Q3 2020 Wheaton Precious Metals Corp Earnings Call
documents together with the q1
On twenty-twenty mdna the Q3 2020 mdna and the press release from last night's it out the material assumptions in risk factors that could cause actual results to differ including among others place in the price of Commodities impacts on Wheaton or mining operations from the precious metals purchases as a result of the epidemic including the COVID-19 and image. Whereas related to mining operations from which wheat and purchases precious metals. They continued ability of whedon's counterparty to satisfy the obligations under precious metal purchase agreements and the impact of any material change, in fact law or jurisprudence on the t r a settlement. It should be noted at all figures refer to on stays collar and US Dollars unless otherwise noted in addition reference to Wheaton or Wheaton precious metals on this call include Wheaton precious metal band or its wholly-owned subsidiaries is applicable and I'd like to send the call over to Randy Smallwood our president and chief executive officer.
Thank you, Patrick and good morning. Ladies and gentlemen. Thank you for joining us today to discuss Wheaton third-quarter results of twenty-twenty. I hope everyone has been keeping healthy and safe off since our last quarterly conference call at Wheaton our top priority Remains the health and safety of our employees and the communities in which we operate.
Now with regard to our third-quarter results. I am very pleased to announce that Wheaton's high-quality portfolio of assets generated nearly two hundred and thirty million dollars in operating cash flow in the third quarter alone resulting in a record of over $555 million for the first nine months of 2020.
And given Wheaton's unique dividend policy this strong cash flow has resulted in a 20% increase in our dividend to be paid in the fourth quarter.
In addition, we recently announced a listing on the London Stock Exchange that we hope will provide another point of entry and make it easier for new internationally based shareholders to invest. In fact, we didn't we continue to focus on delivering value to all of our stakeholders. I will provide updates on Wheaton's response to COVID-19 after Gary discusses our third cup results. So now I'd like to turn the call over to Gary Brown senior vice president and Chief Financial Officer who provide more details on our results Gary. Thank you Randy and good morning. Ladies and gentlemen, the company's precious metal interests produced 171400 gold equivalent ounces in the third quarter of 2020 comprised of 91800 Oz of gold six million ounces of silver and 5400 ounces of Palladium. This represents a 22% increase in production relative to the prior quarter with the my name.
Or temporarily suspended due to COVID-19 & cute too having return to operation relative to the third quarter of the prior year production decreased by 7% with gold production wage increasing 11% Do you primarily to the expected mining of lower grade material at slovo while silver and Palladium production was virtually unchanged gold equivalent sales volumes increased by 2% relative to the third quarter of 2019 to 157500 ounces with sales volumes in the comparable quarter of the prior Year's reflecting a buildup in ounces produced but not delivered. It is interesting to note that our sales volume was 17% higher than not reported by any other streaming or royalty company and the quarter.
That's September.
Three at twenty twenty ounces produced but not delivered or P BND amounted to approximately 124000 gold equivalent payable ounces representing approximately 2.2 months worth of payable production. This compares to an average P BND balance of approximately 140000 gold equivalent ounces over the preceding four quarters and it is possible that a build up a p BND could occur in the future revenue for the third quarter of 2020 amount of to a record-setting 307 million am representing a 37% increase relative to Q3 2019 primarily due to a 35% increase in the average realized gold equivalent price of this Revenue 56% was a tribute attributable to Gold sales 40% to Silver and 4% to Palladium. Again, it is worth noting that our Revenue in Q3 2020 was 10% off.
Higher than any other streaming or royalty company gross margin for the third quarter of 2020 increased 85% to $177 million dollars highlighting the left of business model provides to increases in precious metal prices cash-based G&A expenses amounted to 20 million dollars in the third quarter of 2020 representing an increase of $7,000 from Q3 2019 with the increase being primarily related to higher accrued cost associated with the performance share units or psu's and higher charitable donations off with the company donating 1 million dollars during Q3 2020 relative to the previously-announced $5000000 community support and response fund related to the COVID-19 pandemic public interest costs for the third quarter of 2020 amount of two million dollars resulting in an effective interest rate on outstanding debt of 1.24% as compared to eleven million dollars at minimum wage.
Costs an effect of interest rate of 4.02% incurred in Q3 2019 with the average outstanding debt balance decreasing by over 45% off net earnings amounted to 150 million dollars in the third quarter of 2020 compared to seventy six million dollars in Q3 2019 basic adjusted earnings per share increased 113% to $0.34 compared to $0.16 per share in the prior-year operating cash flow for the third quarter of 2020 amounted to $228,000 or $0.51 per share compared to $142 million dollars or thirty two cents per share in the prior-year representing a 59% increase on a per-share basis home though. This level of operating cash flow did not represent a record for the company. It was 7% higher than any other streaming or royalty company generated in the quarter based on the yep.
But he's dividend policy the company's board.
Has declared a dividend of $0.12 a share payable to shareholders of record on November 25th 2020.
This represents a 20% increase relative to the dividend paid in the prior quarter and highlights how shareholders participate directly and efficiently in any precious metal pricing real life under our unique dividend policy under the dividend reinvestment plan. The board has elected to offer shareholders. The option of having their dividends reinvested in newly issued common shares of the company offers a 1% discount to market for 2020 the company continues to estimate that non stock-based G&A expenses, which exclude expenses relating to the value of stock options in life. You will amount to forty-two forty-three million dollars for twenty twenty.
During the third quarter of 2020 the company repaid 153 million dollars on the revolving facility dispersed $37 million dollars in dividends and invest eleven million dollars in long-term Investments with these cash outflows being partially offset by proceeds from the sale of various equity instruments, totaling $49 million dollars and the exercise of choice options in the amount of 3 million dollars overall net cash increased by $78 million dollars in Q3 2020 resulting in cash and cash equivalents September 30th of two thousand and ten million dollars this combined with the 488 million dollars outstanding under the revolving facility resulted in a net debt position as at September 30th of $1,278 million dollars ads such the company is well-positioned to satisfy its funding commitments and sustain its dividend policy while at the same time having the flexibility to consummate dead.
Additional accretive precious metal purchase agreements in summary our high-quality portfolio of streaming assets. Not only helped Wheaton set new records in Q3 2020. They generate the highest volume revenue and operating cash flow of any streaming or royalty company in the world leading to a 20% increase in its dividend and positioning company extremely well to reap the benefits of any continuation of the rally and precious metal prices as well as to execute on it to creative growth strategy with that. I will turn the call back over.
Thank you, Gary. The company continues to keep up-to-date on development surrounding COVID-19 and has taken steps to protect the health and safety of our employees and the community as well as measures to minimize any impacts to our business.
I will now provide a general update on our guidance corporate development activities and Community initiatives.
We are pleased that all of our mining partners partners operations that were temporarily suspended due to COVID-19 have resumed operations production in the third quarter rebounded strongly following the temporary suspensions in the prior quarter and the company is on track to meet the higher end of our guidance as a reminder on a gold equivalent basis. We expect to produce between 655000 to 685000 Gold equivalent ounces in 2020. Wheaton's long-term production forecast remains unchanged at seven hundred fifty thousand gold equivalent ounces per year on average between 2020 and 2024.
On the corporate development front we continue to remain very active subsequent to the quarter. We announced that we had finalized the previously-announced precious metal stream with called this gold purchase 6.5% of the gold production and 100% of the silver production from them. Our motto project located in Colombia. We are excited to partner with called us in advancing this project and we are very encouraged by the continued strong exploration success. We remain unwavering in our focus on delivering the highest-quality portfolio precious metals production to our shareholders through our town to your asset base strong organic girl's profile and acquisition of a creative growth opportunities such as more model.
Wheaton or Success is Not only measured in terms of financial results and accretive Acquisitions, but also in our ability to make a positive difference in that Richard earlier in this year. We established a dedicated us five million dollar fund to help address the impacts of COVID-19 more than doubling our budget for Community Support. We have now deployed approximately 3 million of those dollars of our COVID-19 response fund to support various programs. Globally. The majority of these funds are dedicated to the communities around our mining Partners operations and not only help to alleviate the near-term impacts of the pandemic but also leave positive sustainable benefits in Brazil in Mexico Peru, the fund has helped to provide food security medical services and supplies such as an ambulance and ventilators and economic opportunities for those in need specifically in birth.
Till we have funded the production of face masks to help produce the spread of COVID-19 while supporting local female entrepreneurs.
We continue to work with our partners to identify additional programs that support their COVID-19 relief efforts. Now more than ever. We must come together to help support our communities and make a positive impact and we continue to urge our peers in the streaming space to follow our lead in this regard.
In summary, despite the temporary shutdowns of some operations the first nine months of 2020 has resulted in record revenue and cash-flow and the second increase to our dividend this year. I'm not really that but we remain optimistic that we will be able to continue growing the company and add additional production from long-life assets producing in the lowest half of their respective cost curves.
And with our recent listing on the London Stock Exchange, we are excited that a new audience now has the opportunity to invest in Wheaton and we believe our business model offers UK investors and New Age healing opportunity to gain exposure to Precious Metals through a streaming company of Wheaton scale.
Given the bullish precious metals markets the strength of our business model and our high-quality portfolio of assets. We remain confident that we can continue to create sustainable value for all of our stakeholders and continue to be leaders in the streaming and royalty space. So with that I would like to open up the call for questions operator. Thank you. Ladies and gentlemen, we will not conduct the question-and-answer session. If you'd like to ask a question, please press star then the number one on your telephone keypad. If you would like to withdraw your question, press the pound key should be a brief pause while we compiled the Q&A roster. And your first question here comes from the line of Ralph proceeding from 8 Capitol, please go ahead your line is now open.
Hi there. Good morning. Thank you for taking my questions Randy Randy in your commentary. And in the higher end of June 2020. Where are you feeling most confident in terms of the operations? I think it's been well telegraphed at penasquito strong quarter-over-quarter and Q4 is going to be their strongest. Is that the primary source are you feeling great wage and some of the other operations and if so, which ones well, it was definitely seeing the best grades and continues to you know, surprise to that side and on top of that new month doing great great work there with respect to recoveries and and throughput and so it's you know, it's just a combination of Penasquitos probably is the is the the strongest within within the group itself off but we are seeing strength in every asset. I think I think we're we're the comfort is coming from is actually the fact that everyone rebounded from the suspension. So rapidly, you know, good strong production numbers and
We had when we originally came up with the revised guidance. We had felt that that the combination of the higher absenteeism and and and a restart of the operations that were suspended was going to slow things down a bit, but it off it. It really appears that our operators had had put a lot, you know, put a lot of effort into making sure that when the restart happened it happened strong and and and relatively well so so yeah, but you know, I think across the board it was it was Penasquitos performing a bit on grades and recoveries, and and then overall just all of the operations that the impacts on Thursday. No from the pandemic of they've just be bounded in a stronger sense all the way across the board.
Great. Yeah good answer. I appreciate that and as an industry, we've seen a lot of dividend increases right then it's becoming sort of you know, a little bit more competitive in terms of woke up and ship and and in the context of the London listing and the news source of capital. How are you feeling in particular about that 30% ratio, right? It's been a place for a couple of years, you know, could you go higher would you go off your thoughts on that would be appreciated? Oh, we will go higher. It's just a matter of timing. You know, we we have course have very very strong cash flows and good strong organic growth in the portfolio month. So we have a choice, you know, we we fund or dividend but the rest of it goes back into the ground now, you know, if we don't make any further Investments our debt should Disappear by the first quarter of next year, you'll start building up a war chest to to put back into the ground. But if that works just gets too big we will be increasing the dividend of heated back and so as I like to say our our first objective is to you know, pay pay a good strong healthy divij.
like we are right now but continue growing the
Company, but if we don't see the right opportunity to put the money back into the ground, then we return it to our shareholders and the dividend will grow so it's I think it's a matter of time as our company grows as as the organic growth. We've got that scheduled over the next five to ten years comes into fruition. Uh, you know, I can't see it's going to get tougher and tougher for us to invest all of that cash flow back into Iraq, which means that the dividend will grow but you know, the the real advantage of our dividend mechanism is the fact that it is directly linked to our cash flows. And of course our cash flows are directly linked to check prices. And so so the shareholders are actually reaping a benefit Beyond, you know, the increase in share price with these higher precious metal prices that we see and so it's a it's a good strong system. That sucks. Yeah, we do average it over the previous four quarters, so it doesn't take much to understand that there's there's still upward pressure on this dividend even for the next quarter and the quarter after that as long as you age,
To stay up where we are right now. It's going to continue growing it on a per-share basis.
Great Wall said righty. Thank you.
Thank you Ralph.
Once again, ladies and gentlemen, if you'd like to ask a question, please press star followed by the number one on your telephone keypad. Your next question comes from the line of Cosmos with CIBC, please go ahead your line is now open.
Hi. Thanks, Randy, Gary Hayes and Patrick and thanks for taking my questions here maybe.
Thanks Randy. Maybe my first question here is on you know, the else is produced and not yet delivered, you know, clearly twenty-twenty was an unusual year with COVID-19 off but in the past, you know in Q4, you know, there was usually a big be a big draw down in terms of inventory and then it would result in higher sales and production for Q4 home and precious metals. Maybe it's too early to tell at this point in time, but should we expect that once again in year 2020?
Hi Cosmo. Scary, you know, it's it's very difficult to predict. You know, we had I think expected that the balance would have been higher at the end of Q3 than it than it ended up being. Um, so, you know, our partners were doing a very good job of keeping, you know, concentrate and adore a uh-huh going and we we generally do anticipate that, you know mining companies in general will I will try to minimize the amount of unsold concentrate and Dora that they have at year end and so dead
You know.
We're not anticipating a a significant buildup in in Q4. But you know, if you look over the past few years, you know, there have been uh, there have been surprised as in that regard. And so, you know, it's hard to to anticipate I would highlight that you know, if there was a build-up that you know, that that translates into sales off the next quarter. So it's not like a a long-term issue. It's a very short-term issue. It's just very difficult to to predict.
Of course, maybe Switching gears a little bit. I was reading your mdna. And I guess as you mentioned Barakat pascua-lama in Q3 the elected not to change the option to cancel the the screen the pnpa could you remind us, you know is this their last sort of opportunity to cancel that and on that, you know, is this the outcome that you had expected and preferred could you maybe comment on that? Cause you had that backwards? It was it was us that had the opportunity to cancel the streets? Okay. Yeah, so I think they would have canceled it a long time ago actually know the it was us we had the opportunity. So the way that the deal was structured was up to a certain point she could ask for the remainder of our money back. And so that point was essentially the end of September and we're still Believers in the project. We think that you know, we did wrong.
Give a substantial amount of competition silver back from Barak already. So although we invested $625 million dollars into the project. Originally. We're I think we're only about two hundred fifty five million into it right now. Because of the compensation silver from the other mines in South America, but that has ended and and for 255 million dollars, we feel that Pascal, this the the 55% of the silver on Pasquale, We think it's worth more than that. We think it's a we we're still a believer in the project. It definitely has its challenges but we we know that Barak is is working to try and and and find a way around the challenges and work with the community and we we do think it's a project that will deliver strong sustainable benefits to both Chile and Argentina at some time in the future of America shoulders sometime in the future and and we're going to be patient and wait for that. So it was our choice to do that and we chose not to take the refund and to stay home.
Vested in to pascua-lama and that passed while I'm a number that's not included in your 750,000. It's just that you're projecting in terms of g o s is Right definitely not dead. Yeah, that's that's hundred fifty thousand ounces is for the next five years including twenty-twenty. I think it's important to highlight that you know, if we're going to maintain that and if you look at our 2020 production, that means that the next four years will average about 770,000 gold equivalent ounces. There is no passport. Llama Inn. There. There is no Rosemont in there. There is no naava. In there. It's it's only projects that are on schedule. And in fact, I would I would say we've taken a pretty conservative approach on slovo in that forecast also, so there's we're we're waiting for the updated mining plan from valet expected sometime next year. So we think there's definitely some upside in that 770000 over the next four years.
For sure.
Maybe you know quickly on constancia as you as you mentioned, you know, ten Focaccia was delayed in 2020 as a result, you know, you were able to receive additional, you know about eight thousand ounces in a know, you know, it seems like they're on track for start up early twenty Twenty-One not saying it's going to happen. But could you remind us, you know, if there's further delays or any kind of other sort of else's that you'll receive in compensation or was the eight thousand ounces pretty much it.
The the the we we did give them an extension because of they've had pandemic, you know impacts down in Peru with respect to age agencies in terms of giving approval on a go-forward basis. And so we did give them an extension through to the end of June next year and at that point we get to sort of refresh and look at them look at the the stream itself whether we decide to adjust the stream or go forward, you know hot Bay has been doing a great job in this thing moving it forward and and we're supportive partner. There's so, you know, we will work with them to make sure that it comes to to a satisfactory Arrangement, but I'm I'm very confident that they'll have it up and running before the end of June great. Thank God, but once again those other questions I have thanks for answering my questions. Thank you both.
Your next question comes from the line of John from John very independent research, please go ahead your line is now open.
Thank you for taking my question. I know I noticed some of them.
being companies
have a lot more operating risk of raised their dividend many times by large percentages.
Could you tell us a little bit more about the philosophy in the 20% dividend hike you're financially strong enough to raise the dividend a little more jobs. Are you going slow and gradual? Cuz you don't want to raise it too quickly or cut it too quickly or are you just putting a priority on repaying your debt and accumulates money for the Rosemont payment the third slo-mo payment and your other reinvestments, I would actually say it's it's I'm still confident that we have some new opportunities will be able to bring into the portfolio. We're very active on the corporate development front John. We've got lots of lots. In fact, I would I would almost argue that we're as long as we've ever been on that front and so we're hopeful that we can actually add a few new assets to the portfolio over the next few months from the you know, so it's it's basically building up that catalog.
But but you know, I have no doubt. We will eventually grow into a yield more yield Focus company that dividend as a percentage overall will grow you know, I think it's important to sort of gain highlight the fact that the 30% was was scheduled as per our formula and so it was predictable. I think everyone are sorry that the 20% increase that we've just had a scheduled you could sit and look at it and and you know that we average it on our cash flows over the previous four quarters. I'm pretty confident that you know, of course depending on how precious metal prices do over the next three months or the remainder of this quarter. There's going to be upward pressure the next next quarter to for the for the next round of dividends. We establish a basement or a floor price every year that we won't drop below for the course of the year. And then we use 30% as a reference know it can tell you that if we if we don't put money back into the ground then it then the dividend will grow. Yep.
You know as of right now we still have a big.
And that debt that will disappear in the first quarter will probably build up a little bit of a war chest if we don't put it back in the ground and then and then we won't let it get to be too big of a war chest cuz we're not really busy and money. We we'd rather have it in ounces in the ground than cash in the in the bank. And so so that's the point that will turn it around and put it back into a dividend. If we if the work just gets too big Thursday. We we as Outsiders can't see the evaluation project flow that you have the choice to do you think the likelihood is that there's a $500 million or 1 billion dollar large project on the horizon in the next year or two.
You know what Tatum's on the line here. I'm going to let him answer that one. He's he leads our corporate development pretty girls your Romancing Hazel.
Good morning, John. How are you? Just to give you a bit of an idea John. We as Randy mentioned earlier. We've been incredibly unpleasantly busy. I guess we've got lots of New Opportunities. We're look up the majority of them fall into the sub five hundred million category. And those are primarily development-stage opportunities that fit into our early deposit structure as well as expansion opportunities, but we are seeing strong some large Billion Dollar Deals out. There is at least a couple out there that you know, they take time to come to fruition. But you know there there there's also been some royalty packages which really don't make sense from a wage respective mostly because they they come with a significant amount of non precious metals. But yeah, there's John as Randy mentioned earlier. I don't think we've been this busy in a long time. We're young been saying that for probably the last three quarters in it pleasantly, it keeps going how much capacity does the project team have to go to sites. And yep.
Rigorously evaluated in the COVID-19 as long as it lasts. Can you look at can you physically due diligence on one project a week or one project a month or how tough is it sure is great question. The pandemic is not really affected our ability to advance streaming due diligence and concentrate transactions. We're constantly looking at and evaluating New Opportunities and we've completed. Visits in the last month alone some two of those were with external consultants and two of those were with our team specifically, you know, and one of the reasons I'm actually doing this by telephone rather than in the office as I'm actually in a two-week quarantine. Cuz I just got back from one of those types of myself. So, you know, we're still very very active. We've probably got at least another PS3 site visits in the next month and half schedule the loan and they may be using Wheaton employees. They've using Consultants we can rely on but you know, we're definitely still very very active dog.
John every every jurisdiction is different in terms of how we manage that and so it all comes down to minimizing the risk and and being confident in terms of what we're investing into our what we're looking at and so long so there's a balancing act with respect to every asset that we look at
Thank you.
Thank you, John.
Your next question comes from the line of Jackie przybylowski from BMO Capital markets, please go ahead your line is now open. Oh sure. Thanks. Thanks very much. Good morning. Everyone off. I guess just a follow-up on John's question. You know, he's asking about the pipeline of deals. You're seeing. Can you maybe give us an indication are these deals of meaningful size? Are you talking about how long that would be sort of three hundred five hundred million in an upfront payment or is that a change to the deals that are smaller? Is there any color you can give in terms of that that distinction they took it over to you again? Yeah, you bet a Jackie. How are you? Yeah. No, this is Jackie there.
There's a whole array of deals say they range anywhere from you know, one to two hundred million all the way up to 700 to a billion. So there's there's quite a few the majority of them are I would say between $300 and $400 range or two hundred four hundred billion. That's probably a better range. So we're we're definitely still looking at a lot of opportunities out there.
I think it's very much and and just Switching gears to to your mdna. You talked about voisey's Bay, you're scheduled to start receiving Cobalt from that mind took in a couple of months. Now, it's hard to believe 20-21 is almost here in in the n d n a u you talked about the pace of implementation at the underground project is being slowed down because of Kobe does that affect the deliveries of cobalt that you are expecting? Is there any potential for delays to that delivery thinks know it's you know, the the beauty of the month is essentially it's transitioning from open-pit underground, but they still have several years of open-pit reserves in front of them and and it was always going to be a gradual transition. If anything they did suspend operations in 2020 and and a year that I think we're all going to be very happy to see behind us, but they they did suspend production up at voisey's Bay Area.
20/20 with which in fact pushed some of the stuff that would have been mined in 2020 into our streaming. Which starts in twenty Twenty-One. So there's a slight Advantage we've had probably a bit more open pit reserve a shuttle that'll keep the mill full and and processing and so we we don't expect any change in the production profile. It's just they'll be sourcing from the open-pit as they as they get the underground up. It was always planned as being a a very, you know, a phased transition over a number of years and and they've always got the backup of some of the open-pit material available to keep make sure that the middle stays full
Okay, that's really helpful. Thanks very much. That's that's not my question. Thanks. Thank you Jackie. Thank you. Your next question comes from the line of Charles Gibson from Edison, please go ahead your line is now open.
Hello.
Good morning. And if I may congratulations on an excellent quarter round E. I wonder if I could ask not at all. I want if I could I was just about my motto quickly. I see and congratulations on on closing that deal. I saw it was backdated to the 1st of July. There's no sign of it having contributed in the third quarter and I just wonder what that means in terms of the accounting if you like. I supposed to be question for Gary going going forwards when it comes to the fourth quarter results. You can have two courses in my master in the fourth quarter or is or you going to restate the third quarter or just how you're going to treat that.
Yeah, good question Charles, you know there's still some conditions that need to be satisfied here in order to you know, cross the bridge ahead with silver so to speak and and so assuming that those conditions are satisfied in Q4, we would offer support the production, uh from July in Q4 we and and any sales jobs that would result would would be attributed to to Q4 as well. That makes perfect sense. Thank you. Can I was just a follow-up question which is nothing to do with that of course, but I just need to sit last couple of quarters. Minto has been contributing to production but not to sales and I just wonder if you could give us an idea of when you think you might start contributing authors.
Sales. Yeah, you know we would expect that the that production will be converted to sales, you know walk in Q4. It was a recent start up and and they're moving materials out and it's new operators that are in there. And so we're we're working Thursday through that process, but we'll have it all cleaned up by the by the fourth quarter action. All right. Look forward to that. Thank you very much indeed. That's everything for me. Congratulations. Again. Thanks Charles.
One more call please operator. Certainly. Your next question comes from a line of Brian Arthur from Raymond James, please go ahead your line is now open.
Good morning. The other thing you mentioned in the md&a is just the delay of Blitz. Can you just go through how you see that sort of evolving with the feed the mail and then how that looks in your 5-year versus what it look out for. Well, it's I mean originally it was scheduled out to be coming into and and it is a gradual game. So it's not like they're turning on a switch or something like that. They're just in case the number of working faces in in both Blitz and and in the East Boulder operation, so it's it's going on at both sites, but this is sort of the the more headline project but you know one of the challenges and we should be seeing this, you know, I'm surprised it actually doesn't get talked about a bit more in the industry. But the the biggest impact in terms of the new measures that we have to sort of minimise risk on pandemic seems to be the underdog operations and the time it takes to safely move everyone to the face to get the work done and and and at the end of the shift back away from the face productivity in underground mine off.
Has has definitely been impacted by by the pandemic response and by you know, the efforts to minimize risk, and and I think that's what's capturing.
Stillwater as a whole is that they're seeing higher absenteeism rates like a lot of minds but they're also because they're entirely underground also dealing with extra or lower productivity on a permanent shift basis because of the extra efforts of that are required to minimize risk and and you know, it's not just Stillwater problem. It is we've seen it in all of our underground operations that it seems to be an impact. It's having uh, you know, uh impact on productivity and so so all of that sort of spills over into challenges on the blitz because you know, the blitz being an expansion project and change their their efforts are to you know, first first priority is to you know, maintain current levels of production and the expansion is sort of is what's required after that. And so they're new guidance came out to believe it's two years now before or expect to be up to that full level, you know, of course the original they they had already delayed that expected completion date, but the original date would have been in 2013.
The one was when they were first expecting it to be up and running and so at the full levels, so it'll be a gradual increase over time. They continue to work on that and then I I'm hopeful that the industry does, you know five ways to address these productivity issues that we're seeing cuz it it's a broader industry impact as a result of this pandemic and and you know, we have to have to find some way to get to work around that long at the same time minimizing risk, of course.
Great. Thanks very much, Randy. Thank you. Thank you, Brian. And and thank you everyone for dining in today and closing We Believe Wheaton is well-positioned to continue delivering value to our shareholders for a number of different reasons firstly by having low and predictable costs that result in some of the highest margins in the entire precious metal space and sectoral operating cash flows. Secondly through our study organic growth profile and proven track record of accretive quality acquisitions.
Thirdly by offering our shareholders exposure to some of the highest quality Minds in the world who are portfolio of long-life low-cost assets.
and lastly by being a leader amongst precious metal streamers and sustainability through initiatives such as the CSR fund and supporting our partners and the communities in which we live and operate em,
I do. Look forward to speaking with you all again soon. Stay healthy stay safe. Thank you.
And ladies and gentlemen, this concludes this conference call for today. Thank you for participating please disconnect your lines.
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