Q1 2024 Wheaton Precious Metals Corp Earnings Call
Speaker Change: [music].
Good morning, ladies.
Operator: Good morning, ladies and gentlemen. Thank you for standing by. Welcome to Wheaton Precious Metals' 2024 First Quarter Results Conference Call.
Gentlemen, thank.
Thank you for standing by.
Operator: All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star and then the number 1 on your telephone keypad, or type your answer in the Q&A box of the webinar. If you would like to withdraw your question, please press star 2. Thank you. I would like to remind everyone that this conference call is being recorded on Friday, May 10, 2024, at 11 a.m. Eastern Time. I will now turn the conference over to Emma Murray, Vice President of Investor Relations. Please go ahead.
Kim to lead in precious metals 2024 first quarter results conference call.
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Speaker Change: Tetra answer in the Q&A box to Webinars, if you would like to withdraw your question. Please <unk>. Thank you I would like to remind everyone that this conference call is being recorded on Friday May 10, 2024 to 11, a M. Eastern time I will now turn the conference over to Emory.
Emory: <unk> of Investor Relations. Please go ahead.
Emory: 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, <unk> Senior Vice President corporate development and West Carson Vice President mining operations. Please note that does not currently on the webcast as well.
Emma Murray: Thank you, Operator. Good morning, ladies and gentlemen, and thank you for participating in today's call.
Emma Murray: 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 Hodaly, Senior Vice President, Corporate Development, and Wes Carson, Vice President, Mining Operations. Please note, for those not currently on the webcast, a slide presentation accompanying this conference call is available in PDF format on the presentations page of the Wheaton Precious Metals 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. It should be noted that all figures referred to on today's call are in U.S. dollars unless otherwise noted. With that said, I'd like to turn the call over to Randy Smallwood, our President and Chief Executive Officer.
Emory: The presentation accompanying this conference call is available in PDF format on the presentation page of the Wheaton precious metals 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 tale. It should be noted that all figures referred to on today's call are in U S dollars unless otherwise noted with that.
Emory: I'd like to turn the call over to Randy Smallwood, President and Chief Executive Officer.
Randy V. J. Smallwood: Thank you Emma and good morning, everyone. Thank you for joining us today to discuss <unk> first quarter results of 2024.
Randy V. J. Smallwood: Thank you, Emma, and good morning, everyone. Thank you for joining us today to discuss Wheaton's first quarter results for 2024. I am pleased to announce that our portfolio of long-life, low-cost assets delivered a robust quarter to start the year, generating approximately $220 million of operating cash flow and over $160 million in net earnings, highlighting the effectiveness of our business model in leveraging rising commodity prices while maintaining strong cash operating margins. And we were very excited to have closed the previously announced agreement with Orion Resource Partners for the Platte Reef and Kootz Takaya Streams, completing an upfront payment of $450 million in February of this year.
Randy V. J. Smallwood: I am pleased to announce that our portfolio of long life low cost assets delivered a robust quarter to start the year generating approximately $220 million of operating cash flow and over $160 million in net earnings underscoring the effectiveness of our business model and leveraging rising.
Randy V. J. Smallwood: Prices, while maintaining strong cash operating margins.
Randy V. J. Smallwood: And we were very excited to have closed the previously announced agreement with Orion resource partners for the Platt reef acoustic highest streams completing an upfront payment of $450 million in February of this year.
Randy V. J. Smallwood: After advancing this payment we remained very liquid with $306 million in cash at $2 billion Undrawn revolving credit facility and ongoing strong operating cash flows, allowing the company to fund all outstanding commitments as well as provide the flexibility to acquire additional accretive.
Randy V. J. Smallwood: After advancing this payment, Wheaton remains very liquid with $306 million in cash, a $2 billion undrawn revolving credit facility, and ongoing strong operating cash flows, allowing the company to fund all outstanding commitments as well as provide the flexibility to acquire additional accretive mineral stream interest.
Randy V. J. Smallwood: Of mineral stream interests.
Randy V. J. Smallwood: Building on the momentum from a record eight acquisitions in 2023, our corporate development team remains actively engaged in evaluating new opportunities and we continue to see healthy appetite for streaming as a source of capital for the mining industry.
Randy V. J. Smallwood: Building on the momentum from a record eight acquisitions in 2023, our corporate development team remains actively engaged in evaluating new opportunities, and we continue to see a healthy appetite for streaming as a source of capital for the mining industry. In addition, during the quarter, we were proud... to have been recognized among Corporate Night's 100 most sustainable corporations in the world in 2024. As the architects of sustainable streaming, this accomplishment is reflective of our commitment to operating responsibly in all facets of our business. And with that, I would like to now turn the call over to Wes Carson, our Vice President of Operations, who will provide more details on our operating results.
Randy V. J. Smallwood: In addition, during the quarter we were proud.
Randy V. J. Smallwood: To have been recognized among corporate Knights 100, most sustainable corporations in the world in 2024.
Randy V. J. Smallwood: As the architect sustainable streaming this accomplishment is reflective of our commitment to operating responsibly in all facets of our business.
Randy V. J. Smallwood: And with that I would like to now turn the call over to West Carson Vice President of operations, who will provide more details on our operating results Wes.
Wesley Carson: Thanks, Randy. Good morning.
Wesley Carson: Thanks, Randy good morning.
Wesley Carson: Overall production in the first quarter came in higher than expected driven by strong performances at Salobo and Constancia in Venice Quito.
Wesley Carson: Overall production in the first quarter came in higher than expected, driven by strong outperformance at Salobo, Constancia, and Penasquito. In the first quarter of 2024, Slobo produced 61,600 ounces of attributable gold, an increase of approximately 41% relative to the first quarter of 2023, driven primarily by higher throughput. Slobo's strong production in Q1 is attributed primarily to the continued ramp-up of Slobo 3 expansion and sustained overall improvements at both Slobo 1 and 2.
Wesley Carson: In the first quarter of 2024 global produced 61600 ounces of attributable gold an increase of approximately 41% relative to the first quarter of 2023, driven primarily by higher throughput.
Wesley Carson: <unk> strong production in Q1.
Attributable primarily to the continued ramp up of Salobo three expansion and sustained overall improvements at both level one and two.
Wesley Carson: In the first quarter of 2020 for Constancia produced 640000 ounces of attributable silver and 13900 ounces of attributable gold an increase of approximately 16% and 101% respectively relative to the first quarter of 2023 strong quarterly silver and gold production continued in Q1 as a result of the significantly higher gold grades.
Wesley Carson: In the first quarter of 2024, Constantia produced 640,000 ounces of attributable silver and 13,900 ounces of attributable gold, an increase of approximately 16% and 101%, respectively. Relative to the first quarter of 2023, strong quarterly silver and gold production continued in Q1 as a result of the significantly higher gold grades from the mining of the Papacancho deposit and associated higher recovery. In the first quarter of 2024, Penesquito produced 2.6 million ounces of attributable silver, an increase of approximately 27% relative to the first quarter of 2023, primarily due to higher grades.
Wesley Carson: From the mining of the public conscious deposit and associated higher recoveries.
In the first quarter of 2024 kind of Sito produced $2 6 million ounces of attributable silver an increase of approximately 27% relative to the first quarter of 2023, primarily due to higher grades.
Wesley Carson: Production in the first quarter focused on mining in the Chile-Colorado Pit, which contains higher silver, lead, and zinc metal grades than the main Pinasco Pit. On April 30th, 2024, Ivanhoe reported that construction activities for the Platte Reef Phase 1 concentrator were on schedule at almost 90% complete and on track for cold commissioning in the third quarter of 2024. An updated independent feasibility study on an optimized development plan for the acceleration of Phase 2 is planned to be completed and published in the fourth quarter of 2024.
Wesley Carson: <unk> in the first quarter focused on mining in the Chile, Colorado pit, which contains higher silver lead and zinc metal grades than the main <unk> pit.
Wesley Carson: On April 30 of 2024 Ivanhoe reported the construction activities for the <unk> phase one concentrated are on schedule at almost 90% complete and on track for cold commissioning in the third quarter of 2024.
Wesley Carson: And updated independent feasibility study on an optimized development plan for the acceleration of phase II is planned to be completed and published in the fourth quarter of 2024 as a result of the planned acceleration of phase two Ivanhoe reports that the first feed and ramp up of production for phase one will be deferred until the mid 2025.
Wesley Carson: As a result of the planned acceleration of Phase 2, Ivanhoe reports that the first feed and ramp-up of production for Phase 1 will be deferred until mid-2025. In addition, a preliminary economic assessment on a Phase III expansion is expected to be completed at the same time, increasing flat reefs' processing capacity up to approximately 10 million tonnes per annum. The result of this is expected to rank Platte Reef as one of the world's largest PGM, nickel, copper, and gold producers.
In addition, our preliminary economic assessment on the phase III expansion is expected to be completed at the same time, increasing flat <unk> processing capacity up to approximately 10 million tonnes per annum.
Wesley Carson: The result of which is expected to rank <unk> as one of the world's largest PGM nickel copper and gold producers.
Wesley Carson: In 2020 for Geo production is forecast to be consistent with levels achieved in 2023.
Wesley Carson: In 2024, GEO production is forecast to be consistent with levels achieved in 2023. As expected, stronger attributable production from Peniscito and Boise's Bay is forecast to be offset by lower production from Slobo, the suspension of operations at Minto, and the temporary halting of production at Alves. Attributable production is forecast to increase at Penasquito as a result of uninterrupted operations and at Boise's Bay due to the ongoing transition from the Ovoid Pit to the underground mine.
As expected stronger attributable production from <unk> and Boise's Bay is forecast to be offset by lower production from <unk> and the suspension of operations at Minto and the temporary halting of production at <unk>.
Wesley Carson: Attributable production is forecast to increase in <unk> as a result of uninterrupted operations.
Wesley Carson: These base due to the ongoing transition from the <unk> pit to the underground mines.
Wesley Carson: Attributable production is forecast to decrease slightly at Slobo due to lower grades as per the mine plan, which is expected to be partially offset by increasing throughput as the Slobo 3 expansion continues toward completion. Wheaton's estimated tributal production in 2024 continues to be forecast at 325,000 to 370,000 ounces of gold, 18.5 to 20.5 million ounces of silver, and 12,000 to 15,000 ounces of other metals. Resulting in production of approximately 550,000 to 620,000 GEOs, unchanged from previous guidance.
Wesley Carson: Attributable production is forecast to decrease slightly at Salobo due to lower grades as per the mine plan, which are expected to be partially offset by increasing throughput at the <unk> III expansion continues toward completion.
Wesley Carson: <unk> estimated attributable production in 2024 continues to be forecast at 325000 to 370000 ounces of gold 18, 5% to $20 5 million ounces of silver and 12000 to 15000 geos of other metals.
Wesley Carson: Resulting in production of approximately 550000 to 620000 geos unchanged from previous guidance.
Wesley Carson: Production is forecast to increase at an industry-leading rate of approximately 40% to over 800,000 GEOs by 2028, primarily due to the growth from operating assets including Salobo, Antimena, Penasquito, Boise's Bay, and Maramato, and development projects which are in construction or or permitted, including Blackwater, and Platte Reef. Goose, Meryl Park, Phoenix, Curipamba, and Santa Domingo, and pre-development projects including Marathon and Copper World, for which production is anticipated towards the latter end of the five-year forecast period. For 2029-2033, attributable production is forecast to average over 850,000 ounces over the five-year period, also unchanged from previous guidance. That concludes the operations overview, and with that, I'll turn the call over to Gary. Thank you.
Wesley Carson: <unk> is forecast to increase at an industry leading rate of approximately 40% to over 800000 Geos by 2028, primarily due to the growth from operating assets, including Salobo and demeanour, Venice Keto voices Bay and mirror model.
Wesley Carson: Development projects, which are in construction <unk> permitted, including Blackwater Platt reef.
Wesley Carson: <unk> Merrill Park, Phoenix, <unk> added Domingo and pre development projects, including marathon in copper world for which production is anticipated towards the latter end of the.
Wesley Carson: The five year forecast period.
Wesley Carson: For 2023, and 2029 to 2033 attributable production is forecast to average over 850000 ounces in the five year period also unchanged from previous guidance that.
Wesley Carson: That concludes the operations overview and with that I'll turn the call over to Gary.
Gary D. Brown: Thank you, Wes. As described by Wes, production in the first quarter amounted to 160,000 GEOs, a 19% increase relative to the comparable period of the prior year. Most notably, gold production increased 28% primarily due to Salobo and Constancia. Sales volumes amounted to 143,000 GEOs, a 31% increase relative to the comparable period of the prior year, primarily due to higher production levels coupled with relative changes in ounces produced but not yet delivered, or PBND.
Gary D. Brown: Thank you Wes.
Gary D. Brown: As described by less production in the first quarter amounted to 160000, Geos, a 19% increase relative to the comparable period of the prior year.
Gary D. Brown: Most notably gold production increased 28%, primarily due to salobo and Constancia.
Gary D. Brown: Sales volumes amounted to 143000, Geos at 31% increase relative to the comparable period of the prior year, primarily due to higher production levels, coupled with relative changes in ounces produced but not yet delivered or <unk>.
Gary D. Brown: This increased sales volume coupled with a 6% increase in commodity prices resulted in revenue rising by 38% to $297 million.
Gary D. Brown: This increased sales volume, coupled with a 6% increase in commodity prices, resulted in revenue rising by 38% to $297 million. Of this revenue, 64% was attributable to gold, 32% to silver, and 2% to each of palladium and cobalt. As of March 31st, 2024, approximately 120,000 GEOs were in PB&E, representing approximately 2.3 months of payable production, which is consistent with our expected range of two to three months.
Gary D. Brown: This revenue, 64% was attributable to gold, 32% to silver and 2% to Egypt Palladium and cobalt.
As at March 31, 2020 for approximately 120000, Geos, where in <unk>, representing approximately two three months of payable production, which is consistent with our expected range of two to three months.
Gary D. Brown: G&A expenses amounted to $10.5 million for the first quarter, and the company continues to anticipate that G&A will total $41 to $45 million for the year, with these figures excluding share-based compensation, as well as donations and community investment. Adjusted net earnings amounted to $164 million, with a $59 million increase from the prior year due primarily to a higher gross margin coupled with lower stock-based compensation. Despite the persistent inflationary environment and thanks to our low and predictable cost structure, Wheaton continued to deliver robust cash operating margins in the first quarter, resulting in cash flow from operations of over $219 million, an increase of 62% from the prior year, driven primarily by higher sales volume.
Gary D. Brown: G&A expenses amounted to $10 $5 million for the first quarter and the company continues to anticipate that G&A will total 41% to $45 million for the year with these figures excluding share based compensation as well as donations and community investments.
Gary D. Brown: Adjusted net earnings amounted to $164 million with a $59 million increase from the prior year due primarily to the higher gross margin coupled with lower stock based compensation.
Gary D. Brown: Despite the persistent inflationary environment and thanks to our low and predictable cost structure. We can continue to deliver robust cash operating margins in the first quarter, resulting in cash flow from operations of over $219 million, an increase of 62% from the prior year driven primarily.
Gary D. Brown: Merrily by higher sales volumes.
Gary D. Brown: We have declared a quarterly dividend of $0.155 per share, a 3% increase from the prior year. During the quarter, Wheaton made total upfront cash payments of $462 million, $450 million of which was related to the Platte Reef and Kutsakaya Streams, with the balance relating to the Delamar and Mount Todd royalties. When coupled with cash generated from operating activities, our overall net cash outflows amounted to $240 million in the first quarter of 2024, resulting in cash and cash equivalents as at March 31st of $306 million.
Gary D. Brown: We have declared a quarterly dividend of <unk> 15, five cents per share a 3% increase from the prior year.
Gary D. Brown: During the quarter, we made total upfront cash payments.
Gary D. Brown: $462 million.
Gary D. Brown: $450 million of which was relative to the flat rates and could <unk> streams with the balance relating to the del Mar and Mt. Todd royalties.
Gary D. Brown: When coupled with cash generated from operating activities. Our overall net cash outflows amounted to $240 million in the first quarter of 2024, resulting in cash and cash equivalents as at March 31 of $306 million. Additionally.
Gary D. Brown: Additionally, subsequent to the quarter, the company disposed of its investment in Hecla Mining for gross proceeds of $177 million. This 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 entry.
Gary D. Brown: Additionally, subsequent to the quarter the company disposed of its investment in Hecla mining for gross proceeds of $177 million.
Gary D. Brown: This 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.
Gary D. Brown: Lastly, I would like to provide an update on Global Minimum Tax. As previously disclosed, the company does expect its income generated outside of Canada to be subject to a 15% Global Minimum Tax, or GMT. While we continue to anticipate that the tax will be retroactive to January 1, 2024, Canada has not yet enacted the legislation, and as such, the company has recorded no current tax expense associated with GMT in the quarter.
Gary D. Brown: Lastly, I did want to provide an update on global minimum tax as previously disclosed the company does expect its income generated outside of Canada to be subject to a 15% global minimum tax or GMT, while we continue to anticipate that the tax will be retroactive to.
Gary D. Brown: January one 2020 for Canada has not yet enacted legislation and as such the company has recorded no current tax expense associated with GMT in the quarter.
Gary D. Brown: For reference, in the first quarter, the wholly owned foreign subsidiaries, which reside in jurisdictions where the GMT is expected to apply, had net earnings of $165 million, with 15% of such amount amounting to $25 million. We will recognize the tax expense associated with the GMT in our consolidated financial statements in the appropriate period relative to when the legislation is enacted. As such, assuming that the legislation is enacted in its current proposed form, we will record multiple quarters' worth of GMT in the quarter that such enactment occurs. That concludes the financial summary, and with that, I will turn the call back over to Randy.
Gary D. Brown: For reference in the first quarter, the wholly owned foreign subsidiaries, which reside in jurisdictions, where the GMT is expected to apply had net earnings of $165 million with 15% of such amount amounting to $25 million.
Gary D. Brown: We will recognize the tax expense associated with the GMT in our consolidated financial statements and the appropriate period relative to when the legislation is enacted as such assuming that the legislation is enacted in its current proposed form we will record multiple quarters worth of GMT.
Gary D. Brown: In the quarter that such enactment occurs.
Gary D. Brown: That concludes the financial summary, and with that I will turn the call back over to Randy.
Randy V. J. Smallwood: Thank you Gary.
Randy V. J. Smallwood: In summary, Q1 was a very strong start to the year for Wheaton distinguished by several key highlights.
Randy V. J. Smallwood: In summary, Q1 was a very strong start to the year for Wheaton, distinguished by several key highlights. We achieved robust three-month revenue, earnings, and cash flow and declared a 15.5-cent quarterly dividend aligned with our new progressive dividend policy. Our pipeline of development projects was further de-risked by construction advancements and the receipt of various key permits by our partners.
Randy V. J. Smallwood: We achieved robust three month revenue earnings and cash flow and declared a <unk> 15, and a half cent quarterly dividend aligned with our new progressive dividend policy.
Our pipeline of development projects was further de risked by construction advancements in the receipt of various key permits by our partners supporting our impressive organic growth profile of over 40% by 2028.
Randy V. J. Smallwood: Supporting our impressive organic growth profile of over 40% by 2028. We continue to maintain low and predictable costs, which, when coupled with our leverage to increasing commodity prices, result in some of the highest margins in the entire precious metals space. Our balance sheet also remains strong, providing ample capacity to add accretive, high-quality streams to our portfolio. And lastly, we take pride in being a leader amongst precious metal streamers in sustainability and by supporting our partners and the communities in which we live and operate. So with that, I would like to open up the call for questions. Operator? Thank you.
Randy V. J. Smallwood: We continue to maintain low and predictable costs, which when coupled with our leverage to increase in commodity prices result in some of the highest margins in the entire precious metal space.
Randy V. J. Smallwood: Our balance sheet also remains strong providing ample capacity to add accretive high quality streams into our portfolio.
Randy V. J. Smallwood: And lastly, we take pride in being a leader amongst precious metal streamers in sustainability and by supporting our partners and the communities in which we live and operate.
Speaker Change: So with that I would like to open up the call for questions operator.
Speaker Change: Yes.
Operator: Thank you. Ladies and gentlemen, we will now conduct the question and answer session. If you would like to ask a question, please press the star and the number 1 on your telephone keypad. If you would like to withdraw your question, please press star 2. There will be a brief pause while we compile the Q&A roster. Your first question is from Ralph Profiti from East Capitol. Please ask your question.
Speaker Change: Peter.
Speaker Change: Ladies and gentlemen, we will now conduct the question and answer session.
Speaker Change: I would like to ask a question. Please press the star and the number one and your telephone keypad.
Speaker Change: If you would like to withdraw your question. Please press star two.
Speaker Change: There will be a brief pause while we compile the Q&A roster.
Speaker Change: Yes.
Speaker Change: Your first question is from Ralph <unk> from.
Ralph: Capital. Please ask your question.
Ralph Profiti: Thanks, Operator. Good morning.
Ralph: Thanks, operator, good morning.
Randy V. J. Smallwood: Randy, you know, getting back to Wheaton's roots in silver, prices have been very strong year to date. Just wondering what the transaction pipeline looks like for more of those silver heavily levered deals. I would imagine those are still pretty rare to come by, and there seems to be a lot of gold with silver and vice versa in some of the transactions that you're making. But what is the transaction market startup that we wanted to look at bringing more silver into the deal structure?
Ralph: Randy.
Ralph: Getting back to.
Silver prices have been very strong year to date I'm just wondering what the what the transaction pipeline looks for it looks like for more of those silver heavily levered deals.
Ralph: I would imagine those are still pretty rare.
Ralph: Combined there seems to be a lot of gold with silver and vice versa, and some of the transaction with Germany, but once the transaction Mark will startup we wanted to look at.
Ralph: More silver into the deal structure.
Randy V. J. Smallwood: Yeah, it's, Ralph, you're bang on. It's tough to find good silver projects. You know, one of the things that's a bit unique about silver is that most of it is produced from lead-zinc operations, whereas, you know, a lot of by-product gold comes from copper operations, and we just don't hear a lot of lead-zinc developments out there. It's not a very sexy metal in today's world, so yeah, we're not seeing a lot on the silver I'll let Haytham add some color to that. He's definitely much more in tune in terms of the opportunity set out there.
Speaker Change: Yes, Rob.
Off that.
Hang on it's tough to find good silver projects.
Speaker Change: The things that is a bit unique about silver is that most of it is produced from lead zinc operations, whereas.
Speaker Change: A lot of byproduct gold comes from copper operations, and we just don't hear a lot of lead zinc developments out there it's not those aren't very sexy metals in today's world.
Speaker Change: So yes, we're not seeing a lot on the silver side I'll, let haytham.
Haytham: Add some color to that he is definitely much more in tune in terms of the opportunity set out there sure. Thanks, Randy and good morning, Ralph. Thank you for the question I will say like if.
Haytham Hodaly: Sure, thanks, Randy. And good morning, Ralph.
Haytham Hodaly: Thank you for the question. I would say, like, if I look at the top 10 opportunities I have, probably at least a third of those have a fairly significant silver exposure. So there definitely is silver out there. It is, as Randy said, there's not a lot of new silver, it's mostly for, you know, if you're looking at balance sheet strengthening or balance sheet repair, that type of thing.
Haytham: I look at the top 10 opportunities I have probably at least a third of those have a fairly significant silver exposure. So there definitely is silver out there.
It is as Randy said Theres not a lot of new silver, it's mostly for if youre looking at balance sheet strengthening our balance sheet repair that type of thing.
Speaker Change: Gotcha Okay.
Ralph Profiti: Gotcha. Okay. And, you know, maybe I can just stay on the silver theme and, you know, maybe go to Wes and ask him about sort of the near-term mine plan for silver coming out of Penasquito. Sort of looking over the course of 2024 Q1, a very good quarter on the silver side, and we're coming off a strike-impacted second half last year, you know, puts us in a position where, and you talked about the chilly Colorado pit where we're currently tracking ahead of guidance, just wondering what that cadence looks like on silver for the rest of the year.
Speaker Change: Maybe I could just.
Speaker Change: Stay on the silver theme and maybe go to western and asked him about sort of the near term mine plan for silver coming out of China.
Western: So then looking over the course of 2020 for Q1 very good quarter on the silver side, and we're coming off a strike impacted second half last year.
Western: Puts us in a position where you talked about the Chile, Colorado pit, where we're currently tracking ahead of guidance just wondering what that cadence looks like on silver for the rest of the year.
Wesley Carson: Thanks Ralph. They are starting to transfer back over to the Pinasco pit later in the year here, so we will see kind of a slight weakening of that as the year goes on, but it is fairly consistent through the year here in terms of silver production. There is still production, excuse me, from Chile and Colorado through the year, so it will be fairly consistent through the year, but as they move back to Pinasco, that is where they do get the higher gold grades and slightly lower silver.
Speaker Change: Thanks, Ralph they are starting to transfer back over to the <unk> pit. The later in the year here. So we will see kind of a slight weakening of that is as the year goes on but it is fairly consistent through the year here. The silver production is still production.
Speaker Change: Excuse me from Chile, Colorado through the year so.
Speaker Change: It will be fairly consistent through the year, but as they move back to <unk> that is where they do get the higher gold grades and slightly lower silver grades.
Speaker Change: Got you helpful. Thanks, everyone.
Ralph Profiti: Gotcha. Helpful. Thanks everyone.
Speaker Change: Thanks Ralph.
Speaker Change: Yes.
Speaker Change: Thank you. Your next question is from Cosmos <unk> from CIBC. Please ask your question.
Operator: Thank you. Your next question is from Cosmos Chiu from CIBC. Please ask your question.
Cosmos Chiu: Great, thanks Randy and Gary. Maybe my first question is about your production year. Randy, as you mentioned, very strong Q1, 160,000 ounces, but you've maintained your full year guidance at 550 to 620. If I were to straight line it, but you know, life isn't that simple, but if I were to multiply your Q1 by four, I would get to a number that's higher than the top end of your annual guidance. Could you remind us, to the extent possible, Randy, what we should look for? I think Wes kind of mentioned it, penosquito, it could come down a little bit, but what else can we look for in terms of quarter over quarter, sort of, production?
Cosmos: Great, Thanks, Randy Gary and team.
Randy V. J. Smallwood: I mean, I'll let Wes add a little bit of color at the end, but what we do see is relatively consistent production over the course of the year. I think the last quarter at year-end there, we were giving guidance to be a little bit more heavily weighted towards the back end of the year, but we have had some outperformance here, obviously, in the first quarter. We're not confident enough to adjust guidance in the sense of having that outperformance continue through the course of the year, but even if we stay on track, you're right, we're in a very, very good position to at least meet guidance, if not exceed it, and so we just want to see a bit more strength behind that, so I don't know, Wes, if you've got some color to add to that.
Cosmos: Maybe my first question is on <unk>.
Cosmos: <unk> here.
Cosmos: Randy as you mentioned very strong Q1 hundred $60 analysis, but you've maintained your full year guidance of 5% to 620 <unk>.
Cosmos: If I were to straight line it.
Cosmos: Life isn't that simple, but if I were to multiply your Q1 by four.
Get to a number that's higher than the top end of your annual guidance could you remind us to the extent possible Randy.
Cosmos: And what we should look for I think west kind of mentioned that mosquito it could come down a little bit.
Cosmos: But what else can we look for in terms of quarter over quarter and sort of.
Cosmos: Production, yes.
Speaker Change: I mean, I'll, let Wes add a little bit of color at the end of it but.
Cosmos: What we do see is relatively consistent production over the course of the year I think.
Cosmos: The last quarter at year end, there, we were giving guidance to be a little bit more heavily weighted towards the back end of the year, but we haven't had some outperformance year, obviously in the first quarter.
Cosmos: We're not we're not confident enough to adjust guidance in the sense of having that the outperformance continue through the course of the year, but even if we stay on track you're right. We're going to be we're in a very very good position to at least meet guidance if not exceed exceed it and so we just want to see a bit more strength behind that so I don't know Wes if you get some color to add to that yes, I would agree.
Wesley Carson: Yeah, I would agree. I think it's just that after the first quarter, it's a little premature for us to get too excited about it, I think, yet, but I'm certainly very happy with the quarter. I mean, Constanze would be the other one that, I mean, there is that volatility as Popconcha kind of comes in and out of the production there. So that would be the other one that we'll watch through the year as we go through it, and there is some change to that production from Constanze through the year, but fairly consistent through the rest of the year is what we're expecting.
I think it is just that.
Wes: After the first quarter I think it's a little premature for us to get too excited about it I think yet, but certainly very happy with the quarter.
Wes: Nancy would be the other one that I mean, there is that volatility is pop contract kind of comes in and out of the production. There. So that'd be another one that we'll walk through the year as we go through and there is some change to that.
Production from Constancia them through the year, but fairly consistent through the rest of the year is what we're expecting.
Cosmos Chiu: Sounds good. Maybe a quick question on global minimum taxes? As you mentioned, Gary, $165 million is the net income from your subsidiary. I'm just trying to figure out how you calculated that. Is it as simple as, say, the spot price for gold minus $430 an ounce, which is what it was in Q1, multiplied by all the stream houses going through your subsidiary, or is there another sort of deduction that you can take as well?
Speaker Change: It sounds good.
Speaker Change: Maybe a quick question on global minimum taxes.
Speaker Change: As you mentioned, Gary under $65 million and net income from your subsidiary.
Speaker Change: Im just trying to figure out how you calculated is it as simple as say the spot price for gold minus $430 announced cost which is what it was in Q1 multiply by all of the stream ounces going through your subsidiary.
Speaker Change: Or is there other sort of deductions that you can take as well.
Gary D. Brown: No, it's pretty much the former of those. We really estimate the tax based upon the accounting income generated outside of Canada.
Speaker Change: No it's pretty much the former of those.
Speaker Change: It's really we estimate.
Speaker Change: The tax based upon the accounting.
Speaker Change: Income generated outside of Canada.
Speaker Change: So is there a potential when it gets enacted.
Gary D. Brown: So is there potential, you know, when it gets enacted, that there's other deductions you can take before applying the 15% or at this point in time? I mean, until the legislation is fully enacted, you know, I think there's potential. We're not, we're not, um..., projecting that that's going to take place.
Speaker Change: There is other deductions it can take 5% to 15%.
Speaker Change: Well at this point.
Until the legislation is full.
Speaker Change: Fully enacted.
Speaker Change: I think theres potential we're not.
Speaker Change: We're not.
Speaker Change: But projecting that that's going to take place.
Speaker Change: Okay.
Cosmos Chiu: And as a follow-up, Gary, how is it going to work? I know that, as you said, when it gets enacted, you'll put through an expense in your income statement. But this is also retroactive to January 1st. So, is there a potential that you have to make a lump sum payment at that point in time, including the $25 million from Q1. Is that how it works?
As a follow up Gary how is it going to work I know that as you said when it gets enacted youll put through an expense in your income statement, but this is also a retroactive to January 1st so.
Gary D. Brown: Is there a potential that you have to make a lump sum payment.
Gary D. Brown: At that point in time, including $25 million.
Gary D. Brown: Q1.
Gary D. Brown: Is that how it works.
Gary D. Brown: Well, we would have a lump sum expense, but the tax doesn't get paid for 2024 until 2026, but you know if we, like assuming that the legislation gets fully enacted by June 30th, we would have two quarters of global minimum tax flowing through our Q2 results. If it doesn't get enacted by June 30th, and it gets enacted
Gary D. Brown: Well, we would have a lump sum.
Gary D. Brown: Specs, but the tax doesn't get paid until 'twenty for 2024 until 2026.
Gary D. Brown: But if.
If we.
Gary D. Brown: Like assuming that the.
Gary D. Brown: Ed legislation gets fully enacted by June 30, we would have two quarters.
Gary D. Brown: <unk>.
Global minimum tax flowing through our Q2 results if it doesn't get.
Gary D. Brown: Enacted by June 30.
And it gets enacted by September 30th than we would have three quarters of GMT going through our third quarter results.
Unknown Speaker: Unknown Speaker One of the keys there, Cosmos, is that
Gary D. Brown: One of the keys there cosmos.
Gary D. Brown: We don't actually make the payments until 2026.
Gary D. Brown: That's the way it looks like it's going to be structured as is that it.
Gary D. Brown: It's going to be several years behind the actual tax year before the payment is actually made.
Speaker Change: Got it.
Cosmos Chiu: Got it. Thanks, Randy, Gary, and the team. That's all the questions I have, and have a good weekend. Thanks, Cosmos. Thanks, Cosmos. Go Canucks.
Thanks.
Speaker Change: Randy Gary and team that's all the questions I have and have a good weekend. Thanks.
Speaker Change: Thanks, Scott Thanks Cosmos.
Speaker Change: What.
Cosmos Chiu: Thank you.
Speaker Change: Thank you.
Speaker Change: Yeah.
Speaker Change: Sure.
Speaker Change: Sure.
Speaker Change: Yes.
Speaker Change: Thank you. Your next question is from Brian Macarthur from Raymond James Please ask your question.
Operator: Thank you. Your next question is from Brian MacArthur from Raymond James. Please ask your question.
Brian Macarthur: Good morning, and thank you for taking my question. Again, it goes back to what you were just answering, Gary, about Cosmos.
Brian Macarthur: Good morning, and thank you for taking my question and again it goes back to what you were just answering Gary with Cosmos, So Jeff So I'm really clear on this.
Brian Macarthur: So, just so I'm really clear on this. Everything we're talking about is accounting. So from a cash basis, if that's what we're focused on, really all we need to think about is assuming this tax gets enacted this year, i.e., 2024; you'll just pay 15% cash taxes on your 2024 income in 2026. Is that the way I should think about it?
Brian Macarthur: Everything we're talking about is accounting so from a cash basis. If that's what we're focused on really all we need to think about is assuming this tax gets enacted this year I E 2024, you'll just pay 15% cash taxes of 2020 for income in 2026 is that the way I should think about it.
Brian Macarthur: On the income generated outside of Canada.
Brian Macarthur: It's just the maturity okay. So from a pure cash basis I get it we want to make sure everybody understands this is accounting not cash, but there's really no cash effect this year.
Unknown Speaker: [inaudible] Okay, so from a pure cash basis, I get it. We want to make sure everybody understands this is accounting, not cash, but there's really no cash effect this year. That's correct. Perfect. Thank you. And maybe just the other question following up with that earlier about obviously Slobo did very well, and you've got this, you know, ramp-up of volume through the middle, but you've got grades coming off. I know you probably don't want to revise anything yet this year, but do we expect Q1's production at Slovo to continue throughout the year?
Speaker Change: That's correct.
Speaker Change: Perfect. Thank you and maybe just the other question following up what was asked earlier about <unk>.
Speaker Change: Obviously, salobo did very well and you've got this ramp up of volume.
Speaker Change: So the mill, but you've got grades coming off.
Speaker Change: And I know you probably don't want to get revised anything yet this year, but do we expect Q1 production at this level to continue throughout the year.
Speaker Change: I'll, let <unk> answer that one.
Wesley Carson: I'll let Wes answer that one.
Wesley Carson: I think we saw slightly better grades than expected at Slobo in Q1. Really, I mean, the grades do drop off kind of in the plan as we go through the year, and it's just a function of where they are in that pit. But I mean, they have certainly shown that the production that's going through, particularly Slobo 3, has been very positive. So, as we said at the start, I don't think we're confident enough to up the forecast at this point, but it is looking positive for the rest of the year. So would that be positive or negative?
unknown: Sure I mean, I think we saw slightly better grades than expected at Salobo in in Q1 and.
Speaker Change: Really I mean, the grades do drop off kind of in the plan is as we go through the year and it's just a function of where they are in that pit. So but they have certainly shown the production that's going through particularly Salobo III has been very positive. So as we set up the start I don't think we are confident enough.
Speaker Change: The forecast at this point, but it is looking positive from for the rest of the year.
Speaker Change: So would that be positive reconciliation or is it just they happen to be in a different part of the ore body that you got better than expected Q1 or can you comment.
Brian Macarthur: So would that be positive reconciliation? Or is it just that they happen to be in a different part of the order body that you got better than expected? Q1? Or can you comment? Positive reconciliation. Perfect. Thanks very much for answering my question.
Speaker Change: Positive reconciliation.
Speaker Change: Perfect. Thanks, very much for answering my questions.
Speaker Change: Yes.
Speaker Change: Thanks, Brian.
Speaker Change: Okay.
Operator: Thank you once again. Please press R1 should you wish to ask a question. Your next question is from Tanya Jakusconek from Scotiabank. Please ask your question.
Speaker Change: Thank you once again, please press <unk>, one should you wish to ask a question.
Our next question is from Tanya <unk>.
From Scotiabank. Please ask your question.
Good morning, everyone I recognize myself today, so that was good.
Tanya Jakusconek: Good morning, everyone. I recognized myself today. That was good. Thank you for taking my questions.
Tanya: Alright. Thank you my question.
Tanya Jakusconek: Just wanted to circle back, Wes, on the operational side. I think we touched on Salobo. We touched on Penasquito, and I think Newmont also confirmed on their call that production was going to be for silver evenly distributed for the year. The one I wanted to touch base on was Wazi Bay. We had talked last quarter about quarter over quarter improvements. Is that how I should still be thinking about that asset?
Just wanted to circle back with on the operational side I think we touched on Salobo Lee touched on panic Quito and I think Newmont also confirmed on their call that production was going to be for silver evenly distributed.
Tanya: For the year.
Tanya: The one I wanted to touch base on was on one the day, we had talked last quarter about quarter over quarter improvement is that how I should.
Tanya: There'll be thinking about that asset.
Wesley Carson: Absolutely, as those undergrounds come more online, we will see quarter over quarter improvement there, and that is what's forecast for the rest of this year, and certainly, we saw very good performance from them in Q1, really ahead of what we've been expecting, so, and I think we can continue to see that growth through the year.
Speaker Change: Absolutely as those Undergrounds come more online, we will see quarter over quarter improvement there and that is what is forecast for the rest of this year and certainly we saw very good performance from them in Q1 really ahead of what we'd been expecting so and I think we can continue to see that grow through the year.
Tanya Jakusconek: Okay, and then I think what Randy had mentioned, the 48-52, first half, second half, looks like to be more of a normal distribution or thereabouts for the next three quarters. Would that be a safe assumption?
Speaker Change: And then I think what Randy had mentioned the 48 52.
Randy: Second half looks like to be more of a normal distribution or thereabout for the next three quarters would that be.
Randy: Assumption.
Randy V. J. Smallwood: Yeah, you know, based on what we see right now, I think it's probably more like a 50-50. If we continue, you know, if we do see some outperformance in the latter half, I mean, obviously, we'll consider it at the end of the second quarter and determine whether we want to change our guidance. But we're definitely, you know, we're definitely well positioned to be on track. And as Ralph mentioned earlier on, I think it was Ralph or Cosmos mentioned earlier on, you know, four times this production is beating it. But, you know, we're definitely in a really good position to have a strong year.
Yes.
Randy: Based on what we see right now I think it's probably more like a 50 50. If we continue if we do see some outperformance in the latter half I mean, obviously, we'll consider it at the end of the second quarter and determine whether we want to change our guidance, but we're definitely we're definitely well positioned to be on.
Randy: On track.
Randy: As <unk>.
I mentioned earlier on I think it was Ralph Cosmos I mentioned earlier <unk> four times. This production is beating it but yes.
So we're definitely.
Randy: In a really good position to have a strong year.
Tanya Jakusconek: Okay, maybe just moving on to some of the financials if I could. You have quite a number of investments, I think, still. I think you've sold out all of your HECLA. Where does the rest of the investment portfolio stand, and how should we be thinking of that in terms of harnessing some cash?
Speaker Change: Okay, maybe just moving on to some of the financials if I could.
Speaker Change: You have quite a number of investments I think bill I think you sold out all of your Hecla.
Speaker Change: Where does the rest of the investment portfolio span and how we should we be thinking of that in terms of harnessing some cash.
Haytham Hodaly: Hi Tanya, Haytham, thank you for the question. I will say that the Hekla was a bit of an opportunistic sale, and you know we're happy with that transaction. Looking at the rest of our portfolio, the majority of our portfolio is with our streaming partners. Our equities held because we entered into the transactions when we did the streams. You know, our philosophy at this point in time is we will hold those shares until our partners get up and running in advance, and if there's an opportunity to sell down the road, that's when we'll do it. We have no interest in selling those shares right now.
Bill: Hi, Thank you Tait and thank you for the question I will say that the hecla was a bit of an opportunistic sale and.
Bill: We're happy with that transaction looking at the rest of our portfolio. The majority of our portfolio is with our streaming partners our equity is held.
Bill: We entered into transactions when we did the streams.
Our philosophy at this point in time is we will hold those shares until our partners get up and running in advance and if theres an opportunity to sell down the road. That's when we'll do it we have no interest in selling those shares right now.
Haytham Hodaly: The primary focus of those types of investments is to be supportive of those partners, be a good, strong, supportive shareholder. And so, you know, there's no sense in putting pressure on them when they're going through the development phase of their projects. So, you know, it is a longer-term commitment, as is the streaming agreement itself.
Our primary focus on those type of investments is to be supportive of those partners would be a good strong supportive shareholder.
Bill: And so.
Bill: No sense in putting pressure on them when they're when they're going through the development phase on their projects. So.
Bill: It is a longer term commitment is as is the streaming agreement itself.
Bill: Okay.
Tanya Jakusconek: Okay, that's good on the investments, and then maybe if I could still follow through, Haytham, on just on the transaction opportunities. Just want to circle back. Sibanyi put out a comment that they're looking at up to $500 million in streaming opportunities, so I want to circle back to number one. Any thoughts of additional platinum-palladium opportunities? I personally don't think Stillwater can take on another Roseanne or Stream, but maybe some of the other things in South Africa and or their gold assets. I don't think you're interested in Lethium. Maybe a comment on how that would fit your portfolio?
Bill: Okay on the <unk>.
Bill: And then maybe if I can still follow through.
Bill: On that just on the transaction opportunity.
Want to circle back to that and you put out a comment that theyre looking at up to $500 million of streaming opportunity.
Speaker Change: To circle back to number one.
Speaker Change: Any thoughts of additional platinum palladium opportunities I personally don't think still water can take on another royalty and stream that maybe some of the other items in South Africa and or their gold assets. I don't think you are interested in lithium.
Speaker Change: Can you comment on how that would fit your portfolio.
Haytham Hodaly: Sure, I'll keep it simple. We're always looking to add precious metals, with gold and silver as the primary two precious metals. If we can add gold or silver and, alongside it, add platinum or palladium to top it off at the price that they need, that's something we could consider. You're right; I don't think we would increase Stillwater's stream there, but there are other opportunities throughout their portfolio that they are considering.
Speaker Change: Sure I mean, I'll keep it simple, we're always looking to add precious metals being gold and silver as a primary to quest smells, if we can add gold or silver and alongside AD platinum or palladium to top it off to the price that they need thats something we could consider youre right I don't think we would increase Stillwater.
Speaker Change: Stream there, but there are other opportunities throughout their portfolio that they are considering.
Haytham Hodaly: Sabani is a good, strong partner of ours. We've had a great, great, great relationship with Neil and the team there, and we're so hopeful that we can grow that relationship as we always hope with all of our partnerships. You know, they've got quite a broad selection of assets there, and we're sure we can help them unlock some value there
Speaker Change: <unk> is a good strong partner of ours, we've had great great great relationship with Neil and the team there and so.
Speaker Change: Hopeful that we can grow that relationship.
Speaker Change: As we're always hopeful with all of our partnerships.
Speaker Change: Yes.
Speaker Change: Got quite a broad selection of assets there and were sure we can help them unlock some value there somewhere.
Speaker Change: And the balance sheet repair.
Yes, yes. Thank you for that and then maybe just.
Tanya Jakusconek: you know, just circling back again on the opportunities. I know I ask all the time, all of these big opportunities for balance sheet repair keep coming up for some of the bigger non-gold companies and assets, sales for the Newcrest, Newmont portfolio, et cetera, et cetera. Haytham, I think you mentioned you were looking at 10 or 20, I forget how many you mentioned you were looking at of your deals. And yeah, I mean, we always have at least a dozen on the go. Tanya, we're probably up closer to 15 right now.
Speaker Change: Just circling back again.
Speaker Change: The opportunities I know.
Speaker Change: All of these big opportunities for balance sheet repaired keeps coming up.
Speaker Change: So some of the bigger non gold companies and asset sales floor, the new Kraft newmont portfolio et cetera et cetera.
Speaker Change: Hey, Tom I think you mentioned you were looking at 10 or 20 I forget how many you mentioned you are looking at.
Tom: Yes sure.
Tom: Yeah, I mean, we always have.
Tom: At least a dozen on the go to Daniel we're probably up closer to 15 right now.
Haytham Hodaly: Of those, I would say there are probably a handful that are fairly sizable. But in this environment, you know, there's no guarantee that a stream will actually get done. But it is, it is, I guess, enlightening to see that streaming is measured alongside debt, equity, and other forms of capital as well. So there are definitely people kicking the tires, and we're there trying to get involved.
Tom: Of those I would say there is probably a handful that are fairly sizable but in this environment. There is no guarantee the stream will actually get done but it is.
Tom: I guess enlightening to see that streaming is measured alongside debt equity and other forms of capital as well. So there's definitely people kicking the tires and where they're trying to get involved.
Tanya Jakusconek: We are happy to see the equity market waking up a little bit and starting to see some support on that side because we've been strong believers that streaming can't be the only source of capital. It should be standing alongside a nice balanced spread on that capital. So happy to see a little bit there because that's going to open up some opportunities just in that sense, standing alongside some equity raises to fund these developments.
Tom: We are happy to see the equity market waking up a little bit and we're starting to see some support on that side, because we've been strong believers that streaming can't be the only source of capital.
Tom: It should be standing alongside a nice balanced.
Tom: Spread the spread on that capital and so happy to see a little bit there because thats going to open up some opportunities just in that in that sense standing alongside some equity raises to fund these developments.
Tom: And these bigger deals that you have a handful up I think Keith and those would be the 500 million deal.
Tanya Jakusconek: And these bigger deals, you said you had a handful of. I think, Haytham, those would be the plus 500 million deals. Can I assume those are pure streaming? Or should I be thinking that there's equity components plus debt components to total plus 500? Or should it be a simple streaming structure?
Tom: And I assume those are curious streaming or should I be thinking that there's equity component that component to total plus 500.
Tom: Alright.
Tom: Simple screening Scott sure sure.
Haytham Hodaly: Sure, I mean the majority of those are looking at streaming structures. You know, when you're looking at opportunities that are sizable, typically, the counterparty does not want to dilute, and they have access to debt on their own. For the smaller opportunities, I can tell you there's a, I guess you would look at a portfolio, not a portfolio; you'd look at a number of financing mechanisms alongside.
Speaker Change: Sure I mean, the majority of those started looking at streaming structures.
Speaker Change: When you are looking at opportunities that sizable typically.
Scott: Counterparty does not want to dilute and they have access to that on their own for the smaller opportunities that I can tell you there is.
Scott: I guess, you would look at our portfolio and not a profile that you'd look at a number of financing mechanisms alongside streaming.
Tanya Jakusconek: Okay, and so the main financing mechanisms for the smaller ones are, you know, the royalty stream, and plus debt equity would be the structure. That's correct.
Scott: Okay, and so the main main financing mechanisms for the smaller ones are royalty stream and closed that equity would be the structure.
Scott: Yes.
Speaker Change: That's correct.
Haytham Hodaly: We don't see a lot in the royalty space. The royalties tend to, I mean, streaming has proven to be much more attractive as a source of capital than royalties, so we don't just don't see new royalties; we see existing royalties being traded around, but not too many people are creating new royalties, especially on advanced projects. If they're doing royalties, it's at an early, very early stage. Basically royalties so that one day they can put them in a portfolio and try to sell them to companies like us.
Speaker Change: Don't see a lot in the royalty space the royalties.
Speaker Change: Streaming has proven to be much more attractive as a source of capital than royalties. So we don't just don't see new royalties, we see existing royalties being traded around but not too. Many people are creating new royalties, especially on advanced projects.
Speaker Change: Royalties on.
Speaker Change: On the.
Speaker Change: At this stage early very early stage.
Great.
Speaker Change: Great basically royalty so that one day, they can put them in our portfolio and try to sell them to companies like us.
Speaker Change: Okay, well wait for that I. Appreciate you, taking all my questions and great quarter. Thank you. Thanks Craig.
Tanya Jakusconek: Okay, well, we'll wait for those. I appreciate you taking all my questions and having a great quarter. Thanks Gary. Always a pleasure Tanya.
Speaker Change: Tanya.
Thank you.
Operator: Thank you. Your next question is from Richard Hatch from Berenberg. Please ask your question.
Speaker Change: Question is from Richard Hatch from Darrin <unk>. Please ask your question.
Richard Hatch: Thanks for the call. I've just got a couple of questions. First of all, on the HEC Club, my numbers say you made about 50% on that trade, so it's a good deal, but is there any tax that you've got to pay on the sale of those shares, or anything we need to be working on there, or not? Thanks.
Richard Hatch: Yes, thanks, good morning, Randy.
Thanks for the cool and just a couple of questions and just lastly on this one.
Richard Hatch: The numbers you made at 50% on that trade.
Speaker Change: Good deal.
Richard Hatch: Is there any tax you've got to pay on the Saturday sheds uniquely working now.
Richard Hatch: Thanks.
Richard Hatch: The.
Tax law, we will.
Unknown Speaker: The We will have tax liability associated with that. It will be included at 50% and subject to a 27% tax.
Richard Hatch: Tax liability associated with the with that.
Richard Hatch: It will be included.
Richard Hatch: 50%.
Richard Hatch: And subject to a 27%.
Richard Hatch: Income tax standard capital gains.
50% of the gain is taxed at a 27% rate. So net effect is about 13, 5% on the total.
Richard Hatch: Yes.
Okay very helpful. Thanks, and second one is just on <unk>.
Richard Hatch: It's nice to see that asset and kind of coming back to performing better again.
Richard Hatch: Any commentary around the expansion case.
Richard Hatch: Some some vale you anything you might be able to add on that please.
Speaker Change: But a little expansion case, I mean, the high grading high high grading cases.
Speaker Change: Oh I see okay.
Speaker Change: Yes, I mean the focus.
Speaker Change: Definitely let west to add some color to this but the current focus is of course trying to get to the next phase of the expansion payment and so they're working their way towards that whether they achieve it this year or next year remains to be seen there. They are definitely continuing to improve on line three but.
Speaker Change: As it has been sort of laid out before the whole site has to perform in order to satisfy that until the line one and line <unk> still got some work to do on that front, but bill is as we've seen this quarter, they actually outperformed even our own expectations right and so so given that we think it's shaping up well for them to hopefully satisfy that.
Speaker Change: Once once that next phase gets satisfied then we'd be looking at the the high grade.
Bonus kicker and Thats it.
It starts in the year subsequent to whenever they satisfy phase III expansion payment and it's it's basically on an annual basis, if they meet certain objectives, we will make an additional payment towards.
Speaker Change: Vale.
Speaker Change: For for satisfying those things and so so that wont start until next year at the earliest.
Speaker Change: Again, depending on when they finish the phase two of the main expansion payment.
Speaker Change: Yes, I think just to add on to what Randy said, there I mean really the focus right now is on getting <unk> III up to its full capacity and really having a little bit wanting to built up there as well that the high grade is really an expansion on the open pit and getting some more equipment going in there and thats really once they get those plants up and running then the trend the focus will move over to the mine and then.
Speaker Change: Getting that going.
Speaker Change: Okay Tom.
Speaker Change: In the past they have just to add to have talked in the past about the possibility of exploring our phase four expansion and theres been some discussion about whether that would be at.
Tom: An additional 6 million tons per annum or 12, whether it's a full lineup. So there is still some discussion and studies going on internally on that front too. So theres no doubt theres still a healthy focus on salobo absolutely yes.
Tom: And that's just.
Speaker Change: And Thats just clear upside for you right. There is no extra commitments, you're going to pay for that correct.
Speaker Change: Yes.
Speaker Change: And then so just on that great upside are you able to give us any kind of a feel for what kind of ex hi.
Speaker Change: Great potential we could be seeing from next year, if they go down that rice.
Speaker Change: The challenge.
Speaker Change: Yeah, sorry, let's I'll step in.
Speaker Change: The challenge is it depends on how much they grow their mobile fleet it depends on how much they pushed towards the low grade stockpiling side and so there's a number of different factors that they have to balance stockpile capacity.
Speaker Change: Yes.
Speaker Change: If they shift more of the low grade towards that then the naked easily pushed grade substantially higher.
And so it really does come down to what kind of a fleet expansion. They go through in the pit and Thats, what will sort of dictate what kind of grades that can deliver to the mill.
Speaker Change: Okay got you and then last one is just on.
Mineral park, and if I look at the MD&A equaled $150 million.
Speaker Change: You could deploy into that one this year and any kind of stable and tani on that please.
I mean, it looks like it's on track.
Speaker Change: We're moving forward and so yes.
Speaker Change: It's an asset that we know well we're pretty excited about it it's always.
Speaker Change: Delivered more silver than expected in times past and so we're expecting to see similar results out of it and whats really exciting about it is the.
Speaker Change: The current ownership group is is identified and really is in the process of resolving the challenges that that project had in the past and so we think it's going to be a nice Pleasant addition to the.
Speaker Change: Re addition to the portfolio at this time round.
Speaker Change: So we're pretty happy with that group they've they've done a good job of identifying what the challenges are and they are putting the money right where it needs to be spent in terms of getting it there. So fully expect it to be coming onstream here within the within the couple of years.
And that $150 I think it will be will be provided in stage payments right. It's not all one lumpy that will be provided.
Speaker Change: Over over I would say three or four different payments 25 million each of the last one was $40 million.
Speaker Change: Gotcha, Okay, sorry, yes.
Speaker Change: Is that something that could be a key to that level or is it too early to say that yet.
Speaker Change: Yes, it could be Q2.
Speaker Change: Okay helpful. Thanks for your time I appreciate it.
Unknown Speaker: [inaudible]
Speaker Change: Thanks, Richard and thanks, everyone for your time today, we are pleased to report a good strong start to our 20th anniversary year here at Wheaton.
Richard Hatch: Okay, very helpful, thanks. The second one is just on Solobo; it's nice to see that asset kind of coming back to performing better again. Any commentary around the expansion case from Vale or anything you might be able to add on that, please? (inaudible)
Speaker Change: We didn't high quality portfolio of assets sector, leading growth profile and commitment to sustainability provides our shareholders with a solid outlook for the future and one of the best vehicles for investing into gold and precious metals space.
Unknown Speaker: Oh, I see. Okay.
Randy V. J. Smallwood: Yeah, I mean, you know, the focus, definitely let Wes add some color to this, but, you know, the current focus is, of course, trying to get to the next phase of the expansion payment. And so they're working their way toward that, you know; whether they achieve it this year or next year remains to be seen. They're definitely continuing to improve on line three, but, you know, as it's been sort of laid out before, the whole site has to perform in order to satisfy that. So line one and line two still have some work to do on that front.
Wesley Carson: But, you know, as we've seen this quarter, they actually outperformed even their own expectations, right? And given that, you know, we think it's shaping up well for them to hopefully meet that. You know, once that next phase gets satisfied, then we'll be looking at the high-grade, you know, bonus kicker. And actually, it starts in the year subsequent to whenever they satisfy phase two of the expansion payment. And it's, you know, it's basically on an annual basis.
Wesley Carson: If they meet certain objectives, we'll make an additional payment towards VALE for satisfying those things. And so that won't start until, you know, next year at the earliest, again, depending on when they finish phase two of the main expansion payment.
Randy V. J. Smallwood: Yeah, I think just to add on to what Randy said there, I mean really, the focus right now is on getting SLOBO 3 up to its full capacity and really having SLOBO 1 and 2 built up there as well. The high grade is really an expansion of the open pit and getting some more equipment going in there. And that's really, once they get those plants up and running, then the focus will move over to the mine and getting that going, I think.
Unknown Attendee: They have talked in the past, just to add, about the possibility of exploring a phase 4 expansion, and there's been some discussion about whether that would be at an additional 6 million tonnes per annum or 12, whether it's a full line. So there is still some discussion and studies going on internally on that front too. So there's no doubt there's still a healthy focus on Salobo. Absolutely. Lots of upside.
Unknown Attendee: And that's just pure upside for you, right? There's no extra commitments you've got to pay for that, correct? Yeah. Unknown Attendee Yeah, and then, sorry, just on that grade upside, are you able to give us any kind of a feel for what kind of extra higher grade potential we could be seeing from, you know, next year if they go down that road?
Unknown Speaker: The challenge, sorry Wes, I'll step in. The challenge depends on how much they grow their mobile fleet. It depends on how much they push towards the low-grade stockpile side. And so, you know, there's a number of different factors that they have to balance. Stockpile capacity, you know, if they shift more of the low-grade towards that, then they could easily push grades substantially higher. It really does come down to what kind of a fleet expansion they go through in the pit. And that will sort of dictate what kind of grades they can deliver to the mills.
Richard Hatch: Okay, gotcha. And then last one is just on Mineral Park. I think if I look at the MD&A, you've got $115 million that you could deploy into that one this year. Any kind of guidance on timing on that, please?
Unknown Speaker: It looks like it's on track. The work is moving forward. It's an asset that we know well; we're pretty excited about it. It's always delivered more silver than expected in times past, so we're expecting to see similar results out of it. What's really exciting about it is that the current ownership group has identified and is in the process of resolving the challenges that that project had in the past. We think it's going to be a nice, pleasant re-addition to the portfolio this time around. We're pretty happy with that group. They've done a good job of identifying what the challenges are, and they're putting the money right back into us.
Unknown Speaker: and that hundred and fifty line will be
Richard Hatch: Yeah, gotcha. Okay, fine. Sorry, while I've got you, is that something that could be a Q2 outflow, or is it too early to say that yet? Yeah, it could be Q2.
Speaker Change: As we celebrate our 20th anniversary throughout 2024, I am sincerely thankful to all of our stakeholders for being a part of wheat and success and I truly look forward to a golden future together.
Richard Hatch: Helpful. Thanks for your time. Much appreciated. Thanks, Richard.
Randy V. J. Smallwood: Thanks Richard and thanks everyone for your time today. We are pleased to report a good, strong start to our 20th anniversary year here at Wheaton. Wheaton's high-quality portfolio of assets, sector-leading growth profile, and commitment to sustainability provide our shareholders with a solid outlook for the future and one of the best vehicles for investing in the gold and precious metals space. As we celebrate our 20th anniversary throughout 2024, I am sincerely thankful to all of our stakeholders for being a part of Wheaton's success, and I truly look forward to a golden future together. We look forward to speaking with you again soon. Thank you.
Operator: Thank you. This concludes this conference call for today. Thank you for participating. Please disconnect your line.
Speaker Change: We look forward to speaking with you again soon thank you.
Speaker Change: Thank you.
Speaker Change: This concludes today's conference call for today. Thank you for participating please disconnect your lines.