SECOND QUARTER 2022 FINANCIAL RESULTS Wheaton Precious Metals Announces Second Quarter Results for 2022
August 11, 2022 TSX | NYSE | LSE: WPM
Vancouver, British Columbia
Designated News Release
SECOND QUARTER 2022 FINANCIAL RESULTS
Wheaton Precious Metals Announces Second Quarter Results for 2022
“Throughout the first half of 2022, we have focused on optimizing our portfolio and further
enhancing our financial flexibility in order to ensure that we are well positioned to respond to
accretive growth opportunities and continue creat ing value for our shareholders ,” said Randy
Smallwood, President and Chief Executive Officer of Wheaton Precious Metals. “While not without
its challenges, our diverse portfolio once again delivered strong operating cash flow and an
attractive dividend yield, highlighting the resilienc y of the streaming model to the inflationary
pressures currently being felt across the global economy . Furthermore, we are pleased with our
continued progress and leadership on sustainability initiatives as highlighted in our third annual
Sustainability Report.”
Second Quarter 2022 Highlights:
• Over $300 million in revenue and $206 million in operating cash flow , resulting in a cash
balance of $449 million and no debt as at June 30, 2022.
• $149 million in adjusted net earnings1.
• Announced the proposed termination of the Keno Hill precious metal purchase agreement
(“PMPA”) for $135 million.
• Subsequent to the quarter, Wheaton added a sustainability-linked element in connection with
the extension to its existing undrawn US$2 billion revolving credit facility.
• Recognized as one of the Best 50 Corporate Citizens in Canada by Corporate Knights.
• Declared quarterly dividend 1 of $0.1 5 per common share , consistent with the comparable
period in 2021.
Operational Overview
(all figures in US dollars unless
otherwise noted) Q2 2022 Q2 2021 Change YTD 2022 YTD 2021 Change
Units produced
Gold ounces 68,365 90,072 (24.1)% 146,419 168,601 (13.2)%
Silver ounces 6,537 6,529 0.1 % 12,770 13,294 (3.9)%
Palladium ounces 3,899 5,301 (26.4)% 8,387 11,070 (24.2)%
Cobalt pounds 136 380 (64.1)% 371 1,542 (76.0)%
Gold equivalent ounces 2 162,569 190,272 (14.6)% 333,265 387,028 (13.9)%
Units sold
Gold ounces 84,337 90,090 (6.4)% 162,238 165,194 (1.8)%
Silver ounces 5,848 5,600 4.4 % 11,401 12,257 (7.0)%
Palladium ounces 3,378 3,869 (12.7)% 7,453 9,000 (17.2)%
Cobalt pounds 225 395 (43.0)% 736 527 39.7 %
Gold equivalent ounces 2 170,371 176,502 (3.5)% 336,436 348,773 (3.5)%
Revenue $ 302,922 $ 330,393 (8.3)% $ 610,166 $ 654,512 (6.8)%
Net earnings $ 149,074 $ 166,124 (10.3)% $ 306,542 $ 328,126 (6.6)%
Per share $ 0.330 $ 0.369 (10.6)% $ 0.679 $ 0.729 (6.9)%
Adjusted net earnings 1 $ 149,285 $ 161,626 (7.6)% $ 307,292 $ 322,760 (4.8)%
Per share 1 $ 0.331 $ 0.359 (7.8)% $ 0.681 $ 0.718 (5.1)%
Operating cash flows $ 206,359 $ 216,415 (4.6)% $ 416,899 $ 448,569 (7.1)%
Per share 1 $ 0.457 $ 0.481 (5.0)% $ 0.924 $ 0.997 (7.3)%
All amounts in thousands except gold, palladium & gold equivalent ounces, and per share amounts.12
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Revised Annual and Long-Term Production Guidance
Given the proposed termination of the Keno Hill PMPA, lower production from Stillwater due to
severe weather and flooding in the state of Montana in June as well as lower than expected
production at Salobo, Wheaton is lowering production guidance. Wheaton’s estimated attributable
production for 2022 is now forecast to be approxima tely 6 40,000 to 6 80,000 gold equivalent
ounces2 (“GEOs”). For the five -year period ending December 31, 2026, average annual
production is expected to increase to 8 20,000 GEO’s2, primarily due to anticipated continued
production growth from Salobo, Stillwater, Constancia, and Voisey’s Bay as well as incremental
production ounces from Marmato, Blackwater, Toroparu, Marathon, the Copper World Complex
(formerly referred to as Rosemont) and Santo Domingo towards the latter end of the forecast
period. Average forecast production for the ten -year period ending December 31, 2031, is
expected to now be 870,000 GEO’s2 and includes incremental production from the Kutcho project
and the Victor mine in Sudbury. Vale S.A. has indicated the potential for an additional expansion
after the completion of the current Salobo III expansion, but Wheaton does not currently include
this in its forecast.
2022 Production Guidance Forecast
Original Guidance Updated Guidance
Gold Ounces 350,000 to 380,000 300,000 to 320,000
Silver Ounces (‘000s) 23,000 to 24,500 22,500 to 24,000
Other Metals2 (GEOs) 44,000 to 48,000 35,000 to 40,000
Total GEOs2 700,000 to 760,000 640,000 to 680,000
Long-Term Forecast
5-Year Annual Average (GEOs)2 850,000 820,000
10-Year Annual Average (GEOs)2 910,000 870,000
Financial Review
Revenues
Revenue was $303 million in the second quarter of 2022 representing an 8% decrease from the
second quarter of 2021 due primarily to a 5% decrease in the average realized gold equivalent²
price; and a 3% decrease in the number of GEOs² sold.
Revenue was $610 million in the six months ended June 30, 2022, representing a 7% decrease
from the comparable period of the previous year due primarily to a 4% decrease in the number of
gold equivalent² ounces sold; and a 3% decrease in the average realized gold equivalent² price.
Cash Costs and Margin
Average cash costs¹ in the second quarter of 2022 were $440 per GEO² as compared to $444 in
the second quarter of 2021. This resulted in a cash operating margin¹ of $1,338 per GEO² sold,
a decrease of 6% as compared with the second quarter of 2021.
Average cash costs¹ for the six months ended June 30, 2022 were $431 per GEO² as compared
to $451 in the comparable period of the previous year. This resulted in a cash operating margin¹
of $1,383 per GEO² sold, a decrease of 3% as compared with the comparable period of the
previous year.
Balance Sheet (at June 30, 2022)
• Approximately $449 million of cash on hand.
• Subsequent to the quarter, the Company extended its existing undrawn $2 billion revolving
term loan (the "Revolving Facility") with its maturity date now July 18, 2027. As part of the
extension, Wheaton added a sustainability -linked element which impact s the interest rate
paid on drawn amounts and standby fees.
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• The Company is well positioned to fund all outstanding commitments and known
contingencies as well as providing flexibility to acquire additional accretive mineral stream
interests.
Second Quarter Asset Highlights
Salobo: In the second quarter of 2022, Salobo produced 34,100 ounces of attributable gold, a
decrease of approximately 39% relative to the second quarter of 2021 , primarily due to lower
throughput and grades. According to Vale S.A.’s Production and Sales 2Q22 report (“Vale”), mine
movement saw continued improvement throughout the quarter , but concentrate production was
negatively impacted by plant performance due to delays in ramp-up after planned and corrective
maintenance. Vale expects further maintenance work to continue in the second half of 2022.
As per Vale’s Second Quarter 2022 Performance Report, Vale outlines the Salobo lll Project
progress including the start of commissioning activities at the primary crushing and stockpile
areas. In addition, Vale notes that the remediation work for the January 2022 landslide has been
completed. Vale reports that physical completion of the Salobo III mine expansion was 95% at
the end of the second quarter.
Antamina: In the second quarter of 2022, Antamina produced 1.4 million ounces of attributable
silver, a decrease of approximately 11% relative to the second quarter of 2021 , primarily due to
lower grades as per the mine plan.
Constancia: In the second quarter of 2022, Constancia produced 600,000 ounces of attributable
silver and 8,000 ounces of attributable gold, an increase of approximately 25% and 46%,
respectively, relative to the second quarter of 2021, with the increases being primarily due to the
mining of higher-grade material associated with the Pampacancha deposit.
Sudbury: In the second quarter of 2022, Vale’s Sudbury mines produced 7,200 ounces of
attributable gold, an increase of approximately 58% relative to the second quarter of 2021 ,
primarily due to higher throughput as during 2021, operations at the mine were suspended due to
a labour dispute which lasted from June 1to August 9, 2021.
Stillwater: In the second quarter of 2022, the Stillwater mines produced 2,200 ounces of
attributable gold and 3,900 ounc es of attributable palladium, a decrease of approximately 27%
for gold and 26% for palladium relative to the second quarter of 2021 . As per Sibanye-Stillwater
Limited’s news release dated August 11, 2022, regional floods impacted the Stillwater operations
on June 13, 2022, including damage to bridges and the access road to the Stillwater mine .
Operations at the Stillwater mine , which accounts for 60% of the mined production from the
Stillwater operations, were suspended for seven weeks, but resumed on July 29, 2022. Access
to the East Boulder mine and the Columbus metallurgical facilities remains intact and both
facilities continued operating during the flooding events.
San Dimas: In the second qu arter of 2022, San Dimas produced 10,000 ounces of attributable
gold, a decrease of approximately 12% relative to the second quarter of 2021, primarily the result
of mining lower grade material . According to First Majestic Silver Corp.’s (“First Majestic”) Q2
production report, underground development for stope preparation and ventilation within the Perez
vein is progressing and forecast to be ready for initial production in August. Furthermore, First
Majestic reports that improving dilution controls at San Dimas and prioritizing long-hole stoping of
the Jessica and Regina veins is anticipated to improve ore grade and overall production in the
second half of 2022.
Other Gold: In the second quarter of 2022, total Other Gold attributable production was 6,800
ounces, a decrease of approximately 32% relative to the second quarter of 2021, primarily due to
the lower throughput and grades at 777, which closed as of June 2022.
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Voisey’s Bay: In the second quarter of 2022, the Voisey's Bay mine produced 136,000pounds
of attributable cobalt, a decrease of approximately 64% relative to the second quarter of 2021 ,
primarily due to lower throughput resulting from a scheduled maintenance shut down coupled with
lower grades during the ongoing transitional period between the depletion of the Ovoid open-pit
mine and ramp -up to full production of the Voisey’s Bay underground project. As per Vale’s
Second Quarter 2022 Performance Report, physical completion of the Voisey’s Bay underground
mine extension was 74% at the end of the second quarter. Civil works continue for the balance of
facilities, with civil completion planned by the end of 2022.
Development Assets
Copper World Complex (formerly referred to as Rosemont): On June 8, 2022, Hudbay
Minerals Inc. (“Hudbay”) announced the results of the preliminary economic assessment (“PEA”)
of its 100% -owned Copper World Complex in Arizona, which includes the recently discovered
Copper World deposits along with the Rosemont deposit. The PEA highlights a two-phase mine
plan, with Phase I reflecting a standalone operation on private land and patented mining claims
over a 16 -year mine life. Phase II expands mining activities onto federal land and extends the
mine life to 44 years. In addition, Hudbay is evaluating several opportunities to optimize the
project, including the potential to expand Phase I beyond 16 years with additions to the company’s
private land package for tailings and waste rock storage and the potential to accelerate Phase II
if federal permits are received earlier than as outlined in the PEA. As per the PEA, Hudbay
anticipates the Phase 1 feasibility study and permits should be completed by the end of 2023,
with a sanctioning decision by Hudbay in 2024, and construction expected to take three years.
Fenix: On June 28, 2022, Rio2 Limited (“Rio2”) provided an update on the Fenix Gold
environmental assessment process. The Environmental Assessment Service (“SEA”) published
the Consolidation Evaluation Report with the recommendation to reject the Environmental Impact
Assessment (“EIA”) as it has been alleged that Fenix Gold has not provided enough information
during the evaluation process to eliminate adverse impacts over the chinchilla, guanaco, and
vicuña. On July 5, 2022, Rio2 announced that the Regional Evaluation Commission has voted for
not approving the EIA for its Fenix Gold project in Chile. Following this decision, Rio2 provided a
further update on July 11, 2022, stating that Rio2 along with its Chilean environmental and legal
advisor, are currently evaluating options to continue to advance the project.
Portfolio Optimization
Keno Hill: On July 5, 2022, Hecla Mining Company (“Hecla”) announced a definitive agreement
for Hecla to acquire all of the outstanding common shares of Alexco Resource Corp. (“Ale xco”).
In conjunction with this agreement, the Company has entered into an agreement with Hecla to
terminate the Keno Hill PMPA in exchange for $135 million of Hecla common stock , conditional
upon the completion of Hecla’s acquisition of Alexco and other customary approvals.
Produced But Not Yet Delivered3 and Inventory
As at June 30, 2022, payable ounces and pounds attributable to the Company produced but not
yet delivered amounted to:
• 61,200 payable gold ounces, a decrease of 20,200 ounces during Q2 2022, primarily due
to decreases at the Salobo and Sudbury mines.
• 3.7 million payable silver ounces, a decrease of 0.2 million ounces during Q2 2022 primarily
due to decreases at the Peñasquito and Yauliyacu mines.
• 6,300 payable palladium ounces, an increase of 700 ounces during Q2 2022.
• 280,000 payable cobalt pounds, a decrease of 270 thousand pounds during Q2 2022.
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As of June 30, 2022, approximately 582,000 pounds of cobalt were held in inventory by Wheaton,
an increase of 172,000 pounds during Q2 2022.
Detailed mine-by-mine production and sales figures can be found in the Appendix to this press
release and in Wheaton’s consolidated MD&A in the ‘Results of Operations and Operational
Review’ section.
Sustainability
Recognized as One of the Best 50 Corporate Citizens in Canada: Wheaton was named to the
Corporate Knights’ 2022 list of the Best 50 Corporate Citizens in Canada. Corporate Knights has
been producing global corporate and fund rankings for 20 years. Wheaton was selected from a
pool of 332 Canadian companies – each evaluated on a set of 24 environmental, social and
governance indicators, relative to their industry peers and using publicly available information.
The Best 50 Corporate Citizens sets the standard for sustainability leadership in Canada.
Sustainability-Linked Revolving Credit Facility : Wheaton has added a sustainability -linked
element in connection with the extension to its existing undrawn US$2 billion revolving credit
facility, underscoring Wheaton’s commitment to sustainability initiatives. Under the renewed
revolving credit facility, the interest rate paid on drawn amounts and standby fees will be adjusted
based upon Wheaton’s performance in three sustainability -related areas including climate
change, diversity and overall sustainability performance.
Published third Annual Sustainability Report: On May 24, 2022, Wheaton published its third
annual Sustainability Report. Highlights of the report include e stablishment of a formal ESG
strategy with targets and commitments across several material ESG topics and significant
enhancement of disclosure around climate change (including inaugural reporting of our Scope 3
financed emissions associated with our Mining Partners).
Webcast and Conference Call Details
A conference call and webcast will be hel d on Friday, August 12, 2022 starting at 8:00am PT /
11:00 am ET to discuss these results. To participate in the live call please use one of the following
methods:
Dial toll free from Canada or the US: 1-888-664-6383
Dial from outside Canada or the US: 1-416-764-8650
Pass code: 06939369
Live webcast: Webcast URL
The accompanying sl ideshow will also be available in PDF format on the ‘Events’ page of the
Wheaton Precious Metals website before the conference call.
The conference call will be recorded and available until August 19, 2022 at 11:59 pm ET. The
webcast will be available for one year. You can listen to an archive of the call by one of the
following methods:
Dial toll free from Canada or the US: 1-888-390-0541
Dial from outside Canada or the US: 1-416-764-8677
Pass code: 939369 #
Archived webcast: Webcast URL
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This earnings release should be read in conjunction with Wheaton Precious Metals’ MD&A and
Financial Statements, which are available on the Company’s website at www.wheatonpm.com
and have been posted on SEDAR at www.sedar.com.
Mr. Wes Carson, P.Eng., Vice President, Mining Operations is a “qualified person” as such term
is defined under National Instrument 43 -101, and ha ve reviewed and approved the technical
information disclosed in this news release.
Wheaton Precious Metals believes that there are no significant differences between its
corporate governance practices and those required to be followed by United States domestic
issuers under the NYSE listing standards. This confirmation is located on the Wheaton Precious
Metals website at http://www.wheatonpm.com/Company/corporate-governance/default.aspx.
About Wheaton Precious Metals Corp. and Outlook
Wheaton is the world’s premier precious metals streaming company with the highest -quality
portfolio of long-life, low-cost assets. Its business model offers investors commodity price leverage
and exploration upside but with a much lower risk profile than a tradi tional mining company.
Wheaton delivers amongst the highest cash operating margins in the mining industry, allowing it
to pay a competitive dividend and continue to grow through accretive acquisitions. As a result,
Wheaton has consistently outperformed gold and silver, as well as other mining investments.
Wheaton is committed to strong ESG practices and giving back to the communities where
Wheaton and its mining partners operate. Wheaton creates sustainable value through streaming
for all of its stakeholders.
In accordance with Wheaton Precious Metals™ Corp.’s (“Wheaton Precious Metals”, “Wheaton”
or the “Company”) MD&A and financial statements, reference to the Company and Wheaton
includes the Company’s wholly owned subsidiaries.
End Notes
1 Please refer to non-IFRS measures at the end of this press release. Dividends declared in the referenced calendar
quarter, relative to the financial results of the prior quarter. Details of the dividend can be found in the Wheaton’s news
release date August 11, 2022, titled “Wheaton Precious Metals Declares Quarterly Dividend.”
2 Commodity price assumptions for the gold equivalent production and sales in 202 2 are $1,800 / ounce gold, $2 4 /
ounce silver, and $2,100 / ounce palladium and $33 / pound cobalt. Other metal includes palladium and cobalt.
3 Payable gold, silver and palladium ounces and cobalt pounds produced but not yet delivered are based on
management estimates only and rely upon information provided by the owners and operators of mining operations and
may be revised and updated in future periods as additional information is received.
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Condensed Interim Consolidated Statements of Earnings
Three Months Ended
June 30
Six Months Ended
June 30
(US dollars and shares in thousands, except per
share amounts - unaudited) 2022 2021 2022 2021
Sales $ 302,922 $ 330,393 $ 610,166 $ 654,512
Cost of sales
Cost of sales, excluding depletion $ 74,943 $ 78,445 $ 144,936 $ 157,228
Depletion 65,682 70,308 123,084 140,482
Total cost of sales $ 140,625 $ 148,753 $ 268,020 $ 297,710
Gross margin $ 162,297 $ 181,640 $ 342,146 $ 356,802
General and administrative expenses 9,685 8,904 19,089 18,639
Share based compensation 1,608 7,978 11,509 9,608
Donations and community investments 1,160 1,583 1,973 2,188
Earnings from operations $ 149,844 $ 163,175 $ 309,575 $ 326,367
Other (income) expense (820) (3,420) (650) (3,301)
Earnings before finance costs and income taxes $ 150,664 $ 166,595 $ 310,225 $ 329,668
Finance costs 1,389 1,357 2,811 2,930
Earnings before income taxes $ 149,275 $ 165,238 $ 307,414 $ 326,738
Income tax (expense) recovery (201) 886 (872) 1,388
Net earnings $ 149,074 $ 166,124 $ 306,542 $ 328,126
Basic earnings per share $ 0.330 $ 0.369 $ 0.679 $ 0.729
Diluted earnings per share $ 0.330 $ 0.368 $ 0.678 $ 0.728
Weighted average number of shares
outstanding
Basic 451,524 450,088 451,221 449,800
Diluted 452,359 451,203 452,123 450,869
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Condensed Interim Consolidated Balance Sheets
As at
June 30
As at
December 31
(US dollars in thousands - unaudited) 2022 2021
Assets
Current assets
Cash and cash equivalents $ 448,626 $ 226,045
Accounts receivable 13,550 11,577
Other 16,160 12,102
Total current assets $ 478,336 $ 249,724
Non-current assets
Mineral stream interests $ 5,841,478 $ 5,905,797
Early deposit mineral stream interests 45,342 34,741
Mineral royalty interest 6,606 6,606
Long-term equity investments 60,799 61,477
Convertible notes receivable - 17,086
Property, plant and equipment 4,814 5,509
Other 11,320 15,211
Total non-current assets $ 5,970,359 $ 6,046,427
Total assets $ 6,448,695 $ 6,296,151
Liabilities
Current liabilities
Accounts payable and accrued liabilities $ 9,546 $ 13,935
Current portion of performance share units 11,989 14,807
Current portion of lease liabilities 824 813
Other 97 136
Total current liabilities $ 22,456 $ 29,691
Non-current liabilities
Lease liabilities 1,619 2,060
Deferred income taxes 236 100
Performance share units 4,517 11,498
Pension liability 3,066 2,685
Total non-current liabilities $ 9,438 $ 16,343
Total liabilities $ 31,894 $ 46,034
Shareholders' equity
Issued capital $ 3,729,300 $ 3,698,998
Reserves 12,273 47,036
Retained earnings 2,675,228 2,504,083
Total shareholders' equity $ 6,416,801 $ 6,250,117
Total liabilities and shareholders' equity $ 6,448,695 $ 6,296,151