SECOND QUARTER 2021 FINANCIAL RESULTS
VANCOUVER, BC, Aug. 12, 2021 /CNW/ - "Wheaton once again delivered strong results in the second quarter and remains well on track to achieve 2021 guidance of 720,000 to 780,000 gold equivalent ounces. With record sales volumes in the first half of 2021, Wheaton generated both record revenue and cash flow of $655 million and $449 million, respectively. This solid performance reflects the underlying strength of our diversified, high-quality portfolio, and has resulted in an increase to our dividend for the fourth quarter in a row, an increase of 50% over the prior year," said Randy Smallwood, President and Chief Executive Officer of Wheaton Precious Metals Corp. "We continue to remain extremely active on the corporate development front, closing the previously announced precious metals stream on Capstone's Santo Domingo project and subsequent to the quarter, entering into an agreement on a new precious metals stream on Rio2's Fenix Gold project in Chile. In addition, we remain committed to sustainability and are proud to have published our annual sustainability report in the second quarter, highlighting our focus on delivering value to all of our stakeholders."
Second Quarter 2021 Highlights:
$216 million in operating cash flow during the second quarter.
Record quarterly revenue of $330 million during the second quarter.
Gold equivalent production2 increased over 32% relative to Q2 2020.
Declared quarterly dividend1 of $0.15 per common share representing the fourth quarterly dividend increase in a row and a 50% increase relative to Q2 2020.
Initial gold and silver production from the Pampacancha deposit at the Constancia mine.
First gold and silver deliveries from the Marmato mine.
Inaugural cobalt production from Voisey's Bay underground extension.
Operational Overview
(all figures in US dollars unless otherwise noted)
Q2 2021 Q2 2020 Change
Units produced go to
https://www.wheatonpm.com/news/pressreleases/News-Releases-Details/2021/Wheaton-Precious-Metals-Announces-Record-Revenue-Cash-Flow-and-Sales-Volume-for-the-First-Half-of-2021/default.aspx
Subsequent to the Quarter – Corporate Development
Fenix Gold Project: On July 20, 2021, the Company signed a non-binding term sheet with Rio2 Limited ("Rio2") to enter into a precious metals purchase agreement ("PMPA") in connection with the Fenix Gold project located in Chile. Under the terms of the proposed Fenix PMPA, the Company will acquire 6% of the gold production until 90,000 ounces have been delivered and 4% of the gold production until 140,000 ounces have been delivered, after which the stream drops to 3.5% for the life of mine. In addition, under the proposed Fenix PMPA, the Company will pay a total upfront cash consideration of $50 million, $25 million of which is payable upon closing, subject to certain conditions, and $25 million payable subject to Rio2's receipt of its Environmental Impact Assessment for the Fenix Gold project, and certain other conditions. In addition, the Company will make ongoing delivery payments equal to approximately 18% of the spot price until the value of gold delivered less the production payment is equal to the upfront consideration of $50 million, at which point the production payment will increase to 22% of the spot gold price. The entering into of the Fenix PMPA is subject to, among other matters, the negotiation and completion of definitive documentation.
Financial Review
Revenues
Revenue was $330 million in the second quarter of 2021 representing a 33% increase from the second quarter of 2020 due primarily to a 24% increase in the average realized gold equivalent² price; and coupled with a 7% increase in the number of gold equivalent² ounces sold.
Cash Costs and Margin
Average cash costs¹ in the second quarter of 2021 were $444 per gold equivalent² ounce as compared to $396 in Q2 2020. This resulted in a cash operating margin¹ of $1,426 per gold equivalent² ounce sold, an increase of 29% as compared with the second quarter of 2020.
Balance Sheet (at June 30, 2021 )
Approximately $235 million of cash on hand.
The Company's $2 billion revolving term loan (the "Revolving Facility") remains fully repaid. During the quarter, the term of the Revolving Facility was extended by an additional year, with the facility now maturing on June 9, 2026.
Second Quarter Asset Highlights
Salobo: In the second quarter of 2021, Salobo produced 55,600 ounces of attributable gold, a decrease of approximately 6% relative to the second quarter of 2020 due to lower grade, partially offset by higher throughput. According to Vale S.A.'s ("Vale") Second Quarter 2021 Performance Report, production was mainly impacted as the mine maintenance workshops continued to ramp up in the quarter after a broader review in the first quarter of 2021, which limited mine movement and feed grade available for the quarter. Vale further reports that physical completion of the Salobo III mine expansion was 77% at the end of the second quarter and is on track for start-up in the second half of 2022.
Peñasquito: In the second quarter of 2021, Peñasquito produced 2.0 million ounces of attributable silver, an increase of approximately 109% relative to the second quarter of 2020 as operations at the mine were temporarily suspended during the second quarter of 2020 as a result of the COVID-19 pandemic.
Antamina: In the second quarter of 2021, Antamina produced 1.6 million ounces of attributable silver, an increase of approximately 155% relative to the second quarter of 2020 as operations at the mine were temporarily suspended during the second quarter of 2020 as a result of the COVID-19 pandemic.
San Dimas: In the second quarter of 2021, San Dimas produced 11,500 ounces of attributable gold, an increase of approximately 89% relative to the second quarter of 2020, primarily due to operations being temporarily suspended during the second quarter of 2020 due to the COVID-19 pandemic coupled with the impact of changing the silver to gold conversion ratio from 70:1 to 90:1 from April 1, 2020 to October 15, 2020, at which time it reverted to 70:1.
Constancia: In the second quarter of 2021, Constancia produced 0.5 million ounces of attributable silver and 5,500 ounces of attributable gold, an increase of approximately 85% and 59%, respectively, relative to the second quarter of 2020, which was primarily due to operations being temporarily suspended during the second quarter of 2020 due to the COVID-19 pandemic, and, for gold, the improved grades and recoveries as a result of the commencement of first ore production from the Pampacancha satellite deposit. According to Hudbay Minerals Inc.'s ("Hudbay") second quarter of 2021 MD&A, following the finalization of the remaining land user agreement and due to its short ramp-up period, Pampacancha achieved commercial production in April 2021. On May 10, 2021, Wheaton and Hudbay agreed to amend the Constancia streaming agreement so that Hudbay would no longer be required to deliver an additional 8,020 ounces of gold to Wheaton for not mining four million tonnes of ore from Pampacancha by June 30, 2021. As part of this amendment, Hudbay has agreed to increase the fixed gold recoveries that apply to Constancia ore production from 55% to 70% during the reserve life of Pampacancha3.
Sudbury: In the second quarter of 2021, Vale's Sudbury mines produced 4,800 ounces of attributable gold, a decrease of approximately 48% relative to the second quarter of 2020, which was primarily due to lower grades and throughput, as operations at the mine were suspended due to a labour dispute, which lasted from June 1, 2021 to August 9, 2021. Vale announced on August 3, 2021 that a new five-year collective bargaining agreement had been ratified with mine workers. The Sudbury PMPA had an effective date of February 28, 2013 with a term of 20 years. Under the provisions of the Sudbury PMPA, should the facilities at Sudbury be shut down for 60 or more cumulative days, exclusive of scheduled maintenance or shutdowns for periods of 20 days or less, the term of the Sudbury PMPA shall be extended for the same duration.
Stillwater: In the second quarter of 2021, the Stillwater mines produced 3,000 ounces of attributable gold and 5,300 ounces of attributable palladium, a decrease of approximately 8% for gold and 8% for palladium relative to the second quarter of 2020 due to lower grades.
Other Gold: In the second quarter of 2021, total Other Gold attributable production was 10,000 ounces, an increase of approximately 30% relative to the second quarter of 2020, primarily due production from the newly acquired Marmato stream.
Other Silver: In the second quarter of 2021, total Other Silver attributable production was 2.7 million ounces, an increase of approximately 47% relative to the second quarter of 2020, primarily due to higher production at Yauliyacu as prior year operations were temporarily suspended due to the COVID-19 pandemic coupled with the resumption of mining at Keno Hill and production from the newly acquired Cozamin and Marmato streams.
Voisey's Bay: In the second quarter of 2021, the Voisey's Bay mine produced 380,000 pounds of attributable cobalt. As at the end of the second quarter 2021, approximately 134,000 pounds of cobalt were held in inventory by Wheaton and 777,000 pounds were produced but not delivered. As per Vale's Second Quarter 2021 Performance Report, physical completion of the Voisey's Bay underground mine extension, which includes developing two underground mines -Reid Brook and Eastern Deeps - was 66% at the end of the second quarter. Reid Brook produced its first ore in June of 2021, and Vale reports that Eastern Deeps is expected to start up in 2022.
Produced But Not Yet Delivered4
As at June 30, 2021, payable ounces and pounds attributable to the Company produced but not yet delivered amounted to:
65,900 payable gold ounces, a decrease of 3,600 ounces during Q2 2021, primarily due to reductions during the period relative to the Salobo and Sudbury mines partially offset by an increase at the Constancia mine.
4.0 million payable silver ounces, an increase of 0.2 million ounces during Q2 2021, primarily due to increases during the period relative to the Yauliyacu and Constancia mines.
6,800 payable palladium ounces, an increase of 1,400 ounces during Q2 2021.
777,300 payable cobalt pounds, a decrease of 40,300 pounds during Q2 2021.
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
On April 15, 2021, the previously announced PMPA relative to the Marmato mine was closed, with the initial upfront cash consideration of $34 million being paid to Aris Gold Corporation on that date.
On April 21, 2021, the previously announced PMPA with Capstone Mining Corp. ("Capstone") relative to the Santo Domingo project was closed with the initial upfront cash consideration of $30 million being paid to Capstone on that date.
On July 20, 2021, the Company signed a non-binding term sheet with Rio2 to enter into a PMPA relative to the Fenix Gold project located in Chile.
Sustainability
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 June 30, 2021, the Company has made donations totalling approximately $4 million through the CSR Fund.
2020 Sustainability Report: In the second quarter of 2021, Wheaton published its annual sustainability report, a comprehensive disclosure outlining Wheaton's commitment to sustainability and environmental, social and governance ("ESG") performance.
Partner CSR Program: In the second quarter of 2021, Wheaton continued to support a wide range of programs with various mining partners. Wheaton committed to support the Enseña Peru educational program near the Antamina mine for another two years, bringing to a total of six years of Wheaton's support; continued to work with the Vale Foundation in supporting ten different programs focused on health, education, entrepreneurial support and community engagement opportunities near the Salobo mine; and, committed to the second phase of an agricultural and livestock development program previously supported by Wheaton and a new waste management program with Hudbay near the Constancia mine.
Webcast and Conference Call Details
A conference call and webcast will be held on Friday, August 13, 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:
1-888-664-6383
Dial from outside Canada or the US:
1-416-764-8650
Pass code:
26071335
Live audio webcast:
Webcast URL
Participants should dial in five to ten minutes before the call.
The accompanying slideshow will also be available in PDF format on the 'Presentations' page of the Wheaton Precious Metals website before the conference call.
The conference call will be recorded and available until August 20, 2021 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:
071335 #
Archived audio 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, is a "qualified person" as such term is defined under National Instrument 43-101 and has reviewed and approved the technical information disclosed in this news release.
Wheaton Precious Metals believes that there are no significant differences between its corporate governance practices and those required to be followed by United States domestic issuers under the NYSE listing standards. This confirmation is located on the Wheaton Precious Metals website at http://www.wheatonpm.com/Company/corporate-governance/default.aspx.
About Wheaton Precious Metals Corp. 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 in 2021 is forecast to be 370,000 to 400,000 ounces of gold, 22.5 to 24.0 million ounces of silver, and 40,000 to 45,000 gold equivalent ounces2 ("GEOs") of other metals, resulting in production of approximately 720,000 to 780,000 GEOs2, unchanged from previous guidance. For the five-year period ending in 2025, the Company estimates that average production will amount to 810,000 GEOs5. For the ten-year period ending in 2030, the Company estimates that average annual production will amount to 830,000 GEOs5.
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.
2
Commodity price assumptions for the gold equivalent production and sales in 2021 and long-term forecasts are $1,800 / ounce gold, $25 / ounce silver, and $2,300 / ounce palladium and $17.75 / pound cobalt. Other metal includes palladium and cobalt.
3
If Hudbay mines and processes four million tonnes of ore from the Pampacancha deposit by December 31, 2021, the Company will make an additional deposit payment of $4 million to Hudbay.
4
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.
5
Gold equivalent guidance based on the commodity prices outlined in note 2 above. 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.
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)
2021
2020
2021
2020
Sales
$
330,393
$
247,954
$
654,512
$
502,744
Cost of sales
Cost of sales, excluding depletion
$
78,445
$
65,211
$
157,228
$
132,119
Depletion
70,308
58,661
140,482
123,503
Total cost of sales
$
148,753
$
123,872
$
297,710
$
255,622
Gross margin
$
181,640
$
124,082
$
356,802
$
247,122
General and administrative expenses
18,465
21,799
30,435
34,981
Earnings from operations
$
163,175
$
102,283
$
326,367
$
212,141
Other (income) expense
(3,420)
(3,366)
(3,301)
(3,963)
Earnings before finance costs and income taxes
$
166,595
$
105,649
$
329,668
$
216,104
Finance costs
1,357
4,636
2,930
11,753
Earnings before income taxes
$
165,238
$
101,013
$
326,738
$
204,351
Income tax recovery (expense)
886
4,799
1,388
(3,643)
Net earnings
$
166,124
$
105,812
$
328,126
$
200,708
Basic earnings per share
$
0.369
$
0.236
$
0.729
$
0.448
Diluted earnings per share
$
0.368
$
0.235
$
0.728
$
0.447
Weighted average number of shares outstanding
Basic
450,088
448,636
449,800
448,217
Diluted
451,203
450,042
450,869
449,513
Condensed Interim Consolidated Balance Sheets
As at
June 30
As at
December 31
(US dollars in thousands - unaudited)
2021
2020
Assets
Current assets
Cash and cash equivalents
$
235,446
$
192,683
Accounts receivable
12,952
5,883
Other
6,050
3,265
Total current assets
$
254,448
$
201,831
Non-current assets
Mineral stream interests
$
5,563,515
$
5,488,391
Early deposit mineral stream interests
33,991
33,241
Mineral royalty interest
6,606
3,047
Long-term equity investments
86,379
199,878
Convertible notes receivable
15,979
11,353
Property, plant and equipment
5,984
6,289
Other
14,564
13,242
Total non-current assets
$
5,727,018
$
5,755,441
Total assets
$
5,981,466
$
5,957,272
Liabilities
Current liabilities
Accounts payable and accrued liabilities
$
12,781
$
13,023
Current portion of performance share units
13,113
17,297
Current portion of lease liabilities
805
773
Other
103
76
Total current liabilities
$
26,802
$
31,169
Non-current liabilities
Bank debt
$
-
$
195,000
Lease liabilities
2,508
2,864
Deferred income taxes
252
214
Performance share units
6,507
11,784
Pension liability
2,133
1,670
Total non-current liabilities
$
11,400
$
211,532
Total liabilities
$
38,202
$
242,701
Shareholders' equity
Issued capital
$
3,674,783
$
3,646,291
Reserves
67,325
126,882
Retained earnings
2,201,156
1,941,398
Total shareholders' equity
$
5,943,264
$
5,714,571
Total liabilities and shareholders' equity
$
5,981,466
$
5,957,272
Condensed Interim Consolidated Statements of Cash Flows
Three Months Ended
June 30
Six Months Ended
June 30
(US dollars in thousands - unaudited)
2021
2020
2021
2020
Operating activities
Net earnings
$
166,124
$
105,812
$
328,126
$
200,708
Adjustments for
Depreciation and depletion
70,775
59,140
141,424
124,492
Interest expense
32
3,515
294
9,494
Equity settled stock based compensation
1,307
1,305
2,632
2,808
Performance share units
(10,258)
(868)
(9,952)
2,409
Pension expense
265
233
416
268
Income tax expense (recovery)
(886)
(4,799)
(1,388)
3,643
Loss (gain) on fair value adjustment of share purchase warrants held
194
(333)
1,145
(262)
Fair value (gain) loss on convertible note receivable
(3,388)
(3,267)
(4,626)
(2,477)
Investment income recognized in net earnings
(95)
(37)
(97)
(155)
Other
103
264
694
(53)
Change in non-cash working capital
(7,803)
(5,505)
(9,775)
(885)
Cash generated from operations before income taxes and interest
$
216,370
$
155,460
$
448,893
$
339,990
Income taxes recovered (paid)
(21)
(19)
(51)
70
Interest paid
(29)
(3,685)
(370)
(10,833)
Interest received
95
37
97
154
Cash generated from operating activities
$
216,415
$
151,793
$
448,569
$
329,381
Financing activities
Bank debt repaid
$
-
$
(75,000)
$
(195,000)
$
(234,000)
Credit facility extension fees
(1,673)
(7)
(1,673)
(1,367)
Share purchase options exercised
743
11,094
5,536
18,016
Lease payments
(173)
(139)
(387)
(306)
Dividends paid
(103,549)
(83,003)
(103,549)
(83,003)
Cash (used for) generated from financing activities
$
(104,652)
$
(147,055)
$
(295,073)
$
(300,660)
Investing activities
Mineral stream interests
$
(64,771)
$
-
$
(215,790)
$
-
Early deposit mineral stream interests
-
-
(750)
(750)
Mineral royalty interest
(10)
-
(3,571)
-
Acquisition of long-term investments
(2,377)
-
(2,377)
-
Proceeds on disposal of long-term investments
-
123
112,188
123
Other
(386)
(71)
(520)
(328)
Cash generated from (used for) investing activities
$
(67,544)
$
52
$
(110,820)
$
(955)
Effect of exchange rate changes on cash and cash equivalents
$
65
$
298
$
87
$
12
Increase in cash and cash equivalents
$
44,284
$
5,088
$
42,763
$
27,778
Cash and cash equivalents, beginning of period
191,162
126,676
192,683
103,986
Cash and cash equivalents, end of period
$
235,446
$
131,764
$
235,446
$
131,764
Summary of Units Produced
Q2 2021
Q1 2021
Q4 2020
Q3 2020
Q2 2020
Q1 2020
Q4 2019
Q3 2019
Gold ounces produced ²
Salobo
55,590
46,622
62,854
63,408
59,104
62,575
74,716
73,615
Sudbury 3
4,787
6,466
6,659
3,798
9,257
7,795
6,468
6,082
Constancia 8
5,519
2,453
3,929
3,780
3,470
3,681
4,757
5,172
San Dimas 4, 8
11,478
10,491
11,652
9,228
6,074
11,318
11,352
11,239
Stillwater 5
2,962
3,041
3,290
3,176
3,222
2,955
3,585
3,238
Other
Minto 6
3,206
2,638
789
1,832
2,928
2,124
2,189
-
777 9
5,035
6,280
2,866
5,278
4,728
4,551
3,987
4,278
Marmato
1,713
-
-
-
-
-
-
-
Total Other
9,954
8,918
3,655
7,110
7,656
6,675
6,176
4,278
Total gold ounces produced
90,290
77,991
92,039
90,500
88,783
94,999
107,054
103,624
Silver ounces produced 2
Peñasquito 8
2,026
2,202
2,014
1,992
967
2,658
1,895
2,026
Antamina 8
1,558
1,577
1,930
1,516
612
1,311
1,342
1,223
Constancia 8
468
406
478
430
254
461
632
686
Other
Los Filos 8
26
31
6
17
14
29
55
33
Zinkgruvan
457
420
515
498
389
662
670
587
Yauliyacu 8
821
737
454
679
273
557
358
620
Stratoni
164
165
185
156
148
183
147
131
Minto 6
33
21
16
15
19
18
18
-
Neves-Corvo
408
345
420
281
479
377
385
431
Aljustrel
400
474
440
348
388
352
325
240
Cozamin
182
230
-
-
-
-
-
-
Marmato
39
-
-
-
-
-
-
-
Keno Hill
55
30
-
-
-
-
-
-
777 9
83
130
51
96
108
96
81
62
Total Other
2,668
2,583
2,087
2,090
1,818
2,274
2,039
2,104
Total silver ounces produced
6,720
6,768
6,509
6,028
3,651
6,704
5,908
6,039
Palladium ounces produced ²
Stillwater 5
5,301
5,769
5,672
5,444
5,759
5,312
6,057
5,471
Cobalt pounds produced ²
Voisey's Bay 10
379,757
1,162,243
-
-
-
-
-
-
GEOs produced 7
194,140
190,820
189,682
181,184
146,857
194,901
196,850
194,499
SEOs produced 7
13,978
13,739
13,657
13,045
10,574
14,033
14,173
14,004
Average payable rate 2
Gold
95.8%
95.0%
95.2%
95.3%
94.7%
95.1%
95.6%
95.1%
Silver
87.0%
86.6%
86.3%
86.1%
81.9%
85.6%
85.3%
85.1%
Palladium
95.0%
91.6%
93.6%
94.0%
90.8%
91.0%
92.2%
91.3%
Cobalt
93.3%
93.3%
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
GEO 7
91.7%
90.4%
91.1%
91.1%
89.8%
90.4%
91.5%
90.4%
1)
All figures in thousands except cobalt pounds and 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. On June 1, 2021, Vale announced that operations at the Sudbury mines were suspended 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: Q2-2021 – 432,000 ounces; Q1-2021 – 437,000 ounces; Q4-2020 – 476,000 ounces; Q3-2020 – 420,000 ounces; Q2-2020 – 276,000 ounces; Q1-2020 – 419,000 ounces; Q4-2019 – 415,000 ounces; and Q3-2019 – 410,000 ounces.
5)
Comprised of the Stillwater and East Boulder gold and palladium interests.
6)
The Minto mine was placed into care and maintenance from October 2018 to October 2019.
7)
GEOs and SEOs, which are provided to assist the reader, are based on the following commodity price assumptions: $1,800 per ounce gold; $25.00 per ounce silver; $2,300 per ounce palladium; and $17.75 per pound cobalt; consistent with those used in estimating the Company's production guidance for 2021.
8)
Operations at these mines had been temporarily suspended during the second quarter of 2020 as a result of the COVID-19 pandemic. During the second half of 2020, all of the operations were restarted. Additionally, 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.
9)
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.
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.
Summary of Units Sold
Q2 2021
Q1 2021
Q4 2020
Q3 2020
Q2 2020
Q1 2020
Q4 2019
Q3 2019
Gold ounces sold
Salobo
57,296
51,423
53,197
59,584
68,487
74,944
58,137
63,064
Sudbury 2
6,945
3,691
7,620
7,858
7,414
4,822
7,394
7,600
Constancia 7
2,321
1,676
3,853
4,112
3,024
3,331
5,108
4,742
San Dimas 7
11,214
10,273
11,529
9,687
6,030
11,358
11,499
11,374
Stillwater 3
2,574
3,074
3,069
3,015
3,066
3,510
2,925
3,314
Other
Minto 4
2,359
2,390
1,540
-
-
-
-
-
777
5,694
2,577
5,435
5,845
4,783
2,440
4,160
4,672
Marmato
1,687
-
-
-
-
-
-
-
Total Other
9,740
4,967
6,975
5,845
4,783
2,440
4,160
4,672
Total gold ounces sold
90,090
75,104
86,243
90,101
92,804
100,405
89,223
94,766
Silver ounces sold
Peñasquito 7
1,844
2,174
1,417
1,799
1,917
2,310
1,268
1,233
Antamina 7
1,499
1,930
1,669
1,090
788
1,244
1,227
1,059
Constancia 7
295
346
442
415
254
350
672
521
Other
Los Filos 7
42
27
-
19
25
37
26
44
Zinkgruvan
355
293
326
492
376
447
473
459
Yauliyacu 7
601
1,014
15
580
704
9
561
574
Stratoni
167
117
169
134
77
163
120
126
Minto 4
29
26
20
-
-
-
-
-
Neves-Corvo
215
239
145
201
236
204
154
243
Aljustrel
208
257
280
148
252
123
121
139
Cozamin
168
173
-
-
-
-
-
-
Marmato
35
-
-
-
-
-
-
-
Keno Hill
33
12
-
-
-
-
-
-
777
109
49
93
121
100
41
62
86
Total Other
1,962
2,207
1,048
1,695
1,770
1,024
1,517
1,671
Total silver ounces sold
5,600
6,657
4,576
4,999
4,729
4,928
4,684
4,484
Palladium ounces sold
Stillwater 3
3,869
5,131
4,591
5,546
4,976
4,938
5,312
4,907
Cobalt pounds sold
Voisey's Bay
394,623
132,277
-
-
-
-
-
-
GEOs sold 5
176,700
175,419
155,665
166,611
164,844
175,154
161,066
163,314
SEOs sold 5
12,722
12,630
11,208
11,996
11,869
12,611
11,597
11,759
Cumulative payable units PBND 6
Gold ounces
65,943
69,533
70,555
75,750
79,632
88,383
98,475
85,335
Silver ounces
3,990
3,741
4,486
3,437
3,222
4,961
4,142
3,796
Palladium ounces
6,822
5,373
5,597
4,616
4,883
4,875
4,872
4,163
Cobalt pounds
777,304
819,819
-
-
-
-
-
-
GEO 5
137,746
136,441
140,008
129,391
130,623
163,521
162,225
143,380
SEO 5
9,366
9,242
10,081
9,316
9,405
11,774
11,680
10,323
Inventory on hand
Cobalt pounds
134,482
132,277
-
-
-
-
-
-
1)
All figures in thousands except cobalt pounds and gold and palladium ounces sold.
2)
Comprised of the Coleman, Copper Cliff, Garson, Creighton and Totten gold interests.
3)
Comprised of the Stillwater and East Boulder gold and palladium interests.
4)
The Minto mine was placed into care and maintenance from October 2018 to October 2019.
5)
GEOs and SEOs, which are provided to assist the reader, are based on the following commodity price assumptions: $1,800 per ounce gold; $25.00 per ounce silver; $2,300 per ounce palladium; and $17.75 per pound cobalt; consistent with those used in estimating the Company's production guidance for 2021.
6)
Payable gold, silver and palladium ounces as well as cobalt pounds produced but not yet delivered ("PBND") are based on management estimates. These figures may be updated in future periods as additional information is received.
7)
Operations at these mines had been temporarily suspended during the second quarter of 2020 as a result of the COVID-19 pandemic. During the second half of 2020, all of the operations were restarted.
Results of Operations
The operating results of the Company's reportable operating segments are summarized in the tables and commentary below.
Three Months Ended June 30, 2021
Units Produced²
Units
Sold
Average
Realized
Price
($'s
Per Unit)
Average
Cash Cost
($'s Per
Unit) 3
Average
Depletion
($'s Per
Unit)
Sales
Net
Earnings
Cash Flow
From
Operations
Total
Assets
Gold
Salobo
55,590
57,296
$
1,798
$
412
$
374
$
103,039
$
58,015
$
79,426
$
2,468,716
Sudbury 4
4,787
6,945
1,817
400
1,024
12,618
2,725
10,262
310,120
Constancia
5,519
2,321
1,798
408
315
4,174
2,496
3,227
104,310
San Dimas
11,478
11,214
1,798
618
322
20,167
9,627
13,242
175,275
Stillwater
2,962
2,574
1,798
326
397
4,629
2,769
3,791
222,069
Other 5
9,954
9,740
1,814
559
125
17,666
11,007
12,238
65,296
90,290
90,090
$
1,801
$
450
$
390
$
162,293
$
86,639
$
122,186
$
3,345,786
Silver
Peñasquito
2,026
1,844
$
26.65
$
4.29
$
3.55
$
49,133
$
34,682
$
41,223
$
336,314
Antamina
1,558
1,499
26.63
5.39
7.53
39,903
20,545
31,013
601,117
Constancia
468
295
26.65
6.02
7.56
7,865
3,858
6,088
212,197
Other 6
2,668
1,962
26.78
8.39
5.20
52,554
25,893
34,132
608,588
6,720
5,600
$
26.69
$
6.11
$
5.40
$
149,455
$
84,978
$
112,456
$
1,758,216
Palladium
Stillwater
5,301
3,869
$
2,797
$
503
$
442
$
10,822
$
7,164
$
8,876
$
237,407
Cobalt
Voisey's Bay
379,757
394,623
$
19.82
$
4.41
$
8.17
$
7,823
$
2,859
$
2,052
$
222,106
Operating results
$
330,393
$
181,640
$
245,570
$
5,563,515
Other
General and administrative
$
(18,465)
$
(26,566)
Finance costs
(1,357)
(978)
Other
3,420
(1,590)
Income tax
886
(21)
Total other
$
(15,516)
$
(29,155)
$
417,951
$
166,124
$
216,415
$
5,981,466
1)
Units produced and sold relative to gold, silver and palladium are reported in ounces, while cobalt is reported in pounds. All figures in thousands except cobalt pounds produced and sold, 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)
Comprised of the operating Coleman, Copper Cliff, Garson, Creighton and Totten gold interests and the non-operating Stobie and Victor gold interests.
5)
Comprised of the operating 777, Minto and Marmato gold interests, the non-operating Rosemont and Santo Domingo gold interests.
6)
Comprised of the operating Los Filos, Zinkgruvan, Yauliyacu, Stratoni, Neves-Corvo, Aljustrel, Minto, Keno Hill, Cozamin, Marmato and 777 silver interests and the non-operating Loma de La Plata, Pascua-Lama and Rosemont silver interests.
On a gold equivalent and silver equivalent basis, results for the Company for the three months ended June 30, 2021 were as follows:
Three Months Ended June 30, 2021
Ounces
Produced 1, 2
Ounces
Sold 2
Average
Realized
Price
($'s Per
Ounce)
Average
Cash Cost
($'s Per
Ounce) 3
Cash Operating Margin
($'s Per Ounce) 4
Average
Depletion
($'s Per
Ounce)
Gross
Margin
($'s Per
Ounce)
Gold equivalent basis 5
194,140
176,700
$ 1,870
$ 444
$ 1,426
$ 398
$ 1,028
Silver equivalent basis 5
13,978
12,722
$ 25.97
$ 6.17
$ 19.80
$ 5.53
$ 14.27
1)
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.
2)
Silver ounces produced and sold in thousands.
3)
Refer to discussion on non-IFRS measure (iii) at the end of this press release.
4)
Refer to discussion on non-IFRS measure (iv) at the end of this press release.
5)
GEOs and SEOs, which are provided to assist the reader, are based on the following commodity price assumptions: $1,800 per ounce gold; $25.00 per ounce silver; $2,300 per ounce palladium; and $17.75 per pound cobalt; consistent with those used in estimating the Company's production guidance for 2021.
Three Months Ended June 30, 2020
Units Produced²
Units
Sold
Average
Realized
Price
($'s
Per Unit)
Average
Cash Cost
($'s Per
Unit) 3
Average
Depletion
($'s Per
Unit)
Sales
Net
Earnings
Cash Flow
From
Operations
Total
Assets
Gold
Salobo
59,104
68,487
$
1,719
$
408
$
374
$
117,706
$
64,122
$
90,059
$
2,551,563
Sudbury 4
9,257
7,414
1,700
400
831
12,605
3,475
9,639
333,885
Constancia
3,470
3,024
1,719
404
338
5,196
2,954
3,975
108,260
San Dimas
6,074
6,030
1,719
609
315
10,364
4,791
6,691
188,888
Stillwater
3,222
3,066
1,719
303
449
5,269
2,963
4,339
227,042
Other 5
7,656
4,783
1,700
420
305
8,132
4,663
6,121
10,965
88,783
92,804
$
1,716
$
418
$
405
$
159,272
$
82,968
$
120,824
$
3,420,603
Silver
Peñasquito
967
1,917
$
16.55
$
4.26
$
3.24
$
31,714
$
17,335
$
23,549
$
360,998
Antamina
612
788
16.55
3.28
8.74
13,039
3,570
10,458
651,049
Constancia
254
254
16.55
5.96
7.63
4,203
752
2,689
223,583
Other 6
1,818
1,770
17.05
7.03
2.22
30,186
13,800
14,895
481,133
3,651
4,729
$
16.73
$
5.23
$
4.01
$
79,142
$
35,457
$
51,591
$
1,716,763
Palladium
Stillwater
5,759
4,976
$
1,917
$
353
$
428
$
9,540
$
5,657
$
7,786
$
245,727
Cobalt
Voisey's Bay
-
-
$
n.a.
$
n.a.
$
n.a.
$
-
$
-
$
-
$
227,510
Operating results
$
247,954
$
124,082
$
180,201
$
5,610,603
Other
General and administrative
$
(21,799)
$
(20,452)
Finance costs
(4,636)
(4,642)
Other
3,366
(3,295)
Income tax
4,799
(19)
Total other
$
(18,270)
$
(28,408)
$
523,441
$
105,812
$
151,793
$
6,134,044
1)
Units produced and sold relative to gold, silver and palladium are reported in ounces, while cobalt is reported in pounds. All figures in thousands except cobalt pounds produced and sold, 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)
Comprised of the operating Coleman, Copper Cliff, Garson, Creighton and Totten gold interests as well as the non-operating Stobie and Victor gold interests.
5)
Comprised of the operating Minto and 777 gold interests in addition to the non-operating Rosemont gold interest.
6)
Comprised of the operating Los Filos, Zinkgruvan, Yauliyacu, Stratoni, Neves-Corvo, Aljustrel, Minto and 777 silver interests as well as the non-operating Keno Hill, Loma de La Plata, Pascua-Lama and Rosemont silver interests.
On a gold equivalent and silver equivalent basis, results for the Company for the three months ended June 30, 2020 were as follows:
Three Months Ended June 30, 2020
Ounces
Produced 1, 2
Ounces
Sold 2
Average
Realized
Price
($'s Per
Ounce)
Average
Cash Cost
($'s Per
Ounce) 3
Cash Operating Margin
($'s Per Ounce) 4
Average
Depletion
($'s Per
Ounce)
Gross
Margin
($'s Per
Ounce)
Gold equivalent basis 5
146,857
164,844
$ 1,504
$ 396
$ 1,108
$ 356
$ 752
Silver equivalent basis 5
10,574
11,869
$ 20.89
$ 5.49
$ 15.40
$ 4.94
$ 10.46
1)
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.
2)
Silver ounces produced and sold in thousands.
3)
Refer to discussion on non-IFRS measure (iii) at the end of this press release.
4)
Refer to discussion on non-IFRS measure (iv) at the end of this press release.
5)
GEOs and SEOs, which are provided to assist the reader, are based on the following commodity price assumptions: $1,800 per ounce gold; $25.00 per ounce silver; $2,300 per ounce palladium; and $17.75 per pound cobalt; consistent with those used in estimating the Company's production guidance for 2021.
Non-IFRS Measures
Wheaton has included, throughout this document, certain non-IFRS performance measures, including (i) adjusted net earnings and adjusted net earnings per share; (ii) operating cash flow per share (basic and diluted); (iii) average cash costs of gold, silver and palladium on a per ounce basis and cobalt on a per pound basis, with the Company receiving its first deliveries of cobalt relative to its Voisey's Bay PMPA during the first quarter of 2021; and (iv) cash operating margin. The Company has removed the non-IFRS measure relative to net debt as Wheaton fully repaid its debt during the first quarter of 2021.
i.
Adjusted net earnings and adjusted net earnings per share are calculated by removing the effects of non-cash impairment charges, non-cash fair value (gains) losses and other one-time (income) expenses as well as the reversal of non-cash income tax expense (recovery) which is offset by income tax expense (recovery) recognized in the Statements of Shareholders' Equity and OCI, respectively. The Company believes that, in addition to conventional measures prepared in accordance with IFRS, management and certain investors use this information to evaluate the Company's performance.
The following table provides a reconciliation of adjusted net earnings and adjusted net earnings per share (basic and diluted).
Three Months Ended
June 30
(in thousands, except for per share amounts)
2021
2020
Net earnings
$
166,124
$
105,812
Add back (deduct):
(Gain) loss on fair value adjustment of share purchase warrants held
194
(333)
(Gain) loss on fair value adjustment of convertible notes receivable
(3,388)
(3,267)
Income tax expense (recovery) recognized in the Statement of Shareholders' Equity
(463)
(160)
Income tax expense (recovery) recognized in the Statement of OCI
(479)
(4,698)
Other
(362)
-
Adjusted net earnings
$
161,626
$
97,354
Divided by:
Basic weighted average number of shares outstanding
450,088
448,636
Diluted weighted average number of shares outstanding
451,203
450,042
Equals:
Adjusted earnings per share - basic
$
0.359
$
0.217
Adjusted earnings per share - diluted
$
0.358
$
0.216
ii.
Operating cash flow per share (basic and diluted) is calculated by dividing cash generated by operating activities by the weighted average number of shares outstanding (basic and diluted). The Company presents operating cash flow per share as management and certain investors use this information to evaluate the Company's performance in comparison to other companies in the precious metal mining industry who present results on a similar basis.
The following table provides a reconciliation of operating cash flow per share (basic and diluted).
Three Months Ended
June 30
(in thousands, except for per share amounts)
2021
2020
Cash generated by operating activities
$
216,415
$
151,793
Divided by:
Basic weighted average number of shares outstanding
450,088
448,636
Diluted weighted average number of shares outstanding
451,203
450,042
Equals:
Operating cash flow per share - basic
$
0.481
$ |