TIDMWPM
RNS Number : 0066J
Wheaton Precious Metals Corp.
11 August 2023
August 11, 2023
Vancouver, British Columbia
Designated News Release
SECOND QUARTER FINANCIAL results
Wheaton Precious Metals Announces Solid Second Quarter Results
for 2023
"Wheaton delivered solid operational results during the quarter,
generating over $200 million of operating cash flow, primarily
driven by significant sequential improvement at the recently
commissioned expansion at our largest asset, Salobo. Furthermore,
we continued to see momentum on the corporate development front
with the addition of a new gold stream on Lumina Gold's Cangrejos
project and the expansion of our existing gold stream on Artemis
Gold's Blackwater project," said Randy Smallwood, President and
Chief Executive Officer of Wheaton Precious Metals. "Despite
operations at Peñasquito being suspended in early June, we achieved
quarter-over-quarter gold equivalent production growth. As such, we
are reiterating our 2023 production guidance, which we now expect
to have a slightly higher weighting toward gold, highlighting the
resilience of our high-quality, diversified portfolio. Lastly, we
are proud to have published our 2022 Sustainability Report and
inaugural 2022 Climate Change Report, demonstrating our continued
commitment to sustainability and focus on delivering value to all
of our stakeholders."
Solid Financial Results and Strong Balance Sheet
-- Second quarter of 2023: $265 million in revenue, $202 million
in operating cash flow, $141 million in net earnings and $143
million in adjusted net earnings [1]
-- A cash balance of $829 million and no debt as at June 30,
2023, after making total upfront cash payments of $89 million
relative to mineral stream interests in the quarter
-- Undrawn $2 billion revolving credit facility extended by an
additional year with the facility now maturing on June 22, 2028
-- Declared a quarterly dividend (1) of $0.15 per common share
High Quality Asset Base
-- Streaming agreements on 19 operating mines and 13 development projects
-- 93% of attributable production from assets in the lowest half
of their respective cost curves [2](, [3])
-- 30 years of mine life based on Proven and Probable Mineral
Reserves and potential additional mine life from mineral resource
conversion and exploration (2) (, [4])
-- Accretive portfolio growth:
o Acquired a 6.6% gold stream on Lumina Gold Corp.'s ("Lumina")
Cangrejos Project ("Cangrejos")
o Expanded the gold stream on Artemis Gold Inc.'s Blackwater
Project ("Blackwater")
-- Further de-risked growth profile: the Goose Project was
acquired by B2Gold Corp ("B2Gold"). and Aris Mining Corporation
("Aris Mining") received approval of the Environmental Management
Plan which now permits the development of the Marmato Lower
Mine
-- Second quarter production amounted to 147,700 gold equivalent
ounces(3) ("GEOs"), underscored by significant progress at the
recently commissioned expansion at Salobo
-- Average annual production guidance for 2023 of 600,000 to
660,000 GEOs(2,3) maintained, with sector-leading growth resulting
in five and ten-year average annual production guidance of
approximately 810,000 and 850,000 GEOs(2,3) , respectively
Leadership in Sustainability
-- Top Rankings: #1 out of 117 precious metals companies and
ranked in the Global Top 50 companies by Sustainalytics, AA rated
by MSCI, and Prime rated by ISS
-- Published inaugural Climate Change Report, detailing progress
towards Net-Zero Carbon Emissions by 2050 and covering all material
emissions including Scope 3
-- Published fourth annual Sustainability Report highlighting
our commitment to progress and providing a comprehensive review of
Wheaton's performance in environmental, social and governance
topics
Operational Overview
(all figures in
US dollars
unless otherwise
noted) Q2 2023 Q2 2022 Change YTD 2023 YTD 2022 Change
---------------- ------- ------------ ------------ -------- -------------- ----------
Units produced
Gold ounces 85,083 66,442 28.1 % 158,102 144,496 9.4 %
Silver ounces 4,417 6,500 (32.0)% 9,513 12,675 (24.9)%
Palladium
ounces 3,880 3,899 (0.5)% 7,585 8,387 (9.6)%
Cobalt pounds 152 136 11.3 % 276 371 (25.6)%
Gold equivalent
ounces(3) 147,699 155,932 (5.3)% 291,700 320,843 (9.1)%
Units sold
Gold ounces 75,294 84,337 (10.7)% 137,899 162,238 (15.0)%
Silver ounces 4,437 5,848 (24.1)% 8,186 11,401 (28.2)%
Palladium
ounces 3,392 3,378 0.4 % 6,338 7,453 (15.0)%
Cobalt pounds 265 225 17.8 % 588 736 (20.1)%
Gold equivalent
ounces(3) 138,835 165,766 (16.2)% 256,218 324,847 (21.1)%
Change in PBND
and Inventory
Gold equivalent
ounces(3) (4,872) (25,675) (20,803) 6,392 (36,737) (43,129)
----------------- ------- ------------ ------------ -------- -------------- ----------
Revenue $264,972 $ 302,922 (12.5)% $ 479,437 $ 610,166 (21.4)%
Net earnings $141,448 $ 149,074 (5.1)% $ 252,839 $ 306,542 (17.5)%
Per share $ 0.312 $ 0.330 (5.5)% $ 0.559 $ 0.679 (17.7)%
Adjusted net
earnings (1) $142,584 $ 149,285 (4.5)% $ 247,015 $ 307,292 (19.6)%
Per share (1) $ 0.315 $ 0.331 (4.8)% $ 0.546 $ 0.681 (19.8)%
Operating cash
flows $202,376 $ 206,359 (1.9)% $ 337,482 $ 416,899 (19.0)%
Per share (1) $ 0.447 $ 0.457 (2.2)% $ 0.746 $ 0.924 (19.3)%
----------------- ------- ------------ ------------ -------- -------------- ----------
All amounts in thousands except gold, palladium & gold
equivalent ounces, and per share amounts.
Financial Review
Revenues
Revenue in the second quarter of 2023 was $265 million (56%
gold, 41% silver, 2% palladium and 1% cobalt) , with the $38
million decrease relative to the prior period quarter being
primarily due to relative changes in the GEOs(3) produced but not
yet delivered partially offset by a 4% increase in realized
commodity prices.
Revenue was $479 million in the six months ended June 30, 2023,
representing a $131 million decrease from the comparable period of
the previous year due primarily to a 21% decrease in the number of
GEOs(3) sold, resulting from lower production and relative changes
in the GEOs(3) produced but not yet delivered.
Cash Costs and Margin
Average cash costs(1) in the second quarter of 2023 were $422
per GEO(3) as compared to $452 in the second quarter of 2022. This
resulted in a cash operating margin(1) of $1,487 per GEO(3) sold,
an increase of 8% as compared with the second quarter of 2022 , a
result of the higher realized price per ounce.
Average cash costs(1) for the six months ended June 30, 2023
were $432 per GEO(3) as compared to $446 in the comparable period
of the previous year. This resulted in a cash operating margin(1)
of $1,439 per GEO(3) sold, virtually unchanged from the comparable
period of the previous year.
Cash Flow from Operations
Operating cash flow in the second quarter of 2023 amounted to
$202 million, with the $4 million decrease due primarily to the
lower sales volumes, partially offset by higher amounts of interest
received in the second quarter of 2023 coupled with the timing of
the payout of the Company's performance share units ("PSUs"), with
the PSUs being paid out in the second quarter of 2022 while in
2023, they were paid out in the first quarter.
Operating cash flows for the six months ended June 30, 2023
amounted to $337 million, with the $79 million decrease from the
comparable period of the previous year being due primarily to the
lower sales volumes, partially offset by higher amounts of interest
received during the current year.
Balance Sheet (at June 30, 2023 )
-- Approximately $829 million of cash on hand
-- The Company extended its existing undrawn $2 billion
revolving term loan (the "Revolving Facility") with its maturity
date now June 22, 2028
-- During the second quarter of 2023, the Company made total
upfront cash payments of $89 million relative to the mineral stream
interests consisting of
- a $31 million payment relative to the Goose Project precious
metals purchase agreement ("PMPA")
- a $35 million payment relative to the Blackwater Silver
PMPA
- a $10 million payment relative to the expansion of the
Blackwater Gold PMPA
- a $12 million payment relative to the Cangrejos PMPA
-- With the existing cash on hand coupled with the fully undrawn
$2 billion revolving credit facility , t he Company is well
positioned to fund all outstanding commitments and known
contingencies as well as providing flexibility to acquire
additional accretive mineral stream interests.
Second Quarter Operating Asset Highlights
Salobo: In the second quarter of 2023, Salobo produced 54,800
ounces of attributable gold, an increase of approximately 61%
relative to the second quarter of 2022, driven by higher throughput
and grades. According to Vale S.A. ("Vale"), production in the
second quarter was driven by a better-than-expected ramp up of
Salobo III partially offset by planned maintenance activities and
additional work on the crushers at Salobo I and II. Vale reports
that planned maintenance activities will continue in the second
half of 2023, and that the ramp up of Salobo III is expected to be
fully completed in 2024.
Antamina: In the second quarter of 2023, Antamina produced 1.0
million ounces of attributable silver, a decrease of approximately
28% relative to the second quarter of 2022, primarily due to lower
grades as per the mine plan .
Peñasquito: In the second quarter of 2023, Peñasquito produced
1.7 million ounces of attributable silver, a decrease of
approximately 17% relative to the second quarter of 2022 due to
lower throughput.
On June 8, 2023, Newmont Corporation ("Newmont") reported that
it had suspended operations at the Peñasquito mine due to a labour
dispute. To date, Newmont has indicated that it is in ongoing
discussions with the leadership for the National Union of Mine and
Metal Workers of the Mexican Republic and remains focused on
finding a sustainable resolution to the dispute.
Constancia: In the second quarter of 2023, Constancia produced
0.4 million ounces of attributable silver and 7,400 ounces of
attributable gold, a decrease of approximately 28% and 7%,
respectively, relative to the second quarter of 2022, with the
decrease in both metals being primarily due to lower throughput and
grades. As per Hudbay, full mining activities resumed in the
Pampacancha pit in February and the period of higher planned
stripping activities in the Pampacancha pit was completed in June,
with higher-than-expected production forecast for the second half
of the year.
Sudbury: In the second quarter of 2023, Vale's Sudbury mines
produced 7,700 ounces of attributable gold, an increase of
approximately 46% relative to the second quarter of 2022. As per
Vale, the increase in production from Sudbury was driven primarily
due to lower production in the second quarter of 2022 due to a
28-day maintenance shutdown at the Sudbury smelter and refiner.
Stillwater: In the second quarter of 2023, the Stillwater mines
produced 2,000 ounces of attributable gold and 3,900 ounces of
attributable palladium, a decrease of approximately 7% for gold
relative to the second quarter of 2022 while palladium production
was virtually unchanged . As reported by Sibanye-Stillwater
Limited, production in the quarter was impacted due to an incident
in March at Stillwater West involving the shaft headgear, winder
house and winder rope. As a result, production from the Stillwater
West mine below the 50 level was suspended for approximately five
weeks but recommenced on April 16, 2023.
San Dimas: In the second quarter of 2023, San Dimas produced
11,200 ounces of attributable gold, an increase of approximately
11% relative to the second quarter of 2022 . First Majestic Silver
Corp. reported that exploration drill holes at the San Dimas
property intersected significant gold and silver mineralization in
three separate veins: the Sinaloa North-Elia vein, the Santa Teresa
vein and the Perez vein.
Other Gold: In the second quarter of 2023, total Other Gold
attributable production was 1,900 ounces, a decrease of
approximately 71% relative to the second quarter of 2022, primarily
due to the closure of the 777 mine in June 2022 and the suspension
of operations at the Minto mine in May 2023.
Other Silver: In the second quarter of 2023, total Other Silver
attributable production was 1.3 million ounces, a decrease of
approximately 48% relative to the second quarter of 2022, primarily
due to the closure of the 777 mine and the termination of the Keno
Hill and Yauliyacu PMPAs.
Voisey's Bay: In the second quarter of 2023, the Voisey's Bay
mine produced 152,000 pounds of attributable cobalt, an increase of
approximately 11% relative to the second quarter of 2022, primarily
due to mining lower grade material during the ongoing transitional
period between the depletion of the Ovoid open-pit mine and ramp-up
to full production of the Voisey's Bay underground project.
Production in the second quarter was also impacted as the annual
maintenance schedule at the Long Harbour refinery (from May to
July) was planned longer than the previous year. Vale reports that
physical completion of the Voisey's Bay underground mine extension
was 85% at the end of the second quarter, with Reid Brook's bulk
material handling system expected to be delivered in the third
quarter of 2023, and lateral development advancing on the Eastern
Deeps. Vale achieved the first ore production from the Reid Brook
deposit, the first of two underground mines to be developed in the
project, in the second quarter of 2021. Eastern Deeps, the second
deposit, has started to extract development ore from the deposit
and is scheduled to start the main production ramp-up in the second
half of 2023.
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.
Second Quarter Development Asset Highlights
Blackwater Project: On June 14, 2023, the Company amended the
Blackwater Gold PMPA. Under the terms of the amended agreement, the
Company is entitled to purchase an amount of gold equal to 8% of
the payable gold production until 464,000 ounces have been
delivered (previously 279,908 ounces), with this threshold to
increase should there be a delay in the anticipated timing of
deliveries. Once the threshold has been achieved, the Company's
attributable gold production will drop to 4% of payable gold
production for the life of the mine. In exchange for the amendment,
the Company is committed to pay additional upfront cash
consideration of $40 million, payable in four installments, with
the first payment of $10 million having been paid on June 15, 2023.
In conjunction with this amendment, Artemis announced that they
were committing additional investment as part of its Phase 1
development in order to facilitate the potential fast-tracking of
the Phase 2 expansion.
In addition, on July 4, 2023, Artemis announced receipt of the
Fisheries Act Authorization for development of Blackwater, which
will facilitate the commencement of construction of water diversion
structures and dams in the Davidson Creek valley which runs through
the basin of the Blackwater tailings storage facility.
Marmato Mine: On July 12, 2023, Aris Mining announced that they
have received approval from the Corporación Autónoma Regional del
Caldas, a regional environmental authority in Colombia, of the
Environmental Management Plan which now permits the development of
the Marmato Lower Mine.
Copper World Complex: On April 5, 2023, Hudbay announced the
receipt of confirmation from the Army Corps of Engineers ("ACOE")
that Hudbay's previous surrender of the Section 404 Clean Water Act
permit for the former Rosemont project was formally accepted and
revoked as requested. The ACOE also reaffirmed the validity of the
March 2021 approved jurisdictional determinations whereby the ACOE
determined there are no waters of the U.S. on the property, and
therefore, a 404 Permit is not required. Hudbay continues to expect
to receive the two remaining state permits required (an Aquifer
Protection Permit and an Air Quality Permit) in the second half of
2023. Clearing and grading work to prepare for the Copper World
site, including the construction of roads and other facilities,
continues to be underway. As per Hudbay, pre-feasibility activities
for the private land Phase I of the Copper World project are
well-advanced and a pre-feasibility study is expected to be
released in the third quarter of 2023.
Goose Project: On April 19, 2023, B2Gold acquired Sabina Gold
& Silver Corp ("Sabina"), the owners of the Goose Project.
Subsequent to closing, B2Gold exercised the option to acquire 33%
of the stream under the Goose PMPA in exchange for a cash payment
in the amount of $46 million, resulting in a gain on partial
disposal of the Goose PMPA in the amount of $5 million. B2Gold
continues to advance construction of the Goose Project, moving
toward commencement of production in 2025 and initiating an
exploration program to further define untapped potential and unlock
further opportunities for growth.
Curipamba Project: On August 2, 2023, Adventus Mining Corp.
provided an update that the Constitutional Court of Ecuador (the
"Constitutional Court") has admitted for processing an
unconstitutionality claim filed by the indigenous group CONAIE and
other complainants against Presidential Decree 754 (the "Decree")
that regulates environmental consultation for all public and
private industries and sectors in Ecuador. Adventus also notes that
the Constitutional Court ordered the provisional suspension of the
Decree until the same Constitutional Court resolves the claim
filed. Adventus indicates that the immediate effect of the
provisional suspension of the Decree is that no medium or high
impact projects, from any sector or industry in the country,
including the Curipamba project, shall be able to obtain an
environmental license until the Constitutional Court resolves this
issue. Adventus reports that the Government of Ecuador has stated
that it will employ all measures at its disposal to respond to the
Constitutional Court.
Corporate Development
Cangrejos PMPA: On May 16, 2023, the Company entered into a PMPA
with Lumina in respect of its 100% owned Cangrejos gold-copper
project located in El Oro Province, Ecuador. Under the terms of the
agreement, Wheaton will purchase 6.6% of the payable gold
production until 700,000 ounces of gold have been delivered, at
which point the stream will be reduced to 4.4% of the payable gold
production for the life of the mine. Under the terms of the
Cangrejos PMPA, the Company is committed to pay Lumina total
upfront cash payments of $300 million, $48 million of which is
available pre-construction, with the remainder to be paid in staged
equal installments during construction of the mine, subject to
various customary conditions being satisfied. As it relates to the
$48 million, payments will be made in four installments, including
(i) $12 million which was paid on closing; (ii) $10 million to be
paid six months after closing; (iii) $15 million to be paid 12
months after closing; and (iv) $11 million that can be drawn upon
for committed
acquisition of surface rights.
Sustainability
Annual Sustainability Report
-- Wheaton published its fourth annual Sustainability Report on
May 15, 2023, highlighting its commitment to progress and providing
a comprehensive review of Wheaton's performance in environmental,
social and governance topics including:
o Strategy and Governance: Established a sustainability linked
element in connection with the revolving credit facility
o Diversity, Equity and Inclusion: Achieved target of 30% female
Board members two years early
o Investment Decisions and Due Diligence: 100% of new streaming
agreements in 2022 screened for ESG issues and risks, and 85% of
Wheaton's mining partners are committed to implementing one or more
industry sustainability standards, representing 89% of attributable
2022 production
o Recognition: 'ESG Industry Top-Rated' in precious metals and
'ESG Global 50 Top Rated' out of over 15,000 multi-sector companies
by Sustainalytics, 'AA' rated by MSCI and 'Prime' rated by ISS
Inaugural Climate Change Report:
-- Wheaton published its inaugural Climate Change Report on June 15, 2023, highlighting:
o Details on climate-related governance, strategy, risk
management, and metrics and performance
o Expanded information on the pathway to achieve net-zero carbon
emissions by 2050 and progress to date on this topic
o Identification of climate risks and opportunities and
management strategies.
o Commitment to support our partners' decarbonization and
climate solutions efforts
o 68% of 2021 Scope 3 financed emissions covered by emissions
reductions targets aligned to 2degC or less
o Limited assurance over Scope 2 and Scope 3 finance
emissions
-- On April 27, 2023, Hudbay announced the signing of a new
10-year power purchase agreement with ENGIE Energía Perú for access
to a 100% renewable energy supply to Hudbay's Constancia operations
in Peru. As reported by Hudbay, Hudbay's Scope 1 and Scope 2
greenhouse gas emissions are expected to significantly decline as a
result of the new Constancia renewable energy supply agreement,
which should reduce Wheaton's attributable scope 3 emissions from
the Constancia mine and help advance the Company's Net Zero
targets.
Community Investment Program:
-- During the quarter, Wheaton confirmed its support for a new
Vale initiative aimed at reducing extreme poverty in the
communities surrounding the Salobo mine. The program builds upon
the success of previous initiatives supported by both Wheaton and
the Vale Foundation aimed at promoting social and economic
development.
-- During the quarter, the Wheaton Walk Through Time was
completed at the University of British Columbia. Funded by Wheaton,
the outdoor exhibit links the Pacific Museum of Earth and the Beaty
Biodiversity Museum with an objective to garner interest among
children and youth in earth sciences. It includes a Timeline of the
geological and biological history of the earth since its formation
4.5 billion years ago in combination with a Tree of Life showing
the evolutionary relationship between all living things.
-- The 2023 Courage to Come Back Awards Presented by Wheaton
celebrated its 25th anniversary, attracting over 1,700 guests and
raising over C$2.7 million for Coast Mental Health.
About Wheaton Precious Metals Corp. and Outlook
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 is
committed to strong ESG practices and giving back to the
communities where Wheaton and its mining partners operate. Wheaton
creates sustainable value through streaming for all of its
stakeholders.
Wheaton's estimated attributable production in 2023 is forecast
to be 320,000 to 350,000 ounces of gold, 20.0 to 22.0 million
ounces of silver, and 22,000 to 25,000 GEOs of other metals,
resulting in production of approximately 600,000 to 660,000 GEOs,
unchanged from previous guidance (2) (,) (3) . Due to the
suspension of the Peñasquito mine as a result of the ongoing labour
dispute, and the Company's inability to forecast when it will be
resolved, Wheaton now expects its full-year production to have a
slightly higher weighting toward gold. Assuming the dispute is
resolved and operations resume by the end of the third quarter of
2023, the Company expects to achieve its total GEO(2,3) guidance of
approximately 600,000 to 660,000 GEOs. For the five-year period
ending in 2027, the Company estimates that average production will
amount to 810,000 GEOs, while for the ten-year period ending in
2032, the Company estimates that average annual production will
amount to 850,000 GEOs, also unchanged from previous guidance (2)
(,) (3) .
In accordance with Wheaton Precious Metals(TM) Corp.'s ("Wheaton
Precious Metals", "Wheaton" or the "Company") MD&A and
Financial Statements, reference to the Company and Wheaton includes
the Company's wholly owned subsidiaries.
Webcast and Conference Call Details
A conference call will be held on Friday, August 11, 2023,
starting at 11:00 am (Eastern Time) to discuss these results. To
participate in the live call please use one of the following
methods:
To join the conference call without operator assistance, you may
register and enter your phone number here to receive an instant
automated call back.
Dial toll free from Canada or the US: 1-888-664-6383
Dial from outside Canada or the US: 1-416-764-8650
Pass code: 43211206
Live audio webcast: Webcast Link
Participants should dial in five to ten minutes before the
call.
The conference call will be recorded and available until August
18, 2023 at 11:59 pm ET. 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: 1-888-390-0541
Dial from outside Canada or the US: 1-416-764-8677
Pass code: 211206#
Archived audio webcast: 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.sedarplus.ca.
Mr. Wes Carson, P.Eng., Vice President, Mining Operations, Neil
Burns, P.Geo., Vice President, Technical Services for Wheaton
Precious Metals and Ryan Ulansky, P.Eng., Vice President,
Engineering, are a "qualified person" as such term is defined under
National Instrument 43-101, and have reviewed and approved the
technical information disclosed in this news release (specifically
Mr. Carson has reviewed production figures, Mr. Burns has reviewed
mineral resource estimates and Mr. Ulansky has reviewed the mineral
reserve estimates).
Wheaton Precious Metals believes that there are no significant
differences between its corporate governance practices and those
required to be followed by United States domestic issuers under the
NYSE listing standards. This confirmation is located on the Wheaton
Precious Metals website at
http://www.wheatonpm.com/Company/corporate-governance/default.aspx
.
End Notes
Condensed Interim Consolidated Statements of Earnings
Three Months Ended Six Months Ended
June 30 June 30
(US dollars and shares in thousands, except per share amounts -
unaudited) 2023 2022 2023 2022
----------------------------------------------------------------- ------------ -------- --------- --------
Sales $ 264,972 $302,922 $ 479,437 $610,166
----------------------------------------------------------------- -------- ------- -------- -------
Cost of sales
Cost of sales, excluding depletion $ 58,642 $ 74,943 $ 110,606 $144,936
Depletion 54,474 65,682 99,473 123,084
----------------------------------------------------------------- -------- ------- -------- -------
Total cost of sales $ 113,116 $140,625 $ 210,079 $268,020
----------------------------------------------------------------- -------- ------- -------- -------
Gross margin $ 151,856 $162,297 $ 269,358 $342,146
General and administrative expenses 10,216 9,685 20,315 19,089
Share based compensation 4,484 1,608 11,881 11,509
Donations and community investments 1,940 1,160 3,318 1,973
----------------------------------------------------------------- -------- ------- -------- -------
Earnings from operations $ 135,216 $149,844 $ 233,844 $309,575
Gain on disposal of mineral stream interest (5,027) - (5,027) -
Other (income) expense (8,692) (820) (16,254) (650)
----------------------------------------------------------------- -------- ------- -------- -------
Earnings before finance costs and income taxes $ 148,935 $150,664 $ 255,125 $310,225
Finance costs 1,352 1,389 2,731 2,811
----------------------------------------------------------------- -------- ------- -------- -------
Earnings before income taxes $ 147,583 $149,275 $ 252,394 $307,414
Income tax (expense) recovery (6,135) (201) 445 (872)
----------------------------------------------------------------- -------- ------- -------- -------
Net earnings $ 141,448 $149,074 $ 252,839 $306,542
----------------------------------------------------------------- -------- ------- -------- -------
Basic earnings per share $ 0.312 $ 0.330 $ 0.559 $ 0.679
Diluted earnings per share $ 0.312 $ 0.330 $ 0.558 $ 0.678
Weighted average number of shares outstanding
Basic 452,892 451,524 452,633 451,221
Diluted 453,575 452,359 453,368 452,123
================================================================= ======== ======= ======== =======
Condensed Interim Consolidated Balance Sheets
As at As at
June 30 December 31
(US dollars in thousands - unaudited) 2023 2022
------------------------------------------------- --------------- ---------------
Assets
Current assets
Cash and cash equivalents $ 828,837 $ 696,089
Accounts receivable 6,971 10,187
Cobalt inventory 4,956 10,530
Taxes receivable 4,217 -
Other 4,466 3,287
------------------------------------------------------ ---------- --- ----------
Total current assets $ 849,447 $ 720,093
------------------------------------------------- --- ---------- --- ----------
Non-current assets
Mineral stream interests $ 5,691,166 $ 5,707,019
Early deposit mineral stream interests 46,843 46,092
Long-term equity investments 255,534 256,095
Property, plant and equipment 8,458 4,210
Other 28,457 26,397
------------------------------------------------------ ---------- --- ----------
Total non-current assets $ 6,030,458 $ 6,039,813
------------------------------------------------- --- ---------- --- ----------
Total assets $ 6,879,905 $ 6,759,906
------------------------------------------------- --- ---------- --- ----------
Liabilities
Current liabilities
Accounts payable and accrued liabilities $ 9,578 $ 12,570
Current taxes payable - 2,763
Current portion of performance share units 8,692 14,566
Current portion of lease liabilities 609 818
Total current liabilities $ 18,879 $ 30,717
------------------------------------------------- --- ---------- --- ----------
Non-current liabilities
Performance share units $ 4,549 $ 6,673
Lease liabilities 5,925 1,152
Deferred income taxes 190 165
Pension liability 3,949 3,524
------------------------------------------------------ ---------- --- ----------
Total non-current liabilities $ 14,613 $ 11,514
------------------------------------------------- --- ---------- --- ----------
Total liabilities $ 33,492 $ 42,231
------------------------------------------------- --- ---------- --- ----------
Shareholders' equity
Issued capital $ 3,773,227 $ 3,752,662
Reserves (26,189) 66,547
Retained earnings 3,099,375 2,898,466
------------------------------------------------------ ---------- --- ----------
Total shareholders' equity $ 6,846,413 $ 6,717,675
------------------------------------------------- --- ---------- --- ----------
Total liabilities and shareholders' equity $ 6,879,905 $ 6,759,906
------------------------------------------------- --- ---------- --- ----------
Condensed Interim Consolidated Statements of Cash Flows
Three Months
Ended Six Months Ended
June 30 June 30
(US dollars in thousands - unaudited) 2023 2022 2023 2022
----------------------------------------------- ---------- ---------- ---------- ----------
Operating activities
Net earnings $ 141,448 $ 149,074 $ 252,839 $ 306,542
Adjustments for
Depreciation and depletion 54,857 66,080 100,247 123,875
Gain on disposal of mineral stream
interest (5,027) - (5,027) -
Interest expense 36 24 53 50
Equity settled stock based compensation 1,859 1,498 3,402 2,839
Performance share units - expense 2,625 110 8,479 8,670
Performance share units - paid - (18,247) (16,675) (18,247)
Pension expense 291 271 458 429
Pension paid (20) - (116) -
Income tax expense (recovery) 6,135 201 (445) 872
Loss (gain) on fair value adjustment
of share purchase warrants held 280 154 105 897
Investment income recognized in net
earnings (8,880) (549) (16,028) (743)
Other 418 42 499 (92)
Change in non-cash working capital 1,685 7,365 (387) (8,553)
=============================================== ========= ========= ========= =========
Cash generated from operations before
income taxes and interest $ 195,707 $ 206,023 $ 327,404 $ 416,539
Income taxes paid (988) (80) (4,332) (112)
Interest paid (15) (25) (33) (51)
Interest received 7,672 441 14,443 523
=============================================== ========= ========= ========= =========
Cash generated from operating activities $ 202,376 $ 206,359 $ 337,482 $ 416,899
=============================================== ========= ========= ========= =========
Financing activities
Credit facility extension fees $ (846) $ (2) $ (846) $ (2)
Share purchase options exercised 1,134 1,777 10,510 7,549
Lease payments (177) (202) (379) (402)
----------------------------------------------- --------- --------- --------- ---------
Dividends paid (131,091) (117,117) (131,091) (117,117)
=============================================== ========= ========= ========= =========
Cash used for financing activities $(130,980) $(115,544) $(121,806) $(109,972)
=============================================== ========= ========= ========= =========
Investing activities
Mineral stream interests $ (88,710) $ (15,549) $(120,234) $ (60,801)
Early deposit mineral stream interests - - (750) (750)
Net proceeds on disposal of mineral
stream interests 46,400 - 46,400 -
Acquisition of long-term investments (31) (2,633) (8,175) (22,768)
Proceeds on disposal of long-term
investments 202 - 202 -
Dividends received 917 108 917 220
Other (1,209) (89) (1,770) (125)
=============================================== ========= ========= ========= =========
Cash used for investing activities $ (42,431) $ (18,163) $ (83,410) $ (84,224)
=============================================== ========= ========= ========= =========
Effect of exchange rate changes on
cash and cash equivalents $ 175 $ (189) $ 482 $ (122)
=============================================== ========= ========= ========= =========
Increase in cash and cash equivalents $ 29,140 $ 72,463 $ 132,748 $ 222,581
Cash and cash equivalents, beginning of
period 799,697 376,163 696,089 226,045
=============================================== ========= ========= ========= =========
Cash and cash equivalents, end of
period $ 828,837 $ 448,626 $ 828,837 $ 448,626
----------------------------------------------- --------- --------- --------- ---------
Summary of Units Produced
Q2 2023 Q1 2023 Q4 2022 Q3 2022 Q2 2022 Q1 2022 Q4 2021 Q3 2021
------------------ ---------------- ----------------- ----------------- ----------------- ------------- ------------- ------------ -----------
Gold ounces
produced (2)
Salobo 54,804 43,677 37,939 44,212 34,129 44,883 48,235 55,205
Sudbury (3) 7,721 6,203 5,270 3,437 5,289 5,362 4,379 148
Constancia 7,444 6,905 10,496 7,196 8,042 6,311 9,857 8,533
San Dimas (4) 11,166 10,754 10,037 11,808 10,044 10,461 13,714 11,936
Stillwater (5) 2,017 1,960 2,185 1,833 2,171 2,497 2,664 2,949
Other
Marmato 639 457 533 542 778 477 479 433
777 (6) - - - - 3,509 4,003 4,462 4,717
Minto 1,292 3,063 2,567 3,050 2,480 4,060 3,506 1,703
------------------ ---------------- ----------------- ----------------- ----------------- ------------- ------------- ------------ -----------
Total Other 1,931 3,520 3,100 3,592 6,767 8,540 8,447 6,853
------------------ ---------------- ----------------- ----------------- ----------------- ------------- ------------- ------------ -----------
Total gold ounces
produced 85,083 73,019 69,027 72,078 66,442 78,054 87,296 85,624
------------------ ---------------- ----------------- ----------------- ----------------- ------------- ------------- ------------ -----------
Silver ounces
produced (2)
Peñasquito 1,744 2,076 1,761 2,017 2,089 2,219 2,145 2,180
Antamina 960 851 1,067 1,327 1,330 1,210 1,309 1,475
Constancia 420 552 655 564 584 506 578 521
Other
Los Filos
(7) 28 28 14 21 35 42 37 17
Zinkgruvan 374 632 664 642 739 577 482 658
Neves-Corvo 407 436 369 323 345 344 522 362
Aljustrel 279 343 313 246 292 287 325 314
Cozamin 184 141 157 179 169 186 213 199
Marmato 7 8 9 7 7 11 7 10
Yauliyacu
(8) - - 261 463 756 637 382 372
Stratoni
(9) - - - - - - 129 18
Minto 14 29 33 33 26 45 44 25
Keno Hill
(10) - - - - 48 20 30 44
777 (6) - - - - 80 91 96 81
------------------ ---------------- ----------------- ----------------- ----------------- ------------- ------------- ------------ -----------
Total Other 1,293 1,617 1,820 1,914 2,497 2,240 2,267 2,100
------------------ ---------------- ----------------- ----------------- ----------------- ------------- ------------- ------------ -----------
Total silver
ounces produced 4,417 5,096 5,303 5,822 6,500 6,175 6,299 6,276
------------------ ---------------- ----------------- ----------------- ----------------- ------------- ------------- ------------ -----------
Palladium ounces
produced (2)
Stillwater (5) 3,880 3,705 3,869 3,229 3,899 4,488 4,733 5,105
------------------ ---------------- ----------------- ----------------- ----------------- ------------- ------------- ------------ -----------
Cobalt pounds
produced (2)
Voisey's Bay 152 124 128 226 136 234 381 370
------------------ ---------------- ----------------- ----------------- ----------------- ------------- ------------- ------------ -----------
GEOs produced (11) 147,699 144,000 142,887 153,025 155,932 164,911 177,490 175,767
------------------ ---------------- ----------------- ----------------- ----------------- ------------- ------------- ------------ -----------
Average payable
rate (2)
Gold 95.1% 95.1 % 94.9 % 95.1 % 95.1 % 95.2 % 96.0% 96.0%
Silver 82.8% 82.0% 83.4% 85.5% 85.7% 86.0% 85.9% 86.4%
Palladium 94.1% 96.0% 91.7% 95.0% 94.6% 92.7% 92.2% 94.5%
Cobalt 93.3% 93.3% 93.3% 93.3% 93.3% 93.3% 93.3% 93.3%
GEO (11) 90.4% 89.1% 89.2% 90.3% 90.2% 90.5% 91.3% 91.3%
------------------ ---------------- ----------------- ----------------- ----------------- ------------- ------------- ------------ -----------
1) All figures in thousands except gold and palladium ounces produced.
2) Quantity produced represent the amount of gold, silver,
palladium and cobalt contained in concentrate or doré prior to
smelting or refining deductions. Production figures and 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 and 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. Operations at the Sudbury mines were
suspended from June 1, 2021 to August 9, 2021 as a result of a
labour disruption by unionized employees.
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. For reference, attributable silver production from
prior periods is as follows: Q2 2023 - 423,000 ounces; Q1 2023 -
401,000 ounces; Q4 2022 - 348,000 ounces; Q3 2022 - 412,000 ounces;
Q2 2022 - 382,000 ounces; Q1 2022 - 408,000 ounces; Q4 2021 -
544,000 ounces; Q3 2021 - 472,000 ounces.
5) Comprised of the Stillwater and East Boulder gold and palladium interests.
6) On June 22, 2022, Hudbay announced that mining activities at
777 have concluded and closure activities have commenced.
7) Operations at Los Filos were temporarily suspended from June
22, 2021 to July 26, 2021 as the result of illegal blockades by a
group of unionized employees and members of the Xochipala
community.
8) On December 14, 2022 the Company terminated the Yauliyacu
PMPA in exchange for a cash payment of $132 million.
9) The Stratoni mine was placed into care and maintenance during Q4-2021.
10) On September 7, 2022, the Company terminated the Keno Hill
PMPA in exchange for $141 million of Hecla common stock.
11) GEOs, which are provided to assist the reader, are based on
the following commodity price assumptions: $1,850 per ounce gold;
$24.00 per ounce silver; $1,800 per ounce palladium; and $18.75 per
pound cobalt; consistent with those used in estimating the
Company's production guidance for 2023.
Summary of Units Sold
Q2 2023 Q1 2023 Q4 2022 Q3 2022 Q2 2022 Q1 2022 Q4 2021 Q3 2021
------------------ ---------------- ----------------- ----------------- ----------------- --------------- ------------ ------------ -----------
Gold ounces sold
Salobo 46,030 35,966 41,029 31,818 48,515 42,513 47,171 35,185
Sudbury (2) 4,775 4,368 4,988 5,147 7,916 3,712 965 1,915
Constancia 9,619 6,579 6,013 6,336 7,431 10,494 6,196 8,159
San Dimas 11,354 10,651 10,943 10,196 10,633 10,070 15,182 11,346
Stillwater (3) 2,195 2,094 1,783 2,127 2,626 2,628 2,933 2,820
Other
Marmato 467 480 473 719 781 401 423 438
777 153 126 785 3,098 3,629 4,388 4,290 5,879
Minto 701 2,341 2,982 2,559 2,806 3,695 2,462 1,907
------------------ ---------------- ----------------- ----------------- ----------------- --------------- ------------ ------------ -----------
Total Other 1,321 2,947 4,240 6,376 7,216 8,484 7,175 8,224
------------------ ---------------- ----------------- ----------------- ----------------- --------------- ------------ ------------ -----------
Total gold ounces
sold 75,294 62,605 68,996 62,000 84,337 77,901 79,622 67,649
------------------ ---------------- ----------------- ----------------- ----------------- --------------- ------------ ------------ -----------
Silver ounces sold
Peñasquito 1,913 1,483 2,066 1,599 2,096 2,188 1,818 2,210
Antamina 963 814 1,114 1,155 1,177 1,468 1,297 1,502
Constancia 674 366 403 498 494 644 351 484
Other
Los Filos 37 34 16 24 41 42 17 12
Zinkgruvan 370 520 547 376 650 355 346 354
Neves-Corvo 132 171 80 105 167 204 259 193
Aljustrel 182 205 156 185 123 145 133 155
Cozamin 150 119 150 154 148 177 174 170
Marmato 7 7 7 8 11 8 8 10
Yauliyacu - - 337 1,005 817 44 551 182
Stratoni - - - - (2) 133 42 41
Minto 7 29 23 22 21 31 27 24
Keno Hill - 1 1 30 30 27 24 51
777 2 - 35 73 75 87 69 99
------------------ ---------------- ----------------- ----------------- ----------------- --------------- ------------ ------------ -----------
Total Other 887 1,086 1,352 1,982 2,081 1,253 1,650 1,291
------------------ ---------------- ----------------- ----------------- ----------------- --------------- ------------ ------------ -----------
Total silver
ounces sold 4,437 3,749 4,935 5,234 5,848 5,553 5,116 5,487
------------------ ---------------- ----------------- ----------------- ----------------- --------------- ------------ ------------ -----------
Palladium ounces
sold
Stillwater (3) 3,392 2,946 3,396 4,227 3,378 4,075 4,641 5,703
------------------ ---------------- ----------------- ----------------- ----------------- --------------- ------------ ------------ -----------
Cobalt pounds sold
Voisey's Bay 265 323 187 115 225 511 228 131
------------------ ---------------- ----------------- ----------------- ----------------- --------------- ------------ ------------ -----------
GEOs sold (4) 138,835 117,383 138,218 135,179 165,766 159,082 152,826 145,704
Cumulative payable
units PBND (5)
------------------ ---------------- ----------------- ----------------- ----------------- --------------- ------------ ------------ -----------
Gold ounces 75,291 69,479 62,602 65,978 59,331 81,365 84,989 80,819
Silver ounces 1,267 2,023 1,572 2,243 2,400 2,659 2,997 2,698
Palladium ounces 6,122 5,751 5,098 5,041 6,267 5,535 5,629 5,619
Cobalt pounds 250 285 257 402 280 550 596 637
GEO (4) 100,226 104,204 90,560 104,062 99,403 126,820 135,380 127,739
Inventory on
hand
Cobalt pounds 310 398 633 556 582 410 657 488
------------------ ---------------- ----------------- ----------------- ----------------- --------------- ------------ ------------ -----------
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) GEOs, which are provided to assist the reader, are based on
the following commodity price assumptions: $1,850 per ounce gold;
$24.00 per ounce silver; $1,800 per ounce palladium; and $18.75 per
pound cobalt; consistent with those used in estimating the
Company's production guidance for 2023.
5) Payable gold, silver and palladium ounces as well as cobalt
pounds produced but not yet delivered ("PBND") are based on
management estimates. These figures may be updated in future
periods as additional information is received.
Results of Operations
The operating results of the Company's reportable operating
segments are summarized in the tables and commentary below.
Three Months Ended June 30, 2023
--------------------------------------------------------------------------------------------------------------------------------
Average
Realized Average Average
Price Cash Cost Depletion Gain on Cash Flow
Units Units ($'s ($'s Per ($'s Per Disposal Net From Total
Produced(2) Sold Per Unit) Unit) (3) Unit) Sales (4) Earnings Operations Assets
------------------ ----------- ------ --------- --------- --------- -------- --------- --------- ---------- ----------
Gold
Salobo 54,804 46,030 $ 1,985 $ 420 $ 330 $ 91,350 $ - $ 56,790 $ 71,999 $2,356,169
Sudbury (5) 7,721 4,775 2,000 400 1,025 9,549 - 2,747 7,579 274,048
Constancia 7,444 9,619 1,985 416 316 19,090 - 12,049 15,085 90,469
San Dimas 11,166 11,354 1,985 628 260 22,532 - 12,454 15,401 150,154
Stillwater 2,017 2,195 1,985 357 510 4,356 - 2,451 3,571 213,663
Other (6) 1,931 1,321 1,994 1,131 186 2,634 - 894 1,252 537,197
85,083 75,294 $ 1,986 $ 461 $ 365 $149,511 $ - $ 87,385 $ 114,887 $3,621,700
------------------ ----------- ------ -------- -------- -------- ------- -------- -------- --------- ---------
Silver
Peñasquito 1,744 1,913 $ 24.20 $ 4.43 $ 4.06 $ 46,291 $ - $ 30,041 $ 37,816 $ 279,872
Antamina 960 963 24.20 4.70 7.06 23,302 - 11,985 18,780 532,828
Constancia 420 674 24.20 6.14 6.24 16,322 - 7,968 12,180 186,452
Other (7) 1,293 887 23.88 5.75 3.46 21,166 5,027 18,031 15,878 482,572
--------
4,417 4,437 $ 24.13 $ 5.01 $ 4.92 $107,081 $ 5,027 $ 68,025 $ 84,654 $1,481,724
------------------ ----------- ------ -------- -------- -------- ------- -------- -------- --------- ---------
Palladium
Stillwater 3,880 3,392 $ 1,438 $ 261 $ 445 $ 4,879 $ - $ 2,482 $ 3,993 $ 224,099
------------------ ----------- ------ -------- -------- -------- ------- -------- -------- --------- ---------
Platinum
Marathon - - $ n.a. $ n.a. $ n.a. $ - $ - $ - $ - $ 9,448
------------------ ----------- ------ -------- -------- -------- ------- -------- -------- --------- ---------
Cobalt
Voisey's Bay 152 265 $ 13.23 $ 3.20 $ 13.85 $ 3,501 $ - $ (1,009) $ 4,335 $ 354,195
------------------ ----------- ------ -------- -------- -------- ------- -------- -------- --------- ---------
Operating results $264,972 $ 5,027 $ 156,883 $ 207,869 $5,691,166
------------------------------- ------ -------- -------- -------- ------- -------- -------- --------- ---------
Other
General and administrative $(10,216) $ (9,544)
Share based compensation (4,484) -
Donations and community
investments (1,940) (1,738)
Finance costs (1,352) (999)
Other 8,692 7,776
Income tax (6,135) (988)
Total other $(15,435) $ (5,493) $1,188,739
--------------------------------------- -------- -------- -------- ------- -------- -------- --------- ---------
$ 141,448 $ 202,376 $6,879,905
------------------ ----------- ------ -------- -------- -------- ------- -------- -------- --------- ---------
1) Units of gold, silver and palladium produced and sold are
reported in ounces, while cobalt is reported in pounds. All figures
in thousands except gold and palladium ounces produced and sold and
per unit amounts.
2) Quantity produced represent the amount of gold, silver,
palladium and cobalt 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) The gain on disposal of Other silver interests relates to the
gain on the buyback of 33% of the Goose PMPA.
5) Comprised of the operating Coleman, Copper Cliff, Garson,
Creighton and Totten gold interests and the non-operating Stobie
and Victor gold interests.
6) Comprised of the operating Marmato gold interests as well as
the non-operating Minto, 777, Copper World Complex, Santo Domingo,
Blackwater, Fenix, Goose, Marathon, Curipamba and Cangrejos gold
interests. On June 22, 2022, Hudbay announced that mining
activities at 777 have concluded and closure activities have
commenced. On May 13, 2023, Minto announced the suspension of
operations at the Minto mine.
7) Comprised of the operating Los Filos, Zinkgruvan,
Neves-Corvo, Aljustrel, Cozamin and Marmato silver interests and
the non-operating Minto, 777, Loma de La Plata, Stratoni,
Pascua-Lama, Copper World Complex, Blackwater and Curipamba silver
interests. On June 22, 2022, Hudbay announced that mining
activities at 777 have concluded and closure activities have
commenced. On May 13, 2023, Minto announced the suspension of
operations at the Minto mine.
8) Cash cost per pound of cobalt sold during the second quarter
of 2023 was net of a previously recorded inventory write-down of
$0.5 million, resulting in a decrease of $1.81 per pound of cobalt
sold. The Company reflects the cobalt inventory at the lower of
cost and net realizable value, and will continue to monitor the
market price of cobalt relative to the carrying of the inventory at
each reporting period.
On a gold equivalent and silver equivalent basis, results for
the Company for the three months ended June 30, 2023 were as
follows:
Three Months Ended June 30, 2023
----------------------------------------------------------------------------------------------------------------------
Average
Realized Average Cash Operating Average Gross
Price Cash Cost Margin Depletion Margin
Ounces Ounces ($'s Per ($'s Per ($'s Per Ounce) ($'s Per ($'s Per
Produced (1) Sold Ounce) Ounce) (2) (3) Ounce) Ounce)
-------------------- -------------- -------- ---------- ------------ ------------------- ----------- ----------
Gold equivalent
basis (4) 147,699 138,835 $ 1,909 $ 422 $ 1,487 $ 392 $ 1,095
-------------------- -------------- -------- ---------- ------------ ------------------- ----------- ----------
1) Quantity produced represent the amount of gold, silver,
palladium and cobalt 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) Refer to discussion on non-IFRS measure (iii) at the end of this press release.
3) Refer to discussion on non-IFRS measure (iv) at the end of this press release.
4) GEOs, which are provided to assist the reader, are based on
the following commodity price assumptions: $1,850 per ounce gold;
$24.00 per ounce silver; $1,800 per ounce palladium; and $18.75 per
pound cobalt; consistent with those used in estimating the
Company's production guidance for 2023.
Three Months Ended June 30, 2022
---------------------------------------------------------------------------------------------------------------------
Average
Realized Average Average
Price Cash Cost Depletion Cash Flow
Units Units ($'s ($'s Per ($'s Per Net From Total
Produced(2) Sold Per Unit) Unit) (3) Unit) Sales Earnings Operations Assets
------------------ ----------- ------ --------- --------- --------- -------- --------- ---------- ----------
Gold
Salobo 34,129 48,515 $ 1,872 $ 416 $ 334 $ 90,842 $ 54,462 $ 70,649 $2,407,579
Sudbury (4) 5,289 7,916 1,867 400 1,090 14,780 2,983 11,613 294,485
Constancia 8,042 7,431 1,872 412 271 13,915 8,838 10,686 98,930
San Dimas 10,044 10,633 1,872 624 260 19,910 10,520 13,280 161,350
Stillwater 2,171 2,626 1,872 340 429 4,917 2,897 4,024 217,530
Other (5) 6,767 7,216 1,868 727 57 13,478 7,823 8,529 419,696
------------------ ----------- ------ -------- -------- -------- ------- -------- --------- ---------
66,442 84,337 $ 1,872 $ 465 $ 369 $157,842 $ 87,523 $ 118,781 $3,599,570
------------------ ----------- ------ -------- -------- -------- ------- -------- --------- ---------
Silver
Peñasquito 2,089 2,096 $ 22.47 $ 4.36 $ 3.57 $ 47,102 $ 30,488 $ 37,963 $ 306,742
Antamina 1,330 1,177 22.47 4.42 7.06 26,448 12,934 21,242 561,383
Constancia 584 494 22.47 6.08 6.35 11,101 4,958 7,784 198,672
Other (6) 2,497 2,081 21.91 7.44 5.74 45,577 18,148 30,198 577,944
------------------ ----------- ------ -------- -------- -------- ------- -------- --------- ---------
6,500 5,848 $ 22.27 $ 5.61 $ 5.28 $130,228 $ 66,528 $ 97,187 $1,644,741
------------------ ----------- ------ -------- -------- -------- ------- -------- --------- ---------
Palladium
Stillwater 3,899 3,378 $ 2,132 $ 408 $ 399 $ 7,203 $ 4,477 $ 5,825 $ 229,855
------------------ ----------- ------ -------- -------- -------- ------- -------- --------- ---------
Platinum
Marathon - - $ n.a. $ n.a. $ n.a. $ - $ - $ - $ 4,852
------------------ ----------- ------ -------- -------- -------- ------- -------- --------- ---------
Cobalt
Voisey's Bay 136 225 $ 34.01 $ 6.86 $ 10.40 $ 7,649 $ 3,769 $ 13,797 $ 362,460
------------------ ----------- ------ -------- -------- -------- ------- -------- --------- ---------
Operating results $302,922 $ 162,297 $ 235,590 $5,841,478
------------------------------- ------ -------- -------- -------- ------- -------- --------- ---------
Other
General and administrative $ (9,685) $ (8,546)
Share based compensation (1,608) (18,247)
Donations and community
investments (1,160) (1,152)
Finance costs (1,389) (1,011)
Other 820 (195)
Income tax (201) (80)
------------------ ----------- ------ -------- -------- -------- ------- -------- --------- ---------
Total other $(13,223) $ (29,231) $ 607,217
--------------------------------------- -------- -------- -------- ------- -------- --------- ---------
$ 149,074 $ 206,359 $6,448,695
------------------ ----------- ------ -------- -------- -------- ------- -------- --------- ---------
1) Units of gold, silver and palladium produced and sold are
reported in ounces, while cobalt is reported in pounds. All figures
in thousands except gold and palladium ounces produced and sold and
per unit amounts.
2) Quantity produced represent the amount of gold, silver,
palladium and cobalt 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 Minto, 777 and Marmato gold
interests as well as the non-operating Copper World Complex, Santo
Domingo, Blackwater, Fenix, Goose, Marathon and Curipamba gold
interests. On June 22, 2022, Hudbay announced that mining
activities at 777 have concluded and closure activities have
commenced. On May 13, 2023, Minto announced the suspension of
operations at the Minto mine.
6) Comprised of the operating Los Filos, Zinkgruvan,
Neves-Corvo, Aljustrel, Minto, 777, Marmato and Cozamin silver
interests, the non-operating Stratoni, Loma de La Plata, Copper
World Complex, Pascua-Lama, Blackwater and Curipamba silver
interests and the previously owned Keno Hill and Yauliyacu silver
interests. On June 22, 2022, Hudbay announced that mining
activities at 777 have concluded and closure activities have
commenced. On September 7, 2022, the Keno Hill PMPA was terminated
in exchange for $141 million of Hecla common stock. On December 14,
2022 the Yauliyacu PMPA was terminated in exchange for a cash
payment of $132 million. On May 13, 2023, Minto announced the
suspension of operations at the Minto mine.
On a gold equivalent and silver equivalent basis, results for
the Company for the three months ended June 30, 2022 were as
follows:
Three Months Ended June 30, 2022
----------------------------------------------------------------------------------------------------------------------
Average
Realized Average Cash Operating Average Gross
Price Cash Cost Margin Depletion Margin
Ounces Ounces ($'s Per ($'s Per ($'s Per Ounce) ($'s Per ($'s Per
Produced (1) Sold Ounce) Ounce) (2) (3) Ounce) Ounce)
-------------------- -------------- -------- ---------- ------------ ------------------- ----------- ----------
Gold equivalent
basis (4) 155,932 165,766 $ 1,827 $ 452 $ 1,375 $ 396 $ 979
-------------------- -------------- -------- ---------- ------------ ------------------- ----------- ----------
1) Quantity produced represent the amount of gold, silver,
palladium and cobalt 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) Refer to discussion on non-IFRS measure (iii) at the end of this press release.
3) Refer to discussion on non-IFRS measure (iv) at the end of this press release.
4) GEOs, which are provided to assist the reader, are based on
the following commodity price assumptions: $1,850 per ounce gold;
$24.00 per ounce silver; $1,800 per ounce palladium; and $18.75 per
pound cobalt; consistent with those used in estimating the
Company's production guidance for 2023.
Six Months Ended June 30, 2023
---------------------------------------------------------------------------------------------------------------------------------
Average
Realized Average Average
Price Cash Cost Depletion Gain on Cash Flow
Units Units ($'s ($'s Per ($'s Per Disposal Net From Total
Produced(2) Sold Per Unit) Unit) (3) Unit) Sales 4 Earnings Operations Assets
------------------ ----------- ------- --------- --------- --------- -------- --------- --------- ---------- ----------
Gold
Salobo 98,481 81,996 $ 1,949 $ 420 $ 330 $159,825 $ - $ 98,261 $ 125,353 $2,356,169
Sudbury (5) 13,924 9,143 1,954 400 1,025 17,866 - 4,841 13,925 274,048
Constancia 14,349 16,198 1,952 416 316 31,615 - 19,759 24,873 90,469
San Dimas 21,920 22,005 1,946 626 260 42,812 - 23,319 29,030 150,154
Stillwater 3,977 4,289 1,945 346 510 8,343 - 4,671 6,860 213,663
Other (6) 5,451 4,268 1,932 1,306 117 8,247 - 2,173 2,407 537,197
------------------ ----------- ------- -------- -------- -------- ------- -------- -------- --------- ---------
158,102 137,899 $ 1,949 $ 477 $ 362 $268,708 $ - $ 153,024 $ 202,448 $3,621,700
================== =========== ======= ======== ======== ======== ======= ======== ======== ========= =========
Silver
Peñasquito 3,820 3,396 $ 23.61 $ 4.43 $ 4.06 $ 80,162 $ - $ 51,317 $ 65,119 $ 279,872
Antamina 1,811 1,777 23.58 4.63 7.06 41,897 - 21,128 33,668 532,828
Constancia 972 1,040 23.72 6.14 6.24 24,674 - 11,792 18,288 186,452
Other (7) 2,910 1,973 23.33 5.86 2.95 46,025 5,027 33,668 35,925 482,572
-------- --------
9,513 8,186 $ 23.55 $ 5.04 $ 4.72 $192,758 $ 5,027 $ 117,905 $ 153,000 $1,481,724
------------------ ----------- ------- -------- -------- -------- ------- -------- -------- --------- ---------
Palladium
Stillwater 7,585 6,338 $ 1,517 $ 277 $ 428 $ 9,614 $ - $ 5,149 $ 7,862 $ 224,099
------------------ ----------- ------- -------- -------- -------- ------- -------- -------- --------- ---------
Platinum
Marathon - - $ n.a. $ n.a. $ n.a. $ - $ - $ - $ - $ 9,448
------------------ ----------- ------- -------- -------- -------- ------- -------- -------- --------- ---------
Cobalt
Voisey's Bay 276 588 $ 14.22 $ 3.25 $ 13.85 $ 8,357 $ - $ (1,693) $ 8,820 $ 354,195
------------------ ----------- ------- -------- -------- -------- ------- -------- -------- --------- ---------
Operating results $479,437 $ 5,027 $ 274,385 $ 372,130 $5,691,166
------------------------------- ------- -------- -------- -------- ------- -------- -------- --------- ---------
Other
General and administrative $(20,315) $ (23,384)
Share based compensation (11,881) (16,675)
Donations and community
investments (3,318) (3,146)
Finance costs (2,731) (2,066)
Other 16,254 14,955
Income tax 445 (4,332)
Total other $(21,546) $ (34,648) $1,188,739
---------------------------------------- -------- -------- -------- ------- -------- -------- --------- ---------
$ 252,839 $ 337,482 $6,879,905
------------------ ----------- ------- -------- -------- -------- ------- -------- -------- --------- ---------
1) Units of gold, silver and palladium produced and sold are
reported in ounces, while cobalt is reported in pounds. All figures
in thousands except gold and palladium ounces produced and sold and
per unit amounts.
2) Quantity produced represent the amount of gold, silver,
palladium and cobalt 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) The gain on disposal of Other silver interests relates to the
gain on the buyback of 33% of the Goose PMPA.
5) Comprised of the operating Coleman, Copper Cliff, Garson,
Creighton and Totten gold interests and the non-operating Stobie
and Victor gold interests.
6) Comprised of the operating Marmato gold interests as well as
the non-operating Minto, 777, Copper World Complex, Santo Domingo,
Blackwater, Fenix, Goose, Marathon, Curipamba and Cangrejos gold
interests. On June 22, 2022, Hudbay announced that mining
activities at 777 have concluded and closure activities have
commenced. On May 13, 2023, Minto announced the suspension of
operations at the Minto mine.
7) Comprised of the operating Los Filos, Zinkgruvan,
Neves-Corvo, Aljustrel, Cozamin and Marmato silver interests and
the non-operating Minto, 777, Loma de La Plata, Stratoni,
Pascua-Lama, Copper World Complex, Blackwater and Curipamba silver
interests. On June 22, 2022, Hudbay announced that mining
activities at 777 have concluded and closure activities have
commenced. On May 13, 2023, Minto announced the suspension of
operations at the Minto mine.
8) Cash cost per pound of cobalt sold during the six months
ended June 30, 2023 was net of a previously recorded inventory
write-down of $1.5 million, resulting in a decrease of $2.57 per
pound of cobalt sold. The Company reflects the cobalt inventory at
the lower of cost and net realizable value, and will continue to
monitor the market price of cobalt relative to the carrying of the
inventory at each reporting period.
On a gold equivalent and silver equivalent basis, results for
the Company for the six months ended June 30, 2023 were as
follows:
Six Months Ended June 30, 2023
----------------------------------------------------------------------------------------------------------------------
Average
Realized Average Average Gross
Price Cash Cost Depletion Margin
Ounces Ounces ($'s Per ($'s Per Cash Operating Margin ($'s Per ($'s Per
Produced (1) Sold Ounce) Ounce) (2) ($'s Per Ounce) (3) Ounce) Ounce)
------------------------ ------------- ------- --------- ----------- --------------------- ---------- ---------
Gold equivalent basis
(4) 291,700 256,218 $ 1,871 $ 432 $ 1,439 $ 388 $ 1,051
------------------------ ------------- ------- --------- ----------- --------------------- ---------- ---------
1) Quantity produced represent the amount of gold, silver,
palladium and cobalt 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) Refer to discussion on non-IFRS measure (iii) at the end of this press release.
3) Refer to discussion on non-IFRS measure (iv) at the end of this press release.
4) GEOs, which are provided to assist the reader, are based on
the following commodity price assumptions: $1,850 per ounce gold;
$24.00 per ounce silver; $1,800 per ounce palladium; and $18.75 per
pound cobalt; consistent with those used in estimating the
Company's production guidance for 2023.
Six Months Ended June 30, 2022
----------------------------------------------------------------------------------------------------------------------
Average
Realized Average Average
Price Cash Cost Depletion Cash Flow
Units Units ($'s ($'s Per ($'s Per Net From Total
Produced(2) Sold Per Unit) Unit) (3) Unit) Sales Earnings Operations Assets
------------------ ----------- ------- --------- --------- --------- -------- --------- ---------- ----------
Gold
Salobo 79,012 91,028 $ 1,872 $ 416 $ 334 $170,407 $ 102,147 $ 132,517 $2,407,579
Sudbury (4) 10,651 11,628 1,865 400 1,091 21,689 4,354 17,038 294,485
Constancia 14,353 17,925 1,872 412 271 33,555 21,308 26,168 98,930
San Dimas 20,505 20,703 1,872 621 260 38,756 20,528 25,901 161,350
Stillwater 4,668 5,254 1,872 335 429 9,835 5,823 8,078 217,530
Other (5) 15,307 15,700 1,865 750 40 29,275 16,871 17,351 419,696
------------------ ----------- ------- -------- -------- -------- ------- -------- --------- ---------
144,496 162,238 $ 1,871 $ 470 $ 346 $303,517 $ 171,031 $ 227,053 $3,599,570
------------------ ----------- ------- -------- -------- -------- ------- -------- --------- ---------
Silver
Peñasquito 4,308 4,284 $ 23.30 $ 4.36 $ 3.57 $ 99,829 $ 65,874 $ 81,151 $ 306,742
Antamina 2,540 2,645 23.37 4.71 7.06 61,806 30,680 49,001 561,383
Constancia 1,090 1,138 23.39 6.08 6.34 26,614 12,484 19,697 198,672
Other (6) 4,737 3,334 22.89 6.93 4.88 76,311 36,946 54,073 577,944
------------------ ----------- ------- -------- -------- -------- ------- -------- --------- ---------
12,675 11,401 $ 23.21 $ 5.36 $ 5.04 $264,560 $ 145,984 $ 203,922 $1,644,741
------------------ ----------- ------- -------- -------- -------- ------- -------- --------- ---------
Palladium
Stillwater 8,387 7,453 $ 2,246 $ 400 $ 399 $ 16,736 $ 10,781 $ 13,755 $ 229,855
------------------ ----------- ------- -------- -------- -------- ------- -------- --------- ---------
Platinum
Marathon - - $ n.a $ n.a $ n.a $ - $ - $ - $ 4,852
------------------ ----------- ------- -------- -------- -------- ------- -------- --------- ---------
Cobalt
Voisey's Bay 371 736 $ 34.43 $ 6.09 $ 8.85 $ 25,353 $ 14,350 $ 17,060 $ 362,460
------------------ ----------- ------- -------- -------- -------- ------- -------- --------- ---------
Operating results $610,166 $ 342,146 $ 461,790 $5,841,478
------------------------------- ------- -------- -------- -------- ------- -------- --------- ---------
Other
General and administrative $(19,089) $ (23,365)
Share based compensation (11,509) (18,247)
Donations and community
investments (1,973) (1,567)
Finance costs (2,811) (2,088)
Other 650 488
Income tax (872) (112)
------------------ ----------- ------- -------- -------- -------- ------- -------- --------- ---------
Total other $(35,604) $ (44,891) $ 607,217
---------------------------------------- -------- -------- -------- ------- -------- --------- ---------
$ 306,542 $ 416,899 $6,448,695
------------------ ----------- ------- -------- -------- -------- ------- -------- --------- ---------
1) Units of gold, silver and palladium produced and sold are
reported in ounces, while cobalt is reported in pounds. All figures
in thousands except gold and palladium ounces produced and sold and
per unit amounts.
2) Quantity produced represent the amount of gold, silver,
palladium and cobalt 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 Minto, 777 and Marmato gold
interests as well as the non-operating Copper World Complex, Santo
Domingo, Blackwater, Fenix, Goose, Marathon and Curipamba gold
interests. On June 22, 2022, Hudbay announced that mining
activities at 777 have concluded and closure activities have
commenced. On May 13, 2023, Minto announced the suspension of
operations at the Minto mine.
6) Comprised the operating Los Filos, Zinkgruvan, Neves-Corvo,
Aljustrel, Minto, 777, Marmato and Cozamin silver interests, the
non-operating Stratoni, Loma de La Plata, Copper World Complex,
Pascua-Lama, Blackwater and Curipamba silver interests and the
previously owned Keno Hill and Yauliyacu silver interests. On June
22, 2022, Hudbay announced that mining activities at 777 have
concluded and closure activities have commenced. On September 7,
2022, the Keno Hill PMPA was terminated in exchange for $141
million of Hecla common stock. On December 14, 2022 the Yauliyacu
PMPA was terminated in exchange for a cash payment of $132 million.
On May 13, 2023, Minto announced the suspension of operations at
the Minto mine.
On a gold equivalent and silver equivalent basis, results for
the Company for the six months ended June 30, 2022 were as
follows:
Six Months Ended June 30, 2022
----------------------------------------------------------------------------------------------------------------------
Average
Realized Average Average Gross
Price Cash Cost Depletion Margin
Ounces Ounces ($'s Per ($'s Per Cash Operating Margin ($'s Per ($'s Per
Produced (1) Sold Ounce) Ounce) (2) ($'s Per Ounce) (3) Ounce) Ounce)
------------------------ ------------- ------- --------- ----------- --------------------- ---------- ---------
Gold equivalent basis
(4) 320,843 324,847 $ 1,878 $ 446 $ 1,432 $ 379 $ 1,053
------------------------ ------------- ------- --------- ----------- --------------------- ---------- ---------
1) Quantity produced represent the amount of gold, silver,
palladium and cobalt 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, which are provided to assist the reader, are based on
the following commodity price assumptions: $1,850 per ounce gold;
$24.00 per ounce silver; $1,800 per ounce palladium; and $18.75 per
pound cobalt; consistent with those used in estimating the
Company's production guidance for 2023.
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 cobalt on a per pound basis; and
(iv) cash operating margin.
i. Adjusted net earnings and adjusted net earnings per share are
calculated by removing the effects of non-cash impairment charges
(reversals) (if any), 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 Six Months Ended
June 30 June 30
(in thousands, except for per share amounts) 2023 2022 2023 2022
----------------------------------------------------------- ------------ -------- -------- --------
Net earnings $ 141,448 $149,074 $252,839 $306,542
Add back (deduct):
Gain on disposal of Mineral Stream Interest (5,027) - (5,027) -
(Gain) loss on fair value adjustment of share purchase
warrants held 280 154 105 897
Income tax (expense) recovery recognized in the
Statement of Shareholders' Equity - (292) - 500
Income tax (expense) recovery recognized in the
Statement of OCI 6,044 349 2,090 155
Income tax recovery related to prior year disposal of
Mineral Stream Interest - - (2,672) -
Other (161) - (320) (802)
------------------------------------------------------------ -------- ------- ------- -------
Adjusted net earnings $ 142,584 $149,285 $247,015 $307,292
------------------------------------------------------------ -------- ------- ------- -------
Divided by:
Basic weighted average number of shares outstanding 452,892 451,524 452,633 451,221
Diluted weighted average number of shares outstanding 453,575 452,359 453,368 452,123
------------------------------------------------------------ -------- ------- ------- -------
Equals:
Adjusted earnings per share - basic $ 0.315 $ 0.331 $ 0.546 $ 0.681
Adjusted earnings per share - diluted $ 0.314 $ 0.330 $ 0.545 $ 0.680
------------------------------------------------------------ -------- ------- ------- -------
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 Six Months Ended
June 30 June 30
(in thousands, except for per share amounts) 2023 2022 2023 2022
--------------------------------------------------------- ------------ -------- -------- --------
Cash generated by operating activities $ 202,376 $206,359 $337,482 $416,899
---------------------------------------------------------- -------- ------- ------- -------
Divided by:
Basic weighted average number of shares outstanding 452,892 451,524 452,633 451,221
Diluted weighted average number of shares outstanding 453,575 452,359 453,368 452,123
---------------------------------------------------------- -------- ------- ------- -------
Equals:
Operating cash flow per share - basic $ 0.447 $ 0.457 $ 0.746 $ 0.924
Operating cash flow per share - diluted $ 0.446 $ 0.456 $ 0.744 $ 0.922
---------------------------------------------------------- -------- ------- ------- -------
iii. Average cash cost of gold, silver and palladium on a per
ounce basis and cobalt on a per pound basis is calculated by
dividing the total cost of sales, less depletion, by the ounces or
pounds 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 calculation of average cash cost
of gold, silver and palladium on a per ounce basis and cobalt on a
per pound basis.
Three Months Ended Six Months Ended
June 30 June 30
(in thousands, except for gold and palladium ounces sold
and per unit amounts) 2023 2022 2023 2022
-------------------------------------------------------- --------- --------- --------- ----------
Cost of sales $ 113,116 $ 140,625 $ 210,079 $ 268,020
Less: depletion (54,474) (65,682) (99,473) (123,084)
--------------------------------------------------------- -------- -------- -------- ---------
Cash cost of sales $ 58,642 $ 74,943 $ 110,606 $ 144,936
--------------------------------------------------------- -------- -------- -------- ---------
Cash cost of sales is comprised of:
Total cash cost of gold sold $ 34,675 $ 39,189 $ 65,711 $ 76,321
Total cash cost of silver sold 22,234 32,834 41,231 61,149
Total cash cost of palladium sold 887 1,378 1,752 2,980
Total cash cost of cobalt sold 846 1,542 1,912 4,486
--------------------------------------------------------- -------- -------- -------- ---------
Total cash cost of sales $ 58,642 $ 74,943 $ 110,606 $ 144,936
--------------------------------------------------------- -------- -------- -------- ---------
Divided by:
Total gold ounces sold 75,294 84,337 137,899 162,238
Total silver ounces sold 4,437 5,848 8,186 11,401
Total palladium ounces sold 3,392 3,378 6,338 7,453
Total cobalt pounds sold 265 225 588 736
--------------------------------------------------------- -------- -------- -------- ---------
Equals:
Average cash cost of gold (per ounce) $ 461 $ 465 $ 477 $ 470
Average cash cost of silver (per ounce) $ 5.01 $ 5.61 $ 5.04 $ 5.36
Average cash cost of palladium (per ounce) $ 261 $ 408 $ 277 $ 400
Average cash cost of cobalt (per pound) $ 3.20 $ 6.86 $ 3.25 $ 6.09
--------------------------------------------------------- -------- -------- -------- ---------
iv. Cash operating margin is calculated by subtracting the
average cash cost of gold, silver and palladium on a per ounce
basis and cobalt on a per pound basis from the average realized
selling price of gold, silver and palladium on a per ounce basis
and cobalt on a per pound 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 Six Months Ended
June 30 June 30
(in thousands, except for gold and palladium ounces sold
and per unit amounts) 2023 2022 2023 2022
=========================================================== ============ ======== ======== ========
Total sales:
Gold $ 149,511 $157,842 $268,708 $303,517
Silver $ 107,081 $130,228 $192,758 $264,560
Palladium $ 4,879 $ 7,203 $ 9,614 $ 16,736
Cobalt $ 3,501 $ 7,649 $ 8,357 $ 25,353
Divided by:
Total gold ounces sold 75,294 84,337 137,899 162,238
Total silver ounces sold 4,437 5,848 8,186 11,401
Total palladium ounces sold 3,392 3,378 6,338 7,453
Total cobalt pounds sold 265 225 588 736
------------------------------------------------------------ -------- ------- ------- -------
Equals:
Average realized price of gold (per ounce) $ 1,986 $ 1,872 $ 1,949 $ 1,871
Average realized price of silver (per ounce) $ 24.13 $ 22.27 $ 23.55 $ 23.21
Average realized price of palladium (per ounce) $ 1,438 $ 2,132 $ 1,517 $ 2,246
Average realized price of cobalt (per pound) $ 13.23 $ 34.01 $ 14.22 $ 34.43
Less:
Average cash cost of gold (1) (per ounce) $ (461) $ (465) $ (477) $ (470)
Average cash cost of silver (1) (per ounce) $ (5.01) $ (5.61) $ (5.04) $ (5.36)
Average cash cost of palladium (1) (per ounce) $ (261) $ (408) $ (277) $ (400)
Average cash cost of cobalt (1) (per pound) $ (3.20) $ (6.86) $ (3.25) $ (6.09)
------------------------------------------------------------ -------- ------- ------- -------
Equals:
Cash operating margin per gold ounce sold $ 1,525 $ 1,407 $ 1,472 $ 1,401
As a percentage of realized price of gold 77% 75% 76% 75%
Cash operating margin per silver ounce sold $ 19.12 $ 16.66 $ 18.51 $ 17.85
As a percentage of realized price of silver 79% 75% 79% 77%
Cash operating margin per palladium ounce sold $ 1,177 $ 1,724 $ 1,240 $ 1,846
As a percentage of realized price of palladium 82% 81% 82% 82%
Cash operating margin per cobalt pound sold $ 10.03 $ 27.15 $ 10.97 $ 28.34
As a percentage of realized price of cobalt 76% 80% 77% 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.sedarplus.ca.
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 PMPA counterparties. Forward-looking statements, which
are all statements other than statements of historical fact,
include, but are not limited to, statements with respect the
resolution of the labour dispute and resumption of operations at
Peñasquito, to the future price of commodities, 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 payment
of upfront cash consideration to counterparties under PMPAs, the
satisfaction of each party's obligations in accordance with PMPAs
and royalty arrangements and the receipt by the Company of precious
metals and cobalt production in respect of the applicable Mining
Operations under PMPAs or other payments under royalty
arrangements, 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,
future payments by the Company in accordance with PMPAs, the costs
of future production, the estimation of produced but not yet
delivered ounces, the impact of epidemics (including the COVID-19
virus pandemic), including the potential heightening of other
risks, future sales of common shares under the ATM program,
continued listing of the Company's common shares, any statements as
to future dividends, the ability to fund outstanding commitments
and the ability to continue to acquire accretive 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, possible domestic audits for taxation years subsequent
to 2016 and international audits, the Company's assessment of the
impact of any tax reassessments, the Company's intention to file
future tax returns in a manner consistent with the CRA Settlement,
the Company's climate change and environmental commitments, and
assessments of the impact and resolution of various legal and tax
matters, including but not limited to 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 related to the ongoing labour dispute and
suspension of operations at Peñasquito, risks relating to the
satisfaction of each party's obligations in accordance with the
terms of the Company's PMPAs or royalty arrangements, 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 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 having to rely 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, risks of significant impacts on
Wheaton or the Mining Operations as a result of an epidemic
(including the COVID-19 virus pandemic), 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 (including whether there will be
any material change in the Company's facts or change in law or
jurisprudence), potential amendments to Canada's transfer pricing
rules under the Income Tax Act (Canada) that may result from the
Department of Finance's consultation paper released June 6, 2023,
potential implementation of a 15% global minimum tax, including the
draft legislation issued for consultation by the Canadian Federal
Government on August 4, 2023 that would apply to the income of the
Company's non-Canadian subsidiaries; counterparty credit and
liquidity, mine operator concentration, indebtedness and
guarantees, 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, 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 supplies, 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, environmental, social and
governance matters, Wheaton and the Mining Operations ability to
obtain adequate financing, the Mining Operations ability to
complete permitting, construction, development and expansion,
global financial conditions, Wheaton's acquisition strategy 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.sedarplus.ca and Wheaton's Form 40-F for
the year ended December 31, 2022 on file with the U.S. Securities
and Exchange Commission on EDGAR (the "Disclosure").
Forward-looking statements are based on assumptions management
currently believes to be reasonable, including (without
limitation): that the labour dispute at Peñasquito will resolve and
operations will resume by the end of the third quarter of 2023,
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 the
mineral reserves 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 neither Wheaton nor the
Mining Operations will suffer significant impacts as a result of an
epidemic (including the COVID-19 virus pandemic), 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, and that the net
proceeds of sales of common shares, if any, will be used as
anticipated, that expectations regarding the resolution of legal
and tax matters will be achieved (including ongoing 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 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), 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.
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,
2022, which was filed on March 31, 2023 and other continuous
disclosure documents filed by Wheaton since January 1, 2023,
available on SEDAR+ at www.sedarplus.ca. 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
Company reports information regarding mineral properties,
mineralization and estimates of mineral reserves and mineral
resources in accordance with Canadian reporting requirements which
are governed by, and utilize definitions required by, 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 adopted by the United States Securities and Exchange
Commission ("SEC") under the United States Securities Act of 1933,
as amended (the "Securities Act") which are applicable to U.S.
companies. Accordingly, there is no assurance any mineral reserves
or mineral resources that the Company may report as "proven mineral
reserves", "probable mineral reserves", "measured mineral
resources", "indicated mineral resources" and "inferred mineral
resources" under NI 43-101 would be the same had the Company
prepared the reserve or resource estimates under the standards
adopted by the SEC. 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 https://www.sec.gov/edgar.shtml .
For further information, please contact:
Patrick Drouin or Emma Murray
Wheaton Precious Metals Corp.
info@wheatonpm.com | 1-844-288-9878
[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. Details of
the dividend can be found in the Wheaton's news release date August
10, 2023, titled "Wheaton Precious Metals Declares Quarterly
Dividend."
[2] Statements made in this section contain forward-looking
information with respect to forecast production, funding
outstanding commitments and continuing to acquire accretive mineral
stream interests and readers are cautioned that actual outcomes may
vary. Please see "Cautionary Note Regarding Forward-Looking
Statements" for material risks, assumptions and important
disclosure associated with this information.
[3] Company reports & S and P Capital IQ est. of 2022
byproduct cost curves for gold, zinc/lead, copper, PGM, nickel
& silver mines. GEOs relating to production and guidance, which
are provided to assist the reader, are based on the following
commodity price assumptions: gold $1,850/oz, silver $24/oz,
palladium $1,800/oz, platinum $1,100/oz and cobalt $18.75/lb. 2023
Guidance assumes the resumption of production at Peñasquito before
the end of Q3 2023. Five-year and ten-year guidance does not
include any production from Pascua-Lama, Navidad, Cotabambas,
Metates or additional expansions at Salobo outside of the Salobo
III expansion. In addition, five-year guidance also does not
include any production from Kutcho, or the Victor project at
Sudbury. Ounces produced represent the quantity of silver, gold,
palladium and cobalt contained in concentrate or doré prior to
smelting or refining deductions.
[4] Portfolio mine life based on recoverable reserves and
resources as of Dec 31, 2022 and 2022 actual mill throughput and is
weighted by individual reserve and resource category.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
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END
IR URRUROSUWAUR
(END) Dow Jones Newswires
August 11, 2023 02:00 ET (06:00 GMT)
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