THIRD QUARTER 2022 FINANCIAL RESULTS Wheaton Precious Metals Maintains Strong Cash Operating Margins in the Third Quarter of 2022
November 3, 2022 TSX | NYSE | LSE: WPM Vancouver, British Columbia Designated News Release THIRD QUARTER 2022 FINANCIAL RESULTS
Wheaton Precious Metals Maintains Strong Cash Operating Margins in the Third Quarter of 2022
“At Wheaton, we focus on building a sustainable company that provides investors with profitable, long-term exposure to precious metals. While inflationary pressures have impacted all sectors of the economy, especially mining, Wheaton has maintained cash operating margins of over 75% year to date, highlighting the strength of our streaming business model,” said Randy Smallwood, President and Chief Executive Officer of Wheaton Precious Metals. “Despite some recent challenges, we are pleased with the improvements we have seen over the third quarter in our diverse portfolio of high-quality assets, which is forecast to deliver significant organic growth over the next five years and sustained precious metals production for decades to come. We also are very optimistic that we can continue to add accretive new streams to the portfolio given the number of opportunities that we are currently reviewing coupled with one of the strongest balance sheets in the sector.”
Solid Financial Results and Strong Balance Sheet
- $219 million in revenue and $154 million in operating cash flow in the quarter
- $197 million in net earnings and $94 million in adjusted net earnings1 in the quarter
- A cash balance of $495 million and no debt as at September 30, 2022
- Extended the maturity date of the undrawn US$2 billion revolving credit facility to July 18, 2027
- Declared a quarterly dividend1 of $0.15 per common share
High Quality Asset Base
- Streaming agreements on 21 operating mines and 13 development projects
- 85% of attributable production from assets in the lowest half of their respective cost curves2
- 29 years of mine life based on Proven and Probable Mineral Reserves and potential additional mine life from mineral resource conversion and exploration3
- Average annual production for the ten-year period ending December 31, 2031, is expected to be approximately 850,000 GEOs2,4
- Completed the previously disclosed termination of the Keno Hill precious metal purchase agreement (“PMPA”) for $141 million, resulting in an impairment reversal of $10 million and a gain on disposition of $104 million
- Announced the proposed termination of the Yauliyacu PMPA for $150 million, less the aggregate value of any deliveries to Wheaton of silver produced in 2022 prior to closing
Leadership in Sustainability
- Top Rankings: #1 out of 119 precious metals companies and Global Top 50 out of over 14,900 multi-sector companies by Sustainalytics, AA rated by MSCI, and Prime rated by ISS
- Commitment to Net-Zero Carbon Emissions by 2050 supported by interim targets covering all material emissions including Scope 3
- Established a sustainability linked element in connection with the extension of the revolving credit facility
- Recognized as one of the Best 50 Corporate Citizens in Canada by Corporate Knights
- Recognized by ESG Investing for Best Climate Related Reporting (Mid Cap)
- Supported flood relief to local communities near the Stillwater mine in Montana
- Presenting sponsor of BC Cancer Foundation’s Tour de Cure supporting cancer research
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Operational Overview
| (all figures in US dollars unless otherwise noted) | Q3 2021 Change | YTD 2021 Change | ||||
|---|---|---|---|---|---|---|
| Q3 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 Change in PBND and Inventory Gold equivalent ounces 2 | 85,624 (14.2)% 6,349 (7.3)% 5,105 (36.7)% 370 (39.0)% 183,012 (12.7)% 67,649 (8.4)% 5,487 (4.6)% 5,703 (25.9)% 131 (12.2)% 149,862 (7.4)% 17,659 11,039 | 254,225 (14.2)% 19,643 (5.1)% 16,175 (28.2)% 1,912 (68.8)% 570,040 (13.9)% 232,843 (3.7)% 17,744 (6.3)% 14,703 (20.6)% 658 29.3 % 498,635 (4.7)% 22,375 54,872 | ||||
| 73,508 | 218,004 | |||||
| 5,883 | 18,645 | |||||
| 3,229 | 11,616 | |||||
| 226 | 596 | |||||
| 159,852 | 491,088 | |||||
| 62,000 | 224,238 | |||||
| 5,234 | 16,635 | |||||
| 4,227 | 11,680 | |||||
| 115 | 851 | |||||
| 138,824 | 475,259 | |||||
| 6,620 | (32,497) | |||||
| Revenue Net earnings Per share Adjusted net earnings 1 Per share 1 Operating cash flows Per share 1 | $ | 218,836 | $ 268,957 (18.6)% $ 134,937 45.6 % $ 0.300 45.0 % $ 137,087 (31.5)% $ 0.304 (31.6)% $ 201,287 (23.2)% $ 0.447 (23.5)% | $ | 829,002 | $ 923,468 (10.2)% $ 463,063 8.6 % $ 1.029 8.3 % $ 459,848 (12.8)% $ 1.022 (13.0)% $ 649,856 (12.1)% $ 1.444 (12.3)% |
| $ | 196,460 | $ | 503,001 | |||
| $ | 0.435 | $ | 1.114 | |||
| $ | 93,878 | $ | 401,168 | |||
| $ | 0.208 | $ | 0.889 | |||
| $ | 154,497 | $ | 571,396 | |||
| $ | 0.342 | $ | 1.266 |
All amounts in thousands except gold, palladium & gold equivalent ounces, and per share amounts.
Third Quarter Operating Asset Highlights
Salobo: In the third quarter of 2022, Salobo produced 44,200 ounces of attributable gold, a decrease of approximately 20% relative to the third quarter of 2021, primarily due to lower grades and recovery. According to Vale S.A.’s (“Vale”), plant performance improved relative to the second quarter of 2022 despite additional planned and corrective maintenance performed in the third quarter. Vale plans for maintenance activities to continue in the fourth quarter of 2022 to further improve plant reliability.
Vale reports that physical completion of the Salobo III mine expansion was 98% at the end of the third quarter. Progress in the third quarter included the primary crushing circuit being fully commissioned, hot commissioning of the conveyor system, and commencement of wet commissioning of the flotation circuit.
Antamina: In the third quarter of 2022, Antamina produced 1.4 million ounces of attributable silver, a decrease of approximately 11% relative to the third quarter of 2021, primarily due to lower grades as per the mine plan.
Peñasquito: In the third quarter of 2022, Peñasquito produced 2.0 million ounces of attributable silver, a decrease of approximately 7% relative to the third quarter of 2021 with lower recovery and grades as per the mine plan.
Constancia: In the third quarter of 2022, Constancia produced 0.6 million ounces of attributable silver and 7,200 ounces of attributable gold, an increase of approximately 8% for silver production and a decrease of approximately 16% for gold production relative to the third quarter of 2021, with the increase in silver being primarily due to higher throughput and the decrease in gold production being primarily due to the mining of lower-grade material resulting from mine sequencing.
Sudbury: In the third quarter of 2022, Vale’s Sudbury mines produced 4,700 ounces of attributable gold, an increase of approximately 3109% relative to the third quarter of 2021, primarily due to operations at the mine being temporarily suspended due to a labour dispute which
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lasted from June 1, 2021 to August 9, 2021. Vale reports that in the third quarter, the first phase of the Copper Cliff Complex South Mine Project was opened, including the development of more than 12km of tunnels to reunite the south and north shafts of the mine, which is expected to nearly double ore production at the Copper Cliff Mine. The Copper Cliff Mine has historically represented approximately 20% of attributable production for Wheaton from Sudbury.
Stillwater: In the third quarter of 2022, the Stillwater mines produced 1,800 ounces of attributable gold and 3,200 ounces of attributable palladium, a decrease of approximately 38% for gold and 37% for palladium relative to the third quarter of 2021. As per Sibanye-Stillwater Limited, 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 third quarter of 2022, San Dimas produced 11,800 ounces of attributable gold, virtually unchanged relative to the third quarter of 2021, primarily due to lower throughput offset by higher grades. According to First Majestic Silver Corp., silver and gold grades were higher in the third quarter compared to the prior quarter due to improvements in dilution control from the long hole stoping in the Jessica and Regina veins and due to initial production from the Perez vein commencing in July.
Other Gold: In the third quarter of 2022, total Other Gold attributable production was 3,700 ounces, a decrease of approximately 46% relative to the third quarter of 2021, primarily due to the closure of the 777 mine in June 2022.
Other Silver: In the third quarter of 2022, total Other Silver attributable production was 1.9 million ounces, a decrease of approximately 8% relative to the third quarter of 2021, primarily due to lower production at Aljustrel (grades) and Stratoni (placed into care and maintenance).
Voisey’s Bay: In the third quarter of 2022, the Voisey's Bay mine produced 226,000 pounds of attributable cobalt, a decrease of approximately 39% relative to the third quarter of 2021, primarily due to mining lower grade material during the ongoing transitional period between the depletion of the Ovoid open-pit mine and ramp-up to full production of the Voisey’s Bay underground project. Vale reports that physical completion of the Voisey’s Bay underground mine extension was 78% at the end of the third quarter. Progress in the third quarter included surface activities being well advanced with the port fuel tanks installed and Eastern Deeps mine fresh air infrastructure completed, and in the underground, the Reid Brook bulk Material Handling System advancing on schedule.
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.
Third Quarter Development Asset Highlights
Goose Project: Sabina Gold & Silver Corp. (“Sabina”) announced a formal construction decision for the Goose Project. Sabina noted that the project will be in a position to commence full construction in early 2023 with first production expected in 2025.
Blackwater Project: Artemis Gold Inc. (“Artemis”) announced the commencement of site preparation work at the plant site including site clearing, bulk earthworks and sediment/erosion control. Artemis believes the Blackwater plant site will start major construction works in the first quarter of 2023.
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Marathon Project: Generation Mining Limited (“Gen Mining”) delivered the environmental assessment report for the Marathon Project to federal and provincial ministers and announced the purchasing of an unused, surplus SAG mill and ball mill. Gen Mining anticipates starting construction late in the first quarter of 2023.
Curipamba Project: Adventus Mining Corporation (“Adventus”) announced an Investment Protection Agreement commitment declaration by the Government of Ecuador indicating a significant milestone in the development of the Curipamba Project. Adventus plans for a formal construction commencement in the second quarter of 2023.
Portfolio Optimization
Keno Hill: On September 7, 2022, Hecla Mining Company (“Hecla”) completed the previously announced acquisition of all the outstanding common shares of Alexco. In connection with this acquisition, the Company entered into an agreement with Hecla to terminate the Keno Hill PMPA effective September 7, 2022, in exchange for 34,800,989 common shares of Hecla valued at $141 million (the “Hecla shares”5), resulting in an impairment reversal of the Keno Hill PMPA in the amount of $10 million and a gain on disposal of $104 million.
Yauliyacu: On August 18, 2022, the Company announced that it had entered into an agreement with Glencore plc ("Glencore") to terminate its silver stream on the Yauliyacu Mine in Peru for a cash payment of $150 million, less the aggregate value of any deliveries to Wheaton, prior to closing, of silver produced subsequent to December 31, 2021. Wheaton has agreed to terminate the stream in order to help facilitate the sale by Glencore of the Yauliyacu Mine. As at September 30, 2022, the net termination payment is estimated to be approximately $136 million. The closing of the transaction is contingent on Glencore divesting the Yauliyacu mine by December 31, 2022 and certain other customary conditions. Glencore retains the option to terminate the silver stream even if it does not divest the Yauliyacu mine by December 31, 2022.
Financial Review Revenues
Revenue was $219 million in the third quarter of 2022 representing an 19% decrease from the third quarter of 2021 due primarily to a 12% decrease in the average realized gold equivalent² price; and a 7% decrease in the number of GEOs² sold.
Revenue was $829 million in the nine months ended September 30, 2022, representing a 10% decrease from the comparable period of the previous year due primarily to a 5% decrease in the number of gold equivalent² ounces sold; and a 6% decrease in the average realized gold equivalent² price.
Cash Costs and Margin
Average cash costs¹ in the third quarter of 2022 were $439 per GEO² as compared to $417 in the third quarter of 2021. This resulted in a cash operating margin¹ of $1,137 per GEO² sold, a decrease of 17% as compared with the third quarter of 2021.
Average cash costs¹ for the nine months ended September 30, 2022 were $433 per GEO² as compared to $441 in the comparable period of the previous year. This resulted in a cash operating margin¹ of $1,311 per GEO² sold, a 7% decrease from the comparable period of the previous year.
Balance Sheet (at September 30, 2022)
- Approximately $495 million of cash on hand.
- During the third quarter of 2022, the Company made upfront cash payments totaling $47 million relative to PMPA’s.
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- The Company extended its existing undrawn $2 billion revolving term loan with its maturity date now July 18, 2027. As part of the extension, Wheaton added a sustainability-linked element which may impact the interest rate paid on drawn amounts and standby fees.
- 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.
Sustainability Community Investment Program:
- In the third quarter, Wheaton Precious Metals International Ltd. (“Wheaton International”) in partnership with Sibanye-Stillwater Limited, donated funds to support flood relief in the community of Nye, which is the closest town to the Stillwater mine in Montana. Funds were used to clean up debris and support other flood-related recovery efforts and to support families in financial need whose houses were damaged.
- In the third quarter, new reading rooms were opened in the state of Maranhāo, Brazil, as part of the Routes and Literary Network project that is maintained by the Vale Foundation in partnership with Wheaton International and the Associação Cidade Escola Aprendiz. The new reading rooms benefit 1,800 students from three different schools.
- On August 27th, the Tour de Cure, presented by Wheaton Precious Metals, raised CA$6.3 million for the BC Cancer Foundation. The event is B.C.’s largest cycling fundraiser attracting over 1,100 participants. Since 2014, Wheaton has donated over CA$3.2 million towards crucial advancements in cancer research and care. In addition, the Silver Bullets, Wheaton’s cycling team comprised of employees, friends and family have collectively raised over CA$2 million through the Tour de Cure.
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.
Webcast and Conference Call Details
A conference call and webcast will be held on Friday, November 4, 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: 30587457 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 November 11, 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: 587457 #
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Archived 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.
About Wheaton Precious Metals Corp. and Outlook
Wheaton is the world’s premier precious metals streaming company with the highest-quality portfolio of long-life, low-cost assets. Its business model offers investors commodity price leverage and exploration upside but with a much lower risk profile than a traditional mining company. Wheaton delivers amongst the highest cash operating margins in the mining industry, allowing it to pay a competitive dividend and continue to grow through accretive acquisitions. As a result, Wheaton has consistently outperformed gold and silver, as well as other mining investments. Wheaton is committed to strong ESG practices and giving back to the communities where Wheaton and its mining partners operate. Wheaton creates sustainable value through streaming for all of its stakeholders.
Wheaton’s estimated attributable production for 2022 is forecast to be 300,000 to 320,000 ounces of gold, 22.5 to 24.0 million ounces of silver, and 35,000 to 40,000 gold equivalent ounces2 (“GEOs”), resulting in production of approximately 640,000 to 680,000 GEOs2. As a result of the proposed termination of the Yauliyacu PMPA, the Company now expects average annual production for the five-year period ending December 31, 2026, to be approximately 800,000 GEOs2,4 (from 820,000 GEOs2,4 previously) and for the ten-year period ending December 31, 2031, to be approximately 850,000 GEOs2,4 (from 870,000 GEOs2,4 previously).
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 November 3, 2022, titled “Wheaton Precious Metals Declares Quarterly Dividend.”
2 Company reports & S and P Capital IQ est. of 2022 byproduct cost curves for gold, zinc/lead, copper, PGM, nickel & silver mines. GEOs and SEOs, which are provided to assist the reader, are based on the following commodity price assumptions: $1800/oz, silver $24/oz, palladium $2,100/oz and cobalt $33/lb.
3 Portfolio mine life based on recoverable reserves and resources as of Dec 31, 2021 and 2021 actual mill throughput and is weighted by individual reserve and resource category.
4 Five- and ten-year guidance do not include optionality production from Pascua Lama, Navidad, Cotabambas, Metates or additional expansions at Salobo outside of the project currently in construction. In addition, five-year guidance also does not include any production from Kutcho, or the Victor project at Sudbury.
5 The Hecla shares represent approximately 6% of Hecla’s current issued and outstanding shares and are subject to a six month hold period from the closing date of September 7, 2022.
Condensed Interim Consolidated Statements of Earnings
Three Months Ended Nine Months Ended September 30 September 30
| (US dollars and shares in thousands, except per share amounts - unaudited) | 2021 | 2021 | ||||
| 2022 | 2022 | |||||
| Sales | $ 268,957 | $ 923,468 | ||||
| $ | 218,836 | $ | 829,002 | |||
| Cost of sales Cost of sales, excluding depletion Depletion | $ 62,529 54,976 | $ 219,757 195,458 | ||||
| $ | 60,955 | $ | 205,891 | |||
| 55,728 | 178,812 | |||||
| Total cost of sales | $ 117,505 | $ 415,215 | ||||
| $ | 116,683 | $ | 384,703 | |||
| Gross margin General and administrative expenses Share based compensation Donations and community investments Reversal of impairment of mineral stream interests | $ 151,452 7,932 4,139 1,524 - | $ 508,253 26,572 13,746 3,712 - | ||||
| $ | 102,153 | $ | 444,299 | |||
| 8,360 | 27,448 | |||||
| 77 | 11,586 | |||||
| 1,406 | 3,379 | |||||
| (10,330) | (10,330) | |||||
| Earnings from operations Gain on disposal of mineral stream interest Other (income) expense | $ 137,857 - 1,108 | $ 464,223 - (2,194) | ||||
| $ | 102,640 | $ | 412,216 | |||
| (104,425) | (104,425) | |||||
| (2,799) | (3,448) | |||||
| Earnings before finance costs and income taxes Finance costs | $ 136,749 1,379 | $ 466,417 4,309 | ||||
| $ | 209,864 | $ | 520,089 | |||
| 1,398 | 4,209 | |||||
| Earnings before income taxes Income tax (expense) recovery | $ 135,370 (433) | $ 462,108 955 | ||||
| $ | 208,466 | $ | 515,880 | |||
| (12,006) | (12,879) | |||||
| Net earnings | $ 134,937 | $ 463,063 | ||||
| $ | 196,460 | $ | 503,001 | |||
| Basic earnings per share Diluted earnings per share Weighted average number of shares outstanding Basic Diluted | $ 0.300 $ 0.299 450,326 451,717 | $ 1.029 $ 1.026 449,977 451,369 | ||||
| $ | 0.435 | $ | 1.114 | |||
| $ | 0.434 | $ | 1.112 | |||
| 451,757 | 451,402 | |||||
| 452,386 | 452,221 |
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Condensed Interim Consolidated Balance Sheets
| (US dollars in thousands - unaudited) | As at September 30 | As at December 31 2021 | |||
|---|---|---|---|---|---|
| 2022 | |||||
| Assets Current assets Cash and cash equivalents Accounts receivable Other | $ 226,045 11,577 12,102 | ||||
| $ | 494,618 | ||||
| 11,536 | |||||
| 14,764 | |||||
| Total current assets | $ | 520,918 | $ 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 | ||||
| $ | 5,807,056 | ||||
| 46,092 | |||||
| 6,606 | |||||
| 190,472 | |||||
| - | |||||
| 4,505 | |||||
| 11,946 | |||||
| Total non-current assets | $ | 6,066,677 | $ 6,046,427 | ||
| Total assets | $ | 6,587,595 | $ 6,296,151 | ||
| Liabilities Current liabilities Accounts payable and accrued liabilities Current taxes payable Current portion of performance share units Current portion of lease liabilities Total current liabilities | $ 13,939 132 14,807 813 $ 29,691 | ||||
| $ | 11,274 | ||||
| 6,163 | |||||
| 10,407 | |||||
| 803 | |||||
| $ | 28,647 | ||||
| Non-current liabilities | |||||
| Performance share units Lease liabilities Deferred income taxes Pension liability Total non-current liabilities | 3,661 | 11,498 2,060 100 2,685 $ 16,343 | |||
| 3,661 | |||||
| 1,348 | |||||
| 1,954 | |||||
| 3,173 | |||||
| $ | 10,136 | ||||
| Total liabilities | $ | 38,783 | $ 46,034 | ||
| Shareholders' equity | |||||
| Issued capital Reserves Retained earnings Total shareholders' equity | $ | 3,741,211 | $ 3,698,998 47,036 2,504,083 $ 6,250,117 | ||
| $ | 3,741,211 | ||||
| 7,464 | |||||
| 2,800,137 | |||||
| $ | 6,548,812 | ||||
| Total liabilities and shareholders' equity | $ | 6,587,595 | $ 6,296,151 |
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Condensed Interim Consolidated Statements of Cash Flows
Three Months Ended Nine Months Ended September 30 September 30
| (US dollars in thousands - unaudited) | 2021 | 2021 | ||||
| 2022 | 2022 | |||||
| Operating activities Net earnings Adjustments for Depreciation and depletion Gain on disposal of mineral stream interest 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 | $ 134,937 55,445 - - 30 1,315 2,824 294 433 1,246 490 (178) (9) 4,434 | $ 463,063 196,869 - - 324 3,946 (7,128) 710 (955) 2,392 (4,136) (275) 685 (5,341) | ||||
| $ | 196,460 | $ | 503,001 | |||
| 56,129 | 180,004 | |||||
| (104,425) | (104,425) | |||||
| (10,330) | (10,330) | |||||
| 22 | 72 | |||||
| 1,568 | 4,407 | |||||
| (1,654) | (11,231) | |||||
| 291 | 720 | |||||
| 12,006 | 12,879 | |||||
| 204 | 1,101 | |||||
| - | 1,380 | |||||
| (1,953) | (2,696) | |||||
| (349) | (1,821) | |||||
| 4,728 | (3,825) | |||||
| Cash generated from operations before income taxes and interest Income taxes recovered (paid) Interest paid Interest received | $ | 152,697 | $ 201,261 - (31) 57 | $ | 569,236 | $ 650,154 (51) (401) 154 |
| (29) | (141) | |||||
| (22) | (73) | |||||
| 1,851 | 2,374 | |||||
| Cash generated from operating activities | $ 201,287 | $ 649,856 | ||||
| $ | 154,497 | $ | 571,396 | |||
| Financing activities Bank debt repaid Credit facility extension fees Share purchase options exercised Lease payments Dividends paid | $ - (54) 183 (196) (57,235) | $ (195,000) (1,727) 5,719 (583) (160,784) | ||||
| $ | - | $ | - | |||
| (1,205) | (1,207) | |||||
| - | 7,549 | |||||
| (201) | (603) | |||||
| (59,487) | (176,604) | |||||
| Cash (used for) generated from financing activities | $ (57,302) | $ (352,375) | ||||
| $ | (60,893) | $ | (170,865) | |||
| Investing activities Mineral stream interests Early deposit mineral stream interests Mineral royalty interest Closing costs on disposal of mineral stream interests Acquisition of long-term investments Proceeds on disposal of long-term investments Dividends received Other | $ (1,055) (750) - - (5,076) - 110 (171) | $ (216,845) (1,500) (3,571) - (7,453) 112,188 110 (691) | ||||
| $ | (46,675) | $ | (107,476) | |||
| (750) | (1,500) | |||||
| - | - | |||||
| (139) | (139) | |||||
| - | (22,768) | |||||
| - | - | |||||
| 102 | 322 | |||||
| (69) | (194) | |||||
| Cash (used for) generated from investing activities | $ (6,942) | $ (117,762) | ||||
| $ | (47,531) | $ | (131,755) | |||
| Effect of exchange rate changes on cash and cash equivalents | $ (39) | $ 48 | ||||
| $ | (81) | $ | (203) | |||
| Increase in cash and cash equivalents Cash and cash equivalents, beginning of period | $ 137,004 235,446 | $ 179,767 192,683 | ||||
| $ | 45,992 | $ | 268,573 | |||
| 448,626 | 226,045 | |||||
| Cash and cash equivalents, end of period | $ 372,450 | $ 372,450 | ||||
| $ | 494,618 | $ | 494,618 |
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Summary of Units Produced
| Q4 2021 Q3 2021 Q2 2021 Q1 2021 Q4 2020 | ||||
|---|---|---|---|---|
| Q3 2022 | 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 4,379 148 4,563 7,004 6,659 9,857 8,533 5,525 2,453 3,929 13,714 11,936 11,478 10,491 11,652 2,664 2,949 2,962 3,041 3,290 3,506 1,703 3,206 2,638 789 4,462 4,717 5,035 6,280 2,866 479 433 1,713 - - | |||
| 44,212 | 34,129 | 44,883 | ||
| 4,735 | 5,289 | 5,362 | ||
| 7,196 | 8,042 | 6,311 | ||
| 11,808 | 10,044 | 10,461 | ||
| 1,833 | 2,171 | 2,497 | ||
| 3,182 | 2,480 | 4,060 | ||
| - | 3,509 | 4,003 | ||
| 542 | 778 | 477 | ||
| Total Other | 3,724 | 6,767 | 8,540 | 8,447 6,853 9,954 8,918 3,655 |
| Total gold ounces produced | 87,296 85,624 90,072 78,529 92,039 | |||
| 73,508 | 66,442 | 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 1,366 1,548 1,558 1,577 1,930 578 521 468 406 478 37 17 26 31 6 482 658 457 420 515 382 372 629 737 454 129 18 164 165 185 44 25 33 21 16 522 362 408 345 420 325 314 400 474 440 213 199 183 230 - 7 10 39 - - 30 44 55 27 - 96 81 83 130 51 | |||
| 2,017 | 2,089 | 2,219 | ||
| 1,377 | 1,379 | 1,260 | ||
| 564 | 584 | 506 | ||
| 23 | 23 | 42 | ||
| 642 | 739 | 577 | ||
| 463 | 756 | 637 | ||
| - | - | - | ||
| 42 | 25 | 45 | ||
| 323 | 345 | 344 | ||
| 246 | 292 | 287 | ||
| 179 | 169 | 186 | ||
| 7 | 8 | 11 | ||
| - | 48 | 20 | ||
| - | 80 | 91 | ||
| Total Other | 1,925 | 2,485 | 2,240 | 2,267 2,100 2,477 2,580 2,087 |
| Total silver ounces produced | 6,356 6,349 6,529 6,765 6,509 | |||
| 5,883 | 6,537 | 6,225 | ||
| Palladium ounces produced ² Stillwater 5 | 4,733 5,105 5,301 5,769 5,672 | |||
| 3,229 | 3,899 | 4,488 | ||
| Cobalt pounds produced ² Voisey's Bay | 381 370 380 1,162 ¹⁰ - | |||
| 226 | 136 | 234 | ||
| GEOs produced 11 SEOs produced 11 | 184,551 183,012 190,272 196,756 185,436 13,841 13,726 14,270 14,757 13,908 | |||
| 159,852 | 160,646 | 170,590 | ||
| 11,989 | 12,048 | 12,794 | ||
| Average payable rate 2 Gold Silver Palladium Cobalt GEO 11 | 96.0% 96.0% 95.8% 95.0% 95.2% 86.0% 86.6% 86.9% 86.6% 86.3% 92.2% 94.5% 95.0% 91.6% 93.6% 93.3% 93.3% 93.3% 93.3% n.a. 91.4% 91.3% 91.8% 90.7% 91.2% | |||
| 95.1% | 95.1% | 95.2% | ||
| 86.1% | 85.5% | 86.1% | ||
| 95.0% | 94.6% | 92.7% | ||
| 93.3% | 93.3% | 93.3% | ||
| 90.6% | 90.1% | 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: Q3-2022 - 412,000 ounces; Q2-2022 - 382,000 ounces; Q1-2022 - 408,000 ounces; Q4-2021 - 544,000 ounces; Q3-2021
- 472,000 ounces; Q2-2021 - 467,000 ounces; Q1-2021 - 429,000 ounces; Q4-2020 - 485,000 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 September 7, 2022, the Company terminated the Keno Hill stream in exchange for $141 million of Hecla common shares received as consideration.
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 2022 | 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 53,197 965 1,915 6,945 3,691 7,620 6,196 8,159 2,321 1,676 3,853 15,182 11,346 11,214 10,273 11,529 2,933 2,820 2,574 3,074 3,069 2,462 1,907 2,359 2,390 1,540 4,290 5,879 5,694 2,577 5,435 423 438 1,687 - - | |||
| 31,818 | 48,515 | 42,513 | ||
| 5,147 | 7,916 | 3,712 | ||
| 6,336 | 7,431 | 10,494 | ||
| 10,196 | 10,633 | 10,070 | ||
| 2,127 | 2,626 | 2,628 | ||
| 2,559 | 2,806 | 3,695 | ||
| 3,098 | 3,629 | 4,388 | ||
| 719 | 781 | 401 | ||
| Total Other | 6,376 | 7,216 | 8,484 | 7,175 8,224 9,740 4,967 6,975 |
| Total gold ounces sold | 79,622 67,649 90,090 75,104 86,243 | |||
| 62,000 | 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 1,297 1,502 1,499 1,930 1,669 351 484 295 346 442 17 12 42 27 - 346 354 355 293 326 551 182 601 1,014 15 42 41 167 117 169 27 24 29 26 20 259 193 215 239 145 133 155 208 257 280 174 170 168 173 - 8 10 35 - - 24 51 33 12 - 69 99 109 49 93 | |||
| 1,599 | 2,096 | 2,188 | ||
| 1,155 | 1,177 | 1,468 | ||
| 498 | 494 | 644 | ||
| 24 | 41 | 42 | ||
| 376 | 650 | 355 | ||
| 1,005 | 817 | 44 | ||
| - | (2) | 133 | ||
| 22 | 21 | 31 | ||
| 105 | 167 | 204 | ||
| 185 | 123 | 145 | ||
| 154 | 148 | 177 | ||
| 8 | 11 | 8 | ||
| 30 | 30 | 27 | ||
| 73 | 75 | 87 | ||
| Total Other | 1,982 | 2,081 | 1,253 | 1,650 1,291 1,962 2,207 1,048 |
| Total silver ounces sold | 5,116 5,487 5,600 6,657 4,576 | |||
| 5,234 | 5,848 | 5,553 | ||
| Palladium ounces sold Stillwater 3 | 4,641 5,703 3,869 5,131 4,591 | |||
| 4,227 | 3,378 | 4,075 | ||
| Cobalt pounds sold Voisey's Bay | 228 131 395 132 - | |||
| 115 | 225 | 511 | ||
| GEOs sold 4 SEOs sold 4 | 157,439 149,862 176,502 172,271 152,613 11,808 11,240 13,238 12,920 11,446 | |||
| 138,824 | 170,371 | 166,065 | ||
| 10,412 | 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 4,200 3,845 3,802 3,738 4,486 5,629 5,619 6,822 5,373 5,597 596 637 777 820 - 158,477 150,317 139,145 141,206 136,894 11,886 11,274 10,436 10,590 10,267 | |||
| 67,247 | 59,331 | 81,365 | ||
| 3,550 | 3,672 | 3,910 | ||
| 5,041 | 6,267 | 5,535 | ||
| 402 | 280 | 550 | ||
| 127,840 | 120,735 | 150,032 | ||
| 9,588 | 9,055 | 11,252 | ||
| Inventory on hand Cobalt pounds | 657 488 134 132 - | |||
| 556 | 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 $33.00 per pound cobalt; consistent with those used in estimating the Company's production guidance for 2022.
5) Payable gold, silver and palladium ounces as well as cobalt pounds produced but not yet delivered (“PBND”) are based on management estimates. These figures may be updated in future periods as additional information is received.
- 12 -
Results of Operations
The operating results of the Company’s reportable operating segments are summarized in the tables and commentary below.
Three Months Ended September 30, 2022
Average Average Realized Cash Average Impairment Price Cost Depletion Reversals / Cash Flow Units Units ($'s ($'s Per ($'s Per Gain on Net From Total Produced² Sold Per Unit) Unit) 3 Unit) Sales Disposal 4 Earnings Operations Assets
Gold
| Salobo | 44,212 31,818 $ 1,724 $ | 416 $ | 334 $ 54,860 $ | - $ 31,000 $ 41,617 $ 2,396,952 | |||||
|---|---|---|---|---|---|---|---|---|---|
| Sudbury5 | 4,735 5,147 | 1,745 | 400 | 1,092 | 8,984 | - | 1,303 | 5,943 | 288,863 |
| Constancia | 7,196 6,336 | 1,724 | 415 | 271 | 10,925 | - | 6,578 | 8,295 | 97,213 |
| San Dimas | 11,808 10,196 | 1,724 | 624 | 260 | 17,579 | - | 8,567 | 11,213 | 158,704 |
| Stillwater | 1,833 2,127 | 1,724 | 317 | 429 | 3,667 | - | 2,080 | 2,992 | 216,617 |
| Other6 | 3,724 6,376 | 1,743 | 694 | 59 | 11,113 | - | 6,311 | 5,562 | 461,359 |
| 73,508 62,000 $ 1,728 $ | 474 $ | 353 $ 107,128 $ | - $ 55,839 $ 75,622 $ 3,619,708 |
Silver
| Peñasquito | 2,017 1,599 $ 19.30 $ 4.36 $ 3.57 $ 30,857 $ | - $ 18,182 $ 23,885 $ 301,040 | |||||||
|---|---|---|---|---|---|---|---|---|---|
| Antamina | 1,377 1,155 | 19.30 | 3.75 | 7.06 | 22,287 | - | 9,798 | 17,951 | 553,231 |
| Constancia | 564 | 498 19.30 | 6.12 | 6.35 | 9,613 | - | 3,398 | 6,563 | 195,507 |
| Other7 | 1,925 1,982 | 18.93 | 7.51 | 6.84 | 37,513 | 114,755 | 123,823 | 21,896 | 538,739 |
5,883 5,234 $ 19.16 $ 5.59 $ 5.84 $ 100,270 $ 114,755 $ 155,201 $ 70,295 $ 1,588,517
Palladium
Stillwater 3,229 4,227 $ 2,091 $ 353 $ 399 $ 8,838 $ - $ 5,657 $ 7,344 $ 228,168
Platinum
Marathon - - $ n.a. $ n.a. $ n.a. $ - $ - $ - $ - $ 9,425
Cobalt
Voisey's Bay 226 115 $ 22.68 $ 7.21 $ 13.63 $ 2,600 $ - $ 211 $ 7,352 $ 361,238
Operating results $ 218,836 $ 114,755 $ 216,908 $ 160,613 $ 5,807,056
Other
General and administrative $ (8,360) $ (5,503)
| Share based compensation | (77) | - |
| Donations and community investments | (1,406) | (1,413) |
| Finance costs | (1,398) | (1,020) |
| Other | 2,799 | 1,849 |
| Income tax | (12,006) | (29) |
Total other $ (20,448) $ (6,116) $ 780,539
$ 196,460 $ 154,497 $ 6,587,595
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) Relates to the termination of the Keno Hill PMPA.
5) Comprised of the operating Coleman, Copper Cliff, Garson, Creighton and Totten gold interests and the non-operating Stobie and Victor gold interests.
6) Comprised of the operating Minto and Marmato gold interests as well as the non-operating 777, 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.
7) Comprised of the operating Los Filos, Zinkgruvan, Yauliyacu, Neves-Corvo, Aljustrel, Minto, Cozamin and Marmato silver interests, the non-operating 777, Loma de La Plata, Stratoni, Pascua-Lama, Copper World Complex (formerly referred to as Rosemont), Blackwater and Curipamba silver interests and the previously owned Keno Hill silver interest. 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 September 7, 2022, the Keno Hill stream was terminated in exchange for $141 million of Hecla common stock.