Wheaton Precious Metals Corp · TSX:WPM
Wheaton Precious Metals — Q4 2020 Earnings Presentation
66 slides from Wheaton Precious Metals's earnings presentation, March 2021
Slide 1: The High Margin Precious Metals Company
THE HIGH MARGIN PRECIOUS METALS COMPANY March 2021 Corporate Presentation
Slide 2: Cautionary Statements
CAUTIONARY STATEMENTS CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS The information contained in this Presentation contains “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 and “forward-looking information” within the meanin
Slide 3: Who Is Wheaton Precious Metals?
WHO IS WHEATON PRECIOUS METALS?
Slide 4: A Model Designed to Benefit All Stakeholders
WHEATON PRECIOUS METALS A MODEL DESIGNED TO BENEFIT ALL STAKEHOLDERS Our Vision To be the world’s premier precious metals investment vehicle. Our Mandate To deliver value through streaming to all of our stakeholders: . To our Shareholders, To our Partners, To our Neighbours, by delivering low risk,
Slide 5: Wheaton's Streaming Advantage
WHEATON’S STREAMING ADVANTAGE A SUSTAINABLE OPTION FOR PRECIOUS METAL INVESTING HIGH QUALITY ASSETS COMMODITY PRICE LEVERAGE Ninety percent of Wheaton’s current Investors get leverage to the underlying production comes from mines operating in commodities as delivery payments per ounce the lowest hal
Slide 6: Recent Highlights
WHEATON PRECIOUS METALS CONTINUING TO EXECUTE IN A VIRTUAL WORLD Wheaton lists on London Stock Corporate Development: Exchange Cozamin (Capstone) – 50% of Ag for RECENT HIGHLIGHTS Trading of shares commenced October 28, upfront payment of $150M 2020 under the ticker LSE:WPM Marmato (Aris) – 6.5% of
Slide 7: Diversified Portfolio of High-Quality Assets
HIGH QUALITY ASSET BASE DIVERSIFIED PORTFOLIO OF HIGH-QUALITY ASSETS Operating Mines (24) Development Projects (7) Partners: Vale Keno Hill Minto Barrick Zinkgruvan Kutcho Voisey’s Bay Newmont 777 Sudbury Glencore Coleman Aljustrel Sibanye-Stillwater Stillwater Copper Cliff Stratoni East Boulder Cre
Slide 8: Low Cost, Long Life Production
HIGH QUALITY ASSET BASE LOW COST, LONG LIFE PRODUCTION 2021 Forecast Production Mine Life of Operating Portfolio1,2,3 by Cost Quartile1,3 70 2% 60 8% 18 50 Mine Life (years) 40 10 16% 30 20 74% 33 10 First Second 0 Third Proven & Probable Measured & Inferred Fourth Mineral Reserves Indicated Mineral
Slide 9: Long Term Production Outlook
HIGH QUALITY ASSET BASE LONG TERM PRODUCTION OUTLOOK 1,200 2019 Actuals 2020 Actuals 2021 Guidance Average Annual Production Guidance29: 1,4 GEOs: GEOs: GEOs: 5-year Average: 810,000 GEOs Optionality 720 - 780Koz Gold Equivalent Production (GEO) (Koz) 745Koz 714Koz 10-year Average: 830,000 GEOs 1,00
Slide 10: Predictable Costs and High Margins
CASH OPERATING COSTS PREDICTABLE COSTS AND HIGH MARGINS Total Cash Cost and Cash Operating Margins per Ounce1,5,6,7 Gold Price (US$/0z) $2,500 $2,000 $1,500 79% 76% $1,000 81% 72% 69% 66% 69% 69% 68% 70% 71% 75% $500 $300 $300 $300 $362 $386 $386 $393 $391 $395 $409 $421 $426 $451 $0 2009 2010 2011
Slide 11: Strong Balance Sheet
STRONG BALANCE SHEET AMPLE CAPACITY TO CONTINUE GROWING Cash Flow % Increase Au Price Ag Price Balance Sheet as of December 31, 20201 Sensitivity to from Base $US/oz $US/oz Commodity Price Case $8,000 72% 67% 50% $2,550 $39.88 $7,000 79% 62% 65% 65% 47% 35% $2,295 $35.10 44% $6,000 45% 46% 27% Milli
Slide 12: Margins and Cash Flow: Optionality to Higher Commodity Prices
MARGINS AND CASH FLOW OPTIONALITY TO HIGHER COMMODITY PRICES Operating Cash Flow (Million US$) 19,21 $900 1,000 Over $2 billion of operating cash $800 flow in excess of Wheaton’s original 900 Gold Equivalent Sales (koz) $700 expectation during the last upswing 800 in the commodity prices cycle 700 $
Slide 13: Innovative and Sustainable Dividend
INNOVATIVE AND SUSTAINABLE DIVIDEND LEADING DIVIDEND YIELD AMONGST STREAMERS ▪ Innovative Quarterly Dividend Policy • Dividends linked to operating cash flows whereby 30% of the average of the previous four quarters’ operating cash flows are distributed to shareholders. • Floor of $0.13/share per qu
Slide 14: Benefits to Partner Mining Companies
BENEFITS TO PARTNER MINING COMPANIES
Slide 15: Precious Metals Streaming: Benefits to the Partner Mining Company
PRECIOUS METALS STREAMING THE BENEFITS TO THE PARTNER MINING COMPANY Stream Debt Equity Non-dilutive form of funding ✓ ✓ Initial value creation for both parties ✓ Improves project IRR ✓ Crystalize future production of mining partner ✓ Contractual relationship means support & flexibility ✓ Endorses t
Slide 16: Initial Value Creation and Improved IRRs: Salobo Example
PRECIOUS METALS STREAMING THE BENEFITS TO THE PARTNER MINING COMPANY Initial Value Creation Opportunity exists to The market values create value for both precious metal in a parties Value of Future streaming company’s Precious Metal portfolio greater than Value of Future Stream precious metal produc
Slide 17: Benefits to the Community
BENEFITS TO THE COMMUNITY Value through streaming.
Slide 18: Sustainability: A Core Value
SUSTAINABILITY A CORE VALUE Wheaton delivers sustainable, long-term value from both a business and social perspective Community External & ESG Due Strong Policies Investment Voluntary Diligence & Practices Programs Commitments Wheaton has undertaken a broad range of sustainability initiatives and si
Slide 19: Community Investment Program
COMMUNITY INVESTMENT PROGRAM MAKING AN IMPACT ▪ Only streaming company with formal programs that benefit communities HEALTH EDUCATION ENVIRONMENT COMMUNITY ▪ To help combat COVID-19, Community Investment Budget Wheaton established an additional (1.5% of average net income of previous four years) $5M
Slide 20: Recognition for Sustainability Performance
RECOGNITION FOR SUSTAINABILITY PERFORMANCE ▪ Top-rated among ESG analysts • Rated an “AA” by MSCI ESG Research (upgraded from “A” in September 2020)27 • Ranked #1 for Precious Metals by Sustainalytics ESG Risk Ratings28 • Ranked in the Global Top 50 out of over 12,000 companies across sectors by Sus
Slide 21: Why Invest in Wheaton Precious Metals?
WHY INVEST IN WHEATON PRECIOUS METALS?
Slide 22: The World's Premier Precious Metals Investment
THE WORLD’S PREMIER PRECIOUS METALS INVESTMENT Other Precious Metal Wheaton Streamers Bullion / ETFs Miners >95% of revenue from precious metals17 ✓ ✓ ? No capital cost exposure ✓ ✓ No operating cost exposure12 ✓ ✓ Exploration upside ✓ ✓ ✓ Highly diverse asset base ✓ ✓ Sustainable dividend ✓ ? Lever
Slide 23: Wheaton versus Other Streamers
WHEATON VERSUS OTHER STREAMERS SECTOR LEADING REVENUE GENERATION $1,200 2020 Revenue Mix by Streamer13,17 $1,096M $1,020M $44 $1,000 $92 $18 $86 $400 $800 $106 $600 $499M 100% $60 89% $400 $45 $718 $653 $200 $394 88% $0 Royal Gold Franco Nevada Wheaton Gold Silver PGM Other Oil & Gas Wheaton’s 2020
Slide 24: Wheaton's Track Record
WHEATON’S TRACK RECORD AS OF DECEMBER 31, 2020 $9 Billion invested in streams23 >$7.4 Billion of cash flow generated to date24 >$1.2 billion declared in dividends to date11 Strong annual cash flows expected at current commodity prices25 >40 years of reserve and resource mine life remaining1,2,3 High
Slide 25: Consistently Outperformed Gold and Silver
CONSISTENTLY OUTPERFORMED GOLD AND SILVER Total Average Rolling Multi-Year Return Comparison as of March 8, 202114 200% Average Total Return 150% 100% 50% 0% -50% 1-Year 3-Year 5-Year 10-Year Gold Silver Philadelphia Gold & Silver Index (XAU) VanEck Vectors Gold Miners ETF (GDX) Wheaton Wheaton’s st
Slide 26: If You Like Precious Metals, Wheaton Checks All the Boxes
WHEATON PRECIOUS METALS IF YOU LIKE PRECIOUS METALS, WHEATON CHECKS ALL THE BOXES Cost predictability High quality asset base Long-life operations Leverage to increasing precious metals prices Dedication to sustainability Innovative dividend For more information on Wheaton’s sustainability programs,
Slide 27: Contact
CONTACT INVESTOR RELATIONS CONNECT WITH US Tel: 604-684-9648 @Wheaton_PM Toll Free: 1-844-288-9878 Email: info@wheatonpm.com @WheatonPM TRANSFER AGENT @Wheaton Precious Metals Corp. AST Trust Company (Canada) Toll Free: 1-800-387-0825 International: 1-416-682-3860 Email: inquiries@canstockta.com www
Slide 28: Appendix and Endnotes
APPENDIX AND ENDNOTES Value through streaming.
Slide 29: Shares: Capital Structure
SHARES CAPITAL STRUCTURE AS OF DECEMBER 31, 2020 Weighted average number of shares outstanding: Basic: 449.3 million Diluted15: 450.9 million 3 Month Average Daily Trading Volume: TSX: 1.1 million shares NYSE: 2.5 million shares Appendix 29
Slide 30: Company Acquisition History (2004-2011)
COMPANY ACQUISITION HISTORY Silver Wheaton (SLW) Timeline Since Inception16 Begins Trading 2004 2005 2006 2007 2008 2009 2010 2011 1) San Dimas 4) Yauliyacu 5) Stratoni 7) Keno Hill 8-11) Silverstone 13) Rosemont 2) Los Filos 6) Peñasquito 12) Barrick 3) Zinkgruvan Silver Stream Gold & Silver Stream
Slide 31: Company Acquisition History (2012-2020)
COMPANY ACQUISITION HISTORY Timeline Since Inception16 Silver Wheaton Becomes Wheaton Precious Metals™ (WPM) 2012 2013 2014 2015 2016 2017 2018 2019 2020 14) Constancia 16) Salobo I 16) Salobo II 20) Cotabambas 21) Kutcho 22) Voisey’s Bay 24) Marmato Silver 17) Sudbury 19) Antamina 16) Salobo III 23
Slide 32: Company Acquisition History: Notes to Timeline
COMPANY ACQUISITION HISTORY NOTES TO TIMELINE 1. Subject to an annual inflationary adjustment with the exception of Loma de La Plata and Sudbury. 2. Should the prevailing market price for silver or gold be lower than this amount, the per ounce cash payment will be reduced to the prevailing market pr
Slide 33: Company Acquisition History: Notes to Timeline
COMPANY ACQUISITION HISTORY NOTES TO TIMELINE 15. Comprised of $16 million paid to date and $138 million to be payable on an installment basis to partially fund construction of the mine. Following the delivery of certain feasibility documentation or after December 31, 2017 if the feasibility documen
Slide 34: Streaming Throughout the Cycle
STREAMING THROUGHOUT THE CYCLE SOME DAYS YOU REAP, SOME DAYS YOU SOW… Spot Gold Prices vs. Long-Term Analyst Consensus18 Constancia Ag 777 Au & Ag Voisey's Bay Cobalt Cozamin Marmato $2,500 $60 Salobo 1/Sudbury Barrick / Pascua Lama Stillwater Gold & Constancia Gold Cotabambas $50 Toroparu $2,000 Pa
Slide 35: Cozamin: Asset Overview
GROWTH COZAMIN – ASSET OVERVIEW1 Operator Capstone Mining Corp. Location Zacatecas, Mexico Stream Silver Date of Contract February 19, 2021 (Effective December 1, 2020) Term of Stream1 Life of Mine 50% of silver production until 10 Moz have been Stream Parameters1 delivered, thereafter dropping to 3
Slide 36: Marmato: Asset Overview
GROWTH MARMATO – ASSET OVERVIEW1 Operator Aris Gold Location Colombia (80km south of Medellin) Stream Gold and silver Date of Contract November 5, 2020 (Effective July 1, 2020) Term of Stream1 Life of Mine 6.5% of gold production (until 190,000 ounces of gold have been delivered, 3.25% of gold produ
Slide 37: Revenue Exposure: Highly Diversified Portfolio
REVENUE EXPOSURE HIGHLY DIVERSIFIED PORTFOLIO 2021-2025E Revenue Mix1,4 Cobalt Colombia Palladium 3% 1% 5% USA 7% Europe 7% Brazil 32% Canada Gold 11% 51% Silver 41% Peru 21% Mexico 21% Appendix 37
Slide 38: Strengthening Partnerships
STRENGTHENING PARTNERSHIPS CSR PROGRAM FOCUSES ON COMMUNITIES NEAR PARTNER MINES Partner CSR Program: ▪ First streaming / royalty company to focus support on mining communities • Program provides long-term, sustainable benefits to the communities near our partners’ mines ▪ Current initiatives • Vale
Slide 39: Community Impact
COMMUNITY IMPACT SUPPORTING LOCAL AND GLOBAL INITIATIVES Canadian initiatives support a broad range of services and causes ▪ Primary sponsor of key fundraising events for: • The BC Ride to Conquer Cancer – BC Cancer Agency • Daffodil Ball – Canadian Cancer Agency • Sports Celebrities Festival – Spec
Slide 40: Margins and Cash Flow
MARGINS AND CASH FLOW STRONG CASH FLOW GENERATION DRIVEN BY COST CERTAINTY $1,200 Operating Cash Flow, Production Payment, G&A and Other Costs5,6,7 $1,096 $1,000 $892 $861 $850 $843 $794 $800 $730 $706 Millions ($US) $620 $649 $600 $423 $400 $239 $167 $200 $0 2008 2009 2010 2011 2012 2013 2014 2015
Slide 41: Key Asset Updates
HIGH-QUALITY ASSET BASE KEY ASSET UPDATES1,2 Salobo: 75% of gold production for life of mine (mine life currently >40 years) ▪ 62.9Koz of gold produced in Q4 2020 ▪ Salobo III expansion 68% complete at end of Q4 2020 ▪ Exploration potential at depth Peñasquito: 25% of silver production for life of m
Slide 42: Strong Track Record of Accretive Growth
STRONG TRACK RECORD OF ACCRETIVE GROWTH EXPANSION & GROWTH THROUGH EXPLORATION & ACQUISITIONS Total attributable gold equivalent R&R per 100 shares since inception2,8 9.0 M&I P&P Mined 8.0 7.0 6.0 Gold Eq oz / 100 share 5.0 4.0 3.0 2.0 1.0 0.0 -1.0 -2.0 -3.0 -4.0 2004 2014 2005 2006 2007 2008 2009 2
Slide 43: Resolution of the Canadian Tax Dispute
RESOLUTION OF THE CANADIAN TAX DISPUTE REASSESSMENT FOR 2005-2010 SETTLED ON DECEMBER 13, 2018 Background10 ▪ CRA reassessed Wheaton in September 2015 for tax years 2005-2010: • CRA’s position was that income earned by Wheaton’s foreign subsidiaries (Wheaton International) outside of Canada from min
Slide 44: Strong Track Record of Organic Growth
STRONG TRACK RECORD OF ORGANIC GROWTH EXPLORATION AND INFERRED CONVERSION Reserves and Resources Growth2,8 9.4Moz GEOs 11.9M GEOs 12.8M GEOs 14.8M GEOs or 676M SEOs or 923M SEOs or 858M SEOs or 1,063M SEOs (M&I) (M&I) 26.3M GEOs or 1,893M SEOs (P&P) 20.0M GEOs or 1,442M SEOs (P&P) Total Acquired Tot
Slide 45: Streams vs. Royalties
STREAMS VS. ROYALTIES Streaming Model Royalty Model A ‘stream’ is a long term contract for the A ‘royalty’ is generally a registered interest in purchase of a certain percentage of refined tenure metal Outside of Canada, streaming agreements can International royalties are viewed as passive allow th
Slide 46: How Precious Metals Streaming Works
HOW PRECIOUS METALS STREAMING WORKS A NEW ALTERNATIVE IN PORTFOLIO OPTIMIZATION UPFRONT PAYMENT (CASH AND/OR WPM SHARES) Wheaton makes an Upfront Payment and in return, we purchase a fixed percentage of the PARTNER future precious metals MINING production from a mine COMPANY at a predetermined price
Slide 47: Wheaton Streaming Model
WHEATON STREAMING MODEL ANALYZE THE IMPACT POTENTIAL 6 1 ON WHEATON’S OPPORTUNITY PORTFOLIO Using the appropriate discount After identifying a rate, future cash potential opportunity, flows are discounted we use the production 5 FUTURE CASH PRODUCTION 2 to determine the profile and reasonable FLOWS
Slide 48: Why Wheaton Is the Premier Streaming Company
WHY WHEATON IS THE PREMIER STREAMING COMPANY An established track record of treating our partners fairly, before and after a stream is Focused on sustainable consummated. Five of our last nine streams on operating assets were with existing partners. relationships Wheaton also provides additional sup
Slide 49: Attributable Reserves & Resources: Proven & Probable
ATTRIBUTABLE RESERVES & RESOURCES TOTAL PROVEN & PROBABLE Proven & Probable Reserves Attributable to Wheaton Precious Metals (1,2,3,8,27) Proven Probable Proven & Probable As of December 31, 2020 unless otherwise noted (6) Tonnage Grade Contained Tonnage Grade Contained Tonnage Grade ContainedProces
Slide 50: Attributable Reserves & Resources: Proven & Probable
ATTRIBUTABLE RESERVES & RESOURCES TOTAL PROVEN & PROBABLE Proven & Probable Reserves Attributable to Wheaton Precious Metals (1,2,3,8,27) Proven Probable Proven & Probable As of December 31, 2020 unless otherwise noted (6) Tonnage Grade Contained Tonnage Grade Contained Tonnage Grade Contained Proce
Slide 51: Attributable Reserves & Resources: Proven & Probable
ATTRIBUTABLE RESERVES & RESOURCES TOTAL PROVEN & PROBABLE Proven & Probable Reserves Attributable to Wheaton Precious Metals (1,2,3,8,27) Proven Probable Proven & Probable As of December 31, 2020 unless otherwise noted (6) Tonnage Grade Contained Tonnage Grade Contained Tonnage Grade Contained Proce
Slide 52: Attributable Reserves & Resources: Measured & Indicated
ATTRIBUTABLE RESERVES & RESOURCES TOTAL MEASURED & INDICATED Measured & Indicated Resources Attributable to Wheaton Precious Metals (1,2,3,8,27) Proven Probable Proven & Probable As of December 31, 2020 unless otherwise noted (6) Tonnage Grade Contained Tonnage Grade Contained Tonnage Grade Containe
Slide 53: Attributable Reserves & Resources: Measured & Indicated
ATTRIBUTABLE RESERVES & RESOURCES TOTAL MEASURED & INDICATED Measured & Indicated Resources Attributable to Wheaton Precious Metals (1,2,3,4,5,9,27) Measured Indicated Measured & Indicated As of December 31, 2020 unless Tonnage Grade Contained Tonnage Grade Contained Tonnage Grade Contained otherwis
Slide 54: Attributable Reserves & Resources: Measured & Indicated
ATTRIBUTABLE RESERVES & RESOURCES TOTAL MEASURED & INDICATED Measured & Indicated Resources Attributable to Wheaton Precious Metals (1,2,3,4,5,9,27) Measured Indicated Measured & Indicated As of December 31, 2020 unless Tonnage Grade Contained Tonnage Grade Contained Tonnage Grade Contained otherwis
Slide 55: Attributable Reserves & Resources: Inferred
ATTRIBUTABLE RESERVES & RESOURCES TOTAL INFERRED Inferred Resources Attributable to Wheaton Precious Metals (1,2,3,4,5,9,27) Inferred Resources Attributable to Wheaton Precious Metals (1,2,3,4,5,9,27) Inferred Inferred As of December 31, 2020 unless As of December 31, 2019 unless Tonnage Grade Conta
Slide 56: Reserves & Resources Endnotes
ATTRIBUTABLE RESERVES & RESOURCES ENDNOTES 1. All Mineral Reserves and Mineral Resources have been estimated in accordance with the 2014 Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Standards for Mineral Resources and Mineral Reserves and National Instrument 43-101 – Standards for Di
Slide 57: Reserves & Resources Endnotes (Continued)
ATTRIBUTABLE RESERVES & RESOURCES ENDNOTES (CONTINUED) 8. Mineral Reserves are estimated using appropriate process and mine recovery rates, dilution, operating costs and the following commodity prices: a. Aljustrel mine – 3.5% zinc cut-off for the Feitais, Moinho and St João mines and 3.0% zinc cut-
Slide 58: Reserves & Resources Endnotes (Continued)
ATTRIBUTABLE RESERVES & RESOURCES ENDNOTES (CONTINUED) 9. Mineral Resources are estimated using appropriate recovery rates and the following commodity prices: a. Aljustrel mine – 3.5% zinc cut-off for Feitais, Moinho and St João mines and 3.0% zinc cut-off for the Estação project. b. Antamina mine -
Slide 59: Reserves & Resources Endnotes (Continued)
ATTRIBUTABLE RESERVES & RESOURCES ENDNOTES (CONTINUED) 9. Mineral Resources are estimated using appropriate recovery rates and the following commodity prices: t. Stillwater mines – geologic boundaries for Inferred Mineral Resources at both the Stillwater mine and East Boulder mine. u. Stratoni mine
Slide 60: Reserves & Resources Endnotes (Continued)
ATTRIBUTABLE RESERVES & RESOURCES ENDNOTES (CONTINUED) 12. The Company’s attributable Mineral Resources and Mineral Reserves for the Antamina silver interest, Cozamin silver interest, Marmato gold and silver interests, Sudbury gold interest and Voisey’s Bay cobalt interest have been constrained to t
Slide 61: Endnotes
ENDNOTES 1. The information contained herein contains “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 and "forward-looking information" within the meaning of applicable Canadian securities legislation concerning the business, oper
Slide 62: Endnotes
ENDNOTES (con. ) international operations of Wheaton and the Mining Operations, exploration, development, operations, expansions and improvements at the Mining Operations, environmental regulations and climate change, Wheaton and the Mining Operations ability to obtain and maintain necessary license
Slide 63: Endnotes
ENDNOTES (con.) Metallurgy and Petroleum (the "CIM") – CIM Definition Standards on Mineral Resources and Mineral Reserves, adopted by the CIM Council, as amended (the "CIM Standards"). These definitions differ from the definitions in Industry Guide 7 ("SEC Industry Guide 7") under the U.S. Securitie
Slide 64: Endnotes
ENDNOTES 9. Estimated operating cash flow calculations based on rolling five-year production forecast with (i) production payments of between $5.81 per silver ounce, $451 per gold ounce, and 18% production payment per palladium ounce and per cobalt pound (and assumed marketing cost). (iii) 90% payab
Slide 65: Endnotes
ENDNOTES 21. Gold equivalent ounce sales calculated using assumes Gold $1,800/oz, Silver $25/oz, Palladium $2,300/oz and Cobalt $17.75/lb. 22. Capex is defined as the actual and estimated growth capital expenditure from 2007 to 2018 as reported in the Salobo Copper-Gold Mine Technical Report dated D
Slide 66: Non-IFRS Measures
NON-IFRS MEASURES Wheaton Precious Metals has included, throughout this document, certain non-IFRS performance measures, including (i) adjusted net earnings and adjusted net earnings per share; (ii) operating cash flow per share (basic and diluted); (iii) average cash costs of silver and gold on a p
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