- The average effective interest rate for Q3 2020 was 1.24%.
Third Quarter Asset Highlights
Salobo: In the third quarter of 2020, Salobo
produced 63,400 ounces of attributable gold, a decrease of
approximately 14% relative to the third quarter of 2019 due to
lower grades. According to Vale S.A.'s ("Vale") Third Quarter 2020
Performance Report, physical completion of the Salobo III mine
expansion was 62% at the end of the third quarter. Vale
reports that the expansion remains on track to start up in the
first half of 2022.
San Dimas: In the third quarter of 2020, San Dimas
produced 9,200 ounces of attributable gold, a decrease of
approximately 18% relative to the third quarter of
2019 primarily due to the impact of revising the silver to
gold conversion ratio from 70:1 to 90:1 effective April 1, 2020, as per the PMPA4. The
exchange ratio was reinstated to 70:1 during October 2020.
Antamina: In the third quarter of 2020, Antamina
produced 1.5 million ounces of attributable silver, an increase of
approximately 24% relative to the third quarter of 2019, primarily
due to higher grades and throughput, partially offset by lower
recovery.
Stillwater: In the third quarter
of 2020, Stillwater produced 5,400
ounces of attributable palladium and 3,200 ounces of attributable
gold, virtually unchanged relative to the third quarter of 2019.
According to Sibanye-Stillwater Limited's ("Sibanye-Stillwater")
Third Quarter 2020 Operating Update, a review of the Blitz project
was conducted following the suspension of growth capital activities
due to COVID-19, and the project is now expected to reach a steady
state by 2024, a delay of up to two years. Sibanye-Stillwater also
reports that the Fill the Mill project at the East Boulder mine
remains on schedule to be completed by the end of 2020.
Constancia: In the third quarter of 2020,
Constancia produced 0.4 million ounces of attributable silver and
3,800 ounces of attributable gold, a decrease of approximately 37%
and 27%, respectively, relative to the third quarter of 2019,
primarily due to lower grades. As per Wheaton's PMPA with
Hudbay Minerals Inc. ("Hudbay"), the failure to achieve a minimum
level of throughput at the Pampacancha deposit during 2019 entitles
Wheaton to an additional 8,020 ounces of gold in 2020 (received in
quarterly installments), of which 2,005 ounces of gold was received
during the third quarter of 2020 and included as production.
According to Hudbay's Third Quarter MD&A, significant progress
has been made on completing the Pampacancha individual land-user
agreements and, as of September 30,
2020, approximately 79% of the land has been vacated and
turned over to Hudbay. Hudbay expects a Pampacancha production
start date of early 2021.
Other Gold: In the third quarter of
2020, total Other Gold attributable production was 7,100 ounces, an
increase of approximately 66% relative to the third quarter of
2019, primarily due to the resumption of mining at the Minto mine.
Other Silver: In the third quarter of
2020, total Other Silver attributable production was 2.1 million
ounces, virtually unchanged relative to the third quarter of 2019,
as stronger attributable production at Aljustrel and Yauliyacu were
offset by lower production at Zinkgruvan and Neves-Corvo.
Keno Hill Restart: Alexco Resource
Corp reported on September 15, 2020,
that progress on site-wide capital projects at the Keno Hill Silver
District, including mill modifications and infrastructure
improvements, continues to be on pace for completion with mill
commissioning and production of silver concentrate in the fourth
quarter of 2020.
Produced But Not Yet Delivered5
As at September 30, 2020, payable
ounces attributable to the Company produced but not yet delivered
amounted to:
- 77,000 payable gold ounces, a decrease of 2,600 ounces during
Q3 2020, primarily due to a reduction during the period relative to
the Sudbury mines.
- 3.4 million payable silver ounces, an increase of 0.2 million
ounces during Q3 2020, primarily due to an increase during the
period relative to the Peñasquito mine partially offset by a
reduction at the Zinkgruvan mine.
- 4,600 payable palladium ounces, a decrease of 300 ounces during
Q3 2020.
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.
Community Support and Response Fund to Combat the COVID-19
Pandemic
In the second quarter of 2020, Wheaton announced
the launch of a $5 million Community
Support and Response Fund (the "CSR Fund") to support global
efforts to combat the COVID-19 pandemic and its impacts on our
communities. The CSR Fund is designed to meet the immediate needs
of the communities in which Wheaton operates and around the mines
from which Wheaton receives precious metals. This fund is
incremental to Wheaton's already active Community Investment
Program that currently provides support to over 50 programs in
multiple communities around the world. As of September 30, 2020, the Company has made
donations totalling approximately $3
million under this program.
Webcast and Conference Call Details
A conference call and webcast will be held Tuesday, November 10, 2020, 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:
|
7579702
|
Live audio
webcast:
|
link
|
Participants should dial in five to ten minutes before the
call.
The conference call will be recorded and available until
November 17, 2020 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:
|
7579702
|
Archived audio
webcast:
|
link
|
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.aspx.
About Wheaton Precious Metals Corp.
Wheaton is the world's premier precious metals streaming company
with the highest-quality portfolio of long-life, low-cost assets.
Its business model offers investors commodity price leverage and
exploration upside but with a much lower risk profile than a
traditional mining company. Wheaton delivers amongst the highest
cash operating margins in the mining industry, allowing it to pay a
competitive dividend and continue to grow through accretive
acquisitions. As a result, Wheaton has consistently outperformed
gold and silver, as well as other mining investments. Wheaton
creates sustainable value through streaming.
Wheaton's estimated attributable precious metals production in
2020 is forecast to be between 655,000 and 685,000 gold
equivalent ounces2. Wheaton expects to produce between
365,000 and 385,000 ounces of gold, 21.5 and 22.5 million ounces of
silver, and 23,000 and 24,500 ounces of palladium.
In accordance with Wheaton Precious Metals™ Corp.'s ("Wheaton
Precious Metals", "Wheaton" or the "Company") MD&A and
financial statements, reference to the Company includes the
Company's wholly owned subsidiaries.
End
Notes
|
____________________
|
1 Please refer to non-IFRS measures
at the end of this press release.
|
2 Commodity price assumptions for the
gold equivalent production and sales in 2020 are $1,500 / ounce
gold, $18 / ounce silver, and $2,000 / ounce palladium.
|
3 Under the PMPA with Caldas Gold,
the Company will pay a total cash consideration of $110 million,
$38 million of which is payable upon closing and the remaining
portion of which is payable during the construction of the Marmato
Deep Zone project, subject to receipt of required permits and
licenses, sufficient financing having been obtained to cover total
expected capital expenditures, and other customary conditions. In
addition, the Company will make ongoing payments equal to 18% of
the spot gold and silver price until the market value of gold and
silver delivered to the Company, net of the per ounce cash payment,
exceeds the initial upfront cash deposit, and 22% of the spot gold
and silver price thereafter.
|
4 Under the terms of the PMPA, the
Company is entitled to an amount equal to 25% of the payable gold
production plus an additional amount of gold equal to 25% of the
payable silver production converted to gold at a fixed gold to
silver exchange ratio of 70:1 from the San Dimas mine. If the
average gold to silver price ratio decreases to less than 50:1 or
increases to more than 90:1 for a period of 6 months or more, then
the "70" shall be revised to "50" or "90", as the case may be,
until such time as the average gold to silver price ratio is
between 50:1 to 90:1 for a period of 6 months or more in which
event the "70" shall be reinstated.
|
5 Payable gold, silver and
palladium ounces produced but not yet delivered are based on
management estimates only and rely upon information provided by the
owners and operators of mining operations and may be revised and
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)
|
|
2020
|
2019
|
2020
|
2019
|
Sales
|
|
$
|
307,268
|
$
|
223,595
|
$
|
810,012
|
$
|
638,110
|
Cost of
sales
|
|
|
|
|
|
|
|
|
|
Cost of sales,
excluding depletion
|
|
$
|
70,119
|
$
|
64,624
|
$
|
202,238
|
$
|
194,796
|
Depletion
|
|
|
60,601
|
|
63,396
|
|
184,104
|
|
193,180
|
Total cost of
sales
|
|
$
|
130,720
|
$
|
128,020
|
$
|
386,342
|
$
|
387,976
|
Gross
margin
|
|
$
|
176,548
|
$
|
95,575
|
$
|
423,670
|
$
|
250,134
|
General and
administrative expenses
|
|
|
21,326
|
|
14,028
|
|
56,307
|
|
42,811
|
Impairment of mineral
stream interests
|
|
|
-
|
|
-
|
|
-
|
|
165,912
|
Earnings from
operations
|
|
$
|
155,222
|
$
|
81,547
|
$
|
367,363
|
$
|
41,411
|
Other (income)
expense
|
|
|
2,624
|
|
(3,533)
|
|
(1,340)
|
|
(709)
|
Earnings before
finance costs and income taxes
|
$
|
152,598
|
$
|
85,080
|
$
|
368,703
|
$
|
42,120
|
Finance
costs
|
|
|
2,766
|
|
11,871
|
|
14,519
|
|
39,123
|
Earnings before
income taxes
|
|
$
|
149,832
|
$
|
73,209
|
$
|
354,184
|
$
|
2,997
|
Income tax recovery
(expense)
|
|
|
43
|
|
2,751
|
|
(3,601)
|
|
5,618
|
Net
earnings
|
|
$
|
149,875
|
$
|
75,960
|
$
|
350,583
|
$
|
8,615
|
Basic earnings per
share
|
|
$
|
0.334
|
$
|
0.170
|
$
|
0.782
|
$
|
0.019
|
Diluted earnings per
share
|
|
$
|
0.332
|
$
|
0.170
|
$
|
0.779
|
$
|
0.019
|
Weighted average
number of shares outstanding
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
449,125
|
|
446,802
|
|
448,484
|
|
445,598
|
Diluted
|
|
|
451,999
|
|
447,849
|
|
449,892
|
|
446,467
|
Condensed Interim Consolidated Balance Sheets
|
As at
September 30
|
As at
December 31
|
(US dollars in
thousands - unaudited)
|
2020
|
2019
|
Assets
|
|
|
|
|
Current
assets
|
|
|
|
|
Cash and cash
equivalents
|
$
|
209,834
|
$
|
103,986
|
Accounts
receivable
|
|
8,317
|
|
7,138
|
Other
|
|
3,647
|
|
43,628
|
Total current
assets
|
$
|
221,798
|
$
|
154,752
|
Non-current
assets
|
|
|
|
|
Mineral stream
interests
|
$
|
5,547,769
|
$
|
5,734,106
|
Early deposit mineral
stream interests
|
|
33,241
|
|
31,741
|
Mineral royalty
interest
|
|
3,036
|
|
3,036
|
Long-term equity
investments
|
|
254,462
|
|
309,757
|
Convertible notes
receivable
|
|
10,836
|
|
21,856
|
Property, plant and
equipment
|
|
6,542
|
|
7,311
|
Other
|
|
13,503
|
|
15,448
|
Total non-current
assets
|
$
|
5,869,389
|
$
|
6,123,255
|
Total
assets
|
$
|
6,091,187
|
$
|
6,278,007
|
Liabilities
|
|
|
|
|
Current
liabilities
|
|
|
|
|
Accounts payable and
accrued liabilities
|
$
|
16,760
|
$
|
11,794
|
Current portion of
performance share units
|
|
19,010
|
|
10,668
|
Current portion of
lease liabilities
|
|
734
|
|
724
|
Other
|
|
83
|
|
41,514
|
Total current
liabilities
|
$
|
36,587
|
$
|
64,700
|
Non-current
liabilities
|
|
|
|
|
Bank debt
|
$
|
487,500
|
$
|
874,500
|
Lease
liabilities
|
|
2,968
|
|
3,528
|
Deferred income
taxes
|
|
206
|
|
148
|
Performance share
units
|
|
11,245
|
|
8,401
|
Pension
liability
|
|
1,343
|
|
810
|
Total non-current
liabilities
|
$
|
503,262
|
$
|
887,387
|
Total
liabilities
|
$
|
539,849
|
$
|
952,087
|
Shareholders'
equity
|
|
|
|
|
Issued
capital
|
$
|
3,638,234
|
$
|
3,599,203
|
Reserves
|
|
113,553
|
|
160,701
|
Retained
earnings
|
|
1,799,551
|
|
1,566,016
|
Total shareholders'
equity
|
$
|
5,551,338
|
$
|
5,325,920
|
Total liabilities and
shareholders' equity
|
$
|
6,091,187
|
$
|
6,278,007
|
Condensed Interim Consolidated Statements of Cash
Flows
|
|
Three Months
Ended
September 30
|
Nine Months Ended
September 30
|
(US dollars in
thousands - unaudited)
|
|
2020
|
2019
|
2020
|
2019
|
Operating
activities
|
|
|
|
|
|
|
|
|
|
Net
earnings
|
|
$
|
149,875
|
$
|
75,960
|
$
|
350,583
|
$
|
8,615
|
Adjustments
for
|
|
|
|
|
|
|
|
|
|
Depreciation and
depletion
|
|
|
61,050
|
|
63,845
|
|
185,542
|
|
194,590
|
Gain on disposal of
mineral royalty interest
|
|
|
-
|
|
(2,929)
|
|
-
|
|
(2,929)
|
Impairment
charges
|
|
|
-
|
|
-
|
|
-
|
|
165,912
|
Interest
expense
|
|
|
1,795
|
|
10,885
|
|
11,289
|
|
36,473
|
Equity settled stock
based compensation
|
|
|
1,319
|
|
1,447
|
|
4,127
|
|
4,259
|
Performance share
units
|
|
|
9,325
|
|
4,803
|
|
11,734
|
|
5,004
|
Pension
expense
|
|
|
265
|
|
-
|
|
533
|
|
-
|
Income tax expense
(recovery)
|
|
|
(43)
|
|
(2,751)
|
|
3,601
|
|
(5,618)
|
Loss (gain) on fair
value adjustment of share purchase warrants held
|
|
|
1,107
|
|
(2)
|
|
845
|
|
5
|
Fair value (gain) loss
on convertible note receivable
|
|
|
1,095
|
|
(386)
|
|
(1,382)
|
|
677
|
Investment income
recognized in net earnings
|
|
|
(23)
|
|
(205)
|
|
(178)
|
|
(745)
|
Other
|
|
|
567
|
|
(491)
|
|
513
|
|
1,890
|
Change in non-cash
working capital
|
|
|
3,656
|
|
2,093
|
|
2,771
|
|
(421)
|
Cash generated from
operations before income taxes and interest
|
|
$
|
229,988
|
$
|
152,269
|
$
|
569,978
|
$
|
407,712
|
Income taxes
recovered (paid)
|
|
|
-
|
|
(1,751)
|
|
70
|
|
(5,334)
|
Interest
paid
|
|
|
(1,912)
|
|
(8,404)
|
|
(12,745)
|
|
(33,311)
|
Interest
received
|
|
|
23
|
|
186
|
|
177
|
|
686
|
Cash generated from
operating activities
|
|
$
|
228,099
|
$
|
142,300
|
$
|
557,480
|
$
|
369,753
|
Financing
activities
|
|
|
|
|
|
|
|
|
|
Bank debt
repaid
|
|
$
|
(153,000)
|
$
|
(82,000)
|
$
|
(387,000)
|
$
|
(250,500)
|
Credit facility
extension fees
|
|
|
(6)
|
|
(3)
|
|
(1,373)
|
|
(1,103)
|
Share purchase
options exercised
|
|
|
2,763
|
|
12,662
|
|
20,779
|
|
33,055
|
Lease
payments
|
|
|
(132)
|
|
(156)
|
|
(438)
|
|
(479)
|
Dividends
paid
|
|
|
(37,309)
|
|
(32,609)
|
|
(120,312)
|
|
(96,124)
|
Cash (used for)
generated from financing activities
|
|
$
|
(187,684)
|
$
|
(102,106)
|
$
|
(488,344)
|
$
|
(315,151)
|
Investing
activities
|
|
|
|
|
|
|
|
|
|
Mineral stream
interests
|
|
$
|
(40)
|
$
|
(9)
|
$
|
(40)
|
$
|
(183)
|
Early deposit mineral
stream interests
|
|
|
(750)
|
|
(750)
|
|
(1,500)
|
|
(1,500)
|
Proceeds on disposal
of mineral royalty interest
|
|
|
-
|
|
9,000
|
|
-
|
|
9,000
|
Acquisition of
long-term investments
|
|
|
(10,671)
|
|
-
|
|
(10,671)
|
|
(909)
|
Investment in
associate
|
|
|
-
|
|
-
|
|
-
|
|
(132)
|
Proceeds on disposal
of long-term investments
|
|
|
49,454
|
|
16,307
|
|
49,577
|
|
16,307
|
Dividend income
received
|
|
|
-
|
|
20
|
|
-
|
|
59
|
Other
|
|
|
(363)
|
|
(313)
|
|
(691)
|
|
(1,520)
|
Cash generated from
(used for) investing activities
|
|
$
|
37,630
|
$
|
24,255
|
$
|
36,675
|
$
|
21,122
|
Effect of exchange
rate changes on cash and cash equivalents
|
|
$
|
25
|
$
|
(5)
|
$
|
37
|
$
|
135
|
Increase in cash and
cash equivalents
|
|
$
|
78,070
|
$
|
64,444
|
$
|
105,848
|
$
|
75,859
|
Cash and cash
equivalents, beginning of period
|
|
131,764
|
|
87,182
|
|
103,986
|
|
75,767
|
Cash and cash
equivalents, end of period
|
|
$
|
209,834
|
$
|
151,626
|
$
|
209,834
|
$
|
151,626
|
Summary of Ounces Produced
|
Q3
2020
|
Q2
2020
|
Q1
2020
|
Q4
2019
|
Q3
2019
|
Q2
2019
|
Q1
2019
|
Q4
2018
|
Gold ounces produced
²
|
|
|
|
|
|
|
|
|
Salobo
|
63,408
|
59,104
|
62,575
|
74,716
|
73,615
|
67,056
|
60,846
|
76,995
|
Sudbury
3
|
5,068
|
9,257
|
7,795
|
6,468
|
6,082
|
9,360
|
11,374
|
6,646
|
Constancia
8
|
3,780
|
3,470
|
3,681
|
4,757
|
5,172
|
4,533
|
4,826
|
4,266
|
San Dimas
4, 8
|
9,228
|
6,074
|
11,318
|
11,352
|
11,239
|
11,496
|
10,290
|
10,092
|
Stillwater
5
|
3,176
|
3,222
|
2,955
|
3,585
|
3,238
|
3,675
|
3,137
|
3,472
|
Other
|
|
|
|
|
|
|
|
|
|
Minto
6
|
1,832
|
2,928
|
2,124
|
2,189
|
-
|
-
|
-
|
1,441
|
|
777
|
5,278
|
4,728
|
4,551
|
3,987
|
4,278
|
4,788
|
4,445
|
4,248
|
Total Other
|
7,110
|
7,656
|
6,675
|
6,176
|
4,278
|
4,788
|
4,445
|
5,689
|
Total gold ounces
produced
|
91,770
|
88,783
|
94,999
|
107,054
|
103,624
|
100,908
|
94,918
|
107,160
|
Silver ounces
produced 2
|
|
|
|
|
|
|
|
|
Peñasquito
8
|
1,992
|
973
|
2,658
|
1,895
|
2,026
|
702
|
1,594
|
1,455
|
Antamina
8
|
1,516
|
612
|
1,311
|
1,342
|
1,223
|
1,334
|
1,176
|
1,225
|
Constancia
8
|
430
|
254
|
461
|
632
|
686
|
552
|
635
|
695
|
Other
|
|
|
|
|
|
|
|
|
|
Los Filos
8
|
17
|
14
|
29
|
55
|
33
|
37
|
38
|
29
|
|
Zinkgruvan
|
498
|
389
|
662
|
670
|
587
|
590
|
451
|
587
|
|
Yauliyacu
8
|
679
|
273
|
557
|
358
|
620
|
627
|
528
|
233
|
|
Stratoni
|
156
|
148
|
183
|
147
|
131
|
172
|
143
|
149
|
|
Minto
6
|
15
|
19
|
18
|
18
|
-
|
-
|
-
|
8
|
|
Neves-Corvo
|
281
|
479
|
377
|
385
|
431
|
392
|
498
|
509
|
|
Aljustrel
|
348
|
388
|
352
|
325
|
240
|
322
|
470
|
475
|
|
777
|
96
|
108
|
96
|
81
|
62
|
93
|
95
|
113
|
Total Other
|
2,090
|
1,818
|
2,274
|
2,039
|
2,104
|
2,233
|
2,223
|
2,103
|
Total silver ounces
produced
|
6,028
|
3,657
|
6,704
|
5,908
|
6,039
|
4,821
|
5,628
|
5,478
|
Palladium ounces
produced ²
|
|
|
|
|
|
|
|
|
Stillwater
5
|
5,444
|
5,759
|
5,312
|
6,057
|
5,471
|
5,736
|
4,729
|
5,869
|
GEOs produced
7
|
171,370
|
140,348
|
182,533
|
186,027
|
183,394
|
166,399
|
168,759
|
180,732
|
SEOs produced
7
|
14,281
|
11,696
|
15,211
|
15,502
|
15,283
|
13,867
|
14,063
|
15,061
|
Average payable rate
2
|
|
|
|
|
|
|
|
|
Gold
|
95.3%
|
94.7%
|
95.1%
|
95.6%
|
95.1%
|
95.3%
|
95.6%
|
95.5%
|
Silver
|
86.1%
|
81.9%
|
85.6%
|
85.3%
|
85.1%
|
83.3%
|
82.9%
|
83.3%
|
Palladium
|
97.0%
|
86.5%
|
93.0%
|
99.4%
|
83.5%
|
87.6%
|
98.5%
|
96.4%
|
|
|
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 or payable rates may be updated in
future periods as additional information is
received.
|
3)
|
Comprised of the
Coleman, Copper Cliff, Garson, Creighton and Totten gold
interests.
|
4)
|
Under the terms of
the San Dimas PMPA, the Company is entitled to an amount equal to
25% of the payable gold production plus an additional amount of
gold equal to 25% of the payable silver production converted to
gold at a fixed gold to silver exchange ratio of 70:1 from the San
Dimas mine. If the average gold to silver price ratio decreases to
less than 50:1 or increases to more than 90:1 for a period of 6
months or more, then the "70" shall be revised to "50" or "90", as
the case may be, until such time as the average gold to silver
price ratio is between 50:1 to 90:1 for a period of 6 months or
more in which event the "70" shall be reinstated. Effective April
1, 2020, the fixed gold to silver exchange ratio was revised to
90:1. For reference, silver production from prior periods is as
follows: Q3-2020 – 420,000 ounces; Q2-2020 – 276,000 ounces;
Q1-2020 – 419,000 ounces; Q4-2019 – 415,000 ounces; Q3-2019 –
410,000 ounces; Q2-2019 – 401,000 ounces; Q1-2019 – 351,000 ounces;
and Q4-2018 – 342,000 ounces.
|
5)
|
Comprised of the
Stillwater and East Boulder gold and palladium
interests.
|
6)
|
The Minto mine was
placed into care and maintenance from October 2018 to October
2019.
|
7)
|
GEOs and SEOs, which
are provided to assist the reader, are based on the following
commodity price assumptions: $1,500 per ounce gold; $18.00 per
ounce silver; and $2,000 per ounce palladium, consistent with those
used in estimating the Company's production guidance for
2020.
|
8)
|
Operations at these
mines had been temporarily suspended during the second quarter of
2020 as a result of the COVID-19 pandemic. During the third
quarter, all of the operations were restarted.
|
Summary of Ounces Sold
|
Q3
2020
|
Q2
2020
|
Q1
2020
|
Q4
2019
|
Q3
2019
|
Q2
2019
|
Q1
2019
|
Q4
2018
|
Gold ounces
sold
|
|
|
|
|
|
|
|
|
Salobo
|
59,584
|
68,487
|
74,944
|
58,137
|
63,064
|
57,715
|
84,160
|
75,351
|
Sudbury
2
|
7,858
|
7,414
|
4,822
|
7,394
|
7,600
|
8,309
|
4,061
|
4,864
|
Constancia
7
|
4,112
|
3,024
|
3,331
|
5,108
|
4,742
|
4,409
|
5,512
|
3,645
|
San Dimas
7
|
9,687
|
6,030
|
11,358
|
11,499
|
11,374
|
10,284
|
11,510
|
8,453
|
Stillwater
3
|
3,015
|
3,066
|
3,510
|
2,925
|
3,314
|
3,301
|
2,856
|
3,473
|
Other
|
|
|
|
|
|
|
|
|
|
Minto
4
|
-
|
-
|
-
|
-
|
-
|
765
|
3,307
|
2,674
|
|
777
|
5,845
|
4,783
|
2,440
|
4,160
|
4,672
|
5,294
|
3,614
|
4,353
|
Total Other
|
5,845
|
4,783
|
2,440
|
4,160
|
4,672
|
6,059
|
6,921
|
7,027
|
Total gold ounces
sold
|
90,101
|
92,804
|
100,405
|
89,223
|
94,766
|
90,077
|
115,020
|
102,813
|
Silver ounces
sold
|
|
|
|
|
|
|
|
|
Peñasquito
7
|
1,799
|
1,917
|
2,310
|
1,268
|
1,233
|
912
|
1,164
|
901
|
Antamina
7
|
1,090
|
788
|
1,244
|
1,227
|
1,059
|
1,186
|
1,255
|
1,300
|
Constancia
7
|
415
|
254
|
350
|
672
|
521
|
478
|
735
|
629
|
Other
|
|
|
|
|
|
|
|
|
|
Los Filos
7
|
19
|
25
|
37
|
26
|
44
|
26
|
38
|
15
|
|
Zinkgruvan
|
492
|
376
|
447
|
473
|
459
|
337
|
232
|
543
|
|
Yauliyacu
7
|
580
|
704
|
9
|
561
|
574
|
542
|
15
|
317
|
|
Stratoni
|
134
|
77
|
163
|
120
|
126
|
240
|
80
|
78
|
|
Minto
4
|
-
|
-
|
-
|
-
|
-
|
2
|
30
|
22
|
|
Neves-Corvo
|
201
|
236
|
204
|
154
|
243
|
194
|
265
|
240
|
|
Aljustrel
|
148
|
252
|
123
|
121
|
139
|
216
|
381
|
226
|
|
777
|
121
|
100
|
41
|
62
|
86
|
108
|
99
|
129
|
Total Other
|
1,695
|
1,770
|
1,024
|
1,517
|
1,671
|
1,665
|
1,140
|
1,570
|
Total silver ounces
sold
|
4,999
|
4,729
|
4,928
|
4,684
|
4,484
|
4,241
|
4,294
|
4,400
|
Palladium ounces
sold
|
|
|
|
|
|
|
|
|
Stillwater
3
|
5,546
|
4,976
|
4,938
|
5,312
|
4,907
|
5,273
|
5,189
|
5,049
|
GEOs sold
5
|
157,478
|
156,188
|
166,121
|
152,514
|
155,116
|
148,004
|
173,464
|
162,340
|
SEOs sold
5
|
13,123
|
13,016
|
13,843
|
12,709
|
12,926
|
12,334
|
14,455
|
13,528
|
Cumulative payable
ounces
PBND 6
|
|
|
|
|
|
|
|
|
Gold
|
77,000
|
79,632
|
88,383
|
98,475
|
85,335
|
81,535
|
75,236
|
99,474
|
Silver
|
3,443
|
3,228
|
4,961
|
4,142
|
3,796
|
3,102
|
3,315
|
2,941
|
Palladium
|
4,616
|
4,883
|
4,875
|
4,872
|
4,163
|
4,504
|
4,754
|
5,282
|
GEO
5
|
124,473
|
124,877
|
154,420
|
154,672
|
136,441
|
124,765
|
121,349
|
141,804
|
SEO
5
|
10,373
|
10,406
|
12,868
|
12,889
|
11,370
|
10,397
|
10,112
|
11,817
|
|
|
1)
|
All figures in
thousands except gold and palladium ounces sold.
|
2)
|
Comprised of the
Coleman, Copper Cliff, Garson, Creighton and Totten gold
interests.
|
3)
|
Comprised of the
Stillwater and East Boulder gold and palladium
interests.
|
4)
|
The Minto mine was
placed into care and maintenance from October 2018 to October
2019.
|
5)
|
GEOs and SEOs, which
are provided to assist the reader, are based on the following
commodity price assumptions: $1,500 per ounce gold; $18.00 per
ounce silver; and $2,000 per ounce palladium, consistent with those
used in estimating the Company's production guidance for
2020.
|
6)
|
Payable gold, silver
and palladium ounces produced but not yet delivered ("PBND") are
based on management estimates. These figures may be updated in
future periods as additional information is received.
|
7)
|
Operations at these
mines had been temporarily suspended during the second quarter of
2020 as a result of the COVID-19 pandemic. During the third quarter
of 2020, all of the operations were restarted.
|
Results of Operations
The operating results of the Company's reportable operating
segments are summarized in the tables and commentary below.
Three Months Ended
September 30, 2020
|
|
Ounces
Produced²
|
Ounces
Sold
|
Average
Realized
Price
($'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
|
63,408
|
59,584
|
$
|
1,902
|
$
|
408
|
$
|
374
|
$
|
113,319
|
$
|
66,700
|
$
|
91,917
|
$
|
2,529,258
|
Sudbury
4
|
5,068
|
7,858
|
|
1,929
|
|
400
|
|
831
|
|
15,161
|
|
5,485
|
|
12,018
|
|
327,352
|
Constancia
|
3,780
|
4,112
|
|
1,902
|
|
407
|
|
338
|
|
7,819
|
|
4,758
|
|
6,147
|
|
106,870
|
San Dimas
|
9,228
|
9,687
|
|
1,902
|
|
612
|
|
315
|
|
18,423
|
|
9,442
|
|
14,309
|
|
185,835
|
Stillwater
|
3,176
|
3,015
|
|
1,902
|
|
345
|
|
449
|
|
5,734
|
|
3,341
|
|
4,695
|
|
225,688
|
Other
5
|
7,110
|
5,845
|
|
1,929
|
|
423
|
|
305
|
|
11,278
|
|
7,022
|
|
8,804
|
|
9,184
|
|
91,770
|
90,101
|
$
|
1,906
|
$
|
428
|
$
|
404
|
$
|
171,734
|
$
|
96,748
|
$
|
137,890
|
$
|
3,384,187
|
Silver
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Peñasquito
|
1,992
|
1,799
|
$
|
24.55
|
$
|
4.26
|
$
|
3.24
|
$
|
44,154
|
$
|
30,660
|
$
|
36,492
|
$
|
355,167
|
Antamina
|
1,516
|
1,090
|
|
24.55
|
|
4.67
|
|
8.74
|
|
26,758
|
|
12,139
|
|
21,666
|
|
641,521
|
Constancia
|
430
|
415
|
|
24.55
|
|
5.99
|
|
7.63
|
|
10,190
|
|
4,538
|
|
7,704
|
|
220,417
|
Other
6
|
2,090
|
1,695
|
|
24.98
|
|
8.37
|
|
1.94
|
|
42,332
|
|
24,859
|
|
24,333
|
|
475,613
|
|
6,028
|
4,999
|
$
|
24.69
|
$
|
5.89
|
$
|
4.36
|
$
|
123,434
|
$
|
72,196
|
$
|
90,195
|
$
|
1,692,718
|
Palladium
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stillwater
|
5,444
|
5,546
|
$
|
2,182
|
$
|
383
|
$
|
428
|
$
|
12,100
|
$
|
7,604
|
$
|
9,977
|
$
|
243,354
|
Cobalt
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voisey's
Bay
|
-
|
-
|
$
|
n.a.
|
$
|
n.a.
|
$
|
n.a.
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
227,510
|
Operating
results
|
|
|
|
|
|
|
|
$
|
307,268
|
$
|
176,548
|
$
|
238,062
|
$
|
5,547,769
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and
administrative
|
|
|
|
|
|
|
|
|
|
$
|
(21,326)
|
$
|
(7,239)
|
|
|
Finance
costs
|
|
|
|
|
|
|
|
|
|
|
|
(2,766)
|
|
(2,820)
|
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
(2,624)
|
|
96
|
|
|
Income tax
|
|
|
|
|
|
|
|
|
|
|
|
43
|
|
-
|
|
|
Total
other
|
|
|
|
|
|
|
|
|
$
|
(26,673)
|
$
|
(9,963)
|
$
|
543,418
|
|
|
|
|
|
|
|
|
|
|
|
$
|
149,875
|
$
|
228,099
|
$
|
6,091,187
|
|
|
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)
|
Comprised of the
operating Coleman, Copper Cliff, Garson, Creighton and Totten gold
interests as well as the non-operating Stobie and Victor gold
interests.
|
5)
|
Comprised of the
operating 777 and Minto gold interests in addition to the
non-operating Rosemont gold interest.
|
6)
|
Comprised of the
operating Los Filos, Zinkgruvan, Yauliyacu, Stratoni, Neves-Corvo,
Aljustrel, Minto and 777 silver interests as well as the
non-operating Keno Hill, 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, 2020 were as follows:
Three Months Ended
September 30, 2020
|
|
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
|
171,370
|
157,478
|
$
1,951
|
$
445
|
$
1,506
|
$
385
|
$
1,121
|
Silver equivalent
basis 5
|
14,281
|
13,123
|
$
23.41
|
$
5.34
|
$
18.07
|
$
4.62
|
$
13.45
|
|
|
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: $1,500 per ounce gold; $18.00 per
ounce silver; and $2,000 per ounce palladium, consistent with those
used in estimating the Company's production guidance for
2020.
|
Three Months Ended
September 30, 2019
|
|
Ounces
Produced²
|
Ounces
Sold
|
Average
Realized
Price
($'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
|
6,082
|
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
|
|
103,624
|
94,766
|
$
|
1,471
|
$
|
424
|
$
|
417
|
$
|
139,433
|
$
|
59,776
|
$
|
100,499
|
$
|
3,534,415
|
Silver
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Peñasquito
|
2,026
|
1,233
|
$
|
16.81
|
$
|
4.21
|
$
|
3.06
|
$
|
20,721
|
$
|
11,755
|
$
|
15,531
|
$
|
378,587
|
Antamina
|
1,223
|
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
|
2,104
|
1,671
|
|
17.57
|
|
6.70
|
|
2.79
|
|
29,354
|
|
13,510
|
|
16,895
|
|
492,029
|
|
6,039
|
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
|
|
|
|
|
|
|
|
|
|
|
|
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)
|
Comprised of the
operating Coleman, Copper Cliff, Garson, Creighton and Totten gold
interests as well as the non-operating Stobie and Victor gold
interests.
|
5)
|
Comprised of the
operating 777 gold interest in addition to the non-operating Minto
and Rosemont gold interests. The Minto mine was placed into care
and maintenance from October 2018 to October 2019.
|
6)
|
Comprised of the
operating Los Filos, Zinkgruvan, Yauliyacu, Stratoni, Aljustrel,
Neves-Corvo and 777 silver interests as well as the non-operating
Keno Hill, Minto, Loma de La Plata, Pascua-Lama and Rosemont silver
interests. The Minto mine was placed into care and maintenance from
October 2018 to October 2019.
|
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
|
183,394
|
155,116
|
$
1,441
|
$
417
|
$
1,024
|
$
409
|
$
615
|
Silver equivalent
basis 5
|
15,283
|
12,926
|
$
17.30
|
$
5.00
|
$
12.30
|
$
4.90
|
$
7.40
|
|
|
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: $1,500 per ounce gold; $18.00 per
ounce silver; and $2,000 per ounce palladium, consistent with those
used in estimating the Company's production guidance for
2020.
|
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; (iv) cash operating margin; and (v)
net debt.
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 and other one-time (income) expenses as well as the
reversal of non-cash income tax expense (recovery) which is offset
by income tax expense (recovery) recognized in the Statements of
Shareholders' Equity and OCI, respectively. 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)
|
|
2020
|
|
2019
|
Net
earnings
|
|
$
|
149,875
|
|
$
|
75,960
|
Add back
(deduct):
|
|
|
|
|
|
|
(Gain) loss on fair
value adjustment of share purchase warrants held
|
|
|
1,107
|
|
|
(2)
|
(Gain) loss on fair
value adjustment of convertible notes receivable
|
|
|
1,095
|
|
|
(386)
|
Gain on disposal of
mineral royalty interest
|
|
|
-
|
|
|
(2,929)
|
Income tax expense
(recovery) recognized in the Statement of Shareholders'
Equity
|
|
|
(92)
|
|
|
(45)
|
Income tax expense
(recovery) recognized in the Statement of OCI
|
|
|
(9)
|
|
|
(2,733)
|
Other
|
|
|
31
|
|
|
49
|
Adjusted net
earnings
|
|
$
|
152,007
|
|
$
|
69,914
|
Divided
by:
|
|
|
|
|
|
|
Basic weighted average
number of shares outstanding
|
|
|
449,125
|
|
|
446,802
|
Diluted weighted
average number of shares outstanding
|
|
|
451,999
|
|
|
447,849
|
Equals:
|
|
|
|
|
|
|
Adjusted earnings per
share - basic
|
|
$
|
0.338
|
|
$
|
0.156
|
Adjusted earnings per
share - diluted
|
|
$
|
0.336
|
|
$
|
0.156
|
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)
|
|
2020
|
|
2019
|
Cash generated by
operating activities
|
|
$
|
228,099
|
|
$
|
142,300
|
Divided
by:
|
|
|
|
|
|
|
Basic weighted average
number of shares outstanding
|
|
|
449,125
|
|
|
446,802
|
Diluted weighted
average number of shares outstanding
|
|
|
451,999
|
|
|
447,849
|
Equals:
|
|
|
|
|
|
|
Operating cash flow
per share - basic
|
|
$
|
0.508
|
|
$
|
0.318
|
Operating cash flow
per share - diluted
|
|
$
|
0.505
|
|
$
|
0.318
|
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
prescribed by IFRS. 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)
|
|
2020
|
|
2019
|
Cost of
sales
|
|
$
|
130,720
|
|
$
|
128,020
|
Less:
depletion
|
|
|
(60,601)
|
|
|
(63,396)
|
Cash cost of
sales
|
|
$
|
70,119
|
|
$
|
64,624
|
Cash cost of sales is
comprised of:
|
|
|
|
|
|
|
Total cash cost of
gold sold
|
|
$
|
38,570
|
|
$
|
40,154
|
Total cash cost of
silver sold
|
|
|
29,426
|
|
|
23,142
|
Total cash cost of
palladium sold
|
|
|
2,123
|
|
|
1,328
|
Total cash cost of
sales
|
|
$
|
70,119
|
|
$
|
64,624
|
Divided
by:
|
|
|
|
|
|
|
Total gold ounces
sold
|
|
|
90,101
|
|
|
94,766
|
Total silver ounces
sold
|
|
|
4,999
|
|
|
4,484
|
Total palladium ounces
sold
|
|
|
5,546
|
|
|
4,907
|
Equals:
|
|
|
|
|
|
|
Average cash cost of
gold (per ounce)
|
|
$
|
428
|
|
$
|
424
|
Average cash cost of
silver (per ounce)
|
|
$
|
5.89
|
|
$
|
5.16
|
Average cash cost of
palladium (per ounce)
|
|
$
|
383
|
|
$
|
271
|
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)
|
|
2020
|
|
2019
|
Total
sales:
|
|
|
|
|
|
|
Gold
|
|
$
|
171,734
|
|
$
|
139,433
|
Silver
|
|
$
|
123,434
|
|
$
|
76,631
|
Palladium
|
|
$
|
12,100
|
|
$
|
7,531
|
Divided
by:
|
|
|
|
|
|
|
Total gold ounces
sold
|
|
|
90,101
|
|
|
94,766
|
Total silver ounces
sold
|
|
|
4,999
|
|
|
4,484
|
Total palladium ounces
sold
|
|
|
5,546
|
|
|
4,907
|
Equals:
|
|
|
|
|
|
|
Average realized price
of gold (per ounce)
|
|
$
|
1,906
|
|
$
|
1,471
|
Average realized price
of silver (per ounce)
|
|
$
|
24.69
|
|
$
|
17.09
|
Average realized price
of palladium (per ounce)
|
|
$
|
2,182
|
|
$
|
1,535
|
Less:
|
|
|
|
|
|
|
Average cash cost of
gold 1 (per ounce)
|
|
$
|
(428)
|
|
$
|
(424)
|
Average cash cost of
silver 1 (per ounce)
|
|
$
|
(5.89)
|
|
$
|
(5.16)
|
Average cash cost of
palladium 1 (per ounce)
|
|
$
|
(383)
|
|
$
|
(271)
|
Equals:
|
|
|
|
|
|
|
Cash operating margin
per gold ounce sold
|
|
$
|
1,478
|
|
$
|
1,047
|
As a percentage of
realized price of gold
|
|
|
78%
|
|
|
71%
|
Cash operating margin
per silver ounce sold
|
|
$
|
18.80
|
|
$
|
11.93
|
As a percentage of
realized price of silver
|
|
|
76%
|
|
|
70%
|
Cash operating margin
per palladium ounce sold
|
|
$
|
1,799
|
|
$
|
1,264
|
As a percentage of
realized price of palladium
|
|
|
82%
|
|
|
82%
|
|
1) Please refer to
non-IFRS measure (iii), above.
|
v.
|
Net debt is
calculated by subtracting cash and cash equivalents from the
outstanding bank debt under the Revolving Facility. The Company
presents net debt as management and certain investors use this
information to evaluate the Company's liquidity and financial
position.
|
The following table provides a calculation of the Company's net
debt.
|
As at
September 30
|
As at
December 31
|
(in
thousands)
|
2020
|
2019
|
Bank debt
|
$
|
487,500
|
$
|
874,500
|
Less: cash and cash
equivalents
|
|
(209,834)
|
|
(103,986)
|
Net debt
|
$
|
277,666
|
$
|
770,514
|
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
This press release contains "forward-looking statements" within
the meaning of the United States Private Securities Litigation
Reform Act of 1995 and "forward-looking information" within the
meaning of applicable Canadian securities legislation concerning
the business, operations and financial performance of Wheaton and,
in some instances, the business, mining operations and performance
of Wheaton's precious metals purchase agreement ("PMPA")
counterparties. Forward-looking statements, which are all
statements other than statements of historical fact, include, but
are not limited to, statements with respect to the successful
negotiation and entering into of a PMPA with Caldas Gold, payment of US$110 million to Caldas
Gold and the satisfaction of each party's obligations in
accordance with the Caldas Gold PMPA, the receipt by the Company of
silver and gold production in respect of the Marmato Project,
statements with respect to the future price of commodities, the
impact of epidemics (including the COVID-19 virus pandemic),
including the potential heightening of other risks, the estimation
of future production from Mining Operations (including in the
estimation of production, mill throughput, grades, recoveries and
exploration potential), the estimation of mineral reserves and
mineral resources (including the estimation of reserve conversion
rates) and the realization of such estimations, the commencement,
timing and achievement of construction, expansion or improvement
projects by Wheaton's PMPA counterparties at mineral stream
interests owned by Wheaton (the "Mining Operations"), the ability
of Wheaton's PMPA counterparties to comply with the terms of a PMPA
(including as a result of the business, mining operations and
performance of Wheaton's PMPA counterparties) and the potential
impacts of such on Wheaton, the costs of future production, the
estimation of produced but not yet delivered ounces, the impact of
the listing of the Company's common shares on the LSE, any
statements as to future dividends, the ability to fund outstanding
commitments and the ability to continue to acquire accretive PMPAs,
future payments by the Company in accordance with PMPAs, including
any acceleration of payments, projected increases to Wheaton's
production and cash flow profile, projected changes to Wheaton's
production mix, the ability of Wheaton's PMPA counterparties to
comply with the terms of any other obligations under agreements
with the Company, the ability to sell precious metals and cobalt
production, confidence in the Company's business structure, the
Company's assessment of taxes payable and the impact of the CRA
Settlement for years subsequent to 2010, possible 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
and audits. Generally, these forward-looking statements can be
identified by the use of forward-looking terminology such as
"plans", "expects" or "does not expect", "is expected", "budget",
"scheduled", "estimates", "forecasts", "projects", "intends",
"anticipates" or "does not anticipate", or "believes", "potential",
or variations of such words and phrases or statements that certain
actions, events or results "may", "could", "would", "might" or
"will be taken", "occur" or "be achieved". Forward-looking
statements are subject to known and unknown risks, uncertainties
and other factors that may cause the actual results, level of
activity, performance or achievements of Wheaton to be materially
different from those expressed or implied by such forward-looking
statements, including but not limited to risks associated with any
specific risks relating to the completion of documentation and
diligence for the PMPA with Caldas
Gold, the satisfaction of each party's obligations in
accordance with the terms of the PMPA with Caldas Gold, risks associated with the sale of
any common shares under the Company's At The Market equity program
(the "ATM Program") including the amount of any net proceeds from
such offering of common shares, risks associated with fluctuations
in the price of commodities (including Wheaton's ability to sell
its precious metals or cobalt production at acceptable prices or at
all), risks of significant impacts on Wheaton or the Mining
Operations as a result of an epidemic (including the COVID-19 virus
pandemic), risks related to the Mining Operations (including
fluctuations in the price of the primary or other commodities mined
at such operations, regulatory, political and other risks of the
jurisdictions in which the Mining Operations are located, actual
results of mining, risks associated with the exploration,
development, operating, expansion and improvement of the Mining
Operations, environmental and economic risks of the Mining
Operations, and changes in project parameters as plans continue to
be refined), the absence of control over the Mining Operations and
relying on the accuracy of the public disclosure and other
information Wheaton receives from the Mining Operations,
uncertainty in the estimation of production from Mining Operations,
uncertainty in the accuracy of mineral reserve and mineral resource
estimation, the ability of each party to satisfy their obligations
in accordance with the terms of the PMPAs, the estimation of future
production from Mining Operations, Wheaton's interpretation of,
compliance with or application of, tax laws and regulations or
accounting policies and rules being found to be incorrect, any
challenge or reassessment by the CRA of the Company's tax filings
being successful and the potential negative impact to the Company's
previous and future tax filings, assessing the impact of the CRA
Settlement for years subsequent to 2010 (including whether there
will be any material change in the Company's facts or change in law
or jurisprudence), credit and liquidity, indebtedness and
guarantees, mine operator concentration, hedging, competition,
claims and legal proceedings against Wheaton or the Mining
Operations, security over underlying assets, governmental
regulations, international operations of Wheaton and the Mining
Operations, exploration, development, operations, expansions and
improvements at the Mining Operations, environmental regulations
and climate change, Wheaton and the Mining Operations ability to
obtain and maintain necessary licenses, permits, approvals and
rulings, Wheaton and the Mining Operations ability to comply with
applicable laws, regulations and permitting requirements, lack of
suitable infrastructure and employees to support the Mining
Operations, inability to replace and expand mineral reserves,
including anticipated timing of the commencement of production by
certain Mining Operations (including increases in production,
estimated grades and recoveries), uncertainties of title and
indigenous rights with respect to the Mining Operations, Wheaton
and the Mining Operations ability to obtain adequate financing, the
Mining Operations ability to complete permitting, construction,
development and expansion, global financial conditions, and other
risks discussed in the section entitled "Description of the
Business – Risk Factors" in Wheaton's Annual Information Form
available on SEDAR at www.sedar.com, Wheaton's Form 40-F for the
year ended December 31, 2019 and Form
6-K filed March 11, 2020 both on file
with the U.S. Securities and Exchange Commission on EDGAR and
Wheaton's Management's Discussion and Analysis for the three months
ended March 31, 2020 and nine months
ended September 30, 2020, both
available on SEDAR at www.sedar.com and Form 6-Ks filed
May 7, 2020 and November 9, 2020, both available on EDGAR (the
"Disclosure"). Forward-looking statements are based on assumptions
management currently believes to be reasonable, including (without
limitation): the completion of documentation and diligence in
respect of the PMPA with Caldas
Gold, the payment of US$110
million to Caldas Gold and
the satisfaction of each party's obligations in accordance with the
terms of the PMPA with Caldas Gold,
that the sale of common shares under the ATM Program will not have
a significant impact on the market price of the Company's common
shares and that the net proceeds of sales of common shares, if any,
will be used as anticipated, that there will be no material adverse
change in the market price of commodities, that neither Wheaton nor
the Mining Operations will suffer significant impacts as a result
of an epidemic (including the COVID-19 virus pandemic), that the
Mining Operations will continue to operate and the mining projects
will be completed in accordance with public statements and achieve
their stated production estimates, that the mineral reserve and
mineral resource estimates from Mining Operations (including
reserve conversion rates) are accurate, that each party will
satisfy their obligations in accordance with the PMPAs, that
Wheaton will continue to be able to fund or obtain funding for
outstanding commitments, that Wheaton will be able to source and
obtain accretive PMPAs, that any outbreak or threat of an outbreak
of a virus or other contagions or epidemic disease will be
adequately responded to locally, nationally, regionally and
internationally, without such response requiring any prolonged
closure of the Mining Operations or having other material adverse
effects on the Company and counterparties to its PMPAs, that the
trading of the Company's common shares will not be adversely
affected by the differences in liquidity, settlement and clearing
systems as a result of multiple listings of the Common Shares on
the LSE, the TSX and the NYSE, that the trading of the Company's
common shares will not be suspended, that expectations regarding
the resolution of legal and tax matters will be achieved (including
ongoing class action litigation and CRA audits involving the
Company), that Wheaton has properly considered the interpretation
and application of Canadian tax law to its structure and
operations, that Wheaton has filed its tax returns and paid
applicable taxes in compliance with Canadian tax law, that
Wheaton's application of the CRA Settlement for years subsequent to
2010 is accurate (including the Company's assessment that there
will be no material change in the Company's facts or change in law
or jurisprudence for years subsequent to 2010), and such other
assumptions and factors as set out in the Disclosure. There can be
no assurance that forward-looking statements will prove to be
accurate and even if events or results described in the
forward-looking statements are realized or substantially realized,
there can be no assurance that they will have the expected
consequences to, or effects on, Wheaton. Readers should not place
undue reliance on forward-looking statements and are cautioned that
actual outcomes may vary. The forward-looking statements included
herein are for the purpose of providing readers with information to
assist them in understanding Wheaton's expected financial and
operational performance and may not be appropriate for other
purposes. Any forward looking statement speaks only as of the date
on which it is made, reflects Wheaton's management's current
beliefs based on current information and will not be updated except
in accordance with applicable securities laws. Although Wheaton has
attempted to identify important factors that could cause actual
results, level of activity, performance or achievements to differ
materially from those contained in forward‑looking statements,
there may be other factors that cause results, level of activity,
performance or achievements not to be as anticipated, estimated or
intended.
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.