Fourth Quarter and Full Year Financial Results Wheaton Precious Metals Announces Record Revenue and Operating Cash Flow FOR 2020
March 11, 2021 TSX | NYSE | LSE: WPM
Vancouver, British Columbia
Designated News Release
FOURTH QUARTER AND FULL YEAR FINANCIAL RESULTS
WHEATON PRECIOUS METALS ANNOUNCES RECORD REVENUE
AND OPERATING CASH FLOW FOR 2020
“Our strong performance in 2020 was driven by Wheaton’s high-quality portfolio of assets, which
generated over $1 billion in revenue and operating cash flow of over $765 million, both
representing records for the Company,” said Randy Smallwood, President an d Chief Executive
Officer of Wheaton Precious Metals. “Despite the challenges posed by the COVID-19 pandemic,
2020 was a very productive year , and we were successful in delivering value back to our
stakeholders on many fronts. Specifically, we added two new accretive precious metal streams
to our portfolio, expanded our shareholder base by listing on the London Stock Exchange and
provided additional funding to communities impacted by the pandemic. Given the resiliency of our
production base coupled with o ur innovative dividend policy, we are pleased to provide greater
value back to our shareholders in 2021 by increasing the minimum quarterly dividend by over
30% relative to last year.”
Fourth Quarter and Year End 2020 Highlights:
• $208 million in operating cash flow in the quarter resulting in record annual operating cash
flow of over $765 million in 2020.
• Record annual revenue of $1,096 million in 2020.
• Net debt1 reduced by $275 million, resulting in a net debt position of $2 million.
• Declared quarterly dividend1 of $0.13 per common share.
• New precious metal purchase agreements on the Marmato Mine and the Cozamin Mine.
• Total attributable gold Measured and Indicated Mineral Resources increased by 64%,
primarily due to successful exploration at Salobo, which extended the orebody at depth.
• Commenced trading on the Main Market of the London Stock Exchange.
Operational Overview
(all figures in US dollars unless
otherwise noted) Q4 2020 Q4 2019 Change 2020 2019 Change
Ounces produced
Gold 93,137 107,054 (13.0)% 367,419 406,504 (9.6)%
Silver 6,509 5,908 10.2 % 22,892 22,396 2.2 %
Palladium 5,672 6,057 (6.4)% 22,187 21,993 0.9 %
Gold equivalent 2 178,801 186,027 (3.9)% 671,713 704,579 (4.7)%
Ounces sold
Gold 86,243 89,223 (3.3)% 369,553 389,086 (5.0)%
Silver 4,576 4,684 (2.3)% 19,232 17,703 8.6 %
Palladium 4,591 5,312 (13.6)% 20,051 20,681 (3.0)%
Gold equivalent 2 147,277 152,514 (3.4)% 627,063 629,098 (0.3)%
Revenue $ 286,212 $ 223,222 28.2 % $ 1,096,224 $ 861,332 27.3 %
Net earnings $ 157,221 $ 77,524 103 % $ 507,804 $ 86,138 489.5 %
Per share $ 0.350 $ 0.173 102.3 % $ 1.132 $ 0.193 486.5 %
Adjusted net earnings 1 $ 149,441 $ 74,473 100.7 % $ 503,335 $ 242,745 107.4 %
Per share 1 $ 0.333 $ 0.166 100.6 % $ 1.122 $ 0.544 106.1 %
Operating cash flows $ 207,962 $ 131,867 57.7 % $ 765,442 $ 501,620 52.6 %
Per share 1 $ 0.463 $ 0.295 56.9 % $ 1.706 $ 1.125 51.6 %
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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Production Guidance
• 2021 Guidance: Wheaton's estimated attributable production in 202 1 is forecast to be
370,000 to 4 00,000 ounces of gold, 22. 5 to 24.0 million ounces of silver, and 40,000 to
45,000 gold equivalent ounces3 (“GEOs”) of other metals , resul ting in production of
approximately 720,000 to 780,000 GEOs3.
• Five-year guidance: For the five-year period ending in 2025, the Company estimates that
average production will amount to 810,000 GEOs3.
• Ten-year guidance: For the ten-year period ending in 20 30, the Company estimates that
average annual production will amount to 830,000 GEOs3.
Financial Review
Revenues
Revenue was $286 million in the fourth quarter of 2020 representing a 28% increase from the
fourth quarter of 2019 due primarily to a 33% increase in the average re alized gold equivalent²
price; partially offset by a 3% decrease in the number of gold equivalent² ounces sold.
Revenue was $1,096 million in the year ended December 31, 2020 representing a 27% increase
from 2019 due primarily to a 28% increase in the average realized gold equivalent² price.
Costs and Expenses
Average cash costs¹ in the fourth quarter of 2020 were $438 per gold equivalent² ounce as
compared to $418 in the fourth quarter of 2019. This resulted in a cash operating margin¹ of
$1,505 per gold equivalent² ounce sold, an increase of 44% as compared wi th the fourth quarter
of 2019.
Average cash costs¹ in 2020 were $425 per gold equivalent² ounce as compared to $411 in 2019.
This resulted in a cash operating margin¹ of $1,323 per gold equivalent² ounce sold, an increase
of 38% as compared with 2019.
Balance Sheet (at December 31, 2020)
• Approximately $193 million of cash on hand.
• $195 million outstanding under the Company's $2 billion revolving term loan (the "Revolving
Facility").
• During Q4 2020, the company received $113 million in proceeds from the sale of long-term
equity investments including First Majestic Silver Corp. ("First Majestic").
• During Q4 2020, the Company has repaid $293 million under the Revolving Facility.
• During Q4 2020, the net debt¹ was reduced by $275 million to $2 million.
• The average effective interest rate for Q4 2020 was 1.20%.
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.
Fourth Quarter Asset Highlights
Salobo: In the fourth quarter of 2020, Salobo produced 62,900 ounces of attributable gold, a
decrease of approximately 16% relative to the fourth quarter of 2019 due to lower throughput.
According to Vale S.A.’s (“Vale”) Fourth Quarter and Year End 2020 Production and Sales Report,
throughput at Salobo was impacted due to unscheduled maintenance and an incide nt which led
Vale to review and halt mine and plant activities for a short period, during which changes in
maintenance routines were implemented to improve operations and safety conditions. As per
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Vale’s Fourth Quarter and Year End 2020 Performance Report, physical completion of the Salobo
III mine expansion was 68% at the end of the fourth quarter.
Sudbury: In the fourth quarter of 2020, Vale’s Sudbury mines produced 7,800 ounces of
attributable gold, an increase of approximately 20% relative to the fourth quarter of 2019 , due
primarily to higher recoveries.
San Dimas: In the fourth quarter of 2020, San Dimas produced 11,700 ounces of attributable
gold, virtually unchanged relative to the fourth quarter of 2019 . As per the San Dimas precious
metal purchase agreements (“PMPA”), the fixed gold to silver conversion ratio reverted to 70:1
(from 90:1) on October 14, 2020 after the average gold to silver price ratio over a six-month period
fell back below 90:1.
Antamina: In the fourth quarter of 2020, Antamina produced 1.9 million ounces of attributable
silver, an increase of approximately 44% relative to the fourth quarter of 2019 , primarily due to
higher grades and throughput, partially offset by lower recovery.
Stillwater: In the fourth quar ter of 2020, the Stillwater mines produced 3,300 ounces of
attributable gold and 5,700 ounces of attributable palladium, a decrease of approximately 8% for
gold and 6% for palladium relative to the fourth quarter of 2019, primarily due to lower throughput.
According to Sibanye -Stillwater Limited’s (“Sibanye-Stillwater”) Operating and Financial Results
for the Six Month and Year Ended 31 December 2020, throughput was impacted primarily due to
the impact of a spike in COVID-19 infections in the fourth quarter of 2020 associated with a severe
wave of COVID -19 infections in Montana , USA. Sibanye -Stillwater also reported that after a
review of the Blitz project was conducted following the suspension of growth capital activities due
to COVID-19, the project is now expected to reach a steady state by 2024, a delay of up to two
years. Finally, Sibanye-Stillwater highlighted that the Fill the Mill expansion project at the East
Boulder mine was completed on schedule in the fourth quarter of 2020.
Constancia: In the fourth quarter of 2020, Constancia produced 0.5 million ounces of attributable
silver and 3,900 ounces of attributable gold, a decrease of approximately 24% and 17%,
respectively, relative to the fourth 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 entitled 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 fourth quarter of 20 20 and included as production . According to Hudbay’s Fourth Quarter
MD&A, Hudbay had completed the Consulta Previa consultation process for Pampacancha and
received the final mining permit for the development and operation of the mine. In addition, pre-
development activities commenced in early January and pre -stripping activities are expected to
begin once the remaining individual land user agreement has been completed . Hudbay expects
production at Pampacancha to commence later in 2021.
Other Gold: In the fourth quarter of 2020, total Other Gold attributable production was 3,700
ounces, a decrease of approximately 41% relative to the fourth quarter of 2019 , primarily due to
lower production from the 777 and Minto mines. Hudbay reported on November 25, 2020 , that
production at 777 had recommenced after a temporary interruption due to an incident that
occurred on October 9, 2020, during routine maintenance of the hoist rope and skip.
Keno Hill Restart: Alexco Resource Corp (“Alexco”) reported on November 24, 2020 , that the
commissioning of the Keno Hill District mill is commencing as scheduled, with initial production of
lead/silver and zinc concentrates underway. In order to help facilitate the resumption of mining,
Wheaton agreed to modify the PMPA as it relates to the delivery payment per ounce of silver in
exchange for 2 million common share purchase warrants from Alexco.
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Produced But Not Yet Delivered 4
As at December 31, 2020 , payable ounces attributable to the Company produced but not yet
delivered amounted to:
• 71,600 payable gold ounces, a decrease of 4,200 ounces during Q4 2020, primarily due to
a reduction during the period relative to the Minto, 777 and Sudbury mines partially offset
by an increase at the Salobo mine.
• 4.5 million payable silver ounces, an increase of 1.0 million ounces during Q4 2020, primarily
due to an increase during the period relative to the Peñasquito, Yauliyacu and Antamina
mines.
• 5,600 payable palladium ounces, an increase of 1,000 ounces during Q4 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.
Corporate Development
Marmato Mine: On November 5, 2020, the Company announced that it had entered into a PMPA
with Aris Gold Corporation (“Aris Gold”, formerly Caldas Gold Corp.) with respect to the Marmato
Mine located in Colombia. Under the terms of the Marmato PMPA5, the Company is required to
pay Aris Gold total cash consideration of $110 million, $34 million of which is payable once mining
contract 014 -89M is extended, $4 million of which is payable six mon ths thereafter, and the
remaining portion of which is payable during construction of the Marmato Deep Zone (“MDZ”)
project, subject to certain conditions being met. In addition, the Company will make ongoing
payments equal to 18% of the spot gold and silve r 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. The PMPA is effective July 1, 2020,
though no production from Marmato has been included in 2020 operating results.
Cozamin Mine: On December 11, 2020, the Company announced that it had entered into a
PMPA with Capstone Mining Corp. (“Capstone”) with respect to the Cozamin Mine located in
Mexico. Under the terms of the PMPA, the Company paid Capstone upfront cash consideration
of $150 million upon closing, which occurred on February 19, 2021, for 50% of the silver
production until 10 million ounces ("Moz") have been delivered, thereafter dropping to 33% o f
silver production for the life of the mine. In addition, Wheaton will make ongoing payments for
silver ounces delivered equal to 10% of the spot silver price. The PMPA is effective December 1,
2020, though no production from Cozamin has been included in 2020 operating results.
Reserves and Resources (at December 31, 2020)
• Proven and Probable Mineral Reserves attributable to Wheaton were 11.21 million ounces
of gold compared with 11.37 million ounces as reported in Wheaton’s 2019 Annual
Information Form (“AIF”), a decrease of 1%; 552.9 million ounces of silver compared with
542.8 million ounces, an increase of 2%; palladium resources of 0.64 million ounces
compared to 0.66 million ounces, a decrease of 3% ; and cobalt of 31.7 million pound s
compared to 32.7 million pounds, a decrease of 3%.
• Measured and Indicated Mineral Resources attributable to Wheaton were 4.39 million
ounces of gold compared with 2.68 million ounces as reported in Wheaton’s 2019 AIF, an
increase of 64%; silver resource s were 743.1 million ounces compared with 736.6 million
ounces, an increase of 1%; palladium resources were 0.029 million ounces compared to
none in Wheaton’s 2019 AIF and cobalt resources of 1.5 million pounds compared to 1.6, a
decrease of 4%.
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• Inferred Mineral Resources attributable to Wheaton were 4.46 million ounces of gold
compared with 4.16 million ounces as reported in Wheaton’s 2019 AIF, an increase of 7%;
silver resources were 475.8 million ounces compared with 491.0 million ounces, a decrease
of 3%, palladium resources were 0.37 million ounces compared with 0.35 million ounces,
an increase of 6% and cobalt resources of 7.6 million pounds compared to 9.3, a decrease
of 18%.
Estimated attributable reserves and resources contained in this press rele ase are based on
information available to the Company as of March 11, 2021, and therefore will not reflect updates,
if any, after that date. Updated reserves and resources data incorporating year -end 2020
estimates will also be included in the Company's 2020 Annual Information Form. Wheaton’s most
current attributable reserves and resources, as of December 31, 2020, can be found on the
Company’s website at www.wheatonpm.com.
COVID-19 Community Support and Response Fund
In the second quarter of 2020, Wheaton announced the launch of a $5 million Community Support
and Response Fund (the “ CSR Fund”) to support global efforts to combat the 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 and its mining partners operate. This fund is
incremental to Wheaton's already active Community Investment Program that currently provides
support to over 50 programs in multiple communities around the world. As of December 31, 2020,
the Company has made donations totalling approximately $3 million with the CSR Fund.
Webcast and Conference Call Details
A conference call and webcast will be held on Friday, March 12, 2021 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: 1-888-231-8191
Dial from outside Canada or the US: 1-647-427-7450
Pass code: 3349778
Live audio webcast: Webcast Link
Participants should dial in five to ten minutes before the call.
The conference call will be recorded and available until March 19, 202 1 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: 1-855-859-2056
Dial from outside Canada or the US: 1-416-849-0833
Pass code: 3349778
Archived audio webcast: Webcast Link
This earnings release should be read in conjunction with Wheaton Precious Metals’ MD&A and
Financial Statements, which are available on the Company’s website at www.wheatonpm.com
and have been posted on SEDAR at www.sedar.com and copies have been submitted to the
National Storage Mechanism and will shortly be available for inspection at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism.
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 ,
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Engineering, are a “qualified person” as such term is defined under National Instrument 43 -101,
and ha ve 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 signif icant 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 accreti ve acquisitions. As a result,
Wheaton has consistently outperform ed gold and silver, as well as other mining investments.
Wheaton creates sustainable value through streaming.
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 Gold equivalent forecast production for 2021 and the longer term outlook are based on the following commodity price
assumptions: $1,800 / ounce gold, $25 / ounce silver, $2,300 / ounce palladium, and $17.75 / pound of cobalt. Other
metal includes palladium and cobalt. Five - and ten-year guidance do not include optionality production from Pascua
Lama, Navidad, Cotabambas, or additional expansions at Salobo outside of project currently in construction. In addition,
five-year guidance also does not include any production from Rosemont, Toroparu, Kutcho, or the Victor project at
Sudbury.
4 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.
5 Under the Marmato PMPA with Aris Gold, the Company will pay a total cash consideration of $110 million, $72
million of which is payable during the construction of the MDZ project, subject to receipt of required permits and
licenses, sufficient financing having been obtained to cover total expected capital expenditures, and other customary
conditions.
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Consolidated Statements of Earnings
Years Ended December 31
(US dollars and shares in thousands, except per share amounts) 2020 2019
Sales $ 1,096,224 $ 861,332
Cost of sales
Cost of sales, excluding depletion $ 266,763 $ 258,559
Depletion 243,889 256,826
Total cost of sales $ 510,652 $ 515,385
Gross margin $ 585,572 $ 345,947
General and administrative expenses 65,698 54,507
Impairment of mineral stream interests - 165,912
Earnings from operations $ 519,874 $ 125,528
Other (income) expense (2,170) (274)
Earnings before finance costs and income taxes $ 522,044 $ 125,802
Finance costs 16,715 48,730
Earnings before income taxes $ 505,329 $ 77,072
Income tax recovery 2,475 9,066
Net earnings $ 507,804 $ 86,138
Basic earnings per share $ 1.132 $ 0.193
Diluted earnings per share $ 1.128 $ 0.193
Weighted average number of shares outstanding
Basic 448,694 446,021
Diluted 450,070 446,930