Earnings call transcript: Wheaton Precious Metals beats Q1 2025 forecasts

Wheaton Precious Metals Corp (WPM) reported a strong start to 2025 with first-quarter earnings surpassing analyst expectations. The company posted an earnings per share (EPS) of $0.55, exceeding the forecasted $0.52, and reported revenue of $470.41 million, significantly above the projected $416.97 million. Following these results, WPM’s stock rose by 4.62% in after-hours trading, reflecting investor confidence in the company’s performance and outlook. According to InvestingPro data, WPM maintains an impressive "GREAT" financial health score of 3.17, with particularly strong metrics in profitability and cash flow management. The stock has delivered a remarkable 47% return year-to-date, showcasing its strong market performance.

Key Takeaways

• Wheaton Precious Metals’ revenue increased by 59% year-over-year, reaching a record $470 million.
• The company declared a 16.5¢ dividend per share, marking a 6.5% increase.
• Stock price surged by 4.62% after earnings release, indicating positive market sentiment.
• The Salobo III expansion and Blackwater mine developments are key operational highlights.
• Wheaton is exploring substantial streaming opportunities, driven by strong gold prices.

Company Performance

Wheaton Precious Metals demonstrated robust performance in Q1 2025, with a 59% increase in revenue compared to the same quarter last year. The company’s strategic expansions and new project developments have positioned it well within the industry. The completion of the Salobo III expansion and the first gold and silver pour at the Blackwater mine highlight Wheaton’s commitment to growth and innovation.

Financial Highlights

• Revenue: $470.41 million, up 59% year-over-year
• EPS: $0.55, compared to the forecast of $0.52
• Gross margin: $319 million, an 86% increase
• Adjusted net earnings: $251 million, up 53%
• Cash flow from operations: $361 million
• Dividend: 16.5¢ per share, a 6.5% increase

Earnings vs. Forecast

Wheaton Precious Metals’ actual EPS of $0.55 surpassed the forecast of $0.52 by approximately 5.8%. The revenue of $470.41 million also exceeded expectations by 12.8%. This positive earnings surprise reflects the company’s strong operational performance and strategic initiatives.

Market Reaction

Following the earnings announcement, Wheaton’s stock price increased by 4.62%, closing at $86.27 in after-hours trading. This rise places the stock close to its 52-week high of $87.42, signaling strong investor confidence. The stock’s performance is notably robust compared to broader market trends, highlighting Wheaton’s favorable position in the precious metals sector.

Outlook & Guidance

Looking ahead, Wheaton Precious Metals anticipates continued growth with a projected annual production increase of 40%, aiming for 870,000 gold equivalent ounces by 2029. The company is evaluating 15-17 potential streaming opportunities, focusing on direct streaming over corporate transactions. The production split for 2025 is expected to be 47/53 between the first and second halves, with over 950,000 GEOs projected annually from 2029 to 2034. Analysts tracked by InvestingPro share this optimistic outlook, with a highly bullish consensus rating of 1.44 (where 1 is Strong Buy). The company’s revenue is forecast to grow by 41% in FY2025, supported by its strong operational execution and favorable market conditions.

Executive Commentary

CEO Randy Smallwood stated, "In times of economic uncertainty, gold is viewed as a reliable store of value," underscoring the company’s strategic focus on precious metals. Additionally, Kaitham Hodelay emphasized, "As long as we continue to be able to acquire assets at net asset value or less, that’s the route we’ll take," highlighting a disciplined approach to acquisitions.

Risks and Challenges

• Fluctuations in gold and silver prices could impact revenue.
• Operational risks associated with new project developments.
• Potential delays in bringing new projects online.
• Geopolitical risks affecting global mining operations.
• Changes in regulatory environments impacting mining activities.

Q&A

During the Q&A session, analysts inquired about the Copper World project with Hudbay and the timing differences between production and sales. Executives also discussed the potential for larger funding packages and detailed their approach to stream and royalty negotiations, providing insights into future strategic directions.

Wheaton Precious Metals’ performance in Q1 2025 reflects its strategic initiatives and market positioning, with strong financial results and a positive outlook for the future.

Full transcript - Wheaton Precious Metals Corp (WPM) Q1 2025:

Andrew, Conference Call Operator: Good morning, and gentlemen. Thank you for standing by. Welcome to the Wheaton Precious Metals twenty twenty five First Quarter Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question and answer session.

If you would like to withdraw your question, press the pound key. Thank you. I would like to remind everyone that this conference call is being recorded on Friday, 05/09/2025 at 11AM Eastern Time. I will now turn the conference over to Emma Murray, Vice President of Investor Relations. Please go ahead.

Emma Murray, Vice President of Investor Relations, Wheaton Precious Metals: Thank you, Andrew. 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 Vincent Lau, Senior Vice President and Chief Financial Officer Kaitham Hodelay, 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 our website. Some of the comments on today’s call may include forward looking statements.

Please refer to slide two for important cautionary information and disclosures. It should be noted that all figures referred to on today’s call are in U. S. Dollars. With that, I’d like to turn the call over to Randy Smallwood, our President and Chief Executive Officer.

Randy Smallwood, President and Chief Executive Officer, Wheaton Precious Metals: Thank you, Emma, and good morning, everyone. Thank you for joining us today to discuss Wheaton’s first quarter results of 2025. Before we begin, I would like to take a moment to honor founding board member Peter Gillen, who passed away last week. As our longest serving director, Peter played a pivotal role in shaping Wheaton into the company that it is today. His unwavering integrity, strategic vision and deep commitment left a lasting impact on all of us.

More than a respected leader, Peter was a trusted colleague and a very dear friend. On behalf of the Board of Directors, management and staff, we extend our heartfelt condolences to Peter’s family and loved ones during this difficult time. I’d now like to turn back to our quarterly results, which mark a very strong start to the year. As several of our core assets exceeding production expectations, we delivered record quarterly revenue, adjusted net earnings and operating cash flow. Looking ahead, 2025 is shaping up to be a catalyst rich year, with four development projects scheduled to come online over the course of this year.

Notably, the Blackwater mine owned by Artemis Gold achieved its first gold and silver pour in January, and just last week announced commercial production. Our corporate development team remains actively engaged in evaluating new opportunities, and we continue to see a healthy appetite for streaming as a competitive source of capital for the mining industry. During the quarter, we were once again recognized amongst Corporate Knight’s one hundred Most Sustainable Corporations in the World for 2025, a multi sector accolade that we are very proud of. As founders and architects of sustainable streaming, this accomplishment is reflective of our continuing commitment to operate responsibly in all facets of our business. This includes our work to help build healthy, vibrant communities through purposeful investments wherever our partners’ stream related operations are located.

Following the success of Wheaton’s inaugural Future of Mining Challenge, an initiative that seeks to support the mining industry to become more efficient while minimizing its environmental impact, I am pleased to announce the theme, the twenty twenty five-twenty twenty six initiative, will focus on sustainable water management, an exceptionally important component to any mining operation. The company will begin receiving expressions of interest next month, so please stay tuned for further details. And with that, I would now like to turn the call over to Wes Carson, our Vice President of Operations, who will provide more details on our operating results. Wes?

Wes Carson, Vice President, Mining Operations, Wheaton Precious Metals: Thanks Randy, and good morning everyone. Overall production in the first quarter even higher than expected, primarily driven by strong outperformance at Salobo. In the first quarter of twenty twenty five, Salobo delivered over 71,300 ounces of attributable gold production, an increase of approximately 16% compared to Q1 twenty twenty four. This was primarily driven by higher throughput and grades. Strong overall performance this quarter reflects the ongoing ramp up of the Salobo III expansion and continued operational improvements at Salobo I And II.

On 03/04/2025, Valley Base Metals informed us that the second phase of the Salobo III expansion had been completed, having achieved a sustained throughput capacity of over 35,000,000 tonnes per annum over a ninety day period. Following our review of the test results, Wheaton advanced the final expansion payment of $144,000,000 to Vale Base Metals in early Constancia produced over 550,000 ounces of attributable silver and 4,900 ounces of attributable gold in Q1 of twenty twenty five, a decrease of approximately 1365% respectively compared to Q1 twenty twenty four. The reduction to gold and silver production was expected, and due mainly to lower grades as the ore material was mined from the Constancia Pit and reclaimed from the stockpile compared to the prior year. Pampacancha deposit, which contains relatively higher gold grades, is expected to be depleted by early twenty twenty five. As Randy stated, we were excited to see the Blackwater announce the first gold pour and silver in the first quarter, resulting in attributable production of 1,000 ounces of gold and 35,000 ounces of silver.

Most recently on May 2, Artemis declared the commercial production had been achieved at the Blackwater Mine, delivering in excess of 90% of its planned tonnage. Production is expected to increase throughout the year as Artemis continues to ramp. Production outlook for 2025 remains unchanged, with total attributable production expected to fall between 1,270,000 gold equivalent ounces. Production is forecast to be consistent at Slobo through the remainder of 2025 with slightly lower grades as per the mine plan, offset by increasing throughput across Slobo 12 And 3. Production in Antamina is forecast to increase over the remainder of the year due to expected higher silver grades, caused by the ratio of copper zinc ore versus copper only ore being twenty twenty five.

Production from Mineral Park, Goose and Platte Reef continues to be forecast for the second half of twenty twenty five, with construction of these assets proceeding in line with expectations. Looking ahead, we project annual production to grow at an industry leading rate of approximately 40%, reaching 870,000 GEOs by 2029. This growth will come from operating assets including Antamina and Blackwater with additional contributions from development projects that are currently under construction and or permitted, such as Mineral Park, Goose, Platte Reef, Kermak, Koning, Phoenix, El Domo and Copper World. Furthermore, attributable production is forecast to average over 950,000 GEOs from 02/1930 to 02/1934, incorporating expected additional incremental production from these pre development assets. That concludes the operational review, and with that, I will turn the call over to Vincent.

Vincent Lau, Senior Vice President and Chief Financial Officer, Wheaton Precious Metals: Thank you. As described by Wes, production in Q1 was 151,000 GEOs, a 4% decrease from Q1 of twenty twenty four, due mainly to the lower production from Penasquito and Constancia, partially offset by higher production from Salobo and Antamina. Sales volumes were 161,000 GEOs, an increase of 16% from Q1 of twenty twenty four, as strong production levels in Q4 of twenty twenty four resulted in an increase to sales realized in Q1 of twenty twenty five, due to the inherent timing delay between production and sales. As at 03/31/2025, approximately 136,000 GEOs were produced but not yet delivered, or PBND, which represents approximately three months of payable production. The company expects PBND levels to stay at the higher end of our forecasted range of two to three months by the end of twenty twenty five, in part due to the ramp up of new mines forecast to commence operations in the second half of the year.

Strong commodity prices, coupled with our strong production, resulted in record quarterly revenue of $470,000,000 an increase of 59% compared to the prior year, with the increase due mainly to a 36% increase in realized commodity prices, coupled with a 16% increase in sales volume. Gross margin increased by 86% compared to the prior year to $319,000,000 Notably, year over year margin growth exceeded the appreciation in gold prices over the same period, underscoring the effectiveness of our business model in leveraging rising commodity prices while maintaining strong cash operating margins. Adjusted net earnings amounted to $251,000,000 representing a quarterly record, and an increase of 53% compared to the prior year. Wheaton delivered robust cash operating margins in the first quarter, resulting in record quarterly cash flow from operations of $361,000,000 an increase of 65% compared to the prior year, and declared a dividend of 16.5¢ per share, an increase of 6.5% compared to the prior year. For 2025, the company continues to expect that G and A expenses will amount to approximately $50,000,000 During the quarter, Wheaton paid total upfront cash payments for streams of approximately $95,000,000 including $40,000,000 for Minor Park, Dollars Thirty Million for Blackwater, and $25,000,000 for Phoenix.

Overall, net cash inflows amounted to $267,000,000 in the quarter, resulting in a cash balance of $1,100,000,000 at March 31. This cash balance, combined with the fully undrawn $2,000,000,000 revolving credit facility, positions the company exceptionally well to satisfy its funding commitments and acquire additional accretive streams. That concludes the financial summary. And with that, I turn the call back to Randy.

Randy Smallwood, President and Chief Executive Officer, Wheaton Precious Metals: Thank you Vincent. In summary, the first quarter was a very strong start for the year for Wheaton, distinguished by several key highlights. We achieved record three months revenue, earnings and cash flow, and declared a 16.5¢ quarterly dividend, a 6.5% increase from Q1 of twenty twenty four. Our pipeline of development projects was further de risked by construction advancements from multiple assets scheduled to come online within the year, further supporting our impressive anticipated organic growth profile of over 40% by 2029. 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 into our portfolio. And lastly, we take pride in being a leader amongst precious metal streamers in sustainability by supporting our partners and the communities in which we live and operate. So with that, operator, I would like to open up this call for questions.

Andrew, Conference Call Operator: Thank you. Ladies and gentlemen, we will now conduct a question and answer session. Your first question is from Cosmos Chiu from CIBC. Please go ahead.

Cosmos Chiu, Analyst, CIBC: Thanks, Randy and team, welcome, Vincent. Congrats on a very strong or record earnings for Q1. Maybe my first question is on the sales versus production. Vincent, as you mentioned, production was 151,000 ounces and sold was actually higher. And as you kind of pointed out, usually production is higher than sales.

So, my question is, is there any kind of read through into future quarters or is this really a reflection of what has happened in the past? I guess you kind of answered it by talking about PB and D being consistent. And so I guess I’m trying to confirm, should we just kind of model sales and production being fairly consistent on a go forward basis?

Vincent Lau, Senior Vice President and Chief Financial Officer, Wheaton Precious Metals: Yeah, so on a production basis, we’re a bit back end loaded this year in terms of the production levels. So, being at the higher end of the range that we’re forecasting throughout the year, you would expect some pickup in the PBND. So, you know, about three months is what we’re forecasting. So I think you’re right, you’re going to see production levels being at the similar levels as the sales, but factoring in this PBND movement.

Randy Smallwood, President and Chief Executive Officer, Wheaton Precious Metals: Cosmos, if I could add, a lot of the we had a really good fourth quarter but that overproduction came from Salobo, which is copper concentrates. And it’s usually the copper concentrates that take longer to make it through to sales just because you’ve got to ship that concentrate overseas and run it through the whole smelting and then refining process. So it’s, you know, if you look at it, the PBND and it shows it right in the charts on the presentation, it’s dominantly gold and most of our gold comes in the form of copper concentrates from the mines themselves. So the fact that we were so high in the fourth quarter in production at Salobo, we saw, you know, great production out of Salobo in the fourth quarter. You know, we always knew there was going to be a good boost to the sales side in the first quarter because that concentrate takes that long to come through.

And so, you know, it’s always going to have, it’s always going be biased more towards the gold production because most of our gold production does come from copper assets and therefore that pushes us more towards the three month limit versus with dore, which is where most of our silver is, it’s typically about two months for us to convert it to sales.

Cosmos Chiu, Analyst, CIBC: That’s right. Thanks, Randy. Maybe that leads to my next question here at Salobo. You made the final payment on the expansion of $144,000,000 on 04/04/2025. I can’t read my writing.

In April 2025. But that might not be the last payment. I believe, you know, there could be the potential to make additional payments of 5.1 to $8,500,000 annually if they do go with a high grade sort of mind plan. Any updates on, you know, potential to for you to need to make that payment or or any kind of color on the high grade mine plan?

Wes Carson, Vice President, Mining Operations, Wheaton Precious Metals: Thanks, Cosmo. Are working on that high grade mine plan. It really is a higher movement they need from the mine is the main kind of factor in that along with a higher copper grade from the mine, or consistently higher copper grade from the mine. So Tsilobo has been working towards that over the last several years. It’s not imminent that we’re going to hit those levels though.

We continue to monitor it with Vale based metals and we’ll continue to speak to them about it, but I don’t see that happening within the next year or so certainly.

Cosmos Chiu, Analyst, CIBC: For sure. And then, Wes or Randy, I saw in your longer term growth profile, you’ve included Copper World. Could you maybe give us an update on Copper World? Is that now considered fully permitted? Because, you know, I was reading up on your PMPA once again, I guess, it says, you know, dollars 50,000,000 could be advanced upon Hudbay’s receipt of permitting.

And so I guess number one, timing. Number two, is it considered fully permitted? And number three, you know, this is a negotiation that was completed many years ago, $230,000,000. Any kind of potential changes to that number?

Randy Smallwood, President and Chief Executive Officer, Wheaton Precious Metals: Yeah, no, it’s not a negotiation, was a contract that was signed many, many years ago. And so it’s a contract that’s in Oh yeah, a

Cosmos Chiu, Analyst, CIBC: contract, yes.

Randy Smallwood, President and Chief Executive Officer, Wheaton Precious Metals: Yeah, yeah. And so it’s a contract that’s in place. There’s no money that gets advanced until Hudbay delivers not only all permits, which they do have, but they also have to have proper financing in place that satisfies us that they’ve got capacity to get the project built. And they also have to commence construction. And so, you know, there will be no payments from us until that happens.

I think in our current five year guidance, we might have it at the tail end, just the very tail end of the five year guidance, and it’s not significant from a production perspective in terms of getting to the 40% growth. You know, we think it’s probably five to six years out, hopeful that Hudbay moves that faster forward. It’s an impressive project. The Rosemont and then the Copper World area itself all sort of one collective zone that we’re appreciative. In terms of that exploration success that we were originally purchasing, what, fifteen years ago, has actually turned into the main resource that’s going to be started off at the Copper World.

But it’s all part of the project going forward. Hudbay is a very important partner to us. We are always trying to find ways to support our partners on a go forward basis, but we have to be reflective of value. So, I know there’s been lots of talk in the market place about how that’s going to move forward. We’ve got a contract in place and we look forward to working with Hudbay to move this forward.

So, you know, we’re waiting. I think their focus currently right now is looking for a joint venture partner to try and offset some of the capital expenses that are going into this project. And so, you know, we look forward to helping them.

Cosmos Chiu, Analyst, CIBC: So Randy, I guess your advancement of any payment will not happen until a joint venture partnership or joint venture partner is in place.

Randy Smallwood, President and Chief Executive Officer, Wheaton Precious Metals: Well, we would start, that’s if they have to go down that path. They choose not to go down that path, all they have to do is come up with a financial plan that we’re satisfied with, a financing plan, the capacity to fund So whether they choose to do that with a joint venture partner or choose to find a way to do that internally within themselves and keep 100% ownership of the asset going forward. It is an impressive asset and so I’m not sure the logic behind that outside of sourcing capital to help get the project built. But it’s not contingent on them finding a joint venture partner, contingent on them having a satisfactory financial Yeah, exactly. And so, whatever way they choose to get there, that’s their choice.

That’s not contingent on us.

Cosmos Chiu, Analyst, CIBC: Great. And then maybe one last question, switching gears a little bit on cobalt, not the biggest part of your portfolio, but I noticed that the production has increased, Kinda makes sense given that they’re ramping up. So two parts of my question. I guess, number one, it’s at £540,000 now in q one. Is that gonna continue to increase?

Number one. And number two, I noticed that shipping or sales was only about half of that point, £540,000. And it’s always lumpy. So, again, how should we model the the shipment or sales, which in turn affects earnings?

Wes Carson, Vice President, Mining Operations, Wheaton Precious Metals: Yeah, thanks Cosmo. So they did have an exceptional first quarter there. For the rest of the year here, we’re forecasting really slightly lower than that, but kinda consistently in more of that kind of £450,000 a quarter kind of range. And really the sales are very lumpy on that one. And it’s really just because of the shipments on that they go over to Europe and we get paid kind of at that point when they go over there.

So there is quite a lag in that and we will see those sales start to catch up over this quarter with that production. Is that they’ve had a great ramp up there over the last really eighteen months. They did announce kind of that they completed earlier this year as well, the undergrounds and they are at full production on those. So it’s been a long project, gotta get going. The worst one in our portfolio, it got affected by COVID for sure.

So it’s great to see them up and running and getting that consistent, the high quality production out of there.

Cosmos Chiu, Analyst, CIBC: Yeah, and I forget West is £2,000,000 an annum, is that what they’re aiming for after the expansion? Yeah,

Wes Carson, Vice President, Mining Operations, Wheaton Precious Metals: to our account, yeah. Yeah, in that range.

Cosmos Chiu, Analyst, CIBC: Okay. That’s

Randy Smallwood, President and Chief Executive Officer, Wheaton Precious Metals: to our account, yeah.

Cosmos Chiu, Analyst, CIBC: To your account, yes, for sure.

Wes Carson, Vice President, Mining Operations, Wheaton Precious Metals: Yeah, 24.

Cosmos Chiu, Analyst, CIBC: Cool. Thanks, Randy, Wes, and Vincent. Thanks for answering all my questions, have a good weekend.

Randy Smallwood, President and Chief Executive Officer, Wheaton Precious Metals: Thank you, Cosmos.

Andrew, Conference Call Operator: Your next question comes from Daniel Major from UBS. Please go ahead.

Daniel Major, Analyst, UBS: Hi. Thanks very much for the questions. So, yes, a couple start with Antamina’s had some downtime this quarter. Can you provide any feedback you might have had from the joint venture and potential impacts it might have on the profile in the second quarter or indeed the full year?

Wes Carson, Vice President, Mining Operations, Wheaton Precious Metals: Thanks, Daniel. So they did have a, obviously a very unfortunate incident there this past, well, month ago now. And really, yeah, it’s one of those things that we have been in contact with the partner on it, and it’s very, very unfortunate to see those types of things happen. We keep very close eye on the safety record of all of our operations certainly. They were down for about thirty six hours due to the incidents.

We don’t expect it to affect production for the year at all. We are actually headed down to site in a couple of weeks here. So we’ll get a good idea of what things look like for the rest of the year after that. But at this point, don’t expect any change to our current forecast.

Daniel Major, Analyst, UBS: Okay. Thanks. And then maybe just a follow-up on Antamina. Where are looking at in terms of the delta into 2027 as you see it in terms of the mine plan sorry, 2020 yes, ’twenty six, ’twenty seven relative to where we are today, Antamina, just specifically?

Wes Carson, Vice President, Mining Operations, Wheaton Precious Metals: We are seeing a fairly significant ramp up this year as they move back into those copper zinc zones, which have quite a bit higher silver in them than what we’ve seen in the last couple of years. And we do expect that to continue through ’26 and ’27 as well. They have moved that primary crusher out of the bottom of the pit now, and there was quite a bit of high grade that was tied up with that. So they are moving into really a higher grade silver zones over the next couple of years, which is why you do see that ramp up in production.

Daniel Major, Analyst, UBS: Great, thanks. And then the next question, I appreciate it’s associated with the movement in the share price, but 12 you booked $12,000,000 in share based compensation this quarter. How’s the distribution through the year? And if shares stay the same here, should we expect a similar run rate? Or how should we be modeling that line item?

Vincent Lau, Senior Vice President and Chief Financial Officer, Wheaton Precious Metals: Yeah. The $12,000,000 this quarter is is really driven by the the share price outperformance. Run rate on the the PSU side would be around 3 to 4,000,000,000 going forward per quarter.

Daniel Major, Analyst, UBS: 3,000,000 to $4,000,000 a quarter. Okay. Yeah. Thanks. And then, yeah, that’s useful.

Thanks. And then just final question. I mean, you got $1,100,000,000 on the balance sheet. I guess, you’re always looking for opportunities. But yes, is there any sort of scope if prices stay at this kind of level to look at interim distributions or changing the structure of cash returns or are you just firmly going to accrue cash and look for deals?

Kaitham Hodelay, Senior Vice President, Corporate Development, Wheaton Precious Metals: Maybe I’ll take that question, Daniel, this is Hatham. Thanks for the question. I will say that given the number of opportunities that we have in the pipeline right now, and it’s definitely double digit, and we’re seeing a lot of different development stage opportunities looking for funding, we’re seeing higher commodity prices have prompted the sale of existing secondary royalties, we’re seeing balance sheet repair opportunities, and we’re also seeing rationalization of assets by larger seniors. So there’s so many opportunities right now for the potential expenditure of capital towards streaming projects, and then some larger royalty opportunities as well, are pretty comfortable with our existing structure.

Randy Smallwood, President and Chief Executive Officer, Wheaton Precious Metals: Yeah, Daniel, if I would just add, I mean, this run up in gold prices and what we’ve seen is actually really starting firm up enough that people are starting to make commitments into building. And so what we are seeing a lot of is gold streams on gold mines, or silver streams on gold mines, there’s lots of activity there. I’d love to see a bit of strength in the copper space, because there are some pretty promising copper projects out there that are kind of waiting for, I think a bit better cost base to make decisions to go into construction, there’s definitely a lot of activity on the gold side.

Kaitham Hodelay, Senior Vice President, Corporate Development, Wheaton Precious Metals: And then just because we’ve got a billion dollars as of the end

Randy Smallwood, President and Chief Executive Officer, Wheaton Precious Metals: of the last quarter, keep

Kaitham Hodelay, Senior Vice President, Corporate Development, Wheaton Precious Metals: in mind we’ve managed to spend almost $900,000,000 a year for the last ten years. So there are lots of opportunities, it may be a little bumpy, maybe one year is more than the other, but you know, we’ve never had an issue deploying capital accretively.

Daniel Major, Analyst, UBS: Great. Have a great weekend.

Randy Smallwood, President and Chief Executive Officer, Wheaton Precious Metals: Thanks, Daniel. Thank you.

Andrew, Conference Call Operator: Your next question is from Tanya Jakusconek from Scotiabank. Please go ahead.

Tanya Jakusconek, Analyst, Scotiabank: Yes. Good morning, everybody. And again, my sympathies are for Peter. Very sad to see that news.

Randy Smallwood, President and Chief Executive Officer, Wheaton Precious Metals: Thank you for that, Tanya.

Tanya Jakusconek, Analyst, Scotiabank: I’m going to start. A lot of my questions have been answered. I’m just going to follow-up on just a few things that I just wanted confirming. And just on the distribution for the year, I think in the last conference call, talked about a 40 five-fifty May half, second half in terms of the production profile. Is that still the case with all the startups towards the second part of the year?

Wes Carson, Vice President, Mining Operations, Wheaton Precious Metals: Yeah, thanks, Anne. With the strong performance in Q1, we’re actually looking at about kind of 47, 50 three now, I would say, if you kind of measure it that way. So it’s still backend loaded, but a little bit less so than that.

Tanya Jakusconek, Analyst, Scotiabank: Okay, and obviously, depending on what the prices do, that obviously moves the, not your production, but just in case, for the rest of us, the geo sales. Anyway, yeah, I got it. Just on the on and then the PBND will just follow along with that 4,753?

Wes Carson, Vice President, Mining Operations, Wheaton Precious Metals: Yeah, exactly. Yeah.

Randy Smallwood, President and Chief Executive Officer, Wheaton Precious Metals: I mean, we blessed with the fact that a lot of the new mines that are starting up are producing dore. And so, you know, as that new production does come on, it won’t be as long. Now, you know, whenever a new mine starts up, you have to get systems in place and such. So there’s probably going to be a bit of initial delays in terms of converting that to sales. But yeah, there’s not a lot of growth on the concentrate side in our portfolio over the next while.

It’s mostly in the dore side.

Tanya Jakusconek, Analyst, Scotiabank: Okay, that’s good. And then if I could circle back to Copper World and just what Hudbay is looking for, a financing partner to take on some of the risks. I just want to try and understand if you would increase your exposure further to this asset, but more on a stream basis rather than because you said you’d help with support them. I just wanted to make sure it wasn’t as a joint venture partner, but more Yeah,

Randy Smallwood, President and Chief Executive Officer, Wheaton Precious Metals: it definitely wouldn’t be as a joint venture It’s not in our business model to take that level of risk. It’s one of the reasons why we, know, A, to have value for the streams that we acquire is to gain that confidence for our shareholders. And so it definitely would be as a joint venture partner. However, you know, there’s opportunities. One of the challenges is that the current stream is for 100% of the gold and the silver.

So we already are getting 100% of the precious metals from that project. But there are other ways to expand the relationship to provide support, whether it’s, you know, we’ve always said that we’re not chasing copper, but we would take it as ancillary support to help a project go forward. And so maybe that’s an option. You know, they’ve also got some pretty good gold production from other assets within their portfolio. That’s also an option in terms of us being able to access and stream.

So, you know, a, is a pretty wide diverse company. We’ve already got a good healthy stream with them at Constancia. We’ve got a less healthy stream with them at seven seventy seven, which of course isn’t operating anymore and it underperformed for us in the past. And it’s been a long and healthy relationship. And we’re looking forward to continuing to grow that relationship in a supportive role, whichever way we can.

They’ve got a good operating team, they’ve got a good management team, they’ve got a good track record in terms of bringing projects like this on. Constancia has been a huge success. And so we’re going to be there whichever way we can. Their focus right now, as they’ve stated publicly, is sourcing a potential joint venture partner to help spread it out. We’re not sure that they need to do that, but that’s something that they have to answer for themselves and come forward.

We’re going to do everything we can to help them.

Tanya Jakusconek, Analyst, Scotiabank: Okay. Thanks for the clarification. Just didn’t want to see anyone getting in as an operator. I’ve seen that movie before. Just on operating environment, sorry, the deals environment, if I can circle back, and thanks, Haytham, for some of the color.

I just wanted to come back on a couple of things in the environment that you’re seeing. Have you seen the deal size increase at all?

Randy Smallwood, President and Chief Executive Officer, Wheaton Precious Metals: Yes.

Tanya Jakusconek, Analyst, Scotiabank: Yeah, okay. So it has, it has previously.

Kaitham Hodelay, Senior Vice President, Corporate Development, Wheaton Precious Metals: There’s been, I mean, there’s still a lot of the smaller deals are still out there, Tanya, but we are seeing some of the larger deals. And you know, it’s, I’d say the range is still from, initially on the smaller deals was 1 to $3.50, there are a handful of larger deals that are 500 to a billion now, And so there’s lots of things we’ll consider. Keep in mind though, Tanya, not every opportunity out there is a Wheaton opportunity. We’re not going to do anything that sacrifices the integrity of our model. And we’re very cautious to continue to add accretive growth.

So just keep those things in mind.

Randy Smallwood, President and Chief Executive Officer, Wheaton Precious Metals: Tonya, I think it’s just worth highlighting and you can look at two very, very real examples here just recently. Artemis at Blackwater and how we’ve supported them through the startup. I think if you ask the team at Artemis, they’d be very happy with their Wheaton relationship in terms of how we’ve stepped in to sort of adjust and add a bit of value to the stream at a timely basis for them as they’re turning on the switches there. And so, think, you know, that example of being supportive through the startup process has caught a lot of people’s eyes. And then I would go to the Montage deal on Kone.

And, you know, the fact that that deal was structured where we supply the bulk of the capital in terms of getting that project up and running. And they’re going to turn the switches on on that mine and have no project debt and be producing 300,000 ounces a year to their credit. And, you know, those two transactions have really caught the eye of a lot of other developers in this space. And so we’re now starting to get a lot of larger sized opportunities where they’re saying, okay, well, let’s look at Wheaton taking a larger role in terms of we finance these projects into production on a go forward basis. And we’re always happy to invest into high margin, high quality assets.

So, you know, are out there.

Tanya Jakusconek, Analyst, Scotiabank: And what about, Randy, maybe the base metal companies, given the volatility in some of those commodities, the high gold price for them in terms of crystallizing some value on maybe some of their precious metal component to their assets. Has that increased? Have you seen more into

Randy Smallwood, President and Chief Executive Officer, Wheaton Precious Metals: there’s a lot more discussion about it. I just haven’t seen a lot of the base metal projects commit into going into construction going forward. I think they’re waiting for a bit better copper price to, you know, it’s mostly in the copper space that we’re talking, we don’t see a lot in the lead zinc space. But, you know, in the copper space, just want to see a bit stronger, you know, lots of predictions for stronger copper prices. But, you know, unfortunately with some of the deglobalization efforts around the world, it’s having an impact on demand and therefore pricing in copper.

And we just haven’t seen people making the commitments in terms of going into construction. I think they want to see a stronger market for copper before they make that decision. So the talks are ongoing, but they’re nowhere near as advanced as what we’re seeing in the precious metal space, in the gold space specifically.

Kaitham Hodelay, Senior Vice President, Corporate Development, Wheaton Precious Metals: I will add one thing, I’d say of the split of opportunities we’re looking at, approximately half would be as precious metals as a byproduct from these polymetallic acids.

Tanya Jakusconek, Analyst, Scotiabank: Okay, and you said you were up to like 20 ish or so, is that what I heard?

Kaitham Hodelay, Senior Vice President, Corporate Development, Wheaton Precious Metals: Somewhere around 15 to 17 in that range, but it changes every day.

Tanya Jakusconek, Analyst, Scotiabank: Yeah, for sure. And then I guess the last one I would have to add is just ask is on corporate transactions. How do you view that in your max?

Randy Smallwood, President and Chief Executive Officer, Wheaton Precious Metals: Yeah, I would just say that as long as we’ve got 15 to 20 assets in front of us looking at it, our preference is to go down that path. We’ve been at this business now for over twenty years and I think a good old Wheaton stream has a lot of benefits, a lot of strength in terms of how it’s structured, the security and stuff. And as soon as you start looking at corporate transactions, what you’re doing is acquiring someone else’s challenges. And what we’ve seen is a lot of people will give up weaknesses in terms of structure or how a deal is put together, to try and get their foot in the door. And that means it just doesn’t have the same strengths.

And, you know, we’ve seen lots of evidence of that lately in terms of, you know, companies that are challenged because they gave up structural weaknesses and now they’re paying the penalty for that. And so, you know, we like good old wheat streams. That doesn’t mean we don’t look at other streams. We have acquired portfolios of assets. Two years ago we bought a bunch of stuff from Orion, a bunch of assets from Orion.

They were existing streams. They were priced accordingly. If they’d had good structures, they’re probably worth a bit more, right? So, it is something that we’re pretty sensitive to. And our preference is to put our own deals in place and we still see a lot of appetite on that front.

Kaitham Hodelay, Senior Vice President, Corporate Development, Wheaton Precious Metals: Now, Tanya, I’ll just add one We do keep our finger on the pulse. So, we’re always modelling a lot of these junior companies, the ones that we think have or could create value for us down the road, but as Randy said, as long as we continue to be able to acquire assets at net asset value or less stream size, that’s the route we’ll take.

Tanya Jakusconek, Analyst, Scotiabank: Okay, great. Thank you and congrats on a good start to the year.

Kaitham Hodelay, Senior Vice President, Corporate Development, Wheaton Precious Metals: Thanks, Tanya.

Randy Smallwood, President and Chief Executive Officer, Wheaton Precious Metals: Thank you, Tanya.

Andrew, Conference Call Operator: Your next question is from Derek Ma from TD Cowen. Please go ahead.

Derek Ma, Analyst, TD Cowen: Thank you very much. Picking up on your comments on Hudbay, we’ve talked in the past about levels of royalties, which could potentially overburden any one individual asset. How do you think about royalty burden or leverage more holistically from a corporate level of your partners? And is that something that concerns you?

Randy Smallwood, President and Chief Executive Officer, Wheaton Precious Metals: Yes, go ahead.

Kaitham Hodelay, Senior Vice President, Corporate Development, Wheaton Precious Metals: Sure, in terms of, from our perspective, Daniel, sorry, Derek, we try to not take too much of the economics of any specific asset. A lot of the older contracts when some of the precious metals were much less important, they did have some higher levels of precious metal streams, but if you see everything we’ve done of late, we try to stay well under a reasonable amount such that even if commodity prices drop 20%, thirty %, forty %, we are not overburdening the assets such that it has to shut down or make some significant changes. So we’re very cautious as to what we do here in this environment.

Derek Ma, Analyst, TD Cowen: What is the reasonable amount of economics in terms of one individual asset?

Kaitham Hodelay, Senior Vice President, Corporate Development, Wheaton Precious Metals: Optimally we’d like to stay under 20, 20 five percent. Yeah,

Randy Smallwood, President and Chief Executive Officer, Wheaton Precious Metals: Derek, project is different in terms of its own operating margins, right? So that’s one of the things that we always have to stay on top of. It’s why Wes and the operations team, we keep such a close pulse to how our partners are doing, right? We really do put a focus on first and second quartile assets because that’s why it delivers healthy margins, not only for us, but I think most importantly for our operating partners. If our operating partners aren’t healthy, we’re not.

And we’re constantly the pulse of that. You know, I would say that one of the things that makes Wheaton a little bit unique in that front is that we do manage our portfolio. And you know, we don’t just buy things and stick them on the shelf and wait them There’s a life, there’s a time in mines when streams make a lot of sense as a competitive source of capital to help run that. But as the mine matures, it may get a little bit too much of a burden and we’re not scared to crystallize. We have in the past, and I guarantee we will again in the future, where we look for ways to, you know, out of mines as they get a little bit more tired, a little bit more expensive, and make sure that we focus on keeping a nice, tight, clean, profitable portfolio of assets in our company.

And I think that’s a differentiating factor between us and our peers is that, you know, we really do focus on, we’re not here to just sort of take a scattergun lottery approach of just adding assets and trying to cover the world with it. We want a nice, tight, concise, profitable group of assets that we focus on. And so, you know, we’re constantly managing our existing portfolio, not just adding to it.

Kaitham Hodelay, Senior Vice President, Corporate Development, Wheaton Precious Metals: If I’ll add one more thing Derek, I’ll say if you look at our contract structures, they are very thoughtful structures. They typically start with higher streams when they’ve got higher grades, and as the grades drop off, the streams drop off, and that’s all factored into the original valuation and it’s all based on threshold levels being met, etcetera. So we ensure that we’re not overburdening the asset throughout its existing life. It’s so important,

Randy Smallwood, President and Chief Executive Officer, Wheaton Precious Metals: our partners aren’t profitable, not profitable. So, we need to do everything we can to stay on top of that and make sure that we work that way. I really think that’s the difference of a streaming partnership versus some of the traditional space in this business.

Derek Ma, Analyst, TD Cowen: I appreciate that. And maybe that’s a good segue to my next question, which is on amendments to existing PEMPUS. You know, appreciating every situation is different, but broadly speaking, what kind of considerations are is Weaven looking for when you start these negotiations with your partners? And when does amendments make sense for Wheaton?

Kaitham Hodelay, Senior Vice President, Corporate Development, Wheaton Precious Metals: Sure, listen, we’re only looking to change contracts structurally when it makes sense, as you said. And when does that make sense? It usually makes sense towards the latter end when the mines really mature, the grades come off and depends on what commodity price cycle you’re in. So we’re not out there looking to make amendments, our partners typically come to us and say listen, this is what we’re seeing, we want to make an expansion or we want to continue to drill this project but it doesn’t make sense because the project’s taking too much of the economics. Usually we’ll come in, we’ll look at ways to actually expand our overall portfolio through other streams, other opportunities that they may have, change the areas of interest, just get, so where we give up value, we always get value.

We’re not just giving up amendments to our shareholders’ detriment.

Wes Carson, Vice President, Mining Operations, Wheaton Precious Metals: Yeah, I’d say Derek as well, that’s one of the reasons that we monitor very closely the health of all of our assets, so that we’re aware of how these streams are doing and at what point and what things are actually negotiable. As Asaph said, really it is we need to get value back for any of those amendments that we do.

Derek Ma, Analyst, TD Cowen: Great, thank you for that.

Kaitham Hodelay, Senior Vice President, Corporate Development, Wheaton Precious Metals: Thanks, Derek.

Andrew, Conference Call Operator: Your next question is from Brian MacArthur from Raymond James. Please go ahead.

Emma Murray, Vice President of Investor Relations, Wheaton Precious Metals0: Good morning and thank you for taking my question. I kinda wanna go back to what Tanya was talking about. When you talk about these $500 to $1,000,000,000 deals now, are they what I would call global deals where it’s $1,000,000,000 of streaming? Or are they more $500 of streams and, say, 300 of equity and other things? And just in general, if you can maybe comment as you do more of these full funding packages, what sort of ratio as you look for in the stream component of the deal on full value basis?

Because obviously, the streaming model is very unique and nice and tends to get a better multiple than maybe equity does if you’re buying that in a deal.

Kaitham Hodelay, Senior Vice President, Corporate Development, Wheaton Precious Metals: Sure, happy to answer the question Brian, it’s Heath Meaghan. I would say that the streams are our core business. So when we’re talking 500 to a billion in streams or royalties, that’s the primary contract, that’s not looking at revolvers or working capital facilities or equity or debt, that’s just what we’re looking at from a streaming perspective. There are opportunities obviously where we will come in and provide a big chunk of the overall funding, but we typically like to see some counterparty with some skin in the game. To answer your second question, is there a ratio?

I would say, if we’re going to put up anything that’s not a stream, at least 80 plus percent of that value has to be a stream.

Emma Murray, Vice President of Investor Relations, Wheaton Precious Metals0: Great, thanks very much, very clear.

Kaitham Hodelay, Senior Vice President, Corporate Development, Wheaton Precious Metals: Brian, and with that, thank you everyone for your time today. Q1 set a strong foundation for what we expect will be another strong year, as Wheaton’s portfolio of high quality assets, sector leading growth profile and commitment to sustainability provides our stakeholders with a solid outlook for the future. In times of economic uncertainty, gold is viewed as a reliable store of value and our Q1 results demonstrate why we believe Wheaton offers one of the best lower risk opportunities for investors seeking exposure to gold and precious metals. We look forward to speaking with you all again. Thank you.

Andrew, Conference Call Operator: Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.

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