Vancouver-based metals streaming company Wheaton Precious Metals (TSX:WPM) expects its portfolio of operating mines and development projects to grow production by 40% over the next four years.
Wheaton forecasts annual production to reach over 800,000 gold equivalent ounces by 2028, with average annual attributable production growing to over 850,000 gold equivalent ounces from 2029 to 2033.
The prediction comes on the back of first-quarter revenue of US$297 million ($449 million), operating cash flow of US$219 million and US$164 million in net earnings.
Wheaton – which has US$306 million in cash, no debt and an undrawn US$2 billion revolving credit facility – reports attributable Q1 gold equivalent production of 160,100 ounces, a 19% year-on-year increase.
The increase was attributed largely to an expansion of throughput at Vale’s (NYSE:VALE) Saloba Copper-Gold Mine in Brazil and higher production at Hudbay Minerals’ (TSX:HBM) Constancia Copper-Molybdenum-Silver-Gold Mine in Peru following the mining of high-grade zones within the Pampacancha deposit.
This prompted the company to declare a dividend of US$0.155 per share, equating to a payment of US$70.3 million back to shareholders.
Wheaton has streaming and royalty agreements over 18 operating mines and 27 development projects.
Streaming and royalty companies provide upfront financing to exploration and mining companies in exchange for either a fixed percentage royalty over the revenue generated by the operation (royalty) or physical metal produced (streaming).
President and CEO Randy Smallwood says the robust first quarter underscores the effectiveness of Wheaton’s business model in leveraging rising commodity prices while maintaining strong cash operating margins.
“Looking ahead, we continue to forecast peer-leading production growth of 40% by 2028, buoyed by several development projects in our portfolio, many of which achieved significant milestones during the quarter,” he says.
“Building on the momentum from a record eight acquisitions in 2023, our corporate development team remains actively engaged in evaluating new opportunities.”
In February, Wheaton completed the acquisition of the precious metal purchase agreement/royalty agreements over Ivanhoe Mines’ (TSX:IVN) Platreef Platinum Group Metals-Nickel Mine in South Africa and private UK-based BMC Minerals’ Kudz Ze Kayah base metals project in Yukon, Canada.
The company also picked up a 1.5% net smelter royalty over the DeLamar Gold and Florida Mountain Gold-Silver projects in Idaho from Integra Resources Corporation (TSX-V:ITR).
According to Wheaton, which has a market capitalisation of C$34.6 billion ($38.2 million), 93% of attributable production from its assets are in the lowest half of their respective cost curves.
Average cash costs in Q1 2024 amounted to $430 per gold equivalent ounce versus the $475 reported in Q1 2023. This lifted the cash operating margin by 10% to US$1,643 per gold equivalent ounce sold.
Wheaton says that is due to the higher realised price per ounce coupled with the lower average cash costs.
Write to Angela East at Mining.com.au
Images: Vale
