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Wheaton Reports Adjusted Profit, Record Gold Sales

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(Kitco News) - Streaming company Wheaton Precious Metals Corp. (TSX, NYSE: WPM) reported a dip in its adjusted profit for the first quarter late Wednesday but also listed record gold sales and maintained its dividend.

Adjusted net earnings came in at $56.5 million, or 13 cents per share, down 19% from $69.6 million, or 16 cents, in the same quarter of 2018.

However, revenue climbed 13% year-on-year to $225 million, helped by more gold ounces sold and the autumn introduction of palladium sales, the company said. Gold and silver prices fell, however. Further, cash costs rose for gold and silver, and the cash operating margin per ounce fell.

The company’s first-quarter gold production was 93,585 ounces, up 22% from 76,691 a year earlier, and 4,729 palladium ounces. The gold increase was the result of the start of the San Dimas stream effective May 10, 2018, and the Stillwater precious-metals stream effective July 1, as well as higher production at Sudbury, Wheaton reported.

However, silver output fell 24% to 5.6 million ounces from 7.4 million a year earlier. This was due to termination of the San Dimas silver stream effective in May 2018, as well as all deliveries from the Lagunas Norte, Veladero and Pierina mines that ceased March 31, 2018.

“Wheaton’s core assets delivered strong results in the first quarter of 2019 with gold sales exceeding 115,000 ounces—the most gold we have ever sold in a single quarter,” said Randy Smallwood, president and chief executive officer.

“In addition, we also saw one of our key growth projects move forward with Hudbay announcing the conclusion of the permitting process at Rosemont and their intent to begin early development work later this year. Hudbay indicated first production could commence as early as 2022, and we look forward to Rosemont contributing to our future growth profile.”

As of quarter end, the number of gold ounces payable to Wheaton but not yet delivered stood at 51,500, a decline of 25,600 ounces. The number of silver ounces payable but not delivered rose 0.4 million to 3.5 million.

The company announced a second-quarter cash dividend of 9 cents per share that will be payable to shareholders of record as of May 24 and distributed around June 6. Wheaton said it aims to disburse 30% of cash generated by operating activities in the previous four quarters and has set a minimum quarterly dividend of 9 cents for the remainder of 2019.

The company said its production forecast for 2019 and the average over the next five years were not changed. For 2019, Wheaton expects approximately 365,000 ounces of gold, 24.5 million ounces of silver and 22,000 ounces of palladium, resulting in gold-equivalent production of approximately 690,000 ounces.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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