Fourth Quarter and Full Year Financial Results Wheaton Precious Metals Announces Record Revenue, Earnings and Operating Cash Flow for 2021
March 10, 2022 TSX | NYSE | LSE: WPM Vancouver, British Columbia Designated News Release FOURTH QUARTER AND FULL YEAR FINANCIAL RESULTS
WHEATON PRECIOUS METALS ANNOUNCES RECORD REVENUE, EARNINGS AND OPERATING CASH FLOW FOR 2021
“Wheaton generated record annual revenue and operating cash flow in 2021 as our diversified portfolio of high-quality, long-life assets delivered strong results. We are proud of the value we were able to return to our shareholders resulting from our record-setting performance, with total dividends paid in 2021 increasing by over 35% from 2020,” said Randy Smallwood, President and Chief Executive Officer of Wheaton Precious Metals. “In 2021, Wheaton also remained focused on accretive growth, and over the past three months alone, we added five new streams to our already robust portfolio. This additional growth is readily apparent in our ten-year production forecast, where we see annual production climbing to well over 900,000 gold equivalent ounces.”
“In addition to our financial and corporate development successes in 2021, Wheaton also made significant strides in bolstering our sustainability efforts while continuing to support community programs around our offices and mining partners’ sites. We substantially strengthened our policies and disclosure around our environmental, social and governance strategy, including aligning our approach with the most recent climate science with the goal of reaching net zero carbon emissions by 2050. As we enter 2022, we look forward to building off our accomplishments from 2021 and continuing to create lasting value for all of our stakeholders.”
Fourth Quarter and Year End 2021 Highlights:
- Nearly $200 million in operating cash flow during the fourth quarter and a record $845 million during 2021.
- $278 million in revenue during the fourth quarter and a record $1.2 billion during 2021.
- $132 million in adjusted net earnings1 during the fourth quarter and a record $592 million during 2021.
- Attributable production in 2021 was 752,958 gold equivalent ounces2 (“GEOs”), in line with Company guidance.
- Announced a new precious metal purchase agreement (“PMPA”) on Artemis Gold Inc.’s Blackwater Gold Project (“Blackwater”) in respect of silver production and acquired the existing PMPA held by New Gold Inc. in respect of gold production from Blackwater.
- Announced new PMPA on Generation Mining Limited’s Marathon Project in respect of gold and platinum production.
- Subsequent to the quarter, announced new PMPAs on Adventus Mining Corporation’s Curipamba Project in respect of gold and silver production and Sabina Gold & Silver Corp.’s Goose Project in respect of gold production.
- On a GEO3 basis, total attributable Proven and Probable Mineral Reserves for all metals increased by 13%, driven by a 20% increase in total attributable gold Proven and Probable Mineral Reserves, primarily due to recently added PMPAs and increases at Salobo.
- Declared quarterly dividend1 of $0.15 per common share.
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Operational Overview
| (all figures in US dollars unless otherwise noted) | Q4 2020 Change | 2020 Change | ||||
| Q4 2021 | 2021 | |||||
| Units produced Gold ounces Silver ounces Palladium ounces Cobalt pounds Gold equivalent ounces 2 Units sold Gold ounces Silver ounces Palladium ounces Cobalt pounds Gold equivalent ounces 2 | 92,039 (4.0)% 6,509 (2.4)% 5,672 (16.6)% - n.a. 189,682 (1.7)% 86,243 (7.7)% 4,576 11.8 % 4,591 1.1 % - n.a. 155,665 2.1 % | 366,321 (6.5)% 22,892 13.6 % 22,187 (5.8)% 0 n.a. 712,624 5.7 % 369,553 (15.4)% 19,232 18.9 % 20,051 (3.5)% - n.a. 662,275 0.2 % | ||||
| 88,321 | 342,546 | |||||
| 6,356 | 25,999 | |||||
| 4,733 | 20,908 | |||||
| 381 | 2,293 | |||||
| 186,404 | 752,958 | |||||
| 79,622 | 312,465 | |||||
| 5,116 | 22,860 | |||||
| 4,641 | 19,344 | |||||
| 228 | 886 | |||||
| 158,864 | 663,415 | |||||
| Revenue Net earnings Per share Adjusted net earnings 1 Per share 1 Operating cash flows Per share 1 | $ | 278,197 | $ 286,212 (2.8)% $ 157,221 85.6 % $ 0.350 85.1 % $ 149,441 (11.5)% $ 0.333 (12.0)% $ 207,962 (6.1)% $ 0.463 (6.5)% | $ | 1,201,665 | $ 1,096,224 9.6 % $ 507,804 48.7 % $ 1.132 48.1 % $ 503,335 17.6 % $ 1.122 17.3 % $ 765,442 10.4 % $ 1.706 10.1 % |
| $ | 291,822 | $ | 754,885 | |||
| $ | 0.648 | $ | 1.677 | |||
| $ | 132,232 | $ | 592,079 | |||
| $ | 0.293 | $ | 1.315 | |||
| $ | 195,290 | $ | 845,145 | |||
| $ | 0.433 | $ | 1.878 |
All amounts in thousands except gold, palladium & gold equivalent ounces and cobalt pounds produced & sold, and per share amounts.12
Production Guidance
- 2022 Guidance: Wheaton's estimated attributable production in 2022 is forecast to be 350,000 to 380,000 ounces of gold, 23.0 to 25.0 million ounces of silver, and 44,000 to 48,000 GEOs3 of other metals, resulting in production of approximately 700,000 to 760,000 GEOs3.
- Five-year guidance: For the five-year period ending in 2026, the Company estimates that average production will amount to 850,000 GEOs3.
- Ten-year guidance: For the ten-year period ending in 2031, the Company estimates that average annual production will amount to 910,000 GEOs3.
Financial Review Revenues
Revenue was $278 million in the fourth quarter of 2021 representing a 3% decrease from the fourth quarter of 2020 due primarily to a 5% decrease in the average realized gold equivalent² price; partially offset by a 2% increase in the number of GEOs² sold.
Revenue was $1,202 million in the year ended December 31, 2021 representing a 10% increase from 2020 due primarily to a 9% increase in the average realized gold equivalent² price.
Cash Costs and Margin
Average cash costs¹ in the fourth quarter of 2021 were $429 per GEO² as compared to $415 in fourth quarter of 2020. This resulted in a cash operating margin¹ of $1,322 per GEO² sold, a decrease of 7% as compared with the fourth quarter of 2020.
Average cash costs¹ in 2021 were $434 per GEO² as compared to $403 in 2020. This resulted in a cash operating margin¹ of $1,377 per GEO² sold, an increase of 10% as compared with 2020.
Impairment Reversals of Mineral Stream Interests
Net earnings were positively impacted as the result of an impairment reversal on the Voisey’s Bay PMPA amounting to $157 million at December 31, 2021.
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Indicators of impairment reversal were identified relative to the Voisey’s Bay PMPA, as a result of significant and sustained increases in the market prices of cobalt. Management estimated that the recoverable amount under the Voisey’s Bay PMPA exceeded the carrying amount that would have been determined, net of depletion, had no impairment charge been recognized for the PMPA in prior years, resulting in an impairment reversal of $157 million at December 31, 2021.
Balance Sheet (at December 31, 2021)
- Approximately $226 million of cash on hand.
- The Company's $2 billion revolving term loan (the "Revolving Facility") remains fully undrawn.
Fourth Quarter Asset Highlights
Salobo: In the fourth quarter of 2021, Salobo produced 48,200 ounces of attributable gold, a decrease of approximately 23% relative to the fourth quarter of 2020 primarily due to lower throughput, grades and recovery, with throughput being impacted as a result of an 18-day suspension of operations following a conveyor belt fire in October 2021. According to Vale S.A. (“Vale”), other activities, including mine and maintenance operations, continued as usual during this period but concentrate production was interrupted. Concentrate production resumed on October 22, 2021 and ramped up over a three-day period. Vale reported that despite the challenges, mine movement continued to improve at Salobo operation and reached pre-safety review levels by the end of the year.
As per Vale’s Fourth Quarter 2021 Performance Report, on January 6, 2022, heavy rainfall in the region of the Salobo III mine expansion caused a landslide that damaged part of a conveyor belt and blocked access to the project site. Safety conditions at the area were reestablished and Vale is working on additional preventive measures and replacement of damaged equipment. A full assessment of impact by Vale is ongoing with conclusion expected early in the second quarter of 2022. Vale further reports that physical completion of the Salobo III mine expansion was 85% at the end of the fourth quarter.
Peñasquito: In the fourth quarter of 2021, Peñasquito produced 2.1 million ounces of attributable silver, an increase of approximately 7% relative to the fourth quarter of 2020, primarily due to higher grades and recoveries, partially offset by lower throughput.
Antamina: In the fourth quarter of 2021, Antamina produced 1.4 million ounces of attributable silver, a decrease of approximately 29% relative to the fourth quarter of 2020, primarily due to lower throughput and grades. As per Compañía Minera Antamina S.A.’s (the operating company of Antamina) news release dated October 31, 2021, operations at Antamina were briefly suspended to ensure the health and safety of its workforce and other stakeholders following localized protests in Peru.
Constancia: In the fourth quarter of 2021, Constancia produced 0.6 million ounces of attributable silver and 9,900 ounces of attributable gold, an increase of approximately 21% and 151%, respectively, relative to the fourth quarter of 2020. Silver production increased primarily due to higher grades. The increase in gold production was primarily due to higher grades resulting from the commencement of ore production from the Pampacancha satellite deposit and the increase in fixed recoveries from 55% to 70%, partially offset by the receipt of 2,005 ounces in the fourth quarter of 2020 related to delays in accessing the Pampacancha deposit while no delay payment was received in 2021. Additionally, as Hudbay mined and processed four million tonnes of ore from the Pampacancha deposit by December 31, 2021, the Company was required to make an additional deposit payment of $4 million to Hudbay for the increase in the fixed gold recoveries, which was paid on December 23, 2021.
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Sudbury: In the fourth quarter of 2021, Vale’s Sudbury mines produced 5,400 ounces of attributable gold, a decrease of approximately 19% relative to the fourth quarter of 2020, primarily due to lower throughput as a result of the temporary closure of the Totten mine. As per Vale, on September 26, 2021, a large piece of equipment, called a bucket scoop, blocked and damaged the mine shaft resulting in its temporary closure. Vale has reported that production at the Totten mine, which accounts for approximately 15% to 20% of the Company’s gold production from Sudbury, resumed in the first quarter of 2022 and that operations at the Sudbury mines are expected to normalize in the second quarter of 2022.
Stillwater: In the fourth quarter of 2021, the Stillwater mines produced 2,700 ounces of attributable gold and 4,700 ounces of attributable palladium, a decrease of approximately 19% for gold and 17% for palladium relative to the fourth quarter of 2020 due to lower throughput.
San Dimas: In the fourth quarter of 2021, San Dimas produced 13,700 ounces of attributable gold, an increase of approximately 18% relative to the fourth quarter of 2020, primarily due to the mining of higher-grade material.
Other Gold: In the fourth quarter of 2021, total Other Gold attributable production was 8,400 ounces, an increase of approximately 131% relative to the fourth quarter of 2020, primarily due to the mining of higher-grade material at Minto.
Other Silver: In the fourth quarter of 2021, total Other Silver attributable production was 2.3 million ounces, an increase of approximately 9% relative to the fourth quarter of 2020, primarily due to higher production at Neves-Corvo and the newly acquired Cozamin stream, partially offset by lower production at Yauliyacu and Aljustrel.
Voisey’s Bay: In the fourth quarter of 2021, the Voisey's Bay mine produced 381 thousand
| pounds of attributable cobalt. | As per Vale’s Fourth Quarter 2021 Performance Report, physical |
| completion of the Voisey’s Bay underground mine extension, which includes developing two | |
| underground mines - Reid Brook and Eastern Deeps - was 67% at the end of the fourth quarter. |
As per Vale, production commenced from Reid Brook in the second quarter of 2021, and the startup of Eastern Deeps is expected by the second half of 2022.
Produced But Not Yet Delivered4 and Inventory
As at December 31, 2021, payable ounces and pounds attributable to the Company produced but not yet delivered amounted to:
- 85,900 payable gold ounces, an increase of 5,100 ounces during Q4 2021, primarily due to an increase during the period at the Sudbury and Constancia mines.
- 4.2 million payable silver ounces, an increase of 0.4 million ounces during Q4 2021.
- 5,600 payable palladium ounces, virtually unchanged during Q4 2021.
- 596 thousand payable cobalt pounds, virtually unchanged during Q4 2021.
As of December 31, 2021, 657 thousand pounds of cobalt were held in inventory by Wheaton, an increase of 169 thousand pounds during Q4 2021.
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.
Corporate Development
Fenix Gold PMPA: On November 15, 2021, the Company entered into the previously disclosed PMPA with Rio2 Limited (“Rio2”) in connection with the Fenix Gold Project located in Chile.
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Blackwater PMPA: On December 13, 2021, the Company entered into a PMPA with Artemis Gold Inc. (“Artemis”) in respect of silver production from the Blackwater Gold Project located in British Columbia, Canada. Under the PMPA, Wheaton will be entitled to receive 50% of the payable silver production until 17.8 million ounces ("Moz") have been delivered, thereafter dropping to 33% of payable silver production for the life of the mine. The Company is committed to pay total upfront consideration of $141 million for this stream, payable in four equal installments during the construction of Blackwater, subject to customary conditions being satisfied. In addition, Wheaton will make ongoing cash payments equal to 18% of the spot silver price per ounce of silver delivered under the agreement until the value of silver delivered, net of the per ounce production payment for silver, is equal to the upfront consideration of $141 million, and 22% of the spot price of silver thereafter.
Additionally, on December 13, 2021, the Company announced that it had entered into a definitive agreement to acquire the existing gold stream held by New Gold Inc. (“New Gold”) in respect of gold production from Blackwater. Under this agreement, Wheaton will be entitled to receive 8% of the payable gold production until 279,908 ounces have been delivered, thereafter dropping to 4% of payable gold production for the life of the mine. The Company paid $300 million for the stream. In addition, Wheaton will make ongoing production payments equal to 35% of the spot gold price per ounce of gold delivered under the agreement.
Subsequent to the Quarter – Corporate Development
Curipamba PMPA: On January 17, 2022, the Company entered into a PMPA with Adventus Mining Corporation (“Adventus”) in respect of the Curipamba Project (“Curipamba”) located in Ecuador. Under the Curipamba PMPA, Wheaton will purchase 50% of the payable gold production until 150,000 ounces have been delivered, thereafter dropping to 33% of payable gold production for the life of the mine and 75% of the payable silver production until 4.6 million ounces have been delivered, thereafter dropping to 50% for the life of mine. Under the terms of the agreement, the Company is committed to pay Adventus total upfront cash consideration of $175.5 million, $13 million of which is available pre-construction and $500,000 of which will be paid to support certain local community development initiatives around Curipamba. The remainder will be payable in four staged installments during construction, subject to various customary conditions being satisfied. In addition, Wheaton will make ongoing production payments for the gold and silver ounces delivered equal to 18% of the spot prices until the value of gold and silver delivered, net of the production payment, is equal to the upfront consideration of $175.5 million, at which point the production payment will increase to 22% of the spot prices.
Marathon PMPA: On January 26, 2022, the Company entered into a PMPA with Generation Mining Limited (“Gen Mining”) in respect of the Marathon Project located in Ontario, Canada. Under the Marathon PMPA, Wheaton will purchase 100% of the payable gold production until 150,000 ounces have been delivered, thereafter dropping to 67% of payable gold production for the life of the mine and 22% of the payable platinum production until 120,000 ounces have been delivered, thereafter dropping to 15% for the life of mine. Under the terms of the agreement, the Company has committed to pay Gen Mining total upfront cash consideration of C$240 million, C$40 million of which will be paid prior to construction and to be used for the development of the Marathon Project, with the remainder payable in four staged installments during construction, subject to various customary conditions being satisfied and pre-determined completion tests. In addition, Wheaton will make ongoing production payments for the gold and platinum ounces delivered equal to 18% of the spot prices until the value of gold and platinum delivered, net of the production payment, is equal to the upfront consideration of C$240 million, at which point the production payment will increase to 22% of the spot prices.
Goose PMPA: On February 8, 2022, the Company announced that it had entered into a PMPA with Sabina Gold & Silver Corp. (“Sabina”) in respect of the Goose Project, part of Sabina’s Back River Gold District located in Nunavut, Canada (the “Goose Project”). Under the Goose PMPA,
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Wheaton will purchase 4.15% of the payable gold production until 130,000 ounces have been delivered, thereafter dropping to 2.15% until 200,000 ounces have been delivered, thereafter dropping to 1.5% of the payable gold production. Under the terms of the agreement, the Company has committed to pay Sabina an upfront payment of $125 million in four equal installments during construction of the Goose Project, subject to customary conditions. In addition, Wheaton will make ongoing production payments for the gold ounces delivered equal to 18% of the spot gold price until the value of gold, net of the production payment is equal to the upfront consideration of $125 million, at which point the production payment will increase to 22% of the spot gold price.
Reserves and Resources (at December 31, 2021)
- Proven and Probable Mineral Reserves attributable to Wheaton were 14.01 million ounces of gold compared with 11.71 million ounces as reported in Wheaton’s 2020 Annual Information Form (“AIF”), an increase of 20% (primarily due to recently added PMPAs and increases at Salobo); 567.9 million ounces of silver compared with 550.3 million ounces, an increase of 3%; 0.63 million ounces palladium compared with 0.64 million ounces, a decrease of 2%; 31.4 million pounds of cobalt compared to 31.7 million pounds, a decrease of 1%; and first time reporting of platinum of 0.17 million ounces. On a GEO3 basis, total Proven and Probable Mineral Reserves for all metals attributable to Wheaton were 22.98 million ounces, an increase of 13%.
- Measured and Indicated Mineral Resources attributable to Wheaton were 5.34 million ounces of gold compared with 4.50 million ounces as reported in Wheaton’s 2020 AIF, an increase of 18%; 766.6 million ounces of silver compared with 743.0 million ounces, an increase of 3%; 0.12 million ounces of palladium compared to 0.03 million ounces, an increase of 318%; 1.5 million pounds of cobalt remained the same as 2020; and first time reporting of platinum of 0.097 million ounces. On a GEO3 basis, total Measured and Indicated Mineral Resources for all metals attributable to Wheaton were 15.78 million ounces, an increase of 9%.
- Inferred Mineral Resources attributable to Wheaton were 4.96 million ounces of gold compared with 4.46 million ounces as reported in Wheaton’s 2020 AIF, an increase of 11%; 464.0 million ounces of silver compared with 469.5 million ounces, a decrease of 1%, 0.35 million ounces of palladium compared with 0.37 million ounces, a decrease of 7%; 6.8 million pounds of cobalt compared to 7.6, a decrease of 10%; and first time report of platinum of 0.017 million ounces. On a GEO3 basis, total Inferred Mineral Resources for all metals attributable to Wheaton were 11.69 million ounces, an increase of 3%.
Estimated attributable reserves and resources contained in this press release are based on information available to the Company as of March 9, 2022, and therefore will not reflect updates, if any, after that date. Updated reserves and resources data incorporating year-end 2021 estimates will also be included in the Company's 2021 Annual Information Form. Wheaton’s most current attributable reserves and resources, as of December 31, 2021, can be found on the Company’s website at www.wheatonpm.com.
Sustainability
Climate Change Commitments: Subsequent to the quarter, Wheaton announced the adoption of a climate change policy and commitment to net zero carbon emissions by 2050. As part of this policy, Wheaton plans to establish targets across both Scope 2 and Scope 3 attributable emissions to support a 1.5° C trajectory. The Company has also established a fund to support our mining partners' efforts to move to renewable energy sources and reduce emissions at the mines in which we have an interest.
Partner Community Investment Program: Wheaton continues to support a wide range of programs with mining partners including Vale, Glencore, Hudbay and First Majestic Silver, focused on education, health, entrepreneurial support, and community engagement opportunities
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in the communities near the mines from which Wheaton receives precious metals. In the fourth quarter of 2021, the second phase of the Agricultural and Livestock Development Program run by Hudbay in Peru was completed. The program, aimed at improving all aspects of the production chain related to the raising of livestock in rural communities, provided nutritional support to nearly 37,000 animals during the fourth quarter alone.
COVID-19 Community Support and Response Fund: In the second quarter of 2020, Wheaton announced the launch of a $5 million Community Support and Response Fund (the “CSR Fund”) to support global efforts to combat the social and economic impact of the COVID-19 pandemic. The CSR Fund is designed to meet the immediate needs of the communities in which Wheaton and its mining partners operate. This fund is incremental to Wheaton's already active Community Investment Program that currently provides support to over 50 programs in multiple communities around the world. As of December 31, 2021, the Company has made donations totaling approximately $4.6 million through the CSR Fund.
Webcast and Conference Call Details
A conference call and webcast will be held on Friday, March 11, 2022 starting at 8:00am PT / 11:00 am ET to discuss these results. To participate in the live call please use one of the following methods:
Dial toll free from Canada or the US: 1-888-664-6383 Dial from outside Canada or the US: 1-416-764-8650 Pass code: 99785763 Live audio webcast: Webcast URL
Participants should dial in five to ten minutes before the call.
The accompanying slideshow will also be available in PDF format on the ‘Presentations’ page of the Wheaton Precious Metals website before the conference call.
The conference call will be recorded and available until March 18, 2022 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: 785763 # Archived audio webcast: Webcast URL
This earnings release should be read in conjunction with Wheaton Precious Metals’ MD&A and Financial Statements, which are available on the Company’s website at www.wheatonpm.com and have been posted on SEDAR at www.sedar.com.
Mr. Wes Carson, P.Eng., Vice President, Mining Operations, 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.
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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.
In accordance with Wheaton Precious Metals™ 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.
End Notes
1 Please refer to non-IFRS measures at the end of this press release. Dividends declared in the referenced calendar quarter, relative to the financial results of the prior quarter. Details of the dividend can be found in the Wheaton’s news release date March 10, 2022, titled “Wheaton Precious Metals Declares Quarterly Dividend.”
2 Commodity price assumptions for the gold equivalent production and sales in 2021 are $1,800 / ounce gold, $25 / ounce silver, and $2,300 / ounce palladium and $17.75 / pound cobalt. Other metal includes palladium and cobalt. 3 Gold equivalent forecast production for 2022 and the longer term outlook and for mineral reserves and resources are based on the following commodity price assumptions: $1,800 / ounce gold, $24 / ounce silver, $2,100 / ounce palladium, $1,000 / ounce platinum and $33 / pound of cobalt. Other metal includes palladium and cobalt. Five- and ten-year guidance do not include optionality production from Pascua Lama, Navidad, Cotabambas, Metates, or additional expansions at Salobo outside of project currently in construction. In addition, five-year guidance also does not include any production from Kutcho or the Victor project at Sudbury.
4 Payable gold, silver and palladium ounces and cobalt pounds produced but not yet delivered are based on management estimates only and rely upon information provided by the owners and operators of mining operations and may be revised and updated in future periods as additional information is received.
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Consolidated Statements of Earnings
Years Ended December 31
| (US dollars and shares in thousands, except per share amounts) | 2021 | 2020 | |||
| Sales | $ | 1,201,665 | $ 1,096,224 | ||
| Cost of sales Cost of sales, excluding depletion Depletion | $ 266,763 243,889 | ||||
| $ | 287,947 | ||||
| 254,793 | |||||
| Total cost of sales | $ | 542,740 | $ 510,652 | ||
| Gross margin General and administrative expenses Reversal of impairment of mineral stream interests | $ | 658,925 | $ 585,572 65,698 - | ||
| $ | 658,925 | ||||
| 60,985 | |||||
| (156,717) | |||||
| Earnings from operations Other (income) expense | $ | 754,657 | $ 519,874 (2,170) | ||
| $ | 754,657 | ||||
| (5,776) | |||||
| Earnings before finance costs and income taxes Finance costs | $ | 760,433 | $ 522,044 16,715 | ||
| $ | 760,433 | ||||
| 5,817 | |||||
| Earnings before income taxes Income tax recovery | $ | 754,616 | $ 505,329 2,475 | ||
| $ | 754,616 | ||||
| 269 | |||||
| Net earnings | $ | 754,885 | $ 507,804 | ||
| Basic earnings per share Diluted earnings per share Weighted average number of shares outstanding Basic Diluted | $ | 1.677 | $ 1.132 $ 1.128 448,694 450,070 | ||
| $ | 1.673 | ||||
| 450,138 | |||||
| 451,170 |
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Consolidated Balance Sheets
| (US dollars in thousands) | As at December 31 | As at December 31 2020 | |||
|---|---|---|---|---|---|
| 2021 | |||||
| Assets Current assets Cash and cash equivalents Accounts receivable Other | $ 192,683 5,883 3,265 | ||||
| $ | 226,045 | ||||
| 11,577 | |||||
| 12,102 | |||||
| Total current assets | $ | 249,724 | $ 201,831 | ||
| Non-current assets Mineral stream interests Early deposit mineral stream interests Mineral royalty interest Long-term equity investments Convertible notes receivable Property, plant and equipment Other | $ 5,488,391 33,241 3,047 199,878 11,353 6,289 13,242 | ||||
| $ | 5,905,797 | ||||
| 34,741 | |||||
| 6,606 | |||||
| 61,477 | |||||
| 17,086 | |||||
| 5,509 | |||||
| 15,211 | |||||
| Total non-current assets | $ | 6,046,427 | $ 5,755,441 | ||
| Total assets | $ | 6,296,151 | $ 5,957,272 | ||
| Liabilities Current liabilities Accounts payable and accrued liabilities Current portion of performance share units Current portion of lease liabilities Other | $ 13,023 17,297 773 76 | ||||
| $ | 13,935 | ||||
| 14,807 | |||||
| 813 | |||||
| 136 | |||||
| Total current liabilities | $ | 29,691 | $ 31,169 | ||
| Non-current liabilities Bank debt Lease liabilities Deferred income taxes Performance share units Pension liability | $ 195,000 2,864 214 11,784 1,670 | ||||
| $ | - | ||||
| 2,060 | |||||
| 100 | |||||
| 11,498 | |||||
| 2,685 | |||||
| Total non-current liabilities | $ | 16,343 | $ 211,532 | ||
| Total liabilities | $ | 46,034 | $ 242,701 | ||
| Shareholders' equity Issued capital Reserves Retained earnings | $ 3,646,291 126,882 1,941,398 | ||||
| $ | 3,698,998 | ||||
| 47,036 | |||||
| 2,504,083 | |||||
| Total shareholders' equity | $ | 6,250,117 | $ 5,714,571 | ||
| Total liabilities and shareholders' equity | $ | 6,296,151 | $ 5,957,272 |
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Consolidated Statements of Cash Flows
Years Ended December 31
| (US dollars in thousands) | 2021 | 2020 | |||
| Operating activities Net earnings Adjustments for Depreciation and depletion Reversal of impairment of mineral stream interests Interest expense Equity settled stock based compensation Performance share units Pension expense Income tax expense (recovery) Loss (gain) on fair value adjustment of share purchase warrants held Fair value (gain) loss on convertible note receivable Investment income recognized in net earnings Other Change in non-cash working capital | $ 507,804 245,779 - 12,366 5,432 9,398 806 (2,475) (337) (1,899) (230) 1,487 1,025 | ||||
| $ | 754,885 | ||||
| 256,685 | |||||
| (156,717) | |||||
| 352 | |||||
| 5,262 | |||||
| (2,925) | |||||
| 1,014 | |||||
| (269) | |||||
| 2,101 | |||||
| 2,101 | |||||
| (5,733) | |||||
| (462) | |||||
| (510) | |||||
| (8,072) | |||||
| Cash generated from operations before income taxes and interest Income taxes recovered (paid) Interest paid Interest received | $ | 845,611 | $ 779,156 49 (13,992) 229 | ||
| (279) | |||||
| (429) | |||||
| 242 | |||||
| Cash generated from operating activities | $ | 845,145 | $ 765,442 | ||
| Financing activities Bank debt repaid Credit facility extension fees Share purchase options exercised Lease payments Dividends paid | $ (679,500) (1,373) 21,892 (704) (167,212) | ||||
| $ | (195,000) | ||||
| (1,727) | |||||
| 7,953 | |||||
| (780) | |||||
| (218,052) | |||||
| Cash (used for) generated from financing activities | $ | (407,606) | $ (826,897) | ||
| Investing activities Mineral stream interests Early deposit mineral stream interests Mineral royalty interest Acquisition of long-term investments Proceeds on disposal of long-term investments Dividends received Other | $ (322) (1,500) - (10,671) 162,942 - (801) | ||||
| $ | (520,891) | ||||
| (1,500) | |||||
| (3,571) | |||||
| (7,453) | |||||
| 129,753 | |||||
| 221 | |||||
| (775) | |||||
| Cash (used for) generated from investing activities | $ | (404,216) | $ 149,648 | ||
| Effect of exchange rate changes on cash and cash equivalents | $ | 39 | $ 504 | ||
| Increase in cash and cash equivalents Cash and cash equivalents, beginning of year | $ | 33,362 | $ 88,697 103,986 | ||
| $ | 33,362 | ||||
| 192,683 | |||||
| Cash and cash equivalents, end of year | $ | 226,045 | $ 192,683 |
- 12 -
Summary of Units Produced
| Q4 2020 Q3 2020 Q2 2020 Q1 2020 | |||||
|---|---|---|---|---|---|
| Q4 2021 | Q3 2021 | Q2 2021 | Q1 2021 | ||
| Gold ounces produced ² Salobo Sudbury 3 Constancia 7 San Dimas 4, 7 Stillwater 5 Other Minto 777 8 Marmato | 62,854 63,408 59,104 62,575 6,659 3,798 9,257 7,795 3,929 3,780 3,470 3,681 11,652 9,228 6,074 11,318 3,290 3,176 3,222 2,955 789 1,832 2,928 2,124 2,866 5,278 4,728 4,551 - - - - | ||||
| 48,235 | 55,205 | 55,590 | 46,622 | ||
| 5,404 | 148 | 4,563 | 7,004 | ||
| 9,857 | 8,533 | 5,525 | 2,453 | ||
| 13,714 | 11,936 | 11,478 | 10,491 | ||
| 2,664 | 2,949 | 2,962 | 3,041 | ||
| 3,506 | 1,703 | 3,206 | 2,638 | ||
| 4,462 | 4,717 | 5,035 | 6,280 | ||
| 479 | 433 | 1,713 | - | ||
| Total Other | 8,447 | 6,853 | 9,954 | 8,918 | 3,655 7,110 7,656 6,675 |
| Total gold ounces produced | 92,039 90,500 88,783 94,999 | ||||
| 88,321 | 85,624 | 90,072 | 78,529 | ||
| Silver ounces produced 2 Peñasquito 7 Antamina 7 Constancia 7 Other Los Filos 7 Zinkgruvan Yauliyacu 7 Stratoni Minto Neves-Corvo Aljustrel Cozamin Marmato Keno Hill 777 8 | 2,014 1,992 967 2,658 1,930 1,516 612 1,311 478 430 254 461 6 17 14 29 515 498 389 662 454 679 273 557 185 156 148 183 16 15 19 18 420 281 479 377 440 348 388 352 - - - - - - - - - - - - 51 96 108 96 | ||||
| 2,145 | 2,180 | 2,026 | 2,202 | ||
| 1,366 | 1,548 | 1,558 | 1,577 | ||
| 578 | 521 | 468 | 406 | ||
| 37 | 17 | 26 | 31 | ||
| 482 | 658 | 457 | 420 | ||
| 382 | 372 | 629 | 737 | ||
| 129 | 18 | 164 | 165 | ||
| 44 | 25 | 33 | 21 | ||
| 522 | 362 | 408 | 345 | ||
| 325 | 314 | 400 | 474 | ||
| 213 | 199 | 183 | 230 | ||
| 7 | 10 | 39 | - | ||
| 30 | 44 | 55 | 27 | ||
| 96 | 81 | 83 | 130 | ||
| Total Other | 2,267 | 2,100 | 2,477 | 2,580 | 2,087 2,090 1,818 2,274 |
| Total silver ounces produced | 6,509 6,028 3,651 6,704 | ||||
| 6,356 | 6,349 | 6,529 | 6,765 | ||
| Palladium ounces produced ² Stillwater 5 | 5,672 5,444 5,759 5,312 | ||||
| 4,733 | 5,105 | 5,301 | 5,769 | ||
| Cobalt pounds produced ² Voisey's Bay | - - - - | ||||
| 381 | 370 | 380 | 1,162 ⁹ | ||
| GEOs produced 6 SEOs produced 6 | 189,682 181,184 146,857 194,901 13,657 13,045 10,574 14,033 | ||||
| 186,404 | 183,975 | 191,271 | 191,308 | ||
| 13,421 | 13,246 | 13,772 | 13,774 | ||
| Average payable rate 2 Gold Silver Palladium Cobalt GEO 7 | |||||
| 96.0% | 96.0% | 95.8% | 95.0% | 95.2% 95.3% 94.7% 95.1% 86.3% 86.1% 81.9% 85.6% 93.6% 94.0% 90.8% 91.0% n.a. n.a. n.a. n.a. 91.1% 91.1% 89.8% 90.4% | |
| 86.0% | 86.6% | 86.9% | 86.6% | ||
| 92.2% | 94.5% | 95.0% | 91.6% | ||
| 93.3% | 93.3% | 93.3% | 93.3% | ||
| 91.3% | 91.2% | 91.7% | 90.4% |
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. Effective April 1, 2020, the fixed gold to silver exchange ratio was revised to 90:1, with the 70:1 ratio being reinstated on October 15, 2020. For reference, attributable silver production from prior periods is as follows: Q4-2021 - 544,000 ounces; Q3-2021 - 472,000 ounces; Q2-2021 - 467,000 ounces; Q1-2021 - 429,000 ounces; Q4-2020
- 485,000 ounces; Q3-2020 - 420,000 ounces; Q2-2020 - 276,000 ounces; Q1-2020 - 419,000 ounces.
5) Comprised of the Stillwater and East Boulder gold and palladium interests.
6) GEOs and SEOs, which are provided to assist the reader, are based on the following commodity price assumptions: $1,800 per ounce gold; $25.00 per ounce silver; $2,300 per ounce palladium; and $17.75 per pound cobalt; consistent with those used in estimating the Company's production guidance for 2021.
7) Operations at these mines had been temporarily suspended during the second quarter of 2020 as a result of the COVID-19 pandemic. During the second half of 2020, all of the operations were restarted. Additionally, operations at Los Filos were suspended from September 3, 2020 to December 23, 2020 as the result of an illegal road blockade by members of the nearby Carrizalillo community and had been 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) Operations at 777 were temporarily suspended from October 11, 2020 to November 25, 2020 as a result of an incident that occurred on October 9th during routine maintenance of the hoist rope and skip.
9) Effective January 1, 2021, the Company was entitled to cobalt production from the Voisey's Bay mine. As per the Voisey’s Bay PMPA with Vale, Wheaton is entitled to any cobalt processed at the Long Harbour Processing Plant as of January 1, 2021, resulting in reported production in the first quarter of 2021 including some material produced at the Voisey's Bay mine in the previous quarter.