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Wheaton Precious Metals Generates Strong Cash Operating Margins in 2022

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Wheaton Precious Metals Generates Strong Cash Operating Margins in 2022

 

 

 

 

 

“Wheaton’s portfolio of long-life, low-cost assets delivered over $1 billion in revenue and over $740 million in operating cash flow in 2022. This strong financial performance reflects the resiliency of Wheaton’s streaming business model, which delivers amongst the highest margins in the precious metals space. Even in the current inflationary environment, Wheaton averaged 75% cash operating margins in 2022,” said Randy Smallwood, President and Chief Executive Officer of Wheaton Precious Metals. “In addition, Wheaton took strategic steps forward by optimizing the portfolio, adding four new streams and making sector-leading commitments on the sustainability front. With one of the strongest balance sheets in the industry, we enter 2023 exceptionally well-positioned to deliver long-term shareholder value through the significant organic growth profile already embedded in the portfolio as well as through additional accretive acquisitions.”

 

Solid Financial Results and Strong Balance Sheet

  • Fourth Quarter of 2022: $236 million in revenue, $172 million in operating cash flow, $166 million in net earnings and $104 million in adjusted net earnings1
  • Full Year of 2022: $1,065 million in revenue, $743 million in operating cash flow, $669 million in net earnings and $505 million in adjusted net earnings1
  • A cash balance of $696 million and no debt as at December 31, 2022
  • Undrawn US$2 billion revolving credit facility with a July 18, 2027 maturity date
  • Declared a quarterly dividend1 of $0.15 per common share

 

High Quality Asset Base

  • Streaming agreements on 20 operating mines and 12 development projects
  • 93% of attributable production from assets in the lowest half of their respective cost curves2,3
  • 30 years of mine life based on Proven and Probable Mineral Reserves and potential additional mine life from mineral resource conversion and exploration2,4
  • Attributable gold equivalent production of 148,300 ounces in the Fourth Quarter of 2022 and 638,100 for the Full Year of 2022
  • Average annual production for the ten-year period ending December 31, 2032, is expected to be approximately 850,000 gold equivalent ounces (“GEOs”)2,3,5
  • Completed the previously disclosed termination of the Yauliyacu precious metal purchase agreement (“PMPA”), resulting in a $51 million gain on the disposition in the fourth quarter

 

Leadership in Sustainability

  • Top Rankings: #1 out of 114 precious metals companies and Global Top 50 out of over 15,000 multi-sector companies by Sustainalytics, AA rated by MSCI, and Prime rated by ISS
  • Commitment to Net-Zero Carbon Emissions by 2050 supported by interim targets covering all material emissions including Scope 3
  • Established a sustainability linked element in connection with the revolving credit facility
  • Recognized as one of the Best 50 Corporate Citizens in Canada by Corporate Knights

 

Operational Overview 

 

(all figures in US dollars unless otherwise noted) Q4 2022 Q4 2021 Change 2022 2021 Change
Units produced
Gold ounces 70,099 87,296 (19.7) % 286,805 341,521 (16.0) %
Silver ounces 5,352 6,356 (15.8) % 23,997 25,999 (7.7) %
Palladium ounces 3,869 4,733 (18.3) % 15,485 20,908 (25.9) %
Cobalt pounds 128 381 (66.4) % 724 2,293 (68.4) %
Gold equivalent ounces 3 148,323 184,551 (19.6) % 638,113 754,591 (15.4) %
Units sold
Gold ounces 68,996 79,622 (13.3) % 293,234 312,465 (6.2) %
Silver ounces 4,935 5,116 (3.5) % 21,570 22,860 (5.6) %
Palladium ounces 3,396 4,641 (26.8) % 15,076 19,344 (22.1) %
Cobalt pounds 187 228 (18.0) % 1,038 886 17.2 %
Gold equivalent ounces 3 142,190 157,439 (9.7) % 617,450 656,074 (5.9) %
Change in PBND and Inventory
Gold equivalent ounces 3 (11,870) 11,252 23,122 (47,055) 33,628 80,683
Revenue $ 236,051 $ 278,197 (15.1) % $ 1,065,053 $ 1,201,665 (11.4) %
Net earnings $ 166,125 $ 291,822 (43.1) % $ 669,126 $ 754,885 (11.4) %
Per share $ 0.367 $ 0.648 (43.4) % $ 1.482 $ 1.677 (11.6) %
Adjusted net earnings 1 $ 103,744 $ 132,232 (21.5) % $ 504,912 $ 592,079 (14.7) %
Per share 1 $ 0.229 $ 0.293 (21.8) % $ 1.118 $ 1.315 (15.0) %
Operating cash flows $ 172,028 $ 195,290 (11.9) % $ 743,424 $ 845,145 (12.0) %
Per share 1 $ 0.381 $ 0.433 (12.0) % $ 1.646 $ 1.878 (12.4) %
All amounts in thousands except gold, palladium & gold equivalent ounces, and per share amounts.

Fourth Quarter Operating Asset Highlights

 

Salobo: In the fourth quarter of 2022, Salobo produced 37,900 ounces of attributable gold, a decrease of approximately 21% relative to the fourth quarter of 2021, primarily due to lower throughput and grades. According to Vale S.A.’s, plant availability was impacted due to additional planned and corrective maintenance performed in the fourth quarter.

 

 

Vale reports the Salobo III mine expansion project, which will increase the mill throughput by 50%, successfully commenced at the end of 2022. The project consists of two lines, the first of which started up in the fourth quarter of 2022 and the second expected to start in the first quarter of 2023.

 

Subsequent to the quarter, Wheaton and Vale agreed to amend the Salobo PMPA to adjust the expansion payment terms in order to provide increased flexibility for the ramp-up of the expansion while also maintaining an incentive for Vale to maximize grade on an annual basis. The expansion payment will now be phased, with Wheaton making an initial payment once actual throughput is expanded above 32 million tonnes per annum (“Mtpa”) and a second payment if actual throughput is expanded above 35 Mtpa, by January 1, 2031. The total cumulative payments will range from $283 million to $552 million, dependent at Vale’s timing for each of the production increases. In addition, Wheaton will be required to make annual payments of between $5.1 million to $8.5 million for a 10-year period following payment of the expansion payments if the Salobo mine maintains a high-grade mine plan.

 

Antamina: In the fourth quarter of 2022, Antamina produced 1.1 million ounces of attributable silver, a decrease of approximately 19% relative to the fourth quarter of 2021, primarily due to lower grades as per the mine plan.

 

Peñasquito: In the fourth quarter of 2022, Peñasquito produced 1.8 million ounces of attributable silver, a decrease of approximately 18% relative to the fourth quarter of 2021 with lower recovery and grades as per the mine plan.

 

Constancia: In the fourth quarter of 2022, Constancia produced 0.7 million ounces of attributable silver and 10,500 ounces of attributable gold, an increase of approximately 13% and 6%, respectively, relative to the fourth quarter of 2021, with the increase in silver being primarily due to higher grades and recovery while the increase in gold production being primarily due to the mining of higher-grade material. According to Hudbay Minerals Inc. (“Hudbay”), gold production was lower than expected in the fourth quarter as a result of short-term changes in the mine plan that prioritized the processing of lower grade stockpiles and shorter-haulage distance ore from the Constancia pit versus higher-grade ore from the Pampacancha pit. These changes were implemented by Hudbay to ration fuel during a period of nation-wide social unrest and road blockades following a change in Peru’s political leadership in early December 2022, and ensured the plant continued to operate uninterrupted.

 

Sudbury: In the fourth quarter of 2022, Vale’s Sudbury mines produced 6,300 ounces of attributable gold, an increase of approximately 45% relative to the fourth quarter of 2021, primarily due to higher throughput as fourth quarter 2021 production was impacted by the temporary closure of the Totten Mine after the shaft was damaged on September 26, 2021.

 

Stillwater: In the fourth quarter of 2022, the Stillwater mines produced 2,200 ounces of attributable gold and 3,900 ounces of attributable palladium, a decrease of approximately 18% for gold and 18% for palladium relative to the fourth quarter of 2021. As per Sibanye-Stillwater Limited (“Sibanye”), the ramp-up of production post the regional flood event in early June 2022 progressed well, with production rates normalising during Q4 2022. Sibanye continues to reposition the Stillwater operations for the current skills shortage and changing macro environment and expects further normalization of production rates in 2023.

 

San Dimas: In the fourth quarter of 2022, San Dimas produced 10,000 ounces of attributable gold, a decrease of approximately 27% relative to the fourth quarter of 2021, primarily due to the mining of lower grade material. According to First Majestic Silver Corp., silver and gold grades were impacted primarily due to the processing of lower grade development ores from the Perez vein and higher tonnages from underground areas with challenging ground conditions within the Jessica and Regina veins in the Noche Buena area.

 

Other Gold: In the fourth quarter of 2022, total Other Gold attributable production was 3,100 ounces, a decrease of approximately 63% relative to the fourth quarter of 2021, primarily due to the closure of the 777 mine in June 2022.

 

Other Silver: In the fourth quarter of 2022, total Other Silver attributable production was 1.8 million ounces, a decrease of approximately 19% relative to the fourth quarter of 2021, primarily due to the placement of Stratoni into care and maintenance, the closure of the 777 mine and the termination of the Keno Hill and Yauliyacu PMPAs.

 

Voisey’s Bay: In the fourth quarter of 2022, the Voisey’s Bay mine produced 128,000 pounds of attributable cobalt, a decrease of approximately 66% relative to the fourth quarter of 2021, primarily due to mining lower grade material during the ongoing transitional period between the depletion of the Ovoid open-pit mine and ramp-up to full production of the Voisey’s Bay underground project. Vale reports that physical completion of the Voisey’s Bay underground mine extension was 81% at the end of the fourth quarter. In the second quarter of 2021, Vale achieved the first ore production from the Reid Brook deposit, the first of two underground mines to be developed in the project. Eastern Deeps, the second deposit, has started to extract development ore from the deposit and is scheduled to start the main production ramp-up in the second half of 2023.

 

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.

 

Fourth Quarter Development Asset Highlights

 

Blackwater Project: Artemis Gold Inc. announced that it had executed an order for construction equipment required for major construction activities with the initial fleet expected to be delivered in early Q2 2023. In addition, plant site preparation is well advanced with the majority of the bulk earth works completed, and work on the construction camp is proceeding on schedule with 150 rooms and kitchen facilities on track to be ready for occupation by the end of February. Artemis also announced that it has closed the $385 million project loan facility to fund a significant component of the estimated construction costs of the Blackwater project. On March 9, 2023, Artemis announced the approval of its BC Mines Act Permit for the Blackwater project. The approval of the BC Mines Act Permit is the final step required to allow Artemis to commence major works construction activities at the Blackwater Mine in Q1 2023 with the expectation of an initial gold pour in the second half of 2024.

 

Copper World Complex: Hudbay reports that it has executed a new strategy at Copper World focused on project de-risking and a two-phase mine plan with the first phase located on private land claims. The pre-feasibility study for Phase I of Copper World is well-advanced with the main facility engineering completed and metallurgical test work being analyzed as part of the concentrate leaching trade off evaluations. The pre-feasibility study is expected to be released in the second quarter of 2023.

 

Goose Project: Subsequent to the quarter, Sabina Gold & Silver Corp. announced that it had entered into a definitive agreement pursuant to which B2Gold Corp. has agreed to acquire all of the issued and outstanding shares of Sabina.

 

Marathon Project: Generation Mining Limited announced that the Marathon Project was approved by the joint Federal and Provincial Environmental Assessment process, and that they will now proceed to obtain the necessary permits for construction and operation.

 

Curipamba Project: Adventus Mining Corporation (“Adventus”) announced that the Government of Ecuador has signed the Investment Contract in support of the development of the El Domo deposit, which is part of the Curipamba Project.

 

Portfolio Optimization

 

Yauliyacu: On August 18, 2022, the Company announced that it had entered into an agreement with Glencore plc to terminate its silver stream on the Yauliyacu mine in Peru for a cash payment of $150 million, less the aggregate value of any deliveries to Wheaton, prior to closing, of silver produced subsequent to December 31, 2021. The transaction closed on December 6, 2022, and the Company received a cash payment of $132 million. The Yauliyacu PMPA was terminated on December 14, 2022.

 

Financial Review

 

Revenues

 

Revenue was $236 million in the fourth quarter of 2022 representing a 15% decrease from the fourth quarter of 2021 due primarily to a 10% decrease in the number of GEOs³ sold; and a 6% decrease in the average realized gold equivalent³ price.

 

Revenue was $1,065 million in the year ended December 31, 2022, representing an 11% decrease from 2021 due primarily to a 6% decrease in the number of gold equivalent³ ounces sold; and a 6% decrease in the average realized gold equivalent³ price.

 

Cash Costs and Margin

 

Average cash costs¹ in the fourth quarter of 2022 were $434 per GEO² as compared to $433 in the fourth quarter of 2021. This resulted in a cash operating margin¹ of $1,226 per GEO³ sold, a decrease of 8% as compared with the fourth quarter of 2021.

 

Average cash costs¹ in 2022 were $433 per GEO² as compared to $439 in 2021. This resulted in a cash operating margin¹ of $1,292 per GEO³ sold, a 7% decrease from the 2021.

 

Balance Sheet (at December 31, 2022)

  • Approximately $696 million of cash on hand.
  • During the fourth quarter of 2022, the Company made upfront cash payments totaling $44 million relative to PMPAs.
  • With the existing cash on hand coupled with the fully undrawn $2 billion revolving credit facility, the Company is well positioned to fund all outstanding commitments and known contingencies as well as providing flexibility to acquire additional accretive mineral stream interests.

 

Reserves and Resources (at December 31, 2022)

  • Proven and Probable Mineral Reserves attributable to Wheaton were 13.90 million ounces of gold compared with 14.04 million ounces as reported in Wheaton’s 2021 Annual Information Form (“AIF”), a decrease of 1%; 489.2 million ounces of silver compared with 564.6 million ounces, decrease of 13%; 0.60 million ounces palladium compared with 0.63 million ounces, a decrease of 3%; 0.17 million ounces of platinum, unchanged; and 33.2 million pounds of cobalt compared to 31.4 million pounds, an increase of 6%. On a GEO3 basis, total Proven and Probable Mineral Reserves for all metals attributable to Wheaton were 21.27 million ounces, a decrease of 5% with 2% related to the terminations of the Yauliyacu and Keno Hill streams and the closure of the 777 mine.
  • Measured and Indicated Mineral Resources attributable to Wheaton were 5.47 million ounces of gold compared with 5.44 million ounces as reported in Wheaton’s 2021 AIF, an increase of 1%; 674.8 million ounces of silver compared with 767.8 million ounces, a decrease of 12%; 0.09 million ounces of palladium compared to 0.12 million ounces, a decrease of 28%; 0.097 million ounces of platinum, unchanged; and 1.5 million pounds of cobalt, unchanged. On a GEO3 basis, total Measured and Indicated Mineral Resources for all metals attributable to Wheaton were 14.38 million ounces, a decrease of 8% with 6% related to the terminations of the Yauliyacu and Keno Hill streams.
  • Inferred Mineral Resources attributable to Wheaton were 4.69 million ounces of gold compared with 4.98 million ounces as reported in Wheaton’s 2021 AIF, a decrease of 6%; 327.9 million ounces of silver compared with 461.1 million ounces, a decrease of 29%, 0.35 million ounces of palladium, unchanged; 0.017 million ounces of platinum, unchanged; and 7.8 million pounds of cobalt compared to 6.8, an increase of 13%. On a GEO3 basis, total Inferred Mineral Resources for all metals attributable to Wheaton were 9.37 million ounces, a decrease of 18% with 13% related to the terminations of the Yauliyacu and Keno Hill streams.

 

Estimated attributable reserves and resources contained in this press release are based on information available to the Company as of March 2, 2023, and therefore will not reflect updates, if any, after that date. Updated reserves and resources data incorporating year-end 2022 estimates will also be included in the Company’s 2022 Annual Information Form. Wheaton’s most current attributable reserves and resources, as of December 31, 2022, can be found on the Company’s website at www.wheatonpm.com.

 

Sustainability

 

Community Investment Program:

  • In 2022, Wheaton’s contribution to the Nature Trust of B.C. was directed towards the Shoal Creek Estuary in an effort to acquire, protect and enhance estuaries along the B.C. coastline. In the fourth quarter, the Fall Gala Presented by Wheaton raised over $1.5 million in support of The Nature Trust’s conservation programs.
  • In 2022, Wheaton made a $1 million commitment to the British Columbia Institute of Technology’s Inspire Campaign aimed at transforming the campus into a dynamic new learning environment.
  • In the fourth quarter, the Sports Celebrities Festival Presented by Wheaton Precious Metals raised over CA$550,000 in support of Special Olympics BC and the Canucks for Kids Fund.

 

About Wheaton Precious Metals Corp. and Outlook

 

Wheaton is the world’s premier precious metals streaming company with the highest-quality portfolio of long-life, low-cost assets. Its business model offers investors commodity price leverage and exploration upside but with a much lower risk profile than a traditional mining company. Wheaton delivers amongst the highest cash operating margins in the mining industry, allowing it to pay a competitive dividend and continue to grow through accretive acquisitions. As a result, Wheaton has consistently outperformed gold and silver, as well as other mining investments. Wheaton is committed to strong ESG practices and giving back to the communities where Wheaton and its mining partners operate. Wheaton creates sustainable value through streaming for all of its stakeholders.

 

Wheaton’s estimated attributable production in 2023 as well as the 5-year average and 10-year annual gold equivalent production is as follows:

 

Metal 2023

Forecast2

5-year Annual
Average

(2023-2027)2,5

10-year Annual
Average

(2023-2032)2,5

Gold Ounces 320,000 to 350,000
Silver Ounces (‘000s) 20,000 to 22,000
Other Metals (Palladium & Cobalt) (GEOs3) 22,000 to 25,000
Total Gold Equivalent Ounces3 600,000 to 660,000 810,000 850,000

 

In 2023, gold equivalent production is forecast to be slightly higher than 2022 as expected stronger attributable production from Salobo and Constancia is forecast to be offset by weaker production from Antamina and the termination of the silver stream on Yauliyacu. Attributable production is forecast to increase at Salobo as a result of uninterrupted operations as well as the start-up of the Salobo III mine expansion and at Constancia due to higher grades associated with the mining of the Pampacancha deposit. Attributable production is forecast to decrease a Antamina due to lower grades as per the mine plan.

 

Average forecast production over the next five years is expected to increase primarily due to anticipated continued production growth from Salobo, Stillwater, Constancia, Voisey’s Bay and Marmato as well as incremental production ounces from Blackwater, Toroparu, Marathon, Copper World Complex and Santo Domingo towards the latter end of the forecast period. Average forecast production over the next ten years includes additional incremental production from the Fenix project, Kutcho project and the Victor mine in Sudbury. Vale S.A. has indicated the potential for an additional expansion after the Salobo III expansion, but Wheaton does not currently include this in its forecast. Lastly, although Barrick Gold Corp. continues to advance a comprehensive review of the Pascua Lama project, Wheaton does not include any production from the project in its estimated average ten-year production guidance.

 

In accordance with Wheaton Precious Metals™ Corp.’s MD&A and Financial Statements, reference to the Company and Wheaton includes the Company’s wholly owned subsidiaries.

 

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, Neil Burns, P.Geo., Vice President, Technical Services for Wheaton Precious Metals and Ryan Ulansky, P.Eng., Vice President, Engineering, 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, Mr. Burns has reviewed mineral resource estimates and Mr. Ulansky has reviewed the mineral reserve 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.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. Details of the dividend can be found in the Wheaton’s news release date March 9, 2023, titled “Wheaton Precious Metals Declares Quarterly Dividend.”
2  Statements made in this section contain forward-looking information with respect to forecast production, funding outstanding commitments and continuing to acquire accretive mineral stream interests and readers are cautioned that actual outcomes may vary. Please see “Cautionary Note Regarding Forward-Looking Statements” for material risks, assumptions and important disclosure associated with this information.
3  Company reports & S and P Capital IQ est. of 2022 byproduct cost curves for gold, zinc/lead, copper, PGM, nickel & silver mines. GEOs relating to 2022 production, which are provided to assist the reader, are based on the following commodity price assumptions: gold $1,800/oz, silver $24/oz, palladium $2,100/oz and cobalt $33/lb. GEOs relating to 2023 outlook are based on the following commodity price assumptions: gold $1,850/oz, silver $24/oz, palladium $1,800/oz, platinum $1,100/oz and cobalt $18.75/lb.
4  Portfolio mine life based on recoverable reserves and resources as of Dec 31, 2022 and 2022 actual mill throughput and is weighted by individual reserve and resource category.
5  Five- and ten-year guidance do not include optionality production from Pascua Lama, Navidad, Cotabambas, Metates or additional expansions at Salobo outside of the project currently in construction. In addition, five-year guidance also does not include any production from Kutcho, or the Victor project at Sudbury.

 

Consolidated Statements of Earnings

 

Years Ended December 31
(US dollars and shares in thousands, except per share amounts) 2022 2021
Sales $ 1,065,053 $ 1,201,665
Cost of sales
Cost of sales, excluding depletion $ 267,621 $ 287,947
Depletion 231,952 254,793
Total cost of sales $ 499,573 $ 542,740
Gross margin $ 565,480 $ 658,925
General and administrative expenses 35,831 35,119
Share based compensation 20,060 19,265
Donations and community investments 6,296 6,601
Impairment (impairment reversal) of mineral stream interests (8,611) (156,717)
Earnings from operations $ 511,904 $ 754,657
Gain on disposal of mineral stream interest (155,868)
Other (income) expense (7,449) (5,776)
Earnings before finance costs and income taxes $ 675,221 $ 760,433
Finance costs 5,586 5,817
Earnings before income taxes $ 669,635 $ 754,616
Income tax (expense) recovery (509) 269
Net earnings $ 669,126 $ 754,885
Basic earnings per share $ 1.482 $ 1.677
Diluted earnings per share $ 1.479 $ 1.673
Weighted average number of shares outstanding
Basic 451,570 450,138
Diluted 452,344 451,170

Consolidated Balance Sheets

 

As at
December 31
As at
December 31
(US dollars in thousands) 2022 2021
Assets
Current assets
Cash and cash equivalents $ 696,089 $ 226,045
Accounts receivable 10,187 11,577
Cobalt inventory 10,530 8,712
Other 3,287 3,390
Total current assets $ 720,093 $ 249,724
Non-current assets
Mineral stream interests $ 5,707,019 $ 5,905,797
Early deposit mineral stream interests 46,092 34,741
Mineral royalty interest 6,606 6,606
Long-term equity investments 256,095 61,477
Refundable deposit – 777 PMPA 8,073
Convertible notes receivable 17,086
Property, plant and equipment 4,210 5,509
Other 11,718 15,211
Total non-current assets $ 6,039,813 $ 6,046,427
Total assets $ 6,759,906 $ 6,296,151
Liabilities
Current liabilities
Accounts payable and accrued liabilities $ 12,570 $ 13,939
Current taxes payable 2,763 132
Current portion of performance share units 14,566 14,807
Current portion of lease liabilities 818 813
Total current liabilities $ 30,717 $ 29,691
Non-current liabilities
Performance share units 6,673 11,498
Lease liabilities 1,152 2,060
Deferred income taxes 165 100
Pension liability 3,524 2,685
Total non-current liabilities $ 11,514 $ 16,343
Total liabilities $ 42,231 $ 46,034
Shareholders’ equity
Issued capital $ 3,752,662 $ 3,698,998
Reserves 66,547 47,036
Retained earnings 2,898,466 2,504,083
Total shareholders’ equity $ 6,717,675 $ 6,250,117
Total liabilities and shareholders’ equity $ 6,759,906 $ 6,296,151

Consolidated Statements of Cash Flows

 

Years Ended December 31
(US dollars in thousands) 2022 2021
Operating activities
Net earnings $ 669,126 $ 754,885
Adjustments for
Depreciation and depletion 233,539 256,685
Gain on disposal of mineral stream interest (155,868)
Impairment (reversal of impairment of mineral stream interests (8,611) (156,717)
Interest expense 91 352
Equity settled stock based compensation 5,846 5,262
Performance share units (4,196) (2,925)
Pension expense 1,033 1,014
Income tax expense (recovery) 509 (269)
Loss (gain) on fair value adjustment of share purchase warrants held 1,033 2,101
Fair value (gain) loss on convertible note receivable 1,380 (5,733)
Investment income recognized in net earnings (6,774) (462)
Other (1,313) (510)
Change in non-cash working capital 1,573 (8,072)
Cash generated from operations before income taxes and interest $ 737,368 $ 845,611
Income taxes recovered (paid) (171) (279)
Interest paid (93) (429)
Interest received 6,320 242
Cash generated from operating activities $ 743,424 $ 845,145
Financing activities
Bank debt repaid $ $ (195,000)
Credit facility extension fees (1,357) (1,727)
Share purchase options exercised 10,368 7,953
Lease payments (800) (780)
Dividends paid (237,097) (218,052)
Cash (used for) generated from financing activities $ (228,886) $ (407,606)
Investing activities
Mineral stream interests $ (151,929) $ (520,891)
Early deposit mineral stream interests (1,500) (1,500)
Mineral royalty interest (3,571)
Net proceeds on disposal of mineral stream interests 131,763
Acquisition of long-term investments (22,768) (7,453)
Proceeds on disposal of long-term investments 129,753
Dividends received 453 221
Other (316) (775)
Cash (used for) generated from investing activities $ (44,297) $ (404,216)
Effect of exchange rate changes on cash and cash equivalents $ (197) $ 39
Increase in cash and cash equivalents $ 470,044 $ 33,362
Cash and cash equivalents, beginning of year 226,045 192,683
Cash and cash equivalents, end of year $ 696,089 $ 226,045

Summary of Units Produced

 

Q4 2022 Q3 2022 Q2 2022 Q1 2022 Q4 2021 Q3 2021 Q2 2021 Q1 2021
Gold ounces produced ²
Salobo 37,939 44,212 34,129 44,883 48,235 55,205 55,590 46,622
Sudbury 3 6,342 3,437 5,289 5,362 4,379 148 4,563 7,004
Constancia 10,496 7,196 8,042 6,311 9,857 8,533 5,525 2,453
San Dimas 4 10,037 11,808 10,044 10,461 13,714 11,936 11,478 10,491
Stillwater 5 2,185 1,833 2,171 2,497 2,664 2,949 2,962 3,041
Other
Minto 2,567 3,182 2,480 4,060 3,506 1,703 3,206 2,638
777 6 3,509 4,003 4,462 4,717 5,035 6,280
Marmato 533 542 778 477 479 433 1,713
Total Other 3,100 3,724 6,767 8,540 8,447 6,853 9,954 8,918
Total gold ounces produced 70,099 72,210 66,442 78,054 87,296 85,624 90,072 78,529
Silver ounces produced 2
Peñasquito 1,761 2,017 2,089 2,219 2,145 2,180 2,026 2,202
Antamina 1,107 1,377 1,379 1,260 1,366 1,548 1,558 1,577
Constancia 655 564 584 506 578 521 468 406
Other
Los Filos 7 23 23 23 42 37 17 26 31
Zinkgruvan 664 642 739 577 482 658 457 420
Yauliyacu 8 261 463 756 637 382 372 629 737
Stratoni 9 129 18 164 165
Minto 33 42 25 45 44 25 33 21
Neves-Corvo 369 323 345 344 522 362 408 345
Aljustrel 313 246 292 287 325 314 400 474
Cozamin 157 179 169 186 213 199 183 230
Marmato 9 7 8 11 7 10 39
Keno Hill 10 48 20 30 44 55 27
777 6 80 91 96 81 83 130
Total Other 1,829 1,925 2,485 2,240 2,267 2,100 2,477 2,580
Total silver ounces produced 5,352 5,883 6,537 6,225 6,356 6,349 6,529 6,765
Palladium ounces produced ²
Stillwater 5 3,869 3,229 3,899 4,488 4,733 5,105 5,301 5,769
Cobalt pounds produced ²
Voisey’s Bay 128 226 136 234 381 370 380  1,162 ¹¹
GEOs produced 12 148,323 158,554 160,646 170,590 184,551 183,012 190,272 196,756
Average payable rate 2
Gold 94.9 % 95.0 % 95.1 % 95.2 % 96.0 % 96.0 % 95.8 % 95.0 %
Silver 83.5 % 85.5 % 85.5 % 86.1 % 86.0 % 86.6 % 86.9 % 86.6 %
Palladium 91.7 % 95.0 % 94.6 % 92.7 % 92.2 % 94.5 % 95.0 % 91.6 %
Cobalt 93.3 % 93.3 % 93.3 % 93.3 % 93.3 % 93.3 % 93.3 % 93.3 %
GEO 12 89.2 % 90.2 % 90.1 % 90.5 % 91.4 % 91.3 % 91.8 % 90.7 %
1) All figures in thousands except gold and palladium ounces produced.
2) Quantity produced represent the amount of gold, silver, palladium and cobalt contained in concentrate or doré prior to smelting or refining deductions. Production figures and payable rates are based on information provided by the operators of the mining operations to which the mineral stream interests relate or management estimates in those situations where other information is not available. Certain production figures and payable rates may be updated in future periods as additional information is received.
3) Comprised of the Coleman, Copper Cliff, Garson, Creighton and Totten gold interests. Operations at the Sudbury mines were suspended from June 1, 2021 to August 9, 2021 as a result of a labour disruption by unionized employees.
4) Under the terms of the San Dimas PMPA, the Company is entitled to an amount equal to 25% of the payable gold production plus an additional amount of gold equal to 25% of the payable silver production converted to gold at a fixed gold to silver exchange ratio of 70:1 from the San Dimas mine. If the average gold to silver price ratio decreases to less than 50:1 or increases to more than 90:1 for a period of 6 months or more, then the “70” shall be revised to “50” or “90”, as the case may be, until such time as the average gold to silver price ratio is between 50:1 to 90:1 for a period of 6 months or more in which event the “70” shall be reinstated. Effective April 1, 2020, the fixed gold to silver exchange ratio was revised to 90:1, with the 70:1 ratio being reinstated on October 15, 2020. For reference, attributable silver production from prior periods is as follows: Q4 2022 – 348,000 ounces; Q3 2022 – 412,000 ounces; Q2 2022 – 382,000 ounces; Q1 2022 – 408,000 ounces; Q4 2021 – 544,000 ounces; Q3 2021 – 472,000 ounces; Q2 2021 – 467,000 ounces; Q1 2021 – 429,000 ounces..
5) Comprised of the Stillwater and East Boulder gold and palladium interests.
6) On June 22, 2022, Hudbay announced that mining activities at 777 have concluded and closure activities have commenced.
7) Operations at Los Filos were temporarily suspended from June 22, 2021 to July 26, 2021 as the result of illegal blockades by a group of unionized employees and members of the Xochipala community.
8) On December 14, 2022 the Company terminated the Yauliyacu PMPA in exchange for a cash payment of $132 million.
9) The Stratoni mine was placed into care and maintenance during Q4-2021.
10) On September 7, 2022, the Company terminated the Keno Hill stream in exchange for $141 million of Hecla common shares received as consideration.
11) Effective January 1, 2021, the Company was entitled to cobalt production from the Voisey’s Bay mine. As per the Voisey’s Bay PMPA with Vale, Wheaton is entitled to any cobalt processed at the Long Harbour Processing Plant as of January 1, 2021, resulting in reported production in the first quarter of 2021 including some material produced at the Voisey’s Bay mine in the previous quarter.
12) GEOs, which are provided to assist the reader, are based on the following commodity price assumptions: $1,800 per ounce gold; $24.00 per ounce silver; $2,100 per ounce palladium; and $33.00 per pound cobalt; consistent with those used in estimating the Company’s production guidance for 2022.

Summary of Units Sold

 

Q4 2022 Q3 2022 Q2 2022 Q1 2022 Q4 2021 Q3 2021 Q2 2021 Q1 2021
Gold ounces sold
Salobo 41,029 31,818 48,515 42,513 47,171 35,185 57,296 51,423
Sudbury 2 4,988 5,147 7,916 3,712 965 1,915 6,945 3,691
Constancia 6,013 6,336 7,431 10,494 6,196 8,159 2,321 1,676
San Dimas 10,943 10,196 10,633 10,070 15,182 11,346 11,214 10,273
Stillwater 3 1,783 2,127 2,626 2,628 2,933 2,820 2,574 3,074
Other
Minto 2,982 2,559 2,806 3,695 2,462 1,907 2,359 2,390
777 785 3,098 3,629 4,388 4,290 5,879 5,694 2,577
Marmato 473 719 781 401 423 438 1,687
Total Other 4,240 6,376 7,216 8,484 7,175 8,224 9,740 4,967
Total gold ounces sold 68,996 62,000 84,337 77,901 79,622 67,649 90,090 75,104
Silver ounces sold
Peñasquito 2,066 1,599 2,096 2,188 1,818 2,210 1,844 2,174
Antamina 1,114 1,155 1,177 1,468 1,297 1,502 1,499 1,930
Constancia 403 498 494 644 351 484 295 346
Other
Los Filos 16 24 41 42 17 12 42 27
Zinkgruvan 547 376 650 355 346 354 355 293
Yauliyacu 337 1,005 817 44 551 182 601 1,014
Stratoni (2) 133 42 41 167 117
Minto 23 22 21 31 27 24 29 26
Neves-Corvo 80 105 167 204 259 193 215 239
Aljustrel 156 185 123 145 133 155 208 257
Cozamin 150 154 148 177 174 170 168 173
Marmato 7 8 11 8 8 10 35
Keno Hill 1 30 30 27 24 51 33 12
777 35 73 75 87 69 99 109 49
Total Other 1,352 1,982 2,081 1,253 1,650 1,291 1,962 2,207
Total silver ounces sold 4,935 5,234 5,848 5,553 5,116 5,487 5,600 6,657
Palladium ounces sold
Stillwater 3 3,396 4,227 3,378 4,075 4,641 5,703 3,869 5,131
Cobalt pounds sold
Voisey’s Bay 187 115 225 511 228 131 395 132
GEOs sold 4 142,190 138,824 170,371 166,065 157,439 149,862 176,502 172,271
Cumulative payable units PBND 5
Gold ounces 63,601 65,978 59,331 81,365 84,989 80,819 66,238 70,072
Silver ounces 2,820 3,444 3,543 3,910 4,200 3,845 3,802 3,738
Palladium ounces 5,098 5,041 6,267 5,535 5,629 5,619 6,822 5,373
Cobalt pounds 257 402 280 550 596 637 777 820
GEO 4 111,867 125,151 119,009 150,032 158,477 150,317 139,145 141,206
Inventory on hand
Cobalt pounds 633 556 582 410 657 488 134 132
1) All figures in thousands except gold and palladium ounces sold.
2) Comprised of the Coleman, Copper Cliff, Garson, Creighton and Totten gold interests.
3) Comprised of the Stillwater and East Boulder gold and palladium interests.
4) GEOs, which are provided to assist the reader, are based on the following commodity price assumptions: $1,800 per ounce gold; $24.00 per ounce silver; $2,100 per ounce palladium; and $33.00 per pound cobalt; consistent with those used in estimating the Company’s production guidance for 2022.
5) Payable gold, silver and palladium ounces as well as cobalt pounds produced but not yet delivered (“PBND”) are based on management estimates. These figures may be updated in future periods as additional information is received.

 

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, 2022
Units
Produced²
Units
Sold
Average
Realized
Price
($’s
Per Unit)
Average
Cash Cost
($’s Per
Unit) 3
Average
Depletion
($’s Per
Unit)
Sales Impairment
(Charges)
Reversals /
Gain on
Disposal 4
Net
Earnings
Cash Flow
From
Operations
Total
Assets
Gold
Salobo 37,939 41,029 $ 1,728 $ 416 $ 334 $ 70,878 $ $ 40,110 $ 53,800 $ 2,383,262
Sudbury 5 6,342 4,988 1,712 400 1,092 8,538 1,095 7,809 283,416
Constancia 10,496 6,013 1,728 416 271 10,388 6,255 7,885 95,583
San Dimas 10,037 10,943 1,728 624 260 18,903 9,231 12,071 155,865
Stillwater 2,185 1,783 1,728 309 429 3,080 1,765 2,530 215,852
Other 6 3,100 4,240 1,713 894 59 7,264 (1,719) 1,505 4,697 494,143
70,099 68,996 $ 1,725 $ 475 $ 357 $ 119,051 $ (1,719) $ 59,961 $ 88,792 $ 3,628,121
Silver
Peñasquito 1,761 2,066 $ 21.28 $ 4.36 $ 3.57 $ 43,949 $ $ 27,577 $ 34,943 $ 293,674
Antamina 1,107 1,114 21.28 4.33 7.06 23,701 11,009 18,872 545,368
Constancia 655 403 21.28 6.14 6.35 8,572 3,538 6,098 192,947
Other 7 1,829 1,352 22.15 6.19 5.03 29,953 51,443 66,228 20,283 453,096
5,352 4,935 $ 21.52 $ 5.00 $ 4.98 $ 106,175 $ 51,443 $ 108,352 $ 80,196 $ 1,485,085
Palladium
Stillwater 3,869 3,396 $ 1,939 $ 357 $ 399 $ 6,586 $ $ 4,018 $ 5,373 $ 226,812
Platinum
Marathon $ n.a. $ n.a. $ n.a. $ $ $ $ $ 9,428
Cobalt
Voisey’s Bay 128 187 $ 22.62 $ 16.52 ⁸ $ 13.72 $ 4,239 $ $ (1,426) $ 3,766 $ 357,573
Operating results $ 236,051 $ 49,724 $ 170,905 $ 178,127 $ 5,707,019
Other
General and administrative $ (8,383) $ (6,399)
Share based compensation (8,474)
Donations and community investments (2,916) (2,742)
Finance costs (1,377) (1,028)
Other 4,000 4,100
Income tax 12,370 (30)
Total other $ (4,780) $ (6,099) $ 1,052,887
$ 166,125 $ 172,028 $ 6,759,906
1) Units of gold, silver and palladium produced and sold are reported in ounces, while cobalt is reported in pounds. All figures in thousands except gold and palladium ounces produced and sold and per unit amounts.
2) Quantity produced represent the amount of gold, silver, palladium and cobalt contained in concentrate or doré prior to smelting or refining deductions. Production figures are based on information provided by the operators of the mining operations to which the mineral stream interests relate or management estimates in those situations where other information is not available. Certain production figures may be updated in future periods as additional information is received.
3) Refer to discussion on non-IFRS measure (iii) at the end of this press release.
4) The gain on disposal of Other silver interests relates to the termination of the Yauliyacu PMPA, while the impairment of Other gold interests relates to the 777 PMPA.
5) Comprised of the operating Coleman, Copper Cliff, Garson, Creighton and Totten gold interests and the non-operating Stobie and Victor gold interests.
6) Comprised of the operating Minto and Marmato gold interests as well as the non-operating 777, Copper World Complex (formerly referred to as Rosemont), Santo Domingo, Blackwater, Fenix, Goose, Marathon and Curipamba gold interests. On June 22, 2022, Hudbay announced that mining activities at 777 have concluded and closure activities have commenced.
7) Comprised of the operating Los Filos, Zinkgruvan, Neves-Corvo, Aljustrel, Minto, Cozamin and Marmato silver interests, the non-operating 777, Loma de La Plata, Stratoni, Pascua-Lama, Copper World Complex (formerly referred to as Rosemont), Blackwater and Curipamba silver interests and the previously owned Yauliyacu and Keno Hill silver interests. The Stratoni mine was placed into care and maintenance during Q4-2021. On June 22, 2022, Hudbay announced that mining activities at 777 have concluded and closure activities have commenced. On September 7, 2022, the Keno Hill stream was terminated in exchange for $141 million of Hecla common stock. On December 14, 2022 the Yauliyacu PMPA was terminated in exchange for a cash payment of $132 million.
8) Cash cost per pound of cobalt sold during the fourth quarter of 2022 includes an inventory impairment charge of $1.6 million, resulting in an increase of $8.71 per pound. The Company reflects the cobalt inventory at the lower of cost and net realizable will continue to monitor the market price of cobalt relative to the carrying of the inventory at each reporting period.

 

On a gold equivalent and silver equivalent basis, results for the Company for the three months ended December 31, 2022 were as follows:

 

Three Months Ended December 31, 2022
Ounces
Produced 1
Ounces
Sold
Average
Realized
Price
($’s Per
Ounce)
Average
Cash Cost
($’s Per
Ounce) 2
Cash
Operating
Margin
($’s Per
Ounce) 3
Average
Depletion
($’s Per
Ounce)
Gross
Margin
($’s Per
Ounce)
Gold equivalent basis 4 148,323 142,190 $    1,660 $    434 $    1,226 $    374 $    852
1) Quantity produced represent the amount of gold, silver, palladium and cobalt contained in concentrate or doré prior to smelting or refining deductions. Production figures are based on information provided by the operators of the mining operations to which the mineral stream interests relate or management estimates in those situations where other information is not available. Certain production figures may be updated in future periods as additional information is received.
2) Refer to discussion on non-IFRS measure (iii) at the end of this press release.
3) Refer to discussion on non-IFRS measure (iv) at the end of this press release.
4) GEOs, which are provided to assist the reader, are based on the following commodity price assumptions: $1,800 per ounce gold; $24.00 per ounce silver; $2,100 per ounce palladium; and $33.00 per pound cobalt; consistent with those used in estimating the Company’s production guidance for 2022.

 

 

Three Months Ended December 31, 2021
Units
Produced²
Units
Sold
Average
Realized
Price
($’s
Per Unit)
Average
Cash Cost
($’s Per
Unit) 3
Average
Depletion
($’s Per
Unit)
Sales Impairment
Reversal 4
Net
Earnings
(Loss)
Cash Flow
From
Operations
Total
Assets
Gold
Salobo 48,235 47,171 $ 1,799 $ 412 $ 374 $ 84,849 $ $ 47,781 $ 63,659 $ 2,437,939
Sudbury 5 4,379 965 1,795 400 1,024 1,732 357 1,346 307,169
Constancia 9,857 6,196 1,799 412 315 11,147 6,642 8,398 103,789
San Dimas 13,714 15,182 1,799 618 322 27,309 13,030 17,923 166,723
Stillwater 2,664 2,933 1,799 319 397 5,275 3,176 4,340 219,785
Other 6 8,447 7,175 1,795 676 42 12,875 7,721 8,463 364,792
87,296 79,622 $ 1,798 $ 472 $ 338 $ 143,187 $ $ 78,707 $ 104,129 $ 3,600,197
Silver
Peñasquito 2,145 1,818 $ 23.28 $ 4.29 $ 3.55 $ 42,314 $ $ 28,064 $ 34,515 $ 322,018
Antamina 1,366 1,297 23.33 4.73 7.53 30,250 14,351 25,091 580,052
Constancia 578 351 23.28 6.08 7.56 8,170 3,383 5,739 205,884
Other 7 2,267 1,650 23.48 7.22 5.83 38,770 17,226 26,118 593,195
6,356 5,116 $ 23.36 $ 5.47 $ 5.57 $ 119,504 $ $ 63,024 $ 91,463 $ 1,701,149
Palladium
Stillwater 4,733 4,641 $ 1,918 $ 340 $ 442 $ 8,902 $ $ 5,268 $ 7,323 $ 232,830
Cobalt
Voisey’s Bay 381 228 $ 28.94 $ 4.68 $ 8.17 $ 6,604 $ 156,717 $ 160,390 $ 2,443 $ 371,621
Operating results $ 278,197 $ 156,717 $ 307,389 $ 205,358 $ 5,905,797
Other
General and administrative $ (8,547) $ (6,043)
Share based compensation (5,519)
Donations and community investments (2,889) (3,067)
Finance costs (1,508) (1,026)
Other 3,581 296
Income tax (685) (228)
Total other $ (15,567) $ (10,068) $ 390,354
$ 291,822 $ 195,290 $ 6,296,151
1) Units of gold, silver and palladium produced and sold are reported in ounces, while cobalt is reported in pounds. All figures in thousands except gold and palladium ounces produced and sold and per unit amounts.
2) Quantity produced represent the amount of gold, silver, palladium and cobalt contained in concentrate or doré prior to smelting or refining deductions. Production figures are based on information provided by the operators of the mining operations to which the mineral stream interests relate or management estimates in those situations where other information is not available. Certain production figures may be updated in future periods as additional information is received.
3) Refer to discussion on non-IFRS measure (iii) at the end of this press release.
4) Relates to the Voisey’s Bay PMPA.
5) Comprised of the operating Coleman, Copper Cliff, Garson, Creighton and Totten gold interests as well as the non-operating Stobie and Victor gold interests.
6) Comprised of the operating Minto, 777 and Marmato gold interests as well as the non-operating Copper World Complex gold interest (formerly referred to as Rosemont). On June 22, 2022, Hudbay announced that mining activities at 777 have concluded and closure activities have commenced.
7) Comprised of the operating Los Filos, Zinkgruvan, Stratoni, Neves-Corvo, Aljustrel, Minto, 777, Marmato and Cozamin silver interests, the non-operating Loma de La Plata, Copper World Complex (formerly referred to as Rosemont) and Pascua-Lama silver interests and the previously owned Keno Hill and Yauliyacu silver interests. The Stratoni mine was placed into care and maintenance during Q4-2021. On June 22, 2022, Hudbay announced that mining activities at 777 have concluded and closure activities have commenced. On September 7, 2022, the Keno Hill stream was terminated in exchange for $141 million of Hecla common stock. On December 14, 2022 the Yauliyacu PMPA was terminated in exchange for a cash payment of $132 million.

 

On a gold equivalent and silver equivalent basis, results for the Company for the three months ended December 31, 2021 were as follows:

 

Three Months Ended December 31, 2021
Ounces
Produced 1
Ounces
Sold
Average
Realized
Price
($’s Per
Ounce)
Average
Cash Cost
($’s Per
Ounce)2
Cash
Operating
Margin
($’s Per
Ounce) 3
Average
Depletion
($’s Per
Ounce)
Gross
Margin
($’s Per
Ounce)
Gold equivalent basis 4 184,551 157,439 $    1,767 $    433 $    1,334 $    377 $    957
1) Quantity produced represent the amount of gold, silver, palladium and cobalt contained in concentrate or doré prior to smelting or refining deductions. Production figures are based on information provided by the operators of the mining operations to which the mineral stream interests relate or management estimates in those situations where other information is not available. Certain production figures may be updated in future periods as additional information is received.
2) Refer to discussion on non-IFRS measure (iii) at the end of this press release.
3) Refer to discussion on non-IFRS measure (iv) at the end of this press release.
4) GEOs, which are provided to assist the reader, are based on the following commodity price assumptions: $1,800 per ounce gold; $24.00 per ounce silver; $2,100 per ounce palladium; and $33.00 per pound cobalt; consistent with those used in estimating the Company’s production guidance for 2022.

 

 

Year Ended December 31, 2022
Units
Produced²
Units
Sold
Average
Realized
Price
($’s
Per Unit)
Average
Cash Cost
($’s Per
Unit) 3
Average
Depletion
($’s Per
Unit)
Sales Impairment
(Charges)
Reversals /
Gain on
Disposal 4
Net
Earnings
Cash Flow
From
Operations
Total
Assets
Gold
Salobo 161,163 163,875 $ 1,807 $ 416 $ 334 $ 296,145 $ $ 173,257 $ 227,933 $ 2,383,262
Sudbury 5 20,430 21,763 1,802 400 1,091 39,211 6,752 30,789 283,416
Constancia 32,045 30,274 1,812 414 271 54,868 34,142 42,348 95,583
San Dimas 42,350 41,842 1,798 623 260 75,238 38,327 49,186 155,865
Stillwater 8,686 9,164 1,810 325 429 16,583 9,667 13,600 215,852
Other 6 22,131 26,316 1,811 760 48 47,653 (1,719) 24,687 27,610 494,143
286,805 293,234 $ 1,806 $ 472 $ 350 $ 529,698 $ (1,719) $ 286,832 $ 391,466 $ 3,628,121
Silver
Peñasquito 8,086 7,949 $ 21.97 $ 4.36 $ 3.57 $ 174,635 $ $ 111,634 $ 139,978 $ 293,674
Antamina 5,123 4,914 21.94 4.40 7.06 107,794 51,488 85,824 545,368
Constancia 2,309 2,039 21.97 6.10 6.35 44,798 19,421 32,358 192,947
Other 7 8,479 6,668 21.56 6.95 5.50 143,776 166,198 226,995 96,251 453,096
23,997 21,570 $ 21.84 $ 5.33 $ 5.22 $ 471,003 $ 166,198 $ 409,538 $ 354,411 $ 1,485,085
Palladium
Stillwater 15,485 15,076 $ 2,133 $ 377 $ 399 $ 32,160 $ $ 20,455 $ 26,472 $ 226,812
Platinum
Marathon $ n.a. $ n.a. $ n.a. $ $ $ $ $ 9,428
Cobalt
Voisey’s Bay 724 1,038 $ 31.00 $ 8.10 ⁸ $ 10.26 $ 32,192 $ $ 13,134 $ 28,449 $ 357,573
Operating results $ 1,065,053 $ 164,479 $ 729,959 $ 800,798 $ 5,707,019
Other
General and administrative $ (35,831) $ (35,332)
Share based compensation (20,060) (18,161)
Donations and community investments (6,296) (5,718)
Finance costs (5,586) (4,135)
Other 7,449 6,143
Income tax (509) (171)
Total other $ (60,833) $ (57,374) $ 1,052,887
$ 669,126 $ 743,424 $ 6,759,906
1) Units of gold, silver and palladium produced and sold are reported in ounces, while cobalt is reported in pounds. All figures in thousands except gold and palladium ounces produced and sold and per unit amounts.
2) Quantity produced represent the amount of gold, silver, palladium and cobalt contained in concentrate or doré prior to smelting or refining deductions. Production figures are based on information provided by the operators of the mining operations to which the mineral stream interests relate or management estimates in those situations where other information is not available. Certain production figures may be updated in future periods as additional information is received.
3) Refer to discussion on non-IFRS measure (iii) at the end of this press release.
4) The gain on disposal of Other silver interests relates to the termination of the Keno Hill and Yauliyacu PMPAs, while the impairment of Other gold interests relates to the 777 PMPA.
5) Comprised of the operating Coleman, Copper Cliff, Garson, Creighton and Totten gold interests and the non-operating Stobie and Victor gold interests.
6) Comprised of the operating Minto and Marmato gold interests as well as the non-operating 777 and Copper World Complex (formerly referred to as Rosemont), Santo Domingo, Blackwater, Fenix, Goose, Marathon and Curipamba gold interests. On June 22, 2022, Hudbay announced that mining activities at 777 have concluded and closure activities have commenced.
7) Comprised of the operating Los Filos, Zinkgruvan, Neves-Corvo, Aljustrel, Minto, Cozamin and Marmato silver interests, the non-operating 777, Loma de La Plata, Stratoni, Pascua-Lama, Copper World Complex (formerly referred to as Rosemont), Blackwater and Curipamba silver interests and the previously owned Keno Hill and Yauliyacu silver interests. The Stratoni mine was placed into care and maintenance during Q4-2021. On June 22, 2022, Hudbay announced that mining activities at 777 have concluded and closure activities have commenced. On September 7, 2022, the Keno Hill stream was terminated in exchange for $141 million of Hecla common stock. On December 14, 2022 the Yauliyacu PMPA was terminated in exchange for a cash payment of $132 million.
8) Cash cost per pound of cobalt sold during the fourth quarter of 2022 includes an inventory impairment charge of $1.6 million, resulting in an increase of $1.60 per pound. The Company reflects the cobalt inventory at the lower of cost and net realizable will continue to monitor the market price of cobalt relative to the carrying of the inventory at each reporting period.

 

On a gold equivalent and silver equivalent basis, results for the Company for the year ended December 31, 2022 were as follows:

 

Year Ended December 31, 2022
Ounces
Produced 1
Ounces
Sold
Average
Realized
Price
($’s Per
Ounce)
Average
Cash Cost
($’s Per
Ounce) 2
Cash
Operating
Margin
($’s Per
Ounce) 3
Average
Depletion
($’s Per
Ounce)
Gross
Margin
($’s Per
Ounce)
Gold equivalent basis 4 638,113 617,450 $    1,725 $    433 $    1,292 $    376 $    916
1) Quantity produced represent the amount of gold, silver, palladium and cobalt contained in concentrate or doré prior to smelting or refining deductions. Production figures are based on information provided by the operators of the mining operations to which the mineral stream interests relate or management estimates in those situations where other information is not available. Certain production figures may be updated in future periods as additional information is received.
2) Refer to discussion on non-IFRS measure (iii) at the end of this press release.
3) Refer to discussion on non-IFRS measure (iv) at the end of this press release.
5) GEOs, which are provided to assist the reader, are based on the following commodity price assumptions: $1,800 per ounce gold; $24.00 per ounce silver; $2,100 per ounce palladium; and $33.00 per pound cobalt; consistent with those used in estimating the Company’s production guidance for 2022.

 

 

Year Ended December 31, 2021
Units
Produced²
Units
Sold
Average
Realized
Price
($’s
Per Unit)
Average
Cash Cost
($’s Per
Unit) 3
Average
Depletion
($’s Per
Unit)
Sales Impairment
Reversal 4
Net
Earnings
Cash Flow
From
Operations
Total
Assets
Gold
Salobo 205,652 191,075 $ 1,797 $ 412 $ 374 $ 343,398 $ $ 193,247 $ 264,652 $ 2,437,939
Sudbury 5 16,094 13,516 1,811 400 1,024 24,475 5,221 19,068 307,169
Constancia 26,368 18,352 1,797 411 315 32,974 19,658 25,438 103,789
San Dimas 47,619 48,015 1,797 617 322 86,290 41,199 56,679 166,723
Stillwater 11,616 11,401 1,797 325 397 20,487 12,259 16,784 219,785
Other 6 34,172 30,106 1,804 607 61 54,296 34,192 36,444 364,792
341,521 312,465 $ 1,798 $ 459 $ 361 $ 561,920 $ $ 305,776 $ 419,065 $ 3,600,197
Silver
Peñasquito 8,553 8,046 $ 25.07 $ 4.29 $ 3.55 $ 201,688 $ $ 138,616 $ 167,169 $ 322,018
Antamina 6,049 6,228 25.17 5.04 7.53 156,735 78,458 125,688 580,052
Constancia 1,973 1,476 24.91 6.05 7.56 36,775 16,689 27,848 205,884
Other 7 9,424 7,110 25.07 8.06 5.56 178,231 81,393 123,359 593,195
25,999 22,860 $ 25.08 $ 5.78 $ 5.52 $ 573,429 $ $ 315,156 $ 444,064 $ 1,701,149
Palladium
Stillwater 20,908 19,344 $ 2,369 $ 433 $ 442 $ 45,834 $ $ 28,891 $ 37,450 $ 232,830
Cobalt
Voisey’s Bay 2,293 886 $ 23.11 $ 4.67 $ 8.17 $ 20,482 $ 156,717 $ 165,819 $ 3,687 $ 371,621
Operating results $ 1,201,665 $ 156,717 $ 815,642 $ 904,266 $ 5,905,797
Other
General and administrative $ (35,119) $ (31,931)
Share based compensation (19,265) (16,926)
Donations and community investments (6,601) (6,323)
Finance costs (5,817) (4,271)
Other 5,776 609
Income tax 269 (279)
Total other $ (60,757) $ (59,121) $ 390,354
$ 754,885 $ 845,145 $ 6,296,151
1) Units of gold, silver and palladium produced and sold are reported in ounces, while cobalt is reported in pounds. All figures in thousands except gold and palladium ounces produced and sold and per unit amounts.
2) Quantity produced represent the amount of gold, silver, palladium and cobalt contained in concentrate or doré prior to smelting or refining deductions. Production figures are based on information provided by the operators of the mining operations to which the mineral stream interests relate or management estimates in those situations where other information is not available. Certain production figures may be updated in future periods as additional information is received.
3) Refer to discussion on non-IFRS measure (iii) at the end of this press release.
4) Relates to the Voisey’s Bay PMPA.
5) Comprised of the operating Coleman, Copper Cliff, Garson, Creighton and Totten gold interests as well as the non-operating Stobie and Victor gold interests.
6) Comprised of the operating Minto, 777 and Marmato gold interests as well as the non-operating Copper World Complex gold interest (formerly referred to as Rosemont). On June 22, 2022, Hudbay announced that mining activities at 777 have concluded and closure activities have commenced.
7) Comprised of the operating Los Filos, Zinkgruvan, Stratoni, Neves-Corvo, Aljustrel, Minto, 777, Marmato and Cozamin silver interests, the non-operating Loma de La Plata, Copper World Complex (formerly referred to as Rosemont) and Pascua-Lama silver interests and the previously owned Keno Hill and Yauliyacu silver interests. The Stratoni mine was placed into care and maintenance during Q4-2021. On June 22, 2022, Hudbay announced that mining activities at 777 have concluded and closure activities have commenced. On September 7, 2022, the Keno Hill stream was terminated in exchange for $141 million of Hecla common stock. On December 14, 2022 the Yauliyacu PMPA was terminated in exchange for a cash payment of $132 million.

 

On a gold equivalent and silver equivalent basis, results for the Company for the year ended December 31, 2021 were as follows:

 

Year Ended December 31, 2021
Ounces
Produced 1
Ounces
Sold
Average
Realized
Price
($’s Per
Ounce)
Average
Cash Cost
($’s Per
Ounce) 2
Cash
Operating
Margin
($’s Per
Ounce) 3
Average
Depletion
($’s Per
Ounce)
Gross
Margin
($’s Per
Ounce)
Gold equivalent basis 4 754,591 656,074 $    1,832 $    439 $    1,393 $    388 $    1,005
1) Quantity produced represent the amount of gold, silver, palladium and cobalt contained in concentrate or doré prior to smelting or refining deductions. Production figures are based on information provided by the operators of the mining operations to which the mineral stream interests relate or management estimates in those situations where other information is not available. Certain production figures may be updated in future periods as additional information is received.
2) Refer to discussion on non-IFRS measure (iii) at the end of this press release.
3) Refer to discussion on non-IFRS measure (iv) at the end of this press release.
4) GEOs, which are provided to assist the reader, are based on the following commodity price assumptions: $1,800 per ounce gold; $24.00 per ounce silver; $2,100 per ounce palladium; and $33.00 per pound cobalt; consistent with those used in estimating the Company’s production guidance for 2022.

Non-IFRS Measures

 

Wheaton has included, throughout this document, certain non-IFRS performance measures, including (i) adjusted net earnings and adjusted net earnings per share; (ii) operating cash flow per share (basic and diluted); (iii) average cash costs of gold, silver and palladium on a per ounce basis and cobalt on a per pound basis; and (iv) cash operating margin.

 

i. Adjusted net earnings and adjusted net earnings per share are calculated by removing the effects of  non-cash impairment charges (reversals) (if any), non-cash fair value (gains) losses and other one-time (income) expenses as well as the reversal of non-cash income tax expense (recovery) which is offset by income tax expense (recovery) recognized in the Statements of Shareholders’ Equity and OCI, respectively. The Company believes that, in addition to conventional measures prepared in accordance with IFRS, management and certain investors use this information to evaluate the Company’s performance.
The following table provides a reconciliation of adjusted net earnings and adjusted net earnings per share (basic and diluted).
Three Months Ended
December 31
Years Ended
December 31
(in thousands, except for per share amounts) 2022 2021 2022 2021
Net earnings $ 166,125 $ 291,822 $ 669,126 $ 754,885
Add back (deduct):
Impairment charge (reversal) 1,719 (156,717) (8,611) (156,717)
Gain on disposal of Mineral Stream Interest (51,443) (155,868)
(Gain) loss on fair value adjustment of share purchase warrants held (67) (290) 1,033 2,101
(Gain) loss on fair value adjustment of convertible notes receivable (1,597) 1,380 (5,733)
Income tax (expense) recovery recognized in the Statement of Shareholders’ Equity 974 4,143 1,811
Income tax (expense) recovery recognized in the Statement of OCI (7,214) (325) (6,513) (2,314)
Income tax expense (recovery) resulting from disposal of Mineral Stream Interest, net of above (5,376) 2,404
Other (1,635) (2,182) (1,954)
Adjusted net earnings $ 103,744 $ 132,232 $ 504,912 $ 592,079
Divided by:
Basic weighted average number of shares outstanding 452,070 450,614 451,570 450,138
Diluted weighted average number of shares outstanding 452,778 451,570 452,344 451,170
Equals:
Adjusted earnings per share – basic $ 0.229 $ 0.293 $ 1.118 $ 1.315
Adjusted earnings per share – diluted $ 0.229 $ 0.293 $ 1.116 $ 1.312

 

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) 2022 2021 2022 2021
Cash generated by operating activities $ 172,028 $ 195,290 $ 743,424 $ 845,145
Divided by:
Basic weighted average number of shares outstanding 452,070 450,614 451,570 450,138
Diluted weighted average number of shares outstanding 452,778 451,570 452,344 451,170
Equals:
Operating cash flow per share – basic $ 0.381 $ 0.433 $ 1.646 $ 1.878
Operating cash flow per share – diluted $ 0.380 $ 0.432 $ 1.643 $ 1.873

 

iii. Average cash cost of gold, silver and palladium on a per ounce basis and cobalt on a per pound basis is calculated by dividing the total cost of sales, less depletion, by the ounces or pounds sold. In the precious metal mining industry, this is a common performance measure but does not have any standardized meaning prescribed by IFRS. In addition to conventional measures prepared in accordance with IFRS, management and certain investors use this information to evaluate the Company’s performance and ability to generate cash flow.
The following table provides a calculation of average cash cost of gold, silver and palladium on a per ounce basis and cobalt on a per pound basis.
Three Months Ended
December 31
Years Ended
December 31
(in thousands, except for gold and palladium ounces sold and per unit amounts) 2022 2021 2022 2021
Cost of sales $ 114,870 $ 127,525 $ 499,573 $ 542,740
Less:  depletion (53,139) (59,335) (231,952) (254,793)
Cash cost of sales $ 61,731 $ 68,190 $ 267,621 $ 287,947
Cash cost of sales is comprised of:
Total cash cost of gold sold $ 32,749 $ 37,550 $ 138,468 $ 143,272
Total cash cost of silver sold 24,674 27,993 115,058 132,151
Total cash cost of palladium sold 1,213 1,580 5,687 8,384
Total cash cost of cobalt sold 3,095 1,067 8,408 4,140
Total cash cost of sales $ 61,731 $ 68,190 $ 267,621 $ 287,947
Divided by:
Total gold ounces sold 68,996 79,622 293,234 312,465
Total silver ounces sold 4,935 5,116 21,570 22,860
Total palladium ounces sold 3,396 4,641 15,076 19,344
Total cobalt pounds sold 187 228 1,038 886
Equals:
Average cash cost of gold (per ounce) $ 475 $ 472 $ 472 $ 459
Average cash cost of silver (per ounce) $ 5.00 $ 5.47 $ 5.33 $ 5.78
Average cash cost of palladium (per ounce) $ 357 $ 340 $ 377 $ 433
Average cash cost of cobalt (per pound) $ 16.52 $ 4.68 $ 8.10 $ 4.67

 

iv. Cash operating margin is calculated by subtracting the average cash cost of gold, silver and palladium on a per ounce basis and cobalt on a per pound basis from the average realized selling price of gold, silver and palladium on a per ounce basis and cobalt on a per pound basis. The Company presents cash operating margin as management and certain investors use this information to evaluate the Company’s performance in comparison to other companies in the precious metal mining industry who present results on a similar basis as well as to evaluate the Company’s ability to generate cash flow.
The following table provides a reconciliation of cash operating margin.
Three Months Ended
December 31
Years Ended
December 31
(in thousands, except for gold and palladium ounces sold and per unit amounts) 2022 2021 2022 2021
Total sales:
Gold $ 119,051 $ 143,187 $ 529,698 $ 561,920
Silver $ 106,175 $ 119,504 $ 471,003 $ 573,429
Palladium $ 6,586 $ 8,902 $ 32,160 $ 45,834
Cobalt $ 4,239 $ 6,604 $ 32,192 $ 20,482
Divided by:
Total gold ounces sold 68,996 79,622 293,234 312,465
Total silver ounces sold 4,935 5,116 21,570 22,860
Total palladium ounces sold 3,396 4,641 15,076 19,344
Total cobalt pounds sold 187 228 1,038 886
Equals:
Average realized price of gold (per ounce) $ 1,725 $ 1,798 $ 1,806 $ 1,798
Average realized price of silver (per ounce) $ 21.52 $ 23.36 $ 21.84 $ 25.08
Average realized price of palladium (per ounce) $ 1,939 $ 1,918 $ 2,133 $ 2,369
Average realized price of cobalt (per pound) $ 22.62 $ 28.94 $ 31.00 $ 23.11
Less:
Average cash cost of gold 1 (per ounce) $ (475) $ (472) $ (472) $ (459)
Average cash cost of silver 1 (per ounce) $ (5.00) $ (5.47) $ (5.33) $ (5.78)
Average cash cost of palladium 1 (per ounce) $ (357) $ (340) $ (377) $ (433)
Average cash cost of cobalt 1 (per pound) $ (16.52) $ (4.68) $ (8.10) $ (4.67)
Equals:
Cash operating margin per gold ounce sold $ 1,250 $ 1,326 $ 1,334 $ 1,339
As a percentage of realized price of gold 72 % 74 % 74 % 74 %
Cash operating margin per silver ounce sold $ 16.52 $ 17.89 $ 16.51 $ 19.30
As a percentage of realized price of silver 77 % 77 % 76 % 77 %
Cash operating margin per palladium ounce sold $ 1,582 $ 1,578 $ 1,756 $ 1,936
As a percentage of realized price of palladium 82 % 82 % 82 % 82 %
Cash operating margin per cobalt pound sold $ 6.10 $ 24.26 $ 22.90 $ 18.44
As a percentage of realized price of cobalt 27 % 84 % 74 % 80 %

 

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

 

Posted March 9, 2023

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