Wheaton Precious Metals Reports Higher 2Q Adjusted Profit
(Kitco News) - Streaming company Wheaton Precious Metals Corp. (TSX, NYSE: WPM) late Tuesday reported a rise in its second-quarter adjusted profit as revenues got a boost from higher gold sales and prices.
Adjusted net earnings were $73 million, or 16 cents per share, up from $67 million, or 15 cents, in the same period of 2017.
Net earnings were $318 million, up from $67 million. The April-June net profit included a $246 million gain on the disposal of the San Dimas silver stream.
In May, First Majestic Silver Corp. closed the acquisition of Primero Mining Corp. In conjunction, Wheaton terminated the San Dimas silver purchase agreement and entered into a new San Dimas precious-metal purchase agreement with First Majestic, resulting in a gain on disposal of $246 million, the company explained.
Second-quarter revenue rose to $212 million from $200 million a year ago. This occurred on sales volume of 6 million silver ounces and 87,140 gold ounces. The number of gold ounces rose 21% year-on-year, while the average price increased to $1,305 from $1,263. This more than offset a 6% decline in silver ounces sold and a drop in the average realized silver price to $16.52 from $17.09.
Second-quarter production of 6.1 million ounces of silver was down 15% year-on-year, while output of 85,292 gold ounces was up 7%. As of June 30, payable ounces attributable to the company but not yet delivered amounted to some 4.3 million silver ounces and 75,600 payable gold ounces, Wheaton said. This was a decrease of 0.6 million payable silver ounces and 6,400 gold ounces.
Silver Wheaton maintained a quarterly dividend of 9 cents per share.
The company reconfirmed its estimated 2018 production forecast of approximately 355,000 ounces of gold, 22.5 million ounces of silver and 10,400 ounces of palladium.
During the second quarter, Wheaton completed the acquisition of a cobalt stream on Vale’s Voisey’s Bay mine. The company also later closed a gold and palladium stream on SibanyeStillwater’s Stillwater and East Boulder mines.
“We expect Stillwater to contribute production and cash flow starting in the third quarter of 2018 and Voisey’s Bay starting in 2021,” said Randy Smallwood, president and chief executive officer. “These additions ideally fit within our existing portfolio as they are both high-margin and long-life mines with significant exploration potential.”