SECOND QUARTER 2022 FINANCIAL RESULTS Wheaton Precious Metals Announces Second Quarter Results for 2022
August 11, 2022 TSX | NYSE | LSE: WPM Vancouver, British Columbia Designated News Release SECOND QUARTER 2022 FINANCIAL RESULTS
Wheaton Precious Metals Announces Second Quarter Results for 2022
“Throughout the first half of 2022, we have focused on optimizing our portfolio and further enhancing our financial flexibility in order to ensure that we are well positioned to respond to accretive growth opportunities and continue creating value for our shareholders,” said Randy Smallwood, President and Chief Executive Officer of Wheaton Precious Metals. “While not without its challenges, our diverse portfolio once again delivered strong operating cash flow and an attractive dividend yield, highlighting the resiliency of the streaming model to the inflationary pressures currently being felt across the global economy. Furthermore, we are pleased with our continued progress and leadership on sustainability initiatives as highlighted in our third annual Sustainability Report.”
Second Quarter 2022 Highlights:
- Over $300 million in revenue and $206 million in operating cash flow, resulting in a cash balance of $449 million and no debt as at June 30, 2022.
- $149 million in adjusted net earnings1.
- Announced the proposed termination of the Keno Hill precious metal purchase agreement (“PMPA”) for $135 million.
- Subsequent to the quarter, Wheaton added a sustainability-linked element in connection with the extension to its existing undrawn US$2 billion revolving credit facility.
- Recognized as one of the Best 50 Corporate Citizens in Canada by Corporate Knights.
- Declared quarterly dividend1 of $0.15 per common share, consistent with the comparable period in 2021.
Operational Overview
| (all figures in US dollars unless otherwise noted) | Q2 2021 Change | YTD 2021 Change | ||||
|---|---|---|---|---|---|---|
| Q2 2022 | YTD 2022 | |||||
| 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 | 90,072 (24.1)% 6,529 0.1 % 5,301 (26.4)% 380 (64.1)% 190,272 (14.6)% 90,090 (6.4)% 5,600 4.4 % 3,869 (12.7)% 395 (43.0)% 176,502 (3.5)% | 168,601 (13.2)% 13,294 (3.9)% 11,070 (24.2)% 1,542 (76.0)% 387,028 (13.9)% 165,194 (1.8)% 12,257 (7.0)% 9,000 (17.2)% 527 39.7 % 348,773 (3.5)% | ||||
| 68,365 | 146,419 | |||||
| 6,537 | 12,770 | |||||
| 3,899 | 8,387 | |||||
| 136 | 371 | |||||
| 162,569 | 333,265 | |||||
| 84,337 | 162,238 | |||||
| 5,848 | 11,401 | |||||
| 3,378 | 7,453 | |||||
| 225 | 736 | |||||
| 170,371 | 336,436 | |||||
| Revenue Net earnings Per share Adjusted net earnings 1 Per share 1 Operating cash flows Per share 1 | $ | 302,922 | $ 330,393 (8.3)% $ 166,124 (10.3)% $ 0.369 (10.6)% $ 161,626 (7.6)% $ 0.359 (7.8)% $ 216,415 (4.6)% $ 0.481 (5.0)% | $ | 610,166 | $ 654,512 (6.8)% $ 328,126 (6.6)% $ 0.729 (6.9)% $ 322,760 (4.8)% $ 0.718 (5.1)% $ 448,569 (7.1)% $ 0.997 (7.3)% |
| $ | 149,074 | $ | 306,542 | |||
| $ | 0.330 | $ | 0.679 | |||
| $ | 149,285 | $ | 307,292 | |||
| $ | 0.331 | $ | 0.681 | |||
| $ | 206,359 | $ | 416,899 | |||
| $ | 0.457 | $ | 0.924 |
All amounts in thousands except gold, palladium & gold equivalent ounces, and per share amounts.12
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Revised Annual and Long-Term Production Guidance
Given the proposed termination of the Keno Hill PMPA, lower production from Stillwater due to severe weather and flooding in the state of Montana in June as well as lower than expected production at Salobo, Wheaton is lowering production guidance. Wheaton’s estimated attributable production for 2022 is now forecast to be approximately 640,000 to 680,000 gold equivalent ounces2 (“GEOs”). For the five-year period ending December 31, 2026, average annual production is expected to increase to 820,000 GEO’s2, primarily due to anticipated continued production growth from Salobo, Stillwater, Constancia, and Voisey’s Bay as well as incremental production ounces from Marmato, Blackwater, Toroparu, Marathon, the Copper World Complex (formerly referred to as Rosemont) and Santo Domingo towards the latter end of the forecast period. Average forecast production for the ten-year period ending December 31, 2031, is expected to now be 870,000 GEO’s2 and includes incremental production from the Kutcho project and the Victor mine in Sudbury. Vale S.A. has indicated the potential for an additional expansion after the completion of the current Salobo III expansion, but Wheaton does not currently include this in its forecast.
2022 Production Guidance Forecast
| Original Guidance | Updated Guidance | |
|---|---|---|
| Gold Ounces | 350,000 to 380,000 | 300,000 to 320,000 |
| Silver Ounces (‘000s) | 23,000 to 24,500 | 22,500 to 24,000 |
| Other Metals2 (GEOs) | 44,000 to 48,000 | 35,000 to 40,000 |
| Total GEOs2 | 700,000 to 760,000 | 640,000 to 680,000 |
| Long-Term Forecast | ||
| 5-Year Annual Average (GEOs)2 | 850,000 | 820,000 |
| 10-Year Annual Average (GEOs)2 | 910,000 | 870,000 |
Financial Review Revenues
Revenue was $303 million in the second quarter of 2022 representing an 8% decrease from the second quarter of 2021 due primarily to a 5% decrease in the average realized gold equivalent² price; and a 3% decrease in the number of GEOs² sold.
Revenue was $610 million in the six months ended June 30, 2022, representing a 7% decrease from the comparable period of the previous year due primarily to a 4% decrease in the number of gold equivalent² ounces sold; and a 3% decrease in the average realized gold equivalent² price.
Cash Costs and Margin
Average cash costs¹ in the second quarter of 2022 were $440 per GEO² as compared to $444 in the second quarter of 2021. This resulted in a cash operating margin¹ of $1,338 per GEO² sold, a decrease of 6% as compared with the second quarter of 2021.
Average cash costs¹ for the six months ended June 30, 2022 were $431 per GEO² as compared to $451 in the comparable period of the previous year. This resulted in a cash operating margin¹ of $1,383 per GEO² sold, a decrease of 3% as compared with the comparable period of the previous year.
Balance Sheet (at June 30, 2022)
- Approximately $449 million of cash on hand.
- Subsequent to the quarter, the Company extended its existing undrawn $2 billion revolving term loan (the "Revolving Facility") with its maturity date now July 18, 2027. As part of the extension, Wheaton added a sustainability-linked element which impacts the interest rate paid on drawn amounts and standby fees.
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- The 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 Asset Highlights
Salobo: In the second quarter of 2022, Salobo produced 34,100 ounces of attributable gold, a decrease of approximately 39% relative to the second quarter of 2021, primarily due to lower throughput and grades. According to Vale S.A.’s Production and Sales 2Q22 report (“Vale”), mine movement saw continued improvement throughout the quarter, but concentrate production was negatively impacted by plant performance due to delays in ramp-up after planned and corrective maintenance. Vale expects further maintenance work to continue in the second half of 2022.
As per Vale’s Second Quarter 2022 Performance Report, Vale outlines the Salobo lll Project progress including the start of commissioning activities at the primary crushing and stockpile areas. In addition, Vale notes that the remediation work for the January 2022 landslide has been completed. Vale reports that physical completion of the Salobo III mine expansion was 95% at the end of the second quarter.
Antamina: In the second quarter of 2022, Antamina produced 1.4 million ounces of attributable silver, a decrease of approximately 11% relative to the second quarter of 2021, primarily due to lower grades as per the mine plan.
Constancia: In the second quarter of 2022, Constancia produced 600,000 ounces of attributable silver and 8,000 ounces of attributable gold, an increase of approximately 25% and 46%, respectively, relative to the second quarter of 2021, with the increases being primarily due to the mining of higher-grade material associated with the Pampacancha deposit.
Sudbury: In the second quarter of 2022, Vale’s Sudbury mines produced 7,200 ounces of attributable gold, an increase of approximately 58% relative to the second quarter of 2021, primarily due to higher throughput as during 2021, operations at the mine were suspended due to a labour dispute which lasted from June 1to August 9, 2021.
Stillwater: In the second quarter of 2022, the Stillwater mines produced 2,200 ounces of attributable gold and 3,900 ounces of attributable palladium, a decrease of approximately 27% for gold and 26% for palladium relative to the second quarter of 2021. As per Sibanye-Stillwater Limited’s news release dated August 11, 2022, regional floods impacted the Stillwater operations on June 13, 2022, including damage to bridges and the access road to the Stillwater mine. Operations at the Stillwater mine, which accounts for 60% of the mined production from the Stillwater operations, were suspended for seven weeks, but resumed on July 29, 2022. Access to the East Boulder mine and the Columbus metallurgical facilities remains intact and both facilities continued operating during the flooding events.
San Dimas: In the second quarter of 2022, San Dimas produced 10,000 ounces of attributable gold, a decrease of approximately 12% relative to the second quarter of 2021, primarily the result of mining lower grade material. According to First Majestic Silver Corp.’s (“First Majestic”) Q2 production report, underground development for stope preparation and ventilation within the Perez vein is progressing and forecast to be ready for initial production in August. Furthermore, First Majestic reports that improving dilution controls at San Dimas and prioritizing long-hole stoping of the Jessica and Regina veins is anticipated to improve ore grade and overall production in the second half of 2022.
Other Gold: In the second quarter of 2022, total Other Gold attributable production was 6,800 ounces, a decrease of approximately 32% relative to the second quarter of 2021, primarily due to the lower throughput and grades at 777, which closed as of June 2022.
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Voisey’s Bay: In the second quarter of 2022, the Voisey's Bay mine produced 136,000pounds of attributable cobalt, a decrease of approximately 64% relative to the second quarter of 2021, primarily due to lower throughput resulting from a scheduled maintenance shut down coupled with lower grades 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. As per Vale’s Second Quarter 2022 Performance Report, physical completion of the Voisey’s Bay underground mine extension was 74% at the end of the second quarter. Civil works continue for the balance of facilities, with civil completion planned by the end of 2022.
Development Assets
Copper World Complex (formerly referred to as Rosemont): On June 8, 2022, Hudbay Minerals Inc. (“Hudbay”) announced the results of the preliminary economic assessment (“PEA”) of its 100%-owned Copper World Complex in Arizona, which includes the recently discovered Copper World deposits along with the Rosemont deposit. The PEA highlights a two-phase mine plan, with Phase I reflecting a standalone operation on private land and patented mining claims over a 16-year mine life. Phase II expands mining activities onto federal land and extends the mine life to 44 years. In addition, Hudbay is evaluating several opportunities to optimize the project, including the potential to expand Phase I beyond 16 years with additions to the company’s private land package for tailings and waste rock storage and the potential to accelerate Phase II if federal permits are received earlier than as outlined in the PEA. As per the PEA, Hudbay anticipates the Phase 1 feasibility study and permits should be completed by the end of 2023, with a sanctioning decision by Hudbay in 2024, and construction expected to take three years.
Fenix: On June 28, 2022, Rio2 Limited (“Rio2”) provided an update on the Fenix Gold environmental assessment process. The Environmental Assessment Service (“SEA”) published the Consolidation Evaluation Report with the recommendation to reject the Environmental Impact Assessment (“EIA”) as it has been alleged that Fenix Gold has not provided enough information during the evaluation process to eliminate adverse impacts over the chinchilla, guanaco, and vicuña. On July 5, 2022, Rio2 announced that the Regional Evaluation Commission has voted for not approving the EIA for its Fenix Gold project in Chile. Following this decision, Rio2 provided a further update on July 11, 2022, stating that Rio2 along with its Chilean environmental and legal advisor, are currently evaluating options to continue to advance the project.
Portfolio Optimization
Keno Hill: On July 5, 2022, Hecla Mining Company (“Hecla”) announced a definitive agreement for Hecla to acquire all of the outstanding common shares of Alexco Resource Corp. (“Alexco”). In conjunction with this agreement, the Company has entered into an agreement with Hecla to terminate the Keno Hill PMPA in exchange for $135 million of Hecla common stock, conditional upon the completion of Hecla’s acquisition of Alexco and other customary approvals.
Produced But Not Yet Delivered3 and Inventory
As at June 30, 2022, payable ounces and pounds attributable to the Company produced but not yet delivered amounted to:
- 61,200 payable gold ounces, a decrease of 20,200 ounces during Q2 2022, primarily due to decreases at the Salobo and Sudbury mines.
- 3.7 million payable silver ounces, a decrease of 0.2 million ounces during Q2 2022 primarily due to decreases at the Peñasquito and Yauliyacu mines.
- 6,300 payable palladium ounces, an increase of 700 ounces during Q2 2022.
- 280,000 payable cobalt pounds, a decrease of 270 thousand pounds during Q2 2022.
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As of June 30, 2022, approximately 582,000 pounds of cobalt were held in inventory by Wheaton, an increase of 172,000 pounds during Q2 2022.
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.
Sustainability
Recognized as One of the Best 50 Corporate Citizens in Canada: Wheaton was named to the Corporate Knights’ 2022 list of the Best 50 Corporate Citizens in Canada. Corporate Knights has been producing global corporate and fund rankings for 20 years. Wheaton was selected from a pool of 332 Canadian companies – each evaluated on a set of 24 environmental, social and governance indicators, relative to their industry peers and using publicly available information. The Best 50 Corporate Citizens sets the standard for sustainability leadership in Canada.
Sustainability-Linked Revolving Credit Facility: Wheaton has added a sustainability-linked element in connection with the extension to its existing undrawn US$2 billion revolving credit facility, underscoring Wheaton’s commitment to sustainability initiatives. Under the renewed revolving credit facility, the interest rate paid on drawn amounts and standby fees will be adjusted based upon Wheaton’s performance in three sustainability-related areas including climate change, diversity and overall sustainability performance.
Published third Annual Sustainability Report: On May 24, 2022, Wheaton published its third annual Sustainability Report. Highlights of the report include establishment of a formal ESG strategy with targets and commitments across several material ESG topics and significant enhancement of disclosure around climate change (including inaugural reporting of our Scope 3 financed emissions associated with our Mining Partners).
Webcast and Conference Call Details
A conference call and webcast will be held on Friday, August 12, 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: 06939369 Live webcast: Webcast URL
The accompanying slideshow will also be available in PDF format on the ‘Events’ page of the Wheaton Precious Metals website before the conference call.
The conference call will be recorded and available until August 19, 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: 939369 # Archived webcast: Webcast URL
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This earnings release should be read in conjunction with Wheaton Precious Metals’ MD&A and Financial Statements, which are available on the Company’s website at www.wheatonpm.com and have been posted on SEDAR at www.sedar.com.
Mr. Wes Carson, P.Eng., Vice President, Mining Operations is a “qualified person” as such term is defined under National Instrument 43-101, and have reviewed and approved the technical information disclosed in this news release.
Wheaton Precious Metals believes that there are no significant differences between its corporate governance practices and those required to be followed by United States domestic issuers under the NYSE listing standards. This confirmation is located on the Wheaton Precious Metals website at http://www.wheatonpm.com/Company/corporate-governance/default.aspx.
About Wheaton Precious Metals Corp. 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 August 11, 2022, titled “Wheaton Precious Metals Declares Quarterly Dividend.”
2 Commodity price assumptions for the gold equivalent production and sales in 2022 are $1,800 / ounce gold, $24 / ounce silver, and $2,100 / ounce palladium and $33 / pound cobalt. Other metal includes palladium and cobalt. 3 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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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) | 2022 | 2021 | 2022 | 2021 | ||||||
| Sales | $ | 302,922 | $ 330,393 | $ | 610,166 | $ 654,512 | ||||
| Cost of sales Cost of sales, excluding depletion Depletion | $ 78,445 70,308 | $ 157,228 140,482 | ||||||||
| $ | 74,943 | $ | 144,936 | |||||||
| 65,682 | 123,084 | |||||||||
| Total cost of sales | $ | 140,625 | $ 148,753 | $ | 268,020 | $ 297,710 | ||||
| Gross margin General and administrative expenses Share based compensation Donations and community investments | $ | 162,297 | $ 181,640 8,904 7,978 1,583 | $ | 342,146 | $ 356,802 18,639 9,608 2,188 | ||||
| $ | 162,297 | $ | 342,146 | |||||||
| 9,685 | 19,089 | |||||||||
| 1,608 | 11,509 | |||||||||
| 1,160 | 1,973 | |||||||||
| Earnings from operations Other (income) expense | $ | 149,844 | $ 163,175 (3,420) | $ | 309,575 | $ 326,367 (3,301) | ||||
| $ | 149,844 | $ | 309,575 | |||||||
| (820) | (650) | |||||||||
| Earnings before finance costs and income taxes Finance costs | $ | 150,664 | $ 166,595 1,357 | $ | 310,225 | $ 329,668 2,930 | ||||
| $ | 150,664 | $ | 310,225 | |||||||
| 1,389 | 2,811 | |||||||||
| Earnings before income taxes Income tax (expense) recovery | $ | 149,275 | $ 165,238 886 | $ | 307,414 | $ 326,738 1,388 | ||||
| $ | 149,275 | $ | 307,414 | |||||||
| (201) | (872) | |||||||||
| Net earnings | $ | 149,074 | $ 166,124 | $ | 306,542 | $ 328,126 | ||||
| Basic earnings per share Diluted earnings per share Weighted average number of shares outstanding Basic Diluted | $ | 0.330 | $ 0.369 $ 0.368 450,088 451,203 | $ | 0.679 | $ 0.729 $ 0.728 449,800 450,869 | ||||
| $ | 0.330 | $ | 0.678 | |||||||
| 451,524 | 451,221 | |||||||||
| 452,359 | 452,123 |
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Condensed Interim Consolidated Balance Sheets
| (US dollars in thousands - unaudited) | As at June 30 | As at December 31 2021 | |||
|---|---|---|---|---|---|
| 2022 | |||||
| Assets Current assets Cash and cash equivalents Accounts receivable Other | $ 226,045 11,577 12,102 | ||||
| $ | 448,626 | ||||
| 13,550 | |||||
| 16,160 | |||||
| Total current assets | $ | 478,336 | $ 249,724 | ||
| 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 | $ 5,905,797 34,741 6,606 61,477 17,086 5,509 15,211 | ||||
| $ | 5,841,478 | ||||
| 45,342 | |||||
| 6,606 | |||||
| 60,799 | |||||
| - | |||||
| 4,814 | |||||
| 11,320 | |||||
| Total non-current assets | $ | 5,970,359 | $ 6,046,427 | ||
| Total assets | $ | 6,448,695 | $ 6,296,151 | ||
| Liabilities Current liabilities Accounts payable and accrued liabilities Current portion of performance share units Current portion of lease liabilities Other | $ 13,935 14,807 813 136 | ||||
| $ | 9,546 | ||||
| 11,989 | |||||
| 824 | |||||
| 97 | |||||
| Total current liabilities | $ | 22,456 | $ 29,691 | ||
| Non-current liabilities Lease liabilities Deferred income taxes Performance share units Pension liability | 2,060 100 11,498 2,685 | ||||
| 1,619 | |||||
| 236 | |||||
| 4,517 | |||||
| 3,066 | |||||
| Total non-current liabilities | $ | 9,438 | $ 16,343 | ||
| Total liabilities | $ | 31,894 | $ 46,034 | ||
| Shareholders' equity Issued capital Reserves Retained earnings | $ 3,698,998 47,036 2,504,083 | ||||
| $ | 3,729,300 | ||||
| 12,273 | |||||
| 2,675,228 | |||||
| Total shareholders' equity | $ | 6,416,801 | $ 6,250,117 | ||
| Total liabilities and shareholders' equity | $ | 6,448,695 | $ 6,296,151 |
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Condensed Interim Consolidated Statements of Cash Flows
Three Months Ended Six Months Ended June 30 June 30
| (US dollars in thousands - unaudited) | 2021 | 2021 | ||||
| 2022 | 2022 | |||||
| Operating activities Net earnings Adjustments for Depreciation and depletion 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 | $ 166,124 70,775 32 1,307 (10,258) 265 (886) 194 (3,388) (95) 103 (7,803) | $ 328,126 141,424 294 2,632 (9,952) 416 (1,388) 1,145 (4,626) (97) 694 (9,775) | ||||
| $ | 149,074 | $ | 306,542 | |||
| 66,080 | 123,875 | |||||
| 24 | 50 | |||||
| 1,498 | 2,839 | |||||
| (18,137) | (9,577) | |||||
| 271 | 429 | |||||
| 201 | 872 | |||||
| 154 | 897 | |||||
| - | 1,380 | |||||
| (549) | (743) | |||||
| 42 | (1,472) | |||||
| 7,365 | (8,553) | |||||
| Cash generated from operations before income taxes and interest Income taxes recovered (paid) Interest paid Interest received | $ | 206,023 | $ 216,370 (21) (29) 95 | $ | 416,539 | $ 448,893 (51) (370) 97 |
| (80) | (112) | |||||
| (25) | (51) | |||||
| 441 | 523 | |||||
| Cash generated from operating activities | $ 216,415 | $ 448,569 | ||||
| $ | 206,359 | $ | 416,899 | |||
| Financing activities Bank debt repaid Credit facility extension fees Share purchase options exercised Lease payments Dividends paid | $ - (1,673) 743 (173) (103,549) | $ (195,000) (1,673) 5,536 (387) (103,549) | ||||
| $ | - | $ | - | |||
| (2) | (2) | |||||
| 1,777 | 7,549 | |||||
| (202) | (402) | |||||
| (117,117) | (117,117) | |||||
| Cash (used for) generated from financing activities | $ (104,652) | $ (295,073) | ||||
| $ | (115,544) | $ | (109,972) | |||
| 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 | $ (64,771) - (10) (2,377) - - (386) | $ (215,790) (750) (3,571) (2,377) 112,188 - (520) | ||||
| $ | (15,549) | $ | (60,801) | |||
| - | (750) | |||||
| - | - | |||||
| (2,633) | (22,768) | |||||
| - | - | |||||
| 108 | 220 | |||||
| (89) | (125) | |||||
| Cash (used for) generated from investing activities | $ (67,544) | $ (110,820) | ||||
| $ | (18,163) | $ | (84,224) | |||
| Effect of exchange rate changes on cash and cash equivalents | $ 65 | $ 87 | ||||
| $ | (189) | $ | (122) | |||
| Increase in cash and cash equivalents Cash and cash equivalents, beginning of period | $ 44,284 191,162 | $ 42,763 192,683 | ||||
| $ | 72,463 | $ | 222,581 | |||
| 376,163 | 226,045 | |||||
| Cash and cash equivalents, end of period | $ 235,446 | $ 235,446 | ||||
| $ | 448,626 | $ | 448,626 |
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Summary of Units Produced
| Q4 2021 Q3 2021 Q2 2021 Q1 2021 Q4 2020 Q3 2020 | |||
|---|---|---|---|
| Q2 2022 | Q1 2022 | ||
| Gold ounces produced ² Salobo Sudbury 3 Constancia San Dimas 4 Stillwater 5 Other Minto 777 6 Marmato | 48,235 55,205 55,590 46,622 62,854 63,408 4,379 148 4,563 7,004 6,659 3,798 9,857 8,533 5,525 2,453 3,929 3,780 13,714 11,936 11,478 10,491 11,652 9,228 2,664 2,949 2,962 3,041 3,290 3,176 3,506 1,703 3,206 2,638 789 1,832 4,462 4,717 5,035 6,280 2,866 5,278 479 433 1,713 - - - | ||
| 34,129 | 44,883 | ||
| 7,212 | 5,362 | ||
| 8,042 | 6,311 | ||
| 10,044 | 10,461 | ||
| 2,171 | 2,497 | ||
| 2,480 | 4,060 | ||
| 3,509 | 4,003 | ||
| 778 | 477 | ||
| Total Other | 6,767 | 8,540 | 8,447 6,853 9,954 8,918 3,655 7,110 |
| Total gold ounces produced | 87,296 85,624 90,072 78,529 92,039 90,500 | ||
| 68,365 | 78,054 | ||
| Silver ounces produced 2 Peñasquito Antamina Constancia Other Los Filos 7 Zinkgruvan Yauliyacu Stratoni 8 Minto Neves-Corvo Aljustrel Cozamin Marmato Keno Hill 9 777 6 | 2,145 2,180 2,026 2,202 2,014 1,992 1,366 1,548 1,558 1,577 1,930 1,516 578 521 468 406 478 430 37 17 26 31 6 17 482 658 457 420 515 498 382 372 629 737 454 679 129 18 164 165 185 156 44 25 33 21 16 15 522 362 408 345 420 281 325 314 400 474 440 348 213 199 183 230 - - 7 10 39 - - - 30 44 55 27 - - 96 81 83 130 51 96 | ||
| 2,089 | 2,219 | ||
| 1,379 | 1,268 | ||
| 584 | 506 | ||
| 23 | 42 | ||
| 739 | 577 | ||
| 756 | 637 | ||
| - | - | ||
| 25 | 45 | ||
| 345 | 344 | ||
| 292 | 287 | ||
| 169 | 186 | ||
| 8 | 11 | ||
| 48 | 20 | ||
| 80 | 91 | ||
| Total Other | 2,485 | 2,240 | 2,267 2,100 2,477 2,580 2,087 2,090 |
| Total silver ounces produced | 6,356 6,349 6,529 6,765 6,509 6,028 | ||
| 6,537 | 6,233 | ||
| Palladium ounces produced ² Stillwater 5 | 4,733 5,105 5,301 5,769 5,672 5,444 | ||
| 3,899 | 4,488 | ||
| Cobalt pounds produced ² Voisey's Bay | 381 370 380 1,162 ¹⁰ - - | ||
| 136 | 234 | ||
| GEOs produced 11 SEOs produced 11 | 184,551 183,012 190,272 196,756 185,436 177,230 13,841 13,726 14,270 14,757 13,908 13,292 | ||
| 162,569 | 170,696 | ||
| 12,193 | 12,802 | ||
| Average payable rate 2 Gold Silver Palladium Cobalt GEO 11 | 96.0% 96.0% 95.8% 95.0% 95.2% 95.3% 86.0% 86.6% 86.9% 86.6% 86.3% 86.1% 92.2% 94.5% 95.0% 91.6% 93.6% 94.0% 93.3% 93.3% 93.3% 93.3% n.a. n.a. 91.4% 91.3% 91.8% 90.7% 91.2% 91.2% | ||
| 95.1% | 95.2% | ||
| 85.5% | 86.2% | ||
| 94.6% | 92.7% | ||
| 93.3% | 93.3% | ||
| 90.2% | 90.5% |
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: Q2-2022 - 382,000 ounces; Q1-2022 - 408,000 ounces; 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.
5) Comprised of the Stillwater and East Boulder gold and palladium interests.
6) 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. On June 22, 2022, Hudbay announced that mining activities at 777 have concluded and closure activities have commenced.
7) 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) The Stratoni mine was placed into care and maintenance during Q4-2021.
9) On June 22, 2022, Alexco elected to temporarily suspend milling operations for five to six months to focus on advancing underground development at Keno Hill.
10) 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.
11) GEOs and SEOs, which are provided to assist the reader, are based on the following commodity price assumptions: $1,800 per ounce gold; $24.00 per ounce silver; $2,100 per ounce palladium; and $33.00 per pound cobalt; consistent with those used in estimating the Company's production guidance for 2022.
- 11 -
Summary of Units Sold
| Q4 2021 Q3 2021 Q2 2021 Q1 2021 Q4 2020 Q3 2020 | |||
|---|---|---|---|
| Q2 2022 | Q1 2022 | ||
| Gold ounces sold Salobo Sudbury 2 Constancia San Dimas Stillwater 3 Other Minto 777 Marmato | 47,171 35,185 57,296 51,423 53,197 59,584 965 1,915 6,945 3,691 7,620 7,858 6,196 8,159 2,321 1,676 3,853 4,112 15,182 11,346 11,214 10,273 11,529 9,687 2,933 2,820 2,574 3,074 3,069 3,015 2,462 1,907 2,359 2,390 1,540 - 4,290 5,879 5,694 2,577 5,435 5,845 423 438 1,687 - - - | ||
| 48,515 | 42,513 | ||
| 7,916 | 3,712 | ||
| 7,431 | 10,494 | ||
| 10,633 | 10,070 | ||
| 2,626 | 2,628 | ||
| 2,806 | 3,695 | ||
| 3,629 | 4,388 | ||
| 781 | 401 | ||
| Total Other | 7,216 | 8,484 | 7,175 8,224 9,740 4,967 6,975 5,845 |
| Total gold ounces sold | 79,622 67,649 90,090 75,104 86,243 90,101 | ||
| 84,337 | 77,901 | ||
| Silver ounces sold Peñasquito Antamina Constancia Other Los Filos Zinkgruvan Yauliyacu Stratoni Minto Neves-Corvo Aljustrel Cozamin Marmato Keno Hill 777 | 1,818 2,210 1,844 2,174 1,417 1,799 1,297 1,502 1,499 1,930 1,669 1,090 351 484 295 346 442 415 17 12 42 27 - 19 346 354 355 293 326 492 551 182 601 1,014 15 580 42 41 167 117 169 134 27 24 29 26 20 - 259 193 215 239 145 201 133 155 208 257 280 148 174 170 168 173 - - 8 10 35 - - - 24 51 33 12 - - 69 99 109 49 93 121 | ||
| 2,096 | 2,188 | ||
| 1,177 | 1,468 | ||
| 494 | 644 | ||
| 41 | 42 | ||
| 650 | 355 | ||
| 817 | 44 | ||
| (2) | 133 | ||
| 21 | 31 | ||
| 167 | 204 | ||
| 123 | 145 | ||
| 148 | 177 | ||
| 11 | 8 | ||
| 30 | 27 | ||
| 75 | 87 | ||
| Total Other | 2,081 | 1,253 | 1,650 1,291 1,962 2,207 1,048 1,695 |
| Total silver ounces sold | 5,116 5,487 5,600 6,657 4,576 4,999 | ||
| 5,848 | 5,553 | ||
| Palladium ounces sold Stillwater 3 | 4,641 5,703 3,869 5,131 4,591 5,546 | ||
| 3,378 | 4,075 | ||
| Cobalt pounds sold Voisey's Bay | 228 131 395 132 - - | ||
| 225 | 511 | ||
| GEOs sold 4 SEOs sold 4 | 157,439 149,862 176,502 172,271 152,613 163,218 11,808 11,240 13,238 12,920 11,446 12,241 | ||
| 170,371 | 166,065 | ||
| 12,778 | 12,455 | ||
| Cumulative payable units PBND 5 Gold ounces Silver ounces Palladium ounces Cobalt pounds GEO 4 SEO 4 | 84,989 80,819 66,238 70,072 70,555 75,750 4,200 3,845 3,802 3,738 4,486 3,437 5,629 5,619 6,822 5,373 5,597 4,616 596 637 777 820 - - 158,477 150,317 139,145 141,206 136,894 126,968 11,886 11,274 10,436 10,590 10,267 9,523 | ||
| 61,198 | 81,365 | ||
| 3,684 | 3,920 | ||
| 6,267 | 5,535 | ||
| 280 | 550 | ||
| 122,758 | 150,170 | ||
| 9,207 | 11,263 | ||
| Inventory on hand Cobalt pounds | 657 488 134 132 - - | ||
| 582 | 410 |
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 and SEOs, which are provided to assist the reader, are based on the following commodity price assumptions: $1,800 per ounce gold; $24.00 per ounce silver; $2,100 per ounce palladium; and $33.00 per pound cobalt; consistent with those used in estimating the Company's production guidance for 2022.
5) Payable gold, silver and palladium ounces as well as cobalt pounds produced but not yet delivered (“PBND”) are based on management estimates. These figures may be updated in future periods as additional information is received.
- 12 -
Results of Operations
The operating results of the Company’s reportable operating segments are summarized in the tables and commentary below.
Three Months Ended June 30, 2022 Average Realized Average Average Price Cash Cost Depletion Cash Flow Units Units ($'s ($'s Per ($'s Per Net From Total Produced² 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 | |||||
|---|---|---|---|---|---|---|---|---|---|
| Sudbury4 | 7,212 | 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 |
| Other5 | 6,767 | 7,216 | 1,868 | 727 | 57 | 13,478 | 7,823 | 8,529 | 419,696 |
| 68,365 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 | 1,379 | 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 |
| Other6 | 2,485 | 2,081 | 21.91 | 7.44 | 5.74 | 45,577 | 18,148 | 30,198 | 577,944 |
| 6,537 | 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) $ Share based compensation (1,608) Donations and community investments (1,160) Finance costs (1,389) Other 820 Income tax (201) | (8,379) |
| (18,161) | |
| (1,135) | |
| (1,011) | |
| (465) | |
| (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 and the non-operating Stobie and Victor gold interests.
5) Comprised of the operating 777, Minto and Marmato gold interests as well as the non-operating Copper World Complex (formerly referred to as Rosemont), 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.
6) Comprised of the operating Los Filos, Zinkgruvan, Yauliyacu, Neves-Corvo, Aljustrel, Minto, Keno Hill, Cozamin, Marmato and 777 silver interests as well as the non-operating Loma de La Plata, Stratoni, Pascua-Lama, Copper World Complex (formerly referred to as Rosemont), Blackwater and Curipamba silver interests. The Stratoni mine was placed into care and maintenance during Q4-2021. On June 22, 2022, Hudbay announced that mining activities at 777 have concluded and closure activities have commenced. On June 22, 2022, Alexco elected to temporarily suspend milling operations for five to six months to focus on advancing underground development at Keno Hill.
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 Cash
| Realized | Average | Operating | Average | Gross | |||
|---|---|---|---|---|---|---|---|
| Price | Cash Cost | Margin | Depletion | Margin | |||
| Ounces | Ounces | ($'s Per | ($'s Per | ($'s Per | ($'s Per | ($'s Per | |
| Produced1, 2 | Sold2 | Ounce) | Ounce)3 | Ounce)4 | Ounce) | Ounce) | |
| Gold equivalent basis5 | 162,569 | 170,371 | $ 1,778 | $ 440 | $ 1,338 | $ 386 | $ 952 |
| Silver equivalent basis5 | 12,193 | 12,778 | $ 23.71 | $ 5.87 | $ 17.84 | $ 5.14 | $ 12.70 |
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 and SEOs, which are provided to assist the reader, are based on the following commodity price assumptions: $1,800 per ounce gold; $24.00 per ounce silver; $2,100 per ounce palladium; and $33.00 per pound cobalt; consistent with those used in estimating the Company's production guidance for 2022.