VANCOUVER, BC, Aug. 12, 2020 /CNW/ – Designated News Release – “Wheaton’s high-quality portfolio of assets delivered solid results in the first half of 2020 generating over $500 million in revenue and nearly $330 million in operating cash flow. While production in the second quarter was impacted by temporary shutdowns of some operations as a result of the COVID-19 pandemic, sales volumes remained strong, resulting in a record 322,000 gold equivalent ounces sold in the first half of 2020,” said Randy Smallwood, President and Chief Executive Officer of Wheaton Precious Metals. “At Wheaton, our success is not only measured in terms of financial results, but also in our ability to make a difference. In that regard, during the quarter we established a dedicated fund to help address the impacts of COVID-19, which to date has helped to provide food security, medical services and supplies, and economic opportunities to those in need. The majority of these funds are dedicated to the communities around our partners’ operations, and not only help to alleviate the near-term impacts of the pandemic, but also leave positive, sustainable benefits.”
Over $151 million in operating cash flow in the quarter, an increase of nearly 40%.
Net debt1 reduced by $80 million resulting in a net debt position of $509 million.
Attributable gold equivalent2 production was 140,000 ounces in the second quarter, with the reduction being due to the temporary shutdown of various mines resulting from COVID-19.
Signed a non-binding term sheet on the Marmato Project with Caldas Gold Corp.
Declared quarterly dividend1 of $0.10 per common share.
Donated $2 million of the previously announced $5 million Community Support and Response Fund dedicated to combatting the COVID-19 pandemic.
(all figures in US dollars unless otherwise noted)
Q2 2020
Q2 2019
Change
Ounces produced
Gold
88,631
100,908
(12.2)%
Silver
3,650
4,821
(24.3)%
Palladium
5,759
5,736
0.4 %
Gold equivalent 2
140,112
166,399
(15.8)%
Ounces sold
Gold
92,804
90,077
3.0 %
Silver
4,729
4,241
11.5 %
Palladium
4,976
5,273
(5.6)%
Gold equivalent 2
156,188
148,004
5.5 %
Revenue
$
247,954
$
189,466
30.9 %
Net earnings (loss)
$
105,812
$
(124,694)
n.a
Per share
$
0.236
$
(0.280)
n.a
Adjusted net earnings1
$
97,354
$
41,958
132.0 %
Per share 1
$
0.217
$
0.094
130.5 %
Operating cash flows
$
151,793
$
109,258
38.9 %
Per share 1
$
0.338
$
0.245
38.0 %
Dividends paid 1
$
44,861
$
40,133
11.8 %
Per share
$
0.10
$
0.09
11.1 %
All amounts in thousands except gold, palladium and gold equivalent ounces produced and sold, per ounce amounts and per share amounts.
Mexico and Peru on which the Company has precious metal purchase agreements (“PMPA”s) were temporarily suspended due to government restrictions focused on reducing the spread of COVID-19, consisting of the Constancia, Yauliyacu, San Dimas, Los Filos, Peñasquito and Antamina mines. The revised 2020 and long-term forecasts assume that operations will continue throughout the remainder of the year without major interruptions. Wheaton’s long-term production forecast remains unchanged at 750,000 gold equivalent ounces (“GEO”s) per year on average between 2020 and 2024.
Metal Produced3
Revised 2020
Forecast
Original 2020
Forecast
Annual average
(2020-2024)
Gold Ounces
365,000 to 385,000
390,000 to 410,000
Silver Ounces (‘000s)
21,500 to 22,500
22,000 to 23,500
Palladium Ounces
23,000 to 24,500
23,000 to 24,500
Gold Equivalent Ounces2
655,000 to 685,000
685,000 to 725,000
750,000
June 22, 2020, the Company announced that it had signed a non-binding term sheet with Caldas Gold Corp. (“Caldas Gold”) to enter into a PMPA for the Marmato Project located in Colombia. Under the terms of the proposed PMPA, the Company will acquire 6.5% of the gold production and 100% of the silver production until 190,000 ounces of gold and 2.15 million ounces of silver have been delivered, after which the stream drops to 3.25% of the gold production and 50% of the silver production for the life of mine. Under the proposed PMPA, the Company will pay a total cash consideration of $110 million, $38 million of which is payable upon closing and the remaining portion of which is payable during the construction of the Marmato Deep Zone project, subject to receipt of required permits and licenses, sufficient financing having been obtained to cover total expected capital expenditures, and other customary conditions. In addition, the Company will make ongoing delivery payments equal to approximately 20% of the spot prices over the life of the mine. The entering into of the PMPA is subject to, among other matters, the negotiation and completion of definitive documentation.
$5 million Community Support and Response Fund (the “CSR Fund”) to support the 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 operates and around the mines from which Wheaton receives precious metals. 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, 2020, the Company has made donations totalling $2 million under this program.
$248 million in the second quarter of 2020 representing a 31% increase from the second quarter of 2019 due primarily to a 24% increase in the average realized gold equivalent² price; and a 6% increase in the number of gold equivalent² ounces sold.
$418 per gold equivalent² ounce as compared to $412 in Q2 2019. This resulted in a cash operating margin¹ of $1,170 per gold equivalent² ounce sold, an increase of 35% as compared with Q2 2019.
June 30, 2020)
Approximately $132 million of cash on hand.
$641 million outstanding under the Company’s $2 billion revolving term loan (the “Revolving Facility”).
During Q2 2020, the Company has repaid $75 million under the Revolving Facility.
During Q2 2020, the net debt¹ was reduced by $80 million to $509 million.
The average effective interest rate for Q2 2020 was 1.97%.
March 2020, with their gradual resumption starting in May 2020. Vale reports that the expansion remains on track to start up in the first half of 2022.
San Dimas: In the second quarter of 2020, San Dimas produced 6,100 ounces of attributable gold, a decrease of approximately 47% relative to the second quarter of 2019 primarily due to lower throughput coupled with the impact of revising the silver to gold conversion ratio from 70:1 to 90:1 effective April 1, 2020, as per the PMPA. Operations at the San Dimas mine were temporarily suspended during the quarter resulting from the COVID-19 pandemic, with operations resuming after the Mexican government’s decision to allow mining to restart on May 23, 2020. In addition, First Majestic Silver (“First Majestic”) reports that mill modernization and optimization programs have resumed at San Dimas, including the mid-May delivery of the 3,000 tonnes per day high intensity grinding mill (“HIG”) and several components. As a result of the temporary suspension during the quarter, First Majestic expects the assembly and installation of the new HIG mill to be completed in the second quarter of 2021.
May 26, 2020, and ramped to full production in June.
Constancia: In the second quarter of 2020, Constancia produced 0.3 million ounces of attributable silver and 3,500 ounces of attributable gold, a decrease of approximately 54% and 23%, respectively, relative to the second quarter of 2019, primarily due to lower throughput as operations at the mine were temporarily suspended during the quarter as a result of the COVID-19 pandemic. As per Wheaton’s PMPA with Hudbay Minerals Inc., the failure to achieve a minimum level of throughput at the Pampacancha deposit during 2019 entitles Wheaton to an additional 8,020 ounces of gold in 2020 (received in quarterly installments), of which 2,005 ounces of gold was received during the second quarter of 2020 and included as production.
Minto mine.
June 24, 2020, its intent to recommence mining operations in the Keno Hill Silver District (“Keno Hill”) with ore production, mill commissioning, and concentrate sales planned for Q4 2020. Subsequent to the quarter, Alexco announced that it had received the final amended and renewed Water Use License for Keno Hill. Wheaton is entitled to 25% of the payable silver production from Keno Hill. In order to help facilitate the resumption of mining, Wheaton agreed to modify the PMPA as it relates to the delivery payment per ounce of silver in exchange for 2 million common share purchase warrants from Alexco.
June 30, 2020, payable ounces attributable to the Company produced but not yet delivered amounted to:
79,500 payable gold ounces, a decrease of 8,900 ounces during Q2 2020, primarily due to a draw down during the period relative to the Salobo mine.
3.1 million payable silver ounces, a decrease of 1.8 million ounces during Q2 2020, primarily due to decreases during the period relative to the Peñasquito, Antamina and Yauliyacu mines, all of which had their operations temporarily suspended during the quarter.
4,900 payable palladium ounces, virtually unchanged from the balance at Q1 2020.
Detailed mine-by-mine production and sales figures can be found in the Appendix to this press release and in Wheaton’s consolidated MD&A in the ‘Results of Operations and Operational Review’ section.
Thursday, August 13, 2020, starting at 11:00 am (Eastern Time) to discuss these results. To participate in the live call, please use one of the following methods:
Participants should dial in five to ten minutes before the call.
August 20, 2020 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:
www.sedar.com.” data-reactid=”72″>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.
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.
http://www.wheatonpm.com/Company/corporate-governance/default.aspx. ” data-reactid=”74″>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.
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 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.
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 In order to maintain consistency with the original guidance, commodity price assumptions for the gold equivalent production and sales in 2020 are unchanged at $1,500 / ounce gold, $18 / ounce silver, and $2,000 / ounce palladium.
3 Ounces produced represent the quantity of silver, gold, palladium and cobalt contained in concentrate or doré prior to smelting or refining deductions.
4 Payable gold, silver and palladium ounces produced but not yet delivered are based on management estimates only and rely upon information provided by the owners and operators of mining operations and may be revised and updated in future periods as additional information is received.
Three Months Ended June 30
Six Months Ended June 30
(US dollars and shares in thousands, except per share amounts – unaudited)
2020
2019
2020
2019
Sales
$
247,954
$
189,466
$
502,744
$
414,515
Cost of sales
Cost of sales, excluding depletion
$
65,211
$
60,957
$
132,119
$
130,171
Depletion
58,661
61,404
123,503
129,785
Total cost of sales
$
123,872
$
122,361
$
255,622
$
259,956
Gross margin
$
124,082
$
67,105
$
247,122
$
154,559
General and administrative expenses
21,799
12,249
34,981
28,784
Impairment of mineral stream interests
–
165,912
–
165,912
Earnings from operations
$
102,283
$
(111,056)
$
212,141
$
(40,137)
Other (income) expense
(3,366)
3,090
(3,963)
2,824
Earnings before finance costs and income taxes
$
105,649
$
(114,146)
$
216,104
$
(42,961)
Finance costs
4,636
13,306
11,753
27,252
Earnings before income taxes
$
101,013
$
(127,452)
$
204,351
$
(70,213)
Income tax recovery (expense)
4,799
2,758
(3,643)
2,868
Net earnings (loss)
$
105,812
$
(124,694)
$
200,708
$
(67,345)
Basic earnings per share
$
0.236
$
(0.280)
$
0.448
$
(0.151)
Diluted earnings per share
$
0.235
$
(0.279)
$
0.447
$
(0.151)
Weighted average number of shares outstanding
Basic
448,636
445,769
448,217
445,083
Diluted
450,042
446,470
449,513
445,815
As at June 30
As at December 31
(US dollars in thousands – unaudited)
2020
2019
Assets
Current assets
Cash and cash equivalents
$
131,764
$
103,986
Accounts receivable
3,244
7,138
Current taxes receivable
–
124
Other
45,267
43,504
Total current assets
$
180,275
$
154,752
Non-current assets
Mineral stream interests
$
5,610,603
$
5,734,106
Early deposit mineral stream interests
32,491
31,741
Mineral royalty interest
3,036
3,036
Long-term equity investments
262,798
309,757
Investment in associates
479
882
Convertible notes receivable
24,333
21,856
Property, plant and equipment
6,647
7,311
Other
13,382
14,566
Total non-current assets
$
5,953,769
$
6,123,255
Total assets
$
6,134,044
$
6,278,007
Liabilities
Current liabilities
Accounts payable and accrued liabilities
$
9,447
$
11,794
Current taxes payable
35
–
Current portion of performance share units
14,355
10,668
Current portion of lease liabilities
718
724
Other
41,513
41,514
Total current liabilities
$
66,068
$
64,700
Non-current liabilities
Bank debt
$
640,500
$
874,500
Lease liabilities
3,054
3,528
Deferred income taxes
186
148
Performance share units
6,215
8,401
Pension liability
1,078
810
Total non-current liabilities
$
651,033
$
887,387
Total liabilities
$
717,101
$
952,087
Shareholders’ equity
Issued capital
$
3,626,211
$
3,599,203
Reserves
113,658
160,701
Retained earnings
1,677,074
1,566,016
Total shareholders’ equity
$
5,416,943
$
5,325,920
Total liabilities and shareholders’ equity
$
6,134,044
$
6,278,007
Three Months Ended June 30
Six Months Ended June 30
(US dollars in thousands – unaudited)
2020
2019
2020
2019
Operating activities
Net earnings (loss)
$
105,812
$
(124,694)
$
200,708
$
(67,345)
Adjustments for
Depreciation and depletion
59,140
61,871
124,492
130,745
Impairment charges
–
167,561
362
167,561
Interest expense
3,515
12,434
9,494
25,586
Equity settled stock based compensation
1,305
1,456
2,808
2,813
Performance share units
(868)
793
2,409
201
Pension expense
233
–
268
–
Income tax expense (recovery)
(4,799)
(2,758)
3,643
(2,868)
Loss on fair value adjustment of share purchase warrants held
(333)
7
(262)
7
Share in losses of associate
–
–
41
62
Fair value (gain) loss on convertible note receivable
(3,267)
1,934
(2,477)
1,063
Investment income recognized in net earnings
(37)
(297)
(155)
(539)
Other
264
242
(456)
670
Change in non-cash working capital
(5,505)
4,659
(885)
(2,511)
Cash generated from operations before income taxes and interest
$
155,460
$
123,208
$
339,990
$
255,445
Income taxes recovered (paid)
(19)
(24)
70
(3,586)
Interest paid
(3,685)
(14,200)
(10,833)
(24,907)
Interest received
37
274
154
500
Cash generated from operating activities
$
151,793
$
109,258
$
329,381
$
227,452
Financing activities
Bank debt repaid
$
(75,000)
$
(88,000)
$
(234,000)
$
(168,500)
Credit facility extension fees
(7)
–
(1,367)
(1,100)
Share purchase options exercised
11,094
5,502
18,016
20,393
Lease payments
(139)
(153)
(306)
(323)
Dividends paid
(83,003)
(63,515)
(83,003)
(63,515)
Cash (used for) generated from financing activities
$
(147,055)
$
(146,166)
$
(300,660)
$
(213,045)
Investing activities
Mineral stream interests
$
–
$
–
$
–
$
(174)
Early deposit mineral stream interests
–
(750)
(750)
(750)
Acquisition of long-term investments
–
(909)
–
(909)
Investment in associate
–
(132)
–
(132)
Proceeds on disposal of long-term investments
123
–
123
–
Dividend income received
–
23
–
39
Other
(71)
(53)
(328)
(1,207)
Cash generated from (used for) investing activities
$
52
$
(1,821)
$
(955)
$
(3,133)
Effect of exchange rate changes on cash and cash equivalents
$
298
$
130
$
12
$
141
Increase (decrease) in cash and cash equivalents
$
5,088
$
(38,599)
$
27,778
$
11,415
Cash and cash equivalents, beginning of period
126,676
125,781
103,986
75,767
Cash and cash equivalents, end of period
$
131,764
$
87,182
$
131,764
$
87,182
Q2 2020
Q1 2020
Q4 2019
Q3 2019
Q2 2019
Q1 2019
Q4 2018
Q3 2018
Gold ounces produced ²
Salobo
59,104
62,575
74,716
73,615
67,056
60,846
76,995
72,423
Sudbury 3
9,105
7,795
6,468
6,082
9,360
11,374
6,646
6,510
Constancia 8
3,470
3,681
4,757
5,172
4,533
4,826
4,266
3,634
San Dimas 4,8
6,074
11,318
11,352
11,239
11,496
10,290
10,092
10,642
Stillwater 5
3,222
2,955
3,585
3,238
3,675
3,137
3,472
6,376
Other
Minto 6
2,928
2,124
2,189
–
–
–
1,441
2,546
777
4,728
4,551
3,987
4,278
4,788
4,445
4,248
4,124
Total Other
7,656
6,675
6,176
4,278
4,788
4,445
5,689
6,670
Total gold ounces produced
88,631
94,999
107,054
103,624
100,908
94,918
107,160
106,255
Silver ounces produced 2
Peñasquito 8
973
2,658
1,895
2,026
702
1,594
1,455
1,050
Antamina 8
612
1,311
1,342
1,223
1,334
1,176
1,225
1,406
Constancia 8
254
461
632
686
552
635
695
682
Other
Los Filos 8
7
29
55
33
37
38
29
21
Zinkgruvan
389
662
670
587
590
451
587
513
Yauliyacu 8
273
557
358
620
627
528
233
597
Stratoni
148
183
147
131
172
143
149
165
Minto 6
19
18
18
–
–
–
8
25
Neves-Corvo
479
377
385
431
392
498
509
458
Aljustrel
388
352
325
240
322
470
475
514
777
108
96
81
62
93
95
113
136
Total Other
1,811
2,274
2,039
2,104
2,233
2,223
2,103
2,429
Total silver ounces produced
3,650
6,704
5,908
6,039
4,821
5,628
5,478
5,567
Palladium ounces produced ²
Stillwater 5
5,759
5,312
6,057
5,471
5,736
4,729
5,869
8,817
GEOs produced 7
140,112
182,533
186,027
183,394
166,399
168,759
180,732
184,810
SEOs produced 7
11,676
15,211
15,502
15,283
13,867
14,063
15,061
15,401
Average payable rate 2
Gold
94.7%
95.1%
95.6%
95.1%
95.3%
95.6%
95.5%
95.4%
Silver
79.3%
85.6%
85.3%
85.1%
83.3%
82.9%
83.3%
83.7%
Palladium
86.5%
93.0%
99.4%
83.5%
87.6%
98.5%
96.4%
94.6%
1)
All figures in thousands except gold and palladium ounces produced.
2)
Ounces produced represent the quantity of gold, silver and palladium 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 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)
Comprised of the Coleman, Copper Cliff, Garson, Creighton and Totten gold interests.
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 has been revised to 90:1. For reference, silver production from prior periods is as follows: Q2-2020 – 310,000 ounces; Q1-2020 – 419,000 ounces; Q4-2019 – 415,000 ounces; Q3-2019 – 410,000 ounces; Q2-2019 – 401,000 ounces; Q1-2019 – 351,000 ounces; Q4-2018 – 342,000 ounces; and Q3-2018 – 361,000 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: $1,500 per ounce gold; $18.00 per ounce silver; and $2,000 per ounce palladium, consistent with those used in estimating the Company’s production guidance for 2020.
8)
Operations at these mines had been temporarily suspended during the second quarter of 2020 as a result of the COVID-19 pandemic. As of August 12, 2020, all of the operations have been restarted.
Q2 2020
Q1 2020
Q4 2019
Q3 2019
Q2 2019
Q1 2019
Q4 2018
Q3 2018
Gold ounces sold
Salobo
68,487
74,944
58,137
63,064
57,715
84,160
75,351
65,139
Sudbury 2
7,414
4,822
7,394
7,600
8,309
4,061
4,864
2,560
Constancia 8
3,024
3,331
5,108
4,742
4,409
5,512
3,645
2,980
San Dimas 8
6,030
11,358
11,499
11,374
10,284
11,510
8,453
9,771
Stillwater 3
3,066
3,510
2,925
3,314
3,301
2,856
3,473
2,075
Other
Minto 4
–
–
–
–
765
3,307
2,674
796
777
4,783
2,440
4,160
4,672
5,294
3,614
4,353
5,921
Total Other
4,783
2,440
4,160
4,672
6,059
6,921
7,027
6,717
Total gold ounces sold
92,804
100,405
89,223
94,766
90,077
115,020
102,813
89,242
Silver ounces sold
Peñasquito 8
1,917
2,310
1,268
1,233
912
1,164
901
1,241
Antamina 8
788
1,244
1,227
1,059
1,186
1,255
1,300
1,333
Constancia 8
254
350
672
521
478
735
629
567
Other
Los Filos 8
25
37
26
44
26
38
15
27
Zinkgruvan
376
447
473
459
337
232
543
326
Yauliyacu 8
704
9
561
574
542
15
317
697
Stratoni
77
163
120
126
240
80
78
125
Minto 4
–
–
–
–
2
30
22
–
Neves-Corvo
236
204
154
243
194
265
240
234
Aljustrel
252
123
121
139
216
381
226
302
Lagunas Norte 5
–
–
–
–
–
–
–
1
Veladero 5
–
–
–
–
–
–
–
2
777
100
41
62
86
108
99
129
163
Total Other
1,770
1,024
1,517
1,671
1,665
1,140
1,570
1,877
Total silver ounces sold
4,729
4,928
4,684
4,484
4,241
4,294
4,400
5,018
Palladium ounces sold
Stillwater 3
4,976
4,938
5,312
4,907
5,273
5,189
5,049
3,668
GEOs sold 6
156,188
166,121
152,514
155,116
148,004
173,464
162,340
154,352
SEOs sold 6
13,016
13,843
12,709
12,926
12,334
14,455
13,528
12,863
Cumulative payable ounces PBND 7
Gold
79,518
88,383
98,475
85,335
81,535
75,236
99,474
99,987
Silver
3,087
4,911
4,142
3,796
3,102
3,324
2,950
2,784
Palladium
4,883
4,875
4,872
4,163
4,504
4,754
5,282
4,671
GEO 6
123,075
153,815
154,672
136,441
124,765
121,460
141,915
139,618
SEO 6
10,256
12,818
12,889
11,370
10,397
10,122
11,826
11,635
1)
All figures in thousands except 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)
In accordance with the Pascua-Lama precious metal purchase agreement, all deliveries from Lagunas Norte, Pierina and Veladero ceased effective March 31, 2018.
6)
GEOs and SEOs, which are provided to assist the reader, are based on the following commodity price assumptions: $1,500 per ounce gold; $18.00 per ounce silver; and $2,000 per ounce palladium, consistent with those used in estimating the Company’s production guidance for 2020.
7)
Payable gold, silver and palladium ounces produced but not yet delivered (“PBND”) are based on management estimates. These figures may be updated in future periods as additional information is received.
8)
Operations at these mines had been temporarily suspended during the second quarter of 2020 as a result of the COVID-19 pandemic. As of August 12, 2020 all of the operations have been restarted.
The operating results of the Company’s reportable operating segments are summarized in the tables and commentary below.
Three Months Ended June 30, 2020
Ounces Produced²
Ounces Sold
Average Realized Price ($’s Per Ounce)
Average Cash Cost ($’s Per Ounce)3
Average Depletion ($’s Per Ounce)
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
9,105
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
88,631
92,804
$
1,716
$
418
$
405
$
159,272
$
82,968
$
120,824
$
3,420,603
Silver
Peñasquito
973
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
1,811
1,770
17.05
7.03
2.22
30,186
13,800
14,895
481,133
3,650
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)
All figures in thousands except gold and palladium ounces produced and sold and per ounce amounts.
2)
Ounces produced represent the quantity of gold, silver and palladium 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 777 and Minto 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.
June 30, 2020 were as follows:
Three Months Ended June 30, 2020
Ounces Produced1, 2
Ounces Sold2
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
140,112
156,188
$ 1,588
$ 418
$ 1,170
$ 376
$ 794
Silver equivalent basis 5
11,676
13,016
$ 19.05
$ 5.01
$ 14.04
$ 4.51
$ 9.53
1)
Ounces produced represent the quantity of gold, silver and palladium 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: $1,500 per ounce gold; $18.00 per ounce silver; and $2,000 per ounce palladium, consistent with those used in estimating the Company’s production guidance for 2020.
Three Months Ended June 30, 2019
Ounces Produced²
Ounces Sold
Average Realized Price ($’s Per Ounce)
Average Cash Cost ($’s Per Ounce)3
Average Depletion ($’s Per Ounce)
Sales
Gross Margin
Impairment Charges 4
Net Earnings (Loss)
Cash Flow From Operations
Total Assets
Gold
Salobo
67,056
57,715
$
1,323
$
404
$
383
$
76,329
$
30,898
$
–
$
30,898
$
58,184
$
2,651,697
Sudbury 5
9,360
8,309
1,305
400
819
10,840
709
–
709
7,572
356,328
Constancia
4,533
4,409
1,323
400
361
5,830
2,475
–
2,475
3,954
113,964
San Dimas
11,496
10,284
1,323
605
310
13,601
4,191
–
4,191
9,776
201,448
Stillwater
3,675
3,301
1,323
234
519
4,366
1,881
–
1,881
3,595
233,233
Other 6
4,788
6,059
1,304
405
403
7,904
3,007
–
3,007
5,505
17,246
100,908
90,077
$
1,320
$
420
$
420
$
118,870
$
43,161
$
–
$
43,161
$
88,586
$
3,573,916
Silver
Peñasquito
702
912
$
14.89
$
4.21
$
3.06
$
13,582
$
6,949
$
–
$
6,949
$
9,743
$
382,363
Antamina
1,334
1,186
14.89
2.98
8.73
17,660
3,778
–
3,778
14,277
688,767
Constancia
552
478
14.89
5.90
7.50
7,119
714
–
714
3,652
237,136
Other 7
2,233
1,665
14.98
6.97
2.60
24,952
9,002
–
9,002
14,230
496,675
4,821
4,241
$
14.93
$
5.14
$
4.97
$
63,313
$
20,443
$
–
$
20,443
$
41,902
$
1,804,941
Palladium
Stillwater
5,736
5,273
$
1,381
$
247
$
470
$
7,283
$
3,501
$
–
$
3,501
$
5,979
$
254,772
Cobalt
Voisey’s Bay
–
–
$
n.a
$
n.a
$
n.a
$
–
$
–
$
(165,912)
$
(165,912)
$
–
$
227,510
Operating results
$
189,466
$
67,105
$
(165,912)
$
(98,807)
$
136,467
$
5,861,139
Other
General and administrative
$
(12,249)
$
(9,208)
Finance costs
(13,306)
(14,828)
Other
(3,090)
(3,149)
Income tax
2,758
(24)
Total other
$
(25,887)
$
(27,209)
$
379,684
$
(124,694)
$
109,258
$
6,240,823
1)
All figures in thousands except gold and palladium ounces produced and sold and per ounce amounts.
2)
Ounces produced represent the quantity of gold, silver and palladium 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 777 gold interest in addition to the non-operating Minto and Rosemont gold interests. The Minto mine was placed into care and maintenance from October 2018 to October 2019.
6)
Comprised of the operating Los Filos, Zinkgruvan, Yauliyacu, Stratoni, Neves-Corvo and 777 silver interests as well as the non-operating Keno Hill, Minto, Aljustrel, Loma de La Plata, Pascua-Lama and Rosemont silver interests. The Minto mine was placed into care and maintenance from October 2018 to October 2019.
June 30, 2019 were as follows:
Three Months Ended June 30, 2019
Ounces Produced1, 2
Ounces Sold2
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
166,399
148,004
$
1,280
$
412
$
868
$
415
$
453
Silver equivalent basis 5
13,867
12,334
$
15.36
$
4.94
$
10.42
$
4.98
$
5.44
1)
Ounces produced represent the quantity of gold, silver and palladium 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: $1,500 per ounce gold; $18.00 per ounce silver; and $2,000 per ounce palladium, consistent with those used in estimating the Company’s production guidance for 2020.
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; (iv) cash operating margin; and (v) net debt.
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)
2020
2019
Net earnings (loss)
$
105,812
$
(124,694)
Add back (deduct):
Impairment loss
–
167,561
(Gain) loss on fair value adjustment of share purchase warrants held
(333)
7
(Gain) loss on fair value adjustment of convertible notes receivable
(3,267)
1,934
Income tax expense (recovery) recognized in the Statement of Shareholders’ Equity
(160)
(894)
Income tax expense (recovery) recognized in the Statement of OCI
(4,698)
(1,956)
Adjusted net earnings
$
97,354
$
41,958
Divided by:
Basic weighted average number of shares outstanding
448,636
445,769
Diluted weighted average number of shares outstanding
450,042
446,470
Equals:
Adjusted earnings per share – basic
$
0.217
$
0.094
Adjusted earnings per share – diluted
$
0.216
$
0.094
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)
2020
2019
Cash generated by operating activities
$
151,793
$
109,258
Divided by:
Basic weighted average number of shares outstanding
448,636
445,769
Diluted weighted average number of shares outstanding
450,042
446,470
Equals:
Operating cash flow per share – basic
$
0.338
$
0.245
Operating cash flow per share – diluted
$
0.337
$
0.245
iii. Average cash cost of gold, silver and palladium on a per ounce basis is calculated by dividing the total cost of sales, less depletion, by the ounces sold. In the precious metal mining industry, this is a common performance measure but does not have any standardized meaning prescribed by IFRS. In addition to conventional measures prepared in accordance with IFRS, management and certain investors use this information to evaluate the Company’s performance and ability to generate cash flow.
The following table provides a reconciliation of average cash cost of gold, silver and palladium on a per ounce basis.
Three Months Ended June 30
(in thousands, except for gold and palladium ounces sold and per ounce amounts)
2020
2019
Cost of sales
$
123,872
$
122,361
Less: depletion
(58,661)
(61,404)
Cash cost of sales
$
65,211
$
60,957
Cash cost of sales is comprised of:
Total cash cost of gold sold
$
38,746
$
37,853
Total cash cost of silver sold
24,711
21,800
Total cash cost of palladium sold
1,754
1,304
Total cash cost of sales
$
65,211
$
60,957
Divided by:
Total gold ounces sold
92,804
90,077
Total silver ounces sold
4,729
4,241
Total palladium ounces sold
4,976
5,273
Equals:
Average cash cost of gold (per ounce)
$
418
$
420
Average cash cost of silver (per ounce)
$
5.23
$
5.14
Average cash cost of palladium (per ounce)
$
353
$
247
iv. Cash operating margin is calculated by subtracting the average cash cost of gold, silver and palladium on a per ounce basis from the average realized selling price of gold, silver and palladium on a per ounce basis. The Company presents cash operating margin 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 as well as to evaluate the Company’s ability to generate cash flow.
The following table provides a reconciliation of cash operating margin.
Three Months Ended June 30
(in thousands, except for gold and palladium ounces sold and per ounce amounts)
2020
2019
Total sales:
Gold
$
159,272
$
118,870
Silver
$
79,142
$
63,313
Palladium
$
9,540
$
7,283
Divided by:
Total gold ounces sold
92,804
90,077
Total silver ounces sold
4,729
4,241
Total palladium ounces sold
4,976
5,273
Equals:
Average realized price of gold (per ounce)
$
1,716
$
1,320
Average realized price of silver (per ounce)
$
16.73
$
14.93
Average realized price of palladium (per ounce)
$
1,917
$
1,381
Less:
Average cash cost of gold 1 (per ounce)
$
(418)
$
(420)
Average cash cost of silver 1 (per ounce)
$
(5.23)
$
(5.14)
Average cash cost of palladium 1 (per ounce)
$
(353)
$
(247)
Equals:
Cash operating margin per gold ounce sold
$
1,298
$
900
As a percentage of realized price of gold
76%
68%
Cash operating margin per silver ounce sold
$
11.50
$
9.79
As a percentage of realized price of silver
69%
66%
Cash operating margin per palladium ounce sold
$
1,564
$
1,134
As a percentage of realized price of palladium
82%
82%
1) Please refer to non-IFRS measure (iii), above.
v. Net debt is calculated by subtracting cash and cash equivalents from the outstanding bank debt under the Revolving Facility. The Company presents net debt as management and certain investors use this information to evaluate the Company’s liquidity and financial position.
The following table provides a calculation of the Company’s net debt.
As at June 30
As at December 31
(in thousands)
2020
2019
Bank debt
$
640,500
$
874,500
Less: cash and cash equivalents
(131,764)
(103,986)
Net debt
$
508,736
$
770,514
www.wheatonpm.com and posted on SEDAR at www.sedar.com.” data-reactid=”149″>These non-IFRS measures do not have any standardized meaning prescribed by IFRS, and other companies may calculate these measures differently. The presentation of these non-IFRS measures is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. For more detailed information, please refer to Wheaton’s MD&A available on the Company’s website at www.wheatonpm.com and posted on SEDAR at www.sedar.com.
www.sedar.com, 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 Commission in Washington, D.C. and Wheaton’s Management’s Discussion and Analysis for the three months ended March 31, 2020 available on SEDAR at www.sedar.com and Form 6-K filed May 7, 2020 (the "Disclosure"). Forward-looking statements are based on assumptions management currently believes to be reasonable, including (without limitation): that the completion of documentation and diligence in respect of the PMPA with Caldas Gold, the payment of US$110 million to Caldas Gold and the satisfaction of each party’s obligations in accordance with the terms of the PMPA with Caldas Gold, that there will be no material adverse change in the market price of commodities, that neither Wheaton nor the Mining Operations will suffer significant impacts as a result of an epidemic (including the COVID-19 virus pandemic), 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 contagions or epidemic disease will be adequately responded to locally, nationally, regionally and internationally, without such response requiring any prolonged closure of the Mining Operations or having other material adverse effects on the Company and counterparties to its PMPAs, 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 assurance 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 effects on, Wheaton. Readers should not place undue 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 them 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 materially 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.” data-reactid=”151″>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 with respect to the successful negotiation and entering into of a definitive documentation with Caldas Gold, payment of US$110 million to Caldas Gold and the satisfaction of each party’s obligations in accordance with the PMPA, the receipt by the Company of silver and gold production in respect of the Marmato Project, statements with 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 structure, 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 terminology 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 any specific risks relating to the completion of documentation and diligence for the PMPA with Caldas Gold, the satisfaction of each party’s obligations in accordance with the terms of the PMPA with Caldas Gold, risks associated with any specific risks relating to the completion of documentation and diligence for the Precious Metals Stream agreement, the satisfaction of each party’s obligations in accordance with the terms of the Precious Metals Stream agreement, 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), risks related to the Mining Operations (including 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 with the exploration, development, operating, expansion and improvement of 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 mineral 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 and climate change, 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 of 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 Wheaton’s Annual Information Form available on SEDAR at www.sedar.com, 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 Commission in Washington, D.C. and Wheaton’s Management’s Discussion and Analysis for the three months ended March 31, 2020 available on SEDAR at www.sedar.com and Form 6-K filed May 7, 2020 (the “Disclosure”). Forward-looking statements are based on assumptions management currently believes to be reasonable, including (without limitation): that the completion of documentation and diligence in respect of the PMPA with Caldas Gold, the payment of US$110 million to Caldas Gold and the satisfaction of each party’s obligations in accordance with the terms of the PMPA with Caldas Gold, that there will be no material adverse change in the market price of commodities, that neither Wheaton nor the Mining Operations will suffer significant impacts as a result of an epidemic (including the COVID-19 virus pandemic), 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 contagions or epidemic disease will be adequately responded to locally, nationally, regionally and internationally, without such response requiring any prolonged closure of the Mining Operations or having other material adverse effects on the Company and counterparties to its PMPAs, 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 assurance 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 effects on, Wheaton. Readers should not place undue 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 them 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 materially 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.
In accordance with the Company’s MD&A and financial statements, reference to the Company includes the Company’s wholly owned subsidiaries.
