Third Quarter and Nine Months Financial Results Wheaton Precious Metals Announces Record Operating Cash Flow, Revenue and Sales Volumes in the First Nine Months of 2020
November 9, 2020 TSX: WPM Vancouver, British Columbia NYSE: WPM Designated News Release LSE: WPM THIRD QUARTER AND NINE MONTHS FINANCIAL RESULTS
WHEATON PRECIOUS METALS ANNOUNCES RECORD OPERATING CASH FLOW, REVENUE AND SALES VOLUMES IN THE FIRST NINE MONTHS OF 2020
“Wheaton’s high-quality portfolio of assets generated nearly $230 million in operating cash flow in the third quarter alone, resulting in a record of over $555 million in the first nine months of 2020. Given Wheaton’s unique dividend policy, the strong cash flow in the quarter resulted in a 20% increase in our dividend,” said Randy Smallwood, President and Chief Executive Officer of Wheaton Precious Metals. “In addition, production in the third quarter rebounded strongly following temporary suspensions of some operations as a result of the COVID-19 pandemic in the prior quarter, and the Company is on track to meet the higher end of our guidance.”
“Wheaton continues to focus on delivering value to all of its stakeholders. To our partners and our communities, we have now deployed approximately $3 million of our COVID-19 response fund to support various programs globally. To our current shareholders, we substantially increased our dividend and continued to advance numerous new streaming opportunities that would add accretive growth to Wheaton’s portfolio. And finally, to those investors that do not own our shares yet, we hope that our recently announced listing on the London Stock Exchange provides another point of entry and makes it easier to invest in Wheaton.”
Third Quarter Highlights:
- Over $228 million in operating cash flow in the quarter, an increase of 60% relative to Q3 2019.
- Net debt1 reduced by $231 million resulting in a net debt position of $278 million.
- Attributable gold equivalent2 production was 171,900 ounces in the quarter with the slight reduction relative to Q3 2019 primarily due to the mining of lower grade material at Salobo.
- Declared quarterly dividend1 of $0.12 per common share, a 20% increase from Q2 2020.
- Donated $3 million of the $5 million CSR Fund dedicated to combat COVID-19.
Operational Overview
| (all figures in US dollars unless otherwise noted) | Q3 2020 | Q3 2019 Change | |
|---|---|---|---|
| Ounces produced Gold Silver Palladium Gold equivalent 2 Ounces sold Gold Silver Palladium Gold equivalent 2 | 103,624 (11.4)% 6,039 (0.2)% 5,471 (0.5)% 183,394 (6.6)% 94,766 (4.9)% 4,484 11.5 % 4,907 13.0 % 155,116 1.5 % | ||
| 91,770 | |||
| 6,028 | |||
| 5,444 | |||
| 171,370 | |||
| 90,101 | |||
| 4,999 | |||
| 5,546 | |||
| 157,478 | |||
| Revenue Net earnings Per share Adjusted net earnings 1 Per share 1 Operating cash flows Per share 1 | $ | 307,268 | $ 223,595 37.4 % $ 75,960 97 % $ 0.170 96.5 % $ 69,914 117.4 % $ 0.156 116.3 % $ 142,300 60.3 % $ 0.318 59.7 % |
| $ | 149,875 | ||
| $ | 0.334 | ||
| $ | 152,007 | ||
| $ | 0.338 | ||
| $ | 228,099 | ||
| $ | 0.508 |
All amounts in thousands except gold, palladium and gold equivalent ounces produced and sold, per ounce amounts and per share amounts.12
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Listing on the London Stock Exchange
On October 28, 2020, the Company’s common shares were admitted to the Standard Segment of the Official List of the UK Financial Conduct Authority (“FCA”) and commenced trading on the Main Market of the London Stock Exchange under the ticker symbol WPM.
Corporate Development – Marmato Project
On November 5, 2020, the Company announced that it had entered into the previously disclosed precious metals purchase agreement (“PMPA”) with Caldas Gold Corp. (“Caldas Gold”) (TSX-V: CGC) for the Marmato Project located in Colombia. Under the terms of the PMPA3, the Company will acquire 6.5% of the gold production and 100% of the silver production until 190,000 ounces of gold and 2.15 million ounces of silver have been delivered, after which the stream drops to 3.25% of the gold production and 50% of the silver production for the life of mine.
Financial Review Revenues
Revenue was $307 million in the third quarter of 2020 representing a 37% increase from the third quarter of 2019 due primarily to a 35% increase in the average realized gold equivalent² price; and a 2% increase in the number of gold equivalent² ounces sold.
Costs and Expenses
Average cash costs¹ in the third quarter of 2020 were $445 per gold equivalent² ounce as compared to $417 in Q3 2019. This resulted in a cash operating margin¹ of $1,506 per gold equivalent² ounce sold, an increase of 47% as compared with Q3 2019.
Balance Sheet (at September 30, 2020)
- Approximately $210 million of cash on hand.
- $488 million outstanding under the Company's $2 billion revolving term loan (the "Revolving Facility").
- During Q3 2020, the Company has repaid $153 million under the Revolving Facility.
- During Q3 2020, the net debt¹ was reduced by $231 million to $278 million.
- The average effective interest rate for Q3 2020 was 1.24%.
Third Quarter Asset Highlights
Salobo: In the third quarter of 2020, Salobo produced 63,400 ounces of attributable gold, a decrease of approximately 14% relative to the third quarter of 2019 due to lower grades. According to Vale S.A.’s (“Vale”) Third Quarter 2020 Performance Report, physical completion of the Salobo III mine expansion was 62% at the end of the third quarter. Vale reports that the expansion remains on track to start up in the first half of 2022.
San Dimas: In the third quarter of 2020, San Dimas produced 9,200 ounces of attributable gold, a decrease of approximately 18% relative to the third quarter of 2019 primarily due to the impact of revising the silver to gold conversion ratio from 70:1 to 90:1 effective April 1, 2020, as per the PMPA4. The exchange ratio was reinstated to 70:1 during October 2020.
Antamina: In the third quarter of 2020, Antamina produced 1.5 million ounces of attributable silver, an increase of approximately 24% relative to the third quarter of 2019, primarily due to higher grades and throughput, partially offset by lower recovery.
Stillwater: In the third quarter of 2020, Stillwater produced 5,400 ounces of attributable palladium and 3,200 ounces of attributable gold, virtually unchanged relative to the third quarter of 2019. According to Sibanye-Stillwater Limited’s (“Sibanye-Stillwater”) Third Quarter 2020 Operating Update, a review of the Blitz project was conducted following the suspension of growth capital
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activities due to COVID-19, and the project is now expected to reach a steady state by 2024, a delay of up to two years. Sibanye-Stillwater also reports that the Fill the Mill project at the East Boulder mine remains on schedule to be completed by the end of 2020.
Constancia: In the third quarter of 2020, Constancia produced 0.4 million ounces of attributable silver and 3,800 ounces of attributable gold, a decrease of approximately 37% and 27%, respectively, relative to the third quarter of 2019, primarily due to lower grades. As per Wheaton’s PMPA with Hudbay Minerals Inc. (“Hudbay”), the failure to achieve a minimum level of throughput at the Pampacancha deposit during 2019 entitles Wheaton to an additional 8,020 ounces of gold in 2020 (received in quarterly installments), of which 2,005 ounces of gold was received during the third quarter of 2020 and included as production. According to Hudbay’s Third Quarter MD&A, significant progress has been made on completing the Pampacancha individual land-user agreements and, as of September 30, 2020, approximately 79% of the land has been vacated and turned over to Hudbay. Hudbay expects a Pampacancha production start date of early 2021.
Other Gold: In the third quarter of 2020, total Other Gold attributable production was 7,100 ounces, an increase of approximately 66% relative to the third quarter of 2019, primarily due to the resumption of mining at the Minto mine.
Other Silver: In the third quarter of 2020, total Other Silver attributable production was 2.1 million ounces, virtually unchanged relative to the third quarter of 2019, as stronger attributable production at Aljustrel and Yauliyacu were offset by lower production at Zinkgruvan and Neves- Corvo.
Keno Hill Restart: Alexco Resource Corp reported on September 15, 2020, that progress on sitewide capital projects at the Keno Hill Silver District, including mill modifications and infrastructure improvements, continues to be on pace for completion with mill commissioning and production of silver concentrate in the fourth quarter of 2020.
Produced But Not Yet Delivered 5
As at September 30, 2020, payable ounces attributable to the Company produced but not yet delivered amounted to:
- 77,000 payable gold ounces, a decrease of 2,600 ounces during Q3 2020, primarily due to a reduction during the period relative to the Sudbury mines.
- 3.4 million payable silver ounces, an increase of 0.2 million ounces during Q3 2020, primarily due to an increase during the period relative to the Peñasquito mine partially offset by a reduction at the Zinkgruvan mine.
- 4,600 payable palladium ounces, a decrease of 300 ounces during Q3 2020.
Detailed mine-by-mine production and sales figures can be found in the Appendix to this press release and in Wheaton’s consolidated MD&A in the ‘Results of Operations and Operational Review’ section.
Community Support and Response Fund to Combat the COVID-19 Pandemic
In the second quarter of 2020, Wheaton announced the launch of a $5 million Community Support and Response Fund (the “CSR Fund”) to support global efforts to combat the COVID-19 pandemic and its impacts on our communities. The CSR Fund is designed to meet the immediate needs of the communities in which Wheaton operates and around the mines from which Wheaton receives precious metals. This fund is incremental to Wheaton's already active Community Investment Program that currently provides support to over 50 programs in multiple communities around the world. As of September 30, 2020, the Company has made donations totalling approximately $3 million under this program.
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Webcast and Conference Call Details
A conference call and webcast will be held Tuesday, November 10, 2020, starting at 11:00 am (Eastern Time) to discuss these results. To participate in the live call, please use one of the following methods:
Dial toll free from Canada or the US: 888-231-8191 Dial from outside Canada or the US: 647-427-7450 Pass code: 7579702 Live audio webcast: link
Participants should dial in five to ten minutes before the call.
The conference call will be recorded and available until November 17, 2020 at 11:59 pm (Eastern Time). The webcast will be available for one year. You can listen to an archive of the call by one of the following methods:
Dial toll free from Canada or the US: 855-859-2056 Dial from outside Canada or the US: 416-849-0833 Pass code: 7579702 Archived audio webcast: link
This earnings release should be read in conjunction with Wheaton Precious Metals’ MD&A and Financial Statements, which are available on the Company’s website at www.wheatonpm.com and have been posted on SEDAR at www.sedar.com.
Mr. Wes Carson, P. Eng., Vice President, Mining Operations is a “qualified person” as such term is defined under National Instrument 43-101, and has reviewed and approved the technical information disclosed in this news release.
Wheaton Precious Metals believes that there are no significant differences between its corporate governance practices and those required to be followed by United States domestic issuers under the NYSE listing standards. This confirmation is located on the Wheaton Precious Metals website at http://www.wheatonpm.com/Company/corporate-governance/default.aspx.
About Wheaton Precious Metals Corp.
Wheaton is the world’s premier precious metals streaming company with the highest-quality portfolio of long-life, low-cost assets. Its business model offers investors commodity price leverage and exploration upside but with a much lower risk profile than a traditional mining company. Wheaton delivers amongst the highest cash operating margins in the mining industry, allowing it to pay a competitive dividend and continue to grow through accretive acquisitions. As a result, Wheaton has consistently outperformed gold and silver, as well as other mining investments. Wheaton creates sustainable value through streaming.
Wheaton’s estimated attributable precious metals production in 2020 is forecast to be between 655,000 and 685,000 gold equivalent ounces2. Wheaton expects to produce between 365,000 and 385,000 ounces of gold, 21.5 and 22.5 million ounces of silver, and 23,000 and 24,500 ounces of palladium.
In accordance with Wheaton Precious Metals™ Corp.’s (“Wheaton Precious Metals”, “Wheaton” or the “Company”) MD&A and financial statements, reference to the Company includes the Company’s wholly owned subsidiaries.
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End Notes
1 Please refer to non-IFRS measures at the end of this press release.
2 Commodity price assumptions for the gold equivalent production and sales in 2020 are $1,500 / ounce gold, $18 / ounce silver, and $2,000 / ounce palladium.
3 Under the PMPA with Caldas Gold, the Company will pay a total cash consideration of $110 million, $38 million of which is payable upon closing and the remaining portion of which is payable during the construction of the Marmato Deep Zone project, subject to receipt of required permits and licenses, sufficient financing having been obtained to cover total expected capital expenditures, and other customary conditions. In addition, the Company will make ongoing payments equal to 18% of the spot gold and silver price until the market value of gold and silver delivered to the Company, net of the per ounce cash payment, exceeds the initial upfront cash deposit, and 22% of the spot gold and silver price thereafter.
4 Under the terms of the PMPA, the Company is entitled to an amount equal to 25% of the payable gold production plus an additional amount of gold equal to 25% of the payable silver production converted to gold at a fixed gold to silver exchange ratio of 70:1 from the San Dimas mine. If the average gold to silver price ratio decreases to less than 50:1 or increases to more than 90:1 for a period of 6 months or more, then the "70" shall be revised to "50" or "90", as the case may be, until such time as the average gold to silver price ratio is between 50:1 to 90:1 for a period of 6 months or more in which event the "70" shall be reinstated.
5 Payable gold, silver and palladium ounces produced but not yet delivered are based on management estimates only and rely upon information provided by the owners and operators of mining operations and may be revised and updated in future periods as additional information is received.
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Condensed Interim Consolidated Statements of Earnings
| (US dollars and shares in thousands, except per share amounts - unaudited) | 2019 | 2019 | ||||
| 2020 | 2020 | |||||
| Sales | $ 223,595 | $ 638,110 | ||||
| $ | 307,268 | $ | 810,012 | |||
| Cost of sales Cost of sales, excluding depletion Depletion | $ 64,624 63,396 | $ 194,796 193,180 | ||||
| $ | 70,119 | $ | 202,238 | |||
| 60,601 | 184,104 | |||||
| Total cost of sales | $ 128,020 | $ 387,976 | ||||
| $ | 130,720 | $ | 386,342 | |||
| Gross margin General and administrative expenses Impairment of mineral stream interests | $ 95,575 14,028 - | $ 250,134 42,811 165,912 | ||||
| $ | 176,548 | $ | 423,670 | |||
| 21,326 | 56,307 | |||||
| - | - | |||||
| Earnings from operations Other (income) expense | $ 81,547 (3,533) | $ 41,411 (709) | ||||
| $ | 155,222 | $ | 367,363 | |||
| 2,624 | (1,340) | |||||
| Earnings before finance costs and income taxes Finance costs | $ 85,080 11,871 | $ 42,120 39,123 | ||||
| $ | 152,598 | $ | 368,703 | |||
| 2,766 | 14,519 | |||||
| Earnings before income taxes Income tax recovery (expense) | $ 73,209 2,751 | $ 2,997 5,618 | ||||
| $ | 149,832 | $ | 354,184 | |||
| 43 | (3,601) | |||||
| Net earnings | $ 75,960 | $ 8,615 | ||||
| $ | 149,875 | $ | 350,583 | |||
| Basic earnings per share Diluted earnings per share Weighted average number of shares outstanding Basic Diluted | $ 0.170 $ 0.170 446,802 447,849 | $ 0.019 $ 0.019 445,598 446,467 | ||||
| $ | 0.334 | $ | 0.782 | |||
| $ | 0.332 | $ | 0.779 | |||
| 449,125 | 448,484 | |||||
| 451,999 | 449,892 |
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Condensed Interim Consolidated Balance Sheets
| (US dollars in thousands - unaudited) | As at September 30 | As at December 31 2019 | |||
|---|---|---|---|---|---|
| 2020 | |||||
| Assets Current assets Cash and cash equivalents Accounts receivable Other | $ 103,986 7,138 43,628 | ||||
| $ | 209,834 | ||||
| 8,317 | |||||
| 3,647 | |||||
| Total current assets | $ | 221,798 | $ 154,752 | ||
| 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 | $ 5,734,106 31,741 3,036 309,757 21,856 7,311 15,448 | ||||
| $ | 5,547,769 | ||||
| 33,241 | |||||
| 3,036 | |||||
| 254,462 | |||||
| 10,836 | |||||
| 6,542 | |||||
| 13,503 | |||||
| Total non-current assets | $ | 5,869,389 | $ 6,123,255 | ||
| Total assets | $ | 6,091,187 | $ 6,278,007 | ||
| Liabilities Current liabilities Accounts payable and accrued liabilities Current portion of performance share units Current portion of lease liabilities Other | $ 11,794 10,668 724 41,514 | ||||
| $ | 16,760 | ||||
| 19,010 | |||||
| 734 | |||||
| 83 | |||||
| Total current liabilities | $ | 36,587 | $ 64,700 | ||
| Non-current liabilities Bank debt Lease liabilities Deferred income taxes Performance share units Pension liability | $ 874,500 3,528 148 8,401 810 | ||||
| $ | 487,500 | ||||
| 2,968 | |||||
| 206 | |||||
| 11,245 | |||||
| 1,343 | |||||
| Total non-current liabilities | $ | 503,262 | $ 887,387 | ||
| Total liabilities | $ | 539,849 | $ 952,087 | ||
| Shareholders' equity Issued capital Reserves Retained earnings | $ 3,599,203 160,701 1,566,016 | ||||
| $ | 3,638,234 | ||||
| 113,553 | |||||
| 1,799,551 | |||||
| Total shareholders' equity | $ | 5,551,338 | $ 5,325,920 | ||
| Total liabilities and shareholders' equity | $ | 6,091,187 | $ 6,278,007 |
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Condensed Interim Consolidated Statements of Cash Flows
| (US dollars in thousands - unaudited) | 2019 | 2019 | ||||
| 2020 | 2020 | |||||
| Operating activities Net earnings Adjustments for Depreciation and depletion Gain on disposal of mineral royalty interest Impairment charges 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 | $ 75,960 63,845 (2,929) - 10,885 1,447 4,803 - (2,751) (2) (386) (205) (491) 2,093 | $ 8,615 194,590 (2,929) 165,912 36,473 4,259 5,004 - (5,618) 5 677 (745) 1,890 (421) | ||||
| $ | 149,875 | $ | 350,583 | |||
| 61,050 | 185,542 | |||||
| - | - | |||||
| - | - | |||||
| 1,795 | 11,289 | |||||
| 1,319 | 4,127 | |||||
| 9,325 | 11,734 | |||||
| 265 | 533 | |||||
| (43) | 3,601 | |||||
| 1,107 | 845 | |||||
| 1,095 | (1,382) | |||||
| (23) | (178) | |||||
| 567 | 513 | |||||
| 3,656 | 2,771 | |||||
| Cash generated from operations before income taxes and interest Income taxes recovered (paid) Interest paid Interest received | $ | 229,988 | $ 152,269 (1,751) (8,404) 186 | $ | 569,978 | $ 407,712 (5,334) (33,311) 686 |
| - | 70 | |||||
| (1,912) | (12,745) | |||||
| 23 | 177 | |||||
| Cash generated from operating activities | $ 142,300 | $ 369,753 | ||||
| $ | 228,099 | $ | 557,480 | |||
| Financing activities Bank debt repaid Credit facility extension fees Share purchase options exercised Lease payments Dividends paid | $ (82,000) (3) 12,662 (156) (32,609) | $ (250,500) (1,103) 33,055 (479) (96,124) | ||||
| $ | (153,000) | $ | (387,000) | |||
| (6) | (1,373) | |||||
| 2,763 | 20,779 | |||||
| (132) | (438) | |||||
| (37,309) | (120,312) | |||||
| Cash (used for) generated from financing activities | $ (102,106) | $ (315,151) | ||||
| $ | (187,684) | $ | (488,344) | |||
| Investing activities Mineral stream interests Early deposit mineral stream interests Proceeds on disposal of mineral royalty interest Acquisition of long-term investments Investment in associate Proceeds on disposal of long-term investments Dividend income received Other | $ (9) (750) 9,000 - - 16,307 20 (313) | $ (183) (1,500) 9,000 (909) (132) 16,307 59 (1,520) | ||||
| $ | (40) | $ | (40) | |||
| (750) | (1,500) | |||||
| - | - | |||||
| (10,671) | (10,671) | |||||
| - | - | |||||
| 49,454 | 49,577 | |||||
| - | - | |||||
| (363) | (691) | |||||
| Cash generated from (used for) investing activities | $ 24,255 | $ 21,122 | ||||
| $ | 37,630 | $ | 36,675 | |||
| Effect of exchange rate changes on cash and cash equivalents | $ (5) | $ 135 | ||||
| $ | 25 | $ | 37 | |||
| Increase in cash and cash equivalents Cash and cash equivalents, beginning of period | $ 64,444 87,182 | $ 75,859 75,767 | ||||
| $ | 78,070 | $ | 105,848 | |||
| 131,764 | 103,986 | |||||
| Cash and cash equivalents, end of period | $ 151,626 | $ 151,626 | ||||
| $ | 209,834 | $ | 209,834 |
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Summary of Ounces Produced
| Q4 2019 Q3 2019 Q2 2019 Q1 2019 Q4 2018 | ||||
|---|---|---|---|---|
| Q3 2020 | Q2 2020 | Q1 2020 | ||
| Gold ounces produced ² Salobo Sudbury 3 Constancia 8 San Dimas 4, 8 Stillwater 5 Other Minto 6 777 | 74,716 73,615 67,056 60,846 76,995 6,468 6,082 9,360 11,374 6,646 4,757 5,172 4,533 4,826 4,266 11,352 11,239 11,496 10,290 10,092 3,585 3,238 3,675 3,137 3,472 2,189 - - - 1,441 3,987 4,278 4,788 4,445 4,248 | |||
| 63,408 | 59,104 | 62,575 | ||
| 5,068 | 9,257 | 7,795 | ||
| 3,780 | 3,470 | 3,681 | ||
| 9,228 | 6,074 | 11,318 | ||
| 3,176 | 3,222 | 2,955 | ||
| 1,832 | 2,928 | 2,124 | ||
| 5,278 | 4,728 | 4,551 | ||
| Total Other | 7,110 | 7,656 | 6,675 | 6,176 4,278 4,788 4,445 5,689 |
| Total gold ounces produced | 107,054 103,624 100,908 94,918 107,160 | |||
| 91,770 | 88,783 | 94,999 | ||
| Silver ounces produced 2 Peñasquito 8 Antamina 8 Constancia 8 Other Los Filos 8 Zinkgruvan Yauliyacu 8 Stratoni Minto 6 Neves-Corvo Aljustrel 777 | 1,895 2,026 702 1,594 1,455 1,342 1,223 1,334 1,176 1,225 632 686 552 635 695 55 33 37 38 29 670 587 590 451 587 358 620 627 528 233 147 131 172 143 149 18 - - - 8 385 431 392 498 509 325 240 322 470 475 81 62 93 95 113 | |||
| 1,992 | 973 | 2,658 | ||
| 1,516 | 612 | 1,311 | ||
| 430 | 254 | 461 | ||
| 17 | 14 | 29 | ||
| 498 | 389 | 662 | ||
| 679 | 273 | 557 | ||
| 156 | 148 | 183 | ||
| 15 | 19 | 18 | ||
| 281 | 479 | 377 | ||
| 348 | 388 | 352 | ||
| 96 | 108 | 96 | ||
| Total Other | 2,090 | 1,818 | 2,274 | 2,039 2,104 2,233 2,223 2,103 |
| Total silver ounces produced | 5,908 6,039 4,821 5,628 5,478 | |||
| 6,028 | 3,657 | 6,704 | ||
| Palladium ounces produced ² Stillwater 5 | 6,057 5,471 5,736 4,729 5,869 | |||
| 5,444 | 5,759 | 5,312 | ||
| GEOs produced 7 SEOs produced 7 | 186,027 183,394 166,399 168,759 180,732 15,502 15,283 13,867 14,063 15,061 | |||
| 171,370 | 140,348 | 182,533 | ||
| 14,281 | 11,696 | 15,211 | ||
| Average payable rate 2 Gold Silver Palladium | ||||
| 95.6% 95.1% 95.3% 95.6% 95.5% 85.3% 85.1% 83.3% 82.9% 83.3% 99.4% 83.5% 87.6% 98.5% 96.4% | ||||
| 95.3% | 94.7% | 95.1% | ||
| 86.1% | 81.9% | 85.6% | ||
| 97.0% | 86.5% | 93.0% |
1) All figures in thousands except gold and palladium ounces produced.
2) Ounces produced represent the quantity of gold, silver and palladium contained in concentrate or doré prior to smelting or refining deductions. Production figures and average payable rates are based on information provided by the operators of the mining operations to which the mineral stream interests relate or management estimates in those situations where other information is not available. Certain production figures or payable rates may be updated in future periods as additional information is received.
3) Comprised of the Coleman, Copper Cliff, Garson, Creighton and Totten gold interests.
4) Under the terms of the San Dimas PMPA, the Company is entitled to an amount equal to 25% of the payable gold production plus an additional amount of gold equal to 25% of the payable silver production converted to gold at a fixed gold to silver exchange ratio of 70:1 from the San Dimas mine. If the average gold to silver price ratio decreases to less than 50:1 or increases to more than 90:1 for a period of 6 months or more, then the "70" shall be revised to "50" or "90", as the case may be, until such time as the average gold to silver price ratio is between 50:1 to 90:1 for a period of 6 months or more in which event the "70" shall be reinstated. Effective April 1, 2020, the fixed gold to silver exchange ratio was revised to 90:1. For reference, silver production from prior periods is as follows: Q3-2020 – 420,000 ounces; Q2-2020 – 276,000 ounces; Q1-2020 – 419,000 ounces; Q4-2019 – 415,000 ounces; Q3-2019 – 410,000 ounces; Q2-2019 – 401,000 ounces; Q1-2019 – 351,000 ounces; and Q4-2018 – 342,000 ounces.
5) Comprised of the Stillwater and East Boulder gold and palladium interests.
6) The Minto mine was placed into care and maintenance from October 2018 to October 2019.
7) GEOs and SEOs, which are provided to assist the reader, are based on the following commodity price assumptions: $1,500 per ounce gold; $18.00 per ounce silver; and $2,000 per ounce palladium, consistent with those used in estimating the Company's production guidance for 2020.
8) Operations at these mines had been temporarily suspended during the second quarter of 2020 as a result of the COVID-19 pandemic. During the third quarter, all of the operations were restarted.
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Summary of Ounces Sold
| Q4 2019 Q3 2019 Q2 2019 Q1 2019 Q4 2018 | ||||
|---|---|---|---|---|
| Q3 2020 | Q2 2020 | Q1 2020 | ||
| Gold ounces sold Salobo Sudbury 2 Constancia 7 San Dimas 7 Stillwater 3 Other Minto 4 777 | 58,137 63,064 57,715 84,160 75,351 7,394 7,600 8,309 4,061 4,864 5,108 4,742 4,409 5,512 3,645 11,499 11,374 10,284 11,510 8,453 2,925 3,314 3,301 2,856 3,473 - - 765 3,307 2,674 4,160 4,672 5,294 3,614 4,353 | |||
| 59,584 | 68,487 | 74,944 | ||
| 7,858 | 7,414 | 4,822 | ||
| 4,112 | 3,024 | 3,331 | ||
| 9,687 | 6,030 | 11,358 | ||
| 3,015 | 3,066 | 3,510 | ||
| - | - | - | ||
| 5,845 | 4,783 | 2,440 | ||
| Total Other | 5,845 | 4,783 | 2,440 | 4,160 4,672 6,059 6,921 7,027 |
| Total gold ounces sold | 89,223 94,766 90,077 115,020 102,813 | |||
| 90,101 | 92,804 | 100,405 | ||
| Silver ounces sold Peñasquito 7 Antamina 7 Constancia 7 Other Los Filos 7 Zinkgruvan Yauliyacu 7 Stratoni Minto 4 Neves-Corvo Aljustrel 777 | 1,268 1,233 912 1,164 901 1,227 1,059 1,186 1,255 1,300 672 521 478 735 629 26 44 26 38 15 473 459 337 232 543 561 574 542 15 317 120 126 240 80 78 - - 2 30 22 154 243 194 265 240 121 139 216 381 226 62 86 108 99 129 | |||
| 1,799 | 1,917 | 2,310 | ||
| 1,090 | 788 | 1,244 | ||
| 415 | 254 | 350 | ||
| 19 | 25 | 37 | ||
| 492 | 376 | 447 | ||
| 580 | 704 | 9 | ||
| 134 | 77 | 163 | ||
| - | - | - | ||
| 201 | 236 | 204 | ||
| 148 | 252 | 123 | ||
| 121 | 100 | 41 | ||
| Total Other | 1,695 | 1,770 | 1,024 | 1,517 1,671 1,665 1,140 1,570 |
| Total silver ounces sold | 4,684 4,484 4,241 4,294 4,400 | |||
| 4,999 | 4,729 | 4,928 | ||
| Palladium ounces sold Stillwater 3 | 5,312 4,907 5,273 5,189 5,049 | |||
| 5,546 | 4,976 | 4,938 | ||
| GEOs sold 5 SEOs sold 5 | 152,514 155,116 148,004 173,464 162,340 12,709 12,926 12,334 14,455 13,528 | |||
| 157,478 | 156,188 | 166,121 | ||
| 13,123 | 13,016 | 13,843 | ||
| Cumulative payable ounces PBND 6 Gold Silver Palladium GEO 5 SEO 5 | 98,475 85,335 81,535 75,236 99,474 4,142 3,796 3,102 3,315 2,941 4,872 4,163 4,504 4,754 5,282 154,672 136,441 124,765 121,349 141,804 12,889 11,370 10,397 10,112 11,817 | |||
| 77,000 | 79,632 | 88,383 | ||
| 3,443 | 3,228 | 4,961 | ||
| 4,616 | 4,883 | 4,875 | ||
| 124,473 | 124,877 | 154,420 | ||
| 10,373 | 10,406 | 12,868 |
1) All figures in thousands except gold and palladium ounces sold.
2) Comprised of the Coleman, Copper Cliff, Garson, Creighton and Totten gold interests.
3) Comprised of the Stillwater and East Boulder gold and palladium interests.
4) The Minto mine was placed into care and maintenance from October 2018 to October 2019.
5) GEOs and SEOs, which are provided to assist the reader, are based on the following commodity price assumptions: $1,500 per ounce gold; $18.00 per ounce silver; and $2,000 per ounce palladium, consistent with those used in estimating the Company's production guidance for 2020.
6) Payable gold, silver and palladium ounces produced but not yet delivered (“PBND”) are based on management estimates. These figures may be updated in future periods as additional information is received.
7) Operations at these mines had been temporarily suspended during the second quarter of 2020 as a result of the COVID-19 pandemic. During the third quarter of 2020, all of the operations were restarted.
- 11 -
Results of Operations
The operating results of the Company’s reportable operating segments are summarized in the tables and commentary below.
Three Months Ended September 30, 2020
Average Realized Average Average Price Cash Cost Depletion Cash Flow Ounces Ounces ($'s Per ($'s Per ($'s Per Net From Total Produced² Sold Ounce) Ounce)3 Ounce) Sales Earnings Operations Assets
Gold
| Salobo | 63,408 | 59,584 $ | 1,902 $ | 408 $ | 374 $ 113,319 $ | 66,700 $ | 91,917 $ 2,529,258 | ||
| Sudbury4 | 5,068 | 7,858 | 1,929 | 400 | 831 | 15,161 | 5,485 | 12,018 | 327,352 |
| Constancia | 3,780 | 4,112 | 1,902 | 407 | 338 | 7,819 | 4,758 | 6,147 | 106,870 |
| San Dimas | 9,228 | 9,687 | 1,902 | 612 | 315 | 18,423 | 9,442 | 14,309 | 185,835 |
| Stillwater | 3,176 | 3,015 | 1,902 | 345 | 449 | 5,734 | 3,341 | 4,695 | 225,688 |
| Other5 | 7,110 | 5,845 | 1,929 | 423 | 305 | 11,278 | 7,022 | 8,804 | 9,184 |
| 91,770 | 90,101 $ | 1,906 $ | 428 $ | 404 $ 171,734 $ | 96,748 $ 137,890 $ 3,384,187 |
Silver
| Peñasquito | 1,992 | 1,799 $ | 24.55 $ | 4.26 $ | 3.24 $ | 44,154 $ | 30,660 $ | 36,492 $ | 355,167 |
| Antamina | 1,516 | 1,090 | 24.55 | 4.67 | 8.74 | 26,758 | 12,139 | 21,666 | 641,521 |
| Constancia | 430 | 415 | 24.55 | 5.99 | 7.63 | 10,190 | 4,538 | 7,704 | 220,417 |
| Other6 | 2,090 | 1,695 | 24.98 | 8.37 | 1.94 | 42,332 | 24,859 | 24,333 | 475,613 |
| 6,028 | 4,999 $ | 24.69 $ | 5.89 $ | 4.36 $ 123,434 $ | 72,196 $ | 90,195 $ 1,692,718 |
Palladium
Stillwater 5,444 5,546 $ 2,182 $ 383 $ 428 $ 12,100 $ 7,604 $ 9,977 $ 243,354
Cobalt
Voisey's Bay - - $ n.a. $ n.a. $ n.a. $ - $ - $ - $ 227,510 Operating results $ 307,268 $ 176,548 $ 238,062 $ 5,547,769
Other
| General and administrative $ (21,326) $ Finance costs (2,766) Other (2,624) Income tax 43 | (7,239) |
| (2,820) | |
| 96 | |
| - |
Total other $ (26,673) $ (9,963) $ 543,418 $ 149,875 $ 228,099 $ 6,091,187
1) All figures in thousands except gold and palladium ounces produced and sold and per ounce amounts.
2) Ounces produced represent the quantity of gold, silver and palladium contained in concentrate or doré prior to smelting or refining deductions. Production figures are based on information provided by the operators of the mining operations to which the mineral stream interests relate or management estimates in those situations where other information is not available. Certain production figures may be updated in future periods as additional information is received.
3) Refer to discussion on non-IFRS measure (iii) at the end of this press release.
4) Comprised of the operating Coleman, Copper Cliff, Garson, Creighton and Totten gold interests as well as the non-operating Stobie and Victor gold interests.
5) Comprised of the operating 777 and Minto gold interests in addition to the non-operating Rosemont gold interest.
6) Comprised of the operating Los Filos, Zinkgruvan, Yauliyacu, Stratoni, Neves-Corvo, Aljustrel, Minto and 777 silver interests as well as the non-operating Keno Hill, Loma de La Plata, Pascua-Lama and Rosemont silver interests.
On a gold equivalent and silver equivalent basis, results for the Company for the three months ended September 30, 2020 were as follows:
Three Months Ended September 30, 2020 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 | 171,370 | 157,478 | $ 1,951 | $ 445 | $ 1,506 | $ 385 | $ 1,121 |
| Silver equivalent basis5 | 14,281 | 13,123 | $ 23.41 | $ 5.34 | $ 18.07 | $ 4.62 | $ 13.45 |
1) Ounces produced represent the quantity of gold, silver and palladium contained in concentrate or doré prior to smelting or refining deductions. Production figures are based on information provided by the operators of the mining operations to which the mineral stream interests relate or management estimates in those situations where other information is not available. Certain production figures may be updated in future periods as additional information is received.
2) Silver ounces produced and sold in thousands.
3) Refer to discussion on non-IFRS measure (iii) at the end of this press release.
4) Refer to discussion on non-IFRS measure (iv) at the end of this press release.
5) GEOs and SEOs, which are provided to assist the reader, are based on the following commodity price assumptions: $1,500 per ounce gold; $18.00 per ounce silver; and $2,000 per ounce palladium, consistent with those used in estimating the Company's production guidance for 2020.
- 12 -
Three Months Ended September 30, 2019
Average Realized Average Average Price Cash Cost Depletion Cash Flow Ounces Ounces ($'s Per ($'s Per ($'s Per Net From Total Produced² Sold Ounce) Ounce)3 Ounce) Sales Earnings Operations Assets
Gold
| Salobo | 73,615 | 63,064 $ | 1,471 $ | 404 $ | 383 $ | 92,796 $ | 43,155 $ | 68,949 $ 2,627,534 | |
| Sudbury4 | 6,082 | 7,600 | 1,470 | 400 | 819 | 11,176 | 1,908 | 7,828 | 350,101 |
| Constancia | 5,172 | 4,742 | 1,471 | 404 | 361 | 6,978 | 3,351 | 5,234 | 112,252 |
| San Dimas | 11,239 | 11,374 | 1,471 | 606 | 310 | 16,737 | 6,323 | 9,571 | 197,927 |
| Stillwater | 3,238 | 3,314 | 1,471 | 263 | 519 | 4,876 | 2,285 | 4,005 | 231,512 |
| Other5 | 4,278 | 4,672 | 1,470 | 419 | 462 | 6,870 | 2,754 | 4,912 | 15,089 |
| 103,624 | 94,766 $ | 1,471 $ | 424 $ | 417 $ 139,433 $ | 59,776 $ 100,499 $ 3,534,415 |
Silver
| Peñasquito | 2,026 | 1,233 $ | 16.81 $ | 4.21 $ | 3.06 $ | 20,721 $ | 11,755 $ | 15,531 $ | 378,587 |
| Antamina | 1,223 | 1,059 | 16.80 | 3.46 | 8.73 | 17,792 | 4,885 | 14,420 | 679,521 |
| Constancia | 686 | 521 | 16.81 | 5.95 | 7.50 | 8,764 | 1,752 | 6,953 | 233,225 |
| Other6 | 2,104 | 1,671 | 17.57 | 6.70 | 2.79 | 29,354 | 13,510 | 16,895 | 492,029 |
| 6,039 | 4,484 $ | 17.09 $ | 5.16 $ | 4.81 $ | 76,631 $ | 31,902 $ | 53,799 $ 1,783,362 |
Palladium
Stillwater 5,471 4,907 $ 1,535 $ 271 $ 470 $ 7,531 $ 3,897 $ 6,203 $ 252,465
Cobalt
Voisey's Bay - - $ n.a. $ n.a. $ n.a. $ - $ - $ - $ 227,510
Operating results $ 223,595 $ 95,575 $ 160,501 $ 5,797,752
Other
| General and administrative $ (14,028) $ Finance costs (11,871) Other 3,533 Income tax 2,751 | |
|---|---|
| (6,823) | |
| (9,122) | |
| (505) | |
| (1,751) |
Total other $ (19,615) $ (18,201) $ 461,107
$ 75,960 $ 142,300 $ 6,258,859
1) All figures in thousands except gold and palladium ounces produced and sold and per ounce amounts.
2) Ounces produced represent the quantity of gold, silver and palladium contained in concentrate or doré prior to smelting or refining deductions. Production figures are based on information provided by the operators of the mining operations to which the mineral stream interests relate or management estimates in those situations where other information is not available. Certain production figures may be updated in future periods as additional information is received.
3) Refer to discussion on non-IFRS measure (iii) at the end of this press release.
4) Comprised of the operating Coleman, Copper Cliff, Garson, Creighton and Totten gold interests as well as the non-operating Stobie and Victor gold interests.
5) Comprised of the operating 777 gold interest in addition to the non-operating Minto and Rosemont gold interests. The Minto mine was placed into care and maintenance from October 2018 to October 2019.
6) Comprised of the operating Los Filos, Zinkgruvan, Yauliyacu, Stratoni, Aljustrel, Neves-Corvo and 777 silver interests as well as the non-operating Keno Hill, Minto, Loma de La Plata, Pascua-Lama and Rosemont silver interests. The Minto mine was placed into care and maintenance from October 2018 to October 2019.
On a gold equivalent and silver equivalent basis, results for the Company for the three months ended September 30, 2019 were as follows:
Three Months Ended September 30, 2019
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 | 183,394 | 155,116 | $ 1,441 | $ 417 | $ 1,024 | $ 409 | $ 615 |
| Silver equivalent basis5 | 15,283 | 12,926 | $ 17.30 | $ 5.00 | $ 12.30 | $ 4.90 | $ 7.40 |
1) Ounces produced represent the quantity of gold, silver and palladium contained in concentrate or doré prior to smelting or refining deductions. Production figures are based on information provided by the operators of the mining operations to which the mineral stream interests relate or management estimates in those situations where other information is not available. Certain production figures may be updated in future periods as additional information is received.
2) Silver ounces produced and sold in thousands.
3) Refer to discussion on non-IFRS measure (iii) at the end of this press release.
4) Refer to discussion on non-IFRS measure (iv) at the end of this press release.
5) GEOs and SEOs, which are provided to assist the reader, are based on the following commodity price assumptions: $1,500 per ounce gold; $18.00 per ounce silver; and $2,000 per ounce palladium, consistent with those used in estimating the Company's production guidance for 2020.