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Wheaton Precious Metals Reports Smaller 3Q Adjusted Profit

Kitco News

Streaming company Wheaton Precious Metals Corp. (TSX, NYSE: WPM) late Wednesday reported a smaller third-quarter adjusted profit as revenue fell on lower sales volume and lower gold and silver prices.

Adjusted net earnings were $35 million, or 8 cents per share, compared with $67 million, or 15 cents, in the same quarter of 2017.

Revenue fell to $186 million from $203 million in the year-ago period. The company attributed this to a 13% decrease in the number of silver ounces sold, 12% drop in the average realized silver price to $14.80 an ounce, and a 6% decrease in the gold price to $1,210 an ounce.

During the third quarter, attributable production was 5.7 million ounces of silver, a 24.9% year-on-year decrease. The company blamed the decline mainly on termination of the old San Dimas silver purchase agreement and the start of a new one effective back in May, the expiry of streaming agreements related to the Lagunas Norte, Veladero and Pierina mines on March 31, and reduced production at Peñasquito due to lower throughput and planned lower grades from stockpiles during the commissioning of the now fully constructed Peñasquito pyrite leach project.

Quarterly gold production rose 6.7% year-on-year to 101,552 ounces, and the company recorded its first palladium production of 8,817 ounces.

“Our robust precious-metals business continued to grow in the third quarter with the first production of gold and palladium from our latest stream, Stillwater, exceeding our expectations,” said Randy Smallwood, president and chief executive officer. “With the addition of Stillwater, Wheaton had record gold production and sales volume in the first nine months of 2018 resulting in operating cash flow of almost $370 million.”

“In addition, we believe we are currently well positioned to exceed our production guidance for 2018.”

Wheaton estimates its production in 2018 at approximately 355,000 ounces of gold, 22.5 million ounces of silver and 10,400 ounces of palladium.

The quarterly dividend remains at 9 cents and will be paid to holders of common shares as of the close of business on Nov. 30, with the payment to be distributed around Dec. 13.

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