Wheaton Precious Metals Provides Corporate Update
April 1, 2020 TSX:WPM
Vancouver, British Columbia NYSE: WPM
WHEATON PRECIOUS METALS PROVIDES CORPORATE UPDATE
“During these unprecedented times, Wheaton is taking every step possible to ensure the
health and safety of our employees and the broader community ,” said Randy Smallwood,
President and Chief Executive Officer of Wheaton Precious Metals. “ Given the rapidly
evolving situation, we are monitoring our partners’ operations closely and providing support
wherever possible. With current strong cash flows and ample financial liquidity, Wheaton is
well-positioned to withstand current market conditions and grow our portfolio should there be
any accretive opportunities. These are incredibly challenging times, and we hope everyone
stays healthy and safe."
Business Continuity and Employee Health and Safety
With the recent developments around COVID -19, the health and safety of Wheaton’s
employees and communities remain a top priority, as well as considering any impacts to the
business. With a focus on physical distancing in order to combat the spread of COVID -19
globally, Wheaton closed its offices several weeks ago, and has successfully transitioned to
telecommuting for all of its employees. Wheaton has always maintained detailed business
continuity plans, which include clear policies and procedures to ensure employees can work
from home or other remote areas, as well as defin ed crisis management team s and clear
reporting and communication lines in case of an emergency. This has resulted in a seamless
transition and uninterrupted flow of business, which we expect to continue.
Partner Operations
We remain in close contact with and continue to monitor the situation at all of our partner s’
operations. We have completed a thorough review of our operations with our counterparties
to better understand their policies and procedures around COVID-19. All of our counterparties
are taking steps to ensure business continuity in their operations, but given that this situation
is very fluid, we recognize that there is a risk of some operations being impacted at some
point. We are pleased that each operation has a crisis management team in place and will
make decisions according to their local situation and applicable laws, as well as considering
the health and safety of their employees.
As at the time of writing, Wheaton’s partners’ operations are currently running with the
exception of Voisey’s Bay, Constancia, Yauliyacu, and Peñasquito. Vale made the decision
on March 17th to temporarily suspend operations at Voisey’s Bay to ensure the safety of local
communities, which have limited access to healthcare given their remoteness. We are not
scheduled to begin receiving cobalt from Voisey’s Bay until January 1, 2021, and as a result
we do not expect this temporary shutdown to affect future deliveries. On March 20th, Hudbay
Minerals Inc. announced a temporary shutdown of operations at Constancia, a decision
driven by the limited availability of certain c ritical mining supplies as a result of the national
state of emergency in Peru. Yauliyacu has reportedly temporarily halted mining operations
also as a result of supply chain issues in Peru. On March 3 1st, t he Mexican federal
government mandated that all n on-essential businesses temporar ily suspend operations
until April 30th due to the COVID-19 virus. Newmont Corporation reports that as of April 1 st,
mining has not been deemed an essential activity under the decree , but that they are
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engaging with the gove rnment to understand the intended impacts of the decree on
operations. As a result, Newmont is taking steps towards a safe and orderly ramp down of
operations at the Peñasquito mine. Other Mexican mining operations on which Wheaton has
precious metal purchase agreements include the San Dimas and Los Filos mines.
Production Guidance
Given the temporary shutdowns announced by some of our partners at mines on which we
have precious metal purchase agreements, Wheaton is withdrawing its production guidance
for 2020.
We are closely monitoring and regularly assessing the impact of the COVID -19 virus
pandemic on our partners’ operations and our own operations. However, this pandemic is
evolving rapidly and its effects remain uncertain. It is possible that in the future operations at
other partners’ operations may be temporarily shut down or suspended for in determinate
amounts of time, including the Mexican mining operations.
In these market conditions, commodity price uncertainty highlight s the benefits of the low-
risk, high-margin nature of our business model. With 88% of our production coming from
mines in the lowest half of their respective cost-curves, even at these lower base metal prices,
our partners’ operations are better able to weather low commodity price cycles. In addition,
given the higher margins for our partners at these low-cost mines, we believe that there will
be incentive to return them to production as soon as it is safely possible.
Liquidity and Funding
Wheaton currently continues to generate a significant amount of cash flow and remains very
comfortable with current debt levels. From a liquidity perspective, with $104 million of cash
and cash equivalents combined with over $1.1 billion of available capacity under the $2 billion
Revolving Facility as at December 31, 2019, the company remains well positioned to fund all
outstanding commitments and known contingencies including dividends, as well as providing
flexibility to acquire additional accretive precious metal stream interests.
The company’s dividend policy remains intact, under whi ch the quarterly dividend per
common share is targeted to equal approximately 30% of the average cash generated by
operating activities in the previous four quarters divided by the Company's then outstanding
common shares, all rounded to the nearest cent. To minimize volatility in quarterly dividends,
the Company has set a minimum quarterly dividend of $0.10 per common share for the
duration of 2020 representing an 11% increase relative to 2019. Under the new minimum
dividend policy, the forecast annualized dividend for 2020 would represent an increase of
more than 90% over a five-year period.
Community Support
Wheaton has a very active corporate social responsibility (“CSR”) program focused on
providing financial support to initiatives in our local communities as well as the communities
around the mines from which we receive precious metals . Wheaton will continue to be
supportive of these programs, and where available , look to provide additional support to
programs, especially those that are helping those that are most vulnerable under the current
circumstances. We would encourage everyone, where possible, to do whatever you can to
help those most at need. Charity has never been more important than in these times.
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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 p rofile 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.
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.
CAUTIONARY NOTE REGARDING FORWARD LOOKING-STATEMENTS
This press release contains "forward-looking statements" within the meaning of the United States
Private Securities Litigation Reform Act of 1995 and "forward -looking information" within the
meaning of applicable Canadian securities legislation concerning the business, operations and
financial performance of Wheaton and, in some instances, the business, mining operations and
performance of Wheaton’s precious metals purchase agreement (“ PMPA”) counterparties.
Forward-looking statements, which are all statements other than statements of historical fact,
include, but are not limited to, statements wit h respect to the future price of commodities, the
impact of epidemics (including the COVID-19 virus pandemic), the estimation of future production
from Mining Operations (including in the estimation of production, mill throughput, grades,
recoveries and exploration potential), the estimation of mineral reserves and mineral resources
(including the estimation of reserve conversion rates) and the realization of such estimations, the
commencement, timing and achievement of construction, expansion or improvement projects by
Wheaton’s PMPA counterparties at mineral stream interests owned by Wheaton (the “Mining
Operations”), the ability of Wheaton’s PMPA counterparties to comply with the terms of a PMPA
(including as a result of the business, mining operations and performance of Wheaton’s PMPA
counterparties) and the potential impacts of such on Wheaton, the costs of future production, the
estimation of produced but not yet delivered ounces, any statements as to future dividends, the
ability to fund outstanding commitments and the ability to continue to acquire accretive PMPAs,
future payments by the Company in accordance with PMPAs, including any acceleration of
payments, projected increases to Wheaton's production and cash flow profile, projected changes
to Wheaton's production mix, the ability of Wheaton’s PMPA counterparties to comply with the
terms of any other obligations under agreements with the Company , the ability to sell precious
metals and cobalt production, confidence in the Company's business st ructure, the Company's
assessment of taxes payable and the impact of the CRA Settlement for years subsequent to 2010,
possible audits for taxation years subsequent to 2015, the Company's intention to file future tax
returns in a manner consistent with the CRA Settlement, and assessments of the impact and
resolution of various legal and tax matters, including but not limited to outstanding class actions
and audits. Generally, these forward-looking statements can be identified by the use of forward-
looking te rminology such as "plans", "expects" or "does not expect", "is expected", "budget",
"scheduled", "estimates", "forecasts", "projects", "intends", "anticipates" or "does not anticipate",
or "believes", "potential", or variations of such words and phrases or statements that certain
actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be
achieved". Forward-looking statements are subject to known and unknown risks, uncertainties
and other factors that may cause the actual results, level of activity, performance or achievements
of Wheaton to be materially different from those expressed or implied by such forward -looking
statements, including but not limited to risks associated with fluctuations in the price of
commodities (including Wheaton’s ability to sell its precious metals or cobalt production at
acceptable prices or at all), risks of significant impacts on Wheaton or the Mining Operations as
a result of an epidemic (including the COVID-19 virus pandemic), the Mining Operations (including
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fluctuations in the price of the primary or other commodities mined at such operations, regulatory,
political and other risks of the jurisdictions in which the Mining Operations are located , actual
results of mining, risks associated wit h exploration, development, operating, expansion and
improvement at the Mining Operations, environmental and economic risks of the Mining Operations,
and changes in project parameters as plans continue to be refined), the absence of control over
the Mining Operations and relying on the accuracy of the public disclosure and other information
Wheaton receives from the Mining Operations, uncertainty in the estimation of production from
Mining Operations, uncertainty in the accuracy of mineral reserve and mine ral resource
estimation, the ability of each party to satisfy their obligations in accordance with the terms of the
PMPAs, the estimation of future production from Mining Operations, Wheaton's interpretation of,
compliance with or application of, tax laws and regulations or accounting policies and rules being
found to be incorrect, any challenge or reassessment by the CRA of the Company's tax filings
being successful and the potential negative impact to the Company's previous and future tax
filings, assessing the impact of the CRA Settlement for years subsequent to 2010 (including
whether there will be any material change in the Company's facts or change in law or
jurisprudence), credit and liquidity, indebtedness and guarantees, mine operator concentration,
hedging, competition, claims and legal proceedings against Wheaton or the Mining Operations ,
security over underlying assets, governmental regulations, international operations of Wheaton
and the Mining Operations, exploration, development, operations, expansions and improvements
at the Mining Operations, environmental regulations , climate change and epidemics, Wheaton
and the Mining Operations ability to obtain and maintain necessary licenses, permits, approvals
and rulings, Wheaton and the Mining Operations ability to comply with applicable laws, regulations
and permitting requirements, lack of suitable infrastructure and employees to support the Mining
Operations, inability to replace and expand mineral reserves, including anticipated timing o f the
commencement of production by certain Mining Operations (including increases in production,
estimated grades and recoveries), uncertainties of title and indigenous rights with respect to the
Mining Operations, Wheaton and the Mining Operations ability to obtain adequate financing, the
Mining Operations ability to complete permitting, construction, development and expansion,
global financial conditions, and other risks discussed in the section entitled "Description of the
Business – Risk Factors" in Wh eaton's Annual Information Form available on SEDAR at
www.sedar.com, and in Wheaton's Form 40-F for the year ended December 31, 2019 and Form
6-K filed March 11, 2020 both on file with the U.S. Securities and Exchange C ommission in
Washington, D.C. (the "Disclosure”). Forward -looking statements are based on assumptions
management currently believes to be reasonable, including (without limitation): that there will be
no material adverse change in the market price of commodities, that none of Wheaton, the Mining
Operations nor parties to the PMPAs will suffer significant long-term impacts as a result of an
epidemic (including the COVID-19 virus pandemic), that any closure of the Mining Operations will
be on a temporary basi s, that the Mining Operations will continue to operate and the mining
projects will be completed in accordance with public statements and achieve their stated
production estimates, that the mineral reserve and mineral resource estimates from Mining
Operations (including reserve conversion rates) are accurate, that each party will satisfy their
obligations in accordance with the PMPAs, that Wheaton will continue to be able to fund or obtain
funding for outstanding commitments, that Wheaton will be able to source and obtain accretive
PMPAs, that any outbreak or threat of an outbreak of a virus or other contagio ns or epidemic
disease will be adequately responded to locally, nationally, r egionally and internationally , that
expectations regarding the resolution of legal and tax matters will be achieved (including ongoing
class action litigation and CRA audits involving the Company ), that Wheaton has properly
considered the interpretation and application of Canadian tax law to its structure and operations,
that Wheaton has filed its tax returns and paid applicable taxes in compliance with Canadian tax
law, that Wheaton's application of the CRA Settlement for years subsequent to 2010 is accurate
(including the Company's assessment that there will be no material change in the Company's
facts or change in law or jurisprudence for years subsequent to 2010 ), and such other
assumptions and factors as set out in the Disclosure. There can be no assura nce that forward-
looking statements will prove to be accurate and even if events or results described in the forward-
looking statements are realized or substantially realized, there can be no assurance that they will
have the expected consequences to, or e ffects on, Wheaton. Readers should not place undue
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reliance on forward-looking statements and are cautioned that actual outcomes may vary. The
forward-looking statements included herein are for the purpose of providing readers with
information to assist th em in understanding Wheaton's expected financial and operational
performance and may not be appropriate for other purposes. Any forward looking statement
speaks only as of the date on which it is made, reflects Wheaton’s management’s current beliefs
based on current information and will not be updated except in accordance with applicable
securities laws. Although Wheaton has attempted to identify important factors that could cause
actual results, level of activity, performance or achievements to differ mate rially from those
contained in forward-looking statements, there may be other factors that cause results, level of
activity, performance or achievements not to be as anticipated, estimated or intended.
For further information, please contact:
Patrick Drouin
Senior Vice President, Investor Relations
Wheaton Precious Metals Corp.
Tel: 1-844-288-9878
Email: [email protected]
Website: www.wheatonpm.com