Wheaton Precious Metals Announces Second Quarter Results for 2018 and Declares Third Quarterly Dividend of 2018
FOR IMMEDIATE RELEASE TSX: WPM August 14, 2018 NYSE: WPM
WHEATON PRECIOUS METALS ANNOUNCES SECOND QUARTER RESULTS FOR 2018 AND DECLARES THIRD QUARTERLY DIVIDEND OF 2018
Vancouver, British Columbia – Wheaton Precious Metals™ Corp. (“Wheaton” or the “Company”) is pleased to announce its results for the second quarter ended June 30, 2018. All figures are presented in United States dollars unless otherwise noted.
In the second quarter of 2018, Wheaton had net earnings of $318 million, which included a $246 million gain on the disposal of the San Dimas silver stream. In the first half of 2018, Wheaton had record gold production from Salobo and generated over $260 million in cash flow. During the second quarter, Wheaton completed the acquisition of a cobalt stream on Vale’s Voisey’s Bay mine, and subsequent to the quarter, Wheaton closed a gold and palladium stream on Sibanye- Stillwater’s Stillwater and East Boulder mines.
Operational Overview
| Q2 2018 | Q2 2017 Change | ||
|---|---|---|---|
| Ounces produced Silver Gold Ounces sold Silver Gold | 7,192 (15.3)% 79,636 7.1 % 6,369 (6.2)% 71,965 21.1 % | ||
| 6,091 | |||
| 85,292 | |||
| 5,972 | |||
| 87,140 | |||
| Sales price per ounce Silver Gold Cash costs per ounce 1 Silver 1 Gold 1 Cash operating margin per ounce 1 Silver 1 Gold 1 | $ 17.09 (3.3)% $ 1,263 3.3 % $ 4.51 0.7 % $ 393 3.6 % $ 12.58 (4.8)% $ 870 3.2 % | ||
| $ | 16.52 | ||
| $ | 1,305 | ||
| $ | 4.54 | ||
| $ | 407 | ||
| $ | 11.98 | ||
| $ | 898 | ||
| Revenue Net earnings Per share Adjusted net earnings 1 Per share 1 Operating cash flows Per share 1 Dividends declared 1 Per share | $ | 212,400 | $ 199,684 6.4 % $ 67,612 370.5 % $ 0.15 380.0 % $ 66,624 9.2 % $ 0.15 8.8 % $ 124,681 8.4 % $ 0.28 10.7 % $ 30,926 29.0 % $ 0.07 28.6 % |
| $ | 318,142 | ||
| $ | 0.72 | ||
| $ | 72,722 | ||
| $ | 0.16 | ||
| $ | 135,200 | ||
| $ | 0.31 | ||
| $ | 39,888 | ||
| $ | 0.09 |
All amounts in thousands except gold ounces produced and sold, per ounce amounts and per share amounts.
- 2 -
Highlights
- The decrease in attributable silver production and the increase in attributable gold production for the three months ended June 30, 2018, was primarily due to the termination of the San Dimas silver purchase agreement and the entering into of the new San Dimas precious metals purchase agreement effective May 10, 2018, with the silver production being further impacted by the expiry of the streaming agreement relative to the Lagunas Norte, Veladero and Pierina mines on March 31, 2018, and lower production at Antamina primarily resulting from mine sequencing.
- The decrease in silver sales volume for the three months ended June 30, 2018, was due to the lower production levels, partially offset by positive changes in the balance of payable silver produced but not yet delivered to Wheaton.
- The increase in gold sales volume for the three months ended June 30, 2018, was primarily the result of increased production levels coupled with positive changes in the balance of payable gold produced but not yet delivered to Wheaton.
- Declared quarterly dividend of $0.09 per common share. This represents an increase of 29% relative to the comparable period in 2017.
- On May 10, 2018, First Majestic Silver Corp. ("First Majestic") announced that they had closed the previously announced acquisition of Primero Mining Corp. ("Primero"). In connection with this acquisition, the Company has terminated the San Dimas silver purchase agreement and entered into a new San Dimas precious metal purchase agreement with First Majestic, resulting in a gain on disposal of $246 million.
- On June 28, 2018, Wheaton completed the acquisition from Vale S.A. (“Vale”) of a fixed percentage of cobalt production from the Voisey’s Bay mine starting in January 2021.
Subsequent to the Quarter
- On July 25, 2018, the Company, through its wholly owned subsidiary Wheaton Precious Metals International Ltd. (“Wheaton International”), completed the acquisition from Sibanye Gold Limited ("Sibanye-Stillwater") of a fixed percentage of gold and palladium production from the Stillwater and East Boulder mines (collectively “Stillwater”) effective July 1, 2018.
- On July 17, 2018, the Company acquired 9.99% of the common shares of Adventus Zinc Corporation ("Adventus") and acquired a right of first refusal on any new streaming or royalty transactions on precious metals on the Adventus existing properties in Ecuador.
Reconfirming Production Guidance
- With the addition of the streams on Voisey’s Bay and Stillwater, Wheaton’s estimated attributable production in 2018 is forecast to be approximately 355,000 ounces of gold, 22.5 million ounces of silver, and 10,400 ounces of palladium.
- Estimated average annual attributable production over the next five years (including 2018) is anticipated to be approximately 385,000 ounces of gold, 25 million ounces of silver, 27,000 ounces of palladium, and starting in 2021, 2.1 million pounds of cobalt per year.
“Wheaton’s high-quality portfolio and strong margins generated over $260 million of operating cash flow in the first half of 2018,” said Randy Smallwood, President and Chief Executive Officer of Wheaton Precious Metals. “Since the beginning of the year, Wheaton made two substantial acquisitions with new streams on Voisey’s Bay and Stillwater. We expect Stillwater to contribute production and cash flow starting in the third quarter of 2018 and Voisey’s Bay starting in 2021.
- 3 -
These additions ideally fit within our existing portfolio as they are both high-margin and long-life mines with significant exploration potential. Given our sector-leading cash flow and revolving credit facility, Wheaton was able to consummate these transactions on an accretive basis for shareholders without having to access additional sources of capital. Over the past eight years, we have only raised $1.6 billion in equity, while at the same time invested over $6.5 billion into new streams and paid over $800 million in dividends.”
Financial Review
Revenues
Revenue was $212 million in the second quarter of 2018, on sales volume of 6.0 million ounces of silver and 87,100 ounces of gold. This represents a 6% increase from the $200 million of revenue generated in the second quarter of 2017 due primarily to (i) a 21% increase in the number of gold ounces sold; (ii) a 3% increase in the average realized gold price ($1,305 in Q2 2018 compared with $1,263 in Q2 2017); partially offset by (iii) a 6% decrease in the number of silver ounces sold; and (iv) a 3% decrease in the average realized silver price ($16.52 in Q2 2018 compared with $17.09 in Q2 2017).
Costs and Expenses
Average cash costs¹ in the second quarter of 2018 were $4.54 per silver ounce sold and $407 per gold ounce sold, as compared with $4.51 per silver ounce and $393 per gold ounce during the comparable period of 2017. This resulted in a cash operating margin¹ of $11.98 per silver ounce sold and $898 per gold ounce sold, a decrease of 5% per silver ounce sold and an increase of 3% per ounce of gold sold as compared with Q2 2017. The decrease in the silver cash operating margin was primarily due to a 3% decrease in the average realized silver price in Q2 2018 compared with Q2 2017 while the increase in the gold cash operating margin was primarily due to a 3% increase in the average realized gold price during the same period.
Earnings and Operating Cash Flows
Adjusted net earnings¹ and cash flow from operations in the second quarter of 2018 were $73 million ($0.16 per share) and $135 million ($0.31 per share¹), compared with adjusted net earnings¹ of $67 million ($0.15 per share) and cash flow from operations of $125 million ($0.28 per share¹) for the same period in 2017, an increase of 9% and 8%, respectively.
Balance Sheet
At June 30, 2018, the Company had approximately $93 million of cash on hand and $957 million outstanding under the Company's $2 billion revolving term loan (the "Revolving Facility"). Subsequent to June 30, 2018, the Company used its Revolving Facility to fund the $500 million for the acquisition of the stream on Stillwater.
Second Quarter Asset Highlights
During the second quarter of 2018, attributable production was 6.1 million ounces of silver and 85,300 ounces of gold, representing a decrease of 15% and an increase of 7%, as compared with the second quarter of 2017.
Operational highlights for the quarter ended June 30, 2018, based upon counterparties’ reporting, are as follows:
- 4 -
Salobo
In the second quarter of 2018, Salobo produced 63,900 ounces of attributable gold, an increase of approximately 11% relative to the second quarter of 2017 as higher recovery and throughput were partially offset by lower grades. The Salobo plant operated at 100% of capacity in the quarter.
Peñasquito
In the second quarter of 2018, Peñasquito produced 1.3 million ounces of attributable silver, a decrease of approximately 15% relative to the second quarter of 2017 due to lower production from the oxide heap leach. According to Goldcorp Inc.’s (“Goldcorp”) second quarter of 2018 MD&A, lower production was a result of the planned transition from high-grade ore in Phase 5D at the bottom of the Peñasco pit, to lower grade ore from stockpiles and the remnants of Phase 5D. Production in Phase 5D was reportedly completed during the second quarter of 2018, and equipment was refocused on accelerating stripping activities in Phase 6D and in the Chile Colorado pit.
According to Goldcorp, construction of the Pyrite Leach Project ("PLP") at Peñasquito has been completed with commissioning further accelerated to the third quarter of 2018, now two quarters ahead of schedule. As a result, Goldcorp has modified the production plan for the third quarter with lower than planned mill throughput and low mill head grades, exclusively from the surface stockpile, to accommodate the commissioning of a new major circuit, which is the preferred material to be processing during the commissioning phase where lower recoveries are expected. Goldcorp further notes that a resequencing to higher grades and mill tonnage in the fourth quarter, subsequent to the commissioning, is expected to allow the mine to meet its full year gold production objectives.
Antamina
In the second quarter of 2018, Antamina produced 1.5 million ounces of attributable silver, a decrease of approximately 23% relative to the second quarter of 2017 as expected due to mine sequencing in the open pit.
San Dimas
In the second quarter of 2018, San Dimas produced 5,700 ounces of attributable gold and 0.6 million ounces of attributable silver. On May 10, 2018, First Majestic announced that they had completed the previously announced acquisition of Primero. In connection with this acquisition, Wheaton International terminated the existing San Dimas silver purchase agreement with Primero (the “Primero SPA”) and entered into a new precious metals purchase agreement with First Majestic relating to the San Dimas mine (the "San Dimas PMPA"). Attributable silver production in the quarter was in relation to the Primero SPA, and attributable gold production was attributable to the San Dimas PMPA. Under the San Dimas PMPA, Wheaton is entitled to 25% of gold production plus an additional amount of gold equal to 25% of silver production converted to gold at a fixed gold to silver exchange ratio of 70:1 from the San Dimas mine2, and for each ounce of gold delivered, Wheaton will pay to First Majestic a delivery payment equal to the lesser of $600/oz, subject to a 1% annual inflationary adjustment, and the prevailing market price. First Majestic has provided a corporate guarantee and security limited to San Dimas assets. As part of the transaction, in addition to the new stream, Wheaton received 20,914,590 First Majestic common shares with a fair value of $151 million. As reflected in the Company’s second quarter financial results, the termination of the Primero SPA has resulted in a gain on disposal of $246 million to Wheaton.
Sudbury
In the second quarter of 2018, Vale’s Sudbury mines produced 4,900 ounces of attributable gold, a decrease of approximately 34% relative to the second quarter of 2017 primarily due to
- 5 -
lower grades and throughput. According to Vale’s second quarter of 2018 MD&A, the Coleman mine was in a maintenance shutdown from November 2017 to April 2018.
Constancia
In the second quarter of 2018, Constancia produced 0.6 million ounces of attributable silver and 3,200 ounces of attributable gold, an increase of approximately 9% and 37%, respectively, relative to the second quarter of 2017. Increased silver and gold production was primarily due to higher throughput and grades.
Other Silver
In the second quarter of 2018, total Other Silver attributable production was 2.2 million ounces, a decrease of approximately 6% relative to the second quarter of 2017. The decrease was driven primarily by the cessation of attributable production from the Lagunas Norte, Veladero, and Pierina mines as the silver purchase agreement with Barrick Gold Corp. (“Barrick”) related to these mines expired on March 31, 2018.
Other Gold
In the second quarter of 2018, total Other Gold attributable production was 7,500 ounces, a decrease of approximately 39% relative to the second quarter of 2017. The decrease was due primarily to lower production at both the Minto and 777 mines.
Produced But Not Yet Delivered 31 As at June 30, 2018, payable ounces attributable to the Company produced but not yet delivered³ amounted to 4.3 million payable silver ounces and 75,600 payable gold ounces, representing a decrease of 0.6 million payable silver ounces and 6,400 payable gold ounces during the three month period ended June 30, 2018. Payable silver ounces produced but not yet delivered decreased primarily as a result of decreases related to the San Dimas and Peñasquito silver interests partially offset by an increase related to the Yauliyacu silver interest. Payable gold ounces produced but not yet delivered decreased primarily as a result of a decrease related to the Salobo gold interest partially offset by increases related to the San Dimas and 777 gold interests. Payable ounces produced but not yet delivered to the Wheaton group of companies are expected to average approximately two months of annualized production for silver and two to three months for gold but may vary from quarter to quarter due to a number of mining operation factors including mine ramp-up and timing of shipments.
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.
Voisey’s Bay
On June 28, 2018, the Company entered into an agreement to acquire from Vale an amount of cobalt equal to 42.4% of the Voisey’s Bay cobalt production until the delivery of 31 million pounds of cobalt and 21.2% of cobalt production thereafter for the life of mine at a fixed 93.3% payable rate for a total upfront cash payment of $390 million. In addition, Wheaton will make delivery payments of 18% of the Metal Bulletin market price of cobalt (“cobalt spot price”) per pound of cobalt delivered under the agreement until such time as the upfront cash payment is reduced to zero, after which the per pound price paid will be 22% of the cobalt spot price per cobalt pound delivered. Delivery of cobalt production will commence after January 1, 2021.
- 6 -
Subsequent to the Quarter
Stillwater
On July 25, 2018, Wheaton International entered into an agreement to acquire from Sibanye- Stillwater an amount of gold and palladium equal to a fixed percentage of gold and palladium production from Stillwater starting on July 1, 2018. Wheaton International has paid a total upfront cash payment of $500 million and is entitled to an amount of gold equal to 100% of Stillwater gold production for the life of mine and an amount of palladium equal to: 4.5% of Stillwater palladium production until 375,000 ounces are delivered; thereafter, 2.25% of Stillwater palladium production until 550,000 are delivered; and 1% of Stillwater palladium production thereafter for the life of mine. In addition, Wheaton International will generally make delivery payments of 18% of spot gold and palladium prices until such time as the upfront cash payment is reduced to zero, after which the delivery payments will increase to 22% spot.
Acquisition of Adventus Shares
On July 17, 2018, the Company acquired 7,093,392 common shares of Adventus in a private placement transaction, for a total purchase price of Cdn$6 million, representing 9.99% of Adventus’ issued and outstanding common shares. Concurrently, the Company acquired a right of first refusal on any new streaming or royalty transactions on precious metals on the Adventus existing properties in Ecuador and a right of first offer on any subsequently acquired properties in Ecuador.
Dividend
Third Quarterly Dividend
The third quarterly cash dividend for 2018 of US$0.09 will be paid to holders of record of Wheaton Precious Metals common shares as of the close of business on August 29, 2018 and will be distributed on or about September 13, 2018.
Under the Company’s dividend policy, the quarterly dividend per common share will be equal to 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.
The declaration, timing, amount and payment of future dividends remain at the discretion of the Board of Directors. This dividend qualifies as an ‘eligible dividend’ for Canadian income tax purposes.
Dividend Reinvestment Plan
The Company has previously implemented a Dividend Reinvestment Plan (“DRIP”). Participation in the DRIP is optional. For the purposes of this third quarterly dividend, the Company has elected to issue common shares under the DRIP through treasury at a 3% discount to the Average Market Price, as defined in the DRIP. However, the Company may, from time to time, in its discretion, change or eliminate the discount applicable to Treasury Acquisitions, as defined in the DRIP, or direct that such common shares be purchased in Market Acquisitions, as defined in the DRIP, at the prevailing market price, any of which would be publicly announced.
The DRIP and enrollment forms are available for download on the Company’s website at www.wheatonpm.com, accessible by quick links directly from the home page, and can also be found in the ‘investors’ section, under the ‘dividends’ tab.
- 7 -
Registered shareholders may also enroll in the DRIP online through the plan agent’s selfservice web portal at:
https://www.canstockta.com/en/InvestorServices/Investor_Information/Issuer_List/IssuerDet ail.jsp?companyCode=1501.
Beneficial shareholders should contact their financial intermediary to arrange enrollment. All shareholders considering enrollment in the DRIP should carefully review the terms of the DRIP and consult with their advisors as to the implications of enrollment in the DRIP.
This press release is not an offer to sell or a solicitation of an offer of securities. A registration statement relating to the DRIP has been filed with the U.S. Securities and Exchange Commission and may be obtained under the Company’s profile on the U.S. Securities and Exchange Commission’s website at http://www.sec.gov. A written copy of the prospectus included in the registration statement may be obtained by contacting the Corporate Secretary of the Company at 1021 West Hastings Street, Suite 3500, Vancouver, British Columbia, Canada V6E 0C3.
Outlook – Reconfirming Guidance
Wheaton reconfirms its estimated attributable production forecast for 2018 of approximately 355,000 ounces of gold, 22.5 million ounces of silver, and 10,400 ounces of palladium. Estimated average annual attributable production over the next five years (including 2018) is anticipated to be approximately 385,000 ounces of gold, 25 million ounces of silver, 27,000 ounces of palladium, and starting in 2021, 2.1 million pounds of cobalt per year. As a reminder, Wheaton does not include any production from Barrick’s Pascua-Lama project or Hudbay’s Rosemont project in its estimated average five-year production guidance.
From a liquidity perspective, the $93 million of cash and cash equivalents as at June 30, 2018 combined with the liquidity provided by the available credit under the $2 billion Revolving Facility and ongoing operating cash flows positions the Company well to fund all outstanding commitments and known contingencies as well as providing flexibility to acquire additional accretive precious metal stream interests.
Webcast and Conference Call Details
A conference call and webcast will be held Wednesday, August 15, 2018, 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: 888-231-8191 Dial from outside Canada or the US: 647-427-7450 Pass code: 8248656 Live audio webcast: www.wheatonpm.com
Participants should dial in five to ten minutes before the call.
The conference call will be recorded and available until August 22, 2018 at 11:59 pm (Eastern Time). 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: 855-859-2056
- 8 -
Dial from outside Canada or the US: 416-849-0833 Pass code: 8248656 Archived audio webcast: www.wheatonpm.com
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, Vice President, Mining Operations for Wheaton Precious Metals, 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.
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 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.
3 Payable silver and gold ounces produced but not yet delivered are based on management estimates and may be updated in future periods as additional information is received.
- 9 -
Condensed Interim Consolidated Statements of Earnings
Three Months Ended Six Months Ended June 30 June 30
| (US dollars and shares in thousands, except per share amounts - unaudited) | 2017 | 2017 | ||||||
| 2018 | 2018 | |||||||
| Sales | $ 199,684 | $ 397,635 | ||||||
| $ | 212,400 | $ | 411,652 | |||||
| Cost of sales Cost of sales, excluding depletion Depletion | $ 56,981 59,772 | $ 115,272 123,715 | ||||||
| $ | 62,580 | $ | 118,994 | |||||
| 62,494 | 119,759 | |||||||
| Total cost of sales | $ 116,753 | $ 238,987 | ||||||
| $ | 125,074 | $ | 238,753 | |||||
| Gross margin | $ 82,931 | $ 158,648 | ||||||
| $ | 87,326 | $ | 172,899 | |||||
| Other expenses (income) General and administrative 1 Gain on disposal of mineral stream interest Interest expense Unrealized fair value losses (gains), net Other income Other expense Foreign exchange loss (gain) | $ 9,069 - 6,482 - (1,075) 1,358 41 | $ 16,967 - 12,854 - (2,173) 2,507 85 | ||||||
| $ | 11,972 | $ | 21,729 | |||||
| (245,715) | (245,715) | |||||||
| 5,659 | 11,249 | |||||||
| 295 | 2,165 | |||||||
| (1,538) | (2,372) | |||||||
| 1,709 | 3,430 | |||||||
| 26 | (143) | |||||||
| $ 15,875 | $ 30,240 | |||||||
| $ | (227,592) | $ | (209,657) | |||||
| Earnings before income taxes Income tax recovery | $ 67,056 556 | $ 128,408 428 | ||||||
| $ | 314,918 | $ | 382,556 | |||||
| 3,224 | 3,709 | |||||||
| Net earnings | $ 67,612 | $ 128,836 | ||||||
| $ | 318,142 | $ | 386,265 | |||||
| Basic earnings per share Diluted earnings per share Weighted average number of shares outstanding Basic Diluted | $ 0.15 $ 0.15 441,784 442,370 | $ 0.29 $ 0.29 441,635 442,168 | ||||||
| $ | 0.72 | $ | 0.87 | |||||
| $ | 0.72 | $ | 0.87 | |||||
| 443,191 | 442,961 | |||||||
| 443,770 | 443,453 | |||||||
| 1) Equity settled stock based compensation (a non-cash item) included in general and administrative expenses. | 1,394 | 1,273 | 2,643 | 2,469 | ||||
| $ | $ | $ | $ |
- 10 -
Condensed Interim Consolidated Balance Sheets
| (US dollars in thousands - unaudited) | As at June 30 | As at December 31 2017 | |||
|---|---|---|---|---|---|
| 2018 | |||||
| Assets Current assets Cash and cash equivalents Accounts receivable Other | $ 98,521 3,194 1,700 | ||||
| $ | 92,661 | ||||
| 6,875 | |||||
| 3,580 | |||||
| Total current assets | $ | 103,116 | $ 103,415 | ||
| Non-current assets Mineral stream interests Early deposit mineral stream interests Mineral royalty interest Long-term equity investments Investment in associates Convertible note receivable Other | $ 5,423,277 21,722 9,107 95,732 2,994 15,777 11,289 | ||||
| $ | 5,785,795 | ||||
| 25,990 | |||||
| 9,107 | |||||
| 261,172 | |||||
| 2,793 | |||||
| 13,723 | |||||
| 14,416 | |||||
| Total non-current assets | $ | 6,112,996 | $ 5,579,898 | ||
| Total assets | $ | 6,216,112 | $ 5,683,313 | ||
| Liabilities Current liabilities Accounts payable and accrued liabilities Current portion of performance share units Other | $ 12,118 - 25 | ||||
| $ | 20,008 | ||||
| 1,638 | |||||
| 22 | |||||
| Total current liabilities | $ | 21,668 | $ 12,143 | ||
| Non-current liabilities Bank debt Deferred income taxes Performance share units | $ 770,000 76 1,430 | ||||
| $ | 956,500 | ||||
| 96 | |||||
| 3,233 | |||||
| Total non-current liabilities | $ | 959,829 | $ 771,506 | ||
| Total liabilities | $ | 981,497 | $ 783,649 | ||
| Shareholders' equity Issued capital Reserves Retained earnings | $ 3,472,029 77,007 1,350,628 | ||||
| $ | 3,489,643 | ||||
| 87,819 | |||||
| 1,657,153 | |||||
| Total shareholders' equity | $ | 5,234,615 | $ 4,899,664 | ||
| Total liabilities and shareholders' equity | $ | 6,216,112 | $ 5,683,313 |
- 11 -
Condensed Interim Consolidated Statements of Cash Flows
Three Months Ended Six Months Ended June 30 June 30
| (US dollars in thousands - unaudited) | 2017 | 2017 $ 128,836 124,202 - 12,854 2,469 (457) (705) - - - (163) (734) (8,929) | ||||
| 2018 | 2018 | |||||
| Operating activities Net earnings Adjustments for Depreciation and depletion Gain on disposal of mineral stream interest Interest expense Equity settled stock based compensation Performance share units Deferred income tax expense (recovery) Loss on fair value adjustment of share purchase warrants held Share in losses of associate Fair value adjustment on convertible note receivable Investment income recognized in net earnings Other Change in non-cash working capital | $ 67,612 60,016 - 6,482 1,273 (23) (820) - - - (87) 135 (3,466) | |||||
| $ | 318,142 | $ | 386,265 | |||
| 62,727 | 120,232 | |||||
| (245,715) | (245,715) | |||||
| 5,659 | 11,249 | |||||
| 1,394 | 2,643 | |||||
| 3,316 | 3,500 | |||||
| (3,253) | (3,760) | |||||
| 12 | 111 | |||||
| - | 201 | |||||
| 283 | 2,054 | |||||
| (681) | (1,266) | |||||
| 287 | 513 | |||||
| (1,791) | (4,894) | |||||
| Cash generated from operations before interest paid and received Interest paid Interest received | $ | 140,380 | $ 131,122 (6,513) 72 | $ | 271,133 | $ 257,373 (12,902) 133 |
| (5,459) | (11,055) | |||||
| 279 | 462 | |||||
| Cash generated from operating activities | $ 124,681 | $ 244,604 | ||||
| $ | 135,200 | $ | 260,540 | |||
| Financing activities Bank debt repaid Bank debt drawn Credit facility extension fees Share purchase options exercised Dividends paid | $ (111,000) - (5) 280 (52,108) | $ (240,000) - (1,305) 1,002 (52,108) | ||||
| $ | (79,000) | $ | (186,000) | |||
| 372,500 | 372,500 | |||||
| (5) | (1,205) | |||||
| 878 | 1,027 | |||||
| (64,589) | (64,589) | |||||
| Cash (used for) generated from financing activities | $ (162,833) | $ (292,411) | ||||
| $ | 229,784 | $ | 121,733 | |||
| Investing activities Mineral stream interests Early deposit mineral stream interests Proceeds on disposal of mineral stream interests 1 Acquisition of long-term investments Dividend income received Other | $ - (15) - - 15 (32) | $ - (894) 1,022 - 30 (86) | ||||
| $ | (610,235) | $ | (610,235) | |||
| (4,255) | (4,458) | |||||
| 230,000 | 230,000 | |||||
| (1,016) | (1,016) | |||||
| 20 | 40 | |||||
| (2,384) | (2,425) | |||||
| Cash used for investing activities | $ (32) | $ 72 | ||||
| $ | (387,870) | $ | (388,094) | |||
| Effect of exchange rate changes on cash and cash equivalents | $ 10 | $ 15 | ||||
| $ | (21) | $ | (39) | |||
| Decrease in cash and cash equivalents Cash and cash equivalents, beginning of period | $ | (22,907) | $ (38,174) 114,749 | $ | (5,860) | $ (47,720) 124,295 |
| 115,568 | 98,521 | |||||
| Cash and cash equivalents, end of period | $ 76,575 | $ 76,575 | ||||
| $ | 92,661 | $ | 92,661 |
1) During the three months ended March 31, 2017, the Company received an additional $1 million settlement related to the November 4, 2014 bankruptcy of Mercator Minerals Ltd. (“Mercator”) with whom Wheaton Precious Metals had a silver purchase agreement relative to Mercator’s Mineral Park mine in the United States.
- 12 -
Summary of Ounces Produced
| Q4 2017 Q3 2017 Q2 2017 Q1 2017 Q4 2016 Q3 2016 | ||||||||
|---|---|---|---|---|---|---|---|---|
| Q2 2018 | Q1 2018 | |||||||
| Silver ounces produced 2 San Dimas 3 Peñasquito Antamina Constancia Other Los Filos Zinkgruvan Yauliyacu Stratoni Minto Neves-Corvo Aljustrel Cozamin 4 Lagunas Norte 5 Pierina 5 Veladero 5 777 | 1,324 1,043 973 623 1,429 1,264 1,561 1,641 1,483 1,339 1,328 1,487 1,467 1,735 1,888 1,464 1,599 1,469 670 618 546 540 723 749 48 43 42 32 33 44 619 710 493 538 557 449 335 588 607 562 379 721 131 137 171 166 187 206 30 43 42 56 100 153 305 341 316 330 312 279 - - - - - - - - 17 397 265 239 253 243 218 210 234 215 111 107 114 137 117 50 211 201 144 158 174 160 146 145 138 96 152 166 | |||||||
| 607 | 1,606 | |||||||
| 1,267 | 1,450 | |||||||
| 1,458 | 1,339 | |||||||
| 596 | 646 | |||||||
| 39 | 34 | |||||||
| 453 | 565 | |||||||
| 719 | 550 | |||||||
| 211 | 137 | |||||||
| 30 | 35 | |||||||
| 421 | 405 | |||||||
| 138 | - | |||||||
| - | - | |||||||
| - | 217 | |||||||
| - | 107 | |||||||
| - | 265 | |||||||
| 152 | 146 | |||||||
| Total Other | 2,163 | 2,461 | 2,189 2,558 2,302 2,682 2,510 2,682 | |||||
| Total silver ounces produced | 7,211 7,595 7,192 6,648 7,589 7,651 | |||||||
| 6,091 | 7,502 | |||||||
| Gold ounces produced ² Sudbury 6 Salobo Constancia San Dimas 3 Other Minto 777 | 8,568 8,519 7,468 9,182 8,901 10,779 76,153 72,980 57,514 58,009 77,787 70,776 2,947 2,498 2,332 2,431 3,151 3,737 - - - - - - 3,328 6,105 6,063 9,734 10,906 20,184 5,478 5,114 6,259 4,422 10,919 10,140 | |||||||
| 4,894 | 3,511 | |||||||
| 63,949 | 61,513 | |||||||
| 3,187 | 3,315 | |||||||
| 5,726 | - | |||||||
| 2,554 | 2,707 | |||||||
| 4,982 | 5,645 | |||||||
| Total Other | 7,536 | 8,352 | 8,806 11,219 12,322 14,156 21,825 30,324 | |||||
| Total gold ounces produced | 96,474 95,216 79,636 83,778 111,664 115,616 | |||||||
| 85,292 | 76,691 | |||||||
| SEOs produced 7 GEOs produced 7 | 14,572 14,823 13,009 12,513 15,526 15,521 190,979 195,263 178,100 178,766 218,429 228,001 | |||||||
| 12,829 | 13,583 | |||||||
| 162,388 | 171,310 | |||||||
| Gold / Silver Ratio 8 | ||||||||
| 79.0 | 79.3 | 76.3 | 75.9 | 73.0 | 70.0 | 71.1 | 68.1 | |
| Average payable rate - silver 2 Average payable rate - gold 2 | 90.3% 90.3% 91.1% 89.7% 91.5% 91.0% 94.8% 94.8% 94.5% 94.7% 95.4% 95.0% | |||||||
| 87.0% | 89.8% | |||||||
| 94.7% | 94.4% |
1) All figures in thousands except gold ounces produced.
2) Ounces produced represent the quantity of silver and gold contained in concentrate or doré prior to smelting or refining deductions. Production figures and average payable rates are based on information provided by the operators of the mining operations to which the silver or gold 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) On May 10, 2018 the Company terminated the San Dimas silver purchase agreement and concurrently entered into the San Dimas precious metal purchase agreement.
4) The Cozamin precious metal purchase agreement expired on April 4, 2017.
5) The Lagunas Norte, Pierina and Veladero precious metal purchase agreements expired on March 31, 2018.
6) Comprised of the Coleman, Copper Cliff, Garson, Stobie, Creighton and Totten gold interests. The Stobie gold interest was placed into care and maintenance as of May 2017.
7) Silver equivalent ounces (SEOs) and gold equivalent ounces (GEOs), which are provided to assist the reader, are calculated by converting gold (in the case of SEOs) or silver (in the case of GEOs) using the ratio of the average price of silver to the average price of gold per the London Bullion Metal Exchange during the period.
8) The gold / silver ratio is the ratio of the average price of gold to the average price of silver per the London Bullion Metal Exchange during the period.