Wheaton Precious Metals Announces Third Quarter Results for 2018 and Declares Fourth Quarterly Dividend of 2018

Wheaton Precious Metals Announces Third Quarter Results for 2018 and Declares Fourth Quarterly Dividend of 2018

PR Newswire

VANCOUVER, Nov. 15, 2018

On track to exceed annual production guidance

VANCOUVER, Nov. 15, 2018 /PRNewswire/ -- Wheaton Precious Metals™ Corp. ("Wheaton" or the "Company") (TSX: WPM ) (NYSE: WPM) is pleased to announce its results for the third quarter ended September 30, 2018. All figures are presented in United States dollars unless otherwise noted.

In the third quarter of 2018, Wheaton generated close to $110 million in operating cash flow, and completed the acquisition of a gold and palladium stream on the Stillwater and East Boulder mines (collectively "Stillwater"). During the third quarter, Wheaton received its first deliveries of gold and palladium from Stillwater. Through the first nine months of 2018, Wheaton had record gold production and sales volumes, and is on track to meet annual production guidance, and is currently on track to exceed annual production guidance.

 

Operational Overview




Q3 2018



Q3 2017


Change

Ounces produced









Silver



5,701



7,595


(24.9)%

Gold



101,552



95,216


6.7 %

Palladium



8,817



-


n.a

Ounces sold









Silver



5,018



5,758


(12.9)%

Gold



89,242



82,548


8.1 %

Palladium



3,668



-


n.a

Sales price per ounce









Silver


$

14.80


$

16.87


(12.3)%

Gold


$

1,210


$

1,283


(5.7)%

Palladium


$

955


$

 n.a.


n.a

Cash costs per ounce 1









Silver 1


$

5.04


$

4.43


13.8 %

Gold 1


$

418


$

396


5.6 %

Palladium 1


$

169


$

 n.a.


n.a

Cash operating margin per ounce 1









Silver 1


$

9.76


$

12.44


(21.5)%

Gold 1


$

792


$

887


(10.7)%

Palladium 1


$

786


$

 n.a.


n.a

Revenue


$

185,769


$

203,034


(8.5)%

Net earnings


$

34,021


$

66,578


(48.9)%

Per share


$

0.08


$

0.15


(46.7)%

Adjusted net earnings 1


$

35,132


$

66,578


(47.2)%

Per share 1


$

0.08


$

0.15


(47.4)%

Operating cash flows


$

108,413


$

129,121


(16.0)%

Per share 1


$

0.24


$

0.29


(17.2)%

Dividends declared 1


$

39,921


$

44,201


(9.7)%

Per share


$

0.09


$

0.10


(10.0)%

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

 

Highlights

Reconfirming 2018 Production Guidance

·   Wheaton's estimated attributable production in 2018 is on track to exceed its guidance of approximately 355,000 ounces of gold, 22.5 million ounces of silver and 10,400 ounces of palladium.

Subsequent to the Quarter

·   On October 24, 2018, Vale S.A. ("Vale") announced the approval of the Salobo III mine expansion, which if completed as proposed, would increase processing throughput capacity from 24 million tonnes per annum ("Mtpa") to 36 Mtpa once fully ramped up (the "Salobo Expansion").

"Our robust precious metals business continued to grow in the third quarter with the first production of gold and palladium from our latest stream, Stillwater, exceeding our expectations. With the addition of Stillwater, Wheaton had record gold production and sales volume in the first nine months of 2018 resulting in operating cash flow of almost $370 million." said Randy Smallwood, President and Chief Executive Officer of Wheaton Precious Metals. "In addition, we believe we are currently well positioned to exceed our production guidance for 2018. Finally, we also look forward to Vale pursuing their announced expansion of the Salobo mine in Brazil. Salobo has proven itself to be an exceptional mine, delivering metal to both Vale and Wheaton at a low cost."

Financial Review

Revenues
Revenue was $186 million in the third quarter of 2018, on sales volume of 5.0 million ounces of silver, 89,200 ounces of gold and 3,700 ounces of palladium. This represents a 9% decrease from the $203 million of revenue generated in the third quarter of 2017 due primarily to (i) a 13% decrease in the number of silver ounces sold; (ii) a 12% decrease in the average realized silver price ($14.80 in Q3 2018 compared with $16.87 in Q3 2017); and (iii) a 6% decrease in the average realized gold price ($1,210 in Q3 2018 compared with $1,283 in Q3 2017); partially offset by (iv) an 8% increase in the number of gold ounces sold; and (v) the first sales of palladium.

Costs and Expenses
Average cash costs¹ in the third quarter of 2018 were $5.04 per silver ounce sold, $418 per gold ounce sold and $169 per palladium ounce sold, as compared with $4.43 per silver ounce and $396 per gold ounce during the comparable period of 2017. This resulted in a cash operating margin¹ of $9.76 per silver ounce sold, $792 per gold ounce sold and $786 per palladium ounce sold, a reduction of 22% and 11% for silver and gold, respectively, as compared with Q3 2017. The decrease in the cash operating margin was primarily due to a 12% decrease in the average realized silver price and a 6% decrease in the average realized gold price in Q3 2018 compared with Q3 2017.

Earnings and Operating Cash Flows
Adjusted net earnings¹ and cash flow from operations in the third quarter of 2018 were $35 million ($0.08 per share) and $108 million ($0.24 per share¹), compared with $67 million ($0.15 per share) and $129 million ($0.29 per share¹) for the same period in 2017, a decrease of 47% and 16%, respectively.

Balance Sheet
At September 30, 2018, the Company had approximately $119 million of cash on hand and $1.4 billion outstanding under the Company's $2 billion revolving term loan (the "Revolving Facility").

Third Quarter Asset Highlights

During the third quarter of 2018, attributable production was 5.7 million ounces of silver, 101,600 ounces of gold and 8,800 ounces of palladium, representing a decrease of 25% and an increase of 7% for silver and gold, respectively, as compared with the third quarter of 2017.

Operational highlights for the quarter ended September 30, 2018, based upon counterparties' reporting, are as follows:

Salobo  
In the third quarter of 2018, Salobo produced 68,600 ounces of attributable gold, a decrease of approximately 6% relative to the third quarter of 2017 due to slightly lower grades as expected due to mine sequencing in the open pit. As discussed below, subsequent to the quarter, Vale announced the approval of the Salobo Expansion.

Peñasquito 
In the third quarter of 2018, Peñasquito produced 1.0 million ounces of attributable silver, a decrease of approximately 36% relative to the third quarter of 2017 due to lower throughput and planned lower grades from stockpiles during the commissioning of the now fully constructed PLP. According to Goldcorp Inc.'s ("Goldcorp") third quarter of 2018 MD&A, lower production was a result of the planned transition from higher grade ore in the Peñasco pit to lower grade ore from stockpiles during the first three quarters of 2018. This transition facilitated the stripping campaign in the Peñasco pit and the pre-stripping campaign in the newly developed Chile Colorado pit. Goldcorp further notes that production in the third quarter of 2018 was impacted by a reduction in mill throughput as much harder low-grade stockpiles were processed during commissioning of the Carbon Pre-flotation plant, a component of the PLP.

According to Goldcorp, commissioning of the PLP commenced, with commercial production expected in the fourth quarter of 2018. In addition, Goldcorp reports that substantially all of Peñasquito's production in the fourth quarter will come from higher grade ore from the main Peñasco pit.

Antamina
In the third quarter of 2018, Antamina produced 1.5 million ounces of attributable silver, a decrease of approximately 15% relative to the third quarter of 2017 as expected due to mine sequencing in the open pit.

San Dimas
In the third quarter of 2018, San Dimas produced 10,600 ounces of attributable gold. According to First Majestic Silver Corp.'s ("First Majestic") third quarter of 2018 production report, silver equivalent production in the quarter increased 90% relative to the prior quarter due to increased throughput as some of the lower grade stopes that were deemed uneconomical under the old streaming agreement have now become economical under the new streaming agreement. First Majestic also highlighted increased recoveries as a result of an additional agitator tank being installed in September which increases retention times.

Sudbury
In the third quarter of 2018, Vale's Sudbury mines produced 6,000 ounces of attributable gold, a decrease of approximately 30% relative to the third quarter of 2017 primarily due to lower throughput caused by a planned maintenance shutdown in August (planned maintenance in 2017 occurred in June).

Constancia
In the third quarter of 2018, Constancia produced 0.7 million ounces of attributable silver and 3,300 ounces of attributable gold, an increase of approximately 19% and 31%, respectively, relative to the third quarter of 2017. Increased silver and gold production was primarily due to record mill throughput and higher grades.

Stillwater
In the third quarter of 2018, Stillwater produced 6,400 ounces of attributable gold and 8,800 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 Stillwater. As part of the agreement, Wheaton is 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 quarter. Wheaton's 2018 production guidance for Stillwater was approximately 5,400 ounces of gold and 10,400 ounces of palladium. For more details on the acquisition, please refer to Wheaton's news release dated July 16, 2018.

Other Silver 
In the third quarter of 2018, total Other Silver attributable production was 2.4 million ounces, a decrease of approximately 4% relative to the third quarter of 2017. The decrease was driven primarily by the cessation of attributable production from the Lagunas Norte, Veladero and Pierina mines as the silver purchase agreement with Barrick Gold Corp. ("Barrick") related to these mines expired on March 31, 2018, and lower production at Zinkgruvan, partially offset by the start-up of attributable production at the Aljustrel mine.

Other Gold 
In the third quarter of 2018, total Other Gold attributable production was 6,700 ounces, a decrease of approximately 41% relative to the third quarter of 2017. The decrease was due primarily to lower production at both the 777 and Minto mines. 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 has elected to place the Minto mine on care and maintenance while Capstone seeks alternatives to preserve and maximize the value of the Minto mine.

Produced But Not Yet Delivered 2
As at September 30, 2018, payable ounces attributable to the Company produced but not yet delivered amounted to 4.5 million payable silver ounces, 77,100 payable gold ounces and 4,700 payable palladium ounces, representing an increase of 0.2 million payable silver ounces and 100 payable gold ounces during the three-month period ended September 30, 2018Payable silver ounces produced but not yet delivered increased primarily as a result of increases related to the Peñasquito and Antamina silver interests partially offset by a decrease related to the Yauliyacu silver interest. Payable gold ounces produced but not yet delivered increased primarily as a result of increases related to the Stillwater and Sudbury gold interests partially offset by decreases related to the Minto and 777 gold interests. Payable ounces produced but not yet delivered to the Wheaton group of companies are expected to average approximately two months of annualized production for silver and two to three months for both gold and palladium 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

Salobo Expansion 
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 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 in 2023.

Dividend

Fourth Quarterly Dividend
The fourth quarterly cash dividend for 2018 of US$0.09 will be paid to holders of record of Wheaton Precious Metals common shares as of the close of business on November 30, 2018 and will be distributed on or about December 13, 2018.

Under the Company's dividend policy, the quarterly dividend per common share will be equal to 30% of the average cash generated by operating activities in the previous four quarters divided by the Company's then outstanding common shares, all rounded to the nearest cent. 

The declaration, timing, amount and payment of future dividends remain at the discretion of the Board of Directors. This dividend qualifies as an 'eligible dividend' for Canadian income tax purposes.

Dividend Reinvestment Plan
The Company has previously implemented a Dividend Reinvestment Plan ("DRIP"). Participation in the DRIP is optional. For the purposes of this fourth 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.

Outlook

Wheaton's estimated attributable production in 2018 is forecast to be approximately 355,000 ounces of gold, 22.5 million ounces of silver, and 10,400 ounces of palladium. Estimated average annual attributable production over the next five years (including 2018) is anticipated to be approximately 385,000 ounces of gold, 25 million ounces of silver, 27,000 ounces of palladium, and starting in 2021, 2.1 million pounds of cobalt per year. 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 $119 million of cash and cash equivalents as at September 30, 2018 combined with the liquidity provided by the available credit under the $2 billion Revolving Facility and ongoing operating cash flows positions the Company well to fund all outstanding commitments and known contingencies as well as providing flexibility to acquire additional accretive precious metal stream interests.

Webcast and Conference Call Details

A conference call and webcast will be held Thursday, November 15, 2018, starting at 11:00 am (Eastern Time) to discuss these results. To participate in the live call, please use one of the following methods:

Dial toll free from Canada or the US:           

888-231-8191

Dial from outside Canada or the US:           

647-427-7450                                                  

Pass code:

7977429

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 November 22, 2018 at 11:59 pm (Eastern Time). The webcast will be available for one year. You can listen to an archive of the call by one of the following methods:

Dial toll free from Canada or the US:            

855-859-2056

Dial from outside Canada or the US:            

416-849-0833

Pass code:                                                    

7977429

Archived audio webcast:                              

www.wheatonpm.com 

 

This earnings release should be read in conjunction with Wheaton Precious Metals' MD&A and Financial Statements, which are available on the Company's website at www.wheatonpm.com and have been posted on SEDAR at www.sedar.com.

Mr. Wes Carson, Vice President, Mining Operations for Wheaton Precious Metals, is a "qualified person" as such term is defined under National Instrument 43-101, and has reviewed and approved the technical information disclosed in this news release.

Wheaton Precious Metals believes that there are no significant differences between its corporate governance practices and those required to be followed by United States domestic issuers under the NYSE listing standards. This confirmation is located on the Wheaton Precious Metals website at http://www.wheatonpm.com/Company/corporate-governance/default.aspx.  

End Notes

______________________________

1

Please refer to non-IFRS measures at the end of this press release. Dividends declared in the referenced calendar quarter, relative to the financial results of the prior quarter.

2

Payable silver, gold 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.

 

 

 

Condensed Interim Consolidated Statements of Earnings







Three Months Ended
September 30

Nine Months Ended
September 30

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


2018

2017

2018

2017

Sales


$

185,769

$

203,034

$

597,421

$

600,669

Cost of sales










Cost of sales, excluding depletion


$

63,202

$

58,234

$

182,195

$

173,506

Depletion



64,684


61,852


184,444


185,567

Total cost of sales


$

127,886

$

120,086

$

366,639

$

359,073

Gross margin


$

57,883

$

82,948

$

230,782

$

241,596

General and administrative 1



8,779


8,793


30,507


25,760

Earnings from operations


$

49,104

$

74,155

$

200,275

$

215,836

Gain on disposal of mineral stream interest



-


-


(245,715)


-

Other (income) expense



1,301


74


1,157


(2,007)

Earnings before finance costs and income taxes

$

47,803

$

74,081

$

444,833

$

217,843

Finance costs



12,877


7,766


27,351


23,120

Earnings before income taxes


$

34,926

$

66,315

$

417,482

$

194,723

Income tax (expense) recovery



(905)


263


2,805


691

Net earnings


$

34,021

$

66,578

$

420,287

$

195,414

Basic earnings per share


$

0.08

$

0.15

$

0.95

$

0.44

Diluted earnings per share


$

0.08

$

0.15

$

0.95

$

0.44

Weighted average number of shares outstanding










Basic



443,634


442,094


443,188


441,790

Diluted



444,120


442,476


443,727


442,263

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


$

1,402

$

1,279

$

4,045

$

3,748

 

 

 

Condensed Interim Consolidated Balance Sheets





As at 
September 30

As at
December 31

(US dollars in thousands - unaudited)

2018

2017

Assets





Current assets





Cash and cash equivalents

$

119,373

$

98,521

Accounts receivable


1,099


3,194

Other


2,655


1,700

Total current assets

$

123,127

$

103,415

Non-current assets





Mineral stream interests

$

6,224,128

$

5,423,277

Early deposit mineral stream interests


30,244


21,722

Mineral royalty interest


9,107


9,107

Long-term equity investments


168,427


95,732

Investment in associates


2,621


2,994

Convertible note receivable


13,560


15,777

Other


14,804


11,289

Total non-current assets

$

6,462,891

$

5,579,898

Total assets

$

6,586,018

$

5,683,313

Liabilities





Current liabilities





Accounts payable and accrued liabilities

$

13,346

$

12,118

Current portion of performance share units


1,951


-

Other


22


25

Total current liabilities

$

15,319

$

12,143

Non-current liabilities





Bank debt

$

1,380,500

$

770,000

Deferred income taxes


106


76

Performance share units


2,905


1,430

Total non-current liabilities

$

1,383,511

$

771,506

Total liabilities

$

1,398,830

$

783,649

Shareholders' equity





Issued capital

$

3,495,739

$

3,472,029

Reserves


10,734


77,007

Retained earnings


1,680,715


1,350,628

Total shareholders' equity

$

5,187,188

$

4,899,664

Total liabilities and shareholders' equity

$

6,586,018

$

5,683,313

 

 

 

Condensed Interim Consolidated Statements of Cash Flows








Three Months Ended
September 30

Nine Months Ended
September 30

(US dollars in thousands - unaudited)


2018


2017


2018


2017

Operating activities









Net earnings

$

34,021

$

66,578

$

420,287

$

195,414

Adjustments for









Depreciation and depletion


64,974


62,096


185,206


186,298

Gain on disposal of mineral stream interest


-


-


(245,715)


-

Interest expense


11,806


6,361


23,055


19,215

Equity settled stock based compensation


1,402


1,279


4,045


3,748

Performance share units


(85)


(38)


3,415


(496)

Deferred income tax expense (recovery)


881


(279)


(2,880)


(985)

Loss on fair value adjustment of share purchase warrants held


12


-


123


-

Share in losses of associate


172


-


373


-

Fair value adjustment on convertible note receivable


927


-


2,217


-

Investment income recognized in net earnings


(109)


(93)


(611)


(256)

Other


(1,322)


(233)


(809)


(966)

Change in non-cash working capital


2,983


(234)


(1,911)


(9,162)

Cash generated from operations before interest paid and received

$

115,662

$

135,437

$

386,795

$

392,810

Interest paid


(7,395)


(6,394)


(18,450)


(19,296)

Interest received


146


78


608


211

Cash generated from operating activities

$

108,413

$

129,121

$

368,953

$

373,725

Financing activities









Bank debt repaid

$

(28,000)

$

(99,000)

$

(214,000)

$

(339,000)

Bank debt drawn


452,000


-


824,500


-

Credit facility extension fees


-


(6)


(1,205)


(1,311)

Share purchase options exercised


-


-


1,027


1,002

Dividends paid


(33,873)


(36,663)


(98,462)


(88,771)

Cash (used for) generated from financing activities

$

390,127

$

(135,669)

$

511,860

$

(428,080)

Investing activities









Mineral stream interests

$

(506,171)

$

-

$

(1,116,406)

$

-

Early deposit mineral stream interests


(4,254)


(5)


(8,712)


(899)

Net proceeds on disposal of mineral stream interests 1


(4,000)


-


226,000


1,022

Acquisition of long-term investments


(4,847)


-


(5,863)


-

Proceeds on disposal of long-term investments


47,734


-


47,734


-

Dividend income received


20


15


60


45

Other


(664)


(116)


(3,089)


(202)

Cash used for investing activities

$

(472,182)

$

(106)

$

(860,276)

$

(34)

Effect of exchange rate changes on cash and cash equivalents

$

354

$

(11)

$

315

$

4

Increase (decrease) in cash and cash equivalents

$

26,712

$

(6,665)

$

20,852

$

(54,385)

Cash and cash equivalents, beginning of period


92,661


76,575


98,521


124,295

Cash and cash equivalents, end of period

$

119,373

$

69,910

$

119,373

$

69,910










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




Q3
2018 

Q2
2018 

Q1
2018 

Q4
2017 

Q3
2017 

Q2
2017 

Q1
2017 

Q4
2016 

Silver ounces produced 2










San Dimas 3

-

607

1,606

1,324

1,043

973

623

1,429


Peñasquito

1,050

1,267

1,450

1,561

1,641

1,483

1,339

1,328


Antamina

1,468

1,458

1,339

1,467

1,735

1,888

1,464

1,599


Constancia

737

596

646

670

618

546

540

723


Other











Los Filos

21

32

29

48

43

42

32

33



Zinkgruvan

530

453

565

619

710

493

538

557



Yauliyacu

597

719

550

335

588

607

562

379



Stratoni

165

211

137

131

137

171

166

187



Minto 4

25

30

35

30

43

42

56

100



Neves-Corvo

458

421

405

305

341

316

330

312



Aljustrel

514

138

-

-

-

-

-

-



Cozamin 5

-

-

-

-

-

17

397

265



Lagunas Norte 6

-

-

217

253

243

218

210

234



Pierina 6

-

-

107

111

107

114

137

117



Veladero 6

-

-

265

211

201

144

158

174



777

136

152

146

146

145

138

96

152


Total Other

2,446

2,156

2,456

2,189

2,558

2,302

2,682

2,510

Total silver ounces produced

5,701

6,084

7,497

7,211

7,595

7,192

6,648

7,589

Gold ounces produced ²










Sudbury 7

5,955

6,476

3,511

8,568

8,519

7,468

9,182

8,901


Salobo

68,648

63,949

61,513

76,153

72,980

57,514

58,009

77,787


Constancia

3,261

3,187

3,315

2,947

2,498

2,332

2,431

3,151


San Dimas 3

10,642

5,726

-

-

-

-

-

-


Stillwater

6,376

-

-

-

-

-

-

-


Other











Minto 4

2,546

2,554

2,707

3,328

6,105

6,063

9,734

10,906



777

4,124

4,982

5,645

5,478

5,114

6,259

4,422

10,919


Total Other

6,670

7,536

8,352

8,806

11,219

12,322

14,156

21,825

Total gold ounces produced

101,552

86,874

76,691

96,474

95,216

79,636

83,778

111,664

Palladium ounces produced ²










Stillwater

8,817

-

-

-

-

-

-

-

SEOs produced 8

14,466

12,948

13,577

14,572

14,823

13,009

12,513

15,526

GEOs produced 8

179,016

163,888

171,241

190,979

195,263

178,100

178,766

218,429

Gold / Silver Ratio 8

80.8

79.0

79.3

76.3

75.9

73.0

70.0

71.1

Palladium / Silver Ratio 8

63.4

59.2

61.8

59.3

53.5

47.7

44.0

39.8

Gold / Palladium Ratio 8

1.3

1.3

1.3

1.3

1.4

1.5

1.6

1.8

Average payable rate 2










Silver

84.5%

87.0%

89.8%

90.3%

90.3%

91.1%

89.7%

91.5%


Gold

95.3%

94.7%

94.4%

94.8%

94.8%

94.5%

94.7%

95.4%


Palladium

94.6%

n.a.

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 silver, gold 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 silver, gold or palladium interests relate or management estimates in those situations where other information is not available.  Certain production figures may be updated in future periods as additional information is received. 

3)

On May 10, 2018 the Company terminated the San Dimas silver purchase agreement and concurrently entered into the San Dimas precious metal purchase agreement.

4)

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

5)

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

6)

The Lagunas Norte, Pierina and Veladero precious metal purchase agreements expired on March 31, 2018.

7)

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.

8)

Silver equivalent ounces (SEOs) and gold equivalent ounces (GEOs), which are provided to assist the reader, are calculated by converting gold and palladium (in the case of SEOs) or silver and palladium (in the case of GEOs) using the ratio of the average price of silver to the average price of gold and palladium, respectively, and using the average price of palladium to the average price of gold, with all figures being as per the London Bullion Metal Exchange during the period.                                     

 

 

 

Summary of Ounces Sold











Q3

Q2

Q1

Q4

Q3

Q2

Q1

Q4


2018

2018

2018

2017

2017

2017

2017

2016

Silver ounces sold










San Dimas 2

-

1,070

1,372

1,299

962

845

796

1,571


Peñasquito

1,241

1,547

1,227

1,537

1,109

1,639

860

1,270


Antamina

1,333

1,422

1,413

1,769

1,537

1,453

1,170

1,488


Constancia

567

410

574

491

491

559

383

702


Other











Los Filos

27

35

52

16

43

42

32

33



Zinkgruvan

326

297

391

597

305

398

296

592



Yauliyacu

697

521

360

642

364

423

403

671



Stratoni

125

171

148

110

84

123

195

165



Minto 3

-

28

(1)

34

43

39

37

102



Cozamin 4

-

-

-

-

23

125

232

196



Neves-Corvo

234

178

169

119

117

114

153

147



Aljustrel

302

-

-

-

-

-

-

-



Lagunas Norte 5

1

65

236

237

242

204

217

227



Pierina 5

-

54

88

106

102

136

150

84



Veladero 5

2

104

161

211

201

144

159

174



777

163

70

153

124

135

125

142

84


Total Other

1,877

1,523

1,757

2,196

1,659

1,873

2,016

2,475

Total silver ounces sold

5,018

5,972

6,343

7,292

5,758

6,369

5,225

7,506

Gold ounces sold










Sudbury 6

2,560

4,400

5,186

12,059

3,237

5,822

6,887

10,183


Salobo

65,139

70,734

54,645

71,683

67,198

50,478

63,007

73,646


Constancia

2,980

2,172

3,247

1,965

2,206

2,356

2,315

3,343


San Dimas 2

9,771

3,738

-

-

-

-

-

-


Stillwater

2,075

-

-

-

-

-

-

-


Other











Minto 3

796

2,284

1,763

2,020

4,603

6,988

9,902

15,445



777

5,921

3,812

5,132

6,568

5,304

6,321

6,286

6,314


Total Other

6,717

6,096

6,895

8,588

9,907

13,309

16,188

21,759

Total gold ounces sold

89,242

87,140

69,973

94,295

82,548

71,965

88,397

108,931

Palladium ounces sold










Stillwater

3,668

-

-

-

-

-

-

-

SEOs sold 7

12,462

12,855

11,892

14,488

12,024

11,625

11,412

15,249

GEOs sold 7

154,222

162,715

149,987

189,882

158,401

159,161

163,032

214,529

Cumulative payable silver

ounces PBND 8

4,454

4,240

4,889

4,515

5,257

4,152

3,967

3,224

Cumulative payable gold

ounces PBND 8

77,093

77,029

81,923

79,477

82,632

74,899

71,571

80,621

Cumulative payable palladium

ounces PBND 8

4,671

-

-

-

-

-

-

-

Gold / Silver Ratio 7

80.8

79.0

79.3

76.3

75.9

73.0

70.0

71.1

Palladium / Silver Ratio 7

63.4

59.2

61.8

59.3

53.5

47.7

44.0

39.8

Gold / Palladium Ratio 7

1.3

1.3

1.3

1.3

1.4

1.5

1.6

1.8

1)

All figures in thousands except gold and palladium ounces sold.

2)

On May 10, 2018 the Company terminated the San Dimas silver purchase agreement and concurrently entered into the San Dimas precious metal purchase agreement.

3)

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

4)

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

5)

The Lagunas Norte, Pierina and Veladero precious metal purchase agreements expired on March 31, 2018.

6)

Comprised of the Coleman, Copper Cliff, Garson, Stobie, Creighton and Totten gold interests. The Stobie gold interest was placed into care and maintenance as of May 2017.

7)

Silver equivalent ounces (SEOs) and gold equivalent ounces (GEOs), which are provided to assist the reader, are calculated by converting gold and palladium (in the case of SEOs) or silver and palladium (in the case of GEOs) using the ratio of the average price of silver to the average price of gold and palladium, respectively, and using the average price of palladium to the average price of gold, with all figures being as per the London Bullion Metal Exchange during the period.

8)

Payable silver, gold 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 September 30, 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

Silver

















Peñasquito

1,050

1,241

$

14.94

$

4.17

$

2.96

$

18,544

$

9,702

$

13,369

$

391,385

Antamina

1,468

1,333


14.98


2.98


8.70


19,956


4,398


16,235


721,388

Constancia

737

567


15.10


5.90


7.14


8,561


1,166


5,216


250,724

Other 4

2,446

1,877


14.48


6.82


3.00


27,194


8,757


15,191


506,353


5,701

5,018

$

14.80

$

5.04

$

4.97

$

74,255

$

24,023

$

50,011

$

1,869,850

Gold

















Sudbury 5

5,955

2,560

$

1,218

$

400

$

795

$

3,117

$

58

$

1,948

$

370,331

Salobo

68,648

65,139


1,210


400


386


78,815


27,604


52,760


2,735,159

Constancia

3,261

2,980


1,216


400


374


3,625


1,318


2,433


118,910

San Dimas

10,642

9,771


1,200


600


556


11,725


428


5,862


212,915

Stillwater

6,376

2,075


1,205


217


526


2,500


958


2,049


238,033

Other 6

6,670

6,717


1,225


402


480


8,230


2,306


5,390


23,728


101,552

89,242

$

1,210

$

418

$

426

$

108,012

$

32,672

$

70,442

$

3,699,076

Palladium

















Stillwater

8,817

3,668

$

955

$

169

$

462

$

3,502

$

1,188

$

2,882

$

261,796

Cobalt

















Voisey's Bay

-

-

$

n.a.

$

n.a.

$

n.a.

$

-

$

-

$

-

$

393,406

Operating results








$

185,769

$

57,883

$

123,335

$

6,224,128

Corporate costs















General and administrative










$

(8,779)

$

(4,899)



Finance costs












(12,877)


(8,351)



Other











(1,301)


(1,672)



Income tax expense











(905)


-



Total corporate costs









$

(23,862)

$

(14,922)

$

361,890


$

34,021

$

108,413

$

6,586,018

1)

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

2)

Ounces produced represent the quantity of silver, gold 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 silver, gold or palladium 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 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. The Lagunas Norte, Pierina and Veladero precious metal purchase agreements expired on March 31, 2018 and the Minto mine was placed into care and maintenance in October 2018. 

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.

                                                      

On a silver equivalent and gold equivalent basis, results for the Company for the three months ended September 30, 2018 were as follows:

Three Months Ended September 30, 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)

Silver equivalent basis

14,466

12,462

$

14.91

$

5.07

$

9.84

$

5.19

$

4.65

Gold equivalent basis

179,016

154,222

$

1,205

$

410

$

795

$

419

$

376

1)

Ounces produced represent the quantity of silver, gold 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 silver, gold or palladium 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 September 30, 2017


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

Silver

















San Dimas 4

1,043

962

$

16.84

$

4.32

$

1.46

$

16,205

$

10,640

$

12,049

$

136,763

Peñasquito

1,641

1,109


16.67


4.13


2.88


18,491


10,715


13,911


407,679

Antamina

1,735

1,537


17.01


3.34


9.81


26,147


5,938


21,017


774,993

Constancia

618

491


17.16


5.90


7.36


8,429


1,915


5,531


265,420

Other 5

2,558

1,659


16.79


5.28


3.77


27,854


12,836


19,109


759,840


7,595

5,758

$

16.87

$

4.43

$

5.13

$

97,126

$

42,044

$

71,617

$

2,344,695

Gold

















Sudbury 6

8,519

3,237

$

1,281

$

400

$

769

$

4,147

$

362

$

2,852

$

389,266

Salobo

72,980

67,198


1,280


400


381


86,030


33,561


59,150


2,836,029

Constancia

2,498

2,206


1,301


400


409


2,869


1,083


1,986


122,856

Other 7

11,219

9,907


1,298


368


335


12,862


5,898


8,823


35,924


95,216

82,548

$

1,283

$

396

$

391

$

105,908

$

40,904

$

72,811

$

3,384,075

Operating results








$

203,034

$

82,948

$

144,428

$

5,728,770

Corporate costs















General and administrative










$

(8,793)

$

(6,693)



Finance costs












(7,766)


(8,697)



Other











(74)


83



Income tax recovery











263


-



Total corporate costs









$

(16,370)

$

(15,307)

$

206,916












$

66,578

$

129,121

$

5,935,686

1)

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

2)

Ounces produced represent the quantity of silver and gold 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 silver or gold interests relate or management estimates in those situations where other information is not available.  Certain production figures may be updated in future periods as additional information is received.

3)

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

4)

On May 10, 2018 the Company terminated the San Dimas silver purchase agreement and concurrently entered into the San Dimas precious metal purchase agreement.

5)

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. The Lagunas Norte, Pierina and Veladero precious metal purchase agreements expired on March 31, 2018 and the Minto mine was placed into care and maintenance in October 2018. 

6)

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.

7)

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.

 

On a silver equivalent and gold equivalent basis, results for the Company for the three months ended September 30, 2017 were as follows:

Three Months Ended September 30, 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)

Silver equivalent basis

14,823

12,024

$

16.89

$

4.84

$

12.05

$

5.14

$

6.91

Gold equivalent basis

195,263

158,401

$

1,282

$

368

$

914

$

390

$

524

1)

Ounces produced represent the quantity of silver and gold 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 silver or gold interests relate or management estimates in those situations where other information is not available. Certain production figures may be updated in future periods as additional information is received.

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 silver, gold 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
September 30

(in thousands, except for per share amounts)


2018


2017

Net earnings


$

34,021


$

66,578

Add back (deduct):







Share in losses of associate



172



-

Loss on fair value adjustment of Kutcho Convertible Note



927



-

Loss on fair value adjustment of share purchase warrants held



12



-

Adjusted net earnings


$

35,132


$

66,578

Divided by:







Basic weighted average number of shares outstanding



443,634



442,094

Diluted weighted average number of shares outstanding



444,120



442,476

Equals:







Adjusted earnings per share - basic


$

0.08


$

0.15

Adjusted earnings per share - diluted


$

0.08


$

0.15

 

 

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
September 30

(in thousands, except for per share amounts)


2018


2017

Cash generated by operating activities


$

108,413


$

129,121

Divided by:







Basic weighted average number of shares outstanding



443,634



442,094

Diluted weighted average number of shares outstanding



444,120



442,476

Equals:







Operating cash flow per share - basic


$

0.24


$

0.29

Operating cash flow per share - diluted


$

0.24


$

0.29

 

iii. Average cash cost of silver, gold 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 silver, gold and palladium on a per ounce basis.

 


Three Months Ended
September 30

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


2018


2017

Cost of sales


$

127,886


$

120,086

Less:  depletion



(64,684)



(61,852)

Cash cost of sales


$

63,202


$

58,234

Cash cost of sales is comprised of:







Total cash cost of silver sold


$

25,295


$

25,529

Total cash cost of gold sold



37,287



32,705

Total cash cost of palladium sold



620



-

Total cash cost of sales


$

63,202


$

58,234

Divided by:







Total silver ounces sold



5,018



5,758

Total gold ounces sold



89,242



82,548

Total palladium ounces sold



3,668



-

Equals:







Average cash cost of silver (per ounce)


$

5.04


$

4.43

Average cash cost of gold (per ounce)


$

418


$

396

Average cash cost of palladium (per ounce)


$

169


$

n.a.

 

iv. Cash operating margin is calculated by subtracting the average cash cost of silver, gold and palladium on a per ounce basis from the average realized selling price of silver, gold and palladium on a per ounce basis. The Company presents cash operating margin as management and certain investors use this information to evaluate the Company's performance in comparison to other companies in the precious metal mining industry who present results on a similar basis as well as to evaluate the Company's ability to generate cash flow.

The following table provides a reconciliation of cash operating margin.

 


Three Months Ended
September 30

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


2018


2017

Total sales:







Silver


$

74,255


$

97,126

Gold


$

108,012


$

105,908

Palladium


$

3,502


$

-

Divided by:







Total silver ounces sold



5,018



5,758

Total gold ounces sold



89,242



82,548

Total palladium ounces sold



3,668



-

Equals:







Average realized price of silver (per ounce)


$

14.80


$

16.87

Average realized price of gold (per ounce)


$

1,210


$

1,283

Average realized price of palladium (per ounce)


$

955


$

n.a.

Less:







Average cash cost of silver 1 (per ounce)


$

(5.04)


$

(4.43)

Average cash cost of gold 1 (per ounce)


$

(418)


$

(396)

Average cash cost of palladium 1 (per ounce)


$

(169)


$

n.a.

Equals:







Cash operating margin per silver ounce sold


$

9.76


$

12.44

As a percentage of realized price of silver



66%



74%

Cash operating margin per gold ounce sold


$

792


$

887

As a percentage of realized price of gold



65%



69%

Cash operating margin per palladium ounce sold


$

786


$

n.a.

As a percentage of realized price of palladium



82%



n.a.

1) Please refer to non-IFRS measure (ii), 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:

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:

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

 

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