Q3 2023 Wheaton Precious Metals Corp Earnings Call
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Speaker 1: J.ReoKat Wisoline
[music].
Yes.
Okay.
Good morning, ladies and gentlemen, thank you for standing by.
Welcome to Wheaton precious metals 2023 third quarter results conference call.
All lines have been placed on mute to prevent any background noise.
After the Speakers' remarks, there will be a question and answer session.
If you would like to ask a question. During this time simply press Star then the number one on your telephone keypad will tie to what I'm, saying the Q&A boxes webinar.
If you would like to withdraw your question press the pound key.
I would like to remind everyone that this call is being recorded on Friday November 10th 2023, 11, a M Eastern standard time.
I will now turn the call over to Emma Li.
Vice President of Investor Relations. Please go ahead.
Thank you operator, good morning, ladies and gentlemen, and thank you for participating on today's call I'm joined today by Randy Smallwood, Wheaton precious Metals', President and Chief Executive Officer, Gary Brown, Senior Vice President and Chief Chief Financial Officer, Haytham, <unk> Senior Vice President corporate development, and West Carson Vice President mining operations.
Speaker 2: Thank you, Operator. Good morning, ladies and gentlemen, and thank you for participating in today's call. I'm joined today by Randy Smallwood, Wheaton Precious Metals President and Chief Executive Officer, Gary Brown, Senior Vice President and Chief Financial Officer, Haytham Haudelet, Senior Vice President, Corporate Development, and Wes Carson, Vice President, Mining Operations.
Speaker 2: Please note that for those not currently on the webcast, a slide presentation accompanying this conference call is available in PDF format on the presentation page of our website.
Please note that for those not currently on the webcast and slide presentation accompanying this conference call is available in PDF format on the presentations page of our website.
Some of the commentary in today's call may contain forward looking statements and I would direct everyone to review slide two of the presentation, which contains important cautionary notes regarding such statements. It should be noted that all figures referred to on today's call are in U S dollars unless otherwise noted with that I would like to turn the call over to Randy Smallwood, Our president and Chief Executive Officer.
Speaker 2: Some of the commentary in today's call may contain forward-looking statements, and I would direct everyone to review slide 2 of the presentation, which contains important cautionary notes regarding such statements. It should be noted that all figures referred to on today's call are in U.S. dollars, unless otherwise noted. With that, I'd like to turn the call over to Randy Smallwood, our President and Chief Executive Officer.
Sure.
Speaker 3: Thank you, Emma, and good morning, everyone. Thank you for joining us today to discuss Wheaton's third quarter results of 2023.
Thank you Emma and good morning, everyone. Thank you for joining us today to discuss <unk> third quarter results of 2023.
Speaker 3: I am pleased to announce that our portfolio of long-life, low-cost assets delivered another solid quarter, generating strong metal production and robust cash flows, with a number of our assets hitting record quarterly production levels.
I am pleased to announce that our portfolio of long life low cost assets delivered another solid quarter generating strong metal production and robust cash flows with a number of our assets hitting record quarterly production levels.
Speaker 3: The importance of having a diversified portfolio of high-quality, low-cost assets was evidenced by Wheaton's ability to deliver solid operating results, despite operations at Peñasquito being suspended for the entire third quarter.
The importance of having a diversified portfolio of high quality low cost assets was evidenced by weakens ability to deliver solid operating results. Despite operations at Pinyon keto being suspended for the entire third quarter.
Speaker 3: strong out performances from celibal and constanthia resulted in quarter over quarter production growth further highlighting the resilience of our diversified asset base and delivering on our commitment of continuous growth over the next five years.
Strong outperformance is from Salobo and Constancia resulted in quarter over quarter production growth further highlighting the resilience of our diversified asset base and delivering on our commitment of continuous growth over the next five years.
Speaker 3: Our strong quarterly performance was underscored by significant progress at the expansion of our largest asset, Solobo, which is now expected to reach a throughput capacity of 32 million tonnes per annum in the fourth quarter of 2023.
Our strong quarterly performance was underscored by significant progress at the expansion of our largest asset Salobo, which is now expected to reach a throughput capacity of 32 million tons per annum in the fourth quarter of 2023.
Speaker 3: Our GOAS pipeline of development projects was further de-risked in the quarter, as Artemis received their Fisheries Act authorization for the Blackwater project, which continues to advance on schedule with first gold pour targeted for the second half of 2024.
Our growth pipeline of development projects was further de risked in the quarter as Artemis received their Fisheries Act authorization for the Blackwater project, which continues to advance on schedule with first gold pour targeted for the second half of 2024.
Speaker 3: In addition, Aris Mining announced that they have received approval of their Environmental Management Plan, which now permits the development of the Murmato Lower Minds.
In.
Arris mining announced that they have received approval of their environmental management plan, which now permits the development of the motto lower mine.
Speaker 3: These projects are among a few of the assets that are forecast to contribute to our impressive organic growth profile of over 40% production growth in the next five years.
These projects are among a few of the assets that are forecast to contribute to our impressive organic growth profile of over 40% production growth in the next five years.
During this quarter. We're also proud to have been recognized by ESG investing corporate ESG awards as the best company for ESG and sustainability in the metals and mining sector.
Speaker 3: During this quarter, we are also proud to have been recognized by ESG Investing's Corporate ESG Awards as the best company for ESG and sustainability in the metals and mining sector.
Speaker 3: Looking to the remainder of 2023, and given that Penoesquito has resumed operations, we are very pleased to confirm our previously forecasted annual guidance of between 600 to 600,000 to 600,000 gold equivalent ounces, albeit with a slightly higher weighting towards gold.
Looking to the remainder of 2023 and given the opinions keto has resumed operations. We are very pleased to confirm our previously forecasted annual guidance of 660 <unk>.
Between 600 to 660000 gold equivalent ounces, albeit with a slightly higher weighting towards gold.
Speaker 3: In this high interest rate environment, streaming continues to be one of the most attractive sources of CAV capital. And our corporate development team remains exceptionally busy evaluating opportunities.
And this high interest rate environment streaming continues to be one of the most attractive sources of capital and our corporate development team remains exceptionally busy evaluating opportunities.
Speaker 3: Subsequent to the quarter end, we announced the acquisition of a silver stream on on Waterton Copper's mineral park mine for which Hatham will provide an overview on shortly. This latest acquisition is an example of our commitment to enhancing our portfolio with growth that is a creative and sustainable, benefiting all stakeholders.
Subsequent to the quarter end, we announced the acquisition of silver stream on an waterson coffers mineral Park mine for which Haytham will provide an overview on shortly this latest acquisition is an example of our commitment to enhancing our portfolio with growth that is accretive and sustainable benefiting all stay.
Holders.
And with that I'd like to turn the call over to West Carson, Our Vice President of operations, who will provide more details on our operating results.
Speaker 4: And with that, I'd like to turn a call over to West Carson, our vice president of operations, who will provide more details on our operating results. West. Thanks, Randy. Good morning. Overall, it was a strong quarter with production coming in higher than expected, which, as Randy highlighted, was driven by strong outperformances of both salobo and constancia, partially offset by the temporary suspension at Pansquito.
Yes, thanks, Randy good morning.
Overall, it was a strong quarter with production coming in higher than expected, which as Randy highlighted was driven by strong performances at both Salobo and constancia, partially offset by the temporary suspension Atkins keto.
Speaker 4: In the third quarter of 2023, so it will produce 69,000 ounces of a Tribunal Gold, an increase of approximately 56% relative to the third quarter of 2022. Driven by higher throughput with productions in the third Constraria line, commencing at the end of 2022, and higher Gold recovered.
In the third quarter of 2023, silver produced 69000 ounces of attributable gold an increase of approximately 56% relative to the third quarter of 2022, driven by higher throughput with production from the third concentrator line commencing at the end of 2022 and higher gold recoveries.
Speaker 4: In the third quarter of 2023, Solobo reached its highest production level since the fourth quarter of 2019, as the ramp-up of the Solobo 3 expansion continues to advance and overall improvements at both Solobo 1 and 2 continue.
In the third quarter of 2023, so level reached its highest production level since the fourth quarter of 2019 as the ramp up of the Salobo III expansion continues to advance and overall improvements at both Salobo, one and to continue.
Speaker 4: Over the overall slow-boss flight with the inclusion of the Slow-boss 3 expansion is expected to reach a 3 capacity of 32 million tons per annum in the fourth quarter of 2023 and full throughput capacity by the end of 2024.
Over the overall Salobo site with inclusion of the Salobo III expansion is expected to reach a capacity of 32 million tonnes per annum in the fourth quarter of 2023 and full throughput capacity by the end of 2024.
In the third quarter of 2023, Constancia produced 700000 ounces of attributable silver at 19000 ounces of attributable gold an increase of approximately 24% and 164% respectively relative to the third quarter of 2022.
Speaker 4: In the third quarter of 2023, Constancia produced 700,000 oz of attributable silver and 19,000 oz of attributable gold, an increase of approximately 24% and 164% respectively, relative to the third quarter of 2022.
Speaker 4: Record quarterly gold production, combined with strong silver production as a result of significantly higher grades from the mining of the high grade zones of the public conscious deposit, higher recoveries and higher through.
Record quarterly gold production combined with strong silver production as a result of significantly higher grades from the mining of the high grade high grade zones of the public conscious deposit higher recoveries and higher throughput.
Speaker 4: As stated by HUD, BAE production is expected to continue to benefit from higher grades in the fourth quarter of 2023.
As stated by high base production is expected to continue to benefit from higher grades in the fourth quarter of 2023.
Also in the third quarter of 2023, <unk> had no production, resulting from the suspension of operations at the mine, which began on June seven months of 2023 due to a labor dispute on.
Speaker 4: Also, in the third quarter of 2023, Penosquito had no production resulting from the suspension of operations at the mine, which began on June 7th of 2023 due to a labor dispute.
Speaker 4: On October 3rd, 13th, sorry, 2023, Numont reached a definitive agreement to end the straight and has since begun the safe wrap-up of operation.
On October 3rd 13th Sorry, 2023, Newmont reached a definitive agreement to end the strike and has since begun the safe ramp up of operations.
Speaker 4: Newmont expects to reach full operating capacity by the end of the fourth quarter.
Newmont expects to reach full operating capacity by the end of the fourth quarter.
Speaker 4: Due to the delay between production and sales, the impact of penosketo suspended operations will be reflected in our sales results in the fourth quarter of 2023, resulting in a significant quarter-over-quarter decrease to our reported penosketo sales volume.
Due to the delay between production and sales impact of pendants keto suspended operations will be reflected in our sales results in the fourth quarter of 2023, resulting in a significant quarter over quarter decrease to our reported <unk> sales volumes.
We investigated attributable production for 2023 is forecast to be approximately 600000 to 660000 gold equivalent ounces unchanged from our previous guidance.
Speaker 4: Wheaton's estimated attributable production for 2023 is forecast to be approximately 600,000 to 660,000 gold equivalent ounces, unchanged from our previous guidance.
Speaker 4: For the five-year period ending in 2027, the company estimates the average annual production will amount to 810,000 gold equivalent ounces. And for the 10-year period ending in 2032, the company estimates the average annual production will amount to 850,000 gold equivalent ounces.
For the five year period, ending in 2027, the company estimates the average annual production will amount to 810000 gold equivalent ounces and for the 10 year period ending in 2032. The company estimates the average annual production will amount to 850000 gold equivalent ounces.
Speaker 4: This includes sector-leading organic growth of over 40% with total production from our current portfolio increasing to over 900,000 gold equivalent ounces by the end of 2025.
This includes sector, leaving organic growth of over 40% with total production from our current portfolio increasing to over 900000 gold equivalent ounces by the end of 2027.
Speaker 4: That concludes the operations overview and with that I will send the call over to Gary.
That concludes the operations overview and with that I will turn the call over to Gary.
Speaker 5: Thank you, Wes. As described by Wes, production in the third quarter amounted to 155,000 GEOs, a 6% increase relative to the second quarter of 2023, and consistent with the comparable period of the prior year.
Thank you Wes.
As described by West production in the third quarter amounted to 155000, Geos, a 6% increase relative to the second quarter of 2023 and consistent with the comparable period of the prior year worth noting is that in addition to the quarterly record achieved for gold production at Constancia.
Speaker 5: Worth noting is that in addition to the quarterly record achieved for gold production at Constantia, Zinc Griven achieved a new record for silver production, which is a stream that has been part of our portfolio since 2004.
<unk> achieved a new record for silver production, which has a stream that has been part of our portfolio since 2004 rare.
Speaker 5: Relative to Q3 2022, gold production increased 46%, primarily due to outperformances at salovo and canthansia, partially offset by a 42% decrease in silver production, due primarily to the now resolved labor dispute at PenaSkido and the divestment of the Yaliakub Pimpa, which occurred during 2022.
Relative to Q3 2022 gold production increased 46%, primarily due to out performances at Salobo and Constancia, partially offset by a 42% decrease in silver production due primarily to the now resolved labor labor dispute at Penske auto and the divestment of the <unk> pen.
Which occurred during 2022.
Speaker 5: Sales volumes amounted to 119,000 GEOs, a 14% decreased relative to the second quarter of 2023, and a 12% decreased relative to the comparable period of the prior year. With the year-over-year variance being primarily due to relative changes, it is not yet delivered or PBND.
Sales volumes amounted to 119000, Geos, a 14% decrease relative to the second quarter of 2023, and a 12% decrease relative to the comparable period of the prior year with the year over year variance being primarily due to relative changes in ounces produced but not yet delivered.
<unk>.
Speaker 5: which reduced sales volumes by 18,000 Geos, which is simply driven by the timing of shipping.
Which reduced sales volumes by 18000, Geos, which is simply driven by the timing of shipments.
Speaker 5: Strong commodity prices coupled with our solid production base resulted in revenue of $223 million and a gross margin of $127 million.
Strong commodity prices, coupled with our solid production base resulted in revenue of $223 million and a gross margin of $127 million.
Speaker 5: and a total cash margin of $173 million. Of this revenue, 65% was attributable to gold, 32% to silver, 2% to palladium, and 1% to cobalt.
On a total cash margin of $173 million.
Of this revenue, 65% was attributable to gold, 32% to silver, 2% to palladium and 1% to cobalt.
Speaker 5: As that September 30th, 2023, approximately 125,000 Geos were in PBNB and cobalt inventory. We're representing approximately 2.4 months of payable production, which is a level that is slightly higher than the preceding four quarters, but within our expected range of two to three months.
As at September 32023, approximately 125000, Geos, where in PP&E and cobalt inventory representing approximately two four months of payable production, which is a level that is slightly higher than the preceding four quarters, but within our expected range of two to three.
G&A expenses amounted to $9 million for the third quarter and the company anticipates that G&A will total $40 million to $42 million for the year.
Speaker 5: G&A expenses amounted to $9 million for the third quarter, and the company anticipates that G&A will total 40 to 42 million dollars for the year. The company generated $10 million of interest income on it to cash balances.
The company generated $10 million of interest income on its cash balances.
Speaker 5: $8 million higher than the comparable quarter of the prior year. Adjusted net earnings amounted to $121 million with the $28 million increase from the prior year due primarily to the higher gross margins and higher interest income.
$8 million higher than the comparable quarter of the prior year.
Adjusted net earnings amounted to $121 million with the $28 million increase from the prior year due primarily to the higher gross margins and higher interest income.
Despite the persistent inflationary environment wheat and continued to deliver robust cash operating margins in the second quarter, resulting in cash flow from operations of over $171 million and a quarterly dividend of <unk> 15 per share consistent with the third quarter of 2022.
Speaker 5: Despite the persistent inflationary environment, Wheaton continued to deliver robust cash operating margins in the second quarter, resulting in cash flow from operations of over $171 million. And a quarterly dividend of $0.15 per share, consistent with third quarter of 2022.
Speaker 5: During the quarter, we made total up front cash payments of approximately $90 million towards Artemis' Blackwater Project, along with dividend payments totaling $67 million. Overall, net cash inflows amounted to $5 million in Q3 2023, resulting in cash and cash equivalence as that September 30th of $834 million.
During the quarter, we made total upfront cash payments of approximately $90 million towards Artemis as Blackwater project, along with dividend payments totaling $67 million.
Overall net cash inflows amounted to $5 million in Q3, 2023, resulting in cash and cash equivalents as at September 30 of $834 million.
Speaker 5: This significant cash balance combined with the fully undrawn $2 billion revolving credit facility and the strength of our forecasted operating cash flows positions the company exceptionally well to satisfy its funding commitments and provides us with the financial flexibility to acquire additional accretive mineral stream interests. That concludes the financial summary and with that I will turn the call over to Hey.
This significant cash balance combined with the fully undrawn $2 billion revolving credit facility and the strength of our forecasted operating cash flows positions the company exceptionally well to satisfy its funding commitments and provides us with the financial flexibility to acquire additional accretive mineral stream interests.
That concludes the financial summary, and with that I will turn the call over to hate them.
Speaker 3: Thank you, Gary, and good morning, everyone. As Randy mentioned, the Corporate Development Team remains exceptionally busy evaluating opportunities, and we're excited to have recently announced a precious metals streaming agreement on Waterton Copper's Mineral Park Mine located in Arizona. Mineral Park Mine is a polymetallic mine currently under construction with production expected to reach full capacity in 2026.
Thank you Gary and good morning, everyone as Randy mentioned, the corporate development team remains exceptionally busy evaluating opportunities and we're excited to have recently announced a precious metal streaming agreement on Waterston Koppers Mineral Park mine located in Arizona.
Mineral park minus a poly metallic mine currently under construction with production expected to reach full capacity in 2026.
Speaker 3: Attributable production is forecast to average over 690,000 oz of silver per year for the first five years of production and over 740,000 oz of silver per year for the life of mines.
Attributable production is forecast to average over 690000 ounces of silver per year for the first five years of production and over 740000 ounces silver per year for the life of mine and.
Speaker 3: In exchange, Wheaton will pay watered in copper 150 million in four payments during construction.
In exchange Weeden will pay watered in copper $115 million in four payments. During construction. We're excited to welcome mineral park in our portfolio and to be partnering with water and copper who is investing over $600 million in mineral park, which they expect to result in decades of operational excellence at the mine.
Speaker 3: We're excited to welcome Mineral Park in our portfolio and to be partnering with Water and Copper, who's investing over $600 million at Mineral Park, which they expect to result in decades of operational excellence at the mine. With that, I'll pass it back to Randy.
With that I'll pass it back to Randy.
Thank you Haytham.
In summary, wheat in the third quarter was distinguished by several key highlights.
Speaker 3: In summary, Wheaton's third quarter was distinguished by several key highlights.
Speaker 3: We achieved solid three-month revenue, earnings, and cash flow, and declared a 15-cent quarterly dividend.
We achieved solid three months revenue earnings and cash flow and declared a 15% quarterly dividend.
Speaker 3: We maintained our previously announced annual guidance of 600 to 660,000 gold equivalent ounces, boasted by a significant quarter over quarter over quarter production growth.
We maintained our previously announced annual guidance of 600 to 660000 gold equivalent ounces bolstered by a significant quarter over quarter over quarter production growth.
Our pipeline of development projects was further de risked supporting our impressive organic growth profile of over 40% in the next five years and we continued to grow our asset base welcoming the mineral park mine into our portfolio.
Speaker 3: Our pipeline of development projects was further de-risked, supporting our impressive organic growth profile of over 40% in the next five years. And we continue to grow our asset base, welcoming the Mineral Park mine into our portfolio.
Speaker 3: Our balance sheet remains one of the strongest in the industry, providing ample capacity to add accretive, high-quality streams into our portfolio.
Our balance sheet remains one of the strongest in the industry, providing ample capacity to add accretive high quality streams into our portfolio.
Speaker 1: And lastly, we continue to demonstrate leadership and sustainability with sector-leading ESG ratings and external recognition. So with that, I would like to open up the call for questions, Operator. Thank you. Ladies and gentlemen, we will now conduct the question and answer session.
And lastly, we continued to demonstrate leadership and sustainability with sector, leading ESG ratings and external recognition.
So with that I would like to open up the call for questions operator.
Thank you.
Ladies and gentlemen, we will now conduct the question and answer session.
You would like to ask a question. Please press Star then the number one on your telephone keypad.
If you would like to withdraw your question. Please press the pound key.
Our first question.
From the line of Cosmos <unk> of CIBC. Please go ahead.
Hi.
Okay Cosmos, Johnny suite, we have momentarily lost customers say, if I could ask you to press star one again Kosmos in the meantime, we'll go to our.
Speaker 1: I apologise, we have momentarily lost Cosmos. If I could ask you to press star 1 again Cosmos.
Next question from the line of Richard Hatch earn back. Please go ahead.
Speaker 6: Thanks very much. Morning, Randian team and congrats on that very strong set numbers as usual. Just a few questions. Gary, I appreciate the TVND is a difficult one to forecast, but can you help us just a little bit with whether you expect to see Q4, some of that gold release in Q4? That's the first one.
And thanks, very much good morning, Randy and team and congrats on a very strong set of numbers.
And just a few questions and.
Gary I appreciate the.
TVN D. Is addition to once a forecast, but can you help us just a little bit with them, whether you expect to see Q4.
That gold release.
In Q4, that's the first one.
Yes.
The buildup primarily came from Salobo during the quarter as they are ramping up in the third.
Speaker 5: primarily came from uh... solo vote during uh... the quarter they're ramping up the third uh... line here
<unk> here.
Speaker 5: And so we would expect that that would come down in Q4. I would say though that the 2.4 months average production that sits in PB&D right now is not a novelist for us.
And so we would expect that that.
Wood wood.
Would come down in Q Q4.
I would I would say, though that the two four months average production that sits in PP&E right now is not anomalous for us.
Speaker 5: You know, it's really, you know, you look at what happened over the quarter. We had a 23,000 ounce gold equivalent ounce build-up in PB&D over the quarter, as compared to a 5,000 ounce build-up in Q3 of 2022. So, the difference there results in, you know, a reduction in sales year over year of, you know, about 18,000 ounces, which, again, is simply driven by the timing of shipping.
It's really you look at what happened over the quarter, we had a 23000.
Ounce gold equivalent ounce buildup in PP&E over the quarter as compared to.
5000 ounce buildup in Q3 of 2022, so the difference there results in.
A reduction in sales year over year of about 18000 ounces, which again is simply driven by the timing of shipments.
Speaker 6: Okay, understood, thanks. Second one's just on Salabo. We've already cut their base metal's guidance recently. There is a technical report out there on Salabo, which I guess a few of us have been kind of using as a rule of thumb for what that asset could be. Are you able just to give us any kind of steer or flavor as to what you're thinking into 24, just on that one, just because it's so important to the broader piece.
Okay understood. Thanks.
Second one is just on slide <unk>.
Based on our guidance.
Currently.
There is a technical will pull out their own slightly which I guess, if you have a shipping kind of using as a rule of thumb for that.
Yes, it could be.
Are you able just to sort of give us any kind of Steve will flavors to what youre thinking into 'twenty just on that one just because it's so important to the to the.
Thanks.
Well, Richard it's Randy I'll pipe in here and then let Wes.
Speaker 3: Well, Richard, it's Randy. I'll pipe in here and then let Wes add any finishing statements. You know, they've had great success in terms of ramping up that Line 3 expansion, and, you know, as we said in the opening statement, Sarah,
Any finishing statements.
<unk> had great success in terms of ramping up that line three expansion.
As we said in the opening statements there theyre going to reach their 32 million tonne per annum average this year and they're rolling through it. We're actually we just had west was down on site and was very impressed with everything that we saw in terms of what's going on down there. So so we fully expect that theyre going to continue that Ram.
Speaker 3: They're going to reach their 32 million ton per annum average this year and they're rolling through it. We're actually, we just had West was down on sight and was very impressed with everything that we saw in terms of what's going on down there. So we fully expect that they're going to continue that ramp up through the course of 2024.
Up through the course of 2024 and expected by the end of the year there'll be satisfying the second phase of the expansion payment, which is 35 million tonnes per annum.
Speaker 3: And expected by the end of the year, there'll be satisfying the second phase of the expansion payment, which is 35 million tons per annum.
Speaker 4: The design capacity of that current system right now, line one two, line one and two and now line three is 36 million tons per atom. So I would expect by the end of the next year they're going to be at a run rate very close to that. So I don't know if you can add anything to that. Yeah, I just say, I mean, we had a team of mine myself included down on site two weeks ago and just looking at what was going on with the ramp up there and really getting confidence in how quickly things were ramping up.
The design capacity of that current system right now align one two line <unk> line, one and two.
And now our line three is 36 million tons per annum. So I would expect by the end of the next year theyre going to be at a run rate very close to that so I don't know Wes if you can add anything to that yes, I'd say I mean, we had a team myself included down on site two weeks ago, and just looking at what was going on with <unk> with the ramp up there and really getting confidence in <unk>.
How quickly things were ramping up and I will say that I mean, we've seen it in a steady improvement there over the last 18 months I mean, as you know that when we had some challenges there last year with maintenance and just getting things kind of going in it's been a significant improvement over the last 18 months and that's really continued kind of through this this quarter for sure as well and I think we'll see that continue through next year.
Speaker 4: I'll say that, I mean, we've seen a steady improvement there over the last 18 months. I mean, as you know, we had some challenges there last year with maintenance and just getting things kind of going. And it's been a significant improvement over the last 18 months. And that's really continued kind of through this this quarter for sure as well. And I think we'll see that continued through next year. And as Randy said, and hitting that kind of 35 million ton by the next year, I think is a very...
And as Randy said in hitting that kind of 35 million tons by the next year I think is a very viable goal for them to get to so it's been very impressive to see just the focus of the team has had down there and really on working this through and making the improvements they needed to to both get slow but wanted to kind of back in line and also that ramp up and really.
Speaker 4: Vile will go for them to get to so on. It's been very impressive to see just the the focus of the team has had down there and and Really on working this through and making the improvements they need to do both gets little but one and two kind of back in line and also that ramp up and and
Speaker 4: really on to Level 3 has been, I would say, world class in how quickly they've managed to get that going.
On Salobo III has been I would say world class and how quickly they have managed to get that going.
Okay got you. Thanks, and then sorry, just last couple first one I'll just I'll just drill down in Portugal.
The guide David <unk> zero until Q2 25 right.
Yes, that's what we're looking at right now they've switched over fully to the copper ore mining there and what they are looking at getting back into the zinc in Q2 25, okay.
Okay Cool and then last one just if I look at the price of oil I mean, you spent last few days kind of just adding.
Nice streams that Pat outlets, the midterm I mean.
So as I look at it seems like you are going to be producing non.
Noninterest thousand ounces gold equivalent.
So that will come online over the next few years I mean is that is that in line with you. Thank you I appreciate your guidance.
Steve on the 10 year average.
Ceva's weighted slightly.
<unk>.
Plus 900 still something you're comfortable with just sales.
Sales.
And that isn't being appreciated by the market.
Yes.
To say it sometimes its misleading in terms of doing the average because the average of course counts this year down in the six hundreds and so for us to get to that kind of an average we will be over 900000 ounces gold equivalent production by 2027.
And I'll tell you with the work that Haytham is doing well the whole team is doing on the corporate development front, but haytham seems leading that.
I'm confident that we'll even have a few more acquisitions that will be adding towards that over the next couple of years and so I am incredibly confident I think one of the things that is important to highlight is the bulk of that growth is actually coming from assets that are already operating in our portfolio truly organic growth not greenfield's development stuff and so to have that amount of growth.
<unk> already coming from assets that are in production just gives us all a higher confidence level in terms of getting there and so Richard we're we're at the point of taking weakened to a level never seen by any streaming of royalty company in terms of <unk> and.
In terms of precious metals production.
It's pretty exciting times.
Alright, Thanks, a lot many kids have an awesome.
Yes, Thanks Richard.
Our next question comes from the line of Kosmos too.
Of CIBC.
Please go ahead.
Let's try this again.
Okay, and we have just lost customers to again again I was hoping if you could press star one again in the meantime, we'll go to our next question from the line of Kenya Jack disconnect.
Deutsch Scotiabank. Please go ahead.
Hello Hello.
Hi.
There has to be worth it.
They're working I don't want to be Cosmo as being like half SASSA to time zero.
Thank you for taking my question.
That's helpful. If I could.
Let's start with.
Just on the guidance for this year so that's out.
We'll make sure that our model is that correct.
You are maintaining guidance online just looking at the guidance and we're just slightly below the lower end of your 600000 GE.
So can I just get some guidance for where you think you will be on the gold side, you said more gold exposure should I be thinking you would be at the upper end of that $3 50 range.
While we are definitely going to outperform on the gold side.
As we've seen we've seen constancia doing.
Very well with the pop a conscious one setting record gold production out of that asset like significantly record production, but I think it's important to sort of highlight is how well <unk> is doing.
As we mentioned, we're very close to them satisfying the first phase of this.
This expansion payment, which means that they have to run at 32 million tons per annum and.
They have to do that for 90 days, which means they are already running at those levels.
Because take take to satisfy that average over a 90 day period.
That would mean that there they have to exceed it at a certain point for a good portion of that 90 day period and so so we just were really really impressed with what we've seen on the on the Vale base metal side in terms of taking salobo.
And bringing it back up to where it spent most of its life. The first seven years of our.
Streaming agreements on global it was always an outperformer and we think it's well on its way to becoming an outperformer again and so so there is no doubt that the gold is going to be to the high end of that guidance.
At the cost of silver obviously from Penney's Quito.
And Mike.
Might even wind up pushing a bit over.
We're very comfortable with where we see our guidance. So it sounds like we're a little bit more optimistic than you are Tanya.
I'll take the conservative side.
Yeah. Thank you.
Kenneth Peter just to make sure are you expecting any contribution in Q4, we have nothing in Q4.
And that's again from a ramp up and then who knows what is shipped out. So we've had some lapping but have you assume something for Q4.
On the sales side unlikely, we don't think theres going to be anything on the sales side. So.
Obviously production will be wrapping up we will have something to that but but our approach has been zero on <unk> on the sales side.
Okay, well, let me for the same on that one Randy.
Thank you.
Sure.
Yeah on that.
Great and then my second question, if I could I have three so maybe I'll ask about I hate them, if I could just on mineral Paragon.
Looking at that transaction and when you were thinking about it.
What internal rate of return and you can use it would have a silver price you want but what internal rate of return.
Did this asset generate for you that you thought was good enough for you to do is just has had a bit of a checkered history.
Yes.
Sure. So if you look at it based on the current mine life. The current reserve life of 12 years, which is currently permitted four keep in mind, we think it's actually going to be much much more than that our analysis shows that it's low double digit returns on this.
Okay. So the price of.
Spot price at the time of announcement.
Okay. Okay I appreciate it I just want a benchmarking.
The other thing is one of the things to keep in mind. There Tanya is that yes. As you mentioned, it's had a bit of a checkered history, but with the reinvestments at waters and copper has put in in terms of the expanded capacity on the milling side one of the challenges that deposit has had as over time as they got deeper the rock was just getting harder and harder in the existing milling.
Setup, just wasn't sufficient for it to operate and the investment that we've seen water to put into it. We think is truly setting it up for long term prosperity. It's a game changer on this asset in terms of that capacity on the front end of the mill and.
As you know we were already familiar with the ore body itself, but the challenges in the past I think really related to a data infrastructure data mill mill setup that just wasn't.
Wasn't capable of dealing with the changes in the ore body the new investments.
I can tell you our team our metallurgical team went down how to look at we're very impressed with what we see coming out of that asset. So we're excited about it I. Originally the mill was designed for 35000 short tons. A day tell you theyre trying to flip through 50000 short tons per day are very very hard material. So now is with the reinvestment of up to $600 million in total by the time all of a sudden done this will easily.
The 50000 tons a day and this is a company now that has no debt and.
Was planning on advancing this project very very aggressively so we're very excited about this one.
Our next question comes from the line of Cosmos <unk> of CIBC.
Go ahead.
Hello can you hear me this time.
Can the policies.
Yes.
Clearly Randy doesn't like me or is it Gary that thats unlikely somebody doesn't pay hey, we just cut it off Tanya too so.
Sure.
Part of it.
Apologies everyone.
While the service is not working.
But maybe if we can start off on Salobo.
You've talked a bit about the expansion already.
Could you maybe talk about what that means to Wheaton precious metals and a production profile, we're going to continue to see.
The number to Wheaton precious metal continued to increase is it going to be a straight line. So the increase into 2024.
Reach full capacity, but then again.
Q3 was slightly less in Q2, so how should we model it from your perspective.
Yes.
It's tough to expand beyond where we've already described I mean, we see it climbing up to 35 million tonnes per annum average next year satisfying the phase two of the expansion test the capacity is 36 million tons per annum for what's built there right now currently.
And.
Again, I go back to that everyone should keep in mind the history of slow, but it definitely has had a couple of tough years, but that we signed that initial contract back in 2013, and we had seven eight years of outperformance in terms of.
Higher than design capacity, so so with the team that's in there.
The spirited motivated team that we see on the site right now in terms of moving this forward that the management team at Vale base metals is.
We've just seen a real change in the approach there and Theres a huge there's a very very strong desire to outperform.
And so it wouldn't surprise me at all to ultimately two years out see them exceeding over 36 million tons per annum.
There has long been discussion about a phase four expansion the possibility of it there they are still exploring that concept.
That's of course multi years out, but but what we have is vale base metals.
It's getting more of a of an individual presence in itself.
Focusing on its flagship and of course its flagship is our flagship so we're going to reap the benefits, we and our shareholders are going to reap the benefits of that focus and so we're really excited about where global stands right now.
Yes, sorry, sorry, Cosmos just want to.
Responding to your point about Q3 being lower than I went through I think youre talking about sales there.
Significantly higher and the reason sales were down was because there was.
Over a 20000 ounce buildup of PP&E during Q3 2023.
Yes.
That hadn't happened if that hadn't happened sales would have been significantly higher as well.
Of course, Yeah, I was just trying to.
I'll ask about the I guess, you did 69000 ounces Gary as you mentioned in Q3 is that going to continue to increase unit 43 in Q1 54 in Q2 69000 ounces in Q3.
We're going to see that continuing to increase at least to your accounts.
The expansion continues so I'm, just trying to kind of linked to $35 million.
Time per annum expansion back to what we could expect for WPS.
Yes.
It goes without saying as the throughput increases and they fine tune.
Not only are we seeing the enhanced throughput. We're also seeing better recoveries than we've seen in a very long time and so the combination of those two is just.
Lining up to be as I said, an exciting time.
Does it start to level off at some point here the guidance I mean.
We're seeing that increase as we go through the quarters here and we are getting close to kind of that.
Kind of $32 million that we're expecting and we will see it continue to increase next year with the throughput, but at some point or is it does the growth that we've seen in the last three quarters does start to level off at some point.
Okay, that's what I want to get too.
And then in terms of the payment.
As we all understand you need to make a payment for the expansion.
If I look at your MD&A, the other obligations and contingencies section three.
$370 million earmarked for 2020 $363 million year embark for 2020 for 2025 credits payments.
I don't think you've made that payment yet.
And if that's the case I know it's based on a matrix is based on maximum of $552 million. If they reached $35 million by January 1st 2020, I guess, what I'm trying to get to is when should we expect that payment to be made.
Yes.
<unk>.
We expect I mean, they are not quite there yet, but they are they should be there within a very short period of time, we expect to be making the first phase payments in the fourth quarter of this year. So that's the $370 million.
Hey.
With respect to the second phase.
We hope we will be making it sometime next year.
Definitely the objective of Vale.
And they are definitely on track, we don't see why that Shouldnt happen.
And so we would hope that that $35 million.
Our 35 million tonne per annum payment would be triggered next year.
Okay.
And then.
Maybe on <unk>.
<unk> you mentioned that Q4 sales is going to be less and.
<unk> decreased due to the strike.
In October could you remind me again in terms of the timing like are we going to see us.
The impact of the Stryker to continue again to Wheaton precious metals accounts into Q1, 2024 or should Q1 2024 be fairly normalized by then so production production should definitely be up to full levels by the end of this year.
Sales there may still be a residual as mentioned earlier, we don't see we.
We don't see.
Any sales from <unk> in Q4, if we get some at the end of the year.
It's always interesting in Q4, because every every one of our partners tends to try and squeeze a bit of extra out of the system and as we say squeezed the pipeline.
As has been clear in these Q3 results our pipeline is a little bit full right now we do have although it's not out of normal, but we do have a lot of produced but not yet delivered.
So we would expect to see a bit of a bump on the sales side during Q4 and but.
Unlikely to see anything out of pennies veto there may still be a residual slowdown is because it is going to be a gradual ramp up and then what's the time it takes to get to the sales stage.
We may see a little bit of a residual effect on sales in Q1 of next year, but we'll definitely have better guidance for you at the end of the fourth quarter from that perspective.
Okay, and then maybe one last question.
Broader scale as you mentioned very good growth.
Our sector, leading growth for the company you mentioned 810000 ounces geos for the five years ending 2027 on average 815000 ounces for the 10 years ending 2032.
For the 10 year average.
But then you also mentioned that youre going to give us an update in Q1 2024 updated sort of longer term numbers.
I guess, you can't really tell us details at this point in time, but more broadly given that you have made some additions to the portfolio like the direction of these longer term numbers trend up or am I mistaken.
Okay.
We definitely have added some assets.
And so.
I mean, we determine a long time ago to just maintain our long term guidance come out at the start of the year end and not adjust that as we add assets over the course of the year.
Didn't say theres going to be significant growth, but I think we are doing is building good longer term structure. Some of the assets. We built that we've added.
Hopefully, we'll come in and we're sort of waiting for further clarity in terms of timing as they come forward and so.
We're definitely going in the right direction and.
But it would be tough to sort of give you a firmer guidance for something that.
We sit down every year.
During the first quarter. The first couple of months of the of the new year and have a really good look at all of our production visits and stuff like that to keep keep you in mind just to remind you cosmos I mean, our production forecasts are production forecast, we do it based on our site visits and our read through in terms of how the operations are.
Going in so so it is something that we take very seriously in terms of putting the time into it. So I don't want to preempt that effort in terms of pushing forward, but I can assure you is that is that we will be up over 900000 ounces a year of production by 2027.
And we've got a path that keeps us well up into that range and I think on a track towards 1 million gold equivalent ounces of production.
Shortly thereafter, or even made it may not even may even be at that time and so.
But stay tuned we will give you further clarity in the first quarter as we always do.
Of course.
Great to hear thanks, once again, Randy Gary Haytham Western Emma Congrats on a very strong quarter and have a good weekend.
Cosmos apologies again for the technical issues here and hopefully hopefully we can get Tanya back on again.
Take it personally.
Yes.
Yes.
Yes.
Hello Tanya.
Tanya. Please go ahead. Your line is now open.
Okay, operator, I have two questions. So please don't cut me off.
Yes.
Be very specific here.
It does a pause, but I got cut off but I appreciate taking my questions yet again.
Just wanted to come back to just the Haytham.
M&A and then I have one for Gary on the global minimum tax and non Cayman. So just on that M&A haytham, if I could just ask.
Some of the peers, increasing exposure to existing assets, albeit it has been in royalty farm, but I'm just wondering if when you look at your own assets internally on your screens are there anything that I should think about whether you could see increased exposure within your portfolio like you know.
Some of the screen.
And the portfolio is that an option as well.
We're always considering that.
But I would say the majority of the stuff that we're looking at it in terms of growth going forward, our new opportunities.
<unk> seen an influx of new opportunities just within the last few months, obviously with the equity market stayed in the debt markets overpriced.
Streaming tends to be one of the lowest cost capital type of.
Funding opportunities.
Opportunities so.
We're mostly focused on relatively small and when I say small it's anywhere between call. It 100 to 300, but there are still some chunky ones out there and we hope to get some of these things across the line here in the next little while so focus remains on precious metals obviously.
Yes, and is that when you say chunky and that was the one from 500 to a $1 billion.
Right.
Well we.
I would say they are 400 plus.
Okay.
I appreciate that.
Mostly on developer.
Development of the Hal helping development.
The good development projects it was that.
Doug.
That's right the majority of our development stage opportunities, but some of them are quite advanced so.
Okay. Thank you for that and then if I could for Gary just on the global minimum tax against the.
Competitor.
And Barbados.
Barbados had made some comments on what theyre doing with Tencent the global minimum tax just wondering if you have any update for us in terms of anything from caiman and anything of your insights into the global minimum tax.
Yes. It came in has not.
Proposed adopting global minimum tax so it's still Canada.
<unk> is.
The jurisdiction that we're looking to.
Govern how GMT will impact us.
So theres really no no change on that front.
We're still assuming that the.
The draft legislation will be adopted and approved by the Canadian government here for effect January <unk> of next year and we are totally prepared.
<unk> internally.
Before that.
<unk>.
But there's a lot of work I think that still needs to be done from the government side to get that across the line. So.
If it does get pushed out that would just be.
Our benefit I think.
Okay. No I just interested if that kaman has done anything at the end of the day, Gary I'll note that the taxes and your taxes are going up is just to take that.
Right, Yeah bottom line it doesn't really matter from your perspective it.
1%.
Any any of the assets that were with a contract placement and that came in so it doesn't matter. It's just wondering if Cayman had set any via and either.
Either way, they havent getting 15%.
Please go ahead.
Thanks.
Thank you operator.
Thanks, Doug.
Our last question comes from the line of John <unk> of John.
<unk> Independent research. Please go ahead.
Good morning, Thank you.
I have three follow up questions on.
Mineral park and congratulations Arizona's.
Is there a place in Panama, Ecuador, some other places.
First as to capital budget, 600, or 600, plus or 115.
So a total of 600 600, Jeff.
Could you break down a little bit $600 million budget.
There has been a mine built and operating.
13, 14 years ago.
Was there a stripping that was let go it.
And or.
Equipment.
It was sold off in the bankruptcy.
There was lots of equipment that was installed it didn't work.
Poor Guy and I would like at least five mill motors that didn't work on an original installation.
A lot of bad luck kind of a car battery getting fixed to three o'clock. It didn't work when they put it in as well.
And then finally.
As water to and copper produced anything before.
And maybe does that mean that if cosmos ton you're I started a project we could bring it to.
And the first stream too.
So maybe I'll take your last question.
Answered the first question and I'll take the last question first last question have they produced this they've actually got a pretty incredible technical team their objective in the past has been to pick up projects that have been somewhat.
Somewhat start for capital ramp them up and sell them. So they have produced on some small scale projects that they've tried to to sell off our specifically on mineral park. There actually is an actual sx EW operations Thats actually producing there right now so they have been producing for.
A few months quite a few months at this point in terms of your second question in terms of capital cost John.
Have put in I think close to about $160 million since they acquired it.
So in total I think what's remaining is about 200 and I would say.
Let's say 260, plus a contingency plus management, there is probably somewhere around $330 million in total Capex left to go so all in all in total by the time since they acquired it. They will have spent close to $600 million on it of which roughly I would say half has been spent.
Oh, sorry, I believe the dollars are going out the door, but Mike.
Stripping.
Ripping out old equipment, and putting in new equipment or are they merely adding 15000 tons a day of additional grinding and flotation capacity.
A big chunk of it is is that just that the crushing and grinding is about $70 million to $75 million of the flotation and the control.
<unk> et cetera is about another $75 million indirect excluding EPC Amazon about another $60 million. So those are the big Big factors Big chunks here.
Thank you.
Ladies and gentlemen, this concludes the Q&A portion of today's conference call.
Yes, Randy had to run to a meeting.
A meeting so I'd just like to thank everyone for participating.
And as you can see we are taking the company to a level not seen before in the royalty and streaming space and believe it has never been a better time to own more wheat, and we look forward to speaking with you all again soon and thank you.
This concludes this conference call for today, Thank you for participating.
Please disconnect your lines.
Yes.
Paul.
Okay.
The content is no longer being recorded.
Yes.
Sure.
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