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Streaming Company Posts $318 Million of Net Earnings in Q2

This precious metals firm highlighted that Q2/18 revenue and operating cash flow were up year over year.

Wheaton Precious Metals Corp. (WPM:TSX; WPM:NYSE) announced its Q2/18 financial and operating results along with its most recent dividend.

The company reported Q2/18 net earnings of $318 million, which included a $246 million gain from disposal of the San Dimas silver stream.

Q2/18 revenue was $212 million, up 6% year over year (YOY). Sales volume was 6 million ounces (6 Moz) of silver and 81,100 ounces (81.1 Koz) of gold.

Average cash costs in Q2/18 were $4.54 per ounce of silver sold and $407/oz of gold sold, higher than those in Q2/17, which were $4.51/oz and $393/oz, respectively.

Adjusted net earnings in Q2/18 were $73 million, up 9% YOY. Cash flow from operations was $135 million, up 8% YOY. Reflecting on H1/18, President and CEO Randy Smallwood said in a news release, “Wheaton’s high-quality portfolio and strong margins generated over $260 million of operating cash flow” during that period.

As of June 30, 2018, Wheaton had about $93M million of cash on hand and $957 million outstanding through its $2 billion revolving term loan.

Along with reporting Q2/18 financial results, the streamer declared its third quarterly cash dividend for 2018. It was $0.09 per common share, up 29% from the dividend of the same period in 2017.

Wheaton also provided recent noteworthy transaction updates, which included completion of two acquisitions. One was the cobalt stream from Vale’s Voisey’s Bay mine, and the other, which closed after the end of the second quarter, was the gold and palladium stream from Sibanye-Stillwater’s Stillwater and East Boulder mines. “These additions ideally fit within our existing portfolio as they are both high-margin and long-life mines with significant exploration potential,” noted Smallwood.

Also post-Q2/18, Wheaton acquired Adventus Zinc Corp. and a right of first refusal on any new precious metals streaming or royalty deals on Adventus’ Ecuador properties.

As for total attributable production during Q2/18, Wheaton achieved 6.1 Moz of silver and 85.3 Koz of gold. Compared to Q2/17’s figures, silver production dropped 15% whereas gold production rose 7%, compared to Q2/17’s figures.

With respect to the mines individually, Salobo produced 63.9 Koz of attributable gold, about 11% more than that produced in Q2/17, due to greater recovery and throughput offset partly by lower grades.

Peñasquito produced 1.3 Moz of attributable silver, a 15% decrease relative to Q2/17 because production from the oxide heap leach was lower.

Antamina produced 1.5 Moz of attributable silver, about 23% less than that produced in Q2/17. This drop was anticipated and due to mine sequencing in the open pit.

San Dimas produced 5.7 Koz of attributable gold and 0.6 Moz of attributable silver.

Vale’s Sudbury mines produced 4.9 Koz of attributable gold, about a 34% decrease YOY, resulting from reduced throughput and lower grades.

Constancia produced 0.6 Moz of attributable silver and 3.2 Koz of attributable gold, about 9% and 37% more than quantities produced in Q2/17, respectively. Increased production of both metals is attributed to higher grades and greater throughput.

Looking forward, Wheaton expects to achieve production in FY18 of 355 Koz of gold, 22.5 Moz of silver and 10.4 Koz of palladium.


1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
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