Wheaton Precious Metals(WPM) - 2024 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company generated $234 million in operating cash flows for Q2 2024, leading to record cash flows of over $450 million for the first half of the year, reflecting the effectiveness of its business model in leveraging rising commodity prices [3][14] - Revenue increased by 13% to $299 million compared to Q2 2023, with 61% attributable to gold and 37% to silver [12] - Adjusted net earnings amounted to $150 million, a $7 million increase from the prior year, despite the implementation of a 15% Global Minimum Tax [14] Business Line Data and Key Metrics Changes - Overall production in Q2 2024 was 147,000 gold equivalent ounces (GEOs), a 7% increase year-over-year, driven by higher production from Salobo, Zinkgruvan, and Peñasquito [11] - Salobo produced 63,200 ounces of attributable gold, a 23% increase from Q2 2023, while Constancia produced 450,000 ounces of attributable silver (up 7%) and 6,100 ounces of attributable gold (down 18%) [6][7] - Peñasquito produced 2.3 million ounces of attributable silver, a 30% increase from Q2 2023, primarily due to higher throughput [8] Market Data and Key Metrics Changes - The company remains liquid with $540 million in cash and a $2 billion undrawn revolving credit facility, providing strong flexibility for funding commitments and potential acquisitions [4][15] - Approximately 128,000 GEOs were in production but not yet delivered (PBND), representing about 2.9 months of table production, slightly increasing from the previous four quarters [12] Company Strategy and Development Direction - The company aims to achieve an overall production of approximately 550,000 to 620,000 GEOs in 2024, with a forecasted increase in production of over 40% to over 800,000 ounces by 2028 [10][11] - The corporate development team is actively evaluating new opportunities, with a focus on development stage funding and a healthy appetite for streaming as a source of capital for the mining industry [4][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver value through a diversified portfolio of long-life, low-cost assets and strong operating cash flows [17] - The company is well-positioned to capitalize on favorable commodity price trends and has a pipeline of de-risked development projects supporting its growth profile [17] Other Important Information - The company declared a quarterly dividend of $0.155 per share, a 3% increase from the prior year [15] - The implementation of the Global Minimum Tax resulted in a recorded tax expense of $51 million for the period ending June 30, 2024 [13][14] Q&A Session Summary Question: Expectations for Salobo's grades in 2025 and 2026 - Management indicated a slight drop in grades expected over the next couple of years, but an increase in throughput is anticipated as Salobo 3 ramps up [19][21] Question: Business development opportunities and deal sizes - The company is seeing a mix of opportunities, with a focus on development stage funding and a range of $100 million to $700 million for most deals [22][24] Question: Expected gold and silver production in the second half of the year - Management expects a split of about 52% in the first half and 48% in the second half, with potential weakening in gold production due to lower grades and impacts from a fire at Salobo [27][28] Question: Timing for completing deals - The typical timeline for completing a stream deal ranges from six to eight weeks, depending on the complexity and due diligence required [39][41]