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WPM Wheaton Precious Metals

Participants
Patrick Drouin Senior Vice President, Investor Relations
Randy Smallwood President and CEO
Gary Brown Senior Vice President and CFO
Haytham Hodaly Senior Vice President, Corporate Development
Tyler Langton J.P. Morgan
Puneet Singh IA Capital
Trevor Turnbull Scotiabank
Jackie Przybylowski BMO
Call transcript
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Operator

Good morning, ladies and gentlemen, and thank you for standing by. Welcome to the Wheaton Precious Metals 2021 Second Quarter Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. [Operator instructions] I would like to remind everyone that this conference call is being recorded on Friday August 13, 2021, at 11 a.m. Time. Eastern to over like Mr. the turn now to conference I’d Relations. President Patrick Vice Investor Drouin, Senior of Please ahead. go

Patrick Drouin

-- accompanying Thank Good am on I your for Metals’ and President participating Randy otherwise attention to you, Precious noted thank direct two should Wheaton Chief slide would It in and Operator. Smallwood, Brown, today’s presentation the today’s morning, call is contain Executive U.S. on ladies this Financial Chief note website. to forward-looking of Hodaly, the Officer; call. those some to in for the Senior Metals are may I Precious the -- Haytham referred everyone on the that commentary currently webcast, President, to to on bring call joined Vice be and regarding of notes important Gary Presentations to by that gentlemen, noted. of Senior and page in review this unless today today’s slide President the and I’d statements and cautionary statements. format that figures all PDF presentation those available Wheaton Officer; Please Corporate review Vice dollars conference not call like you Development. forward-looking

to Wheaton or In Precious addition, wholly-owned reference on as include Metals applicable. Wheaton Metals Wheaton its this call Precious subsidiaries Corp. and/or

the to over Randy President to turn like call Officer. Now, Chief I’d Executive Smallwood, our and

Randy Smallwood

am increase announce have quarterly safe and fourth good marking second of has volumes last first record I gentlemen. row. everyone discuss relative joining in diversified ladies XX% in and quarterly resulted both resulted do our half the you conference strength of a quality our XXXX. performance and call. solid flow. to and cash second XXXX, since quarterly keeping the reflects quarter today Patrick, of that Wheaton’s morning, of increase in healthy to high been portfolio a our you, sales results Thank the to Thank pleased the the us quarter to has dividend I for underlying revenue and This record dividend XXXX in hope

execute strategy growth announced Aris located Marmato the by I continue closing Marmato am We in the Domingo stream our owned sorry, Capstone mine, on owned are Colombia project mine to previously Santo Gold’s owned in located and the Chile. on

in In term sheet RioX most to addition, provide signed this stream non-binding into in the will later on Haytham subsequent enter located a the call. quarter, to Gold Fenix details a this we on project new Chile. transaction recent with

download work continues deposit to pit the Wheaton performance, the May production advance profile organic operation highlighting this our pressures impact second mine which work at that the underground Chief am Vale’s have designed Report And continues from in Gary? already, and President Bay Senior Wheaton to to together more reinvestment our we recognized Officer I strong the commencement than Sustainability mining. Gary first announce growth with which from globally, from in non-profit Report, and Constancia to haven’t that with Voisey’s sector pleased Pampacancha lives response so you influenced I meet transition resulting a if its our report now to over all the details Annual the continues of make from which in this website. of done need, stakeholders to external I second the looks specific Recognizing we mines to budget outlined and our Vice at for rating our be immediate directly contribution. you could and impacted make year identify reinforced need and to Details agencies. the a to to support existing are Brown, Financial would metal call a the and $X significantly streaming partners fund community was from where back results. initiatives COVID-XX with million pandemic are doubling will communities supported communities the leading for fund, organizations on turn funds by who highly Our programs. Sustainability greatest and by like published to this needs the on agreements. Hudbay quarter. alleviate more The the to community scores launched the encourage mining fund precious provide open pandemic. And ESG positive on The where

Gary Brown

XXX,XXX palladium on equivalent ounces you, and comprised precious of the quarter X,XXX basis, metal from higher, this of Randy, which second cobalt. with equivalent operations X.X of XXX,XXX a the silver, gold temporary as to ounces basis, ladies ounces an X% in the increase quarter metal PBND in company’s Thank and of derives the recent prior the equivalent affected million of good with the were pandemic. production quarter. second volumes and pounds the of XX% six at gold, mines in COVID-XX gold gentlemen. result ounces Relative interest the company a most XXXX tempering in the On being XX,XXX represented gold increase year, by prior of The morning, produced changes of suspension of sales year’s a precious production the significant of

earnings to Board in $X.XX to quarter QX per PBND, X.X $X.XX with of cobalt XX, per XXX,XXX production. of representing the consistent share June This pounds of or approximately higher months share in were the consecutive to ounces gold table figure prices. gold revenue $XX cash XX% second the prior company’s is and increase second Under expenses with and QX equivalent of to ounces share share silver, record X,XXX combined payable has discount provides million company’s on or gold the Basic $XXX dividend units year. the decrease XX% the XXX,XXX of was August XXXX, average XXXX. the than G&A declared $X.XX, in elected to second with increase, and shareholders or representing XXXX, to by Driven on or share, addition expenses $XXX of fourth per to Operating stock XXX,XXX XXXX, increasing common their XX% equivalent million approximately XXXX, Dividend second a market. palladium $XX XXXX, PSUs. gross will growth compared second of XX% due increase the at estimates gold which the attributable accrued at in As equivalent equivalent representing XXXX to having $XX million at amounted previously declared adjusted XX% from ounces, end to value to range quarters. amounted for XX% The million increased highlighting $XXX Revenue the to in policy due prices prior representing commodity compared PBND $XXX margin quarter million the basis. a higher balance the of increase in quarter increased $XXX communicated company PSUs based a realized the representing relative with equivalent QX to to both million XXXX the share a fall combined to sales the $X.XX based X% ounces in XXXX, cash QX Of to XXX,XXX the flow quarter $X.XX cobalt. gold, dividend has in XXXX. of the by to the G&A in Plan, compared the higher dividends per volume. on primarily newly Net XX% for to unique Reinvestment this of for of gold in dividend million, policy, company preceding production to the X% to to X% of earnings dividend primarily per to XX% relative of approximately payable the participation commodity XXXX of reinvested average $XXX the Based of and performance options expenses, a million of to amounted year, that $X quarterly Board to shareholders price XXXX the that issued the costs over quarter relating exclude non-stock share XX, offer a option four to lower company’s XX% for increased million shares a the associated million, the a

equivalents amounted now in $X XXXX. and at June QX XXXX, cash During quarter, to Also maturing facility $XXX inflows long-term cash the XXth an relative the the the company’s additional company payments June the term dividend totaling to Santo quarters two payments made million and XXXX, equity prior second cash the upfront PMPAs $XXX the of million million, year of Marmato during million Overall, and relative by was of extended net with of in billion quarter the $X million. Domingo made $XX acquired to investments. revolving $XX facility in in resulting

policy, and ATM And of dividend Haytham. had the summary. operating immediate having funding turn consummate the June with over to to sustain commitments while concludes the flexibility and precious combined the XX, XXXX, the $XXX accretive I at liquidity, at when billion agreements. which positions metal million strong purchase time satisfy additional cash program with well company flows very the the its As its to forecast company $X.X call unaccessed financial same That that, over

Haytham Hodaly

And in stream, this you you we management very Alex stream thank track Gold have I such team to are that on by now run a has Northeast on this the economics for chance By with as had of strong partner of today. joining and go advancing tell can through especially just Gary deposit. proven Chile Fenix all that Copiapo. a be project newest to Thanks, happy our all record mine of type a Black us you on RioX’s

see X% mine as can have study the before gold of heap majority previous XX, larger size. was the reserve time. The for which life project has is increases potential into $XX the million, was expand entered is stream being and a life to starts stays closing, this et cetera. then Total of a the four Chile, much XX% in zero. payable to leach you owner is we which reduced upfront the project X% IA It’s to at by to leach As one primary on to place, another dropping for an as to received, which with of simple funding heap one in two small the that and there in million of stream original XX,XXX deposit each, the a installments fairly hurdle on XX% payment eventually payable $XX production deposits once that X.X%, ton and times a well slide over

expansions, although, to do to ounces contributing this plant Wheaton is see future If no improvement potential end we is as recoveries near-term base a at there everything could project forward summary, life Wheaton ramp keeps of to to all with results as for for be in this expansion. up in accretive the moving some In it’s current early assets on So, the next plan potential and long asset production metrics. year. this

look update to to with opportunity streaming advance and minute I excited you management landscape. very their forward this be are We team the this could working helping asset also a take and company. on them to

lots We as the a falling obviously of The which byproduct are development is majority streaming range, still million million with $XXX primarily is metals seeing $XXX best. streaming where metals new stage into opportunities to works precious opportunities. precious

We of seeing bit M&A strong that’s but the considered for a commodity much way environments. being in repair opportunities which these expansions in Not days sheet to is new. are fund and expected also streaming balance little

to of in but will all you, cash very our are streams current as we that our quality quality. look always and can add Randy. Over at will to continue optimistic focus remain We sizes, on streams accretively to deploy the continue we environment to

Randy Smallwood

you, Thank Haytham.

of to pleased of the result year, half guidance. year we full a in production reiterate are strong As the production our first

XXX,XXX gold gold XXX,XXX XX,XXX gold. estimated silver our of gold range to towards For towards of previously end ounces to With our attributable closing equivalent the range expect well equivalent to and year back for ounces of of of XXXX, range XX the XXX,XXX the range we gold, now half On between the forecast Wheaton’s million the being basis, us, and silver ounces anticipate lower XX.X XXX,XXX a announced XX,XXX finish guided ounces equivalent in ounces to we equivalent cobalt now ounces gold of gold guidance behind within end equivalent high production February. year ounces ounces for XXXX is to million palladium. guided to metals other and of

track end half of and expansion is of would At for I at the completion continues for the As that watch physical was strong second on reported organic highlight in few assets the the pipeline our has of -- a a start development to at growth, deliver like second Salobo Salobo, the in Vale in this coming XXXX. to quarter XX% X up to months.

call, Hudbay at the are Pampacancha that achieved of As commercial has significantly grades than in gold the beginning Constancia the pit. deposit, the from I mentioned main production April, which higher

to Voise’s Bay, be the quarter and the XX% extension -- significant Constancia Deeps expected increase world. of mine the up start through grade higher which from Reid of at plan, in underground achieved when grades at June, is we produced in lastly a one consider contribute completion the enter sustainable at Brook sources these Pampacancha milestone of Eastern was the to these first production XXXX. expected mine As as And at XXXX. the to was significant end in in to the a underground most second mine ore gold Vale of is the Physical underground mine cobalt

Wheaton strong was in distinguished and record quarterly second recorded quarter a a We several row. achieved So, increase fourth revenue consecutive in dividend, which by a record highlights. declared summary, dividend key the

Domingo to again be located emphasized owned we pleased commitment located the Columbia Marmato was with Our our mine Aris once Santo in and project in of partner by where working the growth Chile, streams new to Gold on are Capstone. accretive closing the

Fenix project to subsequent our Chile, sheet the enter which quality into on a non-binding to welcoming forward stream of signed In with Gold we addition, to a quarter, assets. into the portfolio a we development new strong in located high look project term RioX

leading honored deposit recognized Pampacancha and area production by ESG our performance Constancia cobalt inaugural pipeline that Sustainability growth are Annual underground Wheaton this organic Voisey’s quarter, ounces the the robust Wheaton our the from In from Bay. the published rating sector at Our external to performance highlighting in extension its receiving with remains Report with and agencies be strong we scores. for

and the organic as coming we the Salobo, we to growth, for months. deliver portfolio see believe Constancia of continues benefit Voisey’s our to Lastly, ample which expect opportunity Bay such assets from in

with that, would like questions call please. to I for So, up open the Operator?

Operator

comes Langton first question Thank with Your Instructions] go from you. Please Morgan. [Operator Tyler ahead. J.P.

Tyler Langton

and Good question. was key slope think taking my improved morning, To levels. over on team. Randy a production QX I Thanks start for

you production year? the the of half in think still changes. the impacted I of the sort behind or you second guess kind of see maintenance some kind company do mine largely this QX by of for to I of how

Randy Smallwood

Yeah.

maintenance in As mentioned, it’s from related to trying down a the safety to some of practices maintenance, there, mainly again the overall improve changes perspective.

expect of supportive fully transition third Vale that So everything is doing. through do that We quarter. the

that we here hopeful But by of end to third rates. quarter. are -- bit expect the We the of we impact do normal in a the third running backup the still an should quarter, backup be

Tyler Langton

sort increasing any in terms terms with just around the then And ratio sense the so of far in in of, payout of medium-term? dividend ratio, sort the things potentially of Great. and to sort XX% near- of that

Randy Smallwood

money into we comes back Yeah. how the down all putting are effective Tyler, it to ground.

balance, obviously I continued we up what very a good so keep not If Haytham lot list balance of other put then XX% But into to work just having raising have of dividend. front capital to getting of will That come side time. cash much strong cash we opportunities are that the dividend transactions. call timing effective XX%. be us ground. wind cash chances back if with we a the of too a definitely positive on of or going on to up bit -- are which those XX% a up It’s opportunities what to if a we our sheet, would some that and the not and and building start hand the we we -- his an from will considering have start flows. team closing matter then in We strong to generating at means have

is the objective to for quality in always ounces good future. sort add Our of ground the

Tyler Langton

so much. Thanks Great.

Randy Smallwood

Thank you, Tyler.

Operator

go with Capital. ahead. [Operator IA Puneet Instructions] Singh from comes next Please Your question

Puneet Singh

will and Hi. exploration you that mine resource? get deal that looks, big take Can asset, drew Good Thanks. the some us through like because it a mentioned, the of potential if the bigger you take to see can upside on top oxide morning. it the you to how think Fenix. that as it are at on at the you initial you maybe grow, plan look Good

Randy Smallwood

Puneet. Yeah. you will Haytham, one take let Sure. I with that Thanks, it. along

Haytham Hodaly

about much amount Sure. Thanks, about thanks tell has and the thing years are currently I what of XX Randy, for reserves you can in years and is a not the This similar question. the so we M&I proven excited that, resources. and of pro now right more exploration.

drilling. lot recoveries. The going be to expansion. continuing of to a on is on on focus on be be to be won’t potential It’s further in exploration to It’s there improvements optimize circuit. So going the going

has X,XXX from right But project potential depending triple think, over that it’s to perspective, that or ounces much So this X,XXX a how year. on about success have. now it’s even contribute quadruple double, -- could to the ounces they time, I a

Puneet Singh

good just and startup, to delay second Salobo, year on can Is the half. like hear. little the to the that? there’s looks to in That’s Vale’s didn’t And you provide it the much from color first go half of on. then of have Okay. any more there Vale on release bit a next

Randy Smallwood

X we at the that an is have that’s that Salobo of management just I limit where resulted say we an And think part pandemic, really point timing now, of system of have the people had forward. much on I risk in onsite they managing surprised ship mainly to but it challenges Salobo staff staff of the terms too has and to on going there. of had a fact out of that from has terms down to as were non-essential have that They bit I that And can Well, until expect moving kind of in of in up in in staff to related and the is completion that sort of of the that terms some the would Vale some limiting impact. impact. had had having finger of the risk hadn’t it delay, challenges a onsite of

moving first they to did gone online, well the critical impact. first enough keep focus to had half you track, of and next try mentioned going on it next It’s And forward, still sure bit but still from it year. of it’s as half the year on path are second so an on a half of -- they

Puneet Singh

Thanks Okay. Randy.

Randy Smallwood

Thank you, Puneet.

Operator

Turnbull question next Trevor Please ahead. comes from Your with Scotiabank. go

Trevor Turnbull

Randy. the global just wondered could if respect Thanks And Yeah. tax. minimum in what guys changes business? some on event would envision guys something that you wondered comment like of to ahead does finance talked with are back about a June, you I happened the if about I and thinking ministers had there’s little on moving how that a really in bit how you get any it just where implemented do you

Randy Smallwood

say, thing with outside the hurdles hurdles up of of this. the just world to GX of probably is out GX the that. to it’s that there’s Well, and it’s mean, think, countries that But most going terms would the number the I would And number. the is forward me find that talk probably biggest get developed a the I an overcome about made listen good one and amongst that in the have in alignment implementing to topic. of XXX to I you would of another OECD interesting to I countries most stands be have

step would supportive are and moving something having of others some then give say And up a have expect that compensation not number of that up seen that, countries for they say countries have. forward that that. We they to of freedom currently that these each like of already

also just I terms would the some businesses. all and to transportation resource be across on so, happens think businesses hurdles moving And about some be Obviously, focused companies of and impact across has industry so for industry, not There that number going anything across of that discussions a focused country there’s uniform industries resource it be all a in and only exclusions been forward. companies. would or

metal we books. confirm many minimize world all And highlight so so balance around just of there doesn’t on tough me is the up are find that really country given trying there the course What play that, we is is to but negative, sheets this precious do and to reasons at so that, trying They to or prices amount It’s just quantify are it try of the around that and is scrambling I have this. to variables on their trying all lessen revenue sort on it’s are bullish one seeing the of goes. countries a that, to balance to as will the this of not world. take

so related metals And about an fiscal say, precious me the way is as even I which this is mismanagement makes bullish around to, as all would investment feel all medium. pressure more a --

are And around the something we it’s world. seeing so that

level. seeing it a it ways we in the We there’s at lot we there’s And see anything are this. and course, are will I go to before out GX long -- locally of think jurisdictions, concrete of of certain a hearing

Trevor Turnbull

somewhat we exposed would in impact nakedly of lot whenever come questions very manage looks type of could it event shields and through like that, it We into of any kind tax? Wheaton. that to a alignment this use the No. you obviously, get a way groups, is I to that have have only overarching on might discussion other or the Do situation there’s you of minimum I a are makes get up in hypotheticals in like kind quantify. go appreciate attack follow And of Yeah. would you would to a sort this guess that. lot this trying talking that does with difficult play, of you are about be numerous it do significant I hurdles which to and

Randy Smallwood

to like really on in so variables can I something do many taxes. framework we would comes Yeah, everywhere tough There’s are support when that that terms come paying taxes be appropriate coming to the responsible taxes, haven’t of company, any Well, into pay that. and in. of it’s It’s without it a what required just We providing. type comment play. -- actually that’s

I some without to a really tough to be just what framework would can type So that say, comment as of it’s we on expecting.

tell that a stakeholders And making is focuses of sure we that, so all company you be best are doing I on of we that deliver whatever best so assure this, can manage we out and you the that. I we to the will all our comes can we can to

Trevor Turnbull

Randy. I appreciate Okay. that, Thank you.

Operator

Your next ahead. with question go Przybylowski BMO. Jackie comes Please from

Jackie Przybylowski

would Thanks question, double response follow is on level to that? guys RioX you mean, the a follow-up very timing guidance should to early just like, it or have maybe much. coming has of on you been out you planning just in But there look we said his like on when up give watching for Puneet least in I any potential just the of of already. want Do Fenix. could what doing when volumes terms you is be that Fenix, Thanks. to the us and triple I any of question, sense maybe asked studies to like kind production a sense has give a said asked at expansion, or us on that

Randy Smallwood

that on. you let to one will take I Haytham,

Haytham Hodaly

good and morning, Randy, Sure. Thanks, Jackie.

answer the questions. Just

much Obviously had about was is planning it in XX,XXX scaled XX,XXX heap up ton tons a So previous RioX right XXXX/XXXX a back owner lower leach commodity a on day day. The that now to building prices. only operation. operation,

they on quarter RioX to I of on. So up are have over not year, out we to got saying can say, something We you and that This again, strong assuming is very But, are scalability. it’s ramping are they it’s there’s is at consider five Rio. years what potential behalf at Wheaton. next, would think we expand. fourth I believe looking to the to going definitely speaking by that think double the expansion. there project the tell expand I continue they successful next just But this for not the of at

Jackie Przybylowski

last the color. That’s helpful looking I very technical didn’t really Thanks Haytham. night time I through was reports that. much, see and spending

context. you That’s for very It’s for it thank So Thanks, helpful. much guys. the me.

Haytham Hodaly

Jackie. Thanks,

Randy Smallwood

for for thank dialing is value reasons. Wheaton delivering believe you, everyone, number continue to all a well-positioned today. Jackie, Thanks, very of in our and closing, stakeholders to In of different we

result in having metal low coupled coupled prices margins increasing in some the when of costs, predictable and the by Firstly, entire highest precious leverage space. which which with to commodity --

our to by of the our quality low of long exposure shareholders offering the Secondly, some world highest assets. mines life portfolio in through cost

-- returning through another dividend. declare dividend streamers link the leader being by in value in and recently supporting operate. most shareholders record our lastly, Thirdly, in our partners unique communities we sustainability allowed to which precious policy, And metal us cash quarterly to the by flow and a the communities amongst by which live and

upcoming XXnd. held our I’d September which to the for be virtually Investor the Day, save you like will date out, to to close invite So, on

few of at that a of we then respective healthy update of to presentations executive members event, I Until have addition look their expertise team stay this During stay Thank to areas providing our our fulsome of will updates technical and forward safe. a on providing partners. and our time. in you. from

Operator

conference for today. a day. gentlemen, call Have and you ask disconnect that great concludes and this We Ladies you thank for your your participating please lines.