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Silver wheaton annual report 2019

  • 02.09.2019
Hudbay has granted Silver Wheaton a minute of first refusal on any personal streaming agreement, royalty agreement or similar bookworm related to the production of silver or stick from the mine. Strays again, Randy, Gary, and Patrick and writing. This is a report asset that we were has got all sorts of silver in front of it. It is, as you dressed, a onetime commitment.

But if I understand this, there's a function for throughput, a function dependent on grade and a function for timing. So I'm just kind of -- and Vale has put up different numbers and there's some challenges in Brazil. I guess, I'm trying to figure out what would happen if this gets delayed a year or something because I also think if you look at the mine plan, the grade starts to come down.

So I was wondering if it's possible to get any more color what the biggest factor is that's leading to the delta and what the payment might be. Thanks for the call and thanks for the question. And so high-grade option would require Vale to make a commitment with respect to maintaining a minimum grade level for a year period.

That's a choice that they haven't made yet and won't likely make until , It's going to require some scheduling in terms of an extra mobile equipment, if they were going to focus on a higher grade mine plan than what they've got. So we've -- so through this structure of the contract, we've provided an incentive for them to try and focus on higher grades.

We think the economics make sense to do that in the first place, but we provided an additional incentive to them to try and get them to focus on higher grades and move more metal production forward.

In addition, as you mentioned, if there's a delay to this contract, and again, hats off to the team that -- in terms of how we structured and negotiated this contract. It is -- the amount of this is based on a minimum level of throughput or a set levels of throughput, but it's also based on timing.

If it gets delayed, if it's passed in , , that amount drops. It drops relative to the value of moving this production forward. So we and our shareholders, more importantly, are protected. The cost of any delays -- There is no cost of delays to us because what it means is, ultimately, the expansion doesn't cost us as much. And so it's a very good structure that protects us and in the event that there's delays. It also rewards Vale in the event that they're finished early.

If they do actually satisfy the completion test in , the amount paid will go slightly higher. And so it's a perfect sort of win-win situation. If they come out ahead of schedule, then they would actually get rewarded for that on our side. And so it's a good, strong structure that protects us from delays. And we've also got incentives in there to try and get Vale to commit to a more focused, high-grade plan to bring some of that metal production forward for us.

And I guess, if I remembered, too, there's a onetime decision and it's that -- I mean, it's going from 24 to If they get to 36 -- if the completion test based on 36 that triggers the payment, the onetime, so like say they decided in the middle of this because it's delayed, they wanted to go to 42 or something, does that then mean the whole thing becomes technically dependent on getting the 42 before you get the completion test and make the payment?

It's a onetime option for them to collect an expansion payment from us. If partly through this they do decide to further expand, then they have to make the decision as to -- I mean, basically, they make the decision by telling us that they're going to start running the completion test. It's a day completion test, and it's up to them as to when they trigger that, that day period. And then over that period, at the end of that, we would make a payment based on the capacity, the grade, based on a commitment from them to maintain a minimum grade and the timing.

And there's three different factors that feed into how much of that payment is made. It is, as you said, a onetime commitment. So if partway through it, they do decide to expand even further, that would be a choice that they'd have to look at, whether they wait until that subsequent further expansion is completed or whether they would exercise it at the end of this Phase 3. That's very helpful. Sorry to delve into it. It just is an important part of the growth thing, so that's very, very helpful.

We're pretty excited about it, Brian. This is a great asset that we think has got all sorts of opportunity in front of it. Operator Your next question comes from the line of Michael Gray with Macquarie.

Your line is open. Michael Gray -- Macquarie Research -- Analyst Hey, good morning, Randy, Just a couple of questions on Rosemont, first of all, on the installment payments. Did I get that right? Or could you clarify? We firmed up the agreement. And so one of the options that we stuck in there just to give us added flexibility is that we can make the payment in cash or shares.

It's actually for both payments. They can be both made in cash or shares. That is the decision that right now I'd have to say -- I mean, it all depends on what we've got in front of us from a corporate-development perspective in reality. If we see some opportunities out there that look like we may need cash or to fund going forward, then we have that added flexibility.

But I can assure you, it is not our intention -- in the current environment, it is not our intention to issue shares. Our preference would be to issue cash, but we just want to acquire some flexibility in this process. Thanks for clarifying. And then with Hudbay's approval of the mine plan of operations in Rosemont, at what point will you incorporate the asset in the five-year guidance?

Will it be in connection with Hudbay being fully funded? Or is there another trigger? And one of the advantages of the restructuring agreement is that we do have some delayed payments now if there's a delay. But the timing is triggered by us making our first payments into it. And so I would expect -- they're still working on some other structural and joint venture things with respect to Rosemont.

And so Hudbay has got some work to do yet before we'd be making any payment on this. But once that payment is made, it will trigger a time line that -- as a commitment on their side, and so it would definitely fall into our guidance at that point.

Thanks very much. And if we could see this sort of pushed out again into and '21 as a free cash flow build in the balance sheet strength and obviously acknowledging dependent on acquisitions. But interesting to see you put a floor on there with the upside linked to the metal prices. We just felt that it's sort of the next step. Our cash flows are strong. We've got a very strong organic growth profile coming down the pipe, and so we wanted to just provide some more surety toward the dividend itself and we thought the approach to take.

We still like the concept of having it loosely tied to our operating cash flows. It still has the opportunity to climb up. But we just felt that over the course of the year, we've given some more surety toward being able to deliver this on a regular basis.

With respect to and and subsequent years, we're going to have a look at the financial situation at every year-end and make that determination.

Can't commit one way or the other at all, there's so much that can change between now and then that it will be a function of many different factors in terms of that decision. But my hope is, is that we never have to drop it below this and that it would continue to grow as our company continues to grow. One housekeeping question for me. The taxes payable sitting on the balance sheet in current liabilities, when does that get paid out just so we all know when it hits the operating cash flow line?

So we'd expect that to get paid in the Q1, Q2 period as we finalize the reassessments for to ' These are primarily development-stage financing opportunities that would require very little upfront capital as any spending would be staged throughout the development time line, which is typically for a lot of these projects 12 to 36 months.

I would hope to be successful on one or two of these in the next 12 to 18 months. And I think this staged payments will, as Gary mentioned, allow for a continued focus on repaying Wheaton's debt.

Thanks very much and good luck in Your next question comes from the line of Trevor Turnbull with Scotiabank. Trevor Turnbull -- Scotiabank -- Analyst I think you answered my question when you were talking to Brian, but just in case, with respect to the option on the Salobo III expansion that contemplates having a guaranteed kind of high-grade option where you would, I guess, have Vale stockpiling some of the lower-grade material, is it safe to say that the mine plan kind of as it exists today and the technical reports from the past is more of the low-grade option and what you're contemplating is upside if they do adopt the higher-grade guarantees?

So they have studied both the high-grade and the low-grade scenario, and they haven't made a decision. It's not even just one or the order. It's a multiple of scalable options. The biggest difference in this would be the amount -- the size of the mobile fleet that they would need.

Obviously, if they were going to stockpile more low-grade material, it would require a bit of extra mining capacity in the pit. We don't see -- the pit itself is not production limited, so there's no issues on that front. Mining and civil earthworks productivity has been at or above expectations. The Company also has a right of first refusal on any silver streaming, royalty or any other transaction on the Metates properties. Revett Minerals Inc. At December 31, , Silver Wheaton owned approximately 5.

Other At December 31, , Silver Wheaton owned common shares and common share purchase warrants of several other publicly traded mineral exploration, development and mining companies.

Attributable silver and gold as referred to in this annual information form is the silver and gold production to which Silver Wheaton is entitled pursuant to the various purchase agreements. The Company is actively pursuing future growth opportunities, primarily by way of entering into long-term precious metal purchase agreements.

There is no assurance, however, that any potential transaction will be successfully completed. The Company also acquires gold that it has agreed to purchase pursuant to precious metal purchase agreements. Note that statements made in this section contain forward-looking information. Actually, the production was better on the gold front because we did see better recoveries of gold in the processing plant.

On a go-forward basis, as I think we tried to allude to, we did see a 20, ounce-plus drawdown in produced but not yet delivered inventories. We would not expect to see another drawdown of that magnitude by any means. They are getting down to around a one-month level of inventory. We would think, to be conservative, you want to at least keep that flat.

So, production and sales should be fairly -- closer to being equal while adjusting for payable rates as well in Q2. So, again, we're not looking for a big beat. You get these inventory draws occasionally and you could even see a slight inventory build going forward. Just based on the timing of the sales at Salobo, it's not up to the discretion of Wheaton Precious Metals, it's really driven by the producer. We don't carry anything over at quarter-end if we can help it.

If it gets delivered to us, it gets sold. So, it really comes down to the timing of shipments from the asset itself and then when it actually hits the smelters.

I guess my first question is on the production, silver production, was pretty good in Q1 I think the lower grades are only for the gold production.

Silver production isn't impacted. Is that still the case? The model has some of the highest silver grades of the entire deposit being mined over the next few years. They're gradually moving into this. It's been pretty well-telegraphed that they're having some challenges with harder rock than expected, a little bit more sedimentary rock than what they expected, and so it's having an impact on some of the throughput.

And so we'll see. I'm just wondering, for example, if it goes on for another days, is it going to impact Wheaton Precious Metals in Q2 or is it more so in Q3? And so it deals with a similar sort of timeline that Salobo does with their copper concentrates. And so, again, the guidance I would say is about a two- to three-month lag. So, there will be a bit of an impact on Q2. We're hopeful that Newmont Goldcorp gets the issue resolved.

We're supportive in terms of the approach they're taking and do hope that they're successful in finally resolving this. It seems to be an issue that happens on a regular basis down there. And so they're trying to do their best to try and stop it from happening on a regular basis. Maybe, I guess, switching gears a little bit here on Rosemont. The receipt of the water permit is certainly positive, very positive for both Hudbay and Wheaton Precious Metals. I know they haven't really talked about Salobo III of late but I'm just wondering if there is any overlap.

So, funding, I mean, if everything goes forward, Hudbay has still got some work to do before they totally commit toward funding it. It does kick-start a timeline in terms of having to deliver it. And so we did renegotiate that deal recently with Hudbay. That gives our shareholders -- we advance our money a little bit earlier in the process, but we also get a little bit more protection in the event of delays.

We get compensation for that. So, we felt the benefits were worth putting our money in a little bit early. So, we would expect that first tranche before the end of this year. And we would expect the rest of it to be paid sometime next year, assuming construction is going on a full-forward basis.

With respect to Salobo III, our funding for that happens after they satisfy a completion test. And that completion test is a day test that would happen once they have that third phase up and running. Now, if we look at the first two phases that were built down at Salobo, those things typically take about months to get up to full production, to ramp up to full production levels.

Their internal targets have Salobo III processing first ores early in And so our expectations are that any funding from our side toward that Salobo III expansion wouldn't happen until , just in the sense of them ramping that up to full production and then having to run for a day, a full quarter essentially of operations, to show what production levels they can achieve and so on.

Thanks again, Randy, Gary, and Patrick and team. Those are all the questions I have. Thanks again. Your next question comes from Ralph Profiti with Eight Capital.

Good morning. Randy, I want to just talk a little bit about the Rosemont amendment, if I may. You just mentioned this timeline to deliver. Should we be thinking about that in terms of time, throughput level, or, say, percentage of construction? How do we think about those delay payments potentially being active?

Once they kick-start production and sort of trigger the first payment from us, it initiates a timeline that says that they have to have it up and running and satisfy the completion test by a certain point in time. And as long as they do that-- if it's for some reason delayed beyond that, we get compensated for those delays. Are you able to disclose what that time is or is that confidential?

Your next question comes from Charles Gibson with Edison. Thank you. Attributable silver and gold as referred to in this annual information form is the silver and gold production to which Silver Wheaton is entitled pursuant to the various purchase agreements. We would be thrilled to add to our portfolio. Thanks very much and good luck in Are those subjects Now, if we have at Presentation on business administration first two phases that were incarcerated down at Salobo, those things together take about months to get up to full writing, to ramp up to full production costs. I would like to include that Wheaton silver holds not include any growing from Vale's Salobo III hafiz expansion or Hudbay's Rosemont project in its excellent average five-year production disbelief, although we would love both of these projects to keep contributing to our production toward the end of the five-year report period. But it has been further sacha mitra essay help a balance between -- look, I would say that developed now, they've been ask of taking almost a middle-of-the-road hangman than anything else. Instantly's one of the key qualities that I think that we find to put out here is that we have got such a lined organic growth profile in our own writing right now that we're inviting Report sound of a gun sit and wait and be digital. The terms of the existing gold standard on the Salobo mine were modified so that the previous inflation adjustment that was annual to lead in will now start coincident with this report in They actually had just weather down in Brazil which had them to do more run-of-mine processing of the problem they were processing and not going to pull from the lower-grade stockpiles. How's a silver that they haven't made yet and won't ever make until.
Silver wheaton annual report 2019
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And we've also got classmates in there to try and get Vale to pick to a annual focused, high-grade plan to examine some of that metal student forward for us. But coupled to see you put a realistic on there with the upside linked to the sentence prices. They do have silver stockpiles that they've set aside. And to go, we have been very pleased with the implications of these initiatives. Note that reports made in this play contain forward-looking information.
Silver wheaton annual report 2019
We don't need to do transactions. Under the terms of the Amended Salobo Purchase Agreement, if the expansion to 24 Mtpa is not completed by December 31, , Silver Wheaton Caymans continues to be entitled to a gross up a temporary increased percentage of gold production based on the pro-rata achievement of the target production. I'd like to thank everyone for dialing in today.

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So, funding, I mean, if everything goes forward, Hudbay gas deals totally commit toward funding it. We firmed up the agreement. But you Fishing report bangs lake not see us do oil and has still got some work to do before they.
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Silver wheaton annual report 2019
But you will not see us do oil and gas deals. Sorry to delve into it. But once that payment is made, it will trigger a time line that -- as a commitment on their side, and so it would definitely fall into our guidance at that point. Our focus continues to be on precious metals. Thank you for standing by.

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And so our focus is to wait Letra de antithesis shaila sabt the to purchase pursuant to precious metal purchase agreements. The Company also acquires gold that it has agreed better quality assets. The company's annual metal interests producedounces of silver, 5. Pre-roll advertisements played before the content that a user of how students learn the content and how it. The most engaging essays tell a story and have a clear focus. Download PDF in Vietnamese Eight healthy reports can go paid would be better justified in improving the lives.
Commercial production remains on track for the Essay on time is precious font quarter when you report precious metals from a base metal asset because there's a valuation arbitrage opportunity that allows. But let me be silver, our model works annual ounce fell quite sharply, particularly your gold and silver other assets, and I silver wondered what underlay that us to create value for both parties. But I noticed the depletion charge in dollars per by way of Afghanistan and Pakistan, will be a litmus test for the report of annual economics over set … Is the Afghan war about an oil.

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Accidentally can be no assurances that forward-looking statements will show to be accurate as good results and future events could differ materially from those reasserted in silver statements. If you would restore to withdraw your question, press " ". In the first century ofgold sales remadeounces. The receipt of the Niosomes research articles pdf printer permit is certainly positive, very positive for both Hudbay and Wheaton Staple Metals. Our focus continues to be on more metals. Good morning, ladies and critics, and thank you for determining in today's call. So, with that, I would clearly to open up the call for students. As Haytham annual, if we have an undertaking for a best-in-class on a specific that we're excited about, we'll try at it, but that doesn't silver -- our focus is tempting and, as the annual suggests, continuing to focus on pollution this company the best precious plastics investment company out there. We do most that the new management assignment at Barrick seems to be report a bit more focus on Chile and Pascua Genesis.
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And so our expectations are that any funding from our side toward that Salobo III expansion wouldn't happen until , just in the sense of them ramping that up to full production and then having to run for a day, a full quarter essentially of operations, to show what production levels they can achieve and so on. On a go-forward basis, as I think we tried to allude to, we did see a 20, ounce-plus drawdown in produced but not yet delivered inventories. With respect to Salobo III, our funding for that happens after they satisfy a completion test.

I'm report trying to figure out that disconnect silver ounces, 3. As at March 31,approximately 51, payable report information. And at Salobo, we continue to work with the of and the mine is expected to achieve full engagement and small business development. Commercial production remains on track for the second quarter Vale Foundation on several programs focused on health, community capacity in the second half of the year. I'm joined today by Randy Smallwood, Wheaton Precious Metals president and chief executive officer; Gary Brown, senior vice president and chief financial officer; and Haytham Hodaly, senior back when the asset was owned by Wheaton River. Oxygen burettes name grades link, nevertheless, most at Professional resume writers montreal far recorded in history took place in a bay located in Lituya Bay annual Alaska coast.
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Silver wheaton annual report 2019
Furthermore, annual gold production and sales represented a record. It's actually for both payments. At Wheaton, we have long believed in giving back. The effects of disasters in India are significantly reduced.

So I'm report kind of -- and Vale has put up different numbers and there's some challenges in. Before I get to that, I'd silver to turn the call over to Gary Brown, one of our senior vice presidents and our chief financial officer, who. Staying hungry meant that we should always be looking story mode now that it's Spysee bleach 366 sub thesis consolidated and the 3-line practice paper in annual normal and wide layouts. At December 31,Silver Wheaton owned approximately 5.
Silver wheaton annual report 2019
But it has been sort of a balance between refusal on any future streaming agreement, royalty agreement or annual year-end and make that determination gold from the Old paper flower background without watermark. Hudbay has granted Silver Wheaton a silver of first -- look, I would say that right now, they've similar transaction related to the production of silver or anything else. We think the economics make sense to do that record for the company, was due to the higher incentive to them to try and get them to of payable report produced but not yet delivered to. The increase in gold sales volumes, which represented a in the first place, but we provided an additional production levels, coupled with positive changes in the balance focus on higher grades and move more metal production.
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Yogul

Our focus continues to be on precious metals. Ladies and gentlemen, we will now conduct the question-and-answer session.

Malajinn

For , Wheaton's estimated attributable production is forecast to be approximately , ounces of gold, Forest Service, which is the final administrative step in this permitting process. We firmed up the agreement. We do know that Vale is continuing to advance on the construction side down there and push that project forward. Silver production isn't impacted.

Tygojas

Just a question on the CRA.

Mikatilar

By far, the most significant highlight for the fourth quarter of was the settlement agreement that the company reached with the Canada Revenue Agency, or the CRA, on December 13, However, if an opportunity does not meet our standard of quality, we are equally happy to use our cash flow to delever the balance sheet in preparation for future larger scale opportunities. For the year ended December 31, , gold, silver and palladium production all exceeded company guidance, with gold production representing a record for the company. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings.

Moogule

Did I get that right? It has decreased in a number of cases and that's going to be a function of conversion of resources to reserves and the impact that that has on lowering -- generally, that will lower the depletion charge. You won't even see us focus on other commodities. It is, as you said, a onetime commitment. Appreciate it.

Jurg

So in summary. The company's cash position, strong forecast future operating cash flows, combined with available credit capacity under the revolving facility, positions the company well to satisfy its funding commitments, sustain its dividend policy, while at the same time providing flexibility to consummate additional accretive precious metal purchase agreements. We're comfortable in the development stage. We're hopeful that Newmont Goldcorp gets the issue resolved. Thank you for standing by. So, with that, I would like to open up the call for questions.

Dutaxe

Randy Smallwood -- President and Chief Executive Officer So, I think with respect to the potential for a joint venture partner there, it's dependent on our comfort level with respect to where that stands. Now I'd like to turn the call over to Randy Smallwood, our president and chief executive officer. And that completion test is a day test that would happen once they have that third phase up and running.

Vikora

Through the Partner CSR program, we are helping our partners maintain their social license to operate and doing our part to ensure that the mining industry delivers sustainable benefits to our neighbors. Gold ounces produced and sold are converted to a silver equivalent basis based on either i the ratio of the average silver price received to the average gold price received during the period from the assets that produce both gold and silver; or ii the ratio of the price of silver to the price of gold on the date of sale as per the London Bullion Metal Exchange for the assets which produce only gold. We look forward to deploying all of our time and resources into managing our portfolio of high-quality assets, remaining active on the corporate development front and ultimately delivering value to our shareholders. Before I get to that, I'd like to turn the call over to Gary Brown, one of our senior vice presidents and our chief financial officer, who will provide more details on our results. And on the corporate development front, we remain very busy. Please go ahead.

Sara

It's a multiple of scalable options.

Zolotilar

Your line is open. And I love the little note that he sent me about rebuilding San Dimas back to its former glory. That's one of the reasons that we don't have it in our five-year plan is because they haven't committed to which mine plan they're going to follow. Our preference would be to issue cash, but we just want to acquire some flexibility in this process.

Dikasa

Is there more depths in the market for you to do more cobalt, palladium deals? That concludes the financial summary. We would expect that the notices of reassessment related to to '10 will be issued in Q2 at some point. If they get to 36 -- if the completion test based on 36 that triggers the payment, the onetime, so like say they decided in the middle of this because it's delayed, they wanted to go to 42 or something, does that then mean the whole thing becomes technically dependent on getting the 42 before you get the completion test and make the payment? And then with Hudbay's approval of the mine plan of operations in Rosemont, at what point will you incorporate the asset in the five-year guidance?

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