Wheaton Precious Metals Corp. is a multinational precious metals streaming company. It produces over 26 million ounces and sells over 29 million ounces of silver mined by other companies as a by-product of their main operations. In 2016 Silver Wheaton reported attributable production totaling 30.4 million ounces of and 353,700 ounces of. The Company also reported record silver and gold sales for the year, generating net earnings of US$195 million on operating cash flows of $584 million. In Q1 2017 Silver Wheaton reported attributable production totaling 6.5 million ounces of silver and 84,900 ounces of gold, equal to 12.5 million silver equivalent ounces. The Company reported net earnings for the quarter of $61 million or $0.14 per share. On May 10, 2017, Silver Wheaton says shareholders approved a company name change to Wheaton Precious Metals, effective immediately.
History
Silver Wheaton was established in 2004. It was previously controlled by Goldcorp until December 7, 2006 when Goldcorp's sale of 18 million shares reduced its ownership to 48%. On February 14, 2008 Goldcorp divested itself completely of Silver Wheaton, selling 108 million shares for C$1.566 billion. Silverstone Resources, acquired in 2009 previously traded on the TSX Venture Exchange under the symbol SST as a Tier 1 stock.
Contracts
Although most agreements it makes are short-term contracts, at least one with the Penasquito mine in Mexico lasts the length of the mine's life. Until the third quarter of 2012 all of the gold it sold came from the Minto Mine in the Yukon, acquired in mid-2009 following the Cdn $190 million acquisition of Silverstone Resources Corp. In 3q2012 it started receiving gold from HudBay's 777 polymetallic mine in Manitoba . In 2013 it began receiving gold from 3 new mines: Sudbury, Salobo, and Constancia. Average realized price for gold produced at 777 was $1390 which is similar to Minto however, average realized cash cost is 32% higher at mine 777. In total, there are 15 agreements with 11 different companies; being able to pay a large portion of the contract price in cash initially and having already developed, extensive relationships with mining companies helps it gain access to the commodity. In 2013 the average price paid per ounce of pure silver was $4.12 up from $4.06, $3.99, $3.97 in 2012, 2011, 2010. Penasquito will give the company an average of 7 million ounces annually for 22 years. In 2013 Penasquito produced 6.216 million ounces for Silver Wheaton at a cost of $4.02 per ounce. Like over half of the world's silver producing mines, the Penasquito mine also produces lead, copper and zinc. In 2013 company production totaled 35.823 million ounces 22.0% higher than 2012, 41.2% more than 2011, +110% vs 2009. In 2013 it sold 29.963 million ounces of silver equivalent at an average price per ounce of $23.58. In 2013 the unit price paid for pure silver was up six cents to $4.12 while the realized price was down 717 cents to $23.86. In 2011 though the unit price paid per silver equivalent ounce was only five cents higher at $4.09 it sold each ounce for 67.6% more, in 2010 it was 36.6% more. Total revenue was down 17% in 2013, up 16% in 2012, up 72% in 2011.
Mines
The silver it has agreed to purchase is in Mexico, Portugal, USA, Chile, Peru, Argentina, Sweden, Greece and Canada. Silver Wheaton doesn't own or operate the mines but the contracts it has with their owners gives it full access to any silver mined there. The six mines from which the company gets most of its silver are : San Dimas, Penasquito, Barrick, Yauliyacu, Zinkgruvan, Cozamin and Minto. In addition there are six other smaller mines that contribute about 22% of the total. The San Dimas mine was sold by Goldcorp in the summer of 2010 to Mala Noche Resources Corp. for half a billion dollars complicating things for Silver Wheaton which had already made an agreement with Goldcorp for the silver. In response Silver Wheaton agreed to a new contract agreement. The Penasquito mine which began producing in September 2010 is Mexico's largest open pit mine. - The agreement it has with Barrick Gold involves the silver produced at 4 mines; Pascua Lama, Lagunas Norte, Pierina and Veladero. The deal involving the Lagunas Norte, Pierina and Veladero mines was made in September 2009, required an initial deposit of $212.2 million, gives Silver Wheaton 100% of the silver produced and ends at the conclusion of 2013. The Pascua-Lama mine contract gives Silver Wheaton access to a quarter of the silver produced there from 2013 to 2017 and could raise silver sales by 30%. - Subsidiary Silverstone Resources Corp. owns 100% of the life of mine silver produced at mines in Neves-Corvo and Aljustrel, Portugal. The Lundin Mining owned Neves-Corvo mine located near the Iberian Pyrite Belt is primarily a copper and zinc producer. - Mine 777 in Manitoba belongs to HudBay Minerals. The mine was the source of 62.8% of Silver Wheaton's gold produced in 2012. In the last quarter alone it accounted for 19,615 ounces of gold, more than Silver Wheaton's other gold mine produced over the entire year. When converted to silver equivalent using the gold to silver ratio, gold from 777 accounted for 40.5% of the increase in total production in 2012.
