Wheaton Precious Metals Announces Record Gold Production and Sales In 2018 and Declares First Quarterly Dividend of 2019

NYSE: WPM

VANCOUVER, British Columbia, March 20, 2019 /PRNewswire/ — Wheaton Precious Metals™ Corp. (‘Wheaton’ or the ‘Company’) is pleased to announce its results for the fourth quarter and year ended December 31, 2018. All figures are presented in United States dollars unless otherwise noted.

In the fourth quarter of 2018, Wheaton generated almost $110 million in operating cash flow, bringing total operating cash flow for the year to over $475 million. The strong cash flow generation was founded on production of over 370 thousand ounces of gold, 24 million ounces of silver and 14 thousand ounces of palladium, all in excess of the Company”s guidance. In addition, Wheaton had record gold production and sales in 2018.

Operational Overview

Q4 2018

Q4 2017

Change

2018

2017

Change

Ounces produced

Gold

107,567

96,474

11.5 %

373,239

355,104

5.1 %

Silver

5,499

7,129

(22.9)%

24,474

28,289

(13.5)%

Palladium

5,869

n.a.

14,686

n.a.

Ounces sold

Gold

102,813

94,295

9.0 %

349,168

337,205

3.5 %

Silver

4,400

7,292

(39.7)%

21,733

24,644

(11.8)%

Palladium

5,049

n.a.

8,717

n.a.

Sales price per ounce

Gold

$

1,229

$

1,277

(3.8)%

$

1,264

$

1,257

0.6 %

Silver

$

14.66

$

16.75

(12.5)%

$

15.81

$

17.01

(7.1)%

Palladium

$

1,137

$

 n.a.

n.a.

$

1,060

$

 n.a.

n.a.

Cash costs per ounce 1

Gold 1

$

409

$

399

2.5 %

$

409

$

395

3.5 %

Silver 1

$

4.66

$

4.48

4.0 %

$

4.67

$

4.49

4.0 %

Palladium 1

$

205

$

 n.a.

n.a.

$

190

$

n.a.

n.a.

Cash operating margin per ounce 1

Gold 1

$

820

$

878

(6.6)%

$

855

$

862

(0.8)%

Silver 1

$

10.00

$

12.27

(18.5)%

$

11.14

$

12.52

(11.0)%

Palladium 1

$

931

$

 n.a.

n.a.

$

870

$

 n.a.

n.a.

Revenue

$

196,591

$

242,546

(18.9)%

$

794,012

$

843,215

(5.8)%

Net earnings (loss)

$

6,828

$

(137,712)

n.a.

$

427,115

$

57,703

640.2 %

Per share

$

0.02

$

(0.31)

n.a.

$

0.96

$

0.13

638.5 %

Adjusted net earnings 1

$

36,745

$

82,323

(55.4)%

$

213,782

$

276,750

(22.8)%

Per share 1

$

0.08

$

0.19

(55.5)%

$

0.48

$

0.63

(23.0)%

Operating cash flows

$

108,461

$

165,083

(34.3)%

$

477,413

$

538,808

(11.4)%

Per share 1

$

0.24

$

0.37

(35.1)%

$

1.08

$

1.22

(11.5)%

Dividends declared 1

$

39,959

$

39,815

0.4 %

$

159,619

$

145,848

9.4 %

Per share

$

0.09

$

0.09

0.0 %

$

0.36

$

0.33

9.1 %

All amounts in thousands except gold and palladium ounces produced and sold, per ounce amounts and per share amounts

 

Highlights

  • Wheaton exceeded production guidance for gold, silver and palladium by 5%, 9% and 41%, respectively, for the year ended December 31, 2018. In addition, annual gold production and sales in 2018 represented a record for the Company.
  • The increase in attributable gold production for the three months and year ended December 31, 2018 was primarily due to the commencement of the San Dimas gold stream effective May 10, 2018, and the Stillwater precious metals stream effective July 1, 2018, as well as higher production at both Salobo and Constancia.
  • The decrease in attributable silver production for the three months and year ended December 31, 2018 was primarily due to the termination of the San Dimas silver stream effective May 10, 2018, all deliveries from the Lagunas Norte, Veladero, and Pierina mines ceasing effective March 31, 2018 in accordance with the Pascua-Lama PMPA and, for the annual period, lower production at Peñasquito due to lower throughput and planned lower grades from stockpiles during the commissioning of the now fully constructed Peñasquito Pyrite Leach Project (‘PLP’).
  • The increase in gold sales for the three months and year ended December 31, 2018 was due to higher production levels, partially offset by negative changes in payable gold produced but not yet delivered to Wheaton.
  • The decrease in silver sales volume for the three months ended December 31, 2018 was due to the lower production levels coupled with negative changes in the balance of payable silver produced but not yet delivered to Wheaton, while for the annual period, the decrease in silver sales volume was due to lower production levels, partially offset by positive changes in payable silver produced but not yet delivered.
  • Declared quarterly dividend of $0.09 per common share. In addition, the Company has set a minimum quarterly dividend of $0.09 per common share for the duration of 2019, subject to the discretion of the Board of Directors.
  • On December 13, 2018, the Company announced that it had reached a settlement with the Canada Revenue Agency (the ‘CRA’) which provides for a final resolution of the Company”s tax appeal in connection with the reassessment under transfer pricing rules of the 2005 to 2010 taxation years related to the income generated by the Company”s wholly-owned foreign subsidiaries outside of Canada. After the application of non-capital losses, the settlement results in no additional cash taxes in respect of the 2005 to 2010 taxation years. The transfer pricing principles reached in the settlement will apply to taxation years after 2010, including the 2011 to 2015 taxation years which are currently under audit and on a go forward basis subject to there being no material change in facts or change in law or jurisprudence.
  • On October 24, 2018, Vale S.A. (‘Vale’) announced the approval of the Salobo III mine expansion, which would increase processing throughput capacity from 24 million tonnes per annum (‘Mtpa’) to 36 Mtpa once fully ramped up (the ‘Salobo Expansion’).

Outlook

  • Wheaton”s estimated attributable production in 2019 is forecast to be 365,000 ounces of gold, 24.5 million ounces of silver and 22,000 ounces of palladium, resulting in gold equivalent productionof approximately 690,000 ounces.    
  • For the five-year period ending in 2023, the Company estimates that average, annual gold equivalent production2 will amount to 750,000 ounces.

Subsequent to the Quarter

  • Hudbay Minerals Inc. (‘Hudbay’) announced its receipt of a Section 404 Water Permit from the U.S. Army Corps of Engineers for the Rosemont Project and that it expects to receive Rosemont”s Mine Plan of Operations from the U.S. Forest Service shortly.

‘Wheaton had an exceptionally successful year with our precious metals business exceeding guidance for gold, silver and palladium resulting in cash flows of over $475 million,’ said Randy Smallwood, President and Chief Executive Officer of Wheaton Precious Metals. ‘In addition to our strong production and cash flow in 2018, we were also able to optimize the San Dimas stream, add two additional high-quality streams from low-cost, long-life mines and reach a settlement in our long-running tax dispute with the CRA.  From the firm foundation that 2018 has provided, we expect our portfolio to now deliver steady organic growth for the foreseeable future, coming from increasing grades and better recoveries at Peñasquito, the Blitz project at Stillwater ramping up to full capacity, the development of the Pampacancha deposit at Constancia, the ongoing expansion of the Salobo mine, continued improvements at San Dimas, and now, the strong possibility of Rosemont coming into production. With our sector-leading cash flows, high margins, and steady organic growth, Wheaton is primed to be the premier investment vehicle for precious metals investors worldwide.’

Financial Review

Revenues
Revenue was $197 million in the fourth quarter of 2018, on sales volume of 102,800 ounces of gold, 4.4 million ounces of silver and 5,000 ounces of palladium. This represents a 19% decrease from the $243 million of revenue generated in the fourth quarter of 2017 due primarily to (i) a 40% decrease in the number of silver ounces sold; (ii) a 12% decrease in the average realized silver price ($14.66 in Q4 2018 compared with $16.75 in Q4 2017); and (iii) a 4% decrease in the average realized gold price ($1,229 in Q4 2018 compared with $1,277 in Q4 2017); partially offset by (iv) a 9% increase in the number of gold ounces sold; and (v) the introduction of palladium sales effective Q3 2018.

Revenue was $794 million in the year ended December 31, 2018, on sales volume of 349,200 ounces of gold and 21.7 million ounces of silver. This represents a 6% decrease from the $843 million of revenue generated in 2017 due primarily to (i) a 12% decrease in the number of silver ounces sold and; (ii) a 7% decrease in the average realized silver price ($15.81 in 2018 compared with $17.01 in 2017); partially offset by (iii) a 4% increase in the number of gold ounces sold; and (iv) the introduction of palladium sales effective Q3 2018.

Costs and Expenses
Average cash costs¹ in the fourth quarter of 2018 were $409 per gold ounce sold, $4.66 per silver ounce sold and $205 per palladium ounce sold, as compared with $399 per gold ounce and $4.48 per silver ounce during the comparable period of 2017. This resulted in a cash operating margin¹ of $820 per gold ounce sold, $10.00 per silver ounce sold and $932 per palladium ounce sold, a reduction of 7% and 19% for gold and silver, respectively, as compared with Q4 2017. The decrease in the cash operating margin was primarily due to a 4% decrease in the average realized gold price and a 12% decrease in the average realized silver price in Q4 2018 compared with Q4 2017.

Average cash costs¹ during the year ended December 31, 2018 were $409 per gold ounce sold, $4.67 per silver ounce sold and $190 per palladium ounce sold, as compared with $395 per gold ounce sold and $4.49 per silver ounce sold during the comparable period of 2017. This resulted in a cash operating margin¹ of $855 per gold ounce sold, $11.14 per silver ounce sold and $870 per palladium ounce sold, a reduction of 1% and 11% for gold and silver, respectively, as compared with 2017. The decrease in the cash operating margin for silver was primarily due to a 7% decrease in the average realized silver price in 2018 compared with 2017.

Earnings and Operating Cash Flows
Adjusted net earnings¹ and cash flow from operations in the fourth quarter of 2018 were $37 million ($0.08 per share) and $108 million ($0.24 per share¹), compared with adjusted net earnings¹ of $82 million ($0.19 per share) and cash flow from operations of $165 million ($0.37 per share¹) for the same period in 2017, a decrease of 55% and 34%, respectively.

Adjusted net earnings¹ and cash flow from operations for the year ended December 31, 2018 were $214 million ($0.48 per share) and $477 million ($1.08 per share¹), compared with adjusted net earnings¹ of $277 million ($0.63 per share) and cash flow from operations of $539 million ($1.22 per share¹) for the same period in 2017, a decrease of 23% and 11%, respectively.

Balance Sheet
At December 31, 2018, the Company had approximately $76 million of cash on hand and $1.3 billion outstanding under the Company”s $2 billion revolving term loan (the ‘Revolving Facility’). On February 27, 2019, the term of the Revolving Facility was extended by an additional year, with the facility now maturing on February 27, 2024.  

Tax Dispute Settlement

On December 13, 2018, the Company reached a settlement with the CRA which provides for a final resolution of Wheaton”s tax appeal in connection with the reassessment of the 2005 to 2010 taxation years under transfer pricing rules related to income generated by the Company”s foreign subsidiaries outside of Canada. The terms of the settlement provide that foreign income on earnings generated by Wheaton”s wholly-owned foreign subsidiaries will not be subject to tax in Canada. The transfer pricing principles reached in the settlement will apply to taxation years after 2010, including the 2011 to 2015 taxation years which are currently under audit and on a go forward basis subject to there being no material change in facts or change in law or jurisprudence. In addition, the settlement provided that the service fee charged by the Company for the services rendered to its foreign subsidiaries will be adjusted by, first, including the capital-raising costs incurred by the Company for the purpose of funding precious metals purchase agreements entered into by the Company”s foreign subsidiaries and secondly, increasing the markup on costs incurred by the Company that are charged to the foreign subsidiaries, including attributable capital-raising costs, from 20% to 30%.

The CRA Settlement resulted in total expenses of $29 million in respect of the 2005-2017 taxation years being reflected in the Statement of Earnings during the fourth quarter, including a non-cash income tax expense of $16 million, for a net cash expense of $13 million comprised of (i) $4 million of current income taxes; (ii) $4 million of interest and penalties; and (iii) $5 million of professional fees.

Fourth Quarter Asset Highlights

During the fourth quarter of 2018, attributable production was 107,600 ounces of gold, 5.5 million ounces of silver and 5,900 ounces of palladium, representing an increase of 11% and a decrease of 23% for gold and silver, respectively, as compared with the fourth quarter of 2017.

Operational highlights for the quarter ended December 31, 2018, based upon counterparties” reporting, are as follows:

Salobo  
In the fourth quarter of 2018, Salobo produced 77,000 ounces of attributable gold, an increase of approximately 1% relative to the fourth quarter of 2017. As per Vale”s third quarter 2018 MD&A, on October 24, 2018, Vale”s Board of Directors approved the Salobo Expansion, a brownfield expansion, which if completed as proposed, would increase processing throughput capacity to 36 Mtpa. Wheaton Precious Metals International Ltd. (‘Wheaton International’) first entered into a gold purchase agreement with Vale in respect of the Salobo mine in 2013 and made subsequent amendments to the agreement in 2015 and 2016 (the ‘Gold Agreement’). As part of the Gold Agreement, if actual throughput is expanded above 28 Mtpa within a predetermined period, and depending on the grade of material processed, Wheaton will be required to make an additional payment to Vale based on a set fee schedule. As proposed, the Salobo Expansion would increase throughput capacity from 24 Mtpa to 36 Mtpa once fully ramped up. Vale has approved the investment of US$1.1 billion in the Salobo Expansion, with a start-up scheduled for the first half of 2022 and an estimated ramp-up of 15 months. Vale has indicated that the Salobo Expansion will encompass a third concentrator and will use Salobo”s existing infrastructure. As agreed to as part of the original Gold Agreement and based on Vale”s disclosure relating to size and timing of the Salobo Expansion, the Company estimates that an expansion payment of between $550 million to $650 million would be payable. Given Vale”s proposed schedule, this payment would likely be made no earlier than 2023.

Peñasquito 
In the fourth quarter of 2018, Peñasquito produced 1.5 million ounces of attributable silver, a decrease of approximately 7% relative to the fourth quarter of 2017 due to lower throughput. According to Goldcorp Inc.”s fourth quarter of 2018 MD&A, higher than expected ore hardness impacted mill throughput in the quarter. In addition, commissioning of the PLP continued during the quarter, with the project having achieved commercial production as of December 31, 2018. The Carbon Pre-flotation Plant, a component of the PLP, achieved commercial production on October 1, 2018, and was successfully treating high-carbon ore during the fourth quarter of 2018.

Antamina
In the fourth quarter of 2018, Antamina produced 1.2 million ounces of attributable silver, a decrease of approximately 15% relative to the fourth quarter of 2017 as expected due to mine sequencing in the open pit.

San Dimas
In the fourth quarter of 2018, San Dimas produced 10,100 ounces of attributable gold. According to First Majestic Silver Corp.”s (‘First Majestic’) fourth quarter of 2018 production report, the San Dimas mill processed a total of 172,641 tonnes with average gold and silver grades of 3.9 g/t and 262 g/t, respectively. The operation reportedly continued to process higher volumes from lower grade stopes left behind as they were deemed uneconomical under the old streaming agreement and have now become economical under the new streaming agreement.

Sudbury
In the fourth quarter of 2018, Vale”s Sudbury mines produced 7,100 ounces of attributable gold, a decrease of approximately 18% relative to the fourth quarter of 2017 primarily due to lower throughput and grades.

Constancia
In the fourth quarter of 2018, Constancia produced 4,300 ounces of attributable gold and 0.7 million ounces of attributable silver , an increase of approximately 45% and 12%, respectively, relative to the fourth quarter of 2017 due to higher precious metals grades and recovery.

Stillwater
In the fourth quarter of 2018, the Stillwater mines produced 3,500 ounces of attributable gold and 5,900 ounces of attributable palladium. On July 25, 2018, the Company, through its wholly owned subsidiary Wheaton International, completed the acquisition from Sibanye-Stillwater of a fixed percentage of gold and palladium production from the Stillwater mines. As part of the agreement, Wheaton International was entitled to the attributable gold and palladium production for which an offtaker payment was received after July 1, 2018, resulting in reported production for the third quarter including some material processed in the previous quarters. As a result, the Stillwater mines significantly outperformed the Company”s expectations in the first six months of the stream, with attributable production of 9,800 ounces of attributable gold and 14,700 ounces of attributable palladium relative to 2018 guidance of approximately 5,400 ounces of gold and 10,400 ounces of palladium.

Other Gold 
In the fourth quarter of 2018, total Other Gold attributable production was 5,700 ounces, a decrease of approximately 35% relative to the fourth quarter of 2017. The decrease was due primarily to lower production at the Minto mine. As per Capstone Mining Corp.”s (‘Capstone’) news release dated October 11, 2018, the agreement under which Capstone had agreed to sell its Minto mine to Pembridge Resources plc has been terminated. In conjunction with this, Capstone placed the Minto mine on care and maintenance in the fourth quarter of 2018.

Other Silver 
In the fourth quarter of 2018, total Other Silver attributable production was 2.1 million ounces, a decrease of approximately 3% relative to the fourth quarter of 2017. The slight 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, and lower production at Yauliyacu, partially offset by the start-up of attributable production at the Aljustrel mine.

Produced But Not Yet Delivered 3
As at December 31, 2018, payable ounces attributable to the Company produced but not yet delivered amounted to 77,500 payable gold ounces, 3.3 million payable silver ounces and 5,300 payable palladium ounces, representing a decrease of 100 payable gold ounces, an increase of 0.2 million payable silver ounces and an increase of 600 payable palladium ounces during the three month period ended December 31, 2018Payable gold ounces produced but not yet delivered decreased slightly primarily as a result of decreases related to the Salobo and Other gold interests partially offset by increases related to the San Dimas and Sudbury gold interests. Payable silver ounces produced but not yet delivered increased primarily as a result of increases related to the Peñasquito partially offset by a decrease related to the Antamina silver interest. Payable ounces produced but not yet delivered to the Wheaton group of companies are expected to average approximately two to three months of annualized production for both gold and palladium and two months for silver 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.

Subsequent to the Quarter

Rosemont
Hudbay announced its receipt of a Section 404 Water Permit from the U.S. Army Corps of Engineers. Hudbay has indicated that it expects to receive Rosemont”s Mine Plan of Operations from the U.S. Forest Service shortly.

As a reminder, Wheaton”s wholly owned subsidiary Wheaton International has a precious metals purchase agreement with Hudbay on Rosemont, which in exchange for an upfront payment of $230 million, entitles the Company to 100% of payable gold and silver produced from Rosemont at a cash price of $450 per ounce of gold and $3.90 per ounce of silver, subject to an annual adjustment for inflation. In February 2019, Wheaton International amended the Rosemont PMPA with Hudbay. As a result of the amendment and given that all material permits have now been received, Wheaton International is committed to pay Hudbay the upfront payment in two instalments, with the first $50 million being advanced upon the request of Hudbay conditional on Hudbay demonstrating that it has sufficient capital to complete construction of Rosemont, development and construction of Rosemont having commenced and other customary conditions. The balance of $180 million will be advanced following a request by Hudbay, conditional on project costs of at least $98 million having been incurred on the Rosemont project and other customary conditions. Additionally, under the terms of the amendment, Hudbay has provided a corporate guarantee and Wheaton International will be entitled to certain delay payments, including where construction ceases in any material respect or if the completion test is not achieved within agreed upon timelines.

Dividend

First Quarterly Dividend
The first quarterly cash dividend for 2019 of US$0.09 will be paid to holders of record of Wheaton Precious Metals common shares as of the close of business on April 5, 2019 and will be distributed on or about April 18, 2019.

Under the Company”s dividend policy, the quarterly dividend per common share is targeted to equal approximately 30% of the average cash generated by operating activities in the previous four quarters divided by the Company”s then outstanding common shares, all rounded to the nearest cent. To minimize volatility in quarterly dividends, the Company has set a minimum quarterly dividend of $0.09 per common share for the duration of 2019.

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 first 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 Acquisitionsas 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.

Registered shareholders may also enroll in the DRIP online through the plan agent”s self-service web portal at: https://www.canstockta.com/en/InvestorServices/Investor_Information/Issuer_List/IssuerDetail.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.

Reserves and Resources

As of December 31, 2018, Proven and Probable Mineral Reserves attributable to Wheaton were 11.75 million ounces of gold compared with 11.28 million ounces as reported in Wheaton”s 2017 Annual Information Form (‘AIF’), an increase of 4%, 542.1 million ounces of silver compared with 575.2 million ounces, a decrease of 6%, 0.66 million ounces of palladium and 32.6 million pounds of cobalt. On an attributable Measured and Indicated Mineral Resource basis, gold resources were 2.89 million ounces compared with 2.67 million ounces as reported in Wheaton”s 2017 AIF, an increase of 8%, silver resources were 784.4 million ounces compared with 887.0 million ounces, a decrease of 12%, and 1.6 million pounds of cobalt. On an attributable Inferred Mineral Resource basis, gold resources were 4.08 million ounces compared with 2.71 million ounces as reported in Wheaton”s 2017 AIF, an increase of 50%, silver resources were 432.7 million ounces compared with 446.5 million ounces, a decrease of 3%, 0.36 million ounces of palladium and 9.3 million pounds of cobalt.

Estimated attributable reserves and resources contained in this press release are based on information available to the Company as of March 20, 2019, and therefore will not reflect updates, if any, after that date. Updated reserves and resources data incorporating year-end 2018 estimates will also be included in the Company”s 2018 Annual Information Form. Wheaton”s most current attributable reserves and resources, as of December 31, 2018, can be found on the Company”s website at www.wheatonpm.com.

Outlook

Wheaton”s estimated attributable precious metals production in 2019 is forecast to be approximately 365,000 ounces of gold, 24.5 million ounces of silver and 22,000 ounces of palladium, resulting in gold equivalent productionof approximately 690,000 ounces. For the five-year period ending in 2023, the Company estimates that average annual gold equivalent production2 will amount to 750,000 ounces. 

In 2019, forecast silver production growth from Peñasquito is expected to be partially offset by the change in the San Dimas stream from silver to gold as well as the cessation in 2018 of production from assets with fixed terms. Gold production in 2019 is expected to be slightly below 2018 as a result of lower grades at Salobo due to mine sequencing (most pronounced in the first quarter of 2019) being partially offset by increased attributable gold production from the San Dimas mine. At Constancia, Hudbay expects to begin mining the Pampacancha satellite deposit later in 2019, which has significantly higher precious metals grades than what is currently being mined; however, given the lack of a definitive schedule at this point, forecast gold production in 2019 does not include any contribution from the Pampacancha deposit4. Palladium production is expected to increase in 2019 as the Company has its first full year of production from the Stillwater stream, which was acquired in July of 2018.

Average production over the next five years is expected to increase primarily due to continued production growth from Peñasquito, Constancia and Stillwater as well as the commencement of the Voisey”s Bay stream in 2021. At Peñasquito, grades are expected to increase and the addition of the PLP should improve recoveries. At Constancia, production from the Pampacancha deposit is included in Wheaton”s five-year production average. Palladium and gold production from Stillwater is expected to increase with the continued ramp-up of the Blitz project, which is expected to reach full capacity in 2021. In addition, effective January 1, 2021, Wheaton will be entitled to receive from Vale an amount of cobalt equal to 42.4% of the Voisey”s Bay mine cobalt production. And lastly, Wheaton does not include any production from Barrick”s Pascua-Lama project or Hudbay”s Rosemont project in its estimated average five-year production guidance5.

From a liquidity perspective, the $76 million of cash and cash equivalents as at December 31, 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 Thursday, March 21, 2019, 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:

5184315

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 March 28, 2019 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

Dial from outside Canada or the US:       

416-849-0833  

Pass code:  

5184315

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, P. Eng., Vice President, Mining Operations and Neil Burns, P. Geo., Vice President of Technical Services for Wheaton Precious Metals, are a ‘qualified person’ as such term is defined under National Instrument 43-101, and have reviewed and approved the technical information disclosed in this news release (specifically Mr. Carson has reviewed production figures and Mr. Burns has reviewed mineral reserves and resource estimates).

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.aspxhttp://www.silverwheaton.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 Gold equivalent ounces for 2018 actual production and sales are calculated by converting silver to a gold equivalent by using the ratio of the average price of silver to the average price of gold and by converting palladium to a gold equivalent by using the average price of palladium to the average price of gold, with all figures being as per the London Bullion Metal Exchange during 2018. Gold equivalent production forecasts for 2018, 2019 and the five-year average are based on the following commodity price assumptions: $1,300 / ounce gold, $16 / ounce silver, $1,350 / ounce palladium, and $21 / pound of cobalt.

3 Payable gold, silver and palladium ounces produced but not yet delivered are based on management estimates and may be updated in future periods as additional information is received.

4 As per Wheaton”s precious metals purchase agreement with Hudbay, Wheaton is entitled to a delay payment payable in gold ounces from Hudbay as a result of the delay in mining the Pampacancha zone. The gold ounces delivered to Wheaton are included in the Company”s production guidance.

5 In preparing the long-term production forecast, Wheaton has considered the impact of Vale”s recently announced approval of the Salobo III copper project, a brownfield expansion, which if completed as proposed, would increase processing throughput capacity from 24 Mtpa to 36 Mtpa once fully ramped up (the ‘Salobo Expansion’). However, readers are cautioned that Vale has not finalized its mine plan and as such, Wheaton has not included any production growth as a result of the Salobo Expansion.

 

Summarized Financial Results 

2018

2017

2016

Precious metal production

Attributable gold ounces produced

373,239

355,104

366,378

Attributable silver ounces produced (000”s)

24,474

28,289

30,029

Attributable palladium ounces produced

14,686

Attributable GEOs produced 1

688,120

738,650

778,165

Attributable SEOs produced (000”s) 1

55,588

54,482

56,743

Precious metal sales

Gold ounces sold

349,168

337,205

330,009

Silver ounces sold (000”s)

21,733

24,644

28,322

Palladium ounces sold

8,717

GEOs sold 1

625,271

671,330

718,430

SEOs sold (000”s) 1

50,511

49,517

52,388

Average realized price ($”s per ounce)

Average realized gold price

$

1,264

$

1,257

$

1,246

Average realized silver price

$

15.81

$

17.01

$

16.96

Average realized palladium price

$

1,060

n.a.

n.a.

Average realized gold equivalent price 1

$

1,270

$

1,256

$

1,241

Average realized silver equivalent price 1

$

15.72

$

17.03

$

17.02

Average cash cost ($”s per ounce) 2

Average gold cash cost

$

409

$

395

$

391

Average silver cash cost

$

4.67

$

4.49

$

4.42

Average palladium cash cost

$

190

n.a.

n.a.

Average gold equivalent cash cost 1

$

393

$

363

$

354

Average silver equivalent cash cost 1

$

4.87

$

4.92

$

4.86

Average depletion ($”s per ounce) 2

Average gold depletion

$

419

$

417

$

479

Average silver depletion

$

4.69

$

4.94

$

5.32

Average palladium depletion

$

463

n.a.

n.a.

Average gold equivalent depletion 1

$

403

$

391

$

430

Average silver equivalent depletion 1

$

4.99

$

5.30

$

5.89

Total revenue ($000”s)

$

794,012

$

843,215

$

891,557

Net earnings ($000”s)

$

427,115

$

57,703

$

195,137

Earnings (loss) per share

Basic

$

0.96

$

0.13

$

0.45

Diluted

$

0.96

$

0.13

$

0.45

Adjusted net earnings 3 ($000”s)

$

213,782

$

276,750

$

266,137

Adjusted earnings per share 3

Basic

$

0.48

$

0.63

$

0.62

Diluted

$

0.48

$

0.63

$

0.62

Cash flow from operations ($000”s)

$

477,413

$

538,808

$

584,301

Dividends

Dividends declared ($000”s)

$

159,619

$

145,848

$

90,612

Dividends declared per share

$

0.36

$

0.33

$

0.21

Total assets ($000”s)

$

6,470,046

$

5,683,313

$

6,153,319

Total non-current financial liabilities ($000”s)

$

1,269,178

$

771,430

$

1,194,012

Total other liabilities ($000”s)

$

28,952

$

12,219

$

19,319

Shareholders” equity ($000”s)

$

5,171,916

$

4,899,664

$

4,939,988

Shares outstanding

444,336,361

442,724,309

441,456,217

1)

Gold equivalent ounces (GEOs) and silver equivalent ounces (SEOs) are provided to assist the reader. GEOs are calculated by converting silver to a gold equivalent by using the ratio of the average price of gold to the average price of silver and by converting palladium to a gold equivalent by using the average price of gold to the average price of palladium. SEOs are calculated by converting gold to a silver equivalent by using the ratio of the average price of gold to the average price of silver and by converting palladium to a silver equivalent by using the average price of palladium to the average price of silver. Average prices are as per the LBMA during the period.     

2)

Refer to discussion on non-IFRS measure (iii) at the end of this press release.

3)

Refer to discussion on non-IFRS measure (i) at the end of this press release.

 

Consolidated Statements of Earnings

 

Years Ended December 31

(US dollars and shares in thousands, except per share amounts)

2018

2017

Sales

$

794,012

$

843,215

Cost of sales

Cost of sales, excluding depletion

$

245,794

$

243,801

Depletion

252,287

262,380

Total cost of sales

$

498,081

$

506,181

Gross margin

$

295,931

$

337,034

General and administrative 1

51,650

34,673

Impairment charges

228,680

Earnings from operations

$

244,281

$

73,681

Gain on disposal of mineral stream interest

(245,715)

Other (income) expense

5,826

(13,535)

Earnings before finance costs and income taxes

$

484,170

$

87,216

Finance costs

41,187

30,399

Earnings before income taxes

$

442,983

$

56,817

Income tax (expense) recovery

(15,868)

886

Net earnings

$

427,115

$

57,703

Basic earnings per share

$

0.96

$

0.13

Diluted earnings per share

$

0.96

$

0.13

Weighted average number of shares outstanding

Basic

443,407

441,961

Diluted

443,862

442,442

1) Equity settled stock based compensation (a non-cash item) included in general 
and administrative expenses.

$

5,432

$

5,051

 

Consolidated Balance Sheets

As at 
December 31

As at
December 31

(US dollars in thousands)

2018

2017

Assets

Current assets

Cash and cash equivalents

$

75,767

$

98,521

Accounts receivable

2,396

3,194

Other

1,541

1,700

Total current assets

$

79,704

$

103,415

Non-current assets

Mineral stream interests

$

6,156,839

$

5,423,277

Early deposit mineral stream interests

30,241

21,722

Mineral royalty interest

9,107

9,107

Long-term equity investments

164,753

95,732

Investment in associates

2,562

2,994

Convertible note receivable

12,899

15,777

Other

13,941

11,289

Total non-current assets

$

6,390,342

$

5,579,898

Total assets

$

6,470,046

$

5,683,313

Liabilities

Current liabilities

Accounts payable and accrued liabilities

$

19,883

$

12,118

Current taxes payable

3,361

Current portion of performance share units

5,578

Other

19

25

Total current liabilities

$

28,841

$

12,143

Non-current liabilities

Bank debt

$

1,264,000

$

770,000

Deferred income taxes

111

76

Performance share units

5,178

1,430

Total non-current liabilities

$

1,269,289

$

771,506

Total liabilities

$

1,298,130

$

783,649

Shareholders” equity

Issued capital

$

3,516,437

$

3,472,029

Reserves

7,893

77,007

Retained earnings

1,647,586

1,350,628

Total shareholders” equity

$

5,171,916

$

4,899,664

Total liabilities and shareholders” equity

$

6,470,046

$

5,683,313

 

Consolidated Statements of Cash Flows

Years Ended December 31

(US dollars in thousands)

2018

2017

Operating activities

Net earnings

$

427,115

$

57,703

Adjustments for

Depreciation and depletion

253,343

263,352

Gain on disposal of mineral stream interest

(245,715)

Impairment charges

228,680

Interest expense

35,839

24,993

Equity settled stock based compensation

5,432

5,051

Performance share units

9,517

140

Income tax expense (recovery)

15,868

(886)

Loss on fair value adjustment of share purchase warrants held

124

6

Receipt of shares in exchange for contractual modifications

(7,500)

Share in losses of associate

432

Fair value (gain) loss on convertible note receivable

2,878

(215)

Investment income recognized in net earnings

(829)

(467)

Other

(46)

(214)

Change in non-cash working capital

8,964

(6,346)

Cash generated from operations before income taxes and interest

$

512,922

$

564,297

Income taxes paid

(960)

(579)

Interest paid

(35,373)

(25,243)

Interest received

824

333

Cash generated from operating activities

$

477,413

$

538,808

Financing activities

Bank debt repaid

$

(330,500)

$

(423,000)

Bank debt drawn

824,500

Credit facility extension fees

(1,205)

(1,311)

Share purchase options exercised

1,027

1,181

Dividends paid

(132,915)

(121,934)

Cash (used for) generated from financing activities

$

360,907

$

(545,064)

Investing activities

Mineral stream interests

$

(1,116,955)

$

Early deposit mineral stream interests

(8,709)

(1,721)

Net proceeds on disposal of mineral stream interests 1

226,000

1,022

Acquisition of long-term investments

(5,863)

(129)

Acquisition of convertible note receivable

(15,562)

Investment in associate

(2,994)

Proceeds on disposal of long-term investments

47,734

Dividend income received

80

60

Other

(3,613)

(249)

Cash used for investing activities

$

(861,326)

$

(19,573)

Effect of exchange rate changes on cash and cash equivalents

$

252

$

55

Decrease in cash and cash equivalents

$

(22,754)

$

(25,774)

Cash and cash equivalents, beginning of year

98,521

124,295

Cash and cash equivalents, end of year

$

75,767

$

98,521

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.

 

Summary of Ounces Produced

 

Q4 2018 

Q3 2018 

Q2 2018 

Q1 2018 

Q4 2017 

Q3 2017 

Q2 2017 

Q1 2017 

Gold ounces produced ²

Sudbury 3

7,053

6,510

6,476

3,511

8,568

8,519

7,468

9,182

Salobo

76,995

68,648

63,949

61,513

76,153

72,980

57,514

58,009

Constancia

4,266

3,261

3,187

3,315

2,947

2,498

2,332

2,431

San Dimas 4

10,092

10,642

5,726

Stillwater

3,472

6,376

Other

Minto 5

1,441

2,546

2,554

2,707

3,328

6,105

6,063

9,734

777

4,248

4,124

4,982

5,645

5,478

5,114

6,259

4,422

Total Other

5,689

6,670

7,536

8,352

8,806

11,219

12,322

14,156

Total gold ounces produced

107,567

102,107

86,874

76,691

96,474

95,216

79,636

83,778

Silver ounces produced 2

San Dimas 4

607

1,606

1,324

1,043

973

623

Peñasquito

1,455

1,050

1,267

1,450

1,561

1,641

1,483

1,339

Antamina

1,225

1,406

1,394

1,304

1,434

1,686

1,832

1,420

Constancia

695

682

552

598

621

572

506

500

Other

Los Filos

29

21

33

29

48

43

42

32

Zinkgruvan

608

530

453

565

619

710

493

538

Yauliyacu

233

597

719

550

335

588

607

562

Stratoni

149

165

211

137

131

137

171

166

Minto 5

8

25

30

35

30

43

42

56

Neves-Corvo

509

458

421

405

305

341

316

330

Aljustrel

475

514

138

Cozamin 6

17

397

Lagunas Norte 7

217

253

243

218

210

Pierina 7

107

111

107

114

137

Veladero7

265

211

201

144

158

777

113

136

152

146

146

145

138

96

Total Other

2,124

2,446

2,157

2,456

2,189

2,558

2,302

2,682

Total silver ounces produced

5,499

5,584

5,977

7,414

7,129

7,500

7,096

6,564

Palladium ounces produced ²

Stillwater

5,869

8,817

GEOs produced 8

178,215

178,126

162,522

170,203

189,909

194,019

176,786

177,560

SEOs produced 8

15,044

14,394

12,840

13,495

14,491

14,728

12,913

12,429

Gold / Silver Ratio 8

84.4

80.8

79.0

79.3

76.3

75.9

73.0

70.0

Palladium / Silver Ratio 8

79.1

63.4

59.2

61.8

59.3

53.5

47.7

44.0

Gold / Palladium Ratio 8

1.1

1.3

1.3

1.3

1.3

1.4

1.5

1.6

Average payable rate 2

Gold

95.5%

95.2%

94.7%

94.4%

94.8%

94.8%

94.5%

94.7%

Silver

84.0%

84.3%

86.8%

89.7%

90.1%

90.0%

91.0%

89.5%

Palladium

96.4%

94.6%

n.a.

n.a.

n.a.

n.a.

n.a.

n.a.

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, Stobie, Creighton and Totten gold interests. The Stobie gold interest was placed into care and maintenance as of May 2017.

4)

Pursuant to the San Dimas SPA with Primero, the Company acquired 100% of the payable silver produced at San Dimas up to 6 million ounces annually, and 50% of any excess for the life of the mine. The San Dimas SPA was terminated on May 10, 2018 and concurrently the Company entered into the new San Dimas PMPA.

5)

The Minto mine was placed into care and maintenance in October 2018.

6)

The Cozamin precious metal purchase agreement expired on April 4, 2017.

7)

In accordance with the Pascua-Lama precious metal purchase agreement, all deliveries from Lagunas Norte, Pierina and Veladero ceased effective March 31, 2018.

8)

GEOs and SEOs are provided to assist the reader. GEOs are calculated by converting silver to a gold equivalent by using the ratio of the average price of gold to the average price of silver and by converting palladium to a gold equivalent by using the average price of gold to the average price of palladium. SEOs are calculated by converting gold to a silver equivalent by using the ratio of the average price of gold to the average price of silver and by converting palladium to a silver equivalent by using the average price of palladium to the average price of silver. Average prices are as per the LBMA during the period.                                         

 

Summary of Ounces Sold

 

Q4 2018 

Q3 2018 

Q2 2018 

Q1 2018 

Q4 2017 

Q3 2017 

Q2 2017 

Q1 2017 

Gold ounces sold

Sudbury 2

4,864

2,560

4,400

5,186

12,059

3,237

5,822

6,887

Salobo

75,351

65,139

70,734

54,645

71,683

67,198

50,478

63,007

Constancia

3,645

2,980

2,172

3,247

1,965

2,206

2,356

2,315

San Dimas 3

8,453

9,771

3,738

Stillwater

3,473

2,075

Other

Minto 4

2,674

796

2,284

1,763

2,020

4,603

6,988

9,902

777

4,353

5,921

3,812

5,132

6,568

5,304

6,321

6,286

Total Other

7,027

6,717

6,096

6,895

8,588

9,907

13,309

16,188

Total gold ounces sold

102,813

89,242

87,140

69,973

94,295

82,548

71,965

88,397

Silver ounces sold

San Dimas 3

1,070

1,372

1,299

962

845

796

Peñasquito

901

1,241

1,547

1,227

1,537

1,109

1,639

860

Antamina

1,300

1,333

1,422

1,413

1,769

1,537

1,453

1,170

Constancia

629

567

410

574

491

491

559

383

Other

Los Filos

15

27

35

52

16

43

42

32

Zinkgruvan

543

326

297

391

597

305

398

296

Yauliyacu

317

697

521

360

642

364

423

403

Stratoni

78

125

171

148

110

84

123

195

Minto 4

22

28

(1)

34

43

39

37

Cozamin 5

23

125

232

Neves-Corvo

240

234

178

169

119

117

114

153

Aljustrel

226

302

Lagunas Norte 6

1

65

236

237

242

204

217

Pierina 6

54

88

106

102

136

150

Veladero 6

2

104

161

211

201

144

159

777

129

163

70

153

124

135

125

142

Total Other

1,570

1,877

1,523

1,757

2,196

1,659

1,873

2,016

Total silver ounces sold

4,400

5,018

5,972

6,343

7,292

5,758

6,369

5,225

Palladium ounces sold

Stillwater

5,049

3,668

GEOs sold 7

159,667

154,222

162,715

149,987

189,882

158,401

159,161

163,032

SEOs sold 7

13,478

12,462

12,855

11,892

14,488

12,024

11,625

11,412

Cumulative payable gold ounces PBND 8

77,470

77,588

70,259

75,153

72,707

75,862

67,827

64,498

Cumulative payable silver ounces PBND 8

3,284

3,062

3,375

4,126

3,828

4,661

3,662

3,571

Cumulative payable palladium ounces PBND 8

5,282

4,671

Gold / Silver Ratio 7

84.4

80.8

79.0

79.3

76.3

75.9

73.0

70.0

Palladium / Silver Ratio 7

79.1

63.4

59.2

61.8

59.3

53.5

47.7

44.0

Gold / Palladium Ratio 7

1.1

1.3

1.3

1.3

1.3

1.4

1.5

1.6

1)

All figures in thousands except gold and palladium ounces sold.

2)

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.

3)

Pursuant to the San Dimas SPA with Primero, the Company acquired 100% of the payable silver produced at San Dimas up to 6 million ounces annually, and 50% of any excess for the life of the mine. The San Dimas SPA was terminated on May 10, 2018 and concurrently the Company entered into the new San Dimas PMPA.

4)

The Minto mine was placed into care and maintenance in October 2018.

5)

The Cozamin precious metal purchase agreement expired on April 4, 2017.

6)

In accordance with the Pascua-Lama precious metal purchase agreement, all deliveries from Lagunas Norte, Pierina and Veladero ceased effective March 31, 2018.

7)

GEOs and SEOs are provided to assist the reader. GEOs are calculated by converting silver to a gold equivalent by using the ratio of the average price of gold to the average price of silver and by converting palladium to a gold equivalent by using the average price of gold to the average price of palladium. SEOs are calculated by converting gold to a silver equivalent by using the ratio of the average price of gold to the average price of silver and by converting palladium to a silver equivalent by using the average price of palladium to the average price of silver. Average prices are as per the LBMA during the period.

8)

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.

 

Results of Operations 

The operating results of the Company”s reportable operating segments are summarized in the tables and commentary below.

Three Months Ended December 31, 2018

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

Sudbury 4

7,053

4,864

$

1,231

$

400

$

795

$

5,988

$

175

$

4,043

$

366,463

Salobo

76,995

75,351

1,228

400

386

92,496

33,258

62,356

2,706,060

Constancia

4,266

3,645

1,225

400

374

4,467

1,645

3,008

117,547

San Dimas

10,092

8,453

1,241

600

558

10,486

694

5,414

208,195

Stillwater

3,472

3,473

1,232

220

528

4,278

1,680

3,513

236,432

Other 5

5,689

7,027

1,228

381

337

8,628

3,585

5,771

21,359

107,567

102,813

$

1,229

$

409

$

421

$

126,343

$

41,037

$

84,105

$

3,656,056

Silver

Peñasquito

1,455

901

$

14.66

$

4.17

$

2.96

$

13,211

$

6,791

$

9,454

$

388,722

Antamina

1,225

1,300

14.57

2.92

8.70

18,945

3,832

14,898

710,077

Constancia

695

629

14.49

5.90

7.14

9,116

913

5,405

246,231

Other 6

2,124

1,570

14.81

5.89

2.41

23,238

10,214

13,415

502,638

5,499

4,400

$

14.66

$

4.66

$

5.06

$

64,510

$

21,750

$

43,172

$

1,847,668

Palladium

Stillwater

5,869

5,049

$

1,137

$

205

$

463

$

5,738

$

2,363

$

4,703

$

259,693

Cobalt

Voisey”s Bay

$

n.a.

$

n.a.

$

n.a.

$

$

$

$

393,422

Operating results

$

196,591

$

65,150

$

131,980

$

6,156,839

Other

General and administrative

$

(21,143)

$

(6,175)

Finance costs

(13,836)

(17,445)

Other

(4,670)

217

Income tax expense

(18,673)

(116)

Total Other

$

(58,322)

$

(23,519)

$

313,207

$

6,828

$

108,461

$

6,470,046

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, the non-operating Victor gold interest and the Stobie gold interest which was placed into care and maintenance during the second quarter of 2017.

5)

Comprised of the operating 777 gold interest in addition to the non-operating Rosemont and Minto gold interests. The Minto mine was placed into care and maintenance in October 2018.

6)

Comprised of the operating Los Filos, Zinkgruvan, Yauliyacu, Stratoni, Neves-Corvo, Aljustrel and 777 silver interests as well as the non-operating Keno Hill, Minto, Loma de La Plata, Pascua-Lama and Rosemont silver interests. The Minto mine was placed into care and maintenance in October 2018. 

                                                      

On a gold equivalent and silver equivalent basis, results for the Company for the three months ended December 31, 2018 were as follows:

Three Months Ended December 31, 2018

Ounces 
Produced1,2

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

178,215

159,667

$    1,231

$    398

$    833

$    425

$    408

Silver equivalent basis

15,044

13,478

$   14.59

$   4.72

$   9.87

$   5.03

$   4.84

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

 

Three Months Ended December 31, 2017

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

Sudbury 5

8,568

12,059

$

1,283

$

400

$

769

$

15,468

$

1,366

$

$

1,366

$

10,667

$

379,988

Salobo

76,153

71,683

1,275

400

381

91,361

35,390

35,390

62,688

2,808,732

Constancia

2,947

1,965

1,273

400

409

2,501

910

910

1,715

122,051

Other 6

8,806

8,588

1,286

386

478

11,048

3,623

3,623

8,771

31,818

96,474

94,295

$

1,277

$

399

$

440

$

120,378

$

41,289

$

$

41,289

$

83,841

$

3,342,589

Silver

San Dimas 7

1,324

1,299

$

16.33

$

4.32

$

1.46

$

21,206

$

13,693

$

$

13,693

$

15,595

$

134,862

Peñasquito

1,561

1,537

17.05

3.87

2.88

26,200

15,815

15,815

20,245

403,250

Antamina

1,434

1,769

16.74

3.35

9.81

29,620

6,346

6,346

23,700

757,638

Constancia

621

491

16.80

5.90

7.36

8,251

1,736

1,736

5,353

261,803

Other 8

2,189

2,196

16.79

5.60

3.65

36,891

16,558

(228,680)

(212,122)

24,690

523,135

7,129

7,292

$

16.75

$

4.48

$

4.84

$

122,168

$

54,148

$

(228,680)

$

(174,532)

$

89,583

$

2,080,688

Operating results

$

242,546

$

95,437

$

(228,680)

$

(133,243)

$

173,424

$

5,423,277

Other

General and administrative

$

(8,913)

$

(5,394)

Finance costs

(7,279)

(6,729)

Other

11,529

3,831

Income tax recovery

194

(49)

Total other

$

(4,469)

$

(8,341)

$

260,036

$

(137,712)

$

165,083

$

5,683,313

1)

All figures in thousands except gold ounces produced and sold and per ounce amounts.

2)

Ounces produced represent the quantity of gold and silver 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)

Relates to the Pascua Lama PMPA.

5)

Comprised of the operating Coleman, Copper Cliff, Garson, Creighton and Totten gold interests, the non-operating Victor gold interest and the Stobie gold interest which was placed into care and maintenance during the second quarter of 2017.

6)

Comprised of the operating Minto and 777 gold interests in addition to the non-operating Rosemont gold interest. The Minto mine was placed into care and maintenance in October 2018.

7)

Pursuant to the San Dimas SPA, the Company acquired 100% of the payable silver produced at San Dimas up to 6 million ounces annually, and 50% of any excess for the life of the mine. On May 10, 2018, the Company terminated the San Dimas SPA and concurrently entered into the new San Dimas PMPA.

8)

Comprised of the operating Los Filos, Zinkgruvan, Yauliyacu, Stratoni, Minto, Neves-Corvo, Lagunas Norte, Pierina, Veladero and 777 silver interests as well as the non-operating Keno Hill, Aljustrel, Loma de La Plata, Pascua-Lama and Rosemont silver interests. In accordance with the Pascua-Lama PMPA, all deliveries from Lagunas Norte, Pierina and Veladero ceased effective March 31, 2018. Additionally, the Minto mine was placed into care and maintenance in October 2018. 

 

On a gold equivalent and silver equivalent basis, results for the Company for the three months ended December 31, 2017 were as follows:

Three Months Ended December 31, 2017

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

189,909

189,882

$    1,277

$    370

$    907

$    405

$    502

Silver equivalent basis

14,491

14,488

$   16.74

$   4.85

$   11.89

$   5.30

$   6.59

1)

Ounces produced represent the quantity of gold and silver 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.

 

Year Ended December 31, 2018

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

Sudbury 4

23,550

17,010

$

1,281

$

400

$

795

$

21,785

$

1,456

$

14,959

$

366,463

Salobo

271,105

265,869

1,266

400

386

336,474

127,455

230,126

2,706,060

Constancia

14,029

12,044

1,267

400

374

15,259

5,937

10,441

117,547

San Dimas 5

26,460

21,962

1,227

600

557

26,943

1,532

13,766

208,195

Stillwater

9,848

5,548

1,222

219

527

6,777

2,637

5,562

236,432

Other 6

28,247

26,735

1,270

388

391

33,955

13,129

22,162

21,359

373,239

349,168

$

1,264

$

409

$

419

$

441,193

$

152,146

$

297,016

$

3,656,056

Silver

San Dimas 5

2,213

2,442

$

16.62

$

4.32

$

1.46

$

40,594

$

26,470

$

30,045

$

Peñasquito

5,222

4,916

15.80

4.17

2.96

77,691

42,662

57,190

388,722

Antamina

5,329

5,468

15.80

3.16

8.70

86,408

21,582

69,143

710,077

Constancia

2,527

2,180

15.63

5.90

7.14

34,082

5,647

21,219

246,231

Other 7

9,183

6,727

15.58

5.98

3.08

104,804

43,873

64,645

502,638

24,474

21,733

$

15.81

$

4.67

$

4.69

$

343,579

$

140,234

$

242,242

$

1,847,668

Palladium

Stillwater

14,686

8,717

$

1,060

$

190

$

463

$

9,240

$

3,551

$

7,584

$

259,693

Cobalt

Voisey”s Bay

$

n.a.

$

n.a.

$

n.a.

$

$

$

$

393,422

Operating results

$

794,012

$

295,931

$

546,842

$

6,156,839

Other

General and administrative

$

(51,650)

$

(29,509)

Finance costs

(41,187)

(40,363)

Other

(5,826)

1,403

Gain on disposal of the San Dimas SPA

245,715

Income tax expense

(15,868)

(960)

Total other

$

131,184

$

(69,429)

$

313,207

$

427,115

$

477,413

$

6,470,046

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, the non-operating Victor gold interest and the Stobie gold interest which was placed into care and maintenance during the second quarter of 2017.

5)

Pursuant to the San Dimas SPA, the Company acquired 100% of the payable silver produced at San Dimas up to 6 million ounces annually, and 50% of any excess for the life of the mine. On May 10, 2018, the Company terminated the San Dimas SPA and concurrently entered into the new San Dimas PMPA

6)

Comprised of the operating Minto and 777 gold interests in addition to the non-operating Rosemont gold interest. The Minto mine was placed into care and maintenance in October 2018.

7)

Comprised of the operating Los Filos, Zinkgruvan, Yauliyacu, Stratoni, Minto, Neves-Corvo, Aljustrel, Lagunas Norte, Pierina, Veladero and 777 silver interests as well as the non-operating Keno Hill, Loma de La Plata, Pascua-Lama and Rosemont silver interests. In accordance with the Pascua-Lama PMPA, all deliveries from Lagunas Norte, Pierina and Veladero ceased effective March 31, 2018. Additionally, the Minto mine was placed into care and maintenance in October 2018. 

 

On a gold equivalent and silver equivalent basis, results for the Company for the year ended December 31, 2018 were as follows:

Year Ended December 31, 2018

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

688,120

625,271

$    1,270

$    393

$    877

$    403

$    474

Silver equivalent basis

55,588

50,511

$   15.72

$   4.87

$   10.85

$   4.99

$   5.86

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.

 

Year Ended December 31, 2017

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

Cash Flow
From 
Operations

Total 
Assets

Gold

Sudbury 5

33,737

28,005

$

1,259

$

400

$

769

$

35,253

$

2,504

$

$

2,504

$

24,042

$

379,988

Salobo

264,656

252,366

1,258

400

381

317,596

120,547

120,547

216,650

2,808,732

Constancia

10,208

8,842

1,258

400

409

11,125

3,969

3,969

7,575

122,051

Other 6

46,503

47,992

1,250

364

405

59,967

23,072

23,072

38,778

31,818

355,104

337,205

$

1,257

$

395

$

417

$

423,941

$

150,092

$

$

150,092

$

287,045

$

3,342,589

Silver

San Dimas 7

3,963

3,902

$

16.83

$

4.30

$

1.46

$

65,677

$

43,174

$

$

43,174

$

48,887

$

134,862

Peñasquito

6,024

5,145

17.09

4.05

2.88

87,906

52,223

52,223

67,050

403,250

Antamina

6,372

5,929

16.97

3.40

9.81

100,617

22,266

22,266

80,434

757,638

Constancia

2,199

1,924

17.16

5.90

7.36

33,026

7,505

7,505

21,470

261,803

Other 8

9,731

7,744

17.05

5.35

3.72

132,048

61,774

(228,680)

(166,906)

88,495

523,135

28,289

24,644

$

17.01

$

4.49

$

4.94

$

419,274

$

186,942

$

(228,680)

$

(41,738)

$

306,336

$

2,080,688

Operating results

$

843,215

$

337,034

$

(228,680)

$

108,354

$

593,381

$

5,423,277

Other

General and administrative

$

(34,673)

$

(30,298)

Finance costs

(30,399)

(29,570)

Other

13,535

5,874

Income tax recovery

886

(579)

Total other

$

(50,651)

$

(54,573)

$

260,036

$

57,703

$

538,808

$

5,683,313

1)

All figures in thousands except gold ounces produced and sold and per ounce amounts.

2)

Ounces produced represent the quantity of gold and silver 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)

  Relates to the Pascua Lama PMPA.

5)

Comprised of the operating Coleman, Copper Cliff, Garson, Creighton and Totten gold interests, the non-operating Victor gold interest and the Stobie gold interest which was placed into care and maintenance during the second quarter of 2017.

6)

Comprised of the operating Minto and 777 gold interests in addition to the non-operating Rosemont gold interest. The Minto mine was placed into care and maintenance in October 2018.

7)

Pursuant to the San Dimas SPA, the Company acquired 100% of the payable silver produced at San Dimas up to 6 million ounces annually, and 50% of any excess for the life of the mine. On May 10, 2018, the Company terminated the San Dimas SPA and concurrently entered into the new San Dimas PMPA.

8)

Comprised of the operating Los Filos, Zinkgruvan, Yauliyacu, Stratoni, Minto, Cozamin, Neves-Corvo, Lagunas Norte, Pierina, Veladero and 777 silver interests as well as the non-operating Keno Hill, Aljustrel, Loma de La Plata, Pascua-Lama and Rosemont silver interests. In accordance with the Pascua-Lama PMPA, all deliveries from Lagunas Norte, Pierina and Veladero ceased effective March 31, 2018. Additionally, the Cozamin PMPA expired on April 4, 2017 and the Minto mine was placed into care and maintenance in October 2018. 

 

On a gold equivalent and silver equivalent basis, results for the Company for the year ended December 31, 2017 were as follows:

Year Ended December 31, 2017

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

738,650

671,330

$    1,256

$    363

$    893

$    391

$    502

Silver equivalent basis

54,482

49,517

$   17.03

$   4.92

$   12.11

$   5.30

$   6.81

1)

Ounces produced represent the quantity of gold and silver 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.

 

Non-IFRS Measures

Wheaton Precious Metals 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; (iv) cash operating margin.

     i.

Adjusted net earnings and adjusted net earnings per share are calculated by removing the effects of the non-cash impairment charges, non-cash fair value (gains) losses, non-cash share of losses of associates and other one-time (income) expenses. 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
December 31

Years Ended
December 31

(in thousands, except for per share amounts)

2018

2017

2018

2017

Net earnings (loss)

$

6,828

$

(137,712)

$

427,115

$

57,703

Add back (deduct):

Impairment loss

228,680

228,680

Gain on disposal of San Dimas SPA

(245,715)

Share in losses of associate

59

432

Loss on fair value adjustment of share purchase warrants held

1

6

124

6

Loss on fair value adjustment of Kutcho Convertible Note

661

(215)

2,878

(215)

Fees for contract amendments and reconciliations

(8,436)

(248)

(9,424)

Costs associated with the CRA Settlement

Income tax expense related to CRA Settlement

20,334

20,334

Interest and penalties

4,317

4,317

Professional fees

4,545

4,545

Adjusted net earnings

$

36,745

$

82,323

$

213,782

$

276,750

Divided by:

Basic weighted average number of shares outstanding

444,057

442,469

443,407

441,961

Diluted weighted average number of shares outstanding

444,429

442,978

443,862

442,442

Equals:

Adjusted earnings per share – basic

$

0.08

$

0.19

$

0.48

$

0.63

Adjusted earnings per share – diluted

$

0.08

$

0.19

$

0.48

$

0.63

 

 

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
December 31

Years Ended
December 31

(in thousands, except for per share amounts)

2018

2017

2018

2017

Cash generated by operating activities

$

108,461

$

165,083

$

477,413

$

538,808

Divided by:

Basic weighted average number of shares outstanding

444,057

442,469

443,407

441,961

Diluted weighted average number of shares outstanding

444,429

442,978

443,862

442,442

Equals:

Operating cash flow per share – basic

$

0.24

$

0.37

$

1.08

$

1.22

Operating cash flow per share – diluted

$

0.24

$

0.37

$

1.08

$

1.22

 

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. 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
December 31

Years Ended 
December 31

(in thousands, except for gold and palladium ounces sold 
and per ounce amounts)

2018

2017

2018

2017

Cost of sales

$

131,441

$

147,109

$

498,081

$

506,181

Less:  depletion

(67,843)

(76,813)

(252,287)

(262,380)

Cash cost of sales

$

63,598

$

70,296

$

245,794

$

243,801

Cash cost of sales is comprised of:

Total cash cost of gold sold

$

42,054

$

37,603

$

142,728

$

133,165

Total cash cost of silver sold

20,508

32,693

101,410

110,636

Total cash cost of palladium sold

1,036

1,656

Total cash cost of sales

$

63,598

$

70,296

$

245,794

$

243,801

Divided by:

Total gold ounces sold

102,813

94,295

349,168

337,205

Total silver ounces sold

4,400

7,292

21,733

24,644

Total palladium ounces sold

5,049

8,717

Equals:

Average cash cost of gold (per ounce)

$

409

$

399

$

409

$

395

Average cash cost of silver (per ounce)

$

4.66

$

4.48

$

4.67

$

4.49

Average cash cost of palladium (per ounce)

$

205

$

n.a.

$

190

$

n.a.

 

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.

 

(in thousands, except for gold and palladium ounces sold and per ounce amounts)

2018

2017

2018

2017

Total sales:

Gold

$

126,343

$

120,378

$

441,193

$

423,941

Silver

$

64,510

$

122,168

$

343,579

$

419,274

Palladium

$

5,738

$

$

9,240

$

Divided by:

Total gold ounces sold

102,813

94,295

349,168

337,205

Total silver ounces sold

4,400

7,292

21,733

24,644

Total palladium ounces sold

5,049

8,717

Equals:

Average realized price of gold (per ounce)

$

1,229

$

1,277

$

1,264

$

1,257

Average realized price of silver (per ounce)

$

14.66

$

16.75

$

15.81

$

17.01

Average realized price of palladium (per ounce)

$

1,137

$

n.a.

$

1,060

$

n.a.

Less:

Average cash cost of gold 1 (per ounce)

$

(409)

$

(399)

$

(409)

$

(395)

Average cash cost of silver 1 (per ounce)

$

(4.66)

$

(4.48)

$

(4.67)

$

(4.49)

Average cash cost of palladium 1 (per ounce)

$

(205)

$

n.a.

$

(190)

$

n.a.

Equals:

Cash operating margin per gold ounce sold

$

820

$

878

$

855

$

862

As a percentage of realized price of gold

67%

69%

68%

69%

Cash operating margin per silver ounce sold

$

10.00

$

12.27

$

11.14

$

12.52

As a percentage of realized price of silver

68%

73%

70%

74%

Cash operating margin per palladium ounce sold

$

932

$

n.a.

$

870

$

n.a.

As a percentage of realized price of palladium

82%

n.a.

82%

n.a.

1)

Please refer to non-IFRS measure (iii), above.

 

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 Precious Metals” MD&A available on the Company”s website at www.wheatonpm.com and posted on SEDAR at www.sedar.com.

CAUTIONARY NOTE REGARDING FORWARD LOOKING-STATEMENTS

The information contained herein 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. Forward-looking statements, which are all statements other than statements of historical fact, include, but are not limited to, statements with respect to:

  • estimated future production as a result of the Salobo Expansion;
  • the construction timeline, including completion, of the mine expansion, including the underground mines, at Voisey”s Bay by Vale and the commencement and timing of delivery of cobalt by Vale under the Voisey”s Bay cobalt purchase agreement;
  • the receipt by Hudbay of a Mine Plan of Operations from the U.S. Forest Service in respect of the Rosemont project and the commencement of production at the Rosemont project;
  • the effect of the Servicio de Administraciόn Tributaria (‘SAT’) legal claim on the business, financial condition, results of operations and cash flows for 2010-2014 and 2015-2019 in respect of the San Dimas mine;
  • the repayment of the Kutcho convertible note;
  • the ability of Barrick Gold Corporation (‘Barrick’) to advance the Pascua-Lama project (as defined herein);
  • the development and commencement of mining of the Pampacancha deposit at the Constancia mine;
  • proposed improvements at mining operations, including the San Dimas mine;
  • future payments by the Company in accordance with precious metal purchase agreements, including any acceleration of payments, estimated throughput and exploration potential;
  • projected increases to Wheaton”s production and cash flow profile;
  • the expansion and exploration potential at the Salobo and Peñasquito mines;
  • projected changes to Wheaton”s production mix;
  • anticipated increases in total throughput;
  • the estimated future production (including increases in production, estimated grades and recoveries);
  • the future price of commodities;
  • the estimation of mineral reserves and mineral resources;
  • the realization of mineral reserve estimates;
  • the timing and amount of estimated future production (including 2019 and average attributable annual production over the next five years);
  • the costs of future production;
  • reserve determination;
  • estimated reserve conversion rates and 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 precious metal stream interests;
  • confidence in the Company”s business structure;
  • the Company”s estimation of the cash taxes payable in respect of the 2005 to 2010 taxation years as a result of the CRA Settlement;
  • the Company”s assessment of 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.

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:

• Vale is unable to produce the estimated future production in connection with the Salobo Expansion;
• Vale does not meet the construction timeline, including anticipated completion, of the mine expansion, including the underground mines, at Voisey”s Bay or Vale is unable to commence, or the timing of delivery of cobalt by Vale is delayed or deferred under the Voisey”s Bay cobalt purchase agreement;
• Wheaton is unable to sell its cobalt production delivered under the Voisey”s Bay cobalt purchase agreement at acceptable prices or at all or there is a decrease in demand for cobalt, the decrease in uses for cobalt or the discovery of new supplies of cobalt, any or all of which could result in a decrease to the price of cobalt or a decrease in the ability to sell cobalt;
• Hudbay does not receive the Mine Plan of Operations from the U.S. Forest Service in respect of the Rosemont project;
• First Majestic being able to defend the validity of the 2012 APA, is unable to pay taxes in Mexico based on realized silver prices or the SAT proceedings or actions otherwise having an adverse impact on the business, financial condition or results of operation in respect of the San Dimas mine;
• Kutcho not being able to make payments under the Kutcho Convertible Note;
• Hudbay will not commence development and /or mining of the Pampacancha deposit at the Constancia mine;
• proposed improvements at mining operations, including the San Dimas mine, will not be achieved;
• that each party does not satisfy its obligations in accordance with the terms of the precious metal purchase agreements;
• risks related to the satisfaction of each party”s obligations in accordance with the terms of the Company”s precious metal purchase agreements, including the ability of the companies with which the Company has precious metal purchase agreements to perform their obligations under those precious metal purchase agreements in the event of a material adverse effect on the results of operations, financial condition, cash flows or business of such companies, any acceleration of payments, estimated throughput and exploration potential;
• fluctuations in the price of commodities;
• risks related to the mining operations including risks related to fluctuations in the price of the primary commodities mined at such operations, actual results of mining and exploration activities, environmental, economic and political risks of the jurisdictions in which the mining operations are located, and changes in project parameters as plans continue to be refined;
• absence of control over the mining operations and having to rely on the accuracy of the public disclosure and other information Wheaton receives from the owners and operators of the mining operations as the basis for its analyses, forecasts and assessments relating to its own business;
• differences in the interpretation or application of tax laws and regulations or accounting policies and rules;
• Wheaton”s interpretation of, or compliance with, tax laws and regulations or accounting policies and rules, being found to be incorrect or the tax impact to the Company”s business operations being materially different than currently contemplated;
• any challenge 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;
• any reassessment of the Company”s tax filings and the continuation or timing of any such process being outside the Company”s control;
• any requirement to pay reassessed tax, and the amount of any tax, interest and penalties that may be payable changing due to currency fluctuations;
• risks in estimating cash taxes payable in respect of the 2005 to 2010 taxation years and 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 risks;
• indebtedness and guarantees risks;
• mine operator concentration risks;
• hedging risk;
• competition in the streaming industry;
• risks related to Wheaton”s acquisition strategy;
• risks related to the market price of the common shares of Wheaton (the ‘Common Shares’);
• equity price risks related to Wheaton”s holding of long term investments in other companies;
• risks related to interest rates;
• risks related to the declaration, timing and payment of dividends;
• the ability of Wheaton and the mining operations to retain key management employees or procure the services of skilled and experienced personnel;
• litigation risk associated with outstanding legal matters;
• risks related to claims and legal proceedings against Wheaton or the mining operations;
• risks relating to activist shareholders;
• risks relating to reputational damage;
• risks relating to unknown defects and impairments;
• risks relating to security over underlying assets;
• risks related to ensuring the security and safety of information systems, including cyber security risks;
• risks related to the adequacy of internal control over financial reporting;
• risks related to fluctuations in commodity prices of metals produced from the mining operations other than precious metals or cobalt;
• risks related to governmental regulations;
• risks related to international operations of Wheaton and the mining operations;
• risks relating to exploration, development and operations at the mining operations;
• risks related to environmental regulations and climate change;
• the ability of Wheaton and the mining operations to obtain and maintain necessary licenses, permits, approvals and rulings;
• the ability of Wheaton and the mining operations to comply with applicable laws, regulations and permitting requirements;
• lack of suitable infrastructure and employees to support the mining operations;
• uncertainty in the accuracy of mineral reserve and mineral resource estimates;
• inability to replace and expand mineral reserves;
• risks relating to production estimates from mining operations, including anticipated timing of the commencement of production by certain mining operations (including increases in production, estimated grades and recoveries);
• uncertainties related to title and indigenous rights with respect to the mineral properties of the mining operations;
• the ability of Wheaton and the mining operations to obtain adequate financing;
• the ability of the mining operations to complete permitting, construction, development and expansion;
• challenges related to global financial conditions;
• risks relating to future sales or the issuance of equity securities; 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, and in Wheaton”s Form 40-F for the year ended December 31, 2018 and Form 6-K filed March 20, 2019 both on file with the U.S. Securities and Exchange Commission in Washington, D.C. (the ‘Disclosure’).

Forward-looking statements are based on assumptions management currently believes to be reasonable, including but not limited to:

• Vale is able to produce the estimated future production as a result of the Salobo Expansion;
• Vale is able to meet the construction timeline, including anticipated completion, of the mine expansion, including the underground mines, at Voisey”s Bay and Vale is able to commence and meet its timing for delivery of cobalt under the Voisey”s Bay cobalt purchase agreement;
• Wheaton is able to sell cobalt production delivered under the Voisey”s Bay cobalt purchase agreement at acceptable prices and the demand and uses for cobalt will not significantly decrease and the supply of cobalt will not significantly increase;
• that Hudbay will receive the Mine Plan of Operations from the U.S. Forest Service in respect of the Rosemont project;
• that Kutcho will make all required payments and not be in default under the Kutcho Convertible Note;
• Hudbay will commence development and /or mining of the Pampacancha deposit at the Constancia mine or will deliver a delay payment in accordance with the precious metals purchase agreement;
• proposed improvements at mining operations, including the San Dimas mine, will be achieved;
• that Wheaton will be able to terminate the Pascua-Lama precious metal purchase agreement in accordance with its terms;
• that each party will satisfy their obligations in accordance with the precious metal purchase agreements;
• that there will be no material adverse change in the market price of commodities;
• 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 Wheaton will continue to be able to fund or obtain funding for outstanding commitments;
• that Wheaton will be able to source and obtain accretive precious metal stream interests;
• expectations regarding the resolution of legal and tax matters, including the ongoing class action litigation and CRA audits involving the Company;
• that Wheaton will be successful in challenging any reassessment by the CRA;
• that Wheaton has properly considered the 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 ability to enter into new precious metal purchase agreements will not be impacted by any CRA reassessment;
• expectations and assumptions concerning prevailing tax laws and the potential amount that could be reassessed as additional tax, penalties and interest by the CRA;
• that Wheaton”s estimation of cash taxes payable in respect of the 2005 to 2010 taxation years as a result of the CRA Settlement and the Company”s assessment of the impact of the CRA Settlement for years subsequent to 2010 are 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;
• the estimate of the recoverable amount for any precious metal purchase agreement with an indicator of impairment; and
• such other assumptions and factors as set out in the Disclosure.

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. 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. Accordingly, 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 investors 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. Wheaton does not undertake to update any forward-looking statements that are included or incorporated by reference herein, except in accordance with applicable securities laws.

Cautionary Language Regarding Reserves And Resources

For further information on Mineral Reserves and Mineral Resources and on Wheaton more generally, readers should refer to Wheaton”s Annual Information Form for the year ended December 31, 2017 and other continuous disclosure documents filed by Wheaton since January 1, 2018, available on SEDAR at www.sedar.com. Wheaton”s Mineral Reserves and Mineral Resources are subject to the qualifications and notes set forth therein. Mineral Resources which are not Mineral Reserves do not have demonstrated economic viability.

Cautionary Note to United States Investors Concerning Estimates of Measured, Indicated and Inferred Resources: The information contained herein has been prepared in accordance with the requirements of the securities laws in effect in Canada, which differ from the requirements of United States securities laws. The terms ‘mineral reserve’, ‘proven mineral reserve’ and ‘probable mineral reserve’ are Canadian mining terms defined in accordance with Canadian National Instrument 43-101 – Standards of Disclosure for Mineral Projects (‘NI 43-101’) and the Canadian Institute of Mining, Metallurgy and Petroleum (the ‘CIM’) – CIM Definition Standards on Mineral Resources and Mineral Reserves, adopted by the CIM Council, as amended (the ‘CIM Standards’). These definitions differ from the definitions in Industry Guide 7 (‘SEC Industry Guide 7’) under the U.S. Securities Act of 1933, as amended (the ‘U.S. Securities Act’). Under U.S. standards, mineralization may not be classified as a ‘reserve’ unless the determination has been made that the mineralization could be economically and legally produced or extracted at the time the reserve determination is made. Also, under SEC Industry Guide 7 standards, a ‘final’ or ‘bankable’ feasibility study is required to report reserves, the three-year historical average price is used in any reserve or cash flow analysis to designate reserves and the primary environmental analysis or report must be filed with the appropriate governmental authority. In addition, the terms ‘mineral resource’, ‘measured mineral resource’, ‘indicated mineral resource’ and ‘inferred mineral resource’ are defined in and required to be disclosed by NI 43-101; however, these terms are not defined terms under SEC Industry Guide 7 and are normally not permitted to be used in reports and registration statements filed with the SEC. Investors are cautioned not to assume that any part or all of the mineral deposits in these categories will ever be converted into reserves. ‘Inferred mineral resources’ have a great amount of uncertainty as to their existence and as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility or pre-feasibility studies, except in rare cases. Investors are cautioned not to assume that all or any part of an inferred mineral resource exists or is economically or legally mineable. Mineral resources that are not mineral reserves do not have demonstrated economic viability. Disclosure of ‘contained ounces’ in a resource is permitted disclosure under Canadian regulations; however, the SEC normally only permits issuers to report mineralization that does not constitute ‘reserves’ by SEC standards as in place tonnage and grade without reference to unit measures. Accordingly, information contained herein that describes Wheaton”s mineral deposits may not be comparable to similar information made public by U.S. companies subject to reporting and disclosure requirements under the United States federal securities laws and the rules and regulations thereunder. United States investors are urged to consider closely the disclosure in Wheaton”s Form 40-F, a copy of which may be obtained from Wheaton or from http://www.sec.gov/edgar.shtml.

In accordance with the Company”s MD&A and financial statements, reference to the Company includes the Company”s wholly owned subsidiaries.

Patrick Drouin, Senior Vice President, Investor Relations, Wheaton Precious Metals Corp., Tel: 1-844-288-9878, Email: info@wheatonpm.com  Website: www.wheatonpm.com

TSX: WPM

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