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Mar 12, 2020 1:58 AM ET

Wheaton Precious Metals Generates Strong Operating Cash Flow on Record Gold Production and Sales Volumes in 2019


iCrowd Newswire - Mar 12, 2020

VANCOUVER,- “Wheaton’s portfolio of high-quality, long-life assets generated over $500 million in operating cash flow in 2019 with annual gold production and sales volumes achieving a new record,” said Randy Smallwood, President and Chief Executive Officer of Wheaton Precious Metals. “For the first time in company history, Wheaton produced over 400,000 ounces of gold, and that is in addition to over 22.5 million ounces of silver and 22 thousand ounces of palladium. With our strong organic growth profile combined with numerous opportunities that could further grow our asset base, we look forward to setting many new records in the coming years. In addition, we are pleased to deliver greater value back to our shareholders in 2020 by increasing the minimum quarterly dividend by over 10% relative to last year.”

Fourth Quarter and Year End 2019 Highlights:

Operational Overview

     

Q4 2019

   

Q4 2018

 

Change

   

2019

   

2018

 

Change

Ounces produced

                               

Gold

   

107,225

   

107,160

 

0.1 %

   

406,675

   

383,974

 

5.9 %

Silver

   

5,962

   

5,499

 

8.4 %

   

22,562

   

24,474

 

(7.8)%

Palladium

   

6,057

   

5,869

 

3.2 %

   

21,993

   

14,686

 

49.8 %

Gold equivalent 2

   

186,892

   

180,936

 

3.3 %

   

707,195

   

700,446

 

1.0 %

Ounces sold

                               

Gold

   

89,223

   

102,813

 

(13.2)%

   

389,086

   

349,168

 

11.4 %

Silver

   

4,684

   

4,400

 

6.5 %

   

17,703

   

21,733

 

(18.5)%

Palladium

   

5,312

   

5,049

 

5.2 %

   

20,681

   

8,717

 

137.2 %

Gold equivalent 2

   

152,389

   

162,205

 

(6.1)%

   

628,447

   

625,701

 

0.4 %

Revenue

 

$

223,222

 

$

196,591

 

13.5 %

 

$

861,332

 

$

794,012

 

8.5 %

Net earnings

 

$

77,524

 

$

6,828

 

1,035 %

 

$

86,138

 

$

427,115

 

(79.8)%

Per share

 

$

0.17

 

$

0.02

 

750.0 %

 

$

0.19

 

$

0.96

 

(80.2)%

Adjusted net earnings 1

 

$

77,953

 

$

36,745

 

112.1 %

 

$

251,993

 

$

213,782

 

17.9 %

Per share 1

 

$

0.17

 

$

0.08

 

110.5 %

 

$

0.56

 

$

0.48

 

17.2 %

Operating cash flows

 

$

131,867

 

$

108,461

 

21.6 %

 

$

501,620

 

$

477,413

 

5.1 %

Per share 1

 

$

0.29

 

$

0.24

 

20.8 %

 

$

1.12

 

$

1.08

 

3.7 %

Dividends paid 1

 

$

40,252

 

$

39,959

 

0.7 %

 

$

160,656

 

$

159,619

 

0.6 %

Per share

 

$

0.09

 

$

0.09

 

0.0 %

 

$

0.36

 

$

0.36

 

0.0 %

 

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

Subsequent to the Quarter

Production Guidance

Financial Review

Revenues
Revenue was $223 million in the fourth quarter of 2019 representing a 14% increase from the fourth quarter of 2018 due primarily to:

Revenue was $861 million in the year ended December 31, 2019 representing an 8% increase from 2018 due primarily to:

Costs and Expenses
Average cash costs¹ in the fourth quarter of 2019 were:

Average cash costs¹ in 2019 were:

This resulted in a cash operating margin¹ of:

Balance Sheet (at December 31, 2019)

Fourth Quarter Asset Highlights

SaloboIn the fourth quarter of 2019, Salobo produced 74,700 ounces of attributable gold, virtually unchanged relative to the fourth quarter of 2018. In Vale S.A.’s (“Vale”) Fourth Quarter 2019 Performance Report, Vale reports that physical completion of the Salobo III mine expansion is now 40% and is on track to start up in the first half of 2022.

Peñasquito: In the fourth quarter of 2019, Peñasquito produced 1.9 million ounces of attributable silver, an increase of approximately 30% relative to the fourth quarter of 2018 primarily due to higher grades.

San DimasIn the fourth quarter of 2019, San Dimas produced 11,400 ounces of attributable gold, an increase of approximately 12% relative to the fourth quarter of 2018 primarily due to higher grades and throughput. According to First Majestic Silver Corp.’s (“First Majestic”) Fourth Quarter 2019 MD&A, First Majestic has announced plans to increase production at San Dimas by restarting mining operations at the past-producing Tayoltita mine by the end of the first quarter and expects to ramp up production to add another 300 tpd to San Dimas throughput by the end of 2020. In addition, First Majestic plans to install a new 3,000 tpd high-intensity grinding mill circuit and an autogenous grinding mill in the second half of 2020 to further improve recoveries and reduce operating costs.

AntaminaIn the fourth quarter of 2019, Antamina produced 1.3 million ounces of attributable silver, an increase of approximately 10% relative to the fourth quarter of 2018, primarily due to higher grades.

ConstanciaIn the fourth quarter of 2019, Constancia produced 0.6 million ounces of attributable silver and 4,800 ounces of attributable gold, a decrease of approximately 9% for silver production and an increase of approximately 12% for gold production relative to the fourth quarter of 2018. As per Wheaton’s precious metals purchase agreement with Hudbay Minerals Inc. (“Hudbay”), should Hudbay fail to achieve a minimum level of throughput at the Pampacancha deposit during 2018, 2019 and 2020, Wheaton will be entitled to an additional 8,020 ounces of gold (received in quarterly installments) in each of 2019, 2020 and 2021, of which 8,020 ounces of gold was received during 2019. As per Hudbay’s news release dated February 18, 2020, Hudbay secured the surface rights for the Pampacancha deposit and expects to begin mining ore from the satellite deposit in late 2020.

Other Gold: In the fourth quarter of 2019, total Other Gold attributable production was 6,200 ounces, an increase of approximately 9% relative to the fourth quarter of 2018, primarily due to the resumption of mining at the Minto mine.

Produced But Not Yet Delivered 4

As at December 31, 2019, payable ounces attributable to the Company produced but not yet delivered amounted to:

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.

Reserves and Resources (at December 31, 2019)

Estimated attributable reserves and resources contained in this press release are based on information available to the Company as of March 11, 2020, and therefore will not reflect updates, if any, after that date. Updated reserves and resources data incorporating year-end 2019 estimates will also be included in the Company’s 2019 Annual Information Form. Wheaton’s most current attributable reserves and resources, as of December 31, 2019, can be found on the Company’s 

At-The-Market Equity Program

Wheaton intends to initiate an at-the-market equity program (the “ATM Program”) that would allow the Company to issue up to $300 million worth of common shares from treasury (“Common Shares”) to the public from time to time at the prevailing market price or other prices through the Toronto Stock Exchange, the New York Stock Exchange or any other marketplace on which the Common Shares are listed, quoted or otherwise trade. The volume and timing of distributions under the ATM Program, if any, will be determined at the Company’s sole discretion, subject to applicable regulatory limitations. The ATM Program remains subject to negotiation of definitive agreements with the Canadian and U.S. agents, filing of the prospectus supplement with the Canadian securities regulators and U.S. Securities and Exchange Commission (the “SEC”) respectively and receipt of all regulatory approvals, which conditions are anticipated to be satisfied in April. Wheaton intends that the net proceeds from the ATM Program, if any, will be available as one potential source of funding for stream acquisitions and/or other general corporate purposes including the repayment of indebtedness. Details of the ATM Program will be provided upon filing of a prospectus supplement with the Canadian securities regulators and the SEC in early April.  Sales of common shares through the ATM Program will be made pursuant to the terms of an equity distribution agreement.

Outlook

Wheaton’s estimated attributable production in 2020 is forecast to be between 685,000 and 725,000 gold equivalent ounces3 comprised of 390,000 to 410,000 gold ounces, 22.0 to 23.5 million silver ounces, and 23,000 to 24,500 palladium ounces. For the five-year period ending in 2024, the Company estimates that average annual gold equivalent production3 will amount to 750,000 ounces. As a reminder, Wheaton does not include any production from Barrick’s Pascua-Lama project or Hudbay’s Rosemont project in its estimated average five-year production guidance.

From a liquidity perspective, the $104 million of cash and cash equivalents as at December 31, 2019 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.



Contact Information:

Wheaton Precious Metals Corp.








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