ANNUAL REPORT
Wheaton is the world’s premier precious metals
streaming company with the highest-quality portfolio
of long-life, low-cost assets. Its business model offers
investors commodity price leverage and exploration
upside but with a much lower risk profile than a traditional
mining company. Wheaton delivers amongst the highest
cash operating margins in the mining industry, allowing
it to pay a competitive dividend and continue to grow
through accretive acquisitions. As a result, Wheaton has
consistently outperformed gold and silver, as well as
other mining investments. Wheaton creates sustainable
value through streaming.
RANDY SMALLWOOD,
President & CEO
LETTER FROM
THE PRESIDENT & CEO
Dear Shareholders,
To say 2020 was an unprecedented year in modern
history feels like an understatement; however, it has also
been a time to focus on what is most important and
re-emerge stronger than before. At Wheaton, that is
exactly what we did. Holding true to our mandate, we
found ways to help all of our stakeholders despite the
challenges, especially those most in need. Early in the
onset of the pandemic, Wheaton more than doubled
its budget for charitable giving with the launch of a
COVID-19 relief fund, primarily focused on supporting
the front-line workers in the communities around the
mines from which we receive metal. We worked closely
with our mining partners to ensure that they were able
to maintain operations while protecting the health and
safety of their workforces. Our corporate development
team found creative ways to complete due diligence and
to add accretive new streams to our portfolio. Even with
this growth, Wheaton was able to raise its dividend by
over 30% during 2020 as well as reduce net debt1 to nearly
zero by the end of the year. As a result of these efforts and
favourable commodity prices, we were able to deliver
value to our shareholders with our share price increasing
by over 40% in 2020.
Wheaton was able to raise its
dividend by over 30% as well as
reduce net debt1 to nearly zero.
At Wheaton, the welfare of our employees, our mining
partners and the communities surrounding our underlying
assets has always been a top priority. I was pleased to see
our mining partners respond quickly with the adoption of
new protocols and measures to reduce risk, and ensure
safe operations and minimal impact to production.
1. Please refer to non-IFRS measures on page 46 of the financial statements.
WHEATON PRECIOUS METALS | 2020 ANNUAL REPORT
I
Gold’s attraction as a safe
haven in times of uncertainty
saw the metal reach new
all-time highs.
RESULTS & OPERATIONS
The benefits and value of having a high-quality,
geographically diversified portfolio of low-cost assets
were especially apparent in 2020. Despite the numerous
challenges posed by the pandemic, our portfolio
demonstrated its resiliency with production coming in
at the higher end of our adjusted guidance range with
over 670 thousand gold equivalent ounces produced.
During 2020, Wheaton produced 367 thousand ounces
of gold, 22.9 million ounces of silver and 22 thousand ounces
of palladium.
Record revenue of over
$1 billion, $765 million in cash
flow generation and record
dividend distribution of
approximately $190 million.
diligence, which allowed us to continue to review
potential new acquisitions with the same rigor as our
usual process. We were excited to add two high-quality
assets to our portfolio, a gold and silver stream on
the Marmato mine located in Colombia and a silver
stream on the Cozamin mine in Mexico, which we are
welcoming back to our asset base after our previous
stream ended in 2017. Both projects demonstrate strong
upside potential and will provide our shareholders with
further opportunity for organic growth.
At Wheaton, we take a strategic and disciplined
approach to utilizing operating cash flow and will only
look to deploy capital for acquisitions that are accretive
to our shareholders. Ninety percent of Wheaton’s
production comes from assets that fall in the lowest
half of the cost curve. Looking ahead, we will continue
to focus on acquiring precious metals streams that
complement this high-quality portfolio.
ORGANIC GROWTH
Wheaton’s current portfolio of assets includes 24 operating
mines and seven development stage projects. These assets
have over 30 years of mine life based on current reserves
and a healthy resource base with significant potential for
organic growth. Our portfolio is unparalleled in the industry
and offers our shareholders exposure to some of the best
mines in the world.
Unsurprisingly, gold’s attraction as a safe haven in
times of uncertainty saw the metal reach new all-time
highs at the peak of the outbreak in 2020. Silver soon
followed with gains of its own and has gone on to
reach its highest levels since the most recent significant
price rally almost a decade ago. Wheaton’s leverage
to these increasing commodity prices coupled with
our solid production base resulted in record revenue of
over $1 billion, $765 million in cash flow generation and
record dividend distribution of approximately $190 million
to shareholders.
CORPORATE DEVELOPMENT
Despite travel restrictions, our corporate development
team was busier than ever in 2020, closing two
streaming agreements and reviewing hundreds of
other opportunities. We quickly adapted to the new
environment and developed virtual methods for due
These assets have over 30 years
of mine life based on reserves
and a healthy resource base
with significant potential for
organic growth.
We look forward to continued steady organic growth
from our existing asset base over the next five years
and, given the strong tenure of our reserve and resource
base, we have introduced ten-year production guidance
for the first time in addition to our typical one-year and
five-year forecasts. Average production is expected to
increase primarily due to continued production growth
from Salobo, Constancia, Peñasquito and Stillwater as
well as incremental ounces from the Marmato, Cozamin
and Voisey’s Bay streams.
II
WHEATON PRECIOUS METALS | 2020 ANNUAL REPORT
ESG & SUSTAINABILITY
LOOKING AHEAD
The importance of delivering shareholder value while
minimizing our impacts and supporting our local
communities was never more evident than in 2020.
To support our mining partners and local communities,
we launched the $5 million COVID-19 relief fund to help
address and alleviate the impacts of the pandemic, which
more than doubled our existing community investment
budget. At the end of 2020, over $3 million had been
deployed in support of initiatives with our mining partners
and frontline organizations including food banks, shelters
and hospitals.
Wheaton has always been a sustainability leader in
the precious metals streaming space, undertaking a
broad range of initiatives such as the COVID-19 relief
fund and significantly increasing disclosure around ESG
risk management through the release of our inaugural
Sustainability Report. By addressing and minimizing
exposure to ESG-related risks and issues, Wheaton has
strengthened our foundation for long-term sustainability.
We were honoured to be recognized by several ESG
rating providers for our performance in this area with
sector leading scores.
Leadership and teams are truly tested during times of
adversity. I am incredibly proud of the Wheaton team and
their ability to stay on course during such a difficult time in
world history. We have emerged stronger than ever, with
a solid, sustainable foundation and a very promising future.
With our success against a backdrop of global uncertainty,
I consider it our privilege and our responsibility, as corporate
citizens to continue to provide charitable support where it is
needed the most. It is the right thing to do.
As the world recovers from the impacts of the pandemic,
widespread fiat currency devaluation and inflationary
pressures are likely to present a favorable environment for
precious metals, and therefore for our company. With our
value-creating business model, commitment to operating
responsibly and focus on high-quality assets, we will
continue to provide investors with what we consider to be
the best vehicle for investing into precious metals.
To all of our stakeholders; our shareholders, partners,
board of directors, employees and communities:
we are dedicated to delivering sustainable value through
streaming to all of you, and we thank you once again for
your continued trust and confidence. We look forward to
updating you on our progress throughout the year.
We were honoured to be
recognized by several ESG
rating providers for our
performance in this area with
sector leading scores.
RANDY SMALLWOOD,
President & CEO
March 11, 2021
LONDON STOCK EXCHANGE
In October 2020, our entire issued share capital was
admitted to trading on the London Stock Exchange’s
Main Market for listed securities. By listing on the London
Stock Exchange, we intend to broaden our investment
base to those looking for exposure to precious metals
and provide another point of entry for new internationally
based shareholders to invest in Wheaton. The listing will
enhance the Company’s availability to investors around
the world while increasing our profile as the company
continues to grow globally.
WHEATON PRECIOUS METALS | 2020 ANNUAL REPORT III
FINANCIALS
MANAGEMENT’S DISCUSSION AND ANALYSIS
FINANCIAL STATEMENTS
2
65
Management’s Discussion and Analysis of Results of Operations and Financial Condition for the Year Ended
December 31, 2020
This Management’s Discussion and Analysis (“MD&A”) should be read in conjunction with Wheaton Precious Metals
Corp.’s (“Wheaton” or the “Company”) consolidated financial statements for the year ended December 31, 2020 and
related notes thereto which have been prepared in accordance with International Financial Reporting Standards
(“IFRS”) as issued by the International Accounting Standards Board (“IASB”). Reference to Wheaton or the Company
includes the Company’s wholly-owned subsidiaries. This MD&A contains “forward-looking” statements that are subject
to risk factors set out in the cautionary note contained on page 56 of this MD&A as well as throughout this document.
All figures are presented in United States dollars unless otherwise noted. This MD&A has been prepared as of March
11, 2021.
Table of Contents
Overview .......................................................................................................................................................................... 3
COVID-19 Update ............................................................................................................................................................ 3
Operational Overview ...................................................................................................................................................... 4
Highlights ......................................................................................................................................................................... 5
Outlook ............................................................................................................................................................................ 6
Mineral Stream Interests .................................................................................................................................................. 7
Mineral Royalty Interest ................................................................................................................................................... 9
Long-Term Equity Investments ...................................................................................................................................... 10
Convertible Notes Receivable ........................................................................................................................................ 12
Summarized Financial Results ...................................................................................................................................... 14
Summary of Ounces Produced ...................................................................................................................................... 15
Summary of Ounces Sold .............................................................................................................................................. 16
Quarterly Financial Review ........................................................................................................................................... 17
Results of Operations and Operational Review ............................................................................................................. 18
Liquidity and Capital Resources .................................................................................................................................... 27
Share Capital ................................................................................................................................................................. 33
Financial Instruments ..................................................................................................................................................... 33
Risks and Uncertainties ................................................................................................................................................. 34
Critical Accounting Estimates ........................................................................................................................................ 43
New Accounting Standards Effective in 2020 ................................................................................................................ 45
Non-IFRS Measures ...................................................................................................................................................... 46
Subsequent Events ........................................................................................................................................................ 49
Controls and Procedures ............................................................................................................................................... 49
Attributable Reserves and Resources ............................................................................................................................ 50
Cautionary Note Regarding Forward-Looking Statements ............................................................................................. 56
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [2]
Overview
Wheaton Precious Metals Corp. is a precious metal streaming company which generates its revenue primarily from the
sale of precious metals (gold, silver and palladium). The Company is listed on the New York Stock Exchange (“NYSE”)
and the Toronto Stock Exchange (“TSX”) and trades under the symbol WPM. Additionally, on October 28, 2020, the
Company’s common shares commenced trading on the Main Market of the London Stock Exchange (“LSE”) under the
symbol WPM.
As of December 31, 2020, the Company has entered into 25 long-term purchase agreements (three of which are early
deposit agreements), with 19 different mining companies, for the purchase of precious metals and cobalt (“precious
metal purchase agreements” or "PMPA") relating to 24 mining assets which are currently operating, 7 which are at
various stages of development and 1 which has been placed in care and maintenance, located in 12 countries.
Pursuant to the PMPAs, Wheaton acquires metal production from the counterparties for an initial upfront payment plus
an additional cash payment for each ounce or pound delivered which is fixed by contract, generally at or below the
prevailing market price. Attributable metal production as referred to in this MD&A and financial statements is the metal
production to which Wheaton is entitled pursuant to the various PMPAs. During the year ended December 31, 2020,
the per ounce price paid by the Company for the metals acquired under the agreements averaged $5.28 for silver,
$426 for gold and $389 for palladium. The primary drivers of the Company’s financial results are the volume of metal
production at the various mining assets to which the PMPAs relate and the price realized by Wheaton upon the sale of
the metals received.
COVID-19 Update
Business Continuity and Employee Health and Safety
In accordance with local government restrictions and guidelines, Wheaton temporarily closed its physical offices in mid-
March 2020 and successfully transitioned to telecommuting for all of its employees. During the third quarter of 2020, the
physical offices were re-opened on a voluntary basis. As Wheaton has always maintained detailed business continuity
plans, the transition to working remotely was seamless with an uninterrupted flow of business.
Partner Operations
Wheaton has completed a thorough review of operations with our counterparties to better understand their policies and
procedures around COVID-19. We have been advised that each operation has a crisis management team in place and
will make decisions according to their local situation and applicable laws, as well as considering the health and safety
of their employees. During the second quarter of 2020, six partner operations located in Mexico and Peru on which the
Company has PMPAs were temporarily suspended due to government restrictions focused on reducing the impacts of
COVID-19, including the Constancia, Yauliyacu, San Dimas, Los Filos, Peñasquito and Antamina mines. The Peruvian
government issued a decree on May 3, 2020 indicating large mines would be able to reopen subject to approval of
certain protocols, while on May 13, 2020, the federal government of Mexico announced the designation of mining as
an essential activity beginning May 18, 2020. All these mining operations resumed operations during the third quarter
and remained in operation for the balance of the year. Additionally, operations at the Voisey’s Bay mine, located in
Canada, were temporarily suspended, with underground development resuming in late May and operations reaching
full capacity in August. The Company received its first shipment of cobalt under the Voisey’s Bay PMPA in February
2021.
There can be no assurance that our partners’ operations that are currently operational will continue to remain
operational for the duration of the COVID-19 virus pandemic.
Community Support and Response Fund relative to the COVID-19 pandemic
During the second quarter of 2020, Wheaton announced the launch of a $5 million Community Support and Response
Fund (the “CSR Fund”) in order to support the global efforts to combat the COVID-19 pandemic and its impacts on our
communities. The CSR Fund is designed to meet the immediate needs of the communities in which Wheaton operates
and around the mines from which Wheaton receives precious metals. This fund is incremental to Wheaton's already
active Community Investment Program that currently provides support to over 50 programs in multiple communities
around the world.
To December 31, 2020, the Company has made donations totalling $3 million under this program.
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [3]
Operational Overview
Ounces produced
Gold
Silver
Palladium
Gold equivalent 2
Silver equivalent 2
Ounces sold
Gold
Silver
Palladium
Gold equivalent 2
Silver equivalent 2
Change in PBND 3
Gold
Silver
Palladium
Gold equivalent 2
Silver equivalent 2
Per ounce metrics
Sales price
Gold
Silver
Palladium
Gold equivalent 2
Silver equivalent 2
Cash costs 4
Gold 4
Silver 4
Palladium 4
Gold equivalent 2
Silver equivalent 2
Cash operating margin 4
Gold 4
Silver 4
Palladium 4
Gold equivalent 2
Silver equivalent 2
Total revenue
Gold revenue
Silver revenue
Palladium revenue
Net earnings
Per share
Adjusted net earnings 4
Per share 4
Operating cash flows
Per share 4
Dividends paid ⁵
Per share
Q4 2020
Q4 2019
Change
2020
2019
Change
93,137
6,509
5,672
178,801
14,900
86,243
4,576
4,591
147,277
12,273
(4,159)
1,048
981
9,728
811
107,054
5,908
6,057
186,027
15,502
89,223
4,684
5,312
152,514
12,709
367,419
(13.0)%
10.2 %
22,892
(6.4)% 22,187
671,713
(3.9)%
55,976
(3.9)%
(3.3)%
(2.3)%
369,553
19,232
(13.6)% 20,051
627,063
52,255
(3.4)%
(3.4)%
406,504
22,396
21,993
704,579
58,715
389,086
17,703
20,681
629,098
52,425
(9.6)%
2.2 %
0.9 %
(4.7)%
(4.7)%
(5.0)%
8.6 %
(3.0)%
(0.3)%
(0.3)%
13,141
345
709
18,232
1,519
(26,885)
17,300
(703)
344
(272) 725
(21,791)
8,504
(1,816)
708
(998)
25,887
1,201 857
(411) (1,136)
34,660
12,869
1,072 2,888
$
$
$
$
$
$
$
$
$
$
1,882 $
24.72 $
2,348 $
1,943 $
23.32 $
433 $
5.51 $
423 $
438 $
5.26 $
1,483
17.36
1,804
1,464
17.56
426
5.13
321
418
5.02
26.9 % $
42.4 % $
30.2 % $
32.7 % $
32.8 % $
(1.6)% $
(7.4)% $
(31.8)% $
(4.8)% $
(4.8)% $
1,767 $
20.78 $
2,183 $
1,748 $
20.98 $
426 $
5.28 $
389 $
425 $
5.10 $
1,391
16.29
1,542
1,369
16.43
421
5.02
273
411
4.93
1,057
12.23
1,483
1,046
12.54
1,449 $
$
19.21 $
$
1,925 $
$
1,505 $
$
$
18.06 $
$ 286,212 $ 223,222
$ 162,299 $ 132,342
$ 113,131 $
81,296
$ 10,782 $ 9,584
77,524
$ 157,221 $
0.173
$
74,473
$ 149,441 $
0.166
$
$ 207,962 $ 131,867
0.295
40,252
0.09
$
53,914 $
$
$
$
$
0.350
0.333
0.463
0.12
$
$
1,341 $
15.50 $
1,794 $
1,323 $
15.88 $
970
37.1 % $
57.1 % $
11.27
29.8 % $
1,269
958
43.9 % $
11.50
44.0 % $
28.2 % $ 1,096,224 $ 861,332
652,827 $ 541,045
22.6 % $
39.2 % $
399,625 $ 288,401
12.5 % $ 43,772 $ 31,886
86,138
103 % $ 507,804 $
0.193
$
503,335 $ 242,745
0.544
$
765,442 $ 501,620
1.125
$
188,486 $ 160,656
0.36
$
102.3 % $
100.7 % $
100.6 % $
57.7 % $
56.9 % $
33.9 % $
33.3 % $
1.706
1.132
1.122
0.42
27.0 %
27.6 %
41.6 %
27.7 %
27.7 %
(1.2)%
(5.2)%
(42.5)%
(3.4)%
(3.4)%
38.2 %
37.5 %
41.4 %
38.1 %
38.1 %
27.3 %
20.7 %
38.6 %
37.3 %
489.5 %
486.5 %
107.4 %
106.3 %
52.6 %
51.6 %
17.3 %
16.7 %
1) All amounts in thousands except gold and palladium ounces produced and sold, per ounce amounts and per share amounts.
2) Please refer to the tables on the bottom of pages 18, 19, 21 and 22 for further information on the methodology of converting production and sales volumes to gold-equivalent
ounces ("GEOs") and silver-equivalent ounces ("SEOs").
3) Represents the increase (decrease) in payable ounces produced but not delivered (“PBND”) relative to the various mines that the Company derives precious metal from.
Payable ounces PBND will be recognized in future sales as they are delivered to the Company under the terms of their contracts. Payable ounces PBND to Wheaton is
expected to average approximately two to three months of annualized production for both gold and palladium and two months for silver but may vary from quarter to quarter
due to a number of factors, including mine ramp-up and the timing of shipments.1
4) Refer to discussion on non-IFRS measures beginning on page 46 of this MD&A.
5) Dividends declared in the referenced calendar quarter, relative to the financial results of the prior quarter.
1 Statements made in this section contain forward-looking information with respect to forecast ounces produced but not yet delivered
and readers are cautioned that actual outcomes may vary. Please see “Cautionary Note Regarding Forward-Looking Statements”
for material risks, assumptions and important disclosure associated with this information.
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [4]
Highlights
Operations
• During the three and twelve-months ended December 31, 2020, Wheaton generated revenue of $286 million
(57% gold, 39% silver and 4% palladium) and $1,096 million (60% gold, 36% silver and 4% palladium),
respectively, with revenue for the annual period representing a record for the Company.
• During the three months ended December 31, 2020, gold equivalent payable ounces produced but not
delivered (“PBND”) relative to the various mines that the Company derives precious metal from increased by
9,700 ounces, while during the 12 month period it decreased by 21,800 ounces.
• During the three and twelve-months ended December 31, 2020, Wheaton generated operating cash flow of
$208 million and $765 million, respectively, with operating cash flow for the annual period representing a
record for the Company. This represented a 58% and 53% increase relative to the comparable periods of the
prior year.
• During the three and twelve-months ended December 31, 2020, Wheaton reduced its net debt1 by $275
million and $768 million, respectively.
• Relative to the comparable three-month period of the prior year:
o The decrease in attributable gold production was primarily due to lower throughput at Salobo coupled
with lower production at 777 resulting from the temporary suspension of operations following the skip
hoist incident in October 2020.
o The increase in attributable silver production was primarily due to higher grades at Antamina.
o The increase in adjusted net earnings was primarily due to higher margins resulting from a 33% increase
in the realized gold equivalent price.
• Relative to the comparable twelve-month period of the prior year:
o During the second quarter of 2020, operations at 6 of the 20 operating mining assets to which the
PMPAs relate were temporarily suspended as a result of the COVID-19 virus pandemic.
o The decrease in attributable gold production was primarily due to lower production at Salobo, where
production in the second quarter was adversely impacted by COVID 19, coupled with lower production at
Sudbury, Constancia and San Dimas, also impacted by COVID-19, partially offset by the resumption of
mining at Minto.
o The increase in attributable silver production is a result of higher production at Peñasquito, where 2019
production was negatively impacted by an illegal blockade, partially offset by lower production at
Constancia and Yauliyacu, with production at these mine sites being adversely impacted by COVID 19.
o The increase in adjusted net earnings was primarily due to higher margins resulting from a 28% increase
in the realized gold equivalent price.
• On March 11, 2021, the Board of Directors declared a dividend in the amount of $0.13 per common share
representing an increase of 30% relative to the comparable period in 2020.
Corporate Development
• On November 5, 2020, the Company announced that it had entered into a PMPA with Aris Gold Corporation
(“Aris Gold”, formerly Caldas Gold Corp.) for the Marmato mine located in Colombia.
• On December 11, 2020, the Company announced that it had entered into a precious metals purchase
agreement with Capstone Mining Corp. (“Capstone”) in respect of the Cozamin Mine located in Mexico.
Other
• On April 16, 2020, the Company established an at-the-market equity program that allows the Company to
issue up to $300 million worth of common shares from treasury to the public from time to time at the
Company’s discretion and subject to regulatory requirements.
• On October 28, 2020, the Company’s common shares were admitted to the Standard Segment of the Official
List of the UK Financial Conduct Authority (“FCA”) and commenced trading on the Main Market of the LSE
under the symbol WPM.
• During 2020, the company received $163 million in proceeds from the sale of long term equity investments
including First Majestic Silver Corp. ("First Majestic").
1 As explained in non-IFRS measure (v) on page 48 of this MD&A, net debt equals bank debt less cash and cash equivalents.
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [5]
Outlook1
Wheaton’s estimated attributable production in 2021 as well as the 5-year average and 10-year annual gold equivalent
production is as follows.
Metal
Gold Ounces
Silver Ounces (‘000s)
(Palladium & Cobalt)
Other Metals
(GEOs)
Gold Equivalent Ouncesi based on:
$1,800 / oz gold, $25 / oz silver, $2,300 /
oz palladium, $17.75 / lb cobalt
5-year Annual
Average
(2021-2025) 2
10-year Annual
Average
(2021-2030) 2
2021
Forecast 1
370,000 to 400,000
22,500 to 24,000
40,000 to 45,000
720,000 to 780,000
810,000
830,000
1) Ounces produced represent the quantity of silver, gold and palladium contained in concentrate or doré prior to smelting or refining deductions.
2) Five- and ten-year guidance does not include optionality production from Pascua Lama, Navidad, Cotabambas, Metatas, or additional expansions at Salobo outside of
projects currently in construction. In addition, five-year guidance also does not include any production from Rosemont, Toroparu, Kutcho, or the Victor project at Sudbury.
In 2021, gold production is forecast to increase, mainly driven by growth at Salobo, San Dimas and Constancia. Silver
production is forecast to increase as additional ounces from Cozamin and Keno Hill are expected to be partially offset
by slight decreases at Peñasquito due to expected mine sequencing. At Constancia, Hudbay Minerals Inc. (“Hudbay”)
announced that it has completed the Consulta Previa process in accordance with Peruvian law and has been granted
the final permit for the development and operation of the Pampacancha deposit, which is expected to start production
in later 2021. Palladium production is expected to remain stable in 2021 as per Sibanye-Stillwater’s prior
announcement that the Blitz project at Stillwater is expected to experience a two-year delay due to COVID-19.
Beginning January 1, 2021, Wheaton is eligible to start receiving cobalt production from Voisey’s Bay as per the
precious metals purchase agreement with Vale.
Average production over the next five years is expected to increase primarily due to continued production growth from
Salobo, Constancia, Peñasquito and Stillwater as well as incremental ounces from the Marmato, Cozamin and
Voisey’s Bay streams. At Peñasquito, steady production is expected from 2023-2025 following a stripping campaign of
the Chile Colorado pit. At Constancia, production from the Pampacancha deposit is included in Wheaton’s five year
production average beginning later in 2021. Palladium and gold production from Stillwater is expected to increase with
the continued ramp up of the Blitz project which is expected to reach full capacity in 2024. The expansion at the
Salobo mine, which will increase mill throughput capacity by 50%, is also expected to begin contributing to gold
production in 2023. And lastly, Wheaton does not include any production from Barrick Gold Corp.’s Pascua-Lama
project or Hudbay’s Rosemont project in its estimated average five-year production guidance.
From a liquidity perspective, the $193 million of cash and cash equivalents as at December 31, 2020 combined with
the liquidity provided by the available credit under the $2 billion revolving term loan (“Revolving Facility”) and ongoing
operating cash flows positions the Company well to fund all outstanding commitments and known contingencies as
well as providing flexibility to acquire additional accretive mineral stream interests.
1 Statements made in this section contain forward-looking information with respect to forecast production, funding outstanding
commitments and continuing to acquire accretive mineral stream interests and readers are cautioned that actual outcomes may
vary. Please see “Cautionary Note Regarding Forward-Looking Statements” for material risks, assumptions and important
disclosure associated with this information.
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [6]
Mineral Stream Interests1
The following table summarizes the mineral stream interests currently owned by the Company:
Per Ounce
Production
Payment 2,3
Total Upfront
Consideration
Paid to Date ³
Cash Flow
Generated to
Date ³
Ounces
Received to
Date ³
Mineral Stream
Interests
Attributable
Production
Owner ¹ Location¹
Mine
Q4-2020
PBND 3, 4
Date of
Original
Contract
Term ¹
Gold
Salobo
Sudbury ⁵
Constancia
San Dimas
Stillwater ⁸
Other
Minto
Rosemont
777 ¹⁰
Marmato ¹¹
Silver
Peñasquito
Antamina
Constancia
Other
Vale
Vale
Hudbay
FM
Sibanye
PERE
Hudbay
Hudbay
Aris
BRA
CAN
PER
MEX
USA
CAN
USA
CAN
CO
Newmont MEX
PER
Glencore
PER
Hudbay
75%
70%
50% ⁶
variable ⁷
100%
$412 $ 3,059,360 $ 1,357,225 1,411,229
$400
$408
$606
18% of spot
28-Feb-13
209,688 224,201 15,056 20 years 28-Feb-13
8-Aug-12
10-May-18
16-Jul-18
77,821
80,654 263
94,278 105,233 2,993
30,604 4,886
38,121
489,648 3,824
481,090
623,572
135,000
220,000
237,880
400,342
LOM
LOM
LOM
44,568
LOM
100% ⁹ 75% of spot
$450
100%
50%
$425
6.5% ¹¹ 18% of spot
$ 4,676,154 $ 2,258,223
2,341,569 71,590
25%
33.75% ¹² 20% of spot
$6.02
100%
$4.29 $ 485,000 $ 999,292 59,801 1,190
404,619
29,422 1,773
128,001 11,554 43
94,376 1,480
900,000
294,900
880,408
1,290,530
LOM
LOM
LOM
LOM
20-Nov-08
10-Feb-10
8-Aug-12
5-Nov-20
LOM
LOM
LOM
24-Jul-07
3-Nov-15
8-Aug-12
Los Filos
Zinkgruvan
Yauliyacu
Stratoni
Neves-Corvo
Aljustrel
Keno Hill
Minto
Pascua-Lama
Rosemont
777 ¹⁰
Navidad
Marmato ¹¹
Cozamin
Equinox MEX
SWE
Lundin
PER
Glencore
GRC
Eldorado
PRT
Lundin
PRT
Almina
CAN
Alexco
PERE
CAN
Barrick CHL/ARG
Hudbay
Hudbay
PAAS
Aris
USA
CAN
ARG
CO
Capstone MEX
$4.46
100%
$4.46
100%
100% ¹³
$8.94
$11.43
100%
100%
$4.34
100% ¹⁴ 50% of spot
variable ¹⁵
25%
$4.31
100%
$3.90
25%
$3.90
100%
$6.26
100%
12.5%
$4.00
100% ¹¹ 18% of spot
50% ¹⁷ 10% of spot
25 years 15-Oct-04
8-Dec-04
23-Mar-06
23-Apr-07
5-Jun-07
5-Jun-07
2-Oct-08
20-Nov-08
8-Sep-09
10-Feb-10
8-Aug-12
n/a ¹⁶
5-Nov-20
10-Dec-20
LOM
LOM
LOM
50 years
50 years
LOM
LOM
LOM
LOM
LOM
LOM
LOM
LOM
$ 2,560,308
$ 2,822,442 195,153 4,486
Palladium
Stillwater ⁸
Cobalt
Voisey's Bay
Total
Sibanye
USA
4.5% ¹⁸
18% of spot $ 262,120 $ 69,781
49,449 5,597
LOM
16-Jul-18
Vale
CAN
42.4% ¹⁹ 18% of spot $ 390,000 $ - -
-
LOM
11-Jun-18
$ 7,888,582 $ 5,150,446
1) Abbreviations as follows: FM = First Majestic Silver Corp; PERE = Pembridge Resources plc; PAAS = Pan American Silver Corp; BRA = Brazil; CAN = Canada; CHL =
Chile, PER = Peru; MEX = Mexico; USA = United States; SWE = Sweden; GRC = Greece; PRT = Portugal; ARG = Argentina; CO = Colombia; and LOM = Life of Mine.
2) Please refer to the section entitled “Contractual Obligations and Contingencies – Mineral Stream Interests” on page 29 of this MD&A for more information.
3) All figures in thousands except gold and palladium ounces PBND and per ounce amounts. The total upfront consideration paid to date excludes closing costs and capitalized
interest, where applicable. Please refer to the section entitled “Other Contractual Obligations and Contingencies” on page 30 of this MD&A for details of when the remaining
upfront consideration to be paid becomes due.
4) Payable gold, silver and palladium ounces PBND are based on management estimates. These figures may be updated in future periods as additional information is received.
5) Comprised of the operating Coleman, Copper Cliff, Garson, Creighton and Totten gold interests as well as the non-operating Stobie and Victor gold interests. As of
December 31, 2020, the Company has received approximately $210 million of operating cash flows relative to the Sudbury PMPA. Should the market value of gold delivered
to Wheaton through the 20 year term of the contract, net of the per ounce cash payment, be lower than the initial $670 million refundable deposit, the Company will be
entitled to a refund of the difference at the conclusion of the term.
6) As Hudbay failed to achieve a minimum level of throughput at the Pampacancha deposit during 2019, Wheaton received an additional 8,020 ounces of gold in 2020. Should
Hudbay fail to achieve a minimum level of throughput at the Pampacancha deposit during the 18 months ended June 30, 2021, Wheaton will be entitled to an additional
8,020 ounces of gold to be delivered in 4 quarterly installments beginning in the third quarter of 2021.
7) The original San Dimas SPA, entered into on October 15, 2004, was terminated on May 10, 2018 and concurrently the Company entered into the new San Dimas PMPA.
Under the terms of the San Dimas PMPA, the Company is entitled to an amount equal to 25% of the payable gold production plus an additional amount of gold equal to 25%
of the payable silver production converted to gold at a fixed gold to silver exchange ratio of 70:1 from the San Dimas mine. If the average gold to silver price ratio decreases
to less than 50:1 or increases to more than 90:1 for a period of 6 months or more, then the "70" shall be revised to "50" or "90", as the case may be, until such time as the
average gold to silver price ratio is between 50:1 to 90:1 for a period of 6 months or more in which event the "70" shall be reinstated. Effective April 1, 2020, the fixed gold to
silver exchange ratio was revised to 90:1, with the 70:1 ratio being reinstated on October 15, 2020.
8) Comprised of the Stillwater and East Boulder gold and palladium interests.
9) The Company is entitled to acquire 100% of the first 30,000 ounces of gold produced per annum and 50% thereafter.
10) As of December 31, 2020, the Company has received approximately $323 million of operating cash flows relative to the 777 PMPA. Should the market value of gold and
silver delivered to Wheaton through the initial 40 year term of the contract, net of the per ounce cash payment, be lower than the initial $455 million upfront consideration, the
Company will be entitled to a refund of the difference at the conclusion of the 40 year term.
11) Once Wheaton has received 190,000 ounces of gold and 2.15 million ounces of silver the Company’s attributable gold and silver production will be reduced to 3.25% and
50%, respectively.
12) Once Wheaton has received 140 million ounces of silver under the Antamina PMPA, the Company’s attributable silver production will be reduced to 22.5%.
13) Glencore will deliver a per annum amount to Wheaton equal to the first 1.5 million ounces of payable silver produced at Yauliyacu and 50% of any excess.
14) Wheaton only has the rights to silver contained in concentrate containing less than 15% copper at the Aljustrel mine.
15) Effective July 2020, the price paid per ounce of silver delivered under the Keno Hill PMPA has been modified to be between 10% of the spot price of silver, when the market
price of silver is at or above $23.00 per ounce, to 90% of the spot price of silver when the market price of silver is at or below $15.00 per ounce.
16) Wheaton and PAAS have not yet finalized the definitive terms of the agreement.
17) Once Wheaton has received 10 million ounces of silver under the Cozamin PMPA, the Company’s attributable silver production will be reduced to 33%.
18) Once the Company has received 375,000 ounces of palladium under the Stillwater agreement, the Company’s attributable palladium production will be reduced to 2.25%,
and once the Company has received 550,000 ounces of palladium under the agreement, the Company’s attributable palladium production will be reduced to 1%.
19) Once the Company has received 31 million pounds of cobalt under the Voisey’s Bay agreement, the Company’s attributable cobalt production will be reduced to 21.2%.
1 Statements made in this section contain forward-looking information including the timing and amount of estimated future production
and readers are cautioned that actual outcomes may vary. Please see “Cautionary Note Regarding Forward-Looking Statements” for
material risks, assumptions and important disclosure associated with this information.
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [7]
Updates Relative to the Mineral Stream Interests
Acquisition of Marmato Precious Metals Purchase Agreement
On November 5, 2020, the Company announced that it had entered into a PMPA with Aris Gold Corp. (“Aris Gold”)
(TSX:ARIS) in respect to the Marmato mine located in Colombia. Under the terms of the PMPA with Aris Gold, the
Company will acquire from Aris Gold 6.5% of the gold production and 100% of the silver production until 190,000
ounces of gold and 2.15 million ounces of silver have been delivered, after which the stream drops to 3.25% of the
gold production and 50% of the silver production for the life of mine. Under the Marmato PMPA, the Company is
required to pay Aris Gold total cash consideration of $110 million, $34 million of which is payable once mining contract
014-89M is extended, $4 million of which is payable six months thereafter, and the remaining portion of which is
payable during construction of the Marmato Deep Zone (“MDZ”) project, subject to receipt of required permits and
licenses, sufficient financing having been obtained to cover total expected capital expenditures, and other customary
conditions. In addition, the Company will make ongoing payments equal to 18% of the spot gold and silver price until
the market value of gold and silver delivered to the Company, net of the per ounce cash payment, exceeds the initial
upfront cash deposit, and 22% of the spot gold and silver price thereafter. The PMPA is effective July 1, 2020, though
no production from Marmato has been included in 2020 operating results.
Acquisition of Cozamin Precious Metals Purchase Agreement
On December 11, 2020, the Company entered into an agreement with Capstone Mining Corp. ("Capstone") (TSX: CS) in
respect to the Cozamin Mine located in Zacatecas, Mexico. The Company paid Capstone upfront cash consideration of
$150 million upon closing, which occurred on February 19, 2021, for 50% of the silver production until 10 million ounces
("Moz") have been delivered, thereafter dropping to 33% of silver production for the life of the mine. In addition, Wheaton
will make ongoing payments for silver ounces delivered equal to 10% of the spot silver price. The PMPA is effective
December 1, 2020, though no production from Cozamin has been included in 2020 operating results.
Salobo – Mill Throughput Expansion
The Salobo mine currently has a mill throughput capacity of 24 million tonnes per annum (“Mtpa”). As per Vale S.A.’s
(“Vale”) third quarter 2018 report, in October 2018 Vale’s Board of Directors approved the investment in the Salobo III
mine expansion (the “Salobo Expansion”). The Salobo Expansion is proposed to include a third concentrator line and
will use Salobo’s existing infrastructure. Vale anticipates that the Salobo Expansion, which is scheduled to start up in
the first half of 2022, will result in an increase of throughput capacity from 24 Mtpa to 36 Mtpa once fully ramped up.
As per Vale’s Fourth Quarter and Year End 2020 Performance Report, physical completion of the Salobo III mine
expansion was 68% at the end of the fourth quarter.
Keno Hill – Recommencement of Mining Operations
Alexco Resource Corp (“Alexco”) reported on November 24, 2020 the commissioning of the Keno Hill District mill
(“Keno Hill”) commencing as scheduled, with initial production of lead/silver and zinc concentrates underway. In order
to help facilitate the resumption of mining, Wheaton agreed to modify the PMPA as it relates to the delivery payment
per ounce of silver in exchange for 2 million common share purchase warrants from Alexco. Under the amendment,
the price paid per ounce of silver delivered has been modified to be between 10% of the spot price of silver, when the
market price of silver is at or above $23.00 per ounce, to 90% of the spot price of silver when the market price of silver
is at or below $15.00 per ounce.
Los Filos – Illegal blockade
Equinox reported on September 4, 2020 that mining activities at its Los Filos mine in Mexico have been suspended
since September 3, 2020 as the result of an illegal road blockade by members of the nearby Carrizalillo community.
On December 23, 2020, Equinox reported that the blockade had been removed and access to the mine restored. The
Los Filos mine has begun a staged restart and is working towards achieving full operations in January.
777 – Production Interruption
Hudbay reported on October 11, 2020 that production at its 777 mine had been temporarily suspended due to an
incident that occurred on October 9th during routine maintenance of the hoist rope and skip, which is the bucket used
to hoist ore from underground. The hoist rope detached from the skip, causing the skip to fall to the bottom of the
shaft. On November 25, 2020, Hudbay announced that full production has resumed at its 777 mine following the skip
hoist incident in October.
Stillwater – Blitz project delay
According to Sibanye-Stillwater Limited’s (“Sibanye-Stillwater”) Fourth Quarter 2020 Operating Update, COVID-19 has
negatively affected productivity and caused equipment and material delays as a result of associated supply chain
challenges. As a consequence, capital projects not on the project critical path were delayed in the interest of contractor
deployment efficiency. As a result, the Blitz project is now expected to reach a steady state by 2024, a delay of up to
two years.
Sibanye-Stillwater also reports that the Fill the Mill project at the East Boulder mine was brought in on time.
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [8]
Constancia – Pampacancha Delay
As per Hudbay’s MD&A for the year ended December 31, 2020, in early January 2021, Hudbay received the final
mining permit for the development and operation of Pampacancha. Additionally, in January 2021, Hudbay commenced
limited pre-development activities for Pampacancha, including haul road construction and site preparation work.
Hudbay indicate that they continue to advance discussions with the remaining land user family at Pampacancha. Pre-
stripping activities are expected to commence once the remaining land user agreement has been completed.
Hudbay also state that in late January 2021, new COVID-19 restrictions were announced by the government of Peru.
Hudbay notes that as a result of these restrictions and the need to complete the remaining land user agreements,
Hudbay no longer expects to mine four million tonnes of ore from the Pampacancha deposit by June 30, 2021. Hudbay
also notes that if they fail to meet this milestone, they will be required to deliver an additional 8,020 ounces of gold to
the Company in equal quarterly installments, commencing September 30, 2021 in accordance with the Constancia
PMPA. Hudbay and the Company are currently in discussions about, among other things, alternatives to defer the
additional gold deliveries over the Pampacancha mine life.
Barrick – Pascua-Lama Election
During the third quarter of 2020, the Company elected not to exercise its option to cancel the Pascua-Lama PMPA in
exchange for a refund of $253 million.
Early Deposit Mineral Stream Interests
Early deposit mineral stream interests represent agreements relative to early stage development projects whereby
Wheaton can choose not to proceed with the agreement once certain documentation has been received including, but
not limited to, feasibility studies, environmental studies and impact assessment studies. Once Wheaton has elected to
proceed with the agreement, the carrying value of the stream will be transferred to Mineral Stream Interests.
The following table summarizes the early deposit mineral stream interests currently owned by the Company:
Attributable
Production to be
Purchased
Early Deposit
Mineral Stream
Interests
Toroparu
Cotabambas
Kutcho
Mine
Owner
Gold X
Panoro
Kutcho
Location
of
Mine
Upfront
Consideration
Paid to Date 1
Upfront
Consideration
to be Paid 1, 2
Guyana $
Peru
Canada
15,500 $
10,000
7,000
138,000 $
130,000
58,000
Total
Upfront
Consideration¹ Gold
153,500
140,000
65,000
10%
25% ³
100% ⁴
Silver
Term of
Agreement
50% Life of Mine
100% ³ Life of Mine
100% ⁴ Life of Mine
Date of
Original
Contract
11-Nov-13
21-Mar-16
14-Dec-17
$
32,500 $
326,000 $
358,500
1) Expressed in thousands of United States dollars; excludes closing costs and capitalized interest, where applicable.
2) Please refer to the section entitled “Other Contractual Obligations and Contingencies” on page 30 of this MD&A for details of when the remaining upfront consideration to be
paid becomes due.
3) Once 90 million silver equivalent ounces attributable to Wheaton have been produced, the attributable production will decrease to 16.67% of gold production and 66.67% of
silver production for the life of mine.
4) Once 51,000 ounces of gold and 5.6 million ounces of silver have been delivered to Wheaton, the stream will decrease to 66.67% of gold and silver production for the life of
mine.
Toroparu - Development Update
Gold X Mining Corp. (“Gold X”) announced results from a Preliminary Economic Assessment (“PEA”) of its Toroparu
Gold Project in Guyana (“Toroparu”) in a news release dated June 4, 2019, and subsequently filed the PEA on July 23,
2019. As per the PEA, Toroparu has been re‐scoped to include the Sona Hill satellite deposit, modification of the
processing strategy to start with gold‐only production from a Carbon‐in‐Leach circuit for the initial ten years, and an
expansion in year 11 to add flotation processing capacity. In connection with Wheaton’s Toroparu Early Deposit
Agreement, Wheaton may elect to pay Gold X an additional upfront payment, payable on an installment basis to
partially fund construction of the mine, in return for 10% of the gold and 50% of the silver for the life of the mine. Gold
X has indicated that it has estimated revised, lower potential upfront payments from Wheaton as a result of the revised
scope of the project, however such revised payments have not been approved by Wheaton. Gold X was to deliver a
final feasibility study under the Toroparu Early Deposit Agreement on December 31, 2020. Gold X and the Company
are currently in discussions about extending this date.
Mineral Royalty Interest
On August 7, 2014, the Company purchased a 1.5% net smelter return royalty interest (the “Royalty”) in the Metates
properties located in Mexico from Chesapeake Gold Corp. (“Chesapeake”) for the life of mine. Under the terms of the
agreement, the Company paid total upfront cash consideration of $9 million. In accordance with the terms of the
agreement, on August 7, 2019, Chesapeake exercised its option to re-acquire two-thirds of the Royalty, or 1%, for $9
million. As a result, the Company’s Royalty has been reduced to 0.5%. The Company has reflected the transaction as
a disposal of two-thirds of its original investment, resulting in a gain on disposal of $3 million. The Company also has a
right of first refusal on any silver streaming, royalty or any other transaction on the Metates properties.
To date, no revenue has been recognized and no depletion has been taken with respect to this royalty agreement.
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [9]
Long-Term Equity Investments
The Company will, from time to time, invest in securities of companies for strategic purposes including, but not limited
to, exploration and mining companies. The Company held the following investments as at December 31, 2020 and
2019:
(in thousands)
Common shares held
Warrants held
Total long-term equity investments
Common Shares Held
December 31 December 31
2020
2019
$
196,241 $
309,757
3,637
-
$
199,878 $
309,757
Shares
Owned
(000's)
% of
Outstanding
Shares
Owned
(in thousands)
Fair Value at
Sep 30, 2020
Cost of
Additions
Proceeds of
Disposition 1
Three Months Ended December 31, 2020
Fair Value
Adjustment
Gains
(Losses) 2
Fair Value at
Dec 31, 2020
Realized Gain
on Disposal
Bear Creek
13,264
11.80% $ 31,324 $ - $ - $ 1,285 $ 32,609 $ -
Sabina
11,700
First Majestic
7,155
3.59%
3.23%
Other
22,630
163,620
34,433
-
-
-
-
(113,365)
-
7,603
45,729
2,982
30,233
95,984
37,415
-
40,556
-
Total
1) Disposals during 2020 were made in order to capitalize on the share appreciation related to the strong commodity price environment.
2) Fair Value Gains (Losses) are reflected as a component of Other Comprehensive Income (“OCI”).
$ 252,007 $ - $ (113,365) $ 57,599 $ 196,241 $ 40,556
Shares
Owned
(000's)
% of
Outstanding
Shares
Owned
(in thousands)
Fair Value at
Sep 30, 2019
Cost of
Additions
Proceeds of
Disposition 1
Three Months Ended December 31, 2019
Fair Value
Adjustment
Gains
(Losses) 2
Fair Value at
Dec 31, 2019
Realized Loss
on Disposal
Bear Creek
13,264
12.84% $ 19,832 $ - $ - $ 8,151 $ 27,983 $ -
Sabina
11,700
First Majestic
20,240
3.95%
9.73%
Other
15,196
183,978
15,822
-
-
-
-
-
2,100
17,296
64,159
248,137
-
-
(1,518)
2,037
16,341
(1,515)
Total
1) Shares disposed of during the fourth quarter of 2019 were no longer considered to have strategic value.
2) Fair Value Gains (Losses) are reflected as a component of OCI.
$ 234,828 $ - $ (1,518) $ 76,447 $ 309,757 $ (1,515)
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [10]
Shares
Owned
(000's)
% of
Outstanding
Shares
Owned
(in thousands)
Fair Value at
Dec 31, 2019
Cost of
Additions 1
Proceeds of
Disposition 2
Year Ended December 31, 2020
Fair Value
Adjustment
Gains
(Losses) 3
Fair Value at
Dec 31, 2020
Realized Gain
on Disposal
Bear Creek
13,264
11.80% $ 27,983 $ - $ - $ 4,626 $ 32,609 $ -
Sabina
11,700
First Majestic
7,155
3.59%
3.23%
Other
Total
17,296
248,137
16,341
-
-
-
(151,113)
23,570
(11,829)
12,937
(1,040)
9,333
30,233
95,984
37,415
-
56,644
4,170
$ 309,757 $ 23,570 $ (162,942) $ 25,856 $ 196,241 $ 60,814
Includes,4,467,317 common shares of Gold X received upon the conversion of the Gold X Convertible Note see page 12 of this MD&A for more information
1)
2) Disposals during 2020 were made in order to capitalize on the share appreciation related to the strong commodity price environment
3) Fair Value Gains (Losses) are reflected as a component of OCI.
Shares
Owned
(000's)
% of
Outstanding
Shares
Owned
(in thousands)
Fair Value at
Dec 31, 2018
Cost of
Additions
Proceeds of
Disposition 1
Year Ended December 31, 2019
Fair Value
Adjustment
Gains
(Losses) 2
Fair Value at
Dec 31, 2019
Realized Gain
(Loss) on
Disposal
Bear Creek
13,264
12.84% $ 10,112 $ - $ - $ 17,871 $ 27,983 $ -
Sabina
11,700
First Majestic
20,240
3.95%
9.73%
Other
Total
10,549
123,187
20,905
-
-
-
6,747
17,296
(5,395)
130,345
248,137
-
521
893
(12,430)
6,973
16,341
(7,803)
$ 164,753 $ 893 $ (17,825) $ 161,936 $ 309,757 $ (7,282)
1) Disposals of First Majestic shares during 2019 were initiated in order to reduce the Company’s ownership position in First Majestic to under 10% of the issued and
outstanding common shares, while disposals of shares classified as Other were initiated as the holdings were no longer considered to have strategic value.
2) Fair Value Gains (Losses) are reflected as a component of OCI.
Warrants Held
(in thousands)
Other
Fair Value at
Sep 30, 2020
$ 2,455
Cost of
Additions
$ -
(in thousands)
Other
Fair Value at
Sep 30, 2019
$ 10
Cost of
Additions
$ -
Three Months Ended December 31, 2020
Value of
Warrants
Converted into
Shares
$ -
Fair Value
Adjustment
Gains
(Losses)
$ 1,182
Fair Value at
Dec 31, 2020
$ 3,637
Three Months Ended December 31, 2019
Value of
Warrants
Converted into
Shares
$ -
Fair Value
Adjustment
Gains
(Losses)
$ (10)
Fair Value at
Dec 31, 2019
$ -
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [11]
(in thousands)
Other
Fair Value at
Dec 31, 2019
$ -
Cost of
Additions 1
$ 3,299
Year Ended December 31, 2020
Value of
Warrants
Converted into
Shares
$ -
Fair Value
Adjustment
Gains
(Losses)
$ 338
Fair Value at
Dec 31, 2020
$ 3,637
1)
Includes 2 million common share purchase warrants from Alexco with a fair value of $2 million (see page 8 of this MD&A for more information),
(in thousands)
Other
Fair Value at
Dec 31, 2018
$ -
Cost of
Additions
$ 16
Year Ended December 31, 2019
Value of
Warrants
Converted into
Shares
$ -
Fair Value
Adjustment
Gains
(Losses)
$ (16)
Fair Value at
Dec 31, 2019
$ -
The Company’s long-term investments in common shares (“LTI’s”) are held for long-term strategic purposes and not
for trading purposes. As such, the Company has elected to reflect any fair value adjustments, net of tax, as a
component of other comprehensive income (“OCI”). The cumulative gain or loss will not be reclassified to net earnings
on disposal of these long-term investments but is reclassified to retained earnings.
While long-term investments in warrants are also held for long-term strategic purposes, they meet the definition of a
derivative and therefore are classified as financial assets with fair value adjustments being recorded as a component of
net earnings under the classification Other (Income) Expense. Warrants that do not have a quoted market price are
valued using a Black-Scholes option pricing model.
By holding these long-term investments, the Company is inherently exposed to various risk factors including currency
risk, market price risk and liquidity risk.
Convertible Notes Receivable
Kutcho Copper Corp.
Effective December 14, 2017, in connection with the Kutcho Early Deposit Agreement, the Company advanced to Kutcho
$16 million (Cdn$20 million) and received the Kutcho Convertible Note. The Kutcho Convertible Note, which has a seven
year term to maturity, carries interest at 10% per annum, compounded and payable semi-annually. Kutcho elected to
defer the first six interest payments, with all deferred payments being due no later than December 31, 2023. The deferred
interest carries interest at 15% per annum, compounded semi-annually.
At any time prior to the maturity date, the Company has the right to convert all or any part of the outstanding amount of
the Kutcho Convertible Note, excluding outstanding deferred interest, into common shares of Kutcho at Cdn$0.8125 per
share. Kutcho has the right to repay the Kutcho Convertible Note early, subject to the applicable pre-payment cash
penalties as follows:
•
•
20% of the outstanding amount if pre-paid on or after 36 months until 60 months; and
15% of the outstanding amount if pre-paid on or after 60 months until maturity.
Gold X Mining Corp.
Effective December 24, 2019, in connection with the Toroparu Early Deposit Agreement, the Company advanced $10
million to Gold X as part of a $20 million 10% secured convertible debenture private placement offering completed by
Gold X (the “Gold X Convertible Note”). The Gold X Convertible Note carried interest at 10% per annum, compounded
semi-annually and payable annually.
Effective July 14, 2020, the Company elected to convert the outstanding principal relative to the Gold X Convertible Note
into common shares of Gold X at Cdn$3.20 per share, with the outstanding amounts being converted into Canadian
dollars using the exchange rate published by the Bank of Canada on July 13, 2020. In addition, the accrued interest
relative to the Gold X Convertible Note was converted to common shares of Gold X at Cdn$3.57 per share. As a result,
on July 14, 2020, the Company received 4,467,317 common shares of Gold X (see the section Long-Term Equity
Investments of this MD&A) and the Gold X Convertible Note was retired.
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [12]
Convertible Notes Receivable Valuation Summary
The Kutcho Convertible Note is revalued quarterly by discounting the stream of future interest and principal payments
at the rate of interest prevailing at the balance sheet date for instruments of similar term and risk, and adding this value
to the value of the convertibility feature which is estimated using a Black-Scholes model based on assumptions
including risk free interest rate, expected dividend yield, expected volatility and expected remaining life of the Kutcho
Convertible Note.
The value of the Gold X Convertible Note, which was converted into common shares of Gold X effective July 14, 2020,
was determined by reference to the value of the shares received. Prior to electing to convert this convertible note
receivable into common shares of Gold X, the Gold X Convertible Note was revalued quarterly using the same
methodology as the Kutcho Convertible Note above.
A summary of the fair value of these convertible instruments and the fair value changes recognized as a component of
the Company’s net earnings during the three months and years ended December 31, 2020 and 2019 is presented
below:
(in thousands)
Kutcho
Fair Value at
Sep 30, 2020
$ 10,836
Amount
Advanced
$ -
Three Months Ended December 31, 2020
Value
Converted into
Shares
$ -
Fair Value
Adjustment
Gains
(Losses)
$ 517
Fair Value at
Dec 31, 2020
$ 11,353
(in thousands)
Kutcho
Gold X
Total
(in thousands)
Kutcho
Gold X
Total
(in thousands)
Kutcho
Gold X
Total
Fair Value at
Sep 30, 2019
$ 12,222
-
Amount
Advanced
$ -
10,000
Three Months Ended December 31, 2019
Value
Converted into
Shares
$ -
-
Fair Value
Adjustment
Gains
(Losses)
$ (385)
19
Fair Value at
Dec 31, 2019
$ 11,837
10,019
$ 12,222
$ 10,000
$ -
$ (366)
$ 21,856
Fair Value at
Dec 31, 2019
$ 11,837
10,019
Amount
Advanced
$ -
-
Year Ended December 31, 2020
Value
Converted into
Shares
$ -
(12,402)
Fair Value
Adjustment
Gains
(Losses)
$ (484)
2,383
Fair Value at
Dec 31, 2020
$ 11,353
-
$ 21,856
$ -
$ (12,402)
$ 1,899
$ 11,353
Fair Value at
Dec 31, 2018
$ 12,899
-
Amount
Advanced
$ -
10,000
Year Ended December 31, 2019
Value
Converted into
Shares
$ -
-
Fair Value
Adjustment
Gains
(Losses)
$ (1,062)
19
Fair Value at
Dec 31, 2019
$ 11,837
10,019
$ 12,899
$ 10,000
$ -
$ (1,043)
$ 21,856
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [13]
Summarized Financial Results
Attributable precious metal production (ounces)
Gold
Silver (000’s)
Palladium
GEOs 1
SEOs (000’s) 1
Precious metal sales (ounces)
Gold
Silver (000’s)
Palladium
GEOs 1
SEOs (000’s) 1
Average realized price ($'s per ounce)
Gold
Silver
Palladium
GEO 1
SEO 1
Average cash cost ($'s per ounce) 2
Gold
Silver
Palladium
GEO 1
SEO 1
Average depletion ($'s per ounce)
Gold
Silver
Palladium
GEO 1
SEO 1
Total revenue ($000's)
Net earnings ($000's)
Earnings per share
Basic
Diluted
Adjusted net earnings 3 ($000's)
Adjusted earnings per share 3
Basic
Diluted
Cash flow from operations ($000's)
Dividends
Dividends paid ($000's)
Dividends paid per share
Total assets ($000's)
Total non-current financial liabilities ($000’s)
Total other liabilities ($000’s)
Shareholders' equity ($000's)
Shares outstanding
Dec 31, 2020
Dec 31, 2019
Dec 31, 2018
367,419
22,892
22,187
671,713
55,976
369,553
19,232
20,051
627,063
52,255
406,504
22,396
21,993
704,579
58,715
389,086
17,703
20,681
629,098
52,425
383,976
24,405
14,686
696,419
58,035
349,168
21,733
8,717
621,585
51,799
1,767 $
20.78 $
2,183 $
1,748 $
20.98 $
426 $
5.28 $
389 $
425 $
5.10 $
1,391 $
16.29 $
1,542 $
1,369 $
16.43 $
421 $
5.02 $
273 $
411 $
4.93 $
1,264
15.81
1,060
1,277
15.33
409
4.67
190
395
4.75
399 $
4.58 $
428 $
389 $
4.67 $
1,096,224 $
507,804 $
408 $
4.99 $
470 $
408 $
4.90 $
861,332 $
86,138 $
419
4.69
463
406
4.87
794,012
427,115
1.132 $
1.128 $
503,335 $
1.122 $
1.118 $
765,442 $
0.193 $
0.193 $
242,745 $
0.544 $
0.543 $
501,620 $
0.963
0.962
225,509
0.509
0.508
477,413
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
188,486 $
0.42 $
5,957,272 $
211,318 $
31,383 $
5,714,571 $
$
$
$
$
$
$
449,458,394
160,656 $
0.36 $
6,278,007 $
887,239 $
64,848 $
5,325,920 $
447,771,433
159,619
0.36
6,470,046
1,269,178
28,952
5,171,916
444,336,361
1) GEOs and SEOs, which are provided to assist the reader, are based on the following commodity price assumptions: $1,500 per ounce gold; $18.00 per ounce silver; and
$2,000 per ounce palladium, consistent with those used in estimating the Company's production guidance for 2020.
2) Refer to discussion on non-IFRS measure (iii) on page 47 of this MD&A.
3) Refer to discussion on non-IFRS measure (i) on page 46 of this MD&A.
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [14]
Summary of Ounces Produced
Gold ounces produced ²
Salobo
Sudbury 3
Constancia 8
San Dimas 4, 8
Stillwater 5
Other
Minto 6
777 9
Total Other
Q4 2020
Q3 2020
Q2 2020
Q1 2020
Q4 2019
Q3 2019
Q2 2019
Q1 2019
62,854
63,408 59,104
62,575
74,716
73,615
67,056
60,846
7,757
3,798
9,257
7,795
6,468
6,082
9,360 11,374
3,929
3,780
3,470 3,681
4,757
5,172
4,533
4,826
11,652
9,228
6,074 11,318
11,352 11,239 11,496 10,290
3,290
3,176
3,222
2,955
3,585
3,238
3,675 3,137
789
1,832
2,928 2,124
2,189 - - -
2,866
5,278
4,728 4,551
3,987
4,278
4,788
4,445
3,655
7,110
7,656
6,675
6,176
4,278
4,788
4,445
Total gold ounces produced
93,137
90,500
88,783
94,999
107,054
103,624
100,908 94,918
Silver ounces produced 2
Peñasquito 8
Antamina 8
Constancia 8
Other
Los Filos 8
Zinkgruvan
Yauliyacu 8
Stratoni
Minto 6
Neves-Corvo
Aljustrel
777 9
2,014
1,992 967
2,658
1,895
2,026
702 1,594
1,930
1,516 612 1,311
1,342
1,223
1,334 1,176
478
430 254 461
632
686
552 635
6
17 14 29
55
33
37 38
515
498 389 662
670
587
590 451
454
679 273 557
358
620
627 528
185
156 148 183
147 131 172 143
16
15 19 18
18 - - -
420
281 479 377
385 431
392 498
440
348 388 352
325
240
322 470
51
96 108 96
81
62
93 95
Total Other
2,087
2,090 1,818
2,274
2,039
2,104
2,233
2,223
Total silver ounces produced
6,509
6,028 3,651
6,704
5,908
6,039
4,821
5,628
Palladium ounces produced ²
Stillwater 5
GEOs produced 7
SEOs produced 7
Average payable rate 2
Gold
Silver
Palladium
GEO 7
5,672
5,444
5,759 5,312
6,057
5,471
5,736
4,729
178,801
170,100
140,279
182,533
186,027
183,394
166,399
168,759
14,900
14,175 11,690 15,211
15,502
15,283
13,867 14,063
95.2%
86.3%
98.2%
91.5%
95.3%
86.1%
97.0%
91.4%
94.7%
81.9%
86.5%
90.2%
95.1%
85.6%
93.0%
90.8%
95.6%
85.3%
99.4%
91.9%
95.1%
85.1%
83.5%
90.7%
95.3%
83.3%
87.6%
90.8%
95.6%
82.9%
98.5%
90.7%
1) All figures in thousands except gold and palladium ounces produced.
2) Ounces produced represent the quantity of gold, silver and palladium contained in concentrate or doré prior to smelting or refining deductions. Production figures and average
payable rates are based on information provided by the operators of the mining operations to which the mineral stream interests relate or management estimates in those
situations where other information is not available. Certain production figures or payable rates may be updated in future periods as additional information is received.
3) Comprised of the Coleman, Copper Cliff, Garson, Creighton and Totten gold interests.
4) Under the terms of the San Dimas PMPA, the Company is entitled to an amount equal to 25% of the payable gold production plus an additional amount of gold equal to 25%
of the payable silver production converted to gold at a fixed gold to silver exchange ratio of 70:1 from the San Dimas mine. If the average gold to silver price ratio decreases to
less than 50:1 or increases to more than 90:1 for a period of 6 months or more, then the "70" shall be revised to "50" or "90", as the case may be, until such time as the
average gold to silver price ratio is between 50:1 to 90:1 for a period of 6 months or more in which event the "70" shall be reinstated. Effective April 1, 2020, the fixed gold to
silver exchange ratio was revised to 90:1, with the 70:1 ratio being reinstated on October 15, 2020. For reference, attributable silver production from prior periods is as follows:
Q4-2020 – 476,000; Q3-2020 – 420,000 ounces; Q2-2020 – 276,000 ounces; Q1-2020 – 419,000 ounces; Q4-2019 – 415,000 ounces; Q3-2019 – 410,000 ounces; Q2-2019
– 401,000 ounces; and Q1-2019 – 351,000 ounces.
5) Comprised of the Stillwater and East Boulder gold and palladium interests.
6) The Minto mine was placed into care and maintenance from October 2018 to October 2019.
7) GEOs and SEOs, which are provided to assist the reader, are based on the following commodity price assumptions: $1,500 per ounce gold; $18.00 per ounce silver; and
$2,000 per ounce palladium, consistent with those used in estimating the Company's production guidance for 2020.
8) Operations at these mines had been temporarily suspended during the second quarter of 2020 as a result of the COVID-19 pandemic. During the second half of 2020, all of
the operations were restarted. Additionally, operations at Los Filos were suspended from September 3, 2020 to December 23, 2020 as the result of an illegal road blockade by
members of the nearby Carrizalillo community (see page 8 of this MD&A for more information).
9) Operations at 777 were temporarily suspended from October 11, 2020 to November 25, 2020 as a result of an incident that occurred on October 9th during routine
maintenance of the hoist rope and skip (see page 8 of this MD&A for more information).
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [15]
Summary of Ounces Sold
Gold ounces sold
Salobo
Sudbury 2
Constancia 7
San Dimas 7
Stillwater 3
Other
Minto 4
777
Total Other
Q4 2020 Q3 2020
Q2 2020
Q1 2020 Q4 2019 Q3 2019 Q2 2019 Q1 2019
53,197
59,584 68,487
74,944 58,137
63,064 57,715 84,160
7,620
7,858 7,414
4,822
7,394
7,600
8,309 4,061
3,853 4,112 3,024
3,331 5,108
4,742
4,409 5,512
11,529
9,687 6,030
11,358 11,499 11,374 10,284 11,510
3,069 3,015 3,066
3,510
2,925 3,314 3,301
2,856
1,540 - -
- - - 765
3,307
5,435
5,845 4,783
2,440 4,160
4,672
5,294 3,614
6,975
5,845 4,783
2,440 4,160
4,672
6,059 6,921
Total gold ounces sold
86,243 90,101 92,804
100,405
89,223
94,766
90,077 115,020
Silver ounces sold
Peñasquito 7
Antamina 7
Constancia 7
Other
Los Filos 7
Zinkgruvan
Yauliyacu 7
Stratoni
Minto 4
Neves-Corvo
Aljustrel
777
1,417 1,799 1,917
2,310 1,268 1,233 912 1,164
1,669 1,090 788
1,244 1,227 1,059 1,186 1,255
442 415 254
350 672 521 478 735
- 19 25
37 26 44 26 38
326 492 376
447 473 459 337 232
15 580 704
9 561 574 542 15
169 134 77
163 120 126 240 80
20 - -
- - - 2 30
145 201 236
204 154 243 194 265
280 148 252
123 121 139 216 381
93 121 100
41 62 86 108 99
Total Other
1,048 1,695 1,770
1,024 1,517 1,671 1,665 1,140
Total silver ounces sold
4,576
4,999 4,729
4,928
4,684
4,484 4,241
4,294
Palladium ounces sold
Stillwater 3
GEOs sold 5
SEOs sold 5
Cumulative payable ounces PBND 6
4,591
5,546 4,976
4,938 5,312
4,907
5,273 5,189
147,277
157,478 156,188
166,121 152,514 155,116
148,004
173,464
12,273 13,123 13,016
13,843 12,709 12,926 12,334 14,455
Gold
Silver
Palladium
GEO 5
SEO 5
71,590
75,750 79,632
88,383
98,475
85,335 81,535
75,236
4,486
3,437 3,222
4,961 4,142
3,796 3,102 3,315
5,597 4,616 4,883
4,875
4,872 4,163
4,504
4,754
132,882 123,154 124,809
154,420
154,672 136,441
124,765 121,349
11,073 10,263 10,401
12,868 12,889 11,370 10,397 10,112
1) All figures in thousands except gold and palladium ounces sold.
2) Comprised of the Coleman, Copper Cliff, Garson, Creighton and Totten gold interests.
3) Comprised of the Stillwater and East Boulder gold and palladium interests.
4) The Minto mine was placed into care and maintenance from October 2018 to October 2019.
5) GEOs and SEOs, which are provided to assist the reader, are based on the following commodity price assumptions: $1,500 per ounce gold; $18.00 per ounce silver; and
$2,000 per ounce palladium, consistent with those used in estimating the Company's production guidance for 2020.
6) Payable gold, silver and palladium ounces PBND are based on management estimates. These figures may be updated in future periods as additional information is received.
7) Operations at these mines had been temporarily suspended during the second quarter of 2020 as a result of the COVID-19 pandemic. During the second half of 2020, all of
the operations were restarted.
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [16]
Quarterly Financial Review 1
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxx
Gold ounces sold
Realized price 2
Gold sales
Silver ounces sold
Realized price 2
Silver sales
Palladium ounces sold
Realized price 2
Palladium sales
Total sales
Cash cost 2, 3
Gold
Silver
Palladium
Depletion 2
Gold
Silver
Palladium
Net earnings (loss)
Per share
Basic
Diluted
Adjusted net earnings 4
Per share
Basic
Diluted
Cash flow from operations
Per share 5
Basic
Diluted
Dividends declared
Per share
Total assets
Total liabilities
Q4 2020
Q3 2020 Q2 2020
Q1 2020
Q4 2019
Q3 2019
Q2 2019
Q1 2019
86,243
90,101
92,804
100,405
89,223
94,766
90,077
115,020
1,882 $
1,906 $
1,716 $
1,589 $
1,483 $
1,471 $
1,320 $
1,308
162,299 $
171,734 $
159,272 $
159,522 $
132,342 $
139,433 $
118,870 $
150,399
4,576
4,999
4,729
24.72 $
24.69 $
16.73 $
4,928
17.03 $
4,684
17.36 $
4,484
17.09 $
4,241
14.93 $
4,294
15.64
113,131 $
123,434 $
79,142 $
83,917 $
81,296 $
76,631 $
63,313 $
67,162
4,591
5,546
4,976
2,348 $
2,182 $
1,917 $
4,938
2,298 $
5,312
1,804 $
4,907
1,535 $
5,273
1,381 $
5,189
1,443
10,782 $
12,100 $
9,540 $
11,350 $
9,584 $
7,531 $
7,283 $
7,488
286,212 $
307,268 $
247,954 $
254,789 $
223,222 $
223,595 $
189,466 $
225,049
433 $
5.51 $
423 $
397 $
5.16 $
428 $
428 $
5.89 $
383 $
404 $
4.36 $
428 $
418 $
5.23 $
353 $
405 $
4.01 $
428 $
426 $
4.50 $
402 $
389 $
4.80 $
428 $
426 $
5.13 $
321 $
417 $
5.12 $
470 $
424 $
5.16 $
271 $
417 $
4.81 $
470 $
420 $
5.14 $
247 $
420 $
4.97 $
470 $
417
4.64
254
385
5.05
470
157,221 $
149,875 $
105,812 $
94,896 $
77,524 $
75,960 $
(124,694) $
57,349
0.350 $
0.334 $
0.236 $
0.212 $
0.173 $
0.170 $
(0.280) $
0.349 $
0.332 $
0.235 $
0.211 $
0.173 $
0.170 $
(0.279) $
0.129
0.129
149,441 $
152,007 $
97,354 $
104,534 $
74,471 $
69,914 $
41,959 $
56,402
0.333 $
0.338 $
0.217 $
0.233 $
0.166 $
0.156 $
0.094 $
0.331 $
0.336 $
0.216 $
0.233 $
0.166 $
0.156 $
0.094 $
0.127
0.127
207,962 $
228,099 $
151,793 $
177,588 $
131,867 $
142,300 $
109,258 $
118,194
0.463 $
0.508 $
0.338 $
0.397 $
0.295 $
0.318 $
0.245 $
0.461 $
0.505 $
0.337 $
0.396 $
0.294 $
0.318 $
0.245 $
0.266
0.266
53,914 $
44,896 $
44,862 $
44,815 $
40,252 $
40,197 $
40,133 $
40,074
0.12 $
0.10 $
0.10 $
0.10 $
0.09 $
0.09 $
0.09 $
0.09
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$ 5,957,272 $ 6,091,187 $ 6,134,044 $ 6,076,941 $ 6,278,007 $ 6,258,859 $ 6,240,823 $ 6,478,700
$
242,701 $
539,849 $
717,101 $
838,715 $
952,087 $ 1,057,415 $ 1,128,877 $ 1,252,752
Total shareholders' equity
$ 5,714,571 $ 5,551,338 $ 5,416,943 $ 5,238,226 $ 5,325,920 $ 5,201,444 $ 5,111,946 $ 5,225,948
1) All figures in thousands except gold and palladium ounces produced and sold, per ounce amounts and per share amounts.
2) Expressed as US$ per ounce.
3) Refer to discussion on non-IFRS measure (iii) on page 47 of this MD&A.
4) Refer to discussion on non-IFRS measure (i) on page 46 of this MD&A.
5) Refer to discussion on non-IFRS measure (ii) on page 47 of this MD&A.
Changes in sales, net earnings and cash flow from operations from quarter to quarter are affected primarily by
fluctuations in production at the mines, the timing of shipments, changes in the price of commodities, the
commencement of operations of mines under construction, as well as acquisitions of PMPAs and any related capital
raising activities.
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [17]
Results of Operations and Operational Review
The operating results of the Company’s reportable operating segments are summarized in the tables and commentary
below.
Ounces
Produced²
Ounces
Sold
Average
Realized
Price
($'s Per
Ounce)
Average
Cash Cost
($'s Per
Ounce)3
Average
Depletion
($'s Per
Ounce)
Sales
Net
Earnings
Cash Flow
From
Operations
Total
Assets
Three Months Ended December 31, 2020
62,854
53,197 $
1,881 $
408 $
374 $
100,047 $
58,426 $
74,508 $
2,509,344
7,757
3,929
7,620
3,853
11,652
11,529
3,290
3,655
3,069
6,975
1,888
1,881
1,881
1,881
1,888
400
408
612
338
421
831
338
315
449
238
14,384
7,246
21,683
5,772
13,167
5,000
4,373
10,993
3,357
8,576
11,336
5,674
12,812
4,735
10,241
321,016
105,569
182,202
224,310
7,526
93,137
86,243 $
1,882 $
433 $
397 $
162,299 $
90,725 $
119,306 $
3,349,967
2,014
1,930
478
2,087
6,509
1,417 $
24.44 $
4.26 $
3.24 $
34,629 $
23,997 $
28,592 $
350,572
1,669
442
1,048
24.44
24.44
25.69
4.86
6.02
8.03
8.74
7.63
1.00
40,782
10,805
26,915
18,079
4,770
17,456
32,667
8,143
20,804
626,934
217,044
474,975
4,576 $
24.72 $
5.51 $
5.16 $
113,131 $
64,302 $
90,206 $
1,669,525
5,672
4,591 $
2,348 $
423 $
428 $
10,782 $
6,875 $
8,840 $
241,389
Gold
Salobo
Sudbury 4
Constancia
San Dimas
Stillwater
Other 5
Silver
Peñasquito
Antamina
Constancia
Other 6
Palladium
Stillwater
Cobalt
Voisey's Bay
-
- $
n.a. $
n.a. $
n.a. $
- $
- $
- $
227,510
Operating results
Other
General and administrative
Finance costs
Other
Income tax
Total other
$
286,212 $
161,902 $
218,352 $
5,488,391
$
(9,391) $
(8,384)
(2,196)
830
6,076
(1,980)
(5)
(21)
$
(4,681) $
(10,390) $
468,881
$
157,221 $
207,962 $
5,957,272
1) All figures in thousands except gold and palladium ounces produced and sold and per ounce amounts.
2) Ounces produced represent the quantity of gold, silver and palladium contained in concentrate or doré prior to smelting or refining deductions. Production figures are based on
information provided by the operators of the mining operations to which the mineral stream interests relate or management estimates in those situations where other
information is not available. Certain production figures may be updated in future periods as additional information is received.
3) Refer to discussion on non-IFRS measure (iii) on page 47 of this MD&A.
4) Comprised of the operating Coleman, Copper Cliff, Garson, Creighton and Totten gold interests and the non-operating Stobie and Victor gold interests.
5) Comprised of the operating 777 and Minto gold interests, the non-operating Rosemont gold interest and the newly acquired Marmato gold interest.
6) Comprised of the operating Los Filos, Zinkgruvan, Yauliyacu, Stratoni, Neves-Corvo, Aljustrel, Minto, Keno Hill and 777 silver interests, the non-operating Loma de La Plata,
Pascua-Lama and Rosemont silver interests and the newly acquired Marmato and Cozamin silver interests.
On a GEO and SEO basis, results for the Company for the three months ended December 31, 2020 were as follows:
Gold equivalent basis 5
Silver equivalent basis 5
Ounces
Produced 1, 2
178,801
14,900
Ounces
Sold 2
147,277
12,273
Three Months Ended December 31, 2020
Average
Realized
Price
($'s Per
Ounce)
Average
Cash Cost
($'s Per
Ounce) 3
Cash
Operating
Margin
($'s Per
Ounce) 4
Average
Depletion
($'s Per
Ounce)
Gross
Margin
($'s Per
Ounce)
$ 1,943
$ 23.32
$ 438
$ 5.26
$ 1,505
$ 18.06
$ 406
$ 4.87
$ 1,099
$ 13.19
1) Ounces produced represent the quantity of gold, silver and palladium contained in concentrate or doré prior to smelting or refining deductions. Production figures are based on
information provided by the operators of the mining operations to which the mineral stream interests relate or management estimates in those situations where other
information is not available. Certain production figures may be updated in future periods as additional information is received.
2) Silver ounces produced and sold in thousands.
3) Refer to discussion on non-IFRS measure (iii) on page 47 of this MD&A.
4) Refer to discussion on non-IFRS measure (iv) on page 48 of this MD&A.
5) GEOs and SEOs, which are provided to assist the reader, are based on the following commodity price assumptions: $1,500 per ounce gold; $18.00 per ounce silver; and
$2,000 per ounce palladium, consistent with those used in estimating the Company's production guidance for 2020.
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [18]
Ounces
Produced²
Ounces
Sold
Average
Realized
Price
($'s Per
Ounce)
Average
Cash Cost
($'s Per
Ounce)3
Average
Depletion
($'s Per
Ounce)
Sales
Net
Earnings
Cash Flow
From
Operations
Total
Assets
Three Months Ended December 31, 2019
74,716
58,137 $
1,484 $
404 $
383 $
86,252 $
40,488 $
55,963 $
2,605,257
6,468
4,757
7,394
5,108
11,352
11,499
3,585
6,176
2,925
4,160
1,481
1,484
1,484
1,484
1,481
400
404
606
268
420
819
361
310
519
462
10,952
7,578
17,059
4,339
6,162
1,936
3,670
6,531
2,038
2,492
8,342
5,345
7,962
3,556
4,413
344,043
110,406
194,367
229,994
13,168
107,054
89,223 $
1,483 $
426 $
417 $
132,342 $
57,155 $
85,581 $
3,497,235
1,895
1,342
632
1,227
672
2,039
1,517
1,268 $
17.33 $
4.21 $
3.06 $
21,974 $
12,752 $
16,636 $
374,702
17.33
17.33
17.41
3.46
5.96
6.90
8.73
7.50
2.86
21,262
11,641
26,419
6,308
2,598
11,619
16,730
6,348
13,578
668,810
228,187
487,693
5,908
4,684 $
17.36 $
5.13 $
5.12 $
81,296 $
33,277 $
53,292 $
1,759,392
6,057
5,312 $
1,804 $
321 $
470 $
9,584 $
5,381 $
7,877 $
249,969
Gold
Salobo
Sudbury 4
Constancia
San Dimas
Stillwater
Other 5
Silver
Peñasquito
Antamina
Constancia
Other 6
Palladium
Stillwater
Cobalt
Voisey's Bay
-
- $
n.a. $
n.a. $
n.a. $
- $
- $
- $
227,510
Operating results
Other
General and administrative
Finance costs
Other
Income tax
Total other
$
223,222 $
95,813 $
146,750 $
5,734,106
$
(11,695) $
(5,709)
(9,607)
(9,537)
(435)
3,448
409
(46)
$
(18,289) $
(14,883) $
543,901
$
77,524 $
131,867 $
6,278,007
1) All figures in thousands except gold and palladium ounces produced and sold and per ounce amounts.
2) Ounces produced represent the quantity of gold, silver and palladium contained in concentrate or doré prior to smelting or refining deductions. Production figures are based on
information provided by the operators of the mining operations to which the mineral stream interests relate or management estimates in those situations where other
information is not available. Certain production figures may be updated in future periods as additional information is received.
3) Refer to discussion on non-IFRS measure (iii) on page 47 of this MD&A.
4) Comprised of the operating Coleman, Copper Cliff, Garson, Creighton and Totten gold interests as well as the non-operating Stobie and Victor gold interests.
5) Comprised of the operating Minto and 777 gold interests in addition to the non-operating Rosemont gold interest. The Minto mine was placed into care and maintenance from
October 2018 to October 2019.
6) Comprised of the operating Los Filos, Zinkgruvan, Yauliyacu, Stratoni, Neves-Corvo, Aljustrel, Minto and 777 silver interests as well as the non-operating Keno Hill, Loma de
La Plata, Pascua-Lama and Rosemont silver interests. The Minto mine was placed into care and maintenance from October 2018 to October 2019.
On a GEO and SEO basis, results for the Company for the three months ended December 31, 2019 were as follows:
Gold equivalent basis 5
Silver equivalent basis 5
Ounces
Produced 1, 2
186,027
15,502
Ounces
Sold 2
152,514
12,709
Three Months Ended December 31, 2019
Average
Realized
Price
($'s Per
Ounce)
$ 1,464
$ 17.56
Average
Cash Cost
($'s Per
Ounce) 3
$ 418
$ 5.02
Cash
Operating
Margin
($'s Per
Ounce) 4
$ 1,046
$ 12.54
Average
Depletion
($'s Per
Ounce)
$ 417
$ 5.01
Gross
Margin
($'s Per
Ounce)
$ 629
$ 7.53
1) Ounces produced represent the quantity of gold, silver and palladium contained in concentrate or doré prior to smelting or refining deductions. Production figures are based on
information provided by the operators of the mining operations to which the mineral stream interests relate or management estimates in those situations where other
information is not available. Certain production figures may be updated in future periods as additional information is received.
2) Silver ounces produced and sold in thousands.
3) Refer to discussion on non-IFRS measure (iii) on page 47 of this MD&A.
4) Refer to discussion on non-IFRS measure (iv) on page 48 of this MD&A.
5) GEOs and SEOs, which are provided to assist the reader, are based on the following commodity price assumptions: $1,500 per ounce gold; $18.00 per ounce silver; and
$2,000 per ounce palladium, consistent with those used in estimating the Company's production guidance for 2020.
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [19]
Gold Production
For the three months ended December 31, 2020, attributable gold production was 93,100 ounces relative to 107,100
ounces for the comparable period in 2019, with the 14,000 ounce decrease being primarily attributable to the following
factors:
•
•
•
11,900 ounce (16%) decrease related to the gold stream relative to the Salobo mine which was primarily due
to lower throughput which, as per Vale's Fourth Quarter and Year End 2020 Production and Sales Report,
was impacted due to unscheduled maintenance and an incident which led Vale to review and halt mine and
plant activities for a short period, during which changes in maintenance routines were implemented to
improve operations and safety conditions, with the two 12 mtpa lines operating at an average rate of
approximately 83% of capacity during Q4-2020 as compared to 98% during Q4-2019; and
2,500 ounce (41%) decrease related to gold production from the Other mines which was primarily due to the
temporary suspension of the 777 mine following the skip hoist incident in October 2020 coupled with lower
production at Minto; partially offset by
1,300 ounce (20%) increase related to the gold stream relative to the Sudbury mines which was primarily due
to higher recoveries.
Silver Production
For the three months ended December 31, 2020, attributable silver production was 6.5 million ounces relative to 5.9
ounces for the comparable period in 2019, with the 0.6 million ounce increase being primarily attributable to the
following factor:
•
588,000 ounce (44%) increase related to the silver stream relative to the Antamina mine, which was due to
the mining of higher grade material.
Palladium Production
For the three months ended December 31, 2020, attributable palladium production was 5,700 ounces relative to 6,100
ounces for the comparable period in 2019.
Net Earnings
For the three months ended December 31, 2020, net earnings was $157 million relative to $78 million for the
comparable period in 2019, with the $79 million increase being primarily attributable to the following factors:
Net earnings for the three months ended December 31, 2019
Variance in gross margin
Variance in revenue due to:
Payable gold production
Payable silver production
Payable palladium production
Changes in PBND
Prices realized per ounce sold
Total increase to revenue
Variance in cost of sales due to:
Sales volume
Sales mix differences
Cash cost per ounce
Depletion per ounce
Total decrease to cost of sales
Total increase to gross margin
Other variances
General and administrative expenses (see page 25)
Other income / expense (see page 25)
Finance costs (see page 26)
Income taxes (see page 26)
Total increase in net earnings
Net earnings for the three months ended December 31, 2020
$
$
$
$
$
$
$
$
77,524
(20,269)
9,967
(811)
3,518
70,585
62,990
4,189
731
(4,933)
3,112
3,099
66,089
2,304
1,265
7,411
2,628
79,697
157,221
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [20]
Ounces
Produced²
Ounces
Sold
Average
Realized
Price
($'s Per
Ounce)
Average
Cash Cost
($'s Per
Ounce)3
Average
Depletion
($'s Per
Ounce)
Sales
Net
Earnings
Cash Flow
From
Operations
Total
Assets
Year Ended December 31, 2020
247,941 256,212 $
1,757 $
408 $
374 $
450,166 $ 249,708 $ 345,621 $ 2,509,344
28,607
27,714
14,860
14,320
38,272
38,604
12,643
12,660
25,096
20,043
1,797
1,785
1,775
1,766
1,818
400
406
610
316
421
831
338
315
449
281
49,791
25,556
68,519
22,353
36,442
15,679
14,907
32,813
12,666
22,357
38,609
19,744
44,978
18,351
28,007
321,016
105,569
182,202
224,310
7,526
367,419 369,553 $
1,767 $
426 $
399 $
652,827 $ 348,130 $ 495,310 $ 3,349,967
7,631
7,443 $
20.25 $
4.26 $
3.24 $
150,720 $
94,886 $ 119,016 $
350,572
5,369
4,791
1,623
1,461
8,269
5,537
21.34
21.42
20.84
4.19
5.99
7.41
8.74
7.63
1.97
102,241
31,285
115,379
40,312
11,397
63,460
82,188
22,541
74,159
626,934
217,044
474,975
22,892
19,232 $
20.78 $
5.28 $
4.58 $
399,625 $ 210,055 $ 297,904 $ 1,669,525
22,187
20,051 $
2,183 $
389 $
428 $
43,772 $
27,387 $
35,967 $
241,389
Gold
Salobo
Sudbury 4
Constancia
San Dimas
Stillwater
Other 5
Silver
Peñasquito
Antamina
Constancia
Other 6
Palladium
Stillwater
Cobalt
Voisey's Bay
-
- $
n.a. $
n.a. $
n.a. $
- $
- $
- $
227,510
Operating results
Other
General and administrative
Finance costs
Other
Income tax
Total other
$ 1,096,224 $ 585,572 $ 829,181 $ 5,488,391
$
(65,698) $
(46,914)
(16,715)
(17,551)
2,170
2,475
677
49
$
(77,768) $
(63,739) $
468,881
$ 507,804 $ 765,442 $ 5,957,272
1) All figures in thousands except gold and palladium ounces produced and sold and per ounce amounts.
2) Ounces produced represent the quantity of gold, silver and palladium contained in concentrate or doré prior to smelting or refining deductions. Production figures are based on
information provided by the operators of the mining operations to which the mineral stream interests relate or management estimates in those situations where other
information is not available. Certain production figures may be updated in future periods as additional information is received.
3) Refer to discussion on non-IFRS measure (iii) on page 47 of this MD&A.
4) Comprised of the operating Coleman, Copper Cliff, Garson, Creighton and Totten gold interests as well as the non-operating Stobie and Victor gold interests.
5) Comprised of the operating 777 and Minto gold interests, the non-operating Rosemont gold interest and the newly acquired Marmato gold interest.
6) Comprised of the operating Los Filos, Zinkgruvan, Yauliyacu, Stratoni, Neves-Corvo, Aljustrel, Minto, Keno Hill and 777 silver interests, the non-operating Loma de La Plata,
Pascua-Lama and Rosemont silver interests and the newly acquired Marmato and Cozamin silver interests.
On a GEO and SEO basis, results for the Company for the year ended December 31, 2020 were as follows:
Gold equivalent basis 5
Silver equivalent basis 5
Ounces
Produced 1, 2
671,713
55,976
Ounces
Sold 2
627,063
52,255
Year Ended December 31, 2020
Average
Realized
Price
($'s Per
Ounce)
Average
Cash Cost
($'s Per
Ounce) 3
Cash
Operating
Margin
($'s Per
Ounce) 4
Average
Depletion
($'s Per
Ounce)
Gross
Margin
($'s Per
Ounce)
$ 1,748
$ 20.98
$ 425
$ 5.10
$ 1,323
$ 15.88
$ 389
$ 4.67
$ 934
$ 11.21
1) Ounces produced represent the quantity of gold, silver and palladium contained in concentrate or doré prior to smelting or refining deductions. Production figures are based on
information provided by the operators of the mining operations to which the mineral stream interests relate or management estimates in those situations where other
information is not available. Certain production figures may be updated in future periods as additional information is received.
2) Silver ounces produced and sold in thousands.
3) Refer to discussion on non-IFRS measure (iii) on page 47 of this MD&A.
4) Refer to discussion on non-IFRS measure (iv) on page 48 of this MD&A.
5) GEOs and SEOs, which are provided to assist the reader, are based on the following commodity price assumptions: $1,500 per ounce gold; $18.00 per ounce silver; and
$2,000 per ounce palladium, consistent with those used in estimating the Company's production guidance for 2020.
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [21]
Average
Realized
Price
($'s Per
Ounce)
Average
Cash Cost
($'s Per
Ounce)3
Average
Depletion
($'s Per
Ounce)
Ounces
Produced²
Ounces
Sold
Sales
Gross
Margin
Impairment
Charges 4
Net
Earnings
Cash Flow
From
Operations
Total
Assets
Year Ended December 31, 2019
276,233 263,076 $
1,389 $
404 $
383 $ 365,448 $ 158,363 $
- $ 158,363 $ 259,166 $ 2,605,257
33,284 27,364
19,288 19,771
44,377 44,667
13,635 12,396
19,687 21,812
1,397
1,397
1,400
1,396
1,372
400
402
604
250
401
819
361
310
519
376
38,234
27,613
62,528
17,303
29,919
4,868
12,527
21,706
7,776
12,992
406,504 389,086 $
1,391 $
421 $
408 $ 541,045 $ 218,232 $
-
-
-
4,868
344,043
110,406
12,527
21,706
7,776
27,385
19,668
35,534
14,209
21,561
- $ 218,232 $ 377,523 $ 3,497,235
12,992
229,994
194,367
13,168
-
-
6,217
4,577 $
16.30 $
4.21 $
3.06 $ 74,578 $
41,291 $
- $ 41,291 $ 55,310 $
374,702
5,075
4,727
2,505
2,406
8,599
5,993
16.15
16.17
16.45
3.24
5.93
6.68
8.73
7.50
2.50
76,328
38,895
98,600
19,739
6,593
43,581
22,396 17,703 $
16.29 $
5.02 $
4.99 $ 288,401 $ 111,204 $
-
-
668,810
19,739
6,593
61,007
24,637
55,509
- $ 111,204 $ 196,463 $ 1,759,392
43,581
487,693
228,187
-
Gold
Salobo
Sudbury 5
Constancia
San Dimas
Stillwater
Other 6
Silver
Peñasquito
Antamina
Constancia
Other 7
Palladium
Stillwater
21,993 20,681 $
1,542 $
273 $
470 $ 31,886 $
16,511 $
- $ 16,511 $ 26,230 $
249,969
Cobalt
Voisey's Bay
-
- $
n.a. $
n.a. $
n.a. $
- $
- $ (165,912) $ (165,912) $
- $
227,510
Operating results
Other
General and administrative
Finance costs
Other
Income tax
Total other
$ 861,332 $ 345,947 $ (165,912) $ 180,035 $ 600,216 $ 5,734,106
$ (54,507) $ (46,292)
(44,733)
(2,191)
(48,730)
274
9,066
(5,380)
$ (93,897) $ (98,596) $
543,901
$ 86,138 $ 501,620 $ 6,278,007
1) All figures in thousands except gold and palladium ounces produced and sold and per ounce amounts.
2) Ounces produced represent the quantity of gold, silver and palladium contained in concentrate or doré prior to smelting or refining deductions. Production figures are based on
information provided by the operators of the mining operations to which the mineral stream interests relate or management estimates in those situations where other
information is not available. Certain production figures may be updated in future periods as additional information is received.
3) Refer to discussion on non-IFRS measure (iii) on page 47 of this MD&A.
4) Refer to page 24 of this MD&A for more information.
5) Comprised of the operating Coleman, Copper Cliff, Garson, Creighton and Totten gold interests as well as the non-operating Stobie and Victor gold interests.
6) Comprised of the operating Minto and 777 gold interests in addition to the non-operating Rosemont gold interest. The Minto mine was placed into care and maintenance from
October 2018 to October 2019.
7) Comprised of the operating Los Filos, Zinkgruvan, Yauliyacu, Stratoni, Aljustrel, Neves-Corvo, Minto and 777 silver interests as well as the non-operating Keno Hill, Loma de
La Plata, Pascua-Lama and Rosemont silver interests. The Minto mine was placed into care and maintenance from October 2018 to October 2019.
On a GEO and SEO basis, results for the Company for the year ended December 31, 2019 were as follows:
Gold equivalent basis 5
Silver equivalent basis 5
Ounces
Produced 1, 2
704,579
58,715
Ounces
Sold 2
629,098
52,425
Year Ended December 31, 2019
Average
Realized
Price
($'s Per
Ounce)
Average
Cash Cost
($'s Per
Ounce) 3
Cash
Operating
Margin
($'s Per
Ounce) 4
Average
Depletion
($'s Per
Ounce)
Gross
Margin
($'s Per
Ounce)
$ 1,369
$ 16.43
$ 411
$ 4.93
$ 958
$ 11.50
$ 408
$ 4.90
$ 550
$ 6.60
1) Ounces produced represent the quantity of gold, silver and palladium contained in concentrate or doré prior to smelting or refining deductions. Production figures are based on
information provided by the operators of the mining operations to which the mineral stream interests relate or management estimates in those situations where other
information is not available. Certain production figures may be updated in future periods as additional information is received.
2) Silver ounces produced and sold in thousands.
3) Refer to discussion on non-IFRS measure (iii) on page 47 of this MD&A.
4) Refer to discussion on non-IFRS measure (iv) on page 48 of this MD&A.
5) GEOs and SEOs, which are provided to assist the reader, are based on the following commodity price assumptions: $1,500 per ounce gold; $18.00 per ounce silver; and
$2,000 per ounce palladium, consistent with those used in estimating the Company's production guidance for 2020.
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [22]
Gold Production
For the year ended December 31, 2020, attributable gold production was 367,400 ounces, relative to 406,500 ounces
for the comparable period in 2019, with the 39,100 ounce decrease being primarily attributable to the following factors:
•
•
•
•
•
•
28,300 ounce (10%) decrease related to the gold stream relative to the Salobo mine, primarily due to lower
throughput, with production being adversely impacted by increased absenteeism resulting from the COVID-19
pandemic. The two 12 mtpa lines operated at an average rate of approximately 85% of capacity during 2020
as compared to 94% during 2019;
6,100 ounce (14%) decrease related to the gold stream relative to the San Dimas mine, primarily due to lower
grades, coupled with the impact of revising the silver to gold conversion ratio from 70:1 to 90:1 from April 1,
2020 to October 15, 2020;
4,700 ounce (14%) decrease related to the gold stream relative to the Sudbury mines, which was primarily
due to the mining of lower grade material coupled with lower throughput, with production being affected by
protective measures put in place due to the COVID-19 pandemic;
4,400 ounce (23%) decrease related to the gold stream relative to the Constancia mine, primarily due to
lower grades and throughput, with operations at the mine being temporarily suspended during the second
quarter of 2020 resulting from the COVID-19 pandemic; and
1,000 ounce (7%) decrease related to the gold stream relative to the Stillwater mines, primarily due to lower
recoveries, partially offset by higher throughput; partially offset by
5,400 ounce (27%) increase related to gold production at the Other mines, primarily due to the resumption of
production at the Minto mine during October 2019.
Silver Production
For the year ended December 31, 2020, attributable silver production was 22.9 ounces relative to 22.4 million ounces
for the comparable period in 2019, with the 0.5 million ounce increase being primarily attributable to the following
factors:
•
•
•
•
1,413,000 ounce (23%) increase related to the silver stream relative to the Peñasquito mine, primarily due to
higher throughput and recovery, as the impact to throughput in 2019 when there was an illegal blockade
which ran from April 29, 2019 to June 17, 2019 and from September 15, 2019 to October 22, 2019 was
greater than the impact to throughput in 2020 when there was a temporary suspension of operations during
the second quarter resulting from the COVID-19 pandemic; and
294,000 ounce (6%) increase related to the silver stream relative to the Antamina mine, which was primarily
due to higher grades, partially offset by lower recoveries and throughput, as operations at the mine were
temporarily suspended during the second quarter of 2020 resulting from the COVID-19 pandemic; partially
offset by
882,000 ounce (35%) decrease related to the silver stream relative to the Constancia mine, primarily due to
lower grades and throughput, with operations at the mine being temporarily suspended during the second
quarter of 2020 resulting from the COVID-19 pandemic; and
329,000 ounce (4%) decrease related to silver production from the Other mines, due primarily to lower
production at Zinkgruvan, Neves Corvo and Yauliyacu, with operations at Yauliyacu being temporarily
suspended during the second quarter of 2020 resulting from the COVID-19 pandemic, partially offset by the
resumption of mining at the Minto mine during October 2019.
Palladium Production
For the year ended December 31, 2020, attributable palladium production was 22,200 ounces relative to 22,000
ounces for the comparable period in 2019.
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [23]
Net Earnings
For the year ended December 31, 2020, net earnings was $508 million relative to $86 million for the comparable
period in 2019, with the $422 million increase being primarily attributable to the following factors:
Net earnings for the year ended December 31, 2019
Variance in gross margin
Variance in revenue due to:
Payable gold production
Payable silver production
Payable palladium production
Changes in PBND
Prices realized per ounce sold
Total increase to revenue
Variance in cost of sales due to:
Sales volume
Sales mix differences
Cash cost per ounce
Depletion per ounce
Total decrease to cost of sales
Total increase to gross margin
Other variances
General and administrative expenses (see page 25)
Impairment charge - Voisey's Bay cobalt stream - prior period
Other income / expense (see page 25)
Finance costs (see page 26)
Income taxes (see page 26)
Total increase in net earnings
Net earnings for the year ended December 31, 2020
$
$
$
$
$
$
$
$
86,138
(53,692)
10,896
779
38,778
238,131
234,892
1,379
10,205
(14,660)
7,809
4,733
239,625
(11,191)
165,912
1,896
32,015
(6,591)
421,666
507,804
Impairment of Mineral Stream Interests
At every reporting period the Company assesses each PMPA to determine whether any indication of impairment or
impairment reversal exists. Based on the Company’s analysis, there were no indicators of impairment or impairment
reversal at December 31, 2020 or December 31, 2019. The following PMPA was determined to have an indicator of
impairment and be impaired at June 30, 2019:
(in thousands)
Cobalt interests
Voisey's Bay
Total impairment charges
Three Months Ended
December 31
Years Ended
December 31
2020
2019
2020
2019
$
$
- $
- $
- $
- $
- $
165,912
- $
165,912
Voisey’s Bay - Indicator of Impairment
On June 11, 2018, the Company entered into an agreement (the “Voisey’s Bay PMPA”) to acquire from Vale an
amount of cobalt equal to 42.4% of the cobalt production from its Voisey’s Bay mine, located in Canada, until the
delivery of 31 million pounds of cobalt and 21.2% of cobalt production thereafter for the life of mine for a total upfront
cash payment of $390 million. Concurrently, Vale also entered into a streaming agreement with Cobalt 27 Capital
Corp. (“Cobalt 27”) on the Voisey’s Bay mine with similar terms and conditions to the Voisey’s Bay PMPA.
On June 18, 2019, Cobalt 27 announced that it had entered into an agreement with Pala Investments Limited (“Pala”)
whereby Pala would acquire 100% of Cobalt 27’s issued and outstanding common shares. The estimated implied price
paid by Pala for Cobalt 27’s streaming agreement on the Voisey’s Bay mine was significantly lower than the original
upfront cash payment paid by Cobalt 27 to Vale at the time their agreement was entered into. The implied purchase
price paid by Pala to acquire Cobalt 27’s Voisey’s Bay stream was determined to be an indicator of impairment relative
to the Company’s Voisey’s Bay PMPA.
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [24]
The Voisey’s Bay PMPA had a pre-impairment carrying value at June 30, 2019 of $393 million. Management
estimated that the recoverable amount at June 30, 2019 under the Voisey’s Bay PMPA was $227 million, representing
its FVLCD and resulting in an impairment charge of $166 million. The recoverable amount related to the Voisey’s Bay
PMPA was estimated using an average discount rate of 7% and the market price of cobalt of $14.83 per pound. As
this valuation technique requires the use of estimates and assumptions such as commodity prices, discount rates,
recoverable pounds of cobalt and operating performance, it is classified within Level 3 of the fair value hierarchy.
General and Administrative
(in thousands)
Salaries and benefits
Salaries and benefits, excluding PSUs
PSUs
Total salaries and benefits
Depreciation
Donations
Professional fees
Other
Three Months Ended
December 31
Years Ended
December 31
2020
2019
2020
2019
2,830
(2,336)
21,520
$ 4,465 $ 3,076 $ 16,733 $ 13,840
17,174
$ 2,129 $ 5,906 $ 38,253 $ 31,014
1,903
2,946
2,496
10,457
1,889
5,792
3,590
10,742
452
1,413
987
3,105
494
874
594
2,396
General and administrative before equity settled stock
based compensation
$ 8,086 $ 10,264 $ 60,266 $ 48,816
Equity settled stock based compensation (a non-cash
expense)
1,305
1,431
5,432
5,691
Total general and administrative
$ 9,391 $ 11,695 $ 65,698 $ 54,507
For the three months ended December 31, 2020, general and administrative expenses decreased by $2 million
relative to the comparable period in the previous year with the decrease being primarily the result of differences in
accrued costs associated with the Company’s performance share units (“PSUs”) partially offset by higher accrued
bonuses and charitable donations, with the Company having established a $5 million Community Support and
Response Fund relative to the COVID-19 pandemic (see page 3 of this MD&A for more information).
For the year ended December 31, 2020, general and administrative expenses increased by $11 million relative to the
comparable period in the previous year, with the increase being primarily the result of differences in accrued costs
associated with the Company’s PSUs and higher charitable donations.
Other (Income) Expense
(in thousands)
Interest income
Dividend income
Foreign exchange loss
(Gain) loss on fair value adjustment of share
purchase warrants held
(Gain) loss on fair value adjustment of
convertible notes receivable
Gain on disposal of mineral royalty interest
Other
Three Months Ended
December 31
Years Ended
December 31
2020
$ (51)
-
968
2019
$ (131)
-
258
2020
$ (229)
-
152
2019
$ (816)
(59)
1,028
(1,182)
(517)
-
(48)
10
366
-
(68)
(338)
16
(1,899)
-
144
1,043
(2,929)
1,443
Total other (income) expense
$ (830)
$ 435
$ (2,170)
$ (274)
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [25]
Finance Costs
(in thousands)
Average principal outstanding during period
Average effective interest rate during period
Total interest costs incurred during period
Costs related to undrawn credit facilities
Interest expense - lease liabilities
Letter of guarantee
Three Months Ended
December 31
Years Ended
December 31
2020
2019
$ 344,472 $ 929,666 $ 601,112 $ 1,099,846
2019
2020
3.62%
1.20%
2.03%
$ 1,035 $ 8,418 $ 12,226
4,349
140
-
1,137
52
-
1,119
42
-
4.07%
$44,767
3,834
175
(46)
Total finance costs
$ 2,196 $ 9,607 $ 16,715 $ 48,730
Income Tax Expense (Recovery)
(in thousands)
Current income tax expense (recovery)
Deferred income tax expense (recovery) related to:
Origination and reversal of temporary differences
Write down (reversal of write down) or recognition of
prior period temporary differences
Total deferred income tax expense (recovery)
Income tax expense (recovery) recognized in net
Three Months Ended
December 31
Years Ended
December 31
2020
2019
2020
2019
$ (2,000) $ 20 $ (4,606) $ 144
3,301
1,666 $ 14,546 $ 7,311
(7,377)
(16,521)
$ (4,076) $ (3,468) $ 2,131 $ (9,210)
(12,415)
(5,134)
earnings
$ (6,076) $ (3,448) $ (2,475) $ (9,066)
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [26]
Liquidity and Capital Resources1
As at December 31, 2020, the Company had cash and cash equivalents of $193 million (December 31, 2019 - $104
million) and debt outstanding under its Revolving Facility of $195 million (December 31, 2019 - $875 million), resulting
in a net debt position of $2 million (December 31, 2019 - $771 million).2
A summary of the Company’s cash flow activity is as follows:
Three Months Ended December 31, 2020
Cash Flows From Operating Activities
During the three months ended December 31, 2020, the Company generated operating cash flows of $208 million
compared with $132 million during the comparable period of 2019, with the increase being attributable to the following:
Operating cash inflow for the three months ended December 31, 2019
Variance attributable to revenue (see page 20):
Decrease in accounts receivable relative to sales
Total increase to cash inflows attributable to sales
Variance attributable to cost of sales, excluding depletion:
Sales volume
Sales mix differences
Cost per ounce
Increase in accounts payable relative to cost of sales
Total decrease to cash outflows attributable to cost of sales
Total increase to net cash inflows attributable to gross margin
Other variances:
General and administrative
Finance costs
Income taxes
Other
Total increase to net cash inflows
Operating cash inflow for the three months ended December 31, 2020
$
$
$
$
$
$
$
$
131,867
62,990
2,948
65,938
2,056
2,115
(4,932)
6,425
5,664
71,602
(2,675)
7,557
25
(414)
76,095
207,962
Finance Costs Variance
As more fully detailed on page 26 of this MD&A, the decrease to cash outflows relative to finance costs during the
period was due to a combination of lower market rates of interest coupled with a lower average outstanding principal
balance resulting from repayments made during 2020 under the Revolving Facility.
Cash Flows From Financing Activities
During the three months ended December 31, 2020, the Company had net cash outflows from financing activities of
$339 million, which was primarily the result of repayments under the Company’s Revolving Facility in the amount of
$293 million and dividend payments totaling $47 million, partially offset by proceeds relative to the exercise of stock
options in the amount of $1 million. During the three months ended December 31, 2019, the Company had net cash
outflows from financing activities of $169 million which was primarily the result of repayments under the Company’s
Revolving Facility in the amount of $139 million and dividend payments totaling $34 million, partially offset by proceeds
relative to the exercise of stock options in the amount of $4 million.
Cash Flows From Investing Activities
During the three months ended December 31, 2020, the Company had net cash inflows from investing activities of
$113 million, which was primarily the result of $113 million received relative to proceeds on the disposal of long-term
equity investments (see page 10 of this MD&A for more information). During the three months ended December 31,
2019, the Company had net cash outflows from investing activities of $10 million, which was primarily the result of a
$10 million advance to Gold X in exchange for the Gold X Convertible Note (see page 12 of this MD&A).
1 Statements made in this section contain forward-looking information with respect to funding outstanding commitments and
continuing to acquire accretive mineral stream interests and readers are cautioned that actual outcomes may vary. Please see
“Cautionary Note Regarding Forward-Looking Statements” for material risks, assumptions and important disclosure associated with
this information.
2 As explained in non-IFRS measure (v) on page 48 of this MD&A, net debt equals bank debt less cash and cash equivalents.
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [27]
Year Ended December 31, 2020
Cash Flows From Operating Activities
During the year ended December 31, 2020, the Company generated operating cash flows of $765 million compared
with $502 million during the comparable period of 2019, with the increase being attributable to the following:
Operating cash inflow for the year ended December 31, 2019
Variance attributable to revenue (see page 24):
Decrease in accounts receivable relative to sales
Total increase to cash inflows attributable to sales
Variance attributable to cost of sales, excluding depletion:
Sales volume
Sales mix differences
Cost per ounce
Increase in accounts payable relative to cost of sales
Total increase to cash outflows attributable to cost of sales
Total increase to net cash inflows attributable to gross margin
Other variances:
General and administrative
Finance costs
Income taxes
Other
Total increase to net cash inflows
Operating cash inflow for the year ended December 31, 2020
$
$
$
$
$
$
$
$
501,620
234,892
1,940
236,832
731
5,724
(14,658)
336
(7,867)
228,965
(622)
27,182
5,429
2,868
263,822
765,442
Finance Costs Variance
As more fully detailed on page 27 of this MD&A, the decrease to cash outflows relative to finance costs during the
period was due to a combination of lower market rates of interest coupled with a lower average outstanding principal
balance, partially offset by the timing of when interest payments are due during the period. The Company uses excess
cash to pay down the Revolving Facility, with the average principle outstanding during 2020 being $601 million,
compared to an average of $1.1 billion being outstanding during 2019.
Income Taxes Variance
The decrease to cash outflows relative to income taxes was primarily the result of payments made in the previous year
relative to the CRA Settlement.
Cash Flows From Financing Activities
During the year ended December 31, 2020, the Company had net cash outflows from financing activities of $827
million, which was primarily the result of repayments under the Company’s Revolving Facility in the amount of $680
million and dividend payments totaling $167 million, partially offset by proceeds relative to the exercise of stock options
in the amount of $22 million, which is inclusive of $2 million relative to a stock option exercise which occurred on
December 31, 2019. During the year ended December 31, 2019, the Company had net cash outflows from financing
activities of $484 million, which was primarily the result of repayments under the Company’s Revolving Facility in the
amount of $390 million and dividend payments totaling $130 million, partially offset by proceeds relative to the exercise
of stock options in the amount of $37 million.
Cash Flows From Investing Activities
During the year ended December 31, 2020, the Company had net cash inflows from investing activities of $150 million,
which was primarily the result of $163 million received relative to the proceeds on disposal of long-term equity
investments, partially offset by payments totaling $11 million for the acquisition of long-term equity investments (see
page 10 of this MD&A for more information). During the year ended December 31, 2019, the Company had net cash
inflows from investing activities of $11 million, which was primarily the result of a $18 million received relative to the
proceeds on disposal of long-term equity investments and $9 million received from the partial disposition of the
Metates mineral royalty interest, partially offset by the advance of $10 million to Gold X in exchange for the Gold X
Convertible Note and a $2 million payment to Panoro in connection with the Cotabambas Early Deposit Agreement.
Conclusion
In the opinion of management, the $193 million of cash and cash equivalents as at December 31, 2020, combined with
the liquidity provided by the available credit under the $2 billion Revolving Facility and ongoing operating cash flows
positions the Company well to fund all outstanding commitments, as detailed on pages 29 and 30 of this MD&A, in
addition to known contingencies as well as providing flexibility to acquire additional accretive mineral stream interests.
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [28]
Contractual Obligations and Contingencies1
Mineral Stream Interests
The following table summarizes the Company’s commitments to make per-ounce cash payments for gold, silver and
palladium and per pound cash payments for cobalt to which it has the contractual right pursuant to the PMPAs:
Attributable Payable Production to be
Purchased
Per Unit of Measurement Cash Payment 1
Mineral Stream Interests
Peñasquito
Constancia
Salobo
Sudbury
Antamina
San Dimas
Stillwater
Voisey's Bay
Other
Gold
0%
50%
75%
70%
0%
variable ³
100%
0%
Silver Palladium Cobalt
25%
100%
0%
0%
33.75%
0% ³
0%
0%
0%
0%
0%
0%
0%
0%
4.5% ⁴
0%
0% $
0% $
0% $
0%
0% $
0%
0% 42.4% ⁶
Gold
n/a
$
408 ² $
412
400
n/a
606
18% ⁵
n/a
Silver Palladium
n/a
n/a
n/a
n/a
n/a
n/a
4.29
6.02 ²
n/a
n/a
20%
n/a
n/a
n/a
Los Filos
Zinkgruvan
Yauliyacu
Stratoni
Neves-Corvo
Aljustrel
Minto
Keno Hill
Pascua-Lama
Rosemont
Loma de La Plata
777
Marmato
Cozamin
Early Deposit
Toroparu
Cotabambas
Kutcho
0%
0%
0%
0%
0%
0%
100%
100%
100% ⁸
100%
100%
100% ¹¹
100% ¹² 100%
0%
0%
100%
0%
25%
25%
100%
12.5%
50%
100%
6.5% ¹⁶ 100% ¹⁶
50% ¹⁸
0%
10%
25% ¹⁹
100% ²⁰
50%
100% ¹⁹
100% ²⁰
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
n/a
0%
n/a
0%
n/a
0%
n/a
0%
n/a
0%
n/a
0%
75% ¹³ $
0%
n/a
0%
n/a
0%
450
0% $
0%
n/a
0% $ 425 ²
18% ¹⁷
0%
0%
4.46
$
4.46
$
8.94 ⁹
$
$ 11.43 ¹⁰
$
4.34
50%
4.31
variable ¹⁴
3.90
$
3.90
$
$
4.00
$ 6.26 ²
18% ¹⁷
10%
n/a
0% $
0% $
0%
400
450
20%
$
$
3.90
5.90
20%
Cobalt
n/a
n/a
n/a
n/a
n/a
n/a
n/a
18% ⁷
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
18% ⁵
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
Date of
Original
Term of
Contract
Agreement
24-Jul-07
Life of Mine
8-Aug-12
Life of Mine
28-Feb-13
Life of Mine
28-Feb-13
20 years
Life of Mine
3-Nov-15
Life of Mine 10-May-18
16-Jul-18
Life of Mine
11-Jun-18
Life of Mine
25 years
Life of Mine
Life of Mine
Life of Mine
50 years
50 years
Life of Mine
Life of Mine
Life of Mine
Life of Mine
Life of Mine
Life of Mine
Life of Mine
Life of Mine
15-Oct-04
8-Dec-04
23-Mar-06
23-Apr-07
5-Jun-07
5-Jun-07
20-Nov-08
2-Oct-08
8-Sep-09
10-Feb-10
n/a ¹⁵
8-Aug-12
5-Nov-20
10-Dec-20
Life of Mine
Life of Mine
Life of Mine
11-Nov-13
21-Mar-16
14-Dec-17
1) The production payment is measured as either a fixed amount per ounce of metal delivered, or as a percentage of the spot price of the underlying metal on the date of
delivery. Contracts where the payment is a fixed amount per ounce of metal delivered are subject to an annual inflationary increase, with the exception of Loma de La Plata
and Sudbury. Additionally, should the prevailing market price for the applicable metal be lower than this fixed amount, the per ounce cash payment will be reduced to the
prevailing market price, with the exception of Yauliyacu where the per ounce cash payment will not be reduced below $4.44, subject to an annual inflationary factor.
2) Subject to an increase to $9.90 per ounce of silver and $550 per ounce of gold after the initial 40-year term.
3) Under the terms of the San Dimas PMPA, the Company is entitled to an amount equal to 25% of the payable gold production plus an additional amount of gold equal to 25%
of the payable silver production converted to gold at a fixed gold to silver exchange ratio of 70:1 from the San Dimas mine. If the average gold to silver price ratio decreases
to less than 50:1 or increases to more than 90:1 for a period of 6 months or more, then the "70" shall be revised to "50" or "90", as the case may be, until such time as the
average gold to silver price ratio is between 50:1 to 90:1 for a period of 6 months or more in which event the "70" shall be reinstated. Effective April 1, 2020, the fixed gold to
silver exchange ratio was revised to 90:1, with the 70:1 ratio being reinstated on October 15, 2020.
4) The Company is committed to purchase 4.5% of Stillwater palladium production until 375,000 ounces are delivered to the Company, thereafter 2.25% of Stillwater palladium
production until 550,000 ounces are delivered to the Company and 1% of Stillwater palladium production thereafter for the life of mine.
5) To be increased to 22% of the spot price once the market value of gold and palladium delivered to Wheaton, net of the per ounce cash payment, exceeds the initial upfront
cash deposit.
6) Once the Company has received 31 million pounds of cobalt, the Company’s attributable cobalt production will be reduced to 21.2%.
7) To be increased to 22% of the spot price once the market value of cobalt delivered to Wheaton, net of the per pound cash payment, exceeds the initial upfront cash deposit.
8) The Company is committed to purchase an amount equal to 100% of the first 1.5 million ounces of payable silver produced at Yauliyacu per annum and 50% of any excess.
9) Should the market price of silver exceed $20 per ounce, in addition to the $8.94 per ounce, the Company is committed to pay Glencore an additional amount for each ounce
of silver delivered equal to 50% of the excess, to a maximum of $10 per ounce, such that when the market price of silver is $40 or above, the Company will pay Glencore
$18.94 per ounce of silver delivered.
10) In October 2015, in order to incentivize additional exploration and potentially extend the limited remaining mine life of Stratoni, Wheaton and Eldorado Gold agreed to modify
the Stratoni PMPA such that the production price per ounce of silver delivered to Wheaton would be increased over the then fixed price based on the amount of drilling
completed outside of the existing ore body and within Wheaton’s defined area of interest (“Expansion Drilling”) by December 31, 2020.The figures in the above table reflect
the fact that Eldorado completed a total of 30,000 meters of Expansion Drilling, resulting in a $7.00 per ounce increase.
11) Wheaton only has the rights to silver contained in concentrate containing less than 15% copper at the Aljustrel mine.
12) The Company is committed to acquire 100% of the first 30,000 ounces of gold produced per annum and 50% thereafter.
13) The Company has amended the Minto PMPA such that the cash payment per ounce of gold delivered will be 75% of the spot price of gold. This amended pricing will end on
the earlier of (i) 14 months after the first delivery is due; or (ii) once 11,000 ounces of gold have been delivered to the Company. Once this amended pricing ends, the cash
payment per ounce of gold delivered will be $325, subject to an increase in periods where the market price of copper is lower than $2.50 per pound.
14) Effective July 2020, the price paid per ounce of silver delivered under the Keno Hill PMPA has been modified to be between 10% of the spot price of silver when the market
price of silver is at or above $23.00 per ounce, to 90% of the spot price of silver when the market price of silver is at or below $15.00 per ounce.
15) Terms of the agreement not yet finalized.
16) Once Wheaton has received 190,000 ounces of gold and 2.15 million ounces of silver under the Marmato PMPA the Company’s attributable gold and silver production will
be reduced to 3.25% and 50%, respectively.
17) To be increased to 22% of the spot price once the market value of gold and silver delivered to the Company, net of the per ounce cash payment, exceeds the initial upfront
cash deposit.
18) Once Wheaton has received 10 million ounces, the Company’s attributable silver production will be reduced to 33% of silver production for the life of the mine.
19) Once 90 million silver equivalent ounces attributable to Wheaton have been produced, the attributable production will decrease to 16.67% of gold production and 66.67% of
silver production for the life of mine.
20) Once 51,000 ounces of gold and 5.6 million ounces of silver have been delivered to Wheaton, attributable production will decrease to 66.67% of gold and silver production
for the life of mine.
1 Statements made in this section contain forward-looking information and readers are cautioned that actual outcomes may vary.
Please see “Cautionary Note Regarding Forward-Looking Statements” for material risks, assumptions and important disclosure
associated with this information.
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [29]
Other Contractual Obligations and Contingencies
(in thousands)
2021
2022 - 2024
2025 - 2026
After 2026
Sub-Total
Other
Commitments
Total
Obligations With Scheduled Payment Dates
Bank debt 1
Interest 2
Payments for mineral
stream interests
Rosemont 3
Loma de La Plata
Marmato
Cozamin 4
Salobo 5
Payments for early
deposit mineral
stream interest
Toroparu
Cotabambas
Kutcho
Non-revolving credit
facility 6
Leases liabilities
Total contractual
obligations
$
$
-
2,311
- $ 195,000
622
8,722
$
- $ 195,000 $
-
11,655
- $
-
195,000
11,655
-
-
38,000
150,000
-
-
-
-
-
670,000
-
1,500
-
208
895
-
2,500
-
-
2,733
-
-
-
-
-
-
-
-
-
336
-
-
-
-
-
-
-
-
-
-
-
-
38,000
150,000
670,000
-
4,000
-
208
3,964
231,150
32,400
72,000
-
-
138,000
126,000
58,000
-
-
231,150
32,400
110,000
150,000
670,000
138,000
130,000
58,000
208
3,964
$ 192,914 $ 683,955 $ 195,958 $
- $ 1,072,827 $
657,550 $ 1,730,377
1) At December 31, 2020, the Company had $195 million drawn and outstanding on the Revolving Facility.
2) As the applicable interest rates are floating in nature, the interest charges are estimated based on market-based forward interest rate curves at the end of the reporting period
combined with the assumption that the principal balance outstanding at December 31, 2020 does not change until the debt maturity date.
3) Includes contingent transaction costs of $1 million.
4) In connection with the Cozamin PMPA, the Company paid Capstone $150 million on February 19, 2021 once certain conditions had been met.
5) As more fully explained on the following page, assuming the Salobo III expansion project achieves 12 Mtpa of additional processing capacity (bringing total processing
capacity at Salobo to 36 Mtpa) by the end of 2022, the Company would expect to pay an estimated expansion payment of between $570 million to $670 million.
6) Represents the maximum amount available to Kutcho under the Cdn$1.3 million non-revolving credit facility (see the Kutcho section on the following page).
Rosemont
The Company is committed to pay Hudbay total upfront cash payments of $230 million in two installments, with the
first $50 million being advanced upon Hudbay’s receipt of permitting for the Rosemont project and other customary
conditions and the balance of $180 million being advanced once project costs incurred on the Rosemont project
exceed $98 million and certain other customary conditions. Under the Rosemont PMPA, the Company is permitted to
elect to pay the deposit in cash or the delivery of common shares. Additionally, the Company will be entitled to certain
delay payments, including where construction ceases in any material respect, or if completion is not achieved within
agreed upon timelines. Hudbay and certain affiliates have provided the Company with a corporate guarantee and other
security.
On August 1, 2019, Hudbay announced that the U.S. District Court for the District of Arizona (“Court”) issued a ruling
in the lawsuits challenging the U.S. Forest Service’s issuance of the Final Record of Decision (“FROD”) for the
Rosemont project in Arizona. The Court ruled to vacate and remand the FROD such that Rosemont cannot proceed
with construction at this time. On June 22, 2020 Hudbay announced that they had filed the initial brief with the U.S.
Court of Appeals for the Ninth Circuit in relation to appealing this decision. As per Hudbay’s MD&A for the year ended
December 31, 2020, final briefs were filed in November 2020 and the oral hearing was completed in early February
2021. Hudbay indicates that a decision from the Ninth Circuit is expected in the second half of 2021.
Loma de La Plata
In connection with the Loma de La Plata PMPA, the Company is committed to pay Pan American Silver Corp.
(“PAAS”) total upfront cash payments of $32 million following the satisfaction of certain conditions, including PAAS
receiving all necessary permits to proceed with the mine construction and the Company finalizing the definitive terms
of the PMPA.
Marmato
In connection with the Marmato PMPA, the Company is committed to pay Aris Gold total upfront cash payments of
$110 million, $34 million of which is payable once mining contract 014-89M is extended; $4 million of which is payable
six months thereafter; and the remaining portion of which is payable during the construction of the MDZ project,
subject to receipt of required permits and licenses, sufficient financing having been obtained to cover total expected
capital expenditures, and other customary conditions.
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [30]
Toroparu
In connection with the Toroparu Early Deposit Agreement, the Company is committed to pay Gold X an additional
$138 million, payable on an installment basis to partially fund construction of the mine. Following the delivery of certain
feasibility documentation or after December 31, 2020 if the feasibility documentation has not been delivered to
Wheaton by such date (or such date has not been extended), Wheaton may elect not to proceed with the agreement
or not pay the balance of the upfront consideration and reduce the gold stream percentage from 10% to 0.909% and
the silver stream percentage from 50% to nil. If Wheaton elects to terminate, Wheaton will be entitled to a return of the
amounts advanced less $2 million which is non-refundable on the occurrence of certain events. If Wheaton elects to
reduce the streams, Gold X may elect to terminate the agreement and Wheaton will be entitled to a return of the
amount of the deposit already advanced less $2 million which is non-refundable. Gold X has filed a PEA defining the
re-scoping of the Toroparu project, including a revised operating plan. Please see the section entitled Toroparu -
Development Update on page 9 of this MD&A for more information.
Cotabambas
In connection with the Cotabambas Early Deposit Agreement, the Company is committed to pay Panoro a total cash
consideration of $140 million, of which $10 million has been paid to date. Once certain conditions have been met, the
Company will advance an additional $4 million to Panoro, spread over up to three years. Following the delivery of a
bankable definitive feasibility study, environmental study and impact assessment, and other related documents
(collectively, the "Cotabambas Feasibility Documentation"), and receipt of permits and construction commencing, the
Company may then advance the remaining deposit or elect to terminate the Cotabambas Early Deposit Agreement. If
the Company elects to terminate, the Company will be entitled to a return of the portion of the amounts advanced less
$2 million payable upon certain triggering events occurring.
Kutcho
In connection with the Kutcho Early Deposit Agreement, the Company is committed to pay Kutcho a total cash
consideration of $65 million, of which $7 million has been paid to date. The remaining $58 million will be advanced on
an installment basis to partially fund construction of the mine once certain conditions have been satisfied.
The Company will be required to make an additional payment to Kutcho, of up to $20 million, if processing throughput
is increased to 4,500 tonnes per day or more within 5 years of attaining commercial production.
Non-revolving term loan
On November 25, 2019, the Company entered into a non-revolving term loan with Kutcho, under which Kutcho can
draw up to a maximum of $1 million (Cdn$1.3 million), of which $0.8 million (Cdn$1.0 million) has been drawn as at
December 31, 2020. The credit facility carries interest at 15% per annum, compounded monthly and has a revised
maturity date of December 31, 2021.
Salobo
The Salobo mine currently has a mill throughput capacity of 24 Mtpa. In October 2018, Vale’s Board of Directors
approved the investment in the Salobo Expansion, which is proposed to include a third concentrator line and will use
Salobo’s existing infrastructure. Vale anticipates that the Salobo Expansion, which is scheduled to start up in the first
half of 2022 with a ramp-up of 15 months, will result in an increase of throughput capacity from 24 Mtpa to 36 Mtpa
once fully ramped up.
If actual throughput is expanded above 28 Mtpa, then under the terms of the Salobo PMPA, Wheaton will be required
to make an additional set payment to Vale based on the size of the expansion, the timing of completion and the grade
of the material processed. The set payment ranges from $113 million if throughput is expanded beyond 28 Mtpa by
January 1, 2036 up to $923 million if throughput is expanded beyond 40 Mtpa by January 1, 2022. Assuming the
Salobo III expansion project achieves 12 Mtpa of additional processing capacity (bringing total processing capacity at
Salobo to 36 Mtpa) by the end of 2022, the Company would expect to pay an estimated expansion payment of
between $570 million to $670 million. The actual amount and timing of any expansion payment may significantly differ
from this estimate depending on the size, timing and processed grade of any expansion.
Taxes - Canada Revenue Agency – 2013-2015 Taxation Years - Domestic Reassessments 1
The Company received Notices of Reassessment in 2018 and 2019 for the 2013 to 2015 taxation years in which the
CRA is seeking to change the timing of the deduction of upfront payments with respect to the Company’s PMPAs
relating to Canadian mining assets, so that the cost of precious metal acquired under these Canadian PMPAs is equal
to the cash cost paid on delivery plus an amortized amount of the upfront payment determined on a units-of-production
1 The assessment by management of the expected impact of the Domestic Reassessments on the Company is “forward-looking
information”. Statements in respect of the impact of the Domestic Reassessments are based on the expectation that the Company
will be successful in challenging the Domestic Reassessments. Statements in respect of the Domestic Reassessments and
estimates of any future taxes that the CRA may assert are payable are subject to known and unknown risks including that the
Company’s interpretation of, or compliance with, tax laws, is found to be incorrect. Please see “Cautionary Note Regarding Forward-
Looking Statements” in the MD&A for material risks, assumptions and important disclosure associated with this information.
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [31]
basis over the estimated recoverable reserves, and where applicable, resources and exploration potential at the
respective mine (the “Domestic Reassessments”). In total, the Domestic Reassessments assessed tax, interest and
other penalties of $8 million.
Management believes the Company’s position, as reflected in its filed Canadian income tax returns and consistent with
the terms of the PMPAs, that the cost of the precious metal acquired under the Canadian PMPAs is equal to the
market value while a deposit is outstanding, and the cash cost thereafter is correct. The Company has filed Notices of
Objection and paid 50% of the disputed amounts in order to challenge the Domestic Reassessments.
If CRA were to apply the methodology in the Domestic Reassessments to taxation years subsequent to 2015, the
Company estimates that losses would arise that could be carried back to reduce tax and interest relating to the
Domestic Reassessments to approximately $2 million.
U.S. Shareholder Class Action
During July 2015, after the Company disclosed that the CRA was proposing that they would issue notices of
reassessment for federal and provincial tax, transfer pricing penalties, interest and other penalties for the 2005-2010
taxation years (the “Reassessments”), two putative securities class action lawsuits were filed against the Company in
the U.S. District Court for the Central District of California in connection with the proposal (the “Complaints”).
On October 19, 2015, the Complaints were consolidated into one action, In re Silver Wheaton Securities Litigation, as
against the Company, Randy Smallwood, President & Chief Executive Officer, Gary Brown, Senior Vice President &
Chief Financial Officer and Peter Barnes, former Chief Executive Officer (together the “Initial Defendants”) and a lead
plaintiff (the “Plaintiff”) was selected. The Plaintiff filed a consolidated amended complaint in December 2015, which
focuses on the Reassessments and asserted claims under Sections 10(b) and 20(a) of the Securities Exchange Act of
1934 (“Exchange Act”).
On March 27, 2018, the court granted Plaintiff’s motion for leave to file a Second Amended Complaint, which alleges
that Initial Defendants made false and/or misleading statements, as well as failed to disclose material adverse facts
about the Company’s business, operations, prospects and performance in violation of Sections 10(b) and 20(a) of the
Exchange Act, and adds a claim under Section 10(b) against our auditors (together with the “Initial Defendants, the
“Defendants”).
On August 3, 2020, the court issued their final approval of a settlement of the lawsuit for $41.5 million, without
admission of liability by any of the Defendants. The settlement was fully funded by the Company’s insurance carriers
and the other Defendants. The Company was not required to pay any portion of the settlement.
Canadian Shareholder Class Action
By Notice of Action dated August 10, 2016 (as amended September 2, 2016 and supplemented by Statement of Claim
filed September 9, 2016 (collectively, the “Claim”)), proposed representative plaintiff Suzan Poirier commenced
proceedings pursuant to the Class Proceedings Act (Ontario) in the Ontario Superior Court of Justice against Wheaton
Precious Metals Corp., Randy Smallwood, President and Chief Executive Officer and Gary Brown, Senior Vice
President & Chief Financial Officer. The Claim alleges, among other things, misrepresentation pursuant to primary and
secondary market civil liability provisions under the Securities Act (Ontario) and its provincial equivalents, common law
negligence and negligent misrepresentation. The claim focuses on the Reassessments. The Claim purports to be
brought on behalf of proposed class of persons and entities who acquired common shares of Wheaton Precious
Metals Corp. between August 14, 2013 and July 6, 2015 and held some or all of such common shares as of at least
July 6, 2015. On July 21, 2020, the Company received a motion record in support of a proposed motion seeking the
following (among other relief): (i) leave of the court to commence a secondary market action pursuant to section
138.3(1) of the Securities Act (Ontario) and equivalent provisions in the applicable provincial securities statutes: (ii)
certification of the (amended) class and proposed common issues; (iii) leave to file an amended Statement of Claim to
include further particulars and to refer to various provincial securities laws; and (iv) the appointment of a new class
representative (Ms. Miriam Rosenszajn) in place of Ms. Poirier.
The Company believes that the allegations are without merit and intends to vigorously defend against this matter. No
amounts have been recorded for potential liability arising from this claim as no value has been specified in the
statement of claim and the Company cannot reasonably predict the outcome.
Please see “Cautionary Note Regarding Forward-Looking Statements” in the MD&A for material risks, assumptions
and important disclosure associated with outstanding litigation.
Tax Contingencies
Due to the size, complexity and nature of the Company’s operations, various legal and tax matters are outstanding
from time to time, including audits and disputes.
Under the terms of the 2018 settlement with the CRA of the transfer pricing dispute relating to the 2005-2010 taxation
years (“CRA Settlement”), income earned outside of Canada by the Company’s foreign subsidiaries will not be subject
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [32]
to income tax in Canada under transfer pricing rules. The CRA Settlement principles apply to all taxation years after
2010 subject to there being no material change in facts or change in law or jurisprudence.
It is not known or determinable by the Company when any ongoing audits by CRA of international and domestic
transactions will be completed, or whether reassessments will be issued, or the basis, quantum or timing of any such
potential reassessments, and it is therefore not practicable for the Company to estimate the financial effect, if any, of
any ongoing audits. From time to time there may also be proposed legislative changes to law or outstanding legal
actions that may have an impact on applicable law or jurisprudence, the outcome, applicability and impact of which is
also not known or determinable by the Company.
General
By their nature, contingencies will only be resolved when one or more future events occur or fail to occur. The
assessment of contingencies inherently involves the exercise of significant judgment and estimates of the outcome of
future events. If the Company is unable to resolve any of these matters favorably, there may be a material adverse
impact on the Company’s financial performance, cash flows or results of operations. In the event that the Company’s
estimate of the future resolution of any of the foregoing matters changes, the Company will recognize the effects of the
change in its consolidated financial statements in the appropriate period relative to when such change occurs.
Share Capital
During the year ended December 31, 2020, the Company received cash proceeds of $19 million from the exercise of
1,056,363 share purchase options at a weighted average exercise price of Cdn$25.70 per option. During the year
ended December 31, 2019, the Company received cash proceeds of $39 million from the exercise of 2,093,735 share
purchase options at a weighted average exercise price of Cdn$25.79 per option.
During the year ended December 31, 2020, the Company released 128,405 RSUs, as compared to 133,670 RSUs
during the comparable period of the previous year.
The Company has implemented a dividend reinvestment plan (“DRIP”) whereby shareholders can elect to have
dividends reinvested directly into additional Wheaton common shares. During the year ended December 31, 2020,
there were 502,193 common shares issued under the DRIP, compared to 1,261,667 during 2019.
As of March 11, 2021, there were 449,466,394 outstanding common shares, 1,778,817 share purchase options,
370,258 restricted share units and 10,000,000 share purchase warrants.
At the Market Equity Program
On April 16, 2020, the Company established an at-the-market equity program (the “ATM Program”) that allows the
Company to issue up to $300 million worth of common shares from treasury (“Common Shares”) to the public from
time to time at the Company’s discretion and subject to regulatory requirements. Any Common Shares sold in the ATM
Program will be sold (i) in ordinary brokers’ transactions on the NYSE or another US marketplace on which the
Common Shares are listed, quoted or otherwise trade, (ii) in ordinary brokers’ transactions on the TSX, (iii) on another
Canadian marketplace on which the Common Shares are listed, quoted or otherwise trade, or (iv) with respect to sales
in the United States, at the prevailing market price, a price related to the prevailing market price or at negotiated
prices. Since the Common Shares will be distributed at the prevailing market prices at the time of the sale or certain
other prices, prices may vary among purchasers and during the period of distribution.
The ATM Program will be effective until the date that all Common Shares available for issue under the ATM Program
have been issued or the ATM Program is terminated prior to such date by the Company or the agents under the equity
offering sales agreement dated April 16, 2020.
Wheaton intends that the net proceeds from the ATM Program, if any, will be available as one potential source of
funding for stream acquisitions and/or other general corporate purposes including the repayment of indebtedness. As
at March 11, 2021, the Company has not issued any shares under the ATM program.
Financial Instruments
The Company owns equity interests in several companies as long-term investments (see page 10 of this MD&A) in
addition to the Kutcho Convertible Note (see page 12 of this MD&A) and therefore is inherently exposed to various risk
factors including currency risk, market price risk and liquidity risk.
In order to mitigate the effect of short-term volatility in gold, silver and palladium prices, the Company will occasionally
enter into forward contracts in relation to gold, silver and palladium deliveries that it is highly confident will occur within
a given quarter. The Company does not hedge its long-term exposure to commodity prices. Other than these very
short-term forward contracts, the Company has not used derivative financial instruments to manage the risks
associated with its operations and therefore, in the normal course of business, it is inherently exposed to currency,
interest rate and commodity price fluctuations. No forward contracts were outstanding at December 31, 2020 and
December 31, 2019.
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [33]
Risks and Uncertainties
The primary risk factors affecting the Company are set forth below. For discussion of additional risk factors, please
refer to the Company’s Annual Information Form, which is available on the Company’s website, www.wheatonpm.com,
and on SEDAR, www.sedar.com, or is available upon request from the Company. The “Mining Operations” consist of
all of the mineral stream interests currently owned by the Company.
Commodity Prices and Commodity Markets
The price of the common shares and the Company’s financial results may be significantly and adversely affected by a
decline in the price of precious metals and cobalt. The price of precious metals and cobalt fluctuates widely, especially
in recent years, and is affected by numerous factors beyond the Company’s control, including, but not limited to, the
sale or purchase of precious metals by various central banks and financial institutions, interest rates, exchange rates,
inflation or deflation, fluctuation in the value of the United States dollar and foreign currencies, global and regional
supply and demand, and the political and economic conditions of major precious metals and cobalt producing
countries throughout the world. The precious metals and cobalt markets tend to be cyclical, and a general downturn
could result in a significant decrease in the Company’s revenue. Any such price decline may have a material adverse
effect on the Company.
The profitability of Wheaton’s interests under the PMPAs is directly related to the market price of precious metals and
cobalt. The Company’s revenue is sensitive to changes in the price of precious metals and cobalt and the overall
condition of the precious metal and cobalt mining industry and markets, as it derives all of its of revenue from precious
metals and cobalt streams. If Wheaton is unable to sell precious metals or cobalt production as a result of a reduction
in, or an absence of, demand for precious metals or cobalt, there could be a significant decrease in the Company’s
revenue which may have a material adverse effect on the Company or result in the Company not generating positive
cash flow or earnings.
In the event that the prevailing market price of precious metals and cobalt is at or below the price at which the
Company can purchase such commodities pursuant to the terms of the PMPAs associated with its precious metals
and cobalt interests, the Company will not generate positive cash flow or earnings, which could have a material
adverse effect on the Company.
Precious metals and cobalt are by-product metals at all of the Mining Operations, other than silver at the Keno Hill
mines, silver at the Loma de La Plata zone of the Navidad project, gold at the Toroparu project, gold and silver at the
Marmato mine and palladium at the Stillwater mines, and therefore, the economic cut-off applied to the reporting of
precious metals and cobalt reserves and resources will be influenced by changes in the commodity prices of other
metals at the mines.
Impact of Epidemics
All of Wheaton’s PMPAs are subject to the risk of emerging infectious diseases or the threat of outbreaks of viruses or
other contagions or epidemic diseases through the Mining Operations, including the novel COVID-19 virus pandemic.
These infectious disease risks may not be adequately responded to locally, nationally, regionally or internationally due
to lack of preparedness to detect and respond to outbreaks or respond to significant pandemic threats. In addition, a
government may impose strict emergency measures in response to the threat or existence of an infectious disease,
such as the emergency measures imposed by governments of many countries in response to the COVID-19 virus
pandemic. As such, there are potentially significant economic and social impacts of infectious disease risks, including
the inability of Mining Operations to operate as intended, shortage of skilled employees or labour unrest, delays or
shortages in supply chains, inability of employees to access sufficient healthcare, significant social upheavals or
unrest, government or regulatory actions or inactions (including but not limited to, changes in taxation or policies, or
delays in permitting or approvals), decreased demand or the inability to sell precious metals or cobalt or declines in the
price of precious metals and cobalt, capital markets volatility, availability of credit, loss of investor confidence or other
unknown but potentially significant impacts. Given the global nature of Mining Operations, there are potentially
significant economic losses from infectious disease outbreaks that can extend far beyond the initial location of an
infection disease outbreak. As such, both global outbreaks, such as the COVID-19 virus pandemic, as well as regional
and local outbreaks can have a significant impact on Wheaton’s PMPAs and the related Mining Operations. Wheaton
may not be able to accurately predict which Mining Operations will be subject to infectious disease risks or the
quantum of such risks. In addition, Wheaton’s own operations are exposed to infectious disease risks noted above and
as such Wheaton’s operations may be adversely affected by such infectious disease risks. Accordingly, any outbreak
or threat of an outbreak of a virus or other contagions or epidemic disease could have a material adverse effect on
Wheaton, its business, results from operations and financial conditions directly or due to a counterparty (i) being
unable to deliver some or all of the precious metals or cobalt due under the applicable PMPA with that counterparty;
(ii) otherwise defaulting in its obligations under that PMPA; (iii) ceasing operations at one or more mines that are the
subject of that PMPA; or (iv) becoming insolvent. As a result, any of these or other adverse financial or operational
consequences on a counterparty may also have a material adverse effect on Wheaton’s business, financial condition,
results of operations and cash flows.
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [34]
As at the date of this MD&A, all of the Company’s partners’ operations are currently running, though we are closely
monitoring and regularly assessing the impact of the COVID-19 virus pandemic on the Mining Operations and our own
operations. However, this pandemic is evolving rapidly and its effects on the Mining Operations and our own
operations are uncertain. It is possible that in the future operations at the Mining Operations may be temporarily shut
down or suspended for indeterminate amounts of time, any of which may, individually or in the aggregate, have a
material and adverse impact on the Company's business, financial condition, results of operations and cash flows. In
addition, the impact of the COVID-19 virus pandemic on economies and the prospects of economic growth globally
may lead to decreased demands for commodities, including precious metals or cobalt, which may have a material and
adverse impact on the Company's business, financial condition, results of operations and cash flows.
There can be no assurance that our partners’ operations that are operational as of the date of this MD&A will continue
to remain operational for the duration of the COVID-19 virus pandemic. In addition, even if operational, these
operations may be subject to adverse impacts on production and other impacts due to the COVID-19 virus pandemic
response measures, absenteeism and otherwise as a result of the pandemic and any of these impacts may be
material with respect to those operations, as well as our business and financial results.
COVID-19 virus pandemic may heighten other risks
To the extent that the COVID-19 virus pandemic adversely affects the Company’ business and financial results, it may
also have the effect of heightening many of the other risks described in this MD&A and in the “Risk Factors” section of
the Company’s Annual Information Form for the year ended December 31, 2020, including, but not limited to, risks
relating to the Company such as risks related to commodity prices and commodity markets, commodity price
fluctuations, equity price risk associated with the Company’s equity investments, credit and liquidity of counterparties
to our PMPAs, mine operator concentration, our indebtedness and guarantees, our ability to raise additional capital,
our ability to enforce security interests, information systems and cyber security and risks relating to the Mining
Operations such as risks related to mineral reserve and mineral resource estimates, production forecasts, impacts of
governmental regulations, international operations, availability of infrastructure and employees and challenging global
financial conditions.
Risks Relating to the Mining Operations
To the extent that they relate to the production of precious metals or cobalt from, or the continued operation of, the
Mining Operations, the Company will be subject to the risk factors applicable to the operators of such mines or
projects, as more fully described in the Company’s Annual Information Form.
No Control Over Mining Operations
The Company has agreed to purchase a certain percentage of the gold, silver, palladium and/or cobalt produced by
the Mining Operations. The Company is not directly involved in the ownership or operation of mines and has no
contractual rights relating to the operation of the Mining Operations. The owners and operators will generally have the
power to determine the manner in which the relevant properties subject to the asset portfolio are exploited, including
decisions to expand, advance, continue, reduce, suspend or discontinue production from a property and decisions
about the marketing of products extracted from the property. The interests of the Company and the operators of the
relevant properties may not always be aligned. As a result, the cash flows of the Company are dependent upon the
activities of third parties which creates the risk that at any time those third parties may: (i) have business interests or
targets that are inconsistent with those of the Company, (ii) take action contrary to the Company’s policies or
objectives, (iii) be unable or unwilling to fulfill their obligations under their agreements with the Company, or (iv)
experience financial, operational or other difficulties, including insolvency, which could limit or suspend a third party’s
ability to perform its obligations under the PMPAs. At any time, any of the operators of the Mining Operations may
decide to suspend or discontinue operations, including if the costs to operate the mine, or observe the obligations of
the PMPA, exceed the revenues from operations.
The ability for the operators of the Mining Operations to act in their sole discretion could therefore have a material
adverse effect on the Company’s business, financial condition, results of operations and cash flows.
Except in limited circumstances, the Company will not be entitled to any material compensation if such operations do
not meet their forecasted precious metals or cobalt production targets in any specified period or if the operations shut
down, suspend or discontinue on a temporary or permanent basis. There can be no assurance that the precious
metals or cobalt production from such properties will ultimately meet forecasts or targets. In addition, payments from
production generally flow through the operator and there is a risk of delay and additional expense in receiving such
revenues. The PMPA payments are calculated by the operators based on reported production and calculations of the
Company’s payments are subject to, and dependent upon, the adequacy and accuracy of the operators’ production
and accounting functions. Failure to receive payments under the PMPAs to which the Company is entitled may have a
material adverse effect on the Company. In addition, the Company must rely on the accuracy and timeliness of the
public disclosure and other information it receives from the owners and operators of the Mining Operations, and uses
such information, including production estimates, in its analyses, forecasts and assessments relating to its own
business. If the information provided by such third parties to the Company contains material inaccuracies or omissions,
the Company’s ability to accurately forecast or achieve its stated objectives may be materially impaired.
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [35]
Taxes
A significant portion of the Company’s operating profit is derived from its subsidiaries, including Wheaton Precious
Metals International Ltd. which is incorporated and operates in the Cayman Islands and historically, Silverstone
Resources (Barbados) Corp., which was incorporated and operated in Barbados, such that the Company’s profits are
subject to low income tax.
The introduction of new tax laws, regulations or rules, or changes to, or differing interpretation of, or application of, or
court decisions in respect of, existing tax laws, regulations or rules in Canada, the Cayman Islands, Barbados,
Luxembourg, the Netherlands or any of the countries in which the Company’s subsidiaries or the Mining Operations
are located, or to which deliveries of precious metals, precious metals credits or cobalt are made, could result in an
increase in the Company’s taxes, or other governmental charges, duties or impositions. No assurance can be given
that new tax laws, regulations or rules will not be enacted or that existing tax laws, regulations or rules will not be
changed, interpreted, applied or decided upon in a manner which could result in the Company’s profits being subject to
additional taxation or which could otherwise have a material adverse effect on the Company or the price of the
common shares.
Under the terms of the CRA Settlement, income earned outside of Canada by the Company’s foreign subsidiaries will
not be subject to income tax in Canada under transfer pricing rules. The CRA Settlement principles apply to all
taxation years after 2010 subject to there being no material change in facts or change in law or jurisprudence.
It is not known or determinable by the Company when any ongoing audits by CRA of international and domestic
transactions will be completed, or whether reassessments will be issued, or the basis, quantum or timing of any such
potential reassessments, and it is therefore not practicable for the Company to estimate the financial effect, if any, of
any ongoing audits. From time to time there may also be proposed legislative changes to law or outstanding legal
actions that may have an impact on applicable law or jurisprudence, the outcome, applicability and impact of which is
also not known or determinable by the Company, but which may have a material adverse effect on the Company or
the price of the Common Shares.
Counterparty Credit and Liquidity Risk
The Company is exposed to counterparty risks and liquidity risks including, but not limited to: (i) through the
companies with which the Company has PMPAs which may experience financial, operational or other difficulties,
including insolvency, which could limit or suspend those companies’ ability to perform their obligations under those
PMPAs; (ii) through the companies with which the Company has advanced funds in exchange for convertible notes
receivable; (iii) through financial institutions that hold the Company’s cash and cash equivalents; (iv) through
companies that have payables to the Company, including concentrate customers; (v) through the Company’s
insurance providers; and (vi) through the Company’s lenders. The Company is also exposed to liquidity risks in
meeting its operating expenditure requirements in instances where cash positions are unable to be maintained or
appropriate financing is unavailable. These factors may impact the ability of the Company to obtain loans and other
credit facilities in the future and, if obtained, on terms favourable to the Company. If these risks materialize, the
Company’s operations could be adversely impacted and the trading price of the common shares could be adversely
affected.
In the event that a counterparty with which the Company has a PMPA were to experience financial, operational or
other difficulties (such as Vale in connection with the Brumadinho Incident as discussed on page 37 of this MD&A or a
counterparty that is unable to favourably resolve the application of new or existing tax laws, regulations or rules or any
tax audits or disputes), then that counterparty may (i) be unable to deliver some or all of the precious metals or cobalt
due under the applicable PMPA with that counterparty; (ii) otherwise default in its obligations under that PMPA; (iii)
cease operations at one or more mines that are the subject of that PMPA; or (iv) become insolvent. As a result, any of
these or other adverse financial or operational consequences on a counterparty may also have a material adverse
effect on Wheaton’s business, financial condition, results of operations and cash flows. In addition, there is no
assurance that Wheaton will be successful in enforcing its rights under any security or guarantees provided to
Wheaton.
In addition, parties to contracts do not always honour contractual terms and contracts themselves may be subject to
interpretation or technical defects. To the extent companies with which the Company has PMPAs do not abide by their
contractual obligations, the Company would be forced to take legal action to enforce its contractual rights. Such
litigation may be time consuming and costly and there is no guarantee of success. Any pending proceedings or actions
or any decisions determined adversely may have a material and adverse effect on Wheaton’s business, financial
condition, results of operations and cash flows.
San Dimas - Mexican Tax Dispute
In February 2016, Primero Mining Corp. ("Primero") announced that its Mexican subsidiary, Primero Empresa Minera
S.A. de C.V. ("PEM"), received a legal claim from the Mexican tax authorities, Servicio de Administración Tributaria
(“SAT”), seeking to nullify the Advance Pricing Agreement issued by SAT in 2012 (“2012 APA”). The 2012 APA
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [36]
confirmed PEM’s ability to pay taxes in Mexico on the sale of silver on actual prices realized by its Mexican subsidiary
in connection with silver sales under the San Dimas SPA for the tax years 2010 through 2014.
As disclosed by First Majestic in their MD&A for the period ended December 31, 2020, during 2019, as part of the
ongoing annual audits of PEM’s tax returns, the SAT issued reassessments for the 2010 to 2012 tax years in the
amount of $246.6 million inclusive of interest, inflation, and penalties. The key items relate to the view that PEM should
pay taxes based on the market price of silver and denial of the deductibility of interest expense and service fees in
Mexico. First Majestic also indicates that in April 2020, SAT issued notifications to PEM to attempt to secure amounts
it claims are owed pursuant to its reassessments issued. These notifications impose certain restrictions on PEM
including its ability to dispose of its concessions and real properties. First Majestic has challenged SAT’s
reassessments and dismissals through all domestic means available to them, including annulment suits before the
Mexican Federal Tax Court on Administrative Matters ("Federal Court"). In September 2020, First Majestic was served
with a decision made by the Federal Court to nullify the APA granted to PEM. The Federal Court’s decision directs
SAT to re-examine the evidence and basis for the issuance of the APA with retroactive effect, for the following key
reasons:
(i) SAT’s errors in analyzing PEM’s request for the APA and the evidence provided in support of the request;
and
(ii) SAT’s failure to request from PEM certain additional information before issuing the APA.
First Majestic states that they filed an appeal of the decision to the Mexican Circuit Courts on November 30, 2020.
On March 2, 2021, First Majestic announced that it has submitted a Request for Arbitration to the International Centre
for Settlement of Investment Disputes, on its own behalf and on behalf of PEM, based on Chapter 11 of the North
American Free Trade Agreement.
First Majestic indicates that if the SAT is successful in retroactively nullifying the APA and issuing reassessments, it
would likely have a material adverse effect on First Majestic’s results of operations, financial condition and cash flows.
PEM would have rights of appeal in connection with any reassessments. First Majestic states that they continue to
believe PEM’s filings were appropriate and continue to believe its tax filing position based upon the APA is correct.
However, they note that should PEM ultimately be required to pay tax on its silver revenues based on market prices
without any mitigating adjustments, the incremental income tax for the years 2010-2018 would be approximately
$219.2 million, before interest or penalties.
First Majestic has indicated in their MD&A for the period ended December 31, 2020 that while it continues to
vigorously defend the validity of the APA and its transfer pricing position, it is also engaging in dialogue with the SAT
seeking to resolve matters and bring tax certainty through a negotiated solution. To the extent that First Majestic is not
able to defend the validity of the 2012 APA or the SAT determines that the appropriate price to tax sales under the
former San Dimas SPA or the new San Dimas PMPA is significantly different from the actual realized prices
thereunder, it may have an adverse impact on First Majestic’s business, financial condition or results of operations. If
the Company was unable to purchase any further gold under the San Dimas PMPA, it may have a material adverse
effect on Wheaton’s business, financial condition, results of operation and cash flows. In addition, should this occur,
there is no assurance that Wheaton would be successful in enforcing its rights under the security interest granted by
First Majestic or its other remedies under the San Dimas PMPA.
Vale - Brumadinho Incident
On January 25, 2019, Vale’s mining operations in Brumadinho, Minas Gerais, Brazil experienced a significant breach
and failure of a retaining dam around the tailings disposal area (the “Brumadinho Incident”). Vale reported in February
2021 that it has entered into a global settlement with the State of Minas Gerais, the Public Defender of the State of
Minas Gerais and the Federal and the State of Minas Gerais Public Prosecutors Offices, to repair the environmental
and social damage resulting from the Brumadinho Incident. Vale reports that the Global Settlement has an economic
value of Brazilian Real$37,689,767,329, contemplating socio-economic and socio-environmental reparation projects.
While the Brumadinho Incident did not occur at any mine that is the subject of the Company’s PMPAs, the
consequences of the Brumadinho Incident for Vale may have an impact on the Company’s business, financial
condition and results of operations.
Mine Operator and Counterparty Concentration Risk
Precious metals and cobalt purchases under certain of Wheaton’s PMPAs are subject to both mine operator
concentration risk and counterparty concentration risk, including as follows:
•
•
The counterparty obligations under the Salobo, Sudbury and Voisey’s Bay PMPAs are guaranteed by the
parent company Vale. Total revenues relative to Vale during the year ended December 31, 2020 were 46% of
the Company’s total revenue;
The counterparty obligations under the Antamina PMPA and the Yauliyacu PMPA (which is included as part
of Other silver interests) are guaranteed by the parent company Glencore and its subsidiary. Total revenues
relative to Glencore during the year ended December 31, 2020 were 12% of the Company’s total revenue;
and
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [37]
•
The counterparty obligations under the Peñasquito PMPA are guaranteed by the parent company Newmont.
Total revenues relative to Newmont during the year ended December 31, 2020 were 14% of the Company’s
total revenue.
Should any of these mine operators or counterparties become unable or unwilling to fulfill their obligations under their
agreements with Wheaton, or should any of the risk factors identified by Wheaton materialize in respect of the mine
operators, counterparties or the Mining Operations, there could be a material adverse effect on Wheaton, including,
but not limited to, Wheaton’s revenue, net income and cash flows from operations.
In particular, total revenues relative to PMPAs with Vale were 46% and 47% of the Company’s total revenue for the
years ended December 31, 2020 and December 31, 2019, respectively; operating cash flows from the PMPAs with Vale
represented approximately 50% and 57% of the Company’s operating cash flows for the years ended December 31,
2020 and December 31, 2019, respectively; and as at December 31, 2020, the PMPAs with Vale proven and probable
precious metal and cobalt reserves represented approximately 47% of the Company’s total proven and probable GEO
reserves, measured and indicated precious metals and cobalt resources represented approximately 21% of the
Company’s GEO measured and indicated precious metals and cobalt resources and inferred precious metals and cobalt
resources represented approximately 13% of the Company’s total inferred GEO resources (as described in the
Attributable Reserves and Resources section of the Company’s MD&A). If Wheaton was unable to purchase any further
precious metals or cobalt under the PMPAs with Vale, Wheaton’s reserves and resources would be significantly reduced
and Wheaton’s forecasted gold equivalent production for 2021 and average five year forecasted gold equivalent
production for 2021-2025 would be lowered by 39% and 37%, respectively, leading to a corresponding reduction to its
revenue, net earnings and cash flows.
Vale – Xikrin Community
Vale has reported that associations representing the indigenous community of Xikrin do Cateté brought a public civil
action against Vale, the Federal Environmental Agency (IBAMA) and the Federal Indigenous Agency (FUNAI), seeking
the suspension of the environmental permitting process of Salobo mine. Vale has reported that the associations contend
that FUNAI and IBAMA have failed to conduct the appropriate studies regarding the affected indigenous communities
during the environmental permitting process and contends that Vale's operations would be contaminating the water of
the Itacaiunas River and consequently that the indigenous groups affected by this mine have not provided the required
consent. Vale notes that the plaintiffs also requested a monthly payment of Brazilian Real$2 million for each association
until the defendants conclude the studies. Vale reports that applicable law provides for mandatory consultation with the
indigenous communities located within ten kilometers of the mine, and these indigenous communities are located more
than 22 kilometers away from the mine. Vale noted that in October 2017 the court denied plaintiffs' request for an
injunction suspending the Salobo mine and that in February 2019, Vale, IBAMA, and the environmental agency Instituto
Chico Mendes de Conservacao da Biodiversidade filed a joint answer in court, rebutting the plaintiff's claims, and
reaffirming the legality of the environmental permitting process of Salobo mine and the fulfillment of all conditions
imposed by relevant authorities. Vale noted that in March 2019, the Federal Prosecution Office presented an opinion for
the suspension of the activities in the Salobo mine. A decision by the federal court is pending. In July 2019, the Judge
of the Federal Court of Maraba partially granted an injunction requested by the Indigenous Associations, ordering Vale
and Salobo to prepare the indigenous component study of the Salobo Mine project, and rejected all other requests filed
by the plaintiff, including project shutdown and monthly fund payments. In December 2019, in accordance with the
procedure established in the legislation for the preparation of indigenous component studies, Vale presented the
curriculum of the professionals who will prepare such study, as well as the work plan for the acknowledgement and
approval by FUNAI. A response from FUNAI is pending. Vale announced that the decision held by the Federal Court of
Maraba does not affect its operations at the Salobo mine. Vale appealed this decision and announced that it would
continue to vigorously contest the action. However, if as a result of these proceedings it is determined that the activities
at the Salobo mine should be suspended then the ability of the Company to receive gold under the terms of the Salobo
PMPA would be materially impacted which in turn could have a material impact on the Company’s financial conditions,
results of operations and cash flows.
See also “Risks Relating to the Company – Security Over Underlying Assets” and “Risks Relating to the Company –
Mine Operator Concentration Risk”, “Risks Relating to the Company – Indebtedness and Guarantees Risk”, “Risks
Relating to the Mining Operations – International Operations”, “Risks Relating to the Mining Operations – Exploration,
Development, Operating, Expansion and Improvements Risks” and “Risks Relating to the Mining Operations – Land
Title and Indigenous Peoples” in the Company’s Annual Information Form.
Indebtedness and Guarantees Risk
As of December 31, 2020, the Company had $195 million drawn under the Revolving Facility. As a result of this
indebtedness, the Company is required to use a portion of its cash flow to service principal and interest on the debt,
which will limit the cash flow available for other business opportunities. The Company’s ability to make scheduled
payments of the principal of, to pay interest on, or to refinance indebtedness depends on its future performance, which
is subject to economic, financial, competitive and other factors beyond its control (including, in particular, the continued
receipt of precious metals and/or cobalt under the terms of the relevant PMPA agreements). If any of these factors
beyond its control arose, the Company may not continue to generate cash flow in the future sufficient to service debt
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [38]
and make necessary capital expenditures. If the Company is unable to generate such cash flow, it may be required to
adopt one or more alternatives, such as reducing or eliminating dividends, restructuring debt or obtaining additional
equity capital on terms that may be onerous or highly dilutive. The Company’s ability to refinance indebtedness will
depend on the capital markets and its financial condition at such time. The Company may not be able to engage in any
of these activities or engage in these activities on desirable terms, which could result in a default on its debt
obligations.
The terms of the Revolving Facility require the Company to satisfy various affirmative and negative covenants and to
meet certain financial ratios and tests. These covenants limit, among other things, the Company’s ability to incur
further indebtedness if doing so would cause it to fail to meet certain financial covenants, create certain liens on assets
or engage in certain types of transactions. The Company can provide no assurances that in the future, it will not be
limited in its ability to respond to changes in its business or competitive activities or be restricted in its ability to engage
in mergers, acquisitions or dispositions of assets. Furthermore, due to factors beyond its control (for example, due to
an event of force majeure or other disruption at operations, the Company does not receive sufficient precious metals
or cobalt from its counterparties in accordance with the terms of the PMPAs), the Company may fail to comply with
these covenants, including a failure to meet the financial tests or ratios, and any subsequent failure by the Company’s
subsidiaries to comply with guarantee obligations, would likely result in an event of default under the Revolving Facility
and would allow the lenders to accelerate the debt, which could materially and adversely affect the Company’s
business, financial condition and results of operations and its ability to meet its payment obligations under debt, and
the price of the common shares.
In addition, each subsidiary of the Company has guaranteed the obligations of the Company under the Revolving
Facility. While the Revolving Facility is unsecured, as guarantors, any or all of Wheaton’s subsidiaries can be called
upon by lenders for the repayment of the obligations under the Revolving Facility if Wheaton were to default.
Hedging Risk
The Company has a policy that permits hedging its foreign exchange and interest rate exposures to reduce the risks
associated with currency and interest rate fluctuations. The Company also has adopted a policy to allow the forward
sale of forecast precious metals deliveries provided that such sales shall not extend beyond the end of a financial
quarter of the Company.
Hedging involves certain inherent risks including: (a) credit risk - the risk that the creditworthiness of a counterparty
may adversely affect its ability to perform its payment and other obligations under its agreement with the Company or
adversely affect the financial and other terms the counterparty is able to offer the Company; (b) market liquidity risk –
the risk that the Company has entered into a hedging position that cannot be closed out quickly, by either liquidating
such hedging instrument or by establishing an offsetting position; and (c) unrealized fair value adjustment risk – the
risk that, in respect of certain hedging products, an adverse change in market prices for commodities, currencies or
interest rates will result in the Company incurring losses in respect of such hedging products as a result of the hedging
products being out of the money on their settlement dates.
There is no assurance that a hedging program designed to reduce the risks associated with foreign
exchange/currency, interest rate or commodity fluctuations will be successful. Although hedging may protect the
Company from adverse changes in foreign exchange/currency, interest rate or commodity fluctuations, it may also
prevent the Company from fully benefitting from positive changes.
Competition
The Company competes with other companies for PMPAs and similar transactions. Some of these companies may
possess greater financial and technical resources than the Company. Such competition may result in the Company
being unable to enter into desirable PMPAs or similar transactions, to recruit or retain qualified employees or to
acquire the capital necessary to fund its PMPAs. As a result, existing or future competition in the mining industry could
materially adversely affect the Company’s prospects for entering into additional PMPAs in the future.
Litigation Claims and Proceedings
The Company is from time to time involved in various claims, legal proceedings and disputes arising in the ordinary
course of business. If the Company is unable to resolve these disputes favorably, it may have a material adverse
effect on the Company. The Company was previously the subject of litigation in a securities class action complaint in
the United States and is currently the subject of litigation in securities class action complaints in Canada (see
“Canadian Shareholder Class Action” on page 32 of this MD&A).
Securities litigation, including current proceedings against the Company as well as potential future proceedings, could
result in substantial costs and damages and divert the Company’s management’s attention and resources. Any
decision resulting from any such litigation that is adverse to the Company could have a negative impact on the
Company’s financial position.
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [39]
Security Over Underlying Assets
There is no guarantee that the Company will be able to effectively enforce any guarantees, indemnities or other
security interests it may have. Should a bankruptcy or other similar event related to a mining operator occur that
precludes a party from performing its obligations under the PMPA, the Company would have to consider enforcing its
security interest. In the event that the mining operator has insufficient assets to pay its liabilities, it is possible that
other liabilities will be satisfied prior to the liabilities owed to the Company. In addition, bankruptcy or other similar
proceedings are often a complex and lengthy process, the outcome of which may be uncertain and could result in a
material adverse effect on the Company.
In addition, because many of the Mining Operations are owned and operated by foreign affiliates, the Company’s
security interests may be subject to enforcement and insolvency laws of foreign jurisdictions that differ significantly
from those in North America, and the Company’s security interests may not be enforceable as anticipated. Further,
there can be no assurance that any judgments obtained in Canadian courts will be enforceable in any of those
jurisdictions outside of Canada. If the Company is unable to enforce its security interests, there may be a material
adverse effect on the Company.
Acquisition Strategy
As part of the Company’s business strategy, it has sought and will continue to seek new exploration, development and
mining opportunities in the resource industry. In pursuit of such opportunities, the Company may fail to select
appropriate acquisition candidates or negotiate acceptable arrangements, including arrangements to finance
acquisitions or integrate the acquired businesses and their personnel into the Company. The Company cannot assure
that it can complete any acquisition or business arrangement that it pursues, or is pursuing, on favourable terms, or
that any acquisitions or business arrangements completed will ultimately benefit the Company.
In the event that the Company chooses to raise debt capital to finance any acquisition, the Company’s leverage will be
increased. In addition, if the Company chooses to complete an equity financing to finance any acquisition,
shareholders may suffer dilution.
In addition, the introduction of new tax laws or regulations or accounting rules or policies or rating agency policies, or
changes to, or differing interpretations of, or application of, existing tax laws or regulations or accounting rules or
policies or rating agency policies, could make PMPAs less attractive to counterparties. Such changes could adversely
affect the Company's ability to enter into new PMPAs and could have a negative impact on the Company’s financial
position.
The Company may consider opportunities to restructure PMPAs where it believes such a restructuring may provide a
long-term benefit to the Company, even if such restructuring may reduce near-term revenues or result in the Company
incurring transaction related costs. The Company may enter into one or more acquisitions, restructurings or other
streaming transactions at any time.
Market Price of the Common Shares
The Common Shares are listed and posted for trading on the TSX, NYSE and on the LSE. An investment in the
Company’s securities is highly speculative and the price of the Common Shares has fluctuated significantly in the past.
During the year ended December 31, 2020, the trading price of the Common Shares has fluctuated as follows:
Exchange
TSX
NYSE
LSE
Low
C$33.47
$23.74
29.43 GBP
High
C$75.14
$56.21
38.45 GBP
The market price of the Company’s common shares may increase or decrease in response to a number of events and
factors, including any future offerings of the Common Shares pursuant to the ATM Program, any offering or otherwise,
and other factors set out in the Company’s Annual Information Form and the factors listed under the heading
“Cautionary Note Regarding Forward-Looking Statements.”
In addition, the global stock markets and prices for streaming and mining company shares have experienced volatility
that often has been unrelated to the operating performance or prospects of such companies. These market and
industry fluctuations may adversely affect the market price of the Company’s common shares, regardless of the
Company’s operating performance. The variables which are not directly related to the Company’s success and are,
therefore, not within the Company’s control, include other developments that affect the market for streaming and
mining company shares, macroeconomic developments globally, the breadth of the public market for the Company’s
common shares and the attractiveness of alternative investments and particular industries. The effect of these and
other factors on the market price of the Company’s common shares on the exchanges on which they trade has
historically made the Company’s common share price volatile and suggests that the Company’s common share price
will continue to be volatile in the future.
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [40]
It is not uncommon for securities class actions to be brought against publicly listed companies following periods of
volatility or significant decline in the market price of their securities. The Company is currently the subject of a litigation
in a securities class action complaint in Canada (see “Canadian Shareholder Class Action” on page 32 of this MD&A).
Multiple Listings of the Common Shares on the LSE, the TSX and the NYSE May Lead to an Inefficient Market
for the Common Shares
Multiple listings of the Common Shares will result in differences in liquidity, settlement and clearing systems, trading
currencies, prices and transaction costs between the exchanges where the Common Shares will be quoted. These
and other factors may hinder the transferability of the Common Shares between the three exchanges. The Common
Shares are quoted on the TSX, the NYSE and the LSE. Consequently, the trading in and liquidity of the Common
Shares will be split between these three exchanges. The price of the Common Shares may fluctuate and may at any
time be different on the TSX, the NYSE and the LSE. This could adversely affect the trading of the Common Shares
on these exchanges and increase their price volatility and/or adversely affect the price and liquidity of the Common
Shares on these exchanges. The Common Shares are quoted and traded in Canadian Dollars on the TSX, and in US
Dollars on the NYSE. The Common Shares are quoted and traded in pence sterling on the LSE. The market price of
the Common Shares on those exchanges may also differ due to exchange rate fluctuations.
Common Shares May be Suspended from Trading
Each of the TSX, NYSE and LSE has the right to suspend trading in certain circumstances. If the Common Shares are
suspended from trading, the holders of Common Shares may not be able to dispose of their Common Shares on the
LSE, the TSX or the NYSE (as the case may be).
TSX: The objective of the TSX's policies regarding continued listing privileges is to facilitate the maintenance of an
orderly and effective auction market for securities of a wide variety of listed issuers, in which there is a substantial
public interest, and that comply with the requirements of the TSX. The policies are designed and administered in a
manner consistent with that objective. The TSX has adopted certain quantitative and qualitative criteria under which it
will normally consider the suspension from trading and delisting of securities. However, no set of criteria can effectively
anticipate the unique circumstances which may arise in any given situation. Accordingly, each situation is considered
individually on the basis of relevant facts and circumstances. As such, whether or not any of the delisting criteria has
become applicable to a listed issuer or security, the TSX may, at any time, suspend from trading and delist securities if
in the opinion of the TSX, such action is consistent with the objective noted above or further dealings in the securities
on the TSX may be prejudicial to the public interest. In addition, the TSX may at any time suspend from trading the
Common Shares if it is satisfied that the Company has failed to comply with any of the provisions of its listing
agreement with the TSX or other agreements with the TSX, or with any TSX requirement or policy.
NYSE: The NYSE may suspend trading in, and commence proceedings to delist, the Common Shares from time to
time if it determines that Wheaton or the Common Shares fail to satisfy the applicable quantitative or qualitative
continued listing criteria under the NYSE listing standards. Such continued quantitative listing criteria include, but are
not limited to, a minimum number of stockholders, a minimum average closing price over a consecutive 30 trading-day
period, and a minimum average global market capitalization over a consecutive 30 trading-day period. Such continued
qualitative listing criteria include, but are not limited to, the satisfaction of certain requirements of the NYSE
Governance Rules such as the maintenance of an audit committee satisfying certain criteria including with respect to
independence and the continued timely filing of periodic reports with the United States Securities and Exchange
Commission. The NYSE may also suspend trading in, and commence proceedings to delist, the securities of an issuer
if the issuer or its management engage in operations that are in the opinion of the NYSE contrary to the public interest.
Typically, if an issuer or its NYSE-listed securities fall below the NYSE's quantitative or qualitative listing criteria, the
NYSE reviews the appropriateness of continued listing and may give consideration to any definitive action proposed by
the issuer, pursuant to procedures and timelines set forth in the NYSE listing standards, that would bring the issuer or
such securities above the applicable continued listing standards. However, in certain cases, the failure of the issuer or
its listed securities to meet certain continued listing criteria may result in immediate suspension and delisting by the
NYSE without such evaluation or follow-up procedures.
LSE: The FCA may suspend the Common Shares from trading on the LSE from time to time if it determines that the
smooth operation of the market is or may be temporarily jeopardized or it is necessary to protect investors.
Risks Associated with the ATM Program
There is no certainty that gross proceeds of $300 million (or the equivalent in Canadian dollars determined using the
daily exchange rate posted by the Bank of Canada on the date the ATM Common Shares are sold) will be raised
pursuant to the ATM Program. The ATM Program agents have agreed to use their commercially reasonable efforts to
sell, on the Company’s behalf, the ATM Common Shares designated by the Company, but the Company is not
required to request the sale of the maximum amount offered or any amount and, if the Company requests a sale, the
ATM Program agents are not obligated to purchase any ATM Common Shares that are not sold. As a result of the
ATM Program being made on a commercially reasonable efforts basis with no minimum, and only as requested by the
Company, the Company may raise substantially less than the maximum total offering amount or nothing at all.
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [41]
Management of the Company will have broad discretion in the application of the net proceeds from the ATM Program
and could spend the proceeds in ways that do not improve the Company’s results of operations or enhance the value
of the Common Shares. The failure by management to apply these funds effectively could result in financial losses that
could have a material adverse effect on the Company’s business and cause the price of the Common Shares to
decline. Pending their use, the Company may invest the net proceeds from the ATM Program in a manner that does
not produce income or that loses value.
Equity Price Risk
The Company is exposed to equity price risk as a result of holding long-term equity investments in other companies
including, but not limited to, exploration and mining companies. Just as investing in the Company is inherent with risks
such as those set out in this MD&A, by investing in these other companies, the Company is exposed to the risks
associated with owning equity securities and those risks inherent in the investee companies. The Company generally
does not actively trade these investments.
Interest Rate Risk
The Company is exposed to interest rate risk on its outstanding borrowings and short-term investments. Presently, all
of the Company’s outstanding borrowings are at floating interest rates. The Company monitors its exposure to interest
rates and has not entered into any derivative contracts to manage this risk. During the year ended December 31,
2020, the weighted average effective interest rate paid by the Company on its outstanding borrowings was 2.03%
(2019 – 4.07%).
During the years ended December 31, 2020 and December 31, 2019, a fluctuation in interest rates of 100 basis points
(1 percent) would have impacted the amount of interest expensed by approximately $6 million and $11 million,
respectively. Depending upon the amount of the Company’s outstanding borrowings, fluctuations in the interest rates
applicable to the Company could have a material adverse effect on the Company’s business, financial condition,
results of operations and cash flows.
Dividend Policy
The declaration, timing, amount and payment of dividends are at the discretion of the Board of Directors and will
depend upon the Company’s future earnings, cash flows, acquisition capital requirements and financial condition, and
other relevant factors. There can be no assurance that the Company will continue to declare a dividend on a quarterly,
annual or other basis.
Dependence Upon Key Management Personnel
The Company and its subsidiaries have an aggregate of 39 employees and are therefore dependent upon the services
of a small number of employees. The Company is also dependent on the services of a small number of key executives
who are highly skilled and experienced. The loss of these persons or the Company’s inability to attract and retain
additional highly skilled employees, including executives, may adversely affect its business and future operations.
Activist Shareholders
Publicly-traded companies are often subject to demands or publicity campaigns from activist shareholders advocating
for changes to corporate governance practices, such as executive compensation practices, social issues, or for certain
corporate actions or reorganizations. There can be no assurance that the Company will not be subject to any such
campaign, including proxy contests, media campaigns or other activities. Responding to challenges from activist
shareholders can be costly and time consuming and may have an adverse effect on the Company’s reputation. In
addition, responding to such campaigns would likely divert the attention and resources of the Company’s management
and Board of Directors, which could have an adverse effect on the Company’s business and results of operations.
Even if the Company were to undertake changes or actions in response to activism, activist shareholders may
continue to promote or attempt to effect further changes, and may attempt to acquire control of the Company. If
shareholder activists are ultimately elected to the Board of Directors, this could adversely affect the Company’s
business and future operations. This type of activism can also create uncertainty about the Company’s future strategic
direction, resulting in loss of future business opportunities, which could adversely affect the Company’s business,
future operations, profitability and the Company’s ability to attract and retain qualified personnel.
Reputation Damage
Reputational damage can be the result of the actual or perceived occurrence of any number of events, and could
include any negative publicity, whether true or not. While the Company does not ultimately have direct control over
how it is perceived by others, reputational loss could have a material adverse effect on the Company’s financial
performance, financial condition, cash flows and growth prospects.
Impact on Securities Due to Industry Analysts
Both the market price and trading price of the Common Shares may depend on the opinions of the securities analysts
who monitor the operations of the Company and publish research reports on the Company’s future performance. The
Company does not have control over such analysts, who may downgrade their recommended prices for the Common
Shares at any time, issues opinion which are not in line with the Board of Director’s view or not even cover the
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [42]
Company in their publications and reports. Such actions by analysts could have an adverse impact on the trading
volume and price of the Common Shares.
Unknown Defects and Impairments
A defect in a streaming transaction and/or a PMPA may arise to defeat or impair the claim of the Company to such
streaming transaction, which may have a material adverse effect on the Company. It is possible that material changes
could occur that may adversely affect management’s estimate of the recoverable amount for any PMPA. Any
impairment estimates, which are based on applicable key assumptions and sensitivity analysis, are based on
management’s best knowledge of the amounts, events or actions at such time, and the actual future outcomes may
differ from any estimates that are provided by the Company. Any impairment charges on the Company’s carrying value
of the PMPAs could have a material adverse effect on the Company.
Information Systems and Cyber Security
Wheaton’s information systems, and those of its counterparties under the PMPAs, third-party service providers and
vendors, are vulnerable to an increasing threat of continually evolving cyber security risks. Unauthorized parties may
attempt to gain access to these systems or the Company’s information through fraud or other means of deceiving the
Company’s counterparties under its PMPAs, third-party service providers or vendors.
Wheaton’s operations depend, in part, on how well Wheaton and its suppliers, as well as counterparties under the
PMPAs, protect networks, equipment, information technology (“IT”) systems and software against damage from a
number of threats. Wheaton has entered into agreements with third parties for hardware, software,
telecommunications and other services in connection with its operations. The Company’s operations and Mining
Operations also depend on the timely maintenance, upgrade and replacement of networks, equipment, IT systems and
software, as well as pre-emptive expenses to mitigate the risks of failures. Any of these and other events could result
in information system failures, delays and/or increases in capital expenses. The failure of information systems or a
component of information systems could, depending on the nature of any such failure, adversely impact the
Company’s reputation and results of operations.
Although to date the Company has not experienced any known material losses relating to cyber-attacks or other data /
information security breaches, there can be no assurance that Wheaton will not incur such losses in the future. The
Company’s risk and exposure to these matters cannot be fully mitigated because of, among other things, the evolving
nature of these threats. As a result, cyber security and the continued development and enhancement of controls,
processes and practices designed to protect systems, computers, software, data and networks from attack, damage or
unauthorized access remain a priority.
Any future significant compromise or breach of the Company’s data / information security, whether external or internal,
or misuse of data or information, could result in additional significant costs, lost sales, fines and lawsuits, and damage
to the Company’s reputation. In addition, as the regulatory environment related to data / information security, data
collection and use, and privacy becomes increasingly rigorous, with new and constantly changing requirements
applicable to Wheaton’s business and counterparties to the PMPAs, compliance with those requirements could also
result in additional costs. As cyber threats continue to evolve, the Company or its counterparties may be required to
expend additional resources to continue to modify or enhance protective measures or to investigate and remediate any
security vulnerabilities.
Critical Accounting Estimates
The preparation of financial statements in conformity with IFRS requires management to make estimates and
assumptions that affect the reported amount of assets and liabilities and disclosure of contingent liabilities at the
balance sheet date, and the reported amounts of revenues and expenditures during the reporting period. The following
discussion provides details of the critical accounting estimates made in preparing the financial statements. For
additional information, Note 3 of the Company’s consolidated financial statements describes all of the significant
accounting policies while Note 4 describes the significant areas of estimation uncertainty and judgments made by
management in preparing the consolidated financial statements.
Mineral Stream Interests
Attributable Reserve, Resource and Exploration Potential Estimates
Mineral stream interests are significant assets of the Company, with a carrying value of $5.5 billion at December 31,
2020. This amount represents the capitalized expenditures related to the acquisition of the mineral stream interests, net of
accumulated depletion and accumulated impairment charges, if any. The Company estimates the reserves, resources
and exploration potential relating to each agreement. Reserves are estimates of the amount of metals contained in ore
that can be economically and legally extracted from the mining properties in respect of which the Company has PMPAs.
Resources are estimates of the amount of metals contained in mineralized material for which there is a reasonable
prospect for economic extraction from the mining properties in respect of which the Company has PMPAs. Exploration
potential represents an estimate of additional reserves and resources which may be discovered through the mine
operator’s exploration program. The Company adjusts its estimates of reserves, resources (where applicable) and
exploration potential (where applicable) to reflect the Company’s percentage entitlement to metals produced from such
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [43]
mines. The Company compiles its estimates of its reserves and resources based on information supplied by appropriately
qualified persons relating to the geological data on the size, density and grade of the ore body, and require complex
geological and geostatistical judgments to interpret the data. The estimation of recoverable reserves and resources is
based upon factors such as estimates of foreign exchange rates, commodity prices, future capital requirements, and
production costs along with geological assumptions and judgments made in estimating the size and grade of the ore
body. The Company estimates exploration potential based on assumptions surrounding the ore body continuity which
requires judgment as to future success of any exploration programs undertaken by the mine operator. Changes in the
reserve estimates, resource estimates or exploration potential estimates may impact upon the carrying value of the
Company’s mineral stream interests and depletion charges.
Depletion
As described above, the cost of these mineral stream interests are separately allocated to reserves, resources and
exploration potential. The value allocated to reserves is classified as depletable and is depleted on a unit-of-production
basis over the estimated recoverable proven and probable reserves at the mine corresponding to the specific agreement.
The value associated with resources and exploration potential is the value beyond proven and probable reserves at
acquisition and is classified as non-depletable until such time as it is transferred to the depletable category as a result of
the conversion of resources and/or exploration potential into reserves. To make this allocation, the Company estimates
the recoverable reserves, resources and exploration potential at each mining operation. These calculations require the
use of estimates and assumptions, including the amount of contained metals, recovery rates and payable rates. Changes
to these assumptions may impact the estimated recoverable reserves, resources or exploration potential which could
directly impact the depletion rates used. Changes to depletion rates are accounted for prospectively.
Impairment of Assets
As more fully described in the Impairment of Mineral Stream Interests section on page 24 of this MD&A, the Company
assesses each PMPA at the end of every reporting period to determine whether any indication of impairment or
impairment reversal exists. If such an indication exists, the recoverable amount of the PMPA is estimated in order to
determine the extent of the impairment or impairment reversal (if any). The calculation of the recoverable amount requires
the use of estimates and assumptions such as long-term commodity prices, discount rates, recoverable ounces of
attributable metals, and operating performance.
The price of precious metals and cobalt has been extremely volatile over the past several years. The Company monitors
spot and forward metal prices and if necessary re-evaluates the long-term metal price assumptions used for impairment
testing. Should price levels decline or increase in the future, either for an extended period of time or due to known macro
economic changes, the Company may need to re-evaluate the long-term metal price assumptions used for impairment
testing. A significant decrease in long-term metal price assumptions may be an indication of potential impairment, while a
significant increase in long-term metal price assumptions may be an indication of potential impairment reversal. Should
the Company conclude that it has an indication of impairment or impairment reversal at any balance sheet date, the
Company is required to perform an impairment assessment.
In 2015 and 2016, the Company recognized impairments totaling $120 million on its Sudbury PMPA resulting from a
reduction in the estimated recoverable gold ounces. As at December 31, 2020, as a result of the rising spot and forecast
gold prices, the Company considered whether there was an indication of impairment reversal associated with the Sudbury
PMPA. After considering the movements in gold price combined with the recent actual and forecast attributable
production levels, the Company concluded that there was no indicator of impairment reversal.
Valuation of Stock Based Compensation
The Company has various forms of stock based compensation, including share purchase options, restricted share units
(“RSUs”) and performance share units (“PSUs”). The calculation of the fair value of share purchase options, RSUs and
PSUs issued requires the use of estimates as more fully described below.
The Company recognizes a stock based compensation expense for all share purchase options and RSUs awarded to
employees, officers and directors based on the fair values of the share purchase options and RSUs at the date of grant.
The fair values of share purchase options and RSUs at the date of grant are expensed over the vesting periods of the
share purchase options and RSUs, respectively, with a corresponding increase to equity. The fair value of share
purchase options is determined using the Black-Scholes option pricing model with market related inputs as of the date of
grant. Share purchase options with graded vesting schedules are accounted for as separate grants with different vesting
periods and fair values. The fair value of RSUs is the market value of the underlying shares at the date of grant. At the
end of each reporting period, the Company re-assesses its estimates of the number of awards that are expected to vest
and recognizes the impact of any revisions to this estimate in the consolidated statement of earnings.
The Company recognizes a stock based compensation expense for PSUs which are awarded to eligible employees and
are settled in cash. The related expense is based on the value of the anticipated settlement and multiplier for current
performance at the end of the associated performance periods. This estimated expense is reflected as a component of
net earnings over the vesting period of the PSUs with the related obligation recorded as a liability on the balance sheet.
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [44]
The amount of compensation expense is adjusted at the end of each reporting period to reflect the fair market value of
common shares and the number of PSUs anticipated to vest based on the anticipated performance factor.
Revenue Recognition
Revenue relating to the sale of precious metals is recognized when control of the precious metal is transferred to the
customer in an amount that reflects the consideration the Company expects to receive in exchange for those products.
In determining whether the Company has satisfied a performance obligation, it considers the indicators of the transfer
of control, which include, but are not limited to, whether: the Company has a present right to payment; the customer
has legal title to the asset; the Company has transferred physical possession of the asset to the customer; and the
customer has the significant risks and rewards of ownership of the asset.
Under certain PMPAs, precious metal is acquired from the mine operator in the form of gold, silver or palladium
credits, which is then sold through a network of third party brokers or dealers. Revenue from precious metal credit
sales is recognized at the time of the sale of such credits, which is also the date that control of the precious metal is
transferred to the customer. The Company will occasionally enter into forward contracts in relation to precious metal
deliveries that it is highly confident will occur within a given quarter. No forward contracts were outstanding at
December 31, 2020 or December 31, 2019. The sales price is fixed at the delivery date based on either the terms of
these short-term forward sales contracts or the spot price of the precious metal.
Under certain PMPAs, precious metal is acquired from the mine operator in concentrate form, which is then sold under
the terms of the concentrate sales contracts to third-party smelters or traders. Where the Company acquires precious
metals in concentrate form, final precious metal prices are set on a specified future quotational period (the “Quotational
Period”) pursuant to the concentrate sales contracts with third-party smelters, typically one to three months after the
shipment date, based on market prices for precious metals. The contracts, in general, provide for a provisional
payment based upon provisional assays and quoted precious metal prices. Final settlement is based upon the average
applicable price for the Quotational Period applied to the actual number of precious metal ounces recovered calculated
using confirmed smelter weights and settlement assays. Revenues and the associated cost of sales are recorded on a
gross basis under these contracts at the time title passes to the buyer, which is also the date that control of the
precious metal is transferred to the customer. The Company has concluded that the adjustments relating to the final
assay results for the quantity of concentrate sold and the retroactive pricing adjustment for the Quotational Period are
not significant and do not constrain the recognition of revenue.
New Accounting Standards Effective in 2020
Amendment to IFRS 3 - Business Combinations
The amendments to IFRS 3 clarify the definition of a business and includes an optional concentration test to determine
whether an acquired set of activities and assets is a business. The amendments are effective for business
combinations and asset acquisitions occurring on or after January 1, 2020. The Company will apply these
amendments to future acquisition transactions.
Interest Rate Benchmark Reform (Amendments to IFRS 9, IAS 39 and IFRS 7)
The amendments in Interest Rate Benchmark Reform (Amendments to IFRS 9, IAS 39 and IFRS 7) clarify that entities
would continue to apply certain hedge accounting requirements assuming that the interest rates benchmark on which
the hedged cash flows and cash flows from the hedging instrument are based will not be altered as a result of interest
rate benchmark reform. This amendment did not have a significant impact to the Company’s consolidated financial
statements as the Company does not have hedge accounting.
Amendments to IFRS 16 Leases
To provide practical relief to lessees in accounting for rent concessions arising as a result of COVID-19 the
International Accounting Standards Board (“IASB”) proposed an amendment to IFRS 16 which provides lessees with a
practical expedient that relieves a lessee from assessing whether a COVID-19 related rent concession is a lease
modification. The amendment is effective for annual reporting period beginning on or after June 1, 2020, with earlier
application permitted. This amendment did not have a significant impact to the Company’s consolidated financial
statements as the Company has not received any COVID-19 related rent concessions as of the date of these
consolidated financial statements.
Future Changes in Accounting Policies
The International Accounting Standards Board ("IASB") has issued the following new or amended standards:
Amendment to IAS 16 - Property, Plant and Equipment
The amendments to IAS 16 prohibit deducting from the cost of property, plant and equipment the proceeds from
selling items produced while bringing the assets to the location and condition necessary for them to be capable of
operating in the manner intended by management. Instead, a company will recognize such sales proceeds and related
cost in the Statement of Earnings. This amendment is in effect January 1, 2022 with early adoption permitted. The
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [45]
adoption of this guidance is not expected to have a material impact on the Company’s Consolidated Statement of
Earnings.
Non-IFRS Measures
Wheaton has included, throughout this document, certain non-IFRS performance measures, including (i) adjusted net
earnings and adjusted net earnings per share; (ii) operating cash flow per share (basic and diluted); (iii) average cash
costs of gold, silver and palladium on a per ounce basis; (iv) cash operating margin; and (v) net debt.
These non-IFRS measures do not have any standardized meaning prescribed by IFRS, and other companies may
calculate these measures differently. The presentation of these non-IFRS measures is intended to provide additional
information and should not be considered in isolation or as a substitute for measures of performance prepared in
accordance with IFRS.
i.
Adjusted net earnings and adjusted net earnings per share are calculated by removing the effects of non-
cash impairment charges, non-cash fair value (gains) losses and other one-time (income) expenses as well
as the reversal of non-cash income tax expense (recovery) which is offset by income tax expense (recovery)
recognized in the Statements of Shareholders’ Equity and OCI, respectively. The Company believes that, in
addition to conventional measures prepared in accordance with IFRS, management and certain investors use
this information to evaluate the Company’s performance.
The following table provides a reconciliation of adjusted net earnings and adjusted net earnings per share
(basic and diluted).
(in thousands, except for per share amounts)
2020
2019
2020
2019
Three Months Ended
December 31
Years Ended
December 31
Net earnings
Add back (deduct):
Impairment loss
(Gain) loss on fair value adjustment of
share purchase warrants held
(Gain) loss on fair value adjustment of
convertible notes receivable
Gain on disposal of mineral royalty
interest
Income tax expense (recovery)
recognized in the Statement of
Shareholders' Equity
Income tax expense (recovery)
$ 157,221
$
77,524 $ 507,804
$
86,138
-
-
-
165,912
(1,182)
10
(338)
16
(517)
366
(1,899)
1,043
-
-
-
(2,929)
911
1,409
(820)
376
recognized in the Statement of OCI
(7,011)
(4,889)
(1,866)
Other
19
53
454
(9,623)
1,812
Adjusted net earnings
$ 149,441 $
74,473 $ 503,335 $ 242,745
Divided by:
Basic weighted average number of shares
outstanding
Diluted weighted average number of
shares outstanding
Equals:
449,320
447,475
448,694
446,021
450,980
448,426
450,070
446,930
Adjusted earnings per share - basic
Adjusted earnings per share - diluted
$
$
0.333
$
0.331 $
0.166 $
0.166 $
1.122
$
1.118 $
0.544
0.543
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [46]
ii.
Operating cash flow per share (basic and diluted) is calculated by dividing cash generated by operating
activities by the weighted average number of shares outstanding (basic and diluted). The Company presents
operating cash flow per share as management and certain investors use this information to evaluate the
Company’s performance in comparison to other companies in the precious metal mining industry who present
results on a similar basis.
The following table provides a reconciliation of operating cash flow per share (basic and diluted).
(in thousands, except for per share amounts)
2020
2019
2020
2019
Cash generated by operating activities
$ 207,962 $ 131,867 $ 765,442 $ 501,620
Three Months Ended
December 31
Years Ended
December 31
Divided by:
Basic weighted average number of
shares outstanding
Diluted weighted average number of
shares outstanding
Equals:
449,320
447,475
448,694
446,021
450,980
448,426
450,070
446,930
Operating cash flow per share - basic
Operating cash flow per share - diluted
$
$
$
0.463
0.461 $
0.295 $
0.294 $
$
1.706
1.701 $
1.125
1.122
iii.
Average cash cost of gold, silver and palladium on a per ounce basis is calculated by dividing the total cost of
sales, less depletion, by the ounces sold. In the precious metal mining industry, this is a common
performance measure but does not have any standardized meaning prescribed by IFRS. In addition to
conventional measures prepared in accordance with IFRS, management and certain investors use this
information to evaluate the Company’s performance and ability to generate cash flow.
The following table provides a calculation of average cash cost of gold, silver and palladium on a per ounce
basis.
(in thousands, except for gold and palladium ounces sold
and per ounce amounts)
2020
2019
2020
2019
Three Months Ended
December 31
Years Ended
December 31
Cost of sales
Less: depletion
Cash cost of sales
Cash cost of sales is comprised of:
Total cash cost of gold sold
Total cash cost of silver sold
Total cash cost of palladium sold
$ 124,310
$ 127,409 $ 510,652
(59,785)
(63,646)
(243,889)
$ 515,385
(256,826)
$ 64,525 $ 63,763 $ 266,763 $ 258,559
$ 37,355 $ 38,008 $ 157,429 $ 163,997
88,906
5,656
101,529
7,805
25,228
1,942
24,048
1,707
Total cash cost of sales
$ 64,525 $ 63,763 $ 266,763 $ 258,559
Divided by:
Total gold ounces sold
Total silver ounces sold
Total palladium ounces sold
Equals:
86,243
4,576
4,591
89,223
4,684
5,312
369,553
19,232
20,051
389,086
17,703
20,681
$
Average cash cost of gold (per ounce)
$
Average cash cost of silver (per ounce)
Average cash cost of palladium (per ounce) $
433 $
5.51 $
423 $
426 $
5.13 $
321 $
426 $
5.28 $
389 $
421
5.02
273
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [47]
iv.
Cash operating margin is calculated by subtracting the average cash cost of gold, silver and palladium on a
per ounce basis from the average realized selling price of gold, silver and palladium on a per ounce basis.
The Company presents cash operating margin as management and certain investors use this information to
evaluate the Company’s performance in comparison to other companies in the precious metal mining industry
who present results on a similar basis as well as to evaluate the Company’s ability to generate cash flow.
The following table provides a reconciliation of cash operating margin.
(in thousands, except for gold and palladium ounces sold and per
ounce amounts)
Total sales:
Gold
Silver
Palladium
Divided by:
Total gold ounces sold
Total silver ounces sold
Total palladium ounces sold
Equals:
Three Months Ended
December 31
Years Ended
December 31
2020
2019
2020
2019
$ 162,299 $ 132,342 $ 652,827 $ 541,045
$ 113,131 $ 81,296 $ 399,625 $ 288,401
9,584 $ 43,772 $ 31,886
$ 10,782 $
86,243
4,576
4,591
89,223
4,684
5,312
369,553
19,232
20,051
389,086
17,703
20,681
Average realized price of gold (per ounce)
Average realized price of silver (per ounce)
Average realized price of palladium (per ounce)
Less:
Average cash cost of gold 1 (per ounce)
Average cash cost of silver 1 (per ounce)
Average cash cost of palladium 1 (per ounce)
Equals:
$
$
$
$
$
$
1,882 $
24.72 $
2,348 $
1,483 $
17.36 $
1,804 $
1,767 $
20.78 $
2,183 $
1,391
16.29
1,542
(433)
(5.51)
$
$
(423) $
(426) $
(5.13) $
(321) $
(426) $
(5.28) $
(389) $
(421)
(5.02)
(273)
Cash operating margin per gold ounce sold
$
As a percentage of realized price of gold
Cash operating margin per silver ounce sold
As a percentage of realized price of silver
Cash operating margin per palladium ounce sold
$
$
As a percentage of realized price of palladium
1,449 $
77%
19.21 $
78%
1,925 $
82%
1,057 $
71%
12.23 $
70%
1,483 $
82%
1,341 $
76%
15.50 $
75%
1,794 $
82%
970
70%
11.27
69%
1,269
82%
1) Refer to discussion on non-IFRS measure (iii) on page 47 of this MD&A.
v.
Net debt is calculated by subtracting cash and cash equivalents from the outstanding bank debt under the
Revolving Facility. The Company presents net debt as management and certain investors use this
information to evaluate the Company’s liquidity and financial position.
The following table provides a calculation of the Company’s net debt.
(in thousands)
Bank debt
Less: cash and cash equivalents
Net debt
As at
December 31
2020
As at
December 31
2019
195,000 $
(192,683)
874,500
(103,986)
2,317 $
770,514
$
$
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [48]
Subsequent Events
Declaration of Dividend
Under the Company’s dividend policy, the quarterly dividend per common share is targeted to equal approximately
30% of the average cash flow generated by operating activities in the previous four quarters divided by the Company’s
then outstanding common shares, all rounded to the nearest cent. To minimize volatility in quarterly dividends, the
Company has set a minimum quarterly dividend of $0.13 per common share for the duration of 2021. The declaration,
timing, amount and payment of future dividends remain at the discretion of the Board of Directors.
On March 11, 2021, the Board of Directors declared a dividend in the amount of $0.13 per common share, with this
dividend being payable to shareholders of record on March 26, 2021 and is expected to be distributed on or about
April 13, 2021. The Company has implemented a dividend reinvestment plan (“DRIP”) whereby shareholders can elect
to have dividends reinvested directly into additional Wheaton common shares at a discount of 1% of the Average
Market Price, as defined in the DRIP.
Controls and Procedures
Disclosure Controls and Procedures
Wheaton’s management, with the participation of its Chief Executive Officer and Chief Financial Officer, has evaluated
the design and effectiveness of Wheaton’s disclosure controls and procedures, as defined in the rules of the U.S.
Securities and Exchange Commission and Canadian Securities Administrators, as of December 31, 2020. Based on
that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that Wheaton’s
disclosure controls and procedures were effective as of December 31, 2020.
Internal Control Over Financial Reporting
The Company’s management, with the participation of its Chief Executive Officer and Chief Financial Officer, are
responsible for establishing and maintaining adequate internal control over financial reporting. Under the supervision
of the Chief Financial Officer, the Company’s internal control over financial reporting is a process designed to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with IFRS. The Company’s controls include policies and procedures that:
•
•
•
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions
and dispositions of the assets of the Company;
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial
statements in accordance with IFRS, and that receipts and expenditures of the Company are being made
only in accordance with authorizations of the Company’s management and directors; and,
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or
disposition of the Company’s assets that could have a material effect on the annual financial statements or
interim financial statements.
The Company’s management, including its Chief Executive Officer and Chief Financial Officer, has evaluated the
effectiveness of the Company’s internal control over financial reporting using the framework and criteria established in
Internal Control – Integrated Framework (2013), issued by the Committee of Sponsoring Organizations of the
Treadway Commission. Based on this evaluation, management has concluded that the internal control over financial
reporting was effective at as of December 31, 2020.
There have been no changes in the Company’s internal control over financial reporting during the three months ended
December 31, 2020 that would materially affect, or is reasonably likely to materially affect, the Company’s internal
control over financial reporting. Note that as a result of certain operating restrictions resulting from the COVID-19
pandemic, all employees of the Company are permitted to work remotely. Management has reviewed its key controls
to ensure that they continued to operate effectively.
Limitation of Controls and Procedures
The Company’s management, including its Chief Executive Officer and Chief Financial Officer, believe that any
disclosure controls and procedures or internal control over financial reporting, no matter how well conceived and
operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.
Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of
controls must be considered relative to their costs. Because of the inherent limitations in all control systems, they
cannot provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been
prevented or detected. These inherent limitations include the realities that judgments in decision-making can be faulty,
and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the
individual acts of some persons, by collusion of two or more people, or by unauthorized override of the controls. The
design of any system of controls also is based in part upon certain assumptions about the likelihood of future events,
and there can be no assurance that any design will succeed in achieving its stated goals under all potential future
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [49]
conditions. Accordingly, because of the inherent limitations in a cost effective control system, misstatements due to
error or fraud may occur and not be detected.
Attributable Reserves and Resources
The following tables set forth the estimated Mineral Reserves and Mineral Resources (metals attributable to Wheaton
only) for the mines relating to which the Company has PMPAs, adjusted where applicable to reflect the Company’s
percentage entitlement to such metals, as of December 31, 2020, unless otherwise noted. The tables are based on
information available to the Company as of the date of this document, and therefore will not reflect updates, if any,
after such date. The most current Mineral Reserves and Mineral Resources will be available on the Company’s
website.
Attributable Proven and Probable Reserves (1,2,3,8,27)
As of December 31, 2020 unless otherwise noted (6)
Proven
Tonnage Grade Contained
Moz /
Mlbs
g/t / %
Mt
Probable
Tonnage Grade Contained
Moz /
Mlbs
g/t / %
Mt
Proven & Probable
Tonnage Grade Contained
Moz /
Mlbs
g/t / %
Mt
Gold
Salobo (75%) (10)
Stillwater (11)
Constancia (50%)
Sudbury (70%) (12)
San Dimas (25%) (13)
777 (50%)
Minto
Marmato (6.5%) (12,14)
Toroparu (10%) (15,16)
Kutcho (16,17)
Metates Royalty (18)
Total Gold
Silver
Peñasquito (25%) (10)
Constancia
Antamina (33.75%)
(12,19)
Copper
Copper-Zinc
Neves-Corvo
Copper
Zinc
Zinkgruvan
Zinc
Copper
Yauliyacu (20)
Aljustrel (21)
San Dimas (25%) (13)
Cozamin (50%) (12,22)
Copper
Zinc
Keno Hill (25%)
Underground
Los Filos
Stratoni
777
Minto
Marmato (12,14)
Rosemont (23)
Kutcho (16,17)
Metates Royalty (18)
Total Silver
Palladium
Stillwater (4.5%) (11)
Total Palladium
Cobalt
Voisey's Bay (42.4%)
(12,24)
Total Cobalt
106.7
7.9
220.6
10.3
0.5
1.1
0.4
0.1
3.0
-
1.4
0.37
0.39
0.06
0.43
4.38
2.01
0.25
5.14
1.10
-
0.70
28.0
441.2
37.8
2.9
46.6
23.0
5.2
4.7
3.4
2.8
1.3
9.7
0.5
-
-
-
26.2
-
2.1
0.4
0.8
408.6
-
1.4
6.8
12.8
31.0
71.0
77.9
30.0
78.9
47.4
312.5
-
-
-
3.5
-
27.0
3.4
22.1
5.0
-
17.2
0.2
11.2
5.7
0.12
1.27
0.10
0.42
0.14
0.07
0.07
0.003
0.01
0.10
-
0.03
2.22
34.0
40.9
10.2
9.4
5.2
10.8
8.5
2.7
3.4
14.8
4.8
-
-
-
3.0
-
1.8
0.0
0.6
66.2
-
0.8
217.3
0.09
0.09
14.6
14.6
761.2
50.3
42.5
13.5
0.8
0.2
2.0
1.2
9.7
10.4
4.1
0.30
0.39
0.07
0.46
3.12
1.75
0.67
3.11
0.98
0.37
0.45
69.0
85.0
32.7
3.8
32.1
27.3
24.5
25.4
5.4
0.3
6.8
27.4
0.8
7.9
12.9
30.0
60.6
83.6
33.0
101.1
46.9
327.2
6.3
0.7
44.4
44.3
0.3
78.1
0.6
0.5
2.0
18.9
108.0
9.9
4.1
804.5
10.2
148.0
26.0
6.0
6.2
3.0
34.6
13.1
1.5
11.2
6.5
0.12
7.32
0.64
0.09
0.20
0.08
0.01
0.04
0.12
0.31
0.12
0.06
8.99
72.4
10.3
8.1
11.3
23.6
49.5
14.5
0.3
22.2
41.4
8.4
9.0
1.1
7.6
25.5
2.7
0.4
0.4
3.8
10.4
11.0
1.7
335.6
0.55
0.55
17.1
17.1
867.8
58.2
263.1
23.8
1.3
1.3
2.4
1.3
12.7
10.4
5.5
0.31
0.39
0.06
0.45
3.59
1.96
0.60
3.19
1.00
0.37
0.52
97.0
526.2
34.1
3.0
78.6
50.3
29.7
30.1
8.8
3.1
8.2
37.2
1.3
7.2
12.9
30.2
62.2
81.4
30.3
97.4
47.1
321.7
6.3
0.7
44.4
44.3
0.3
104.2
0.6
2.6
2.4
19.7
516.6
9.9
5.5
804.5
8.5
148.0
26.8
5.6
6.9
4.6
34.6
14.2
1.8
11.2
12.1
0.12
8.59
0.73
0.52
0.34
0.15
0.08
0.05
0.13
0.41
0.12
0.09
11.21
106.4
51.2
18.3
20.8
28.8
60.3
23.0
3.0
25.6
56.2
13.2
9.0
1.1
7.6
28.5
2.7
2.2
0.4
4.4
76.7
11.0
2.5
552.9
0.64
0.64
31.7
31.7
Process
Recovery %
(7)
76%
69%
61%
75%
95%
58%
75%
90%
89%
41%
91%
85%
70%
71%
71%
24%
30%
83%
70%
83%
26%
94%
86%
86%
96%
10%
80%
45%
78%
34%
76%
46%
66%
90%
84%
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [50]
Attributable Measured & Indicated Resources (1,2,3,4,5,9,27)
As of December 31, 2020 unless otherwise noted (6)
Tonnage
Measured
Grade
Contained
Tonnage
Indicated
Grade
Mt
g/t / % Moz / Mlbs
Mt
g/t / %
Contained
Moz /
Mlbs
Gold
Salobo (75%) (10)
Stillwater (11)
Constancia (50%)
Sudbury (70%) (12)
777 (50%)
Minto
Marmato (6.5%) (12,14)
Toroparu (10%) (15,16)
Cotabambas (25%) (16,25)
Kutcho (16,17)
Brewery Creek (26)
Total Gold
Silver
Peñasquito (25%) (10)
Constancia
Antamina (33.75%) (12,19)
Copper
Copper-Zinc
Neves-Corvo
Copper
Zinc
Zinkgruvan
Zinc
Copper
Yauliyacu (20)
Aljustrel (21)
Cozamin (50%) (12,22)
Copper
Zinc
Pascua-Lama (25%)
Keno Hill (25%)
Underground
Elsa Tailings
Los Filos
Stratoni
777
Minto
Marmato (12,14)
Rosemont (23)
Loma de La Plata (12.5%)
Toroparu (50%) (15,16)
Cotabambas (16,25)
Kutcho (16,17)
Total Silver
Palladium
Stillwater (4.5%) (11)
Total Palladium
Cobalt
Voisey's Bay (42.4%) (12,24)
Total Cobalt
3.5
3.3
67.1
1.3
0.2
3.3
0.1
1.2
-
-
-
8.7
134.1
31.2
10.5
4.8
6.7
3.7
1.2
5.9
4.3
0.2
-
10.7
-
-
88.5
-
0.4
3.3
0.9
112.2
-
21.9
-
-
0.27
0.26
0.05
0.22
1.97
0.40
5.30
0.93
-
-
-
26.8
2.0
7.0
21.0
55.8
61.9
64.6
42.4
101.4
67.3
53.3
-
57.2
-
-
5.3
-
25.4
3.4
26.5
3.9
-
1.1
-
-
0.03
7.1
1.7
0.04
0.03
0.03
0.10
0.01
0.01
0.04
0.01
0.03
-
-
-
0.27
7.5
8.8
7.0
7.1
8.7
13.4
7.7
1.6
19.2
9.3
0.3
-
19.7
-
-
15.2
-
0.3
0.4
0.8
14.1
-
0.8
-
-
141.8
0.01
0.01
1.5
1.53
294.6
13.3
80.2
7.1
0.1
9.0
1.1
9.0
29.3
5.7
0.4
60.5
160.3
108.1
49.4
28.7
35.7
11.2
0.2
8.0
3.9
4.5
2.2
97.9
0.7
0.6
133.7
0.4
0.1
9.0
12.8
358.0
3.6
98.5
117.1
5.4
0.31
0.21
0.04
0.76
1.57
0.57
2.62
0.87
0.23
0.55
1.11
26.7
2.0
9.0
19.0
52.4
59.0
76.3
39.8
121.8
58.9
36.9
31.2
52.2
455.8
119.0
8.1
138.5
26.4
5.0
8.1
2.7
169.0
0.7
2.7
25.9
0.1
5.1
-
-
2.90
0.09
0.11
0.17
0.00
0.17
0.09
0.25
0.22
0.10
0.02
4.12
52.0
10.3
31.3
30.2
48.3
67.8
27.4
0.3
31.2
7.4
5.3
2.3
164.4
10.5
2.4
35.0
2.0
0.1
1.5
3.4
31.5
19.8
2.3
10.3
4.5
601.3
0.02
0.02
-
-
Measured & Indicated
Grade
Tonnage
Contained
Moz /
Mlbs
Mt
g/t / %
298.1
16.6
147.2
8.3
0.3
12.4
1.1
10.2
29.3
5.7
0.4
69.2
294.4
139.3
59.9
33.5
42.4
14.9
1.4
13.9
8.2
4.7
2.2
108.6
0.7
0.6
222.2
0.4
0.5
12.4
13.8
470.2
3.6
120.4
117.1
5.4
0.31
0.22
0.04
0.68
1.86
0.53
2.81
0.87
0.23
0.55
1.11
26.8
2.0
8.6
19.4
52.9
59.5
73.4
42.0
113.1
63.3
37.5
31.2
52.7
455.8
119.0
7.0
138.5
25.7
4.6
9.4
3.0
169.0
0.8
2.7
25.9
0.2
5.5
1.7
0.04
2.93
0.12
0.21
0.18
0.02
0.21
0.10
0.29
0.22
0.10
0.02
4.39
59.5
19.1
38.3
37.3
57.0
81.2
35.1
1.9
50.4
16.7
5.6
2.3
184.1
10.5
2.4
50.2
2.0
0.4
1.8
4.2
45.6
19.8
3.1
10.3
4.5
743.1
0.03
0.03
1.5
1.5
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [51]
Attributable Inferred Resources (1,2,3,4,5,9,27)
As of December 31, 2020 unless otherwise noted (6)
Inferred
Tonnage
Mt
Grade
g/t / %
Contained
Moz / Mlbs
Gold
Salobo (75%) (10)
Stillwater (11)
Constancia (50%)
Sudbury (70%) (12)
San Dimas (25%) (13)
777 (50%)
Minto
Marmato (6.5%) (12,14)
Cotabambas (25%) (16,25)
Toroparu (10%) (16,17)
Kutcho (16,17)
Brewery Creek (26)
Metates Royalty (18)
Total Gold
Silver
Peñasquito (25%) (10)
Constancia
Antamina (33.75%) (12,19)
Copper
Copper-Zinc
Neves-Corvo
Copper
Zinc
Zinkgruvan
Zinc
Copper
Yauliyacu (20)
Aljustrel (21)
San Dimas (25%) (13)
Cozamin (50%) (12,22)
Copper
Zinc
Rosemont (23)
Pascua-Lama (25%)
Keno Hill (25%)
Underground
Los Filos
Stratoni
777
Minto
Marmato (12,14)
Loma de La Plata (12.5%)
Cotabambas (16,25)
Toroparu (50%) (15,16)
Kutcho (16,17)
Metates Royalty (18)
Total Silver
Palladium
Stillwater (4.5%) (11)
Total Palladium
Cobalt
Voisey's Bay (42.4%) (12,24)
Total Cobalt
198.5
96.2
46.6
2.9
1.5
0.1
6.1
0.9
151.3
12.9
8.8
1.3
0.3
37.7
93.2
219.7
104.2
12.6
3.7
19.0
0.2
13.4
15.7
1.5
2.0
2.6
68.7
3.8
0.4
98.2
1.1
0.2
6.1
13.1
0.2
605.3
58.7
8.8
0.3
0.22
0.43
0.06
0.49
3.58
3.11
0.51
2.56
0.17
0.76
0.25
0.87
0.39
26.4
3.4
9.0
16.0
33.2
63.0
82.0
35.0
246.9
46.2
340.9
40.9
37.5
1.7
17.8
454.6
6.1
188.0
40.0
4.9
4.4
76.0
2.3
0.1
20.6
9.5
1.0
12.1
2.5
0.14
1.39
1.32
0.09
0.05
0.17
0.01
0.10
0.07
0.84
0.32
0.07
0.04
0.003
4.46
32.0
10.3
63.6
53.6
13.5
7.4
50.0
0.3
106.8
23.3
16.1
2.6
3.2
3.7
2.2
6.1
19.4
6.9
0.3
1.0
1.9
0.4
45.4
0.1
5.8
0.1
475.8
0.37
0.37
7.6
7.6
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [52]
Notes on Mineral Reserves & Mineral Resources:
1.
All Mineral Reserves and Mineral Resources have been estimated in accordance with the 2014 Canadian Institute of Mining, Metallurgy and
Petroleum (CIM) Standards for Mineral Resources and Mineral Reserves and National Instrument 43-101 – Standards for Disclosure for Mineral
Projects (“NI 43-101”), or the 2012 Australasian Joint Ore Reserves Committee (JORC) Code for Reporting of Exploration Results, Mineral Resources
and Ore Reserves.
2. Mineral Reserves and Mineral Resources are reported above in millions of metric tonnes (“Mt”), grams per metric tonne (“g/t”) for gold, silver and
palladium, percent (“%”) for cobalt, millions of ounces (“Moz”) for gold, silver and palladium and millions of pounds (“Mlbs”) for cobalt.
3. Qualified persons (“QPs”), as defined by the NI 43-101, for the technical information contained in this document (including the Mineral Reserve and
Mineral Resource estimates) are:
a.
b.
Neil Burns, M.Sc., P.Geo. (Vice President, Technical Services); and
Ryan Ulansky, M.A.Sc., P.Eng. (Senior Director, Engineering),
both employees of the Company (the “Company’s QPs”).
4.
The Mineral Resources reported in the above tables are exclusive of Mineral Reserves. The Cozamin mine, San Dimas mine, Minto mine, Neves-
Corvo mine, Zinkgruvan mine, Stratoni mine, Stillwater mines, Keno Hill mines, Aljustrel mines and Toroparu project (gold only) report Mineral
Resources inclusive of Mineral Reserves. The Company’s QPs have made the exclusive Mineral Resource estimates for these mines based on
average mine recoveries and dilution.
5. Mineral Resources which are not Mineral Reserves do not have demonstrated economic viability.
6. Other than as detailed below, Mineral Reserves and Mineral Resources are reported as of December 31, 2020 based on information available to the
Company as of the date of this document, and therefore will not reflect updates, if any, after such date.
a. Mineral Resources for Aljustrel’s Feitais mine are reported as of July 2020, Moinho & St João mines as of August 2020 and the Estação
project as of July, 2018.
b. Mineral Resources for the Brewery Creek project are reported as of May 31, 2020.
c. Mineral Resources and Mineral Reserves for the Constancia, 777 and San Dimas mines are reported as of December 31, 2019.
d. Mineral Resources for the Cotabambas project are reported as of June 20, 2013.
e. Mineral Resources and Mineral Reserves for the Cozamin mine are reported as of October 31, 2020.
f.
Mineral Resources for Keno Hill’s Elsa Tailings project are reported as of April 22, 2010, Bellekeno mine Indicated Mineral Resources as
of September 30, 2013, Mineral Resources for the Lucky Queen, Flame & Moth and Onek mines as of March 29, 2017 and Bermingham
mine as of March 28, 2019. Mineral Reserves are reported as of March 28, 2019.
g. Mineral Resources for the Kutcho project are reported as of September 8, 2020 and Mineral Reserves are reported as of June 15, 2017.
h. Mineral Resources for the Loma de La Plata project are reported as of May 20, 2009.
i.
j.
Mineral Resources and Mineral Reserves for the Los Filos mine are reported as of October 31, 2018.
Mineral Resources and Mineral Reserves for the Neves-Corvo and Zinkgruvan mines are reported as of June 30, 2020.
k. Mineral Resources and Mineral Reserves for the Marmato mine are reported as of March 17, 2020.
l.
Mineral Resources and Mineral Reserves for the Metates royalty are reported as of April 29, 2016.
m. Mineral Resources and Mineral Reserves for the Minto mine are reported as of December 31, 2018.
n. Mineral Resources and Mineral Reserves for the Rosemont project are reported as of March 30, 2017.
o. Mineral Resources and Mineral Reserves for the Stratoni mine are reported as of September 30, 2020.
p. Mineral Resources for the Toroparu project are reported as of September 20, 2018 and Mineral Reserves are reported as of March 31,
2013.
7.
Process recoveries are the average percentage of gold, silver, palladium or cobalt in a saleable product (doré or concentrate) recovered from mined
ore at the applicable site process plants as reported by the operators.
8. Mineral Reserves are estimated using appropriate process and mine recovery rates, dilution, operating costs and the following commodity prices:
a.
b.
c.
d.
e.
f.
Aljustrel mine – 3.5% zinc cut-off for the Feitais, Moinho and St João mines and 3.0% zinc cut-off for the Estação project.
Antamina mine - $3.08 per pound copper, $1.08 per pound zinc, $8.70 per pound molybdenum and $17.39 per ounce silver.
Constancia mine - $1,375 per ounce gold, $17.00 per ounce silver, $3.10 per pound copper and $11.00 per pound molybdenum.
Cozamin mine - NSR cut-offs of $48.04 per tonne for conventionally backfilled zones for 2020-2022, $51,12 per tonne for conventionally
backfilled zones for 2023 and onward, $56.51 per tonne for paste backfilled zones of Vein 10 and $56.12 per tonne for paste backfilled
zones of Vein 20, all assuming $2.75 per pound copper, $17.00 per ounce silver, $0.90 per pound lead and $1.00 per pound zinc.
Keno Hill mines - $1,300 per ounce gold, $18.50 per ounce silver, $1.00 per pound lead and $1.15 per pound zinc.
Kutcho project – 1.5% copper cut-off for the Main deposit and 1.0% copper cut-off for the Esso deposit, both assuming $2.75 per pound
copper, $1.10 per pound zinc, $1,250 per ounce gold and $17.00 per ounce silver.
g.
Los Filos mine - $1,200 per ounce gold and $4.39 per ounce silver.
h. Marmato mine – 2.23 grams per tonne gold cut-off for the Upper Mine, 1.91 grams per tonne gold cut-off for the Transition Zone and 1.61
grams per tonne gold cut-off for the MDZ, all assuming $1,400 per ounce gold.
i.
j.
k.
Metates royalty – 0.34 grams per tonne gold equivalent cut-off assuming $1,200 per ounce gold and $19.20 per ounce silver.
Minto mine – 1.2% copper cut-off assuming $300 per ounce gold, $3.90 per ounce silver and $2.50 per pound copper.
Neves-Corvo mine – 1.34% copper equivalent cut-off for the copper Mineral Reserves and 5.34% zinc equivalent cut-off for the zinc Mineral
Reserves, both assuming $3.00 per pound copper, $0.95 per pound lead and $1.00 per pound zinc.
l.
Peñasquito mine - $1,200 per ounce gold, $17.00 per ounce silver, $0.90 per pound lead and $1.15 per pound zinc.
m. Rosemont project - $6.00 per ton NSR cut-off assuming $18.00 per ounce silver, $3.15 per pound copper and $11.00 per pound
molybdenum.
n.
o.
p.
q.
r.
Salobo mine – 0.253% copper equivalent cut-off assuming $1,290 per ounce gold and $3.18 per pound copper.
San Dimas mine – $1,350 per ounce gold and $17.50 per ounce silver.
Stillwater mines - combined platinum and palladium cut-off of 6.8 g/t.
Stratoni mine – $273.40 per tonne NSR cut-off assuming $16.00 per ounce silver, $0.91 per pound lead and $1.00 per pound zinc.
Sudbury mines - $1,300 per ounce gold, $8.16 per pound nickel, $3.18 per pound copper, $1,155 per ounce platinum, $1,093 per ounce
palladium and $22.68 per pound cobalt.
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [53]
s.
Toroparu project – 0.38 grams per tonne gold cut-off assuming $1,070 per ounce gold for fresh rock and 0.35 grams per tonne gold cut-off
assuming $970 per ounce gold for saprolite.
t.
Voisey’s Bay mines:
i. Ovoid and SE Extension – Cdn $20.56 per tonne cut-off assuming $6.80 per pound nickel, $3.08 per pound copper and $29.48 per
pound cobalt.
ii. Discovery Hill - $29.52 per tonne cut-off assuming $8.16 per pound nickel, $3.18 per pound copper and $22.68 per pound cobalt.
iii. Reid Brook Division 1 - $225.00 per tonne cut-off assuming $6.35 per pound nickel, $2.90 per pound copper and $20.41 per pound
cobalt.
iv. Reid Brook Divisions 2-4 - $275.00 per tonne cut-off assuming $9.71 per pound nickel, $3.40 per pound copper and $11.52 per
pound cobalt.Eastern Deeps Mineral Reserves - $175.00 per tonne cut-off assuming $6.35 per pound nickel, $2.90 per pound copper
and $20.41 per pound cobalt.
u.
v.
Yauliyacu mine - $17.39 per ounce silver, $3.08 per pound copper, and $1.08 per pound zinc.
Zinkgruvan mine – 6.1% zinc equivalent cut-off for the zinc Mineral Reserve and 1.4% copper cut-off for the copper Mineral Reserve, both
assuming $3.00 per pound copper and $0.95 per pound lead and $1.00 per pound zinc.
w.
777 mine – $1,392 per ounce gold, $16.33 per ounce silver, $2.92 per pound copper and $1.11 per pound zinc.
9. Mineral Resources are estimated using appropriate recovery rates and the following commodity prices:
a.
b.
c.
d.
e.
f.
Aljustrel mine – 3.5% zinc cut-off for Feitais, Moinho and St João mines and 3.0% zinc cut-off for the Estação project.
Antamina mine - $3.30 per pound copper, $1.18 per pound zinc, $10.54 per pound molybdenum and $20.82 per ounce silver.
Brewery Creek project – 0.37 g/t gold cut-off assuming $1,500 per ounce gold.
Constancia mine – $1,375 per ounce gold, $17.00 per ounce silver, $3.10 per pound copper and $11.00 per pound molybdenum.
Cotabambas project – 0.2% copper equivalent cut-off assuming $1,350 per ounce gold, $23.00 per ounce silver, $3.20 per pound copper
and $12.50 per pound molybdenum.
Cozamin mine - $50 per tonne NSR cut-off assuming $3.25 per pound copper, $20.00 per ounce silver, $1.00 per pound lead and $1.20
per pound zinc.
g.
Keno Hill mines:
i. Bellekeno mine – Cdn $185 per tonne NSR cut-off assuming $22.50 per ounce silver, $0.85 per pound lead and $0.95 per pound
zinc.
ii. Lucky Queen & Flame and Moth mines – Cdn $185 per tonne NSR cut-off assuming $1,300 per ounce gold, $20.00 per ounce silver,
$0.94 per pound lead and $1.00 per pound zinc.
iii. Onek mine - Cdn $185 per tonne NSR cut-off assuming $1,250 per ounce gold, $20.00 per ounce silver, $0.90 per pound lead and
$0.95 per pound zinc.
iv. Bermingham mine - Cdn $185 per tonne NSR cut-off assuming $20.00 per ounce silver, $0.95 per pound lead, $1.00 per pound zinc
and $1,300 per ounce gold.
v. Elsa Tailings project – 50 grams per tonne silver cut-off assuming $17.00 per ounce silver and $1,000 per ounce gold.
Kutcho project – 1.0% copper equivalent cut-off for the Main and Sumac deposits and 0.9% copper equivalent cut-off for Esso, all assuming
$3.25 per pound copper, $1.25 per pound zinc, $1,550 per ounce gold and $20.00 per ounce silver.
Loma de La Plata project – 50 grams per tonne silver equivalent cut-off assuming $12.50 per ounce silver and $0.50 per pound lead.
Los Filos mine - $1,400 per ounce gold and $4.39 per ounce silver.
h.
i.
j.
k. Marmato mine – 1.9 grams per tonne gold cut-off for the Upper Mine and 1.3 grams per tonne gold cut-off for the MDZ and Transition Zone,
all assuming $1,500 per ounce gold.
l.
Metates royalty – 0.34 grams per tonne gold equivalent cut-off assuming $1,200 per ounce gold and $19.20 per ounce silver.
m. Minto mine – 0.5% copper cut-off for Open Pit and 1.0% copper cut-off for Underground.
n.
o.
p.
q.
r.
s.
t.
u.
v.
w.
x.
y.
z.
Neves-Corvo mine – 1.0% copper cut-off for the copper Mineral Resource and 4.5% zinc cut-off for the zinc Mineral Resource.
Pascua-Lama project – $1,500 per ounce gold, $18.75 per ounce silver and $3.50 per pound copper.
Peñasquito mine - $1,400 per ounce gold, $20.00 per ounce silver, $1.10 per pound lead and $1.40 per pound zinc.
Rosemont project – $5.70 per ton NSR cut-off assuming $18.00 per ounce silver, $3.15 per pound copper and $11.00 per pound
molybdenum.
Salobo mine – 0.253% copper equivalent cut-off assuming $1,290 per ounce gold and $3.18 per pound copper.
San Dimas mine – $1,450 per ounce gold and $18.50 per ounce silver.
Stillwater mines – geologic boundaries for Inferred Mineral Resources at both the Stillwater mine and East Boulder mine.
Stratoni mine – Geologically constrained to massive sulfide contacts.
Sudbury mines - $1,300 per ounce gold, $8.16 per pound nickel, $3.18 per pound copper, $1,155 per ounce platinum, $1,093 per ounce
palladium and $22.68 per pound cobalt.
Toroparu project – 0.30 grams per tonne gold cut-off assuming $1,350 per ounce gold and $3.00 per pound copper.
Voisey’s Bay mines:
i.
Reid Brook Divisions 2-4 - $275.00 per tonne cut-off assuming $9.71 per pound nickel, $3.40 per pound copper and $11.52 per pound
cobalt.
ii.
Discovery Hill - $29.52 per tonne assuming $8.16 per pound nickel, $3.18 per pound copper and $22.68 per pound cobalt.
Yauliyacu mine – $20.82 per ounce silver, $3.30 per pound copper, and $1.18 per pound zinc.
Zinkgruvan mine – 4.5% zinc cut-off for the zinc Mineral Resource and 1.0% copper cut-off for the copper Mineral Resource.
aa. 777 mine – $1,392 per ounce gold, $16.33 per ounce silver, $2.92 per pound copper and $1.11 per pound zinc.
10. The scientific and technical information in these tables regarding the Peñasquito mine was sourced by the Company from the following filed
documents:
a.
Peñasquito – Newmont’s December 31, 2020 Resources and Reserves press release (https://www.newmont.com/investors/news-
release/news-details/2021/Newmont-Reports-2020-Mineral-Reserves-of-94-Million-Gold-Ounces-Replacing-80-Percent-of-
Depletion/default.aspx) and
b.
Salobo – The Company has filed a technical report for the Salobo Mine, which is available on SEDAR at www.sedar.com
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [54]
The Company QP’s have approved this partner disclosed scientific and technical information in respect of the Peñasquito mine, as well as, the
Company’s Mineral Resource and Mineral Reserve estimates for the Salobo mine.
11. The Stillwater precious metals purchase agreement provides that effective July 1, 2018, Sibanye-Stillwater will deliver 100% of the gold production
for the life of the mines and 4.5% of palladium production until 375,000 ounces are delivered, 2.25% of palladium production until a further 175,000
ounces are delivered and 1.0% of the palladium production thereafter for the life of the mines. Attributable palladium Mineral Reserves and
Mineral Resources have been calculated based upon the 4.5% / 2.25% / 1.0% production entitlements.
The Stillwater mine has been in operation since 1986 and the East Boulder mine since 2002. Individual grades for platinum, palladium, gold and
rhodium are estimated using ratios applied to the combined platinum plus palladium grades based upon average historic production results
provided to the Company as of the date of this document. As such, the Attributable Mineral Resource and Mineral Reserve palladium and gold
grades for the Stillwater mines have been estimated using the following ratios:
a.
b.
Stillwater mine: Pd = (Pt + Pd) / (1/3.5 + 1) and Au = (Pd + Pt) x 0.0238
East Boulder mine: Pd = (Pt + Pd) / (1/3.6 + 1) and Au = (Pd + Pt) x 0.0323
12. The Company’s attributable Mineral Resources and Mineral Reserves for the Antamina silver interest, Cozamin silver interest, Marmato gold and
silver interests, Sudbury gold interest and Voisey’s Bay cobalt interest have been constrained to the production expected for the various contracts.
13. Under the terms of the San Dimas PMPA, the Company is entitled to an amount equal to 25% of the payable gold production plus an additional
amount of gold equal to 25% of the payable silver production converted to gold at a fixed gold to silver exchange ratio of 70:1 from the San Dimas
mine. If the average gold to silver price ratio decreases to less than 50:1 or increases to more than 90:1 for a period of 6 months or more, then the
“70” shall be revised to “50” or “90”, as the case may be, until such time as the average gold to silver price ratio is between 50:1 to 90:1 for a
period of 6 months or more in which event the “70” shall be reinstated.
14. The Marmato purchase agreement provides that Caldas will deliver 6.5% of the gold production until 190 thousand ounces are delivered and
3.25% of gold production thereafter, as well as, 100% of the silver production until 2.15 million ounces are delivered and 50% of silver production
thereafter. Attributable reserves and resources have been calculated on the 6.5% / 3.25% basis for gold and 100% / 50% basis for silver.
15. The Company’s agreement with Gold X Mining Corp is an Early Deposit agreement, whereby the Company will be entitled to purchase 10% of the
gold production and 50% of the silver production from the Toroparu project for the life of mine.
16. The Company has the option in the Early Deposit agreements, to terminate the agreement following the delivery of a feasibility study or if feasibility
study has not been delivered within a required time frame.
17. The Company’s agreement with Kutcho Copper is an Early Deposit agreement, whereby the Company will be entitled to purchase 100% of the
gold and silver production from the Kutcho project until 51,000 ounces of gold and 5.6 million ounces of silver have been delivered, after which
both streams will decrease to 66.67% for the remaining life of mine. Attributable reserves and resources have been calculated on the 100% /
66.67% basis.
18. The Company’s agreement with Chesapeake Gold Corp (Chesapeake) is a royalty whereby the Company will be entitled to a 0.5% net smelter
return royalty.
19. The Antamina silver purchase agreement in respect to the Antamina mine (November 3, 2015) provides that Glencore will deliver 33.75% of the
silver production until 140 million ounces are delivered and 22.5% of silver production thereafter, for a 50 year term that can be extended in
increments of 10 years at the Company’s discretion. Attributable reserves and resources have been calculated on the 33.75% / 22.5% basis.
20. The Yauliyacu mine silver purchase agreement provides that Glencore will deliver to the Company a per annum amount equal to the first 1.5 million
ounces of payable silver produced at the Yauliyacu mine and 50% of any excess for the life of the mine.
21. The Company only has the rights to silver contained in concentrates containing less than 15% copper at the Aljustrel mine.
22. The Cozamin silver purchase agreement provides that Capstone will deliver 50% of the silver production until 10 million ounces are delivered and
33% thereafter for the life of the mine. Attributable reserves and resources have been calculated on the 50% / 33% basis.
23. The Rosemont mine Mineral Resources and Mineral Reserves do not include the Oxide material.
24. The Voisey’s Bay cobalt purchase agreement provides that effective January 1, 2021, Vale will deliver 42.4% of the cobalt production until 31
million pounds are delivered to the Company and 21.2% of cobalt production thereafter, for the life of the mine. Attributable reserves and
resources have been calculated on the 42.4% / 21.2% basis.
25. The Company’s agreement with Panoro is an Early Deposit agreement, whereby the Company will be entitled to purchase 100% of the silver
production and 25% of the gold production from the Cotabambas project until 90 million silver equivalent ounces have been delivered, at which point
the stream will drop to 66.67% of silver production and 16.67% of gold production for the life of mine.
26. The Company’s agreement with Golden Predator is a royalty, whereby the Company will be entitled to a 2.0% net smelter return royalty for the first
600,000 ounces of gold produced, above which the NSR will increase to 2.75%. Golden Predator has the right to repurchase 0.625% of the
increased NSR by paying the Company Cdn$2.0M. Attributable resources have been calculated on the 2.0% / 2.75% basis.
27. Precious metals and cobalt are by-product metals at all of the Mining Operations, other than gold at the Marmato mine, silver at the Keno Hill
mines and the Loma de La Plata zone of the Navidad project, gold at the Toroparu project and palladium at the Stillwater mines and therefore,
the economic cut off applied to the reporting of precious metals and cobalt reserves and resources will be influenced by changes in the commodity
prices of other metals at the mines.
Statements made in this section contain forward-looking information. Please see “Cautionary Note Regarding Forward-Looking Statements” for material
risks, assumptions and important disclosure associated with this information.
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [55]
Cautionary Note Regarding Forward-Looking Statements
The information contained herein contains “forward-looking statements” within the meaning of the United States
Private Securities Litigation Reform Act of 1995 and “forward-looking information” within the meaning of applicable
Canadian securities legislation. Forward-looking statements, which are all statements other than statements of
historical fact, include, but are not limited to, statements with respect to:
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the payment of $110 million to Aris Gold and the satisfaction of each party's obligations in accordance with
the Marmato PMPA, the receipt by the Company of silver and gold production in respect of the Marmato
mine;
the future sales of Common Shares under, the amount of net proceeds from and the use of the net
proceeds from, the ATM Program;
the future price of commodities;
the impact of epidemics (including the COVID-19 virus pandemic), including the potential heightening of
other risks;
the estimation of future production from Mining Operations (including in the estimation of production, mill
throughput, grades, recoveries and exploration potential);
the estimation of mineral reserves and mineral resources (including the estimation of reserve conversion
rates) and the realization of such estimations);
the commencement, timing and achievement of construction, expansion or improvement projects by
Wheaton’s PMPA counterparties at Mining Operations;
the ability of Wheaton’s PMPA counterparties to comply with the terms of a PMPA (including as a result of
the business, mining operations and performance of Wheaton’s PMPA counterparties) and the potential
impacts of such on Wheaton;
the costs of future production;
the estimation of produced but not yet delivered ounces;
statements as to the impact of the listing of the Company’s common shares on the LSE;
any statements as to future dividends;
the ability to fund outstanding commitments and the ability to continue to acquire accretive PMPAs, future
payments by the Company in accordance with PMPAs, including any acceleration of payments;
projected increases to Wheaton's production and cash flow profile;
projected changes to Wheaton’s production mix;
the ability of Wheaton’s PMPA counterparties to comply with the terms of any other obligations under
agreements with the Company;
the ability to sell precious metals and cobalt production;
confidence in the Company’s business structure;
the Company's assessment of taxes payable and the impact of the CRA Settlement for years subsequent
to 2010;
possible audits for taxation years subsequent to 2015;
the Company’s assessment of the impact of any tax reassessments;
the Company’s intention to file future tax returns in a manner consistent with the CRA Settlement;
listing of the Company’s Common Shares on the LSE, NYSE or TSX; and
assessments of the impact and resolution of various legal and tax matters, including but not limited to
outstanding class actions and audits.
Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as
“plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “projects”,
“intends”, “anticipates” or “does not anticipate”, or “believes”, “potential”, or variations of such words and phrases or
statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be
achieved”. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that
may cause the actual results, level of activity, performance or achievements of Wheaton to be materially different from
those expressed or implied by such forward-looking statements, including but not limited to:
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the satisfaction of each party's obligations in accordance with the terms of the Marmato PMPA;
risks associated with fluctuations in the price of commodities (including Wheaton’s ability to sell its precious
metals or cobalt production at acceptable prices or at all);
risks of significant impacts on Wheaton or the Mining Operations as a result of an epidemic (including the
COVID-19 virus pandemic);
risks related to the Mining Operations (including fluctuations in the price of the primary or other
commodities mined at such operations, regulatory, political and other risks of the jurisdictions in which the
Mining Operations are located, actual results of mining, risks association with exploration, development,
operating, expansion and improvement at the Mining Operations, environmental and economic risks of the
Mining Operations, and changes in project parameters as Mining Operations plans continue to be refined);
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [56]
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absence of control over the Mining Operations and having to rely on the accuracy of the public disclosure
and other information Wheaton receives from the owners and operators of the Mining Operations as the
basis for its analyses, forecasts and assessments relating to its own business;
risks related to the uncertainty in the accuracy of mineral reserve and mineral resource estimation;
risks related to the satisfaction of each party’s obligations in accordance with the terms of the Company’s
PMPAs, including the ability of the companies with which the Company has PMPAs to perform their
obligations under those PMPAs in the event of a material adverse effect on the results of operations,
financial condition, cash flows or business of such companies, any acceleration of payments, estimated
throughput and exploration potential;
risks relating to production estimates from Mining Operations, including anticipated timing of the
commencement of production by certain Mining Operations;
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• Wheaton’s interpretation of, or compliance with, or application of, tax laws and regulations or accounting
policies and rules, being found to be incorrect or the tax impact to the Company’s business operations
being materially different than currently contemplated;
any challenge or reassessment by the CRA of the Company’s tax filings being successful and the potential
negative impact to the Company’s previous and future tax filings;
risks in assessing the impact of the CRA Settlement for years subsequent to 2010 (including whether there
will be any material change in the Company's facts or change in law or jurisprudence);
counterparty credit and liquidity risks;
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indebtedness and guarantees risks;
hedging risk;
competition in the streaming industry risk;
risks related to claims and legal proceedings against Wheaton or the Mining Operations;
risks relating to security over underlying assets;
risks related to governmental regulations;
risks related to international operations of Wheaton and the Mining Operations;
risks relating to exploration, development, operating, expansions and improvements at the Mining
Operations;
risks related to environmental regulations and climate change;
the ability of Wheaton and the Mining Operations to obtain and maintain necessary licenses, permits,
approvals and rulings;
the ability of Wheaton and the Mining Operations to comply with applicable laws, regulations and permitting
requirements;
lack of suitable infrastructure and employees to support the Mining Operations;
inability to replace and expand mineral reserves, including anticipated timing of the commencement of
production by certain Mining Operations (including increases in production, estimated grades and
recoveries);
uncertainties related to title and indigenous rights with respect to the mineral properties of the Mining
Operations;
the ability of Wheaton and the Mining Operations to obtain adequate financing;
the ability of the Mining Operations to complete permitting, construction, development and expansion;
challenges related to global financial conditions;
risks related to Wheaton’s acquisition strategy;
risks related to the market price of the common shares of Wheaton (the “Common Shares”);
risks associated with multiple listings of the Common Shares on the LSE, NYSE and TSX;
risks associated with a possible suspension of trading of Common Shares;
risks associated with the sale of Common Shares under the ATM Program, including the amount of any
net proceeds from such offering of Common Shares and the use of any such proceeds;
equity price risks related to Wheaton’s holding of long-term investments in other companies;
risks related to interest rates;
risks related to the declaration, timing and payment of dividends;
the ability of Wheaton and the Mining Operations to retain key management employees or procure the
services of skilled and experienced personnel;
risks relating to activist shareholders;
risks relating to reputational damage;
risks relating to unknown defects and impairments;
risks related to ensuring the security and safety of information systems, including cyber security risks;
risks related to the adequacy of internal control over financial reporting;
risks related to fluctuations in commodity prices of metals produced from the Mining Operations other than
precious metals or cobalt;
risks relating to future sales or the issuance of equity securities; and
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WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [57]
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other risks discussed in the section entitled “Description of the Business – Risk Factors” in Wheaton’s
Annual Information Form available on SEDAR at www.sedar.com, and in Wheaton’s Form 40-F for the
year ended December 31, 2019 and Form 6-K filed March 11, 2020 both on file with the U.S. Securities
and Exchange Commission in Washington, D.C. and Wheaton’s Management’s Discussion and Analysis
for the three months ended March 31, 2020 and nine months ended September 30, 2020, both available
on SEDAR at www.sedar.com and Form 6-Ks filed May 7, 2020 and November 9, 2020, both available on
EDGAR (the "Disclosure”).
Forward-looking statements are based on assumptions management currently believes to be reasonable, including but
not limited to:
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the payment of $110 million to Aris Gold and the satisfaction of each party's obligations in accordance with
the terms of the Marmato PMPA;
that the sale of Common Shares under the ATM Program will not have a significant impact on the market
price of the Company’s Common Shares and that the net proceeds of sales of Common Shares, if any,
will be used as anticipated;
that there will be no material adverse change in the market price of commodities;
that neither Wheaton nor the Mining Operations will suffer significant impacts as a result of an epidemic
(including the COVID-19 virus pandemic);
that the Mining Operations will continue to operate and the mining projects will be completed in accordance
with public statements and achieve their stated production estimates;
that the mineral reserves and mineral resource estimates from Mining Operations (including reserve
conversion rates) are accurate;
that each party will satisfy their obligations in accordance with the PMPAs;
that Wheaton will continue to be able to fund or obtain funding for outstanding commitments;
that Wheaton will be able to source and obtain accretive PMPAs;
that any outbreak or threat of an outbreak of a virus or other contagions or epidemic disease will be
adequately responded to locally, nationally, regionally and internationally, without such response requiring
any prolonged closure of the Mining Operations or having other material adverse effects on the Company
and counterparties to its PMPAs;
that the trading of the Company’s Common Shares will not be adversely affected by the differences in
liquidity, settlement and clearing systems as a result of multiple listings of the Common Shares on the LSE,
the TSX and the NYSE;
that the trading of the Company’s Common Shares will not be suspended;
that expectations regarding the resolution of legal and tax matters will be achieved (including ongoing class
action litigation and CRA audits involving the Company);
that Wheaton has properly considered the application of Canadian tax law to its structure and operations;
that Wheaton has filed its tax returns and paid applicable taxes in compliance with Canadian tax law;
that Wheaton's application of the CRA Settlement for years subsequent to 2010 is accurate (including the
Company's assessment that there has been no material change in the Company's facts or change in law
or jurisprudence for years subsequent to 2010);
the estimate of the recoverable amount for any PMPA with an indicator of impairment; and
such other assumptions and factors as set out in the Disclosure.
Although Wheaton has attempted to identify important factors that could cause actual results, level of activity,
performance or achievements to differ materially from those contained in forward-looking statements, there may be
other factors that cause results, level of activity, performance or achievements not to be as anticipated, estimated or
intended. There can be no assurance that forward-looking statements will prove to be accurate and even if events or
results described in the forward-looking statements are realized or substantially realized, there can be no assurance
that they will have the expected consequences to, or effects on, Wheaton. Accordingly, readers should not place
undue reliance on forward-looking statements and are cautioned that actual outcomes may vary. The forward-looking
statements included herein are for the purpose of providing investors with information to assist them in understanding
Wheaton’s expected financial and operational performance and may not be appropriate for other purposes. Any
forward looking statement speaks only as of the date on which it is made. Wheaton does not undertake to update any
forward-looking statements that are included or incorporated by reference herein, except in accordance with applicable
securities laws.
Cautionary Language Regarding Reserves And Resources
For further information on Mineral Reserves and Mineral Resources and on Wheaton more generally, readers should
refer to Wheaton’s Annual Information Form for the year ended December 31, 2019 and other continuous disclosure
documents filed by Wheaton since January 1, 2020, available on SEDAR at www.sedar.com. Wheaton’s Mineral
Reserves and Mineral Resources are subject to the qualifications and notes set forth therein. Mineral Resources which
are not Mineral Reserves do not have demonstrated economic viability.
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [58]
Cautionary Note to United States Investors Concerning Estimates of Measured, Indicated and Inferred
Resources:
The information contained herein has been prepared in accordance with the requirements of the securities laws in
effect in Canada, which differ from the requirements of United States securities laws. The terms "mineral reserve",
"proven mineral reserve" and "probable mineral reserve" are Canadian mining terms defined in accordance with
Canadian National Instrument 43-101 – Standards of Disclosure for Mineral Projects ("NI 43-101") and the Canadian
Institute of Mining, Metallurgy and Petroleum (the "CIM") – CIM Definition Standards on Mineral Resources and
Mineral Reserves, adopted by the CIM Council, as amended (the "CIM Standards"). In addition, the terms "mineral
resource", "measured mineral resource", "indicated mineral resource" and "inferred mineral resource" are defined in
and required to be disclosed by NI 43-101. Investors are cautioned not to assume that any part or all of the mineral
deposits in these categories will ever be converted into reserves. "Inferred mineral resources" have a great amount of
uncertainty as to their existence and as to their economic and legal feasibility. It cannot be assumed that all or any part
of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred
mineral resources may not form the basis of feasibility or pre-feasibility studies, except in rare cases. Investors are
cautioned not to assume that all or any part of an inferred mineral resource exists or is economically or legally
mineable. Mineral resources that are not mineral reserves do not have demonstrated economic viability. Disclosure of
"contained ounces" in a resource is permitted disclosure under Canadian regulations. The SEC has adopted
amendments to its disclosure rules to modernize the mineral property disclosure requirements for issuers whose
securities are registered with the SEC under the U.S. Securities Exchange Act of 1934, as amended (the “Exchange
Act”). These amendments became effective February 25, 2019 (the “SEC Modernization Rules”) with compliance
required for the first fiscal year beginning on or after January 1, 2021. Under the SEC Modernization Rules, the
historical property disclosure requirements for mining registrants included in SEC Industry Guide 7 will be rescinded
and replaced with disclosure requirements in subpart 1300 of SEC Regulation S-K. Following the transition period, as
a foreign private issuer that is eligible to file reports with the SEC pursuant to the multi-jurisdictional disclosure system,
the Company is not required to provide disclosure on its mineral properties under the SEC Modernization Rules and
will continue to provide disclosure under NI 43-101. As a result of the adoption of the SEC Modernization Rules, the
SEC will recognize estimates of “measured mineral resources”, “indicated mineral resources” and “inferred mineral
resources.” In addition, the SEC has amended its definitions of “proven mineral reserves” and “probable mineral
reserves” to be “substantially similar” to the corresponding definitions under the CIM Definition Standards that are
required under NI 43-101. However, while the above terms are “substantially similar” to CIM Definition Standards,
there are differences in the definitions under the SEC Modernization Rules and the CIM Definition Standards.
Accordingly, there is no assurance any mineral reserves or mineral resources that the Company may report as “proven
mineral reserves”, “probable mineral reserves”, “measured mineral resources”, “indicated mineral resources” and
“inferred mineral resources” under NI 43-101 would be the same had the Company prepared the reserve or resource
estimates under the standards adopted under the SEC Modernization Rules. Accordingly, information contained herein
that describes Wheaton’s mineral deposits may not be comparable to similar information made public by U.S.
companies subject to reporting and disclosure requirements under the United States federal securities laws and the
rules and regulations thereunder. United States investors are urged to consider closely the disclosure in Wheaton’s
Form 40-F, a copy of which may be obtained from Wheaton or from http://www.sec.gov/edgar.html.
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [59]
Management’s Responsibility for Financial Reporting
The accompanying consolidated financial statements of Wheaton Precious Metals Corp. (“Wheaton”) were prepared
by management, which is responsible for the integrity and fairness of the information presented, including the many
amounts that must of necessity be based on estimates and judgments. These consolidated financial statements were
prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International
Accounting Standards Board. Financial information appearing throughout our Management’s Discussion and Analysis
(“MD&A”) is consistent with these consolidated financial statements.
In discharging our responsibility for the integrity and fairness of the consolidated financial statements and for the
accounting systems from which they are derived, we maintain and rely on a comprehensive system of internal controls
designed to ensure that transactions are authorized, assets are safeguarded and proper records are maintained.
These controls include business planning; delegation of authority; careful selection and hiring of staff; accountability for
performance within appropriate and well-defined areas of responsibility; and the communication of policies and
guidelines of business conduct throughout the company.
The Board of Directors oversees management’s responsibilities for financial reporting through the Audit Committee,
which is composed entirely of directors who are neither officers nor employees of Wheaton. The Audit Committee
reviews Wheaton’s interim and annual consolidated financial statements and MD&A and recommends them for
approval by the Board of Directors. Other key responsibilities of the Audit Committee include monitoring Wheaton’s
system of internal controls, monitoring its compliance with legal and regulatory requirements, selecting the external
auditors and reviewing the qualifications, independence and performance of the external auditors.
Deloitte LLP, Independent Registered Public Accounting Firm, appointed by the shareholders of Wheaton upon the
recommendation of the Audit Committee and Board, have performed an independent audit of the consolidated
financial statements and their report follows. The auditors have full and unrestricted access to the Audit Committee to
discuss their audit and related findings.
/s/ Randy Smallwood
Randy Smallwood
/s/ Gary Brown
Gary Brown
President & Chief Executive Officer
Senior Vice President & Chief Financial Officer
March 11, 2021
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [60]
Report of Independent Registered Public Accounting Firm
To the shareholders and the Board of Directors of Wheaton Precious Metals Corp.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Wheaton Precious Metals Corp. and
subsidiaries (the "Company") as of December 31, 2020 and 2019, the related consolidated statements of earnings,
comprehensive income, changes in shareholders’ equity and cash flows for each of the two years in the period
ended December 31, 2020, and the related notes (collectively referred to as the "financial statements"). In our
opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of
December 31, 2020 and 2019, and its financial performance and its cash flows for each of the two years in the
period ended December 31, 2020, in conformity with International Financial Reporting Standards as issued by the
International Accounting Standards Board.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2020, based
on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission and our report dated March 11, 2021, expressed an unqualified
opinion on the Company's internal control over financial reporting.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express
an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered
with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.
federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the
PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of
material misstatement of the financial statements, whether due to error or fraud, and performing procedures that
respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and
disclosures in the financial statements. Our audits also included evaluating the accounting principles used and
significant estimates made by management, as well as evaluating the overall presentation of the financial
statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current-period audit of the financial
statements that was communicated or required to be communicated to the audit committee and that (1) relates to
accounts or disclosures that are material to the financial statements and (2) involved our especially challenging,
subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion
on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below,
providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Indicators of Impairment Reversal of Mineral Stream Interests – Refer to Note 4.3 to the financial statements
Critical Audit Matter Description
The Company considers each precious metals purchase arrangement (“PMPA”) to be a separate cash generating
unit and at the end of each reporting period, the Company assess each PMPA to determine whether any indication
of impairment or impairment reversal exists. During the year, the Company assessed whether any indication of
impairment reversal existed for the Sudbury PMPA by evaluating, among other items whether there were significant
changes to the estimated future cash flows associated with the PMPA compared to previous forecasts used at the
time the historical impairment was recorded in the year ending December 31, 2016. The Company concluded there
was not an indicator of impairment reversal for the Sudbury PMPA at December 31, 2020.
While there are several factors that must be considered to determine whether or not an indicator of impairment
reversal exists at the Sudbury PMPA, the judgments associated with the estimated future cash flows with the most
subjectivity include changes in future payable gold production attributable to the Company over the term of the
PMPA and changes in long-term gold price assumptions. Auditing these judgments requires a high degree of
subjectivity in applying audit procedures and in evaluating the results of those procedures. This resulted in an
increased extent of audit effort, including the involvement of fair value specialists.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to future payable gold production and long-term gold price assumptions, in
determining if there is an indicator of impairment reversal of the Sudbury PMPA, included the following, among
others:
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [61]
• Evaluated the effectiveness of the controls over management’s assessment of indicators of impairment
reversal.
• Evaluated management’s ability to accurately forecast future payable gold production by:
o Assessing the methodology used in management’s estimate of future payable gold production;
and
o Comparing management’s forecast of future payable gold production to previous forecasts and
actual production results.
• With assistance of fair value specialists, evaluated the long-term gold price assumptions by comparing
management’s long-term price assumptions to third party long-term price assumptions for gold.
/s/ Deloitte LLP
Chartered Professional Accountants
Vancouver, Canada
March 11, 2021
We have served as the Company's auditor since 2004.
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [62]
Management’s Report on Internal Control Over Financial Reporting
Management of Wheaton Precious Metals Corp. (“Wheaton”) is responsible for establishing and maintaining
adequate internal control over financial reporting. Internal control over financial reporting is a process designed by, or
under the supervision of the Chief Executive Officer and the Chief Financial Officer and effected by the Board of
Directors, management and other personnel to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance with International Financial
Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board. It includes those policies
and procedures that:
i.
ii.
iii.
pertain to the maintenance of records that accurately and fairly reflect, in reasonable detail, the transactions
related to Wheaton’s assets;
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial
statements in accordance with IFRS, and Wheaton receipts and expenditures are made only in accordance
with authorizations of management and Wheaton’s directors; and
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of Wheaton’s assets that could have a material effect on Wheaton’s financial statements.
Due to its inherent limitations, internal control over financial reporting may not prevent or detect misstatements on a
timely basis. Also, projections of any evaluation of the effectiveness of internal control over financial reporting to
future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or
that the degree of compliance with the policies or procedures may deteriorate.
Management assessed the effectiveness of Wheaton’s internal control over financial reporting as of December 31,
2020, based on the criteria set forth in Internal Control — Integrated Framework (2013) issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO). Based on this assessment, management has
concluded that, as of December 31, 2020, Wheaton’s internal control over financial reporting was effective.
The effectiveness of Wheaton’s internal control over financial reporting, as of December 31, 2020, has been audited
by Deloitte LLP, Independent Registered Public Accounting Firm, who also audited the Company’s consolidated
financial statements as of and for the year ended December 31, 2020, as stated in their report.
/s/ Randy Smallwood
/s/ Gary Brown
Randy Smallwood
Gary Brown
President & Chief Executive Officer
Senior Vice President & Chief Financial Officer
March 11, 2021
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [63]
Report of Independent Registered Public Accounting Firm
To the shareholders and the Board of Directors of Wheaton Precious Metals Corp.
Opinion on Internal Control over Financial Reporting
We have audited the internal control over financial reporting of Wheaton Precious Metals Corp. and subsidiaries (the
“Company”) as of December 31, 2020, based on criteria established in Internal Control — Integrated Framework
(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion,
the Company maintained, in all material respects, effective internal control over financial reporting as of December
31, 2020, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2020, of the
Company and our report dated March 11, 2021, expressed an unqualified opinion on those financial statements.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for
its assessment of the effectiveness of internal control over financial reporting, included in the accompanying
Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the
Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered
with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal
securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the
PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was
maintained in all material respects. Our audit included obtaining an understanding of internal control over financial
reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating
effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered
necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A company’s internal control over financial reporting
includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and expenditures of the company are being made
only in accordance with authorizations of management and directors of the company; and (3) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s
assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may
deteriorate.
/s/ Deloitte LLP
Chartered Professional Accountants
Vancouver, Canada
March 11, 2021
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [64]
Consolidated Statements of Earnings
(US dollars and shares in thousands, except per share amounts)
Sales
Cost of sales
Cost of sales, excluding depletion
Depletion
Total cost of sales
Gross margin
General and administrative expenses
Impairment of mineral stream interests
Earnings from operations
Other (income) expense
Earnings before finance costs and income taxes
Finance costs
Earnings before income taxes
Income tax recovery
Net earnings
Basic earnings per share
Diluted earnings per share
Weighted average number of shares outstanding
Basic
Diluted
Years Ended December 31
Note
2020
2019
6 $ 1,096,224 $
861,332
$
10
266,763 $
243,889
258,559
256,826
$
510,652 $
515,385
$
$
$
$
7
11
8
17.3
23
585,572 $
65,698
-
519,874 $
(2,170)
522,044 $
16,715
505,329 $
2,475
345,947
54,507
165,912
125,528
(274)
125,802
48,730
77,072
9,066
$
507,804 $
86,138
$
$
1.132 $
1.128 $
0.193
0.193
21
21
448,694
450,070
446,021
446,930
The accompanying notes form an integral part of these consolidated financial statements.
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [65]
Consolidated Statements of Comprehensive Income
(US dollars in thousands)
Net earnings
Other comprehensive income
Items that will not be reclassified to net earnings
Gain on LTIs¹
Income tax recovery (expense) related to LTIs¹
Total other comprehensive income
Total comprehensive income
1) LTIs = long-term investments – common shares held.
Years Ended December 31
Note
2020
2019
$
507,804 $
86,138
15 $
23
$
25,856 $
(1,866)
161,936
(9,623)
23,990 $
152,313
$
531,794 $
238,451
The accompanying notes form an integral part of these consolidated financial statements.
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [66]
Consolidated Balance Sheets
(US dollars in thousands)
Assets
Current assets
Cash and cash equivalents
Accounts receivable
Other
Total current assets
Non-current assets
Mineral stream interests
Early deposit mineral stream interests
Mineral royalty interest
Long-term equity investments
Convertible notes receivable
Property, plant and equipment
Other
Total non-current assets
Total assets
Liabilities
Current liabilities
Accounts payable and accrued liabilities
Current portion of performance share units
Current portion of lease liabilities
Other
Total current liabilities
Non-current liabilities
Bank debt
Lease liabilities
Deferred income taxes
Performance share units
Pension liability
Total non-current liabilities
Total liabilities
Shareholders' equity
Issued capital
Reserves
Retained earnings
Total shareholders' equity
As at
December 31
2020
As at
December 31
2019
Note
$
9
24
192,683 $
5,883
3,265
103,986
7,138
43,628
$
201,831 $
154,752
10 $ 5,488,391 $ 5,734,106
31,741
12
3,036
13
309,757
15
21,856
14
7,311
16
15,448
25
33,241
3,047
199,878
11,353
6,289
13,242
$ 5,755,441 $ 6,123,255
$ 5,957,272 $ 6,278,007
$
20.1
17.2
13,023 $
17,297
773
76
11,794
10,668
724
41,514
$
31,169 $
64,700
17.1 $
17.2
23
20.1
27
$
$
195,000 $
2,864
214
11,784
1,670
874,500
3,528
148
8,401
810
211,532 $
887,387
242,701 $
952,087
18 $ 3,646,291 $ 3,599,203
160,701
19
1,566,016
126,882
1,941,398
$ 5,714,571 $ 5,325,920
Total liabilities and shareholders' equity
$ 5,957,272 $ 6,278,007
/s/ Randy Smallwood
Randy Smallwood
Director
/s/ John Brough
John Brough
Director
The accompanying notes form an integral part of these consolidated financial statements.
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [67]
Consolidated Statements of Cash Flows
(US dollars in thousands)
Operating activities
Net earnings
Adjustments for
Depreciation and depletion
Gain on disposal of mineral royalty interest
Impairment charges
Interest expense
Equity settled stock based compensation
Performance share units
Pension expense
Income tax expense (recovery)
Loss (gain) on fair value adjustment of share purchase warrants
held
Fair value (gain) loss on convertible note receivable
Investment income recognized in net earnings
Other
Change in non-cash working capital
Cash generated from operations before income taxes and interest
Income taxes recovered (paid)
Interest paid
Interest received
Years Ended December 31
Note
2020
2019
$
507,804 $
86,138
13
11
17.3
20.1
27
23
8, 15
14
22
$
245,779
-
-
12,366
5,432
9,398
806
(2,475)
(337)
(1,899)
(230)
1,487
1,025
779,156 $
49
(13,992)
229
258,730
(2,929)
165,912
44,942
5,691
7,834
810
(9,066)
16
1,043
(875)
1,833
(11,837)
548,242
(5,380)
(42,059)
817
Cash generated from operating activities
$
765,442 $
501,620
Financing activities
Bank debt repaid
Credit facility extension fees
Share purchase options exercised
Lease payments
Dividends paid
17.1 $
17.1
19.2
17.2
18.2,22
(679,500) $
(1,373)
21,892
(704)
(167,212)
(389,500)
(1,106)
37,038
(637)
(129,986)
Cash (used for) generated from financing activities
$
(826,897) $
(484,191)
Investing activities
Mineral stream interests
Early deposit mineral stream interests
Proceeds on disposal of mineral royalty interest
Acquisition of long-term investments
Acquisition of convertible note receivable
Proceeds on disposal of long-term investments
Dividend income received
Other
Cash generated from (used for) investing activities
Effect of exchange rate changes on cash and cash equivalents
Increase in cash and cash equivalents
Cash and cash equivalents, beginning of year
Cash and cash equivalents, end of year
10 $
12
13
15
14
15
(322) $
(1,500)
-
(10,671)
-
162,942
-
(801)
(183)
(1,500)
9,000
(909)
(10,000)
17,824
59
(3,661)
$
$
$
149,648 $
10,630
504 $
160
88,697 $
103,986
28,219
75,767
$
192,683 $
103,986
The accompanying notes form an integral part of these consolidated financial statements.
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [68]
Consolidated Statements of Shareholders’ Equity
Reserves
Number
of
Shares
(000's)
Share
Purchase
Warrants
Reserve
Share
Purchase
Options
Reserve
Restricted
Share
Units
Reserve
Issued
Capital
LTI 1
Revaluation
Reserve
(Net of Tax)
Total
Reserves
Retained
Earnings
Total
444,336 $ 3,516,437 $ 83,077 $ 31,002 $
5,970 $ (112,156) $
7,893 $ 1,647,586 $ 5,171,916
$
$
$
- $
-
- $
376 $
-
2,040
48,939
134
2,782
1,261
30,669
- $
-
- $
- $
- $
-
- $
- $
- $
-
-
-
-
2,474
3,217
(9,466)
-
-
-
(2,782)
-
- $
- $
- $
86,138 $
86,138
-
152,313 152,313
- 152,313
- $ 152,313 $ 152,313 $
86,138 $ 238,451
- $
-
- $
5,691
- (9,466)
- (2,782)
- $
-
-
-
376
5,691
39,473
-
-
- (160,656) (129,987)
(US dollars in thousands)
At January 1, 2019
Total comprehensive income
Net earnings
OCI 1
Total comprehensive income
Income tax recovery (expense)
SBC 1 expense
Options 1 exercised
RSUs 1 released
Dividends (Note 18.2)
Realized loss on disposal of LTIs ¹ (Note 19.4)
-
-
-
-
7,052
7,052
(7,052)
-
At December 31, 2019
447,771 $ 3,599,203 $ 83,077 $ 24,010 $
6,405 $ 47,209 $ 160,701 $ 1,566,016 $ 5,325,920
Total comprehensive income
Net earnings
OCI 1
Total comprehensive income
Income tax recovery (expense)
SBC 1 expense
Options 1 exercised
RSUs 1 released
Dividends (Note 18.2)
$
$
$
- $
-
- $
(820) $
-
1,056
23,776
128
2,857
503
21,275
- $
-
- $
- $
- $
-
- $
- $
- $
-
-
-
-
2,165
3,267
(4,320)
-
-
-
(2,857)
-
- $
- $
- $ 507,804 $ 507,804
-
23,990 23,990
-
23,990
- $ 23,990 $ 23,990 $ 507,804 $ 531,794
- $
-
- $
5,432
- (4,320)
- (2,857)
- $
-
-
-
(820)
5,432
19,456
-
-
- (188,486) (167,211)
Realized gain on disposal of LTIs ¹ (Note
19.4)
-
-
-
-
(56,064) (56,064)
56,064
-
At December 31, 2020
1) Definitions as follows: “OCI” = Other Comprehensive Income (Loss); “SBC” = Equity Settled Stock Based Compensation; “Options” = Share Purchase Options; “RSUs” =
449,458 $ 3,646,291 $ 83,077 $ 21,855 $
6,815 $ 15,135 $ 126,882 $ 1,941,398 $ 5,714,571
Restricted Share Units; “LTI’s” = Long-Term Investments; “Warrants” = Share Purchase Warrants.
The accompanying notes form an integral part of these consolidated financial statements.
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [69]
Notes to the Consolidated Financial Statements
Years Ended December 31, 2020 and 2019 (US Dollars)
1.
Description of Business and Nature of Operations
Wheaton Precious Metals Corp. is a precious metal streaming company which generates its revenue primarily from
the sale of precious metals (gold, silver and palladium). Wheaton Precious Metals Corp. (“Wheaton” or the
“Company”), which is the ultimate parent company of its consolidated group, is incorporated and domiciled in
Canada, and its principal place of business is at Suite 3500 - 1021 West Hastings Street, Vancouver, British
Columbia, V6E 0C3. The Company trades on the Toronto Stock Exchange (“TSX”) and the New York Stock
Exchange (“NYSE”) under the symbol WPM. Additionally, on October 28, 2020, the Company’s common shares were
admitted to the Standard Segment of the Official List of the UK Financial Conduct Authority and commenced trading
on the Main Market of the London Stock Exchange (“LSE”) under the symbol WPM.
As of December 31, 2020, the Company has entered into 25 long-term purchase agreements (three of which are
early deposit agreements), with 19 different mining companies, for the purchase of precious metals and cobalt
(“precious metal purchase agreements” or "PMPA") relating to 24 mining assets which are currently operating, 7
which are at various stages of development and 1 which has been placed in care and maintenance, located in 12
countries. Pursuant to the PMPAs, Wheaton acquires metal production from the counterparties for an initial upfront
payment plus an additional cash payment for each ounce or pound delivered which is fixed by contract, generally at
or below the prevailing market price.
The consolidated financial statements of the Company for the year ended December 31, 2020 were authorized for
issue as of March 11, 2021 in accordance with a resolution of the Board of Directors.
Business Continuity and Employee Health and Safety
In accordance with local government restrictions and guidelines, Wheaton temporarily closed its physical offices in mid-
March 2020 and successfully transitioned to telecommuting for all of its employees. During the third quarter of 2020,
the physical offices were re-opened on a voluntary basis.
Partner Operations
During the second quarter of 2020, six partner operations located in Mexico and Peru on which the Company has
PMPAs were temporarily suspended due to government restrictions focused on reducing the impacts of COVID-19,
including the Constancia, Yauliyacu, San Dimas, Los Filos, Peñasquito and Antamina mines. The Peruvian
government issued a decree on May 3, 2020 indicating large mines would be able to reopen subject to approval of
certain protocols, while on May 13, 2020, the federal government of Mexico announced the designation of mining as
an essential activity beginning May 18, 2020. All these mining operations resumed operations during the third quarter
and remained in operation for the balance of the year. Additionally, operations at the Voisey’s Bay mine, located in
Canada, were temporarily suspended, with underground development resuming in late May and operations resuming
in July. The Company received its first shipment of cobalt under the Voisey’s Bay PMPA in February 2021.
There can be no assurance that our partners’ operations that are currently operational will continue to remain
operational for the duration of the COVID-19 virus pandemic.
2.
Basis of Presentation and Statement of Compliance
These consolidated financial statements have been prepared in accordance with International Financial Reporting
Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) on a historical cost basis,
except for financial assets which are not held for the purpose of collecting contractual cash flows on specified dates
and derivative assets and derivative liabilities which have been measured at fair value as at the relevant balance
sheet date. The consolidated financial statements are presented in United States (“US”) dollars, which is the
Company’s functional currency, and all values are expressed in thousands unless otherwise noted. References to
“Cdn$” refer to Canadian dollars.
The preparation of financial statements in accordance with IFRS requires the use of certain accounting estimates. It
also requires management to exercise judgment in applying the Company’s accounting policies. The areas involving
a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the financial
statements are disclosed in Note 4.
3.
Significant Accounting Policies
3.1. New Accounting Standards Effective in 2020
Amendment to IFRS 3 - Business Combinations
The amendments to IFRS 3 clarify the definition of a business and includes an optional concentration test to
determine whether an acquired set of activities and assets is a business. The amendments are effective for business
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [70]
Notes to the Consolidated Financial Statements
Years Ended December 31, 2020 and 2019 (US Dollars)
combinations and asset acquisitions occurring on or after January 1, 2020. The Company will apply these
amendments to future acquisition transactions.
Interest Rate Benchmark Reform (Amendments to IFRS 9, IAS 39 and IFRS 7)
The amendments in Interest Rate Benchmark Reform (Amendments to IFRS 9, IAS 39 and IFRS 7) clarify that
entities would continue to apply certain hedge accounting requirements assuming that the interest rates benchmark
on which the hedged cash flows and cash flows from the hedging instrument are based will not be altered as a result
of interest rate benchmark reform. This amendment did not have a significant impact to the Company’s consolidated
financial statements as the Company does not have hedge accounting.
Amendments to IFRS 16 Leases
To provide practical relief to lessees in accounting for rent concessions arising as a result of COVID-19 the
International Accounting Standards Board (“IASB”) proposed an amendment to IFRS 16 which provides lessees with
a practical expedient that relieves a lessee from assessing whether a COVID-19 related rent concession is a lease
modification. The amendment is effective for annual reporting period beginning on or after June 1, 2020, with earlier
application permitted. This amendment did not have a significant impact to the Company’s consolidated financial
statements as the Company has not received any COVID-19 related rent concessions as of the date of these
consolidated financial statements.
3.2. Principles of Consolidation
The consolidated financial statements include the accounts of the Company and its 100% owned subsidiaries Wheaton
Precious Metals International Ltd., Silver Wheaton Luxembourg S.a.r.l. and Wheaton Precious Metals (Cayman) Co.
Subsidiaries are fully consolidated from the date on which the Company obtains a controlling interest. Control is defined
as an investor’s power over an investee with exposure, or rights, to variable returns from the investee and the ability to
affect the investor’s returns through its power over the investee. Subsidiaries are included in the consolidated financial
results of the Company from the effective date of acquisition up to the effective date of disposition or loss of control.
The financial statements of the subsidiaries are prepared for the same reporting period as the parent company, using
consistent accounting policies. Balances, transactions, income and expenses between the Company and its subsidiaries
are eliminated on consolidation.
3.3. Cash and Cash Equivalents
Cash and cash equivalents include cash and highly liquid money market investments including short-term deposits,
treasury bills, commercial paper, bankers’ depository notes and bankers’ acceptances with terms to maturity of less than
three months.
3.4. Revenue Recognition
Revenue relating to the sale of precious metals is recognized when control of the precious metal is transferred to the
customer in an amount that reflects the consideration the Company expects to receive in exchange for those
products. In determining whether the Company has satisfied a performance obligation, it considers the indicators of
the transfer of control, which include, but are not limited to, whether: the Company has a present right to payment; the
customer has legal title to the asset; the Company has transferred physical possession of the asset to the customer;
and the customer has the significant risks and rewards of ownership of the asset.
Under certain PMPAs, precious metal is acquired from the mine operator in the form of gold, silver or palladium
credits, which is then sold through a network of third party brokers or dealers. Revenue from precious metal credit
sales is recognized at the time of the sale of such credits, which is also the date that control of the precious metal is
transferred to the customer. The Company will occasionally enter into forward contracts in relation to precious metal
deliveries that it is highly confident will occur within a given quarter. No forward contracts were outstanding at
December 31, 2020 or December 31, 2019. The sales price is fixed at the delivery date based on either the terms of
these short-term forward sales contracts or the spot price of the precious metal.
Under certain PMPAs, precious metal is acquired from the mine operator in concentrate form, which is then sold
under the terms of the concentrate sales contracts to third-party smelters or traders. Where the Company acquires
precious metals in concentrate form, final precious metal prices are set on a specified future quotational period (the
“Quotational Period”) pursuant to the concentrate sales contracts with third-party smelters, typically one to three
months after the shipment date, based on market prices for precious metals. The contracts, in general, provide for a
provisional payment based upon provisional assays and quoted precious metal prices. Final settlement is based upon
the average applicable price for the Quotational Period applied to the actual number of precious metal ounces
recovered calculated using confirmed smelter weights and settlement assays. Revenues and the associated cost of
sales are recorded on a gross basis under these contracts at the time title passes to the buyer, which is also the date
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [71]
Notes to the Consolidated Financial Statements
Years Ended December 31, 2020 and 2019 (US Dollars)
that control of the precious metal is transferred to the customer. The Company has concluded that the adjustments
relating to the final assay results for the quantity of concentrate sold and the retroactive pricing adjustment for the
Quotational Period are not significant and do not constrain the recognition of revenue.
3.5. Financial Instruments
Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions
of the instrument.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable
to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at
fair value through net earnings) are added to or deducted from the fair value of the financial assets or financial liabilities,
as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or
financial liabilities at fair value through net earnings are recognized immediately in net earnings.
3.6. Financial Assets
Financial assets are subsequently measured at either amortized cost or fair value, depending on the classification of the
financial assets.
Financial Assets at Fair Value Through Other Comprehensive Income (“FVTOCI”)
The Company’s long-term investments in common shares held are for long-term strategic purposes and not for trading.
Upon the adoption of IFRS 9, Financial Instruments (“IFRS 9”), the Company made an irrevocable election to designate
these long-term investments in common shares held as FVTOCI as it believes that this provides a more meaningful
presentation for long-term strategic investments, rather than reflecting changes in fair value in net earnings.
Long-term investments in common shares held are initially measured at fair value. Subsequently, they are measured at
fair value with gains and losses arising from changes in fair value recognized as a component of other comprehensive
income (“OCI”) and accumulated in the long-term investment revaluation reserve. The cumulative gain or loss will not be
reclassified to net earnings on disposal of these long-term investments but is reclassified to retained earnings.
Dividends on these long-term investments in common shares held are recognized as a component of net earnings in the
period they are received under the classification Other (Income) Expense.
Financial Assets at Fair Value Through Net Earnings (“FVTNE”)
Cash and cash equivalents are stated at FVTNE.
Warrants held by the Company for long-term investment purposes are classified as FVTNE. These warrants are
measured at fair value at the end of each reporting period, with any gains or losses arising on remeasurement
recognized as a component of net earnings under the classification Other (Income) Expense.
Convertible notes receivable (Note 14) are classified as FVTNE and are measured at fair value at the end of each
reporting period by discounting the stream of future interest and principal payments at the rate of interest prevailing at
the balance sheet date for instruments of similar term and risk (the market interest rate), and adding this value to the
value of the convertibility feature which is estimated using a Black-Scholes model based on assumptions including risk
free interest rate, expected dividend yield, expected volatility and expected remaining life of the respective convertible
notes receivable. The resulting gains or losses (if any) arising on remeasurement is recognized as a component of net
earnings under the classification Other (Income) Expense.
As discussed in Note 3.4, the Company’s provisionally priced sales contain an embedded derivative that is reflected at
fair value at the end of each reporting period. Fair value gains and losses related to the embedded derivative are
included in revenue in the period they occur.
Financial Assets at Amortized Cost
The non-revolving term loan, which requires regularly scheduled payments of interest and principal, is carried at
amortized cost. Other receivables are non-interest bearing and are stated at amortized cost, which approximate fair
values due to the short terms to maturity. Where necessary, the non-revolving term loan and other receivables are
reported net of allowances for uncollectable amounts.
Foreign Exchange Gains and Losses
The fair value of financial assets denominated in a foreign currency is determined in that foreign currency and translated
at the spot rate at the end of each reporting period. The foreign exchange component forms part of its fair value gain or
loss. Therefore,
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [72]
Notes to the Consolidated Financial Statements
Years Ended December 31, 2020 and 2019 (US Dollars)
•
•
•
For financial assets that are classified as FVTNE, the foreign exchange component is recognized as a
component of net earnings;
For financial assets that are classified as FVTOCI, the foreign exchange component is recognized as a
component of OCI; and
For financial assets that are denominated in a foreign currency and are measured at amortized cost at the end
of each reporting period, the foreign exchange gains and losses are determined based on the amortized cost of
the instruments and are recognized as a component of net earnings.
Derecognition of Financial Assets
The Company derecognizes a financial asset only when the contractual rights to cash flows from the asset expire, or
when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another
entity. If the Company neither transfers nor retains substantially all the risks and rewards of ownership and continues to
control the transferred asset, the Company recognizes its retained interest in the asset and an associated liability for
amounts it may have to pay. If the Company retains substantially all the risks and rewards of ownership of a transferred
financial asset, the Company continues to recognize the financial asset and also recognizes a collateralized borrowing
for the proceeds received.
On derecognition of a financial asset that is classified as FVTOCI, the cumulative gain or loss (net of tax) previously
accumulated in the long-term investment revaluation reserve is not reclassified to net earnings, but is reclassified to
retained earnings.
3.7. Financial Liabilities and Equity Instruments
Debt and equity instruments issued by the Company are classified as either financial liabilities or as equity in accordance
with the substance of the contractual arrangements and the definition of a financial liability and equity instrument. All
financial liabilities are subsequently measured at amortized cost using the effective interest method or at FVTNE,
depending on the classification of the instrument.
Equity Instruments
An equity instrument is a contract that evidences a residual interest in the assets of an entity after deducting all of its
liabilities. Equity instruments issued by the Company are recognized at the proceeds received less direct issue costs
(net of any current or deferred income tax recovery attributable to such costs).
Share Purchase Warrants Issued
Share purchase warrants issued with an exercise price denominated in the Company’s functional currency (US dollars)
are considered equity instruments with the consideration received reflected within shareholders’ equity under the
classification of share purchase warrants reserve. Upon exercise, the original consideration is reallocated from share
purchase warrants reserve to issued share capital along with the associated exercise price.
Bank Debt
Bank debt is initially measured at fair value, net of transaction costs, and is subsequently measured at amortized cost
using the effective interest method. The effective interest method is a method of calculating the amortized cost of a
financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that
exactly discounts estimated future cash payments through the expected life of the financial liability, or (where
appropriate) a shorter period, to the net carrying amount on initial recognition.
Other Financial Liabilities
Accounts payable and accrued liabilities are stated at amortized cost, which approximate fair values due to the short
terms to maturity.
Foreign Exchange Gains and Losses
The fair value of financial liabilities denominated in a foreign currency is determined in that foreign currency and
translated at the spot rate at the end of each reporting period. Therefore,
•
•
For financial liabilities that are denominated in a foreign currency and are measured at amortized cost at the
end of each reporting period, the foreign exchange gains and losses are determined based on the amortized
cost of the instruments and are recognized as a component of net earnings; and
For financial liabilities that are classified as FVTNE, the foreign exchange component forms part of the fair
value gains or losses and is recognized as a component of net earnings.
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [73]
Notes to the Consolidated Financial Statements
Years Ended December 31, 2020 and 2019 (US Dollars)
Derecognition of Financial Liabilities
The Company derecognizes financial liabilities when the Company’s obligations are discharged, cancelled or they
expire. The difference between the carrying amount of the financial liability derecognized and the consideration paid and
payable, including any non-cash assets transferred or liabilities assumed, is recognized as a component of net earnings.
3.8. Mineral Stream Interests
Agreements for which settlement is called for in gold, silver, palladium or cobalt, the amount of which is based on
production at the mines, are stated at cost less accumulated depletion and accumulated impairment charges, if any.
The cost of the asset is comprised of its purchase price, any closing costs directly attributable to acquiring the asset,
and, for qualifying assets, borrowing costs. The purchase price is the aggregate cash amount paid and the fair value of
any other non-cash consideration given to acquire the asset.
Depletion
The cost of these mineral stream interests is separately allocated to reserves, resources and exploration potential.
The value allocated to reserves is classified as depletable and is depleted on a unit-of-production basis over the
estimated recoverable proven and probable reserves at the mine corresponding to the specific agreement. The value
associated with resources and exploration potential is the value beyond proven and probable reserves at acquisition
and is classified as non-depletable until such time as it is transferred to the depletable category as a result of the
conversion of resources and/or exploration potential into reserves.
Asset Impairment
Management considers each PMPA to be a separate cash generating unit (“CGU”), which is the lowest level for which
cash inflows are largely independent of those of other assets. At the end of each reporting period, the Company
assesses each PMPA to determine whether any indication of impairment exists. If such an indication exists, the
recoverable amount of the PMPA is estimated in order to determine the extent of the impairment (if any). The
recoverable amount of each PMPA is the higher of fair value less cost of disposal (“FVLCD”) and value in use (“VIU”). In
determining the recoverable amounts of each of the Company’s CGU’s, the Company uses the FVLCD as this will
generally be greater than or equal to the VIU.
To determine the FVLCD that could be received from each PMPA in an arm’s length transaction at the measurement
date, the Company estimates a range of potential values using the net asset value (“NAV”) methodology and the net
present value (“NPV”) methodology (as described below), and then selects a value within this range which is the most
representative of the estimated recoverable amount of the stream.
NAV is estimated by using an appropriate discount rate to calculate the present value of the expected future cash flows
associated with each mineral category. The values are adjusted for each mineral category dependent on the likelihood
of conversion from resources to reserves. A market multiple is applied to the NAV computed in order to assess the
estimated fair value. Precious metal companies typically trade at a market capitalization that is based on a multiple of
their underlying NAV, with this market multiple being generally understood to take account of a variety of additional value
and risk factors such as the ability to find and produce more metal than what is currently included in the life of mine plan,
the benefit of precious metal price optionality, the potential remaining mine life and adjustments for relative mine and
country risk. Consequently, a market participant would generally apply a NAV multiple when estimating the fair value of
a precious metal interest.
NPV is estimated by using a nominal discount rate to calculate the present value of expected future cash flows.
The expected future cash flows are management’s best estimates of expected future revenues and costs. Under each
valuation methodology, expected future revenues reflect an estimate of future payable production for each mine at which
the Company has a PMPA derived from detailed life of mine plans received from each of the partners. Expected future
revenues also reflect management’s estimated long-term metal prices. Estimated future cash costs are generally fixed
based on the terms of each PMPA as disclosed in Note 28.
If the carrying amount of the PMPA exceeds its recoverable amount, the PMPA is considered impaired and an
impairment charge is reflected as a component of net earnings so as to reduce the carrying amount to its recoverable
value. A previously recognized impairment charge is reversed only if there has been an indicator of a potential
impairment reversal and the resulting assessment of the PMPA’s recoverable amount exceeds its carrying value. If this
is the case, the carrying amount of the PMPA is increased to its recoverable amount. The increased amount cannot
exceed the carrying amount that would have been determined, net of depletion, had no impairment charge been
recognized for the PMPA in prior years. Such reversal is reflected as a component of net earnings.
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [74]
Notes to the Consolidated Financial Statements
Years Ended December 31, 2020 and 2019 (US Dollars)
3.9. Borrowing and Debt Issue Costs
Borrowing costs allocable to qualifying assets, which are assets that necessarily take a substantial period of preparation
for their intended use, are capitalized and included in the carrying amounts of the related assets until such time as the
assets are substantially ready for their intended use. Borrowing costs that do not relate to the acquisition or construction
of qualifying assets are reflected as a component of net earnings under the classification Finance Costs, as incurred.
Debt issue costs on non-revolving facilities are treated as an adjustment to the carrying amount of the original liability
and are amortized over the life of the new or modified liability. Debt issue costs on revolving facilities are recorded as an
asset under the classification Other long-term assets and are amortized over the life of the new or modified credit facility.
3.10. Stock Based Payment Transactions
The Company recognizes a stock based compensation expense for all share purchase options and restricted share
units (“RSUs”) awarded to employees, officers and directors based on the fair values of the share purchase options and
RSUs at the date of grant. The fair values of share purchase options and RSUs at the date of grant are expensed over
the vesting periods of the share purchase options and RSUs, respectively, with a corresponding increase to equity. The
fair value of share purchase options is determined using the Black-Scholes option pricing model with market related
inputs as of the date of grant. Share purchase options with graded vesting schedules are accounted for as separate
grants with different vesting periods and fair values. The fair value of RSUs is the market value of the underlying shares
at the date of grant. At the end of each reporting period, the Company re-assesses its estimates of the number of
awards that are expected to vest and recognizes the impact of any revisions to this estimate in the consolidated
statement of earnings.
The Company recognizes a stock based compensation expense for performance share units (“PSUs”) which are
awarded to eligible employees and are settled in cash. Compensation expense for the PSUs is recorded on a straight-
line basis over the three year vesting period. This estimated expense is reflected as a component of net earnings over
the vesting period of the PSUs with the related obligation recorded as a liability on the balance sheet. The amount of
compensation expense is adjusted at the end of each reporting period to reflect (i) the fair market value of common
shares; (ii) the number of PSUs anticipated to vest; and (iii) the anticipated performance factor.
3.11. Income Taxes
Income tax expense comprises current and deferred income tax. Current and deferred income taxes are recognized
as a component of net earnings except to the extent that it relates to items recognized directly in equity or as a
component of OCI.
Current income tax is the expected tax payable on the taxable income for the year, using tax rates enacted or
substantively enacted at the end of the reporting period, and any adjustment to tax payable in respect of previous
years.
Deferred income tax is recognized using the liability method on temporary differences arising between the tax bases
of assets and liabilities and their carrying amounts in the consolidated financial statements. Deferred income tax
assets and liabilities are measured using tax rates and laws that have been enacted or substantively enacted at the
end of the reporting period and which are expected to apply when the related deferred income tax assets are realized
or the deferred income tax liabilities are settled.
Deferred income tax liabilities are generally recognized for all taxable temporary differences. Deferred income tax
assets are generally recognized for all deductible temporary differences and the carry forward of unused tax losses
and tax credits to the extent that it is probable that sufficient future taxable income, including income arising from
reversing taxable temporary differences and tax planning opportunities, will be available against which those
deductible temporary differences and the carry forward of unused tax losses and tax credits can be utilized.
Deferred income tax liabilities are recognized for taxable temporary differences arising on investments in subsidiaries
except where the reversal of the temporary difference can be controlled and it is probable that the difference will not
reverse in the foreseeable future. Deferred income tax assets arising from deductible temporary differences
associated with such investments are only recognized to the extent that it is probable that there will be sufficient
taxable income against which to utilize the benefits of the temporary differences and they are expected to reverse in
the foreseeable future.
The carrying amount of deferred income tax assets are reviewed at the end of each reporting period and reduced to
the extent that it is no longer probable that sufficient taxable income, including income arising from reversing taxable
temporary differences and tax planning opportunities, will be available to allow all or part of the deferred income tax
assets to be recovered.
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [75]
Notes to the Consolidated Financial Statements
Years Ended December 31, 2020 and 2019 (US Dollars)
Deferred income tax assets and liabilities are not recognized for temporary differences arising from the initial
recognition (other than in a business combination) of assets and liabilities in a transaction which does not affect either
the accounting income or the taxable income. In addition, deferred income tax liabilities are not recognized if the
temporary difference arises from the initial recognition of goodwill.
3.12. Earnings Per Share
Earnings per share calculations are based on the weighted average number of common shares and common share
equivalents issued and outstanding during the year. Diluted earnings per share is calculated using the treasury
method which requires the calculation of diluted earnings per share by assuming that outstanding share purchase
options and warrants with an exercise price that exceeds the average market price of the common shares for the
period are exercised, and the proceeds are used to repurchase shares of the Company at the average market price
of the common shares for the period.
3.13. Foreign Currency Translation
The functional currency is the currency of the primary economic environment in which an entity operates. The
consolidated financial statements are presented in US dollars, which is the functional currency of the Company and its
subsidiaries. Foreign currency monetary assets and liabilities are translated into US dollars at the exchange rates
prevailing at the balance sheet date. Non-monetary assets denominated in foreign currencies are translated using the
rate of exchange at the transaction date. Foreign currency transactions are translated at the rate of exchange prevailing
on the transaction dates. Foreign exchange gains and losses are included in the determination of net earnings except for
the foreign exchange gains and losses on the Company’s long-term investments in common shares held which are
reflected as a component of OCI and accumulated in a separate component of the investments revaluation reserve
which is a component of shareholders’ equity. Once the foreign exchange gains or losses on these long-term
investments in common shares held are realized as a result of a disposal, the accumulated foreign exchange gain or
loss is reallocated from the investments reserve to retained earnings.
3.14. Leasing
The Company as the Lessee
At inception of a contract, the Company assesses whether the contract is, or contains, a lease. A contract is, or
contains, a lease if the contract conveys the right to use an identified asset for a period of time in exchange for
consideration.
The Company recognizes a right-of-use asset and a corresponding lease liability with respect to all lease agreements
in which it is the lessee, except for short-term leases (defined as leases with a lease term of 12 months or less) and
leases of low value assets. For these leases, the Company recognizes the lease payments as an operating expense
on a straight-line basis over the term of the lease unless another systematic basis is more representative of the time
pattern in which economic benefits from the leased asset are consumed.
The lease liability is initially measured at the present value of the lease payments that are not paid at the
commencement date discounted by using the rate implicit in the lease. If this rate cannot be readily determined,
the Company uses its incremental borrowing rate.
The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease
liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments
made.
The Company re-measures the lease liability (and makes a corresponding adjustment to the related right-of-use
asset) whenever the lease term has changed or there is a change in the assessment of exercise of a purchase
option, in which case the lease liability is re-measured by discounting the revised lease payments using a revised
discount rate.
The right-of-use assets comprise the initial measurement of the corresponding lease liability and any initial direct
costs. They are subsequently measured at cost less accumulated depreciation and impairment losses, if any.
3.15. Property, plant and equipment
Property, plant and equipment are measured at cost less accumulated depreciation. The cost includes the original
purchase price of the asset and the costs attributable to bringing the asset to its working condition for its intended
use. Depreciation is based on cost and is calculated on a straight-line basis over the estimated economic life of the
asset. The right of use asset discussed in Note 3.14 and the leasehold improvements are depreciated over the life of
the lease term. Other assets, which include computer software, computer equipment, office furniture and office
equipment, are depreciated over their estimated economic life, which ranges from 3 to 10 years.
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [76]
Notes to the Consolidated Financial Statements
Years Ended December 31, 2020 and 2019 (US Dollars)
3.16. Provisions
Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event,
it is probable that the Company will be required to settle the obligation, and a reliable estimate can be made of the
amount required to settle the obligation.
The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation
at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. Where a
provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present
value of those cash flows.
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party,
a receivable is recognized as an asset if it is virtually certain that reimbursement will be received and the amount of the
receivable can be measured reliably.
3.17. Post-Employment Benefit Costs
The Company provides a Supplemental Employee Retirement Plan (“SERP) to all qualified employees. The SERP is an
unregistered and unfunded defined contribution plan under which the Company makes a fixed notional contribution to an
account maintained by the Company. Any benefits under the SERP have a vesting period of five years from the first date
of employment. The notional contributions are recognized as employee benefit expense in earnings in the periods during
which services are rendered by employees.
3.18. Future Changes to Accounting Policies
The IASB has issued the following new or amended standards:
Standards required to be applied for periods beginning on or after January 1, 2021:
Amendment to IAS 16 - Property, Plant and Equipment
The amendments to IAS 16 prohibit deducting from the cost of property, plant and equipment the proceeds from
selling items produced while bringing the assets to the location and condition necessary for them to be capable of
operating in the manner intended by management. Instead, a company will recognize such sales proceeds and
related cost in the Statement of Earnings. This amendment is in effect January 1, 2022 with early adoption permitted.
The adoption of this guidance is not expected to have a material impact on the Company’s Consolidated Statement of
Earnings.
4.
Key Sources of Estimation Uncertainty and Critical Accounting Judgments
The preparation of the Company’s consolidated financial statements in conformity with IFRS requires management to
make judgments, estimates and assumptions that affect the reported amounts of assets, liabilities and contingent
liabilities at the date of the consolidated financial statements and reported amounts of revenues and expenses during
the reporting period. Estimates and assumptions are continuously evaluated and are based on management’s
experience and other factors, including expectations of future events that are believed to be reasonable under the
circumstances. However, actual outcomes can differ from these estimates.
Information about significant areas of estimation uncertainty and judgments made by management in preparing the
consolidated financial statements are described below.
Key Sources of Estimation Uncertainty
4.1. Attributable Reserve, Resource and Exploration Potential Estimates
Mineral stream interests are significant assets of the Company, with a carrying value of $5.5 billion at December 31,
2020. This amount represents the capitalized expenditures related to the acquisition of the mineral stream interests, net
of accumulated depletion and accumulated impairment charges, if any. The Company estimates the reserves, resources
and exploration potential relating to each agreement. Reserves are estimates of the amount of metals contained in ore
that can be economically and legally extracted from the mining properties in respect of which the Company has PMPAs.
Resources are estimates of the amount of metals contained in mineralized material for which there is a reasonable
prospect for economic extraction from the mining properties in respect of which the Company has PMPAs. Exploration
potential represents an estimate of additional reserves and resources which may be discovered through the mine
operator’s exploration program. The Company adjusts its estimates of reserves, resources (where applicable) and
exploration potential (where applicable) to reflect the Company’s percentage entitlement to metals produced from such
mines. The Company compiles its estimates of its reserves and resources based on information supplied by
appropriately qualified persons relating to the geological data on the size, density and grade of the ore body, and require
complex geological and geostatistical judgments to interpret the data. The estimation of recoverable reserves and
resources is based upon factors such as estimates of foreign exchange rates, commodity prices, future capital
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [77]
Notes to the Consolidated Financial Statements
Years Ended December 31, 2020 and 2019 (US Dollars)
requirements, and production costs along with geological assumptions and judgments made in estimating the size and
grade of the ore body. The Company estimates exploration potential based on assumptions surrounding the ore body
continuity which requires judgment as to future success of any exploration programs undertaken by the mine operator.
Changes in the reserve estimates, resource estimates or exploration potential estimates may impact upon the carrying
value of the Company’s mineral stream interests and depletion charges.
4.2. Depletion
As described in Note 3.8, the Company’s mineral stream interests are separately allocated to reserves, resources and
exploration potential. The value allocated to reserves is classified as depletable and is depleted on a unit-of-production
basis over the estimated recoverable proven and probable reserves at the mine corresponding to the specific
agreement. The value associated with resources and exploration potential is the value beyond proven and probable
reserves at acquisition and is classified as non-depletable until such time as it is transferred to the depletable category
as a result of the conversion of resources and/or exploration potential into reserves. To make this allocation, the
Company estimates the recoverable reserves, resources and exploration potential at each mining operation. These
calculations require the use of estimates and assumptions, including the amount of contained metals, recovery rates and
payable rates. Changes to these assumptions may impact the estimated recoverable reserves, resources or exploration
potential which could directly impact the depletion rates used. Changes to depletion rates are accounted for
prospectively.
Impairment of Assets
4.3.
As more fully described in Note 3.8, the Company assesses each PMPA at the end of every reporting period to
determine whether any indication of impairment or impairment reversal exists. If such an indication exists, the
recoverable amount of the PMPA is estimated in order to determine the extent of the impairment or impairment reversal
(if any). The calculation of the recoverable amount requires the use of estimates and assumptions such as long-term
commodity prices, discount rates, recoverable ounces of attributable metals, and operating performance.
The price of precious metals and cobalt has been extremely volatile over the past several years. The Company monitors
spot and forward metal prices and if necessary re-evaluates the long-term metal price assumptions used for impairment
testing. Should price levels decline or increase in the future, either for an extended period of time or due to known macro
economic changes, the Company may need to re-evaluate the long-term metal price assumptions used for impairment
testing. A significant decrease in long-term metal price assumptions may be an indication of potential impairment, while
a significant increase in long-term metal price assumptions may be an indication of potential impairment reversal. Should
the Company conclude that it has an indication of impairment or impairment reversal at any balance sheet date, the
Company is required to perform an impairment assessment.
In 2015 and 2016, the Company recognized impairments totaling $120 million on its Sudbury PMPA resulting from a
reduction in the estimated recoverable gold ounces. As at December 31, 2020, as a result of the rising spot and forecast
gold prices, the Company considered whether there was an indication of impairment reversal associated with the
Sudbury PMPA. After considering the movements in gold price combined with the recent actual and forecast attributable
production levels, the Company concluded that there was no indicator of impairment reversal.
4.4. Valuation of Stock Based Compensation
As more fully described in Note 3.10, the Company has various forms of stock based compensation, including share
purchase options, restricted share units (“RSUs”) and performance share units (“PSUs”). The calculation of the fair value
of share purchase options, RSUs and PSUs issued requires the use of estimates as more fully described in Notes 19.2,
19.3, and 20.1, respectively.
4.5. Contingencies
Due to the size, complexity and nature of the Company’s operations, various legal and tax matters are outstanding
from time to time, including those matters described in Note 28. By their nature, contingencies will only be resolved
when one or more future events occur or fail to occur. The assessment of contingencies inherently involves the
exercise of significant judgment and estimates of the outcome of future events. If the Company is unable to resolve
any of these matters favorably, there may be a material adverse impact on the Company’s financial performance,
cash flows or results of operations. In the event that management’s estimate of the future resolution of these matters
changes, the Company will recognize the effects of the changes in its consolidated financial statements in the
appropriate period relative to when such changes occur.
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [78]
Notes to the Consolidated Financial Statements
Years Ended December 31, 2020 and 2019 (US Dollars)
Critical Accounting Judgments
4.6. Functional Currency
The functional currency for the Company and each of its subsidiaries is the currency of the primary economic
environment in which the entity operates. As a result of the following factors, the Company has determined that the
functional currency of each entity is the US dollar:
•
•
•
•
The entities’ revenues are denominated in US dollars;
The entities’ cash cost of sales are denominated in US dollars;
The majority of the entities’ cash is held in US dollars; and
The Company generally seeks to raise capital in US dollars.
Determination of the functional currency may involve certain judgments to determine the primary economic environment
and the Company reconsiders the functional currency of its entities if there is a change in events and conditions which
determined the primary economic environment.
Income Taxes
4.7.
The interpretation and application of existing tax laws, regulations or rules in Canada, the Cayman Islands, Barbados,
Luxembourg, the Netherlands or any of the countries in which the Company’s subsidiaries or the mining operations are
located or to which deliveries of precious metals, precious metal credits or cobalt are made requires the use of
judgment. The likelihood that tax positions taken will be sustained is assessed based on facts and circumstances of the
relevant tax position considering all available evidence. Differing interpretation of these laws, regulations or rules could
result in an increase in the Company’s taxes, or other governmental charges, duties or impositions. Refer to Note 28 for
more information.
In assessing the probability of realizing deferred income tax assets, the Company makes estimates related to
expectations of future taxable income, including the expected timing of reversals of existing temporary differences. Such
estimates are based on forecasted cash flows from operations which require the use of estimates and assumptions such
as long-term commodity prices and recoverable metal ounces. The amount of deferred income tax assets recognized on
the balance sheet could be reduced if the actual taxable income differs significantly from expected taxable income. The
Company reassesses its deferred income tax assets at the end of each reporting period.
4.8. Leases
The Company assesses whether a contract contains a lease and, if so, recognizes a lease liability by discounting the
future lease payments by using the Company’s estimated incremental borrowing rate. If the lease agreement contains
an option to extend the lease, the Company must assess the likelihood of whether that option will be exercised. The
determination of whether an option to extend a lease will be exercised requires significant management judgment, and
providing the Company concludes that it is reasonably certain that the option to extend will be exercised, the lease
payments during the extension period will comprise part of the right-of-use asset and corresponding lease liability.
5. Financial Instruments
5.1. Capital Risk Management
The Company manages its capital to ensure that it will be able to continue as a going concern while maximizing the
return to stakeholders through the optimization of the debt and equity balance.
The capital structure of the Company consists of debt (Note 17) and equity attributable to common shareholders,
comprising of issued capital (Note 18), accumulated reserves (Note 19) and retained earnings.
The Company is not subject to any externally imposed capital requirements with the exception of complying with the
minimum tangible net worth covenant under the credit agreement governing bank debt (Note 17).
The Company is in compliance with the debt covenants at December 31, 2020, as described in Note 17.1.
5.2. Categories of Financial Assets and Liabilities
The non-revolving term loan, which requires regularly scheduled payments of interest and principal, is carried at
amortized cost. Other receivables are non-interest bearing and are stated at amortized cost, which approximate fair
values due to the short terms to maturity. Where necessary, the non-revolving term loan and the other receivables are
reported net of allowances for uncollectable amounts. All other financial assets are reported at fair value. Fair value
adjustments on financial assets are reflected as a component of net earnings with the exception of fair value
adjustments associated with the Company’s long-term investments in common shares held. As these long-term
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [79]
Notes to the Consolidated Financial Statements
Years Ended December 31, 2020 and 2019 (US Dollars)
investments are held for strategic purposes and not for trading, the Company has made a one time, irrevocable election
to reflect the fair value adjustments associated with these investments as a component of OCI. Financial liabilities are
reported at amortized cost using the effective interest method. The following table summarizes the classification of the
Company’s financial assets and liabilities:
(in thousands)
Financial assets
Financial assets mandatorily measured at FVTNE 1
Cash and cash equivalents
Trade receivables from provisional concentrate sales, net of fair
value adjustment
Long-term investments - warrants held
Convertible notes receivable
Investments in equity instruments designated as at FVTOCI 1
December 31 December 31
2019
2020
Note
$
192,683 $
103,986
6, 9
15
14
5,429
3,637
11,353
4,350
-
21,856
Long-term investments - common shares held
15
196,241
309,757
Financial assets measured at amortized cost
Non-revolving term loan
Other accounts receivable
Class action settlement recoverable
Total financial assets
Financial liabilities
Financial liabilities at amortized cost
Accounts payable and accrued liabilities
Bank debt
Pension liability
Class action settlement
Total financial liabilities
24
9
24, 28
813
454
-
431
2,788
41,500
$
410,610 $
484,668
17
27
28
13,023
195,000
1,670
-
11,794
874,500
810
41,500
$
209,693 $
928,604
1)
FVTNE refers to Fair Value Through Net Earnings, FVTOCI refers to Fair Value Through Other Comprehensive Income
5.3. Credit Risk
Credit risk is the risk that the counterparty to a financial instrument will cause a financial loss for the Company by
failing to discharge its obligations. To mitigate exposure to credit risk on financial assets, the Company has
established policies to limit the concentration of credit risk, to ensure counterparties demonstrate minimum
acceptable credit worthiness and to ensure liquidity of available funds.
The Company closely monitors its financial assets and does not have any significant concentration of credit risk. The
Company invests surplus cash in short-term, high credit quality, money market instruments. In addition,
counterparties used to sell precious metals are all large, international organizations with strong credit ratings and the
balance of trade receivables owed to the Company in the ordinary course of business is not significant. Therefore,
credit risk associated with trade receivables at December 31, 2020 is considered to be negligible.
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [80]
Notes to the Consolidated Financial Statements
Years Ended December 31, 2020 and 2019 (US Dollars)
The Company’s maximum exposure to credit risk related to its financial assets is as follows:
(in thousands)
Cash and cash equivalents
Trade receivables from provisional concentrate sales, net of fair value
adjustment
Other accounts receivables
Non-revolving term loan
Convertible notes receivable
Class action settlement recoverable
December 31 December 31
Note
$
2020
192,683 $
2019
103,986
9
9
24
14
24, 28
5,429
454
813
11,353
-
4,350
2,788
431
21,856
41,500
Maximum exposure to credit risk related to financial assets
$
210,732 $
174,911
As it relates to the non-revolving term loan and the convertible note receivable, the Company has a security interest in
the applicable mining concessions relative to Kutcho Copper Corp. (“Kutcho”) and with some exceptions, all present and
after acquired property of Kutcho and its applicable subsidiaries.
5.4. Liquidity Risk
The Company has in place a rigorous planning and budgeting process to help determine the funds required to support
the Company’s normal operating requirements on an ongoing basis and its expansionary plans. The Company ensures
that there are sufficient committed loan facilities to meet its short-term business requirements, taking into account its
anticipated cash flows from operations and its holdings of cash and cash equivalents. As at December 31, 2020, the
Company had cash and cash equivalents of $193 million (December 31, 2019 - $104 million) and working capital of
$171 million (December 31, 2019 - $90 million).
The Company holds equity investments of several companies (Note 15) with a combined market value at December 31,
2020 of $200 million (December 31, 2019 - $310 million). The daily exchange traded volume of these shares, including
the shares underlying the warrants, is not sufficient for the Company to liquidate its position in a short period of time
without potentially affecting the market value of the shares. These shares and warrants are held for strategic purposes
and are considered long-term investments and therefore, as part of the Company’s planning, budgeting and liquidity
analysis process, these investments are not relied upon to provide operational liquidity.
The following table summarizes the timing associated with the Company’s remaining contractual payments relating to its
financial liabilities. The table reflects the undiscounted cash flows of financial liabilities based on the earliest date on
which the Company can be required to pay (assuming that the Company is in compliance with all of its obligations). The
table includes both interest and principal cash flows. To the extent that applicable interest rates are floating in nature, the
interest charges are estimated based on market-based forward interest rate curves at the end of the reporting period.
(in thousands)
Non-derivative financial liabilities
Bank debt ¹
Interest on bank debt ²
Accounts payable and accrued
liabilities
Performance share units 3
Pension liability 4
Lease liability
2021
2022 - 2024
2025 - 2026
After 2026
Total
As at December 31, 2020
$
-
2,311
$
-
8,722
$ 195,000
622
$
- $ 195,000
11,655
-
13,023
17,297
1,670
1,053
-
11,784
-
3,204
-
-
-
400
-
-
-
-
13,023
29,081
1,670
4,657
Total
$
35,354 $
23,710 $ 196,022 $
- $ 255,086
1) Assumes the principal balance outstanding at December 31, 2020 does not change until the debt maturity date.
2) As the applicable interest rates are floating in nature, the interest charges are estimated based on market-based forward interest rate curves at the end of the reporting
period combined with the assumption that the principal balance outstanding at December 31, 2020 does not change until the debt maturity date.
3) Assumes a weighted average performance factor of 187% (see Note 20.1).
4) Any benefits under the SERP will be paid out to the employee over a 10-year period, or at the employee’s election, a shorter period upon the employee’s retirement from the
Company.
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [81]
Notes to the Consolidated Financial Statements
Years Ended December 31, 2020 and 2019 (US Dollars)
5.5. Currency Risk
The Company undertakes certain transactions denominated in Canadian dollars, including certain operating expenses
and the acquisition of strategic long-term investments. As a result, the Company is exposed to fluctuations in the value
of the Canadian dollar relative to the United States dollar. The carrying amounts of the Company’s Canadian dollar
denominated monetary assets and monetary liabilities at the end of the reporting period are as follows:
(in thousands)
Monetary assets
Cash and cash equivalents
Accounts receivable
Long-term investments - common shares held
Long-term investments - warrants held
Convertible note receivable
Non-revolving term loan
Other long-term assets
December 31
2020
December 31
2019
$
$
5,041
71
195,816
3,637
11,353
813
3,519
4,148
2,519
309,757
-
11,837
431
3,450
Total Canadian dollar denominated monetary assets
$
220,250
$
332,142
Monetary liabilities
Accounts payable and accrued liabilities
Performance share units
Lease liability
Pension liability
$
$
8,011
23,405
2,403
1,670
6,059
15,423
2,748
810
Total Canadian dollar denominated monetary liabilities
$
35,489
$
25,040
The following tables detail the Company’s sensitivity to a 10% increase or decrease in the Canadian dollar relative to the
United States dollar, representing the sensitivity used when reporting foreign currency risk internally to key management
personnel and represents management’s assessment of the reasonably possible change in exchange rates.
(in thousands)
Increase (decrease) in net earnings
Increase (decrease) in other comprehensive income
Increase (decrease) in total comprehensive income
(in thousands)
Increase (decrease) in net earnings
Increase (decrease) in other comprehensive income
Increase (decrease) in total comprehensive income
As at December 31, 2020
Change in Canadian Dollar
10%
Increase
10%
Decrease
$
(1,105) $
19,582
1,105
(19,582)
$
18,477 $
(18,477)
As at December 31, 2019
Change in Canadian Dollar
10%
Increase
10%
Decrease
$
(265) $
30,976
265
(30,976)
$
30,711 $
(30,711)
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [82]
Notes to the Consolidated Financial Statements
Years Ended December 31, 2020 and 2019 (US Dollars)
Interest Rate Risk
5.6.
The Company is exposed to interest rate risk on its outstanding borrowings and short-term investments. Presently, all
of the Company’s outstanding borrowings are at floating interest rates. The Company monitors its exposure to
interest rates and has not entered into any derivative contracts to manage this risk. During the year ended December
31, 2020, the weighted average effective interest rate paid by the Company on its outstanding borrowings was 2.03%
(2019 – 4.07%).
During the years ended December 31, 2020 and 2019, a fluctuation in interest rates of 100 basis points (1 percent)
would have impacted the amount of interest expensed by approximately $6 million and $11 million, respectively.
5.7. Other Price Risk
The Company is exposed to equity price risk as a result of holding long-term investments in common shares of various
companies. The Company does not actively trade these investments.
If equity prices had been 10% higher or lower at the respective balance sheet date, other comprehensive income for the
year ended December 31, 2020 and 2019 would have increased/decreased by approximately $20 million and $31
million, respectively as a result of changes in the fair value of common shares held.
5.8. Fair Value Estimation
The Company classifies its fair value measurements within a fair value hierarchy, which reflects the significance of the
inputs used in making the measurements as defined in IFRS 13 – Fair Value Measurements (“IFRS 13”).
Level 1 - Unadjusted quoted prices at the measurement date for identical assets or liabilities in active markets.
Level 2 - Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and
liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or
other inputs that are observable or can be corroborated by observable market data.
Level 3 - Unobservable inputs which are supported by little or no market activity.
The following table sets forth the Company’s financial assets and liabilities measured at fair value by level within the fair
value hierarchy. As required by IFRS 13, assets and liabilities are classified in their entirety based on the lowest level of
input that is significant to the fair value measurement.
December 31, 2020
(in thousands)
Note
Total
Level 1
Level 2
Level 3
Cash and cash equivalents
Trade receivables from provisional concentrate
sales, net of fair value adjustment
Long-term investments - common shares held
Long-term investments - warrants held
Kutcho Convertible Note
$
192,683 $
192,683 $
- $
-
9
15
15
14
5,429
196,241
3,637
11,353
-
196,241
-
-
5,429
-
3,637
-
-
-
-
11,353
$
409,343 $
388,924 $
9,066 $
11,353
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [83]
Notes to the Consolidated Financial Statements
Years Ended December 31, 2020 and 2019 (US Dollars)
December 31, 2019
(in thousands)
Note
Total
Level 1
Level 2
Level 3
Cash and cash equivalents
Trade receivables from provisional concentrate
sales, net of fair value adjustment
Long-term investments - common shares held
Long-term investments - warrants held
Convertible notes receivable
$
103,986 $
103,986 $
- $
-
9
15
15
14
4,350
309,757
-
21,856
-
309,757
-
-
4,350
-
-
-
-
-
-
21,856
$
439,949 $
413,743 $
4,350 $
21,856
The non-revolving term loan, which requires regularly scheduled payments of interest and principal, is carried at
amortized cost. Other accounts receivables and accounts payables and accrued liabilities are non-interest bearing
and are stated at carrying values, which approximate fair values due to the short terms to maturity. Where necessary,
the non-revolving term loan as well as other receivables are reported net of allowances for uncollectable amounts.
The Company’s bank debt (Note 17.1) is reported at amortized cost using the effective interest method. The carrying
value of the bank debt approximates its fair value.
5.8.1. Valuation Techniques for Level 1 Assets
Cash and Cash Equivalents
The Company’s cash and cash equivalents are valued using quoted market prices in active markets and, as such,
are classified within Level 1 of the fair value hierarchy.
Long-Term Investments in Common Shares Held
The Company’s long-term investments in common shares held are valued using quoted market prices in active
markets and, as such, are classified within Level 1 of the fair value hierarchy. The fair value of the long-term
investments in common shares held is calculated as the quoted market price of the common share multiplied by the
quantity of shares held by the Company.
5.8.2. Valuation Techniques for Level 2 Assets
Accounts Receivable Arising from Sales of Metal Concentrates
The Company’s trade receivables and accrued liabilities from provisional concentrate sales are valued based on
forward prices of gold and silver to the expected date of final settlement (Note 6). As such, these receivables and/or
liabilities are classified within Level 2 of the fair value hierarchy.
Long-Term Investments in Warrants Held
The fair value of the Company’s long-term investments in warrants held that are not traded in an active market are
determined using a Black-Scholes model based on assumptions including risk free interest rate, expected dividend
yield, expected volatility and expected warrant life which are supported by observable current market conditions and
as such are classified within Level 2 of the fair value hierarchy. The use of reasonably possible alternative
assumptions would not significant affect the Company’s results.
5.8.3. Valuation Techniques for Level 3 Assets
Convertible Notes Receivable
The fair value of the Kutcho Convertible Note and the previously owned Gold X Convertible Note (Note 14), which are
not traded in an active market, is determined by discounting the stream of future interest and principal payments at
the rate of interest prevailing at the balance sheet date for instruments of similar term and risk (the market interest
rate), and adding this value to the value of the convertibility feature which is estimated using a Black-Scholes model
based on assumptions including risk free interest rate, expected dividend yield, expected volatility and expected
remaining life of the respective convertible notes receivable.
As the expected volatility and market interest rate are not observable inputs, these convertible notes receivable are
classified within Level 3 of the fair value hierarchy and any changes in fair value are reflected on the Consolidated
Statement of Earnings under the classification Other (Income) Expense (Note 8).
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [84]
Notes to the Consolidated Financial Statements
Years Ended December 31, 2020 and 2019 (US Dollars)
Relative to the Kutcho Convertible Note, management estimates that the market interest rate on similar borrowings
without the conversion feature was approximately 29% and has used an implied volatility of 30% in valuing the
convertibility feature.
Holding all other variables constant, a fluctuation in interest rates of 1% and a fluctuation in the implied volatility used
of 5% would have impacted the valuation as below:
As at December 31, 2020
(in thousands)
Kutcho Convertible Note
$
Change in interest rate
Increase
1%
(371) $
Decrease
1%
386 $
Change in volatility
Increase
5%
243 $
Decrease
5%
(199)
Minto Derivative Liability
The production payment per ounce of gold delivered to Wheaton under the Minto PMPA is to be increased over the
fixed price in periods where the market price of copper is lower than $2.50 per pound. As this pricing mechanism
meets the definition of a derivative, it is reflected at fair value for financial reporting purposes. At December 31, 2020
and December 31, 2019, the Company estimated the fair value of this derivative liability to be $nil.
6.
Revenue
(in thousands)
Sales
Gold
Gold credit sales
Concentrate sales
Silver
Silver credit sales
Concentrate sales
Palladium
Palladium credit sales
Total sales revenue
Years Ended December 31
2020
2019
$
$
$
$
$
652,827
-
652,827
60% $ 535,766
5,279
60% $ 541,045
0%
320,192
79,433
399,625
29% $ 225,316
63,085
36% $ 288,401
7%
62%
1%
63%
26%
7%
33%
43,772
4% $
31,886
4%
$ 1,096,224 100% $ 861,332 100%
Gold, Silver and Palladium Credit Sales
Under certain PMPAs, precious metal is acquired from the mine operator in the form of precious metal credits, which
is then sold through a network of third party brokers or dealers. Revenue from precious metal credit sales is
recognized at the time of the sale of such credits, which is also the date that control of the precious metal is
transferred to the customer.
During the year ended December 31, 2020, sales to two financial institutions accounted for 33% and 32% of the
Company’s revenue as compared to sales to two financial institutions that accounted for 33% and 25% of the
Company’s revenue during the comparable period of the previous year. The Company would not be materially
affected should any of these financial institutions cease to buy precious metal credits from the Company as these
sales would be redirected to alternate financial institutions.
The Company will occasionally enter into forward contracts in relation to precious metal deliveries that it is highly
confident will occur within a given quarter. No forward contracts were outstanding at December 31, 2020 or
December 31, 2019. The sales price is fixed at the delivery date based on either the terms of these short-term
forward sales contracts or the spot price of precious metal.
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [85]
Notes to the Consolidated Financial Statements
Years Ended December 31, 2020 and 2019 (US Dollars)
Concentrate Sales
Under certain PMPAs, gold and/or silver is acquired from the mine operator in concentrate form, which is then sold
under the terms of the concentrate sales contracts to third-party smelters or traders. Where the Company acquires
precious metal in concentrate form, final precious metal prices are set on a specified future quotational period (the
“Quotational Period”) pursuant to the concentrate sales contracts with third-party smelters, typically one to three
months after the shipment date, based on market prices for precious metal. The contracts, in general, provide for a
provisional payment based upon provisional assays and quoted gold and silver prices. Final settlement is based upon
the average applicable price for the Quotational Period applied to the actual number of precious metal ounces
recovered calculated using confirmed smelter weights and settlement assays. Revenues and the associated cost of
sales are recorded on a gross basis under these contracts at the time title passes to the customer, which is also the
date that control of the precious metal is transferred to the customer. The Company has concluded that the
adjustments relating to the final assay results for the quantity of concentrate sold and the retroactive pricing
adjustment for the Quotational Period are not significant and do not constrain the recognition of revenue.
7.
General and Administrative
(in thousands)
Salaries and benefits
Salaries and benefits, excluding PSUs
PSUs 1
Total salaries and benefits
Depreciation
Donations
Professional fees
Other
General and administrative before equity settled stock based
compensation
Equity settled stock based compensation 2
Stock options
RSUs
Total equity settled stock based compensation
Total general and administrative
Years Ended December 31
Note
2020
2019
20.1
$
$
16,733 $
21,520
38,253 $
1,889
5,792
3,590
10,742
13,840
17,174
31,014
1,903
2,946
2,496
10,457
$
60,266 $
48,816
19.2 $
19.3
$
2,165 $
3,267
5,432 $
2,474
3,217
5,691
$
65,698 $
54,507
1) The PSU accrual related to the anticipated fair value of the PSUs issued uses a weighted average performance factor of 187% during the year ended December 31, 2020 as
compared to 186% during the comparable period of 2019.
2) Equity settled stock based compensation is a non-cash expense.
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [86]
8.
Other (Income) Expense
(in thousands)
Interest income
Notes to the Consolidated Financial Statements
Years Ended December 31, 2020 and 2019 (US Dollars)
Years Ended December 31
Note
$
2020
(229) $
2019
(816)
Dividends received from equity investments designated as FVTOCI ¹
relating to investments held at the end of the reporting period
Foreign exchange loss
Gain on disposal of mineral royalty interest
Net (gain) loss arising on financial assets mandatorily measured at FVTPL
²
(Gain) loss on fair value adjustment of share purchase warrants held
(Gain) loss on fair value adjustment of convertible notes receivable
15
13
15
14
Other
Total other (income) expense
1) FVTOCI refers to Fair Value Through Other Comprehensive Income.
2) FVTPL refers to Fair Value Through Profit or Loss.
9.
Accounts Receivable
-
152
-
(338)
(1,899)
144
(59)
1,028
(2,929)
16
1,043
1,443
$
(2,170) $
(274)
(in thousands)
Trade receivables from provisional concentrate sales, net of fair value
adjustment
Other accounts receivable
Total accounts receivable
December 31 December 31
Note
2020
2019
6
$
$
5,429 $
454
4,350
2,788
5,883 $
7,138
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [87]
Notes to the Consolidated Financial Statements
Years Ended December 31, 2020 and 2019 (US Dollars)
10. Mineral Stream Interests
(in thousands)
Gold interests
Salobo
Sudbury 2
Constancia
San Dimas
Stillwater 3
Other 4
Year Ended December 31, 2020
Cost
Accumulated Depletion & Impairment 1
Balance
Jan 1, 2020
Additions
(Reductions)
Balance
Dec 31, 2020
Balance
Jan 1, 2020
Depletion
Balance
Dec 31, 2020
Carrying
Amount
Dec 31, 2020
$ 3,059,876 $
- $ 3,059,876 $
(454,619) $
(95,913) $
(550,532) $ 2,509,344
623,864
136,058
220,429
239,352
402,232
-
-
-
-
-
623,864
136,058
220,429
239,352
402,232
(279,821)
(23,027)
(302,848)
(25,652)
(26,062)
(9,358)
(389,064)
(4,837)
(12,165)
(5,684)
(5,642)
(30,489)
(38,227)
(15,042)
(394,706)
321,016
105,569
182,202
224,310
7,526
$ 4,681,811 $
- $ 4,681,811 $ (1,184,576) $ (147,268) $ (1,331,844) $ 3,349,967
Silver interests
Peñasquito
$
524,626
Antamina
Constancia
Other 5
900,343
302,948
1,283,054
-
-
-
524,626 $
(149,924) $
(24,130) $
(174,054) $
350,572
900,343
302,948
(231,533)
(74,761)
(1,826)
1,281,228
(795,361)
(41,876)
(11,143)
(10,892)
(273,409)
(85,904)
(806,253)
626,934
217,044
474,975
$ 3,010,971 $
(1,826) $ 3,009,145 $ (1,251,579) $
(88,041) $ (1,339,620) $ 1,669,525
Palladium interests
Stillwater 3
$
263,721 $
- $
263,721 $
(13,752) $
(8,580) $
(22,332) $
241,389
Cobalt interests
Voisey's Bay
$
393,422 $
- $
393,422 $
(165,912) $
- $
(165,912) $
227,510
$ 8,349,925 $
(1,826) $ 8,348,099 $ (2,615,819) $ (243,889) $ (2,859,708) $ 5,488,391
1) Includes cumulative impairment charges to December 31, 2020 as follows: Keno Hill silver interest - $11 million; Pascua-Lama silver interest - $338 million; 777 silver
interest - $64 million; 777 gold interest - $151 million; Sudbury gold interest - $120 million; and Voisey’s Bay cobalt interest - $166 million.
2) Comprised of the Coleman, Copper Cliff, Garson, Stobie, Creighton, Totten and Victor gold interests.
3) Comprised of the Stillwater and East Boulder gold and palladium interests.
4) Comprised of the Minto, Rosemont, 777 and Marmato gold interests.
5) Comprised of the Los Filos, Zinkgruvan, Yauliyacu, Stratoni, Keno Hill, Neves-Corvo, Minto, Aljustrel, Loma de La Plata, Pascua-Lama, Rosemont, 777, Marmato and
Cozamin silver interests. During the third quarter of 2020, Wheaton agreed to modify the Keno Hill PMPA as it relates to the delivery payment per ounce of silver in
exchange for 2 million common share purchase warrants from Alexco (Note 15). The fair value of these warrants have been reflected as a reduction to the cost base of the
Keno Hill silver interest.
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [88]
Notes to the Consolidated Financial Statements
Years Ended December 31, 2020 and 2019 (US Dollars)
Cost
Accumulated Depletion & Impairment 1
Year Ended December 31, 2019
Balance
Jan 1, 2019
Additions
(Reductions)
Balance
Dec 31, 2019
Balance
Jan 1, 2019
Depletion
Impairment
Balance
Dec 31, 2019
Carrying
Amount
Dec 31, 2019
(in thousands)
Gold interests
Salobo
$ 3,059,876 $
- $ 3,059,876 $
(353,816) $
(100,803) $
- $
(454,619) $ 2,605,257
Sudbury 2
Constancia
San Dimas
Stillwater 3
Other 4
623,864
136,058
220,429
239,357
402,232
-
-
-
(5)
-
623,864
(257,401)
(22,420)
-
(279,821)
136,058
220,429
239,352
(18,511)
(7,141)
(12,234)
(13,828)
(2,925)
(6,433)
(8,191)
402,232
(380,873)
-
-
-
(25,652)
(26,062)
(9,358)
-
(389,064)
344,043
110,406
194,367
229,994
13,168
$ 4,681,816 $
(5) $ 4,681,811 $ (1,025,760) $
(158,816) $
- $ (1,184,576) $ 3,497,235
Silver interests
Peñasquito
$
524,626 $
- $
524,626 $
(135,904) $
(14,020) $
- $
(149,924) $
374,702
Antamina
Constancia
Other 5
900,343
302,948
1,283,039
-
-
900,343
(190,266)
(41,267)
302,948
(56,717)
(18,044)
15
1,283,054
(780,401)
(14,960)
-
(231,533)
-
(74,761)
-
(795,361)
668,810
228,187
487,693
$ 3,010,956 $
15 $ 3,010,971 $ (1,163,288) $
(88,291) $
- $ (1,251,579) $ 1,759,392
Palladium interests
Stillwater 3
$
263,726 $
(5) $
263,721 $
(4,033) $
(9,719) $
- $
(13,752) $
249,969
Cobalt interests
Voisey's Bay $
393,422 $
- $
393,422 $
- $
- $
(165,912) $
(165,912) $
227,510
$ 8,349,920 $
5 $ 8,349,925 $ (2,193,081) $
(256,826) $
(165,912) $ (2,615,819) $ 5,734,106
1) Includes cumulative impairment charges to December 31, 2019 as follows: Keno Hill silver interest - $11 million; Pascua-Lama silver interest - $338 million; 777 silver
interest - $64 million; 777 gold interest - $151 million; Sudbury gold interest - $120 million; and Voisey’s Bay cobalt interest - $166 million.
2) Comprised of the Coleman, Copper Cliff, Garson, Stobie, Creighton, Totten and Victor gold interests.
3) Comprised of the Stillwater and East Boulder gold and palladium interests.
4) Comprised of the Minto, Rosemont and 777 gold interests.
5) Comprised of the Los Filos, Zinkgruvan, Yauliyacu, Stratoni, Keno Hill, Neves-Corvo, Minto, Aljustrel, Loma de La Plata, Pascua-Lama, Rosemont and 777 silver interests.
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [89]
Notes to the Consolidated Financial Statements
Years Ended December 31, 2020 and 2019 (US Dollars)
The value allocated to reserves is classified as depletable upon a mining operation achieving first production and is
depleted on a unit-of-production basis over the estimated recoverable proven and probable reserves at the mine. The
value associated with resources and exploration potential is allocated at acquisition and is classified as non-
depletable until such time as it is transferred to the depletable category, generally as a result of the conversion of
resources or exploration potential into reserves.
December 31, 2020
December 31, 2019
Depletable
Non-
Depletable
Total
Depletable
Non-
Depletable
Total
$ 2,085,359 $
423,985 $ 2,509,344 $ 2,078,666 $
526,591 $ 2,605,257
269,834
97,539
73,514
199,616
7,526
51,182
8,030
108,688
24,694
-
321,016
105,569
182,202
224,310
7,526
290,841
101,263
87,593
203,163
13,168
53,202
9,143
106,774
26,831
-
344,043
110,406
194,367
229,994
13,168
$ 2,733,388 $
616,579 $ 3,349,967 $ 2,774,694 $
722,541 $ 3,497,235
$
258,267 $
279,859
92,305 $
347,075
350,572 $
626,934
287,493 $
322,148
87,209 $
346,662
202,475
14,569
98,383
376,592
217,044
474,975
212,173
16,014
83,687
404,006
374,702
668,810
228,187
487,693
$
838,984 $
830,541 $ 1,669,525 $
905,501 $
853,891 $ 1,759,392
(in thousands)
Gold interests
Salobo
Sudbury 1
Constancia
San Dimas
Stillwater 2
Other 3
Silver interests
Peñasquito
Antamina
Constancia
Other 4
Palladium interests
Stillwater 2
$
231,747 $
9,642 $
241,389 $
238,485 $
11,484 $
249,969
Cobalt interests
Voisey's Bay
$
203,436 $
24,074 $
227,510 $
- $
227,510 $
227,510
$ 4,007,555 $ 1,480,836 $ 5,488,391 $ 3,918,680 $ 1,815,426 $ 5,734,106
1) Comprised of the Coleman, Copper Cliff, Garson, Stobie, Creighton, Totten and Victor gold interests.
2) Comprised of the Stillwater and East Boulder gold and palladium interests.
3) Comprised of the Minto, Rosemont and 777 gold interests.
4) Comprised of the Los Filos, Zinkgruvan, Yauliyacu, Stratoni, Keno Hill, Neves-Corvo, Minto, Aljustrel, Loma de La Plata, Pascua-Lama, Rosemont and 777 silver interests.
Acquisition of Marmato Precious Metals Purchase Agreement
On November 5, 2020, the Company announced that it had entered into an agreement with Aris Gold Corp. (“Aris
Gold”) (TSX:ARIS) in respect to the Marmato mine located in Colombia. Under the terms of the PMPA with Aris Gold,
the Company will acquire from Aris Gold 6.5% of the gold production and 100% of the silver production until 190,000
ounces of gold and 2.15 million ounces of silver have been delivered, after which the stream drops to 3.25% of the
gold production and 50% of the silver production for the life of mine. Under the Marmato PMPA, the Company is
required to pay Aris Gold total cash consideration of $110 million, $34 million of which is payable once mining
contract 014-89M is extended, $4 million of which is payable six months thereafter, and the remaining portion of
which is payable during construction of the Marmato Deep Zone (“MDZ”) project, subject to receipt of required
permits and licenses, sufficient financing having been obtained to cover total expected capital expenditures, and
other customary conditions. At December 31, 2020, none of these amounts have been paid (see Note 28). In
addition, the Company will make ongoing payments equal to 18% of the spot gold and silver price until the market
value of gold and silver delivered to the Company, net of the per ounce cash payment, exceeds the initial upfront
cash deposit, and 22% of the spot gold and silver price thereafter. The PMPA is effective July 1, 2020. As at
December 31, 2020, no metal has been delivered to the Company and accordingly no revenue has been recognized
and no depletion has been taken with respect to this PMPA.
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [90]
Notes to the Consolidated Financial Statements
Years Ended December 31, 2020 and 2019 (US Dollars)
Acquisition of Cozamin Precious Metals Purchase Agreement
On December 11, 2020, the Company entered into an agreement with Capstone Mining Corp. ("Capstone") (TSX: CS)
in respect to the Cozamin Mine located in Zacatecas, Mexico. The Company paid Capstone upfront cash consideration
of $150 million upon closing, which occurred on February 19, 2021, for 50% of the silver production until 10 million
ounces ("Moz") have been delivered, thereafter dropping to 33% of silver production for the life of the mine. In addition,
Wheaton will make ongoing payments for silver ounces delivered equal to 10% of the spot silver price. The PMPA is
effective December 1, 2020. As at December 31, 2020, no metal has been delivered to the Company and accordingly no
revenue has been recognized and no depletion has been taken with respect to this PMPA.
11.
Impairment of Mineral Stream Interests
As more fully described in Note 3.8, at every reporting period the Company assesses each PMPA to determine
whether any indication of impairment or impairment reversal exists. Based on the Company’s analysis, there were no
indicators of impairment or impairment reversal at December 31, 2020 and December 31, 2019. The following PMPA
was determined to have an indicator of impairment and be impaired at June 30, 2019:
(in thousands)
Cobalt Interests
Voisey's Bay
Total impairment charges
Years Ended December 31
2020
2019
$
$
- $
165,912
- $
165,912
Voisey’s Bay - Indicator of Impairment
On June 11, 2018, the Company entered into an agreement (the “Voisey’s Bay PMPA”) to acquire from Vale an
amount of cobalt equal to 42.4% of the cobalt production from its Voisey’s Bay mine, located in Canada, until the
delivery of 31 million pounds of cobalt and 21.2% of cobalt production thereafter for the life of mine for a total upfront
cash payment of $390 million. Concurrently, Vale also entered into a streaming agreement with Cobalt 27 Capital
Corp. (“Cobalt 27”) on the Voisey’s Bay mine with similar terms and conditions to the Voisey’s Bay PMPA.
On June 18, 2019, Cobalt 27 announced that it had entered into an agreement with Pala Investments Limited (“Pala”)
whereby Pala would acquire 100% of Cobalt 27’s issued and outstanding common shares. The estimated implied
price paid by Pala for Cobalt 27’s streaming agreement on the Voisey’s Bay mine was significantly lower than the
original upfront cash payment paid by Cobalt 27 to Vale at the time their agreement was entered into. The implied
purchase price paid by Pala to acquire Cobalt 27’s Voisey’s Bay stream was determined to be an indicator of
impairment relative to the Company’s Voisey’s Bay PMPA.
The Voisey’s Bay PMPA had a pre-impairment carrying value at June 30, 2019 of $393 million. Management
estimated that the recoverable amount at June 30, 2019 under the Voisey’s Bay PMPA was $227 million,
representing its FVLCD and resulting in an impairment charge of $166 million. The recoverable amount related to the
Voisey’s Bay PMPA was estimated using an average discount rate of 7% and the market price of cobalt of $14.83 per
pound. As this valuation technique requires the use of estimates and assumptions such as commodity prices,
discount rates, recoverable pounds of cobalt and operating performance, it is classified within Level 3 of the fair value
hierarchy.
12.
Early Deposit Mineral Stream Interests
Early deposit mineral stream interests represent agreements relative to early stage development projects whereby
Wheaton can choose not to proceed with the agreement once certain documentation has been received including,
but not limited to, feasibility studies, environmental studies and impact assessment studies (please see Note 28 for
more information). Once Wheaton has elected to proceed with the agreement, the carrying value of the stream will be
transferred to Mineral Stream Interests.
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [91]
The following table summarizes the early deposit mineral stream interests currently owned by the Company:
Notes to the Consolidated Financial Statements
Years Ended December 31, 2020 and 2019 (US Dollars)
Attributable
Production to be
Purchased
Early Deposit Mineral
Stream Interests
Mine
Owner
Location of
Mine
Upfront
Consideration
Paid to Date 1
Upfront
Consideration
to be Paid 1, 2
Total
Upfront
Consideration¹
Gold
Silver
Term of
Agreement
Toroparu
Cotabambas
Kutcho
Gold X
Panoro
Kutcho
Guyana $
Peru
Canada
15,500 $
10,000
7,000
138,000 $
130,000
58,000
153,500
140,000
65,000
10%
25% ³
100% ⁴
50% Life of Mine
100% ³ Life of Mine
100% ⁴ Life of Mine
$
32,500 $
326,000 $
358,500
1) Expressed in thousands of United States dollars; excludes closing costs and capitalized interest, where applicable.
2) Please refer to Note 28 for details of when the remaining upfront consideration to be paid becomes due.
3) Once 90 million silver equivalent ounces attributable to Wheaton have been produced, the attributable production will decrease to 16.67% of gold production and 66.67%
of silver production for the life of mine.
4) Once 51,000 ounces of gold and 5.6 million ounces of silver have been delivered to Wheaton, the stream will decrease to 66.67% of gold and silver production for the life
of mine.
13. Mineral Royalty Interest
On August 7, 2014, the Company purchased a 1.5% net smelter return royalty interest (the “Royalty”) in the Metates
properties located in Mexico from Chesapeake Gold Corp. (“Chesapeake”) for the life of mine. Under the terms of the
agreement, the Company paid total upfront cash consideration of $9 million. In accordance with the terms of the
agreement, on August 7, 2019, Chesapeake exercised its option to re-acquire two-thirds of the Royalty, or 1%, for $9
million. As a result, the Company’s Royalty has been reduced to 0.5%. The Company has reflected the transaction as
a disposal of two-thirds of its original investment, resulting in a gain on disposal of $3 million. The Company also has
a right of first refusal on any silver streaming, royalty or any other transaction on the Metates properties.
To date, no revenue has been recognized and no depletion has been taken with respect to this royalty agreement.
14. Convertible Notes Receivable
Kutcho Copper Corp.
Effective December 14, 2017, in connection with the Kutcho Early Deposit Agreement, the Company advanced to
Kutcho $16 million (Cdn$20 million) and received the Kutcho Convertible Note. The Kutcho Convertible Note, which has
a seven year term to maturity, carries interest at 10% per annum, compounded and payable semi-annually. Kutcho
elected to defer the first six interest payments, with all deferred payments being due no later than December 31, 2023.
The deferred interest carries interest at 15% per annum, compounded semi-annually.
At any time prior to the maturity date, the Company has the right to convert all or any part of the outstanding amount of
the Kutcho Convertible Note, excluding outstanding deferred interest, into common shares of Kutcho at Cdn$0.8125 per
share. Kutcho has the right to repay the Kutcho Convertible Note early, subject to the applicable pre-payment cash
penalties as follows:
•
•
20% of the outstanding amount if pre-paid on or after 36 months until 60 months; and
15% of the outstanding amount if pre-paid on or after 60 months until maturity.
Gold X Mining Corp.
Effective December 24, 2019, in connection with the Toroparu Early Deposit Agreement (Note 12), the Company
advanced $10 million to Gold X as part of a $20 million 10% secured convertible debenture private placement offering
completed by Gold X (the “Gold X Convertible Note”). The Gold X Convertible Note carried interest at 10% per annum,
compounded semi-annually and payable annually.
Effective July 14, 2020, the Company elected to convert the outstanding principal relative to the Gold X Convertible Note
into common shares of Gold X at Cdn$3.20 per share, with the outstanding amounts being converted into Canadian
dollars using the exchange rate published by the Bank of Canada on July 13, 2020. In addition, the accrued interest
relative to the Gold X Convertible Note was converted to common shares of Gold X at Cdn$3.57 per share. As a result,
on July 14, 2020 the Company received 4,467,317 common shares of Gold X (see Note 15) and the Gold X Convertible
Note was retired.
Convertible Notes Receivable Valuation Summary
The Kutcho Convertible Note is revalued quarterly by discounting the stream of future interest and principal payments
at the rate of interest prevailing at the balance sheet date for instruments of similar term and risk, and adding this
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [92]
Notes to the Consolidated Financial Statements
Years Ended December 31, 2020 and 2019 (US Dollars)
value to the value of the convertibility feature which is estimated using a Black-Scholes model based on assumptions
including risk free interest rate, expected dividend yield, expected volatility and expected remaining life of the Kutcho
Convertible Note.
The value of the Gold X Convertible Note, which was converted into common shares of Gold X effective July 14,
2020, was determined by reference to the value of the shares received. Prior to electing to convert this convertible
note receivable into common shares of Gold X, the Gold X Convertible Note was revalued quarterly using the same
methodology as the Kutcho Convertible Note above.
A continuity schedule of these convertible notes from January 1, 2019 to December 31, 2020 is presented below:
Fair Value at
Dec 31, 2019
$ 11,837
10,019
Amount
Advanced
$ -
-
Year Ended December 31, 2020
Value
Converted into
Shares
$ -
(12,402)
Fair Value
Adjustment
Gains
(Losses)
$ (484)
2,383
Fair Value at
Dec 31, 2020
$ 11,353
-
$ 21,856
$ -
$ (12,402)
$ 1,899
$ 11,353
Fair Value at
Dec 31, 2018
$ 12,899
-
Amount
Advanced
$ -
10,000
Year Ended December 31, 2019
Value
Converted into
Shares
$ -
-
Fair Value
Adjustment
Gains
(Losses)
$ (1,062)
19
Fair Value at
Dec 31, 2019
$ 11,837
10,019
$ 12,899
$ 10,000
$ -
$ (1,043)
$ 21,856
(in thousands)
Kutcho
Gold X
Total
(in thousands)
Kutcho
Gold X
Total
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [93]
Long-Term Equity Investments
15.
Common Shares Held
Notes to the Consolidated Financial Statements
Years Ended December 31, 2020 and 2019 (US Dollars)
Shares
Owned
(000's)
% of
Outstanding
Shares
Owned
(in thousands)
Fair Value at
Dec 31, 2019
Cost of
Additions 1
Proceeds of
Disposition 2
Year Ended December 31, 2020
Fair Value
Adjustment
Gains
(Losses) 3
Fair Value at
Dec 31, 2020
Realized Gain
on Disposal
Bear Creek
13,264
11.80% $ 27,983 $ - $ - $ 4,626 $ 32,609 $ -
Sabina
11,700
First Majestic
7,155
3.59%
3.23%
Other
Total
17,296
248,137
16,341
-
-
-
(151,113)
23,570
(11,829)
12,937
(1,040)
9,333
30,233
95,984
37,415
-
56,644
4,170
$ 309,757 $ 23,570 $ (162,942) $ 25,856 $ 196,241 $ 60,814
Includes,4,467,317 common shares of Gold X received upon the conversion of the Gold X Convertible Note (see Note 14).
1)
2) Disposals during 2020 were made in order to capitalize on the share appreciation related to the strong commodity price environment.
3) Fair Value Gains (Losses) are reflected as a component of OCI.
Shares
Owned
(000's)
% of
Outstanding
Shares
Owned
(in thousands)
Fair Value at
Dec 31, 2018
Cost of
Additions
Proceeds of
Disposition 1
Year Ended December 31, 2019
Fair Value
Adjustment
Gains
(Losses) 2
Fair Value at
Dec 31, 2019
Realized Gain
(Loss) on
Disposal
Bear Creek
13,264
12.84% $ 10,112 $ - $ - $ 17,871 $ 27,983 $ -
Sabina
11,700
First Majestic 20,240
3.95%
9.73%
Other
Total
10,549
123,187
20,905
-
-
-
6,747
17,296
(5,395)
130,345
248,137
-
521
893
(12,430)
6,973
16,341
(7,803)
$ 164,753 $ 893 $ (17,825) $ 161,936 $ 309,757 $ (7,282)
1) Disposals of First Majestic shares during 2019 were initiated in order to reduce the Company’s ownership position in First Majestic to under 10% of the issued and
outstanding common shares, while disposals of shares classified as Other were initiated as the holdings were no longer considered to have strategic value.
2) Fair value gains (losses) are reflected as a component of OCI.
Warrants Held
(in thousands)
Other
Fair Value at
Dec 31, 2019
$ -
Cost of
Additions 1
$ 3,299
Year Ended December 31, 2020
Value of
Warrants
Converted into
Shares
$ -
Fair Value
Adjustment
Gains
(Losses)
$ 338
Fair Value at
Dec 31, 2020
$ 3,637
1)
Includes 2 million common share purchase warrants from Alexco with a fair value of $2 million (Note 10),
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [94]
Notes to the Consolidated Financial Statements
Years Ended December 31, 2020 and 2019 (US Dollars)
(in thousands)
Other
Fair Value at
Dec 31, 2018
$ -
Cost of
Additions
$ 16
Year Ended December 31, 2019
Value of
Warrants
Converted into
Shares
$ -
Fair Value
Adjustment Gains
(Losses)
Fair Value at
Dec 31, 2019
$ (16) $ -
The Company’s long-term investments in common shares (“LTI’s”) are held for long-term strategic purposes and not
for trading purposes. As such, the Company has elected to reflect any fair value adjustments, net of tax, as a
component of other comprehensive income (“OCI”). The cumulative gain or loss will not be reclassified to net
earnings on disposal of these long-term investments but is reclassified to retained earnings.
While long-term investments in warrants are also held for long-term strategic purposes, they meet the definition of a
derivative and therefore are classified as financial assets with fair value adjustments being recorded as a component of
net earnings under the classification Other (Income) Expense. Warrants that do not have a quoted market price are
valued using a Black-Scholes option pricing model.
By holding these long-term investments, the Company is inherently exposed to various risk factors including currency
risk, market price risk and liquidity risk.
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [95]
16.
Property, Plant and Equipment
(in thousands)
Cost
Balance - January 1, 2020
Additions
Disposals
Balance - December 31, 2020
Accumulated Depreciation
Balance - January 1, 2020
Disposals
Depreciation
Balance - December 31, 2020
Net book value - December 31, 2020
(in thousands)
Cost
Balance - January 1, 2019
Additions upon adoption of IFRS 16
Additions
Disposals
Balance - December 31, 2019
Accumulated Depreciation
Balance - January 1, 2019
Disposals
Depreciation
Balance - December 31, 2019
Net book value - December 31, 2019
Notes to the Consolidated Financial Statements
Years Ended December 31, 2020 and 2019 (US Dollars)
December 31, 2020
Leasehold
Improvements
$
$
$
$
$
4,380
2
-
4,382
(2,518)
-
(388)
(2,906)
1,476
Right of Use
Assets -
Property
$
$
$
$
$
4,738
55
-
4,793
(704)
-
(740)
(1,444)
3,349
Other
3,836
429
(134)
4,131
(2,421)
134
(380)
(2,667)
1,464
$
$
$
$
$
Total
$ 12,954
486
(134)
$ 13,306
$
$
$
(5,643)
134
(1,508)
(7,017)
6,289
December 31, 2019
Leasehold
Improvements
Right of Use
Assets -
Property
$
$
$
$
$
4,378
-
9
(7)
4,380
(2,024)
7
(501)
(2,518)
1,862
-
$
4,679
59
-
$ 4,738
$
-
-
(704)
$
(704)
$ 4,034
Other
Total
$
$
$
$
$
3,318
-
547
(29)
3,836
(2,046)
29
(404)
(2,421)
1,415
$
7,696
4,679
615
(36)
$ 12,954
$
$
$
(4,070)
36
(1,609)
(5,643)
7,311
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [96]
17. Credit Facilities
17.1. Bank Debt
(in thousands)
Current portion
Long-term portion
Gross bank debt outstanding 1
Notes to the Consolidated Financial Statements
Years Ended December 31, 2020 and 2019 (US Dollars)
December 31 December 31
2019
2020
$ - $ -
874,500
195,000
$ 195,000 $ 874,500
1) There is $5 million unamortized debt issue costs associated with the Revolving Facility which have been recorded as a long-term asset under the classification Other (see
Note 25).
On February 27, 2020, the term of the Company’s $2 billion revolving term loan (“Revolving Facility”) was extended
by an additional year, with the facility now maturing on February 27, 2025. The Company incurred fees of $1 million in
relation to this extension.
The Company’s Revolving Facility has financial covenants which require the Company to maintain: (i) a net debt to
tangible net worth ratio of less than or equal to 0.75:1; and (ii) an interest coverage ratio of greater than or equal to
3.00:1. Only cash interest expenses are included for the purposes of calculating the interest coverage ratio. The
Company is in compliance with these debt covenants as at December 31, 2020.
Effective February 27, 2020, at the Company’s option, amounts drawn under the Revolving Facility incur interest
based on the Company’s leverage ratio at either (i) LIBOR plus 1.00% to 2.05%; or (ii) the Bank of Nova Scotia’s
Base Rate plus 0.00% to 1.05%. Undrawn amounts under the Revolving Facility are subject to a stand-by fee of
0.20% to 0.41% per annum, dependent on the Company’s leverage ratio.
The Revolving Facility, which is classified as a financial liability and reported at amortized cost using the effective
interest method, can be drawn down at any time to finance acquisitions, investments or for general corporate
purposes.
17.2. Lease Liabilities
The lease liability relative to the Company’s offices located in Vancouver, Canada and the Cayman Islands is as
follows:
(in thousands)
Current portion
Long-term portion
Total lease liabilities
The maturity analysis of these leases is as follows:
(in thousands)
Not later than 1 year
Later than 1 year and not later than 5 years
Later than 5 years
Total lease liabilities
December 31 December 31
2020
773 $
2,864
2019
724
3,528
3,637 $
4,252
$
$
December 31
$
2020
773
2,864
-
$
3,637
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [97]
17.3. Finance Costs
A summary of the Company’s finance costs relative to the above facilities during the period is as follows:
Notes to the Consolidated Financial Statements
Years Ended December 31, 2020 and 2019 (US Dollars)
(in thousands)
Interest Expense During Period
Average principal outstanding during period
Average effective interest rate during period
Total interest expense incurred during period
Costs related to undrawn credit facilities
Interest expense - lease liabilities
Letters of guarantee
Total finance costs
18. Issued Capital
(in thousands)
Issued capital
Years Ended December 31
Note
2020
2019
$
$
17.1
17.1
17.2
601,112 $
2.03%
12,226 $
4,349
140
-
1,099,846
4.07%
44,767
3,834
175
(46)
$
16,715 $
48,730
December 31 December 31
2019
2020
Note
Share capital issued and outstanding: 449,458,394 common shares
(December 31, 2019: 447,771,433 common shares)
18.1
$ 3,646,291 $ 3,599,203
18.1. Shares Issued
The Company is authorized to issue an unlimited number of common shares having no par value and an unlimited
number of preference shares issuable in series. As at December 31, 2020, the Company had no preference shares
outstanding.
A continuity schedule of the Company’s issued and outstanding common shares from January 1, 2019 to December
31, 2020 is presented below:
At January 1, 2019
Share purchase options exercised 1
Restricted share units released 1
Dividend reinvestment plan 2
At December 31, 2019
Share purchase options exercised 1
Restricted share units released 1
Dividend reinvestment plan 2
At December 31, 2020
Number
of
Shares
Weighted
Average
Price
444,336,361
2,039,735
Cdn$25.79
133,670
Cdn$0.00
1,261,667
447,771,433
US$24.31
1,056,363
Cdn$25.70
128,405
Cdn$0.00
502,193
449,458,394
US$37.87
1) The weighted average price of share purchase options exercised and restricted share units released represents the respective exercise price.
2) The Company has implemented a dividend reinvestment plan (“DRIP”) whereby shareholders can elect to have dividends reinvested directly into additional Wheaton
common shares. The weighted average price for common shares issued under the DRIP represents the volume weighted average price of the common shares on the five
trading days preceding the dividend payment date, less a discount of 1% (2019 – 3%).
At the Market Equity Program
On April 16, 2020, the Company established an at-the-market equity program (the “ATM Program”) that allows the
Company to issue up to $300 million worth of common shares from treasury (“Common Shares”) to the public from
time to time at the Company’s discretion and subject to regulatory requirements. Any Common Shares sold in the
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [98]
Notes to the Consolidated Financial Statements
Years Ended December 31, 2020 and 2019 (US Dollars)
ATM Program will be sold (i) in ordinary brokers’ transactions on the NYSE or another US marketplace on which the
Common Shares are listed, quoted or otherwise trade, (ii) ordinary brokers’ transactions on the TSX, (iii) on another
Canadian marketplace on which the Common Shares are listed, quoted or otherwise trade, or (iv) with respect to
sales in the United States, at the prevailing market price, a price related to the prevailing market price or at negotiated
prices. Since the Common Shares will be distributed at the prevailing market prices at the time of the sale or certain
other prices, prices may vary among purchasers and during the period of distribution.
The ATM Program will be effective until the date that all Common Shares available for issue under the ATM Program
have been issued or the ATM Program is terminated prior to such date by the Company or the agents under the
equity offering sales agreement dated April 16, 2020.
Wheaton intends that the net proceeds from the ATM Program, if any, will be available as one potential source of
funding for stream acquisitions and/or other general corporate purposes including the repayment of indebtedness. As
at December 31, 2020, the Company has not issued any shares under the ATM program.
18.2. Dividends Declared
(in thousands, except per share amounts)
Dividends declared per share
Years Ended December 31
2020
2019
0.36
$
0.42
$
Average number of shares eligible for dividend
448,777
446,267
Total dividends paid
Paid as follows:
Cash
DRIP 1
Total dividends paid
$ 188,486
$ 160,656
$ 167,211
89% $ 129,986
21,275
11%
30,670
81%
19%
$ 188,486 100% $ 160,656 100%
Shares issued under the DRIP
502
1,262
1) The Company has implemented a DRIP whereby shareholders can elect to have dividends reinvested directly into additional Wheaton common shares.
2) As at December 31, 2020, cumulative dividends of $1,267 million have been declared and paid by the Company.
19. Reserves
(in thousands)
Reserves
Share purchase warrants
Share purchase options
Restricted share units
Long-term investment revaluation reserve, net of tax
Total reserves
December 31 December 31
2019
2020
Note
$
19.1
19.2
19.3
19.4
83,077 $
21,855
6,815
15,135
83,077
24,010
6,405
47,209
$
126,882 $
160,701
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [99]
Notes to the Consolidated Financial Statements
Years Ended December 31, 2020 and 2019 (US Dollars)
19.1. Share Purchase Warrants
The Company’s share purchase warrants (“warrants”) are presented below:
Warrants outstanding
Weighted
Average
Exercise
Price
Exchange
Ratio
Share
Purchase
Warrants
Reserve
Number of
Warrants
10,000,000
$43.75
1.00 $
83,077
The warrants expire on February 28, 2023. Each warrant entitles the holder the right to purchase one of the
Company’s common shares.
19.2. Share Purchase Options
The Company has established an equity settled share purchase option plan whereby the Company’s Board of
Directors may, from time to time, grant options to employees or consultants. The maximum term of any share
purchase option may be ten years, but generally options are granted with a term to expiry of five years. The exercise
price of an option is not less than the closing price on the TSX on the last trading day preceding the grant date. The
vesting period of the options is determined at the discretion of the Company’s Board of Directors at the time the
options are granted, but generally vest over a period of two years.
Each share purchase option converts into one common share of Wheaton on exercise. No amounts are paid or
payable by the recipient on receipt of the option. The options do not carry rights to dividends or voting rights. Options
may be exercised at any time from the date of vesting to the date of their expiry, subject to certain black-out periods.
The Company expenses the fair value of share purchase options that are expected to vest on a straight-line basis over
the vesting period using the Black-Scholes option pricing model to estimate the fair value for each option at the date of
grant. The Black-Scholes model was developed for use in estimating the fair value of traded options that have no
vesting restrictions. The model requires the use of subjective assumptions, including expected share price volatility.
Historical data has been considered in setting the assumptions. Expected volatility is determined by considering the
trailing 30-month historic average share price volatility. The weighted average fair value of share purchase options
granted and principal assumptions used in applying the Black-Scholes option pricing model are as follows:
Black-Scholes weighted average assumptions
Grant date share price and exercise price
Expected dividend yield
Expected volatility
Risk-free interest rate
Expected option life, in years
Weighted average fair value per option granted
Number of options issued during the period
Total fair value of options issued (000's)
Years Ended December 31
2020
2019
Cdn$33.47
1.78%
30%
0.52%
2.5
Cdn$5.57
451,110
$ 1,807
Cdn$32.88
1.49%
31%
1.60%
2.5
Cdn$6.10
583,500
$ 2,652
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [100]
Notes to the Consolidated Financial Statements
Years Ended December 31, 2020 and 2019 (US Dollars)
The following table summarizes information about the options outstanding and exercisable at December 31, 2020:
Exercise Price (Cdn$)
Exercisable
Options
Non-Exercisable
Options
Total Options
Outstanding
Weighted
Average
Remaining
Contractual Life
$22.82¹
$23.26
$25.99¹
$26.24
$26.27¹
$27.03
$27.51
$30.66¹
$30.82
$31.26¹
$32.93
$33.47
8,000
250,000
14,880
318,755
12,400
1,115
205,150
-
1,492
26,640
215,035
-
-
-
-
-
-
1,115
-
76,800
2,985
47,740
232,820
371,890
8,000
250,000
14,880
318,755
12,400
2,230
205,150
76,800
4,477
74,380
447,855
371,890
0.3 years
0.3 years
2.3 years
2.3 years
1.3 years
3.4 years
1.3 years
4.2 years
3.5 years
3.3 years
3.3 years
4.2 years
1) US$ share purchase options converted to Cdn$ using the exchange rate of 1.2732, being the Cdn$/US$ exchange rate at December 31, 2020.
1,053,467
733,350
1,786,817
2.6 years
A continuity schedule of the Company’s outstanding share purchase options from January 1, 2019 to December 31,
2020 is presented below:
At January 1, 2019
Granted (fair value - $3 million or Cdn$6.10 per option)
Exercised
Forfeited
Expired
At December 31, 2019
Granted (fair value - $2 million or Cdn$5.57 per option)
Exercised
Forfeited
Number of
Options
Outstanding
Weighted
Average
Exercise Price
3,883,350
583,500
(2,039,735)
(15,475)
(17,150)
2,394,490
451,110
(1,056,363)
(2,420)
Cdn$25.71
32.88
25.79
31.04
30.69
Cdn$27.08
33.47
25.70
32.01
At December 31, 2020
1,786,817
Cdn$29.54
As it relates to share purchase options, during the year ended December 31, 2020, the weighted average share price
at the time of exercise was Cdn$54.13 per share, as compared to Cdn$34.83 per share during the comparable period
in 2019.
19.3. Restricted Share Units (“RSUs”)
The Company has established an RSU plan whereby RSUs will be issued to eligible employees or directors as
determined by the Company’s Board of Directors or the Company’s Compensation Committee. RSUs give the holder
the right to receive a specified number of common shares at the specified vesting date. RSUs generally vest over a
period of two years. Compensation expense related to RSUs is recognized over the vesting period based upon the
fair value of the Company’s common shares on the grant date and the awards that are expected to vest. The fair
value is calculated with reference to the closing price of the Company’s common shares on the TSX on the business
day prior to the date of grant.
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [101]
Notes to the Consolidated Financial Statements
Years Ended December 31, 2020 and 2019 (US Dollars)
RSU holders receive a cash payment based on the dividends paid on the Company’s common shares in the event
that the holder of a vested RSU has elected to defer the release of the RSU to a future date. This cash payment is
reflected as a component of net earnings under the classification General and Administrative.
A continuity schedule of the Company’s restricted share units outstanding from January 1, 2019 to December 31,
2020 is presented below:
At January 1, 2019
Granted (fair value - $3 million)
Released
Forfeited
At December 31, 2019
Granted (fair value - $3 million)
Released
Forfeited
At December 31, 2020
Number of
RSUs
Outstanding
Weighted
Average
Intrinsic Value at
Date Granted
370,133
132,620
(133,670)
(2,760)
366,323
132,960
(128,405)
(620)
370,258
$20.36
24.51
20.82
23.19
$21.67
24.26
22.25
24.11
$22.40
During the year ended December 31, 2020, the Company issued 132,960 RSUs with a fair value of $3 million or
Cdn$33.73 per RSU. For the same period in 2019, the Company issued 132,620 RSUs with a fair value of $3 million
or Cdn$32.89 per RSU.
19.4. Long-Term Investment Revaluation Reserve
The Company’s long-term investments in common shares (Note 15) are held for long-term strategic purposes and not
for trading purposes. The Company has chosen to designate these long-term investments in common shares as
financial assets with fair value adjustments being recorded as a component of OCI as it believes that this provides a
more meaningful presentation for long-term strategic investments, rather than reflecting changes in fair value as a
component of net earnings. As some of these long-term investments are denominated in Canadian dollars, changes in
their fair value is affected by both the change in share price in addition to changes in the Cdn$/US$ exchange rate.
Where the fair value of a long-term investment in common shares held exceeds its tax cost, the Company recognizes
a deferred income tax liability. To the extent that the value of the long-term investment subsequently declines, the
deferred income tax liability is reduced. However, where the fair value of the long-term investment decreases below
the tax cost, the Company does not recognize a deferred income tax asset on the unrealized capital loss unless it is
probable that the Company will generate future capital gains that will offset the loss.
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [102]
A continuity schedule of the Company’s long-term investment revaluation reserve from January 1, 2019 to December
31, 2020 is presented below:
Notes to the Consolidated Financial Statements
Years Ended December 31, 2020 and 2019 (US Dollars)
(in thousands)
At January 1, 2019
Unrealized gain (loss) on LTIs 1
Reallocate reserve to retained earnings upon disposal of LTIs 1
At December 31, 2019
Deferred
Tax
Recovery
Total
(Expense)
$(112,156) $ - $(112,156)
Change in
Fair Value
161,936
7,282
152,313
7,052
$ 57,062 $ (9,853) $ 47,209
(9,623)
(230)
Unrealized gain (loss) on LTIs 1
Reallocate reserve to retained earnings upon disposal of LTIs 1
25,856
(60,815)
(1,866)
4,751
23,990
(56,064)
15
At December 31, 2020
$ 22,103 $ (6,968) $ 15,135
1) LTIs refers to long-term investments in common shares held.
20.
Stock Based Compensation
The Company’s stock based compensation consists of share purchase options (Note 19.2), restricted share units
(Note 19.3) and performance share units (Note 20.1). The accrued value of share purchase options and restricted
share units are reflected as reserves in the shareholder’s equity section of the Company’s balance sheet while the
accrued value associated with performance share units is reflected as an accrued liability.
20.1. Performance Share Units (“PSUs”)
The Company has established a Performance Share Unit Plan (“the PSU plan”) whereby PSUs will be issued to
eligible employees as determined by the Company’s Board of Directors or the Company’s Compensation Committee.
PSUs issued under the PSU plan entitle the holder to a cash payment at the end of a three year performance period
equal to the number of PSUs granted, multiplied by a performance factor and multiplied by the fair market value of a
Wheaton common share on the expiry of the performance period. The performance factor can range from 0% to
200% and is determined by comparing the Company’s total shareholder return to those achieved by various peer
companies, the Philadelphia Gold and Silver Index and the price of gold and silver.
Compensation expense for the PSUs is recorded on a straight-line basis over the three year vesting period. The
amount of compensation expense is adjusted at the end of each reporting period to reflect (i) the fair value of
common shares; (ii) the number of PSUs anticipated to vest; and (iii) the anticipated performance factor.
During the year ended December 31, 2020, the Company issued 193,830 PSUs as compared to 191,410 PSUs
during the comparable period of the previous year.
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [103]
A continuity schedule of the Company’s outstanding PSUs (assuming a performance factor of 100% is achieved over
the performance period) and the Company’s PSU accrual from January 1, 2019 to December 31, 2020 is presented
below:
Notes to the Consolidated Financial Statements
Years Ended December 31, 2020 and 2019 (US Dollars)
(in thousands, except for number of PSUs outstanding)
At January 1, 2019
Granted
Accrual related to the fair value of the PSUs outstanding
Foreign exchange adjustment
Paid
Forfeited
At December 31, 2019
Granted
Accrual related to the fair value of the PSUs outstanding
Foreign exchange adjustment
Paid
Forfeited
At December 31, 2020
Number of
PSUs
Outstanding
PSU accrual
liability
655,727 $
191,410
-
-
(229,050)
(13,395)
604,692 $
193,830
-
-
(204,142)
(1,230)
10,756
-
17,174
479
(9,325)
(15)
19,069
-
21,526
614
(12,123)
(5)
593,150 $
29,081
A summary of the PSUs outstanding at December 31, 2020 is as follows:
Year
of Grant
2018
2019
2020
Year of
Maturity
2021
2022
2023
Number
outstanding
213,820
186,730
192,600
593,150
Estimated
Value Per PSU
at Maturity
$43.82
$42.98
$42.40
Anticipated
Performance
Factor
at Maturity
200%
193%
122%
Percent of
Vesting Period
Complete at
Dec 31, 2020
92%
59%
26%
PSU
Liability at
Dec 31, 2020
17,297
9,140
2,644
$ 29,081
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [104]
Notes to the Consolidated Financial Statements
Years Ended December 31, 2020 and 2019 (US Dollars)
21.
Earnings per Share (“EPS”) and Diluted Earnings per Share (“Diluted EPS”)
Diluted earnings per share is calculated using the treasury method which assumes that outstanding share purchase
options and warrants, with exercise prices that are lower than the average market price of the Company’s common
shares for the relevant period, are exercised and the proceeds are used to purchase shares of the Company at the
average market price of the common shares for the relevant period.
Diluted EPS is calculated based on the following weighted average number of shares outstanding:
(in thousands)
Basic weighted average number of shares outstanding
Effect of dilutive securities
Share purchase options
Restricted share units
Years Ended December 31
2020
448,694
2019
446,021
1,003
373
627
282
Diluted weighted average number of shares outstanding
450,070
446,930
The following table lists the number of share purchase options and share purchase warrants excluded from the
computation of diluted earnings per share because the exercise prices exceeded the average market value of the
common shares of Cdn$54.79, compared to Cdn$32.40 for the comparable period in 2019.
(in thousands)
Share purchase options
Share purchase warrants
Total
22.
Supplemental Cash Flow Information
Change in Non-Cash Working Capital
(in thousands)
Change in non-cash working capital
Accounts receivable
Accounts payable and accrued liabilities
Other
Years Ended December 31
2020
-
2019
477
10,000
10,000
10,000
10,477
Years Ended December 31
2020
2019
$
$
(1,181)
3,110
(904)
(2,514)
(9,791)
468
Total change in non-cash working capital
$
1,025
$
(11,837)
Non-Cash Transactions – Payment of Dividends Under DRIP
As more fully described in Note 18.2, during the year ended December 31, 2020, the Company declared and paid
dividends to its shareholders in the amount of $0.42 per common share for total dividends of $189 million.
Approximately 11% of shareholders elected to have their dividends reinvested in common shares of the Company
under the Company's dividend reinvestment plan ("DRIP"). As a result, $168 million of dividend payments were made
in cash and $21 million in common shares issued. For the comparable period in 2019, the Company declared and
paid dividends to its shareholders in the amount of $0.36 per common share for total dividends of $161 million, with
the payment being comprised of $130 million in cash and $31 million in common shares issued.
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [105]
Notes to the Consolidated Financial Statements
Years Ended December 31, 2020 and 2019 (US Dollars)
Non-Cash Transactions – Receipt of Warrants as Consideration for Contract Amendments
As more fully described in notes 10 and 15, during 2020 the Company received 2 million common share purchase
warrants from Alexco with a fair value of $2 million.
Non-Cash Transactions – Conversion of Convertible Note Receivable
As more fully described in notes 14 and 15, on July 14, 2020, the Company elected to convert the Gold X Convertible
Note and, as a result, the Company received 4,467,317 common shares of Gold X with a fair value of $12 million.
23.
Income Taxes
A summary of the Company’s income tax expense (recovery) is as follows:
Income tax recognized in net earnings is comprised of the following:
(in thousands)
Current income tax expense (recovery)
Deferred income tax expense (recovery) related to:
Origination and reversal of temporary differences
Write down (reversal of write down) or recognition of prior period
temporary differences
Total deferred income tax expense (recovery)
Years Ended December 31
2020
(4,606)
$
2019
144
$
$
14,546 $
7,311
(12,415)
$
2,131 $
(16,521)
(9,210)
Income tax expense (recovery) recognized in net earnings
$
(2,475)
$
(9,066)
Income tax recognized as a component of OCI is comprised of the following:
(in thousands)
Years Ended December 31
2019
2020
Income tax expense (recovery) related to LTIs - common shares held
$
1,866
$
9,623
Income tax recognized directly in equity is comprised of the following:
(in thousands)
Income tax expense (recovery) recognized in equity
Years Ended December 31
2019
2020
$
820 $
(376)
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [106]
The provision for income taxes differs from the amount that would be obtained by applying the statutory income tax
rate to consolidated earnings before income taxes due to the following:
Notes to the Consolidated Financial Statements
Years Ended December 31, 2020 and 2019 (US Dollars)
(in thousands)
Earnings before income taxes
Canadian federal and provincial income tax rates
Income tax expense (recovery) based on above rates
Non-deductible stock based compensation and other
Differences in tax rates in foreign jurisdictions
Current period unrecognized temporary differences - impairment of
mineral stream interests
Current period unrecognized temporary differences
Write down (reversal of write down) or recognition of prior period
temporary differences
Income tax expense (recovery)
Years Ended December 31
2020
2019
$
$
505,329 $
27.00%
136,439 $
3,057
(134,206)
77,072
27.00%
20,809
3,362
(78,724)
-
4,650
44,796
17,212
(12,415)
(16,521)
$
(2,475) $
(9,066)
The majority of the Company’s income generating activities, including the sale of precious metals, is conducted by its
100% owned subsidiary Wheaton Precious Metals International Ltd., which operates in the Cayman Islands and is
not subject to income tax.
The recognized deferred income tax assets and liabilities are offset on the balance sheet and relate to Canada,
except for the foreign withholding tax. The movement in deferred income tax assets and liabilities for the years ended
December 31, 2020 and December 31, 2019, respectively, is shown below:
Recognized deferred income tax assets and
liabilities
Deferred tax assets
Non-capital loss carryforward 1
Capital loss carryforward 2
Other 3
Deferred tax liabilities
Year Ended December 31, 2020
Recovery
(Expense)
Recognized
In Net
Earnings
Recovery
(Expense)
Recognized
In OCI
Opening
Balance
Recovery
(Expense)
Recognized
In
Shareholders'
Equity
Closing
Balance
$
8,756 $
8,953
694
(2,077) $
(4,733)
4,806
- $
(3,459)
-
(785) $
-
-
5,894
761
5,500
Interest capitalized for accounting
Debt and share financing fees 4
Unrealized gains on long-term investments
Mineral stream interests 5
Foreign withholding tax
(87)
(711)
(14,073)
(3,532)
(148)
-
18
(79)
-
(66)
-
-
6,344
-
-
-
(35)
-
-
-
(87)
(728)
(7,808)
(3,532)
(214)
Total
$
(148) $
(2,131) $
2,885 $
(820) $
(214)
1) As at December 31, 2020, the Company had recognized the tax effect on $22 million of non-capital losses against deferred tax liabilities.
2) As at December 31, 2020, the Company had recognized the tax effect on $3 million of net capital losses to offset unrealized taxable capital gains on long-term investments.
3) Other includes capital assets, charitable donation carryforward and PSU and pension liabilities.
4) Debt and share financing fees are deducted over a five year period for Canadian income tax purposes. For accounting purposes, debt financing fees are deducted over the
term of the credit facility and share financing fees are charged directly to issued capital.
5) The Company’s position, as reflected in its filed Canadian income tax returns and consistent with the terms of the PMPAs, is that the cost of the precious metal acquired
under the Canadian PMPAs is equal to the market value while a deposit is outstanding (where applicable to an agreement), and the cash cost thereafter. For accounting
purposes, the cost of the mineral stream interests is depleted on a unit-of-production basis as described in Note 4.2.
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [107]
Notes to the Consolidated Financial Statements
Years Ended December 31, 2020 and 2019 (US Dollars)
Year Ended December 31, 2019
Recovery
(Expense)
Recognized
In Net
Earnings
Recovery
(Expense)
Recognized
In OCI
Recovery
(Expense)
Recognized
In
Shareholders'
Equity
Opening
Balance
Recognized deferred income tax assets and liabilities
Deferred tax assets
Non-capital loss carryforward
Capital loss carryforward
Other
Deferred tax liabilities
Interest capitalized for accounting
Debt and share financing fees
Unrealized gains on long-term investments
Mineral stream interests
Foreign withholding tax
$
3,823 $
-
387
(87)
(591)
-
(3,532)
(111)
4,497 $
4,503
307
- $
4,450
-
-
(60)
-
-
(37)
-
-
(14,073)
-
-
Total
$
(111) $
9,210 $
(9,623) $
436 $
-
-
-
(60)
-
-
-
376 $
Deferred income tax assets in Canada not recognized are shown below:
Closing
Balance
8,756
8,953
694
(87)
(711)
(14,073)
(3,532)
(148)
(148)
(in thousands)
Non-capital loss carryforward 1
Debt and equity financing fees
Mineral stream interests
Other
Kutcho Convertible Note
Unrealized losses on long-term investments
December 31 December 31
2020
$
26,313 $
-
96,646
2,296
1,330
5,125
2019
19,145
1,383
107,785
4,282
951
6,733
Total
$
131,710 $
140,279
1) As at December 31, 2020, the Company had not recognized the tax effect on $97 million of non-capital losses as a deferred tax asset.
Deferred income taxes have not been provided on the temporary difference relating to investments in foreign
subsidiaries for which the Company can control the timing of and manner in which funds are repatriated and does not
plan to repatriate funds to Canada in the foreseeable future that would be subject to tax. The temporary difference
relating to investments in foreign subsidiaries is $1.0 billion as at December 31, 2020, all of which is anticipated to
reverse in the future and be exempt from tax on repatriation, leaving nil that would taxable on repatriation.
At December 31, 2020, the Company has available non-capital losses for Canadian income tax purposes which may
be carried forward to reduce taxable income in future years. If not utilized, the non-capital losses in the amount of
$119 million will expire as follows: 2038 – $40 million; 2039 – $63 million; 2040 – $16 million. In addition, the
Company has available net capital losses of $3 million for Canadian income tax purposes which may be carried
forward indefinitely to reduce taxable capital gains in future years.
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [108]
24. Other Current Assets
The composition of other current assets is shown below:
(in thousands)
Non-revolving term loan
Prepaid expenses
Class action settlement recoverable
Other
Total other current assets
Notes to the Consolidated Financial Statements
Years Ended December 31, 2020 and 2019 (US Dollars)
December 31 December 31
Note
2020
$
813 $
28
2,388
-
64
2019
431
1,492
41,500
205
$
3,265 $
43,628
Non-revolving term loan
On November 25, 2019, the Company entered into a non-revolving term loan with Kutcho, under which Kutcho can
draw up to a maximum of $1 million (Cdn$1.3 million). The credit facility carries interest at 15% per annum,
compounded monthly and has a revised maturity date of December 31, 2021.
25. Other Long-Term Assets
The composition of other long-term assets is shown below:
(in thousands)
Intangible assets
Debt issue costs - Revolving Facility
Other
Total other long-term assets
26. Related Party Transactions
December 31 December 31
Note
17.1
$
2020
3,036 $
5,202
5,004
2019
3,419
5,154
6,875
$
13,242 $
15,448
Compensation of Key Management Personnel
Key management personnel compensation, including directors, is as follows:
(in thousands)
Short-term benefits 1
Post-employment benefits
PSUs 2
Equity settled stock based compensation (a non-cash expense) 3
Years Ended December 31
$
2020
2019
8,031 $
658
12,528
3,555
6,599
661
10,643
3,709
Total executive compensation
$
24,772 $
21,612
1) Short-term employee benefits include salaries, bonuses payable within twelve months of the balance sheet date and other annual employee benefits.
2) As more fully disclosed in Note 20.1, PSU compensation expense is recorded on a straight-line basis over the three year vesting period, with the expense being adjusted
at the end of each reporting period to reflect (i) the fair value of common shares; (ii) the number of PSUs anticipated to vest; and (iii) the anticipated performance factor.
3) As more fully disclosed in Notes 19.2 and 19.3, equity settled stock based compensation expense is recorded on a straight-line basis over the vesting period.
27.
Post-Employment Benefit Costs
The Company sponsors a Group Registered Retirement Savings Plan (“RRSP”) for all qualified employees.
Participants in the plan can elect to contribute up to 8% of their annual base salary and cash bonus, and the
Company will contribute 125% of this amount, up to a maximum of 5/9ths of the RRSP dollar limit as established
under the Income Tax Act (Canada). The assets of the Group RRSP are held separately from those of the Company
in independently administered funds.
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [109]
Notes to the Consolidated Financial Statements
Years Ended December 31, 2020 and 2019 (US Dollars)
During 2019, the Company implemented an unregistered and unfunded defined contribution plan (known as the
Supplemental Employee Retirement Plan, or the “SERP”) for all qualified employees. Under the terms of the SERP,
benefits accumulate equal to 10% (or 15% for certain senior employees) of the employee’s base salary plus target
bonus, less amounts contributed by the Company under the Group RRSP plan. Interest on this benefit accrues
annually based on the 5-year Government of Canada bond rate. Any benefits under the SERP have a vesting period
of five years from the first date of employment and will be paid out to the employee over a 10-year period, or at the
employee’s election, a shorter period upon the employee’s retirement from the Company.
A summary of the Company’s post-employment benefit costs during the years ended December 31, 2020 and 2019 is
summarized below:
(in thousands)
Post-employment benefits
Supplemental Employee Retirement Plan (SERP)
Group RRSP
Total post-employment benefits
Years Ended December 31
2020
2019
$
$
806 $
257
810
223
1,063 $
1,033
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [110]
Notes to the Consolidated Financial Statements
Years Ended December 31, 2020 and 2019 (US Dollars)
28. Commitments and Contingencies
Mineral Stream Interests
The following table summarizes the Company’s commitments to make per-ounce cash payments for gold, silver and
palladium and per pound cash payments for cobalt to which it has the contractual right pursuant to the PMPAs:
Attributable Payable Production to be
Purchased
Per Unit of Measurement Cash Payment 1
Mineral Stream Interests
Peñasquito
Constancia
Salobo
Sudbury
Antamina
San Dimas
Stillwater
Voisey's Bay
Other
Gold
0%
50%
75%
70%
0%
variable ³
100%
0%
Silver Palladium Cobalt
25%
100%
0%
0%
33.75%
0% ³
0%
0%
0%
0%
0%
0%
0%
0%
4.5% ⁴
0%
0% $
0% $
0% $
0%
0% $
0%
0% 42.4% ⁶
Gold
n/a
$
408 ² $
412
400
n/a
606
18% ⁵
n/a
Silver Palladium
n/a
n/a
n/a
n/a
n/a
n/a
4.29
6.02 ²
n/a
n/a
20%
n/a
n/a
n/a
Los Filos
Zinkgruvan
Yauliyacu
Stratoni
Neves-Corvo
Aljustrel
Minto
Keno Hill
Pascua-Lama
Rosemont
Loma de La Plata
777
Marmato
Cozamin
Early Deposit
Toroparu
Cotabambas
Kutcho
0%
0%
0%
0%
0%
0%
100%
100%
100% ⁸
100%
100%
100% ¹¹
100% ¹² 100%
0%
0%
100%
0%
25%
25%
100%
12.5%
50%
100%
6.5% ¹⁶ 100% ¹⁶
50% ¹⁸
0%
10%
25% ¹⁹
100% ²⁰
50%
100% ¹⁹
100% ²⁰
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
n/a
0%
n/a
0%
n/a
0%
n/a
0%
n/a
0%
n/a
0%
75% ¹³ $
0%
n/a
0%
n/a
0%
450
0% $
0%
n/a
0% $ 425 ²
18% ¹⁷
0%
0%
4.46
$
4.46
$
8.94 ⁹
$
$ 11.43 ¹⁰
$
4.34
50%
4.31
variable ¹⁴
3.90
$
3.90
$
$
4.00
$ 6.26 ²
18% ¹⁷
10%
n/a
0% $
0% $
0%
400
450
20%
$
$
3.90
5.90
20%
Cobalt
n/a
n/a
n/a
n/a
n/a
n/a
n/a
18% ⁷
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
18% ⁵
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
Date of
Original
Term of
Contract
Agreement
24-Jul-07
Life of Mine
8-Aug-12
Life of Mine
28-Feb-13
Life of Mine
28-Feb-13
20 years
Life of Mine
3-Nov-15
Life of Mine 10-May-18
16-Jul-18
Life of Mine
11-Jun-18
Life of Mine
25 years
Life of Mine
Life of Mine
Life of Mine
50 years
50 years
15-Oct-04
8-Dec-04
23-Mar-06
23-Apr-07
5-Jun-07
5-Jun-07
Life of Mine 20-Nov-08
2-Oct-08
Life of Mine
8-Sep-09
Life of Mine
10-Feb-10
Life of Mine
n/a ¹⁵
Life of Mine
Life of Mine
8-Aug-12
5-Nov-20
Life of Mine
Life of Mine 10-Dec-20
Life of Mine 11-Nov-13
Life of Mine
21-Mar-16
Life of Mine 14-Dec-17
1) The production payment is measured as either a fixed amount per ounce of metal delivered, or as a percentage of the spot price of the underlying metal on the date of
delivery. Contracts where the payment is a fixed amount per ounce of metal delivered are subject to an annual inflationary increase, with the exception of Loma de La
Plata and Sudbury. Additionally, should the prevailing market price for the applicable metal be lower than this fixed amount, the per ounce cash payment will be reduced to
the prevailing market price, with the exception of Yauliyacu where the per ounce cash payment will not be reduced below $4.44, subject to an annual inflationary factor.
2) Subject to an increase to $9.90 per ounce of silver and $550 per ounce of gold after the initial 40-year term.
3) Under the terms of the San Dimas PMPA, the Company is entitled to an amount equal to 25% of the payable gold production plus an additional amount of gold equal to
25% of the payable silver production converted to gold at a fixed gold to silver exchange ratio of 70:1 from the San Dimas mine. If the average gold to silver price ratio
decreases to less than 50:1 or increases to more than 90:1 for a period of 6 months or more, then the "70" shall be revised to "50" or "90", as the case may be, until such
time as the average gold to silver price ratio is between 50:1 to 90:1 for a period of 6 months or more in which event the "70" shall be reinstated. Effective April 1, 2020, the
fixed gold to silver exchange ratio was revised to 90:1, with the 70:1 ratio being reinstated on October 15, 2020.
4) The Company is committed to purchase 4.5% of Stillwater palladium production until 375,000 ounces are delivered to the Company, thereafter 2.25% of Stillwater
palladium production until 550,000 ounces are delivered to the Company and 1% of Stillwater palladium production thereafter for the life of mine.
5) To be increased to 22% of the spot price once the market value of gold and palladium delivered to Wheaton, net of the per ounce cash payment, exceeds the initial upfront
cash deposit.
6) Once the Company has received 31 million pounds of cobalt, the Company’s attributable cobalt production will be reduced to 21.2%.
7) To be increased to 22% of the spot price once the market value of cobalt delivered to Wheaton, net of the per pound cash payment, exceeds the initial upfront cash
deposit.
8) The Company is committed to purchase an amount equal to 100% of the first 1.5 million ounces of payable silver produced at Yauliyacu per annum and 50% of any
excess.
9) Should the market price of silver exceed $20 per ounce, in addition to the $8.94 per ounce, the Company is committed to pay Glencore an additional amount for each
ounce of silver delivered equal to 50% of the excess, to a maximum of $10 per ounce, such that when the market price of silver is $40 or above, the Company will pay
Glencore $18.94 per ounce of silver delivered.
10) In October 2015, in order to incentivize additional exploration and potentially extend the limited remaining mine life of Stratoni, Wheaton and Eldorado Gold agreed to
modify the Stratoni PMPA such that the production price per ounce of silver delivered to Wheaton would be increased over the then fixed price based on the amount of
drilling completed outside of the existing ore body and within Wheaton’s defined area of interest (“Expansion Drilling”) by December 31, 2020.The figures in the above table
reflect the fact that Eldorado completed a total of 30,000 meters of Expansion Drilling, resulting in a $7.00 per ounce increase.
11) Wheaton only has the rights to silver contained in concentrate containing less than 15% copper at the Aljustrel mine.
12) The Company is committed to acquire 100% of the first 30,000 ounces of gold produced per annum and 50% thereafter.
13) The Company has amended the Minto PMPA such that the cash payment per ounce of gold delivered will be 75% of the spot price of gold. This amended pricing will end
on the earlier of (i) 14 months after the first delivery is due; or (ii) once 11,000 ounces of gold have been delivered to the Company. Once this amended pricing ends, the
cash payment per ounce of gold delivered will be $325, subject to an increase in periods where the market price of copper is lower than $2.50 per pound.
14) Effective July 2020, the price paid per ounce of silver delivered under the Keno Hill PMPA has been modified to be between 10% of the spot price of silver when the market
price of silver is at or above $23.00 per ounce, to 90% of the spot price of silver when the market price of silver is at or below $15.00 per ounce.
15) Terms of the agreement not yet finalized.
16) Once Wheaton has received 190,000 ounces of gold and 2.15 million ounces of silver under the Marmato PMPA the Company’s attributable gold and silver production will
be reduced to 3.25% and 50%, respectively.
17) To be increased to 22% of the spot price once the market value of gold and silver delivered to the Company, net of the per ounce cash payment, exceeds the initial upfront
cash deposit.
18) Once Wheaton has received 10 million ounces, the Company’s attributable silver production will be reduced to 33% of silver production for the life of the mine.
19) Once 90 million silver equivalent ounces attributable to Wheaton have been produced, the attributable production will decrease to 16.67% of gold production and 66.67%
of silver production for the life of mine.
20) Once 51,000 ounces of gold and 5.6 million ounces of silver have been delivered to Wheaton, attributable production will decrease to 66.67% of gold and silver production
for the life of mine.
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [111]
Other Contractual Obligations and Contingencies
Notes to the Consolidated Financial Statements
Years Ended December 31, 2020 and 2019 (US Dollars)
(in thousands)
2021
2022 - 2024
2025 - 2026
After 2026
Sub-Total
Other
Commitments
Total
Obligations With Scheduled Payment Dates
Bank debt 1
Interest 2
Payments for mineral
stream interests
Rosemont 3
Loma de La Plata
Marmato
Cozamin 4
Salobo 5
Payments for early
deposit mineral
stream interest
Toroparu
Cotabambas
Kutcho
Non-revolving credit
facility 6
Leases liabilities
Total contractual
obligations
$
$
-
2,311
-
8,722
$ 195,000
622
$
- $ 195,000
11,655
-
$
- $
-
195,000
11,655
-
-
38,000
150,000
-
-
-
-
-
670,000
-
1,500
-
-
2,500
-
-
-
-
-
-
-
-
-
208
895
-
2,733
-
336
-
-
-
-
-
-
-
-
-
-
-
-
38,000
150,000
670,000
231,150
231,150
32,400
72,000
-
-
32,400
110,000
150,000
670,000
-
4,000
-
208
3,964
138,000
126,000
58,000
-
-
138,000
130,000
58,000
208
3,964
$ 192,914 $ 683,955 $ 195,958 $
- $ 1,072,827 $
657,550 $ 1,730,377
1) At December 31, 2020, the Company had $195 million drawn and outstanding on the Revolving Facility.
2) As the applicable interest rates are floating in nature, the interest charges are estimated based on market-based forward interest rate curves at the end of the reporting
period combined with the assumption that the principal balance outstanding at December 31, 2020 does not change until the debt maturity date.
3) Includes contingent transaction costs of $1 million.
4) In connection with the Cozamin PMPA, the Company paid Capstone $150 million on February 19, 2021 once certain conditions had been met.
5) As more fully explained on the following page, assuming the Salobo III expansion project achieves 12 Mtpa of additional processing capacity (bringing total processing
capacity at Salobo to 36 Mtpa) by the end of 2022, the Company would expect to pay an estimated expansion payment of between $570 million to $670 million.
6) Represents the maximum amount available to Kutcho under the non-revolving credit facility (Note 24).
Rosemont
The Company is committed to pay Hudbay total upfront cash payments of $230 million in two installments, with the
first $50 million being advanced upon Hudbay’s receipt of permitting for the Rosemont project and other customary
conditions and the balance of $180 million being advanced once project costs incurred on the Rosemont project
exceed $98 million and certain other customary conditions. Under the Rosemont PMPA, the Company is permitted to
elect to pay the deposit in cash or the delivery of common shares. Additionally, the Company will be entitled to certain
delay payments, including where construction ceases in any material respect, or if completion is not achieved within
agreed upon timelines. Hudbay and certain affiliates have provided the Company with a corporate guarantee and
other security.
On August 1, 2019, Hudbay announced that the U.S. District Court for the District of Arizona (“Court”) issued a ruling
in the lawsuits challenging the U.S. Forest Service’s issuance of the Final Record of Decision (“FROD”) for the
Rosemont project in Arizona. The Court ruled to vacate and remand the FROD such that Rosemont cannot proceed
with construction at this time. On June 22, 2020 Hudbay announced that they had filed the initial brief with the U.S.
Court of Appeals for the Ninth Circuit in relation to appealing this decision. As per Hudbay’s MD&A for the year ended
December 31, 2020, final briefs were filed in November 2020 and the oral hearing was completed in early February
2021. Hudbay indicates that a decision from the Ninth Circuit is expected in the second half of 2021.
Loma de La Plata
In connection with the Loma de La Plata PMPA, the Company is committed to pay Pan American Silver Corp. (“Pan
American”) total upfront cash payments of $32 million following the satisfaction of certain conditions, including Pan
American receiving all necessary permits to proceed with the mine construction and the Company finalizing the
definitive terms of the PMPA.
Marmato
In connection with the Marmato PMPA, the Company is committed to pay Aris Gold Corp. (“Aris Gold”) total upfront
cash payments of $110 million, $34 million of which is payable once mining contract 014-89M is extended; $4 million
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [112]
Notes to the Consolidated Financial Statements
Years Ended December 31, 2020 and 2019 (US Dollars)
of which is payable six months thereafter; and the remaining portion of which is payable during the construction of the
Marmato Deep Zone (“MDZ”) project, subject to receipt of required permits and licenses, sufficient financing having
been obtained to cover total expected capital expenditures, and other customary conditions.
Toroparu
In connection with the Toroparu Early Deposit Agreement, the Company is committed to pay Gold X an additional
$138 million, payable on an installment basis to partially fund construction of the mine. Following the delivery of
certain feasibility documentation or after December 31, 2020 if the feasibility documentation has not been delivered to
Wheaton by such date (or such date has not been extended), Wheaton may elect not to proceed with the agreement
or not pay the balance of the upfront consideration and reduce the gold stream percentage from 10% to 0.909% and
the silver stream percentage from 50% to nil. If Wheaton elects to terminate, Wheaton will be entitled to a return of
the amounts advanced less $2 million which is non-refundable on the occurrence of certain events. If Wheaton elects
to reduce the streams, Gold X may elect to terminate the agreement and Wheaton will be entitled to a return of the
amount of the deposit already advanced less $2 million which is non-refundable. Gold X has filed a Preliminary
Economic Assessment defining the re-scoping of the Toroparu project, including a revised operating plan.
Cotabambas
In connection with the Cotabambas Early Deposit Agreement, the Company is committed to pay Panoro a total cash
consideration of $140 million, of which $10 million has been paid to date. Once certain conditions have been met, the
Company will advance an additional $4 million to Panoro, spread over up to three years. Following the delivery of a
bankable definitive feasibility study, environmental study and impact assessment, and other related documents
(collectively, the "Cotabambas Feasibility Documentation"), and receipt of permits and construction commencing, the
Company may then advance the remaining deposit or elect to terminate the Cotabambas Early Deposit Agreement. If
the Company elects to terminate, the Company will be entitled to a return of the portion of the amounts advanced less
$2 million payable upon certain triggering events occurring.
Kutcho
In connection with the Kutcho Early Deposit Agreement, the Company is committed to pay Kutcho a total cash
consideration of $65 million, of which $7 million has been paid to date. The remaining $58 million will be advanced on
an installment basis to partially fund construction of the mine once certain conditions have been satisfied.
The Company will be required to make an additional payment to Kutcho, of up to $20 million, if processing throughput
is increased to 4,500 tonnes per day or more within 5 years of attaining commercial production.
Salobo
The Salobo mine currently has a mill throughput capacity of 24 million tonnes per annum (“Mtpa”). In October 2018,
Vale’s Board of Directors approved the investment in the Salobo III mine expansion (the “Salobo Expansion”). The
Salobo Expansion is proposed to include a third concentrator line and will use Salobo’s existing infrastructure. Vale
anticipates that the Salobo Expansion, which is scheduled to start up in the first half of 2022 with a ramp-up of 15
months, will result in an increase of throughput capacity from 24 Mtpa to 36 Mtpa once fully ramped up.
If actual throughput is expanded above 28 Mtpa, then under the terms of the Salobo PMPA, Wheaton will be required
to make an additional set payment to Vale based on the size of the expansion, the timing of completion and the grade
of the material processed. The set payment ranges from $113 million if throughput is expanded beyond 28 Mtpa by
January 1, 2036 up to $923 million if throughput is expanded beyond 40 Mtpa by January 1, 2022. Assuming the
Salobo III expansion project achieves 12 Mtpa of additional processing capacity (bringing total processing capacity at
Salobo to 36 Mtpa) by the end of 2022, the Company would expect to pay an estimated expansion payment of
between $570 million to $670 million. The actual amount and timing of any expansion payment may significantly differ
from this estimate depending on the size, timing and processed grade of any expansion.
Canada Revenue Agency – Canada Revenue Agency – 2013-2015 Taxation Years - Domestic Reassessments
The Company received Notices of Reassessment in 2018 and 2019 for the 2013 to 2015 taxation years in which the
Canada Revenue Agency (“CRA”) is seeking to change the timing of the deduction of upfront payments with respect
to the Company’s PMPAs relating to Canadian mining assets, so that the cost of precious metal acquired under these
Canadian PMPAs is equal to the cash cost paid on delivery plus an amortized amount of the upfront payment
determined on a units-of-production basis over the estimated recoverable reserves, and where applicable, resources
and exploration potential at the respective mine (the “Domestic Reassessments”). In total, the Domestic
Reassessments assessed tax, interest and other penalties of $8 million.
Management believes the Company’s position, as reflected in its filed Canadian income tax returns and consistent
with the terms of the PMPAs, that the cost of the precious metal acquired under the Canadian PMPAs is equal to the
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [113]
Notes to the Consolidated Financial Statements
Years Ended December 31, 2020 and 2019 (US Dollars)
market value while a deposit is outstanding, and the cash cost thereafter is correct. The Company has filed Notices of
Objection and paid 50% of the disputed amounts in order to challenge the Domestic Reassessments.
If CRA were to apply the methodology in the Domestic Reassessments to taxation years subsequent to 2015, the
Company estimates that losses would arise that could be carried back to reduce tax and interest relating to the
Domestic Reassessments to approximately $2 million.
U.S. Shareholder Class Action
During July 2015, after the Company disclosed that the CRA was proposing that they would issue notices of
reassessment for federal and provincial tax, transfer pricing penalties, interest and other penalties for the 2005-2010
taxation years (the “Reassessments”), two putative securities class action lawsuits were filed against the Company in
the U.S. District Court for the Central District of California in connection with the proposal (the “Complaints”).
On October 19, 2015, the Complaints were consolidated into one action, In re Silver Wheaton Securities Litigation, as
against the Company, Randy Smallwood, President & Chief Executive Officer, Gary Brown, Senior Vice President &
Chief Financial Officer and Peter Barnes, former Chief Executive Officer (together the “Initial Defendants”) and a lead
plaintiff (the “Plaintiff”) was selected. The Plaintiff filed a consolidated amended complaint in December 2015, which
focuses on the Reassessments and asserted claims under Sections 10(b) and 20(a) of the Securities Exchange Act
of 1934 (“Exchange Act”).
On March 27, 2018, the court granted Plaintiff’s motion for leave to file a Second Amended Complaint, which alleges
that Initial Defendants made false and/or misleading statements, as well as failed to disclose material adverse facts
about the Company’s business, operations, prospects and performance in violation of Sections 10(b) and 20(a) of the
Exchange Act, and adds a claim under Section 10(b) against our auditors (together with the “Initial Defendants, the
“Defendants”).
On August 3, 2020, the court issued their final approval of a settlement of the lawsuit for $41.5 million, without
admission of liability by any of the Defendants. The settlement was fully funded by the Company’s insurance carriers
and the other Defendants. The Company was not required to pay any portion of the settlement.
Canadian Shareholder Class Action
By Notice of Action dated August 10, 2016 (as amended September 2, 2016 and supplemented by Statement of
Claim filed September 9, 2016 (collectively, the “Claim”)), proposed representative plaintiff Suzan Poirier commenced
proceedings pursuant to the Class Proceedings Act (Ontario) in the Ontario Superior Court of Justice against
Wheaton Precious Metals Corp., Randy Smallwood, President and Chief Executive Officer and Gary Brown, Senior
Vice President & Chief Financial Officer. The Claim alleges, among other things, misrepresentation pursuant to
primary and secondary market civil liability provisions under the Securities Act (Ontario) and its provincial equivalents,
common law negligence and negligent misrepresentation. The claim focuses on the Reassessments. The Claim
purports to be brought on behalf of proposed class of persons and entities who acquired common shares of Wheaton
Precious Metals Corp. between August 14, 2013 and July 6, 2015 and held some or all of such common shares as of
at least July 6, 2015. On July 21, 2020, the Company received a motion record in support of a proposed motion
seeking the following (among other relief): (i) leave of the court to commence a secondary market action pursuant to
section 138.3(1) of the Securities Act (Ontario) and equivalent provisions in the applicable provincial securities
statutes: (ii) certification of the (amended) class and proposed common issues; (iii) leave to file an amended
Statement of Claim to include further particulars and to refer to various provincial securities laws; and (iv) the
appointment of a new class representative (Ms. Miriam Rosenszajn) in place of Ms. Poirier.
The Company believes that the allegations are without merit and intends to vigorously defend against this matter. No
amounts have been recorded for potential liability arising from this claim as no value has been specified in the
statement of claim and the Company cannot reasonably predict the outcome.
Tax Contingencies
Due to the size, complexity and nature of the Company’s operations, various legal and tax matters are outstanding
from time to time, including audits and disputes.
Under the terms of the 2018 settlement with the CRA of the transfer pricing dispute relating to the 2005-2010 taxation
years (“CRA Settlement”), income earned outside of Canada by the Company’s foreign subsidiaries will not be
subject to income tax in Canada under transfer pricing rules. The CRA Settlement principles apply to all taxation
years after 2010 subject to there being no material change in facts or change in law or jurisprudence.
It is not known or determinable by the Company when any ongoing audits by CRA of international and domestic
transactions will be completed, or whether reassessments will be issued, or the basis, quantum or timing of any such
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [114]
Notes to the Consolidated Financial Statements
Years Ended December 31, 2020 and 2019 (US Dollars)
potential reassessments, and it is therefore not practicable for the Company to estimate the financial effect, if any, of
any ongoing audits. From time to time there may also be proposed legislative changes to law or outstanding legal
actions that may have an impact on applicable law or jurisprudence, the outcome, applicability and impact of which is
also not known or determinable by the Company.
General
By their nature, contingencies will only be resolved when one or more future events occur or fail to occur. The
assessment of contingencies inherently involves the exercise of significant judgment and estimates of the outcome of
future events. If the Company is unable to resolve any of these matters favorably, there may be a material adverse
impact on the Company’s financial performance, cash flows or results of operations. In the event that the Company’s
estimate of the future resolution of any of the foregoing matters changes, the Company will recognize the effects of
the change in its consolidated financial statements in the appropriate period relative to when such change occurs.
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [115]
Notes to the Consolidated Financial Statements
Years Ended December 31, 2020 and 2019 (US Dollars)
29.
Segmented Information
Operating Segments
The Company’s reportable operating segments, which are the components of the Company’s business where
discrete financial information is available and which are evaluated on a regular basis by the Company’s Chief
Executive Officer (“CEO”), who is the Company’s chief operating decision maker, for the purpose of assessing
performance, are summarized in the tables below:
(in thousands)
Gold
Salobo 4
Sudbury 1, 4
Constancia
San Dimas
Stillwater
Other 2, 4
Total gold interests
Silver
Peñasquito 4
Antamina 4
Constancia
Other 3, 4
Total silver interests
Palladium
Stillwater
Cobalt
Voisey's Bay 4
Total mineral stream interests
Other
General and administrative
Finance costs
Other
Income tax
Total other
Consolidated
Sales
Cost
of Sales
Depletion
Net
Earnings
Year Ended December 31, 2020
Cash Flow
From
Operations
Total
Assets
$
450,166 $
104,545 $
95,913 $
249,708 $
345,621 $
2,509,344
49,791
25,556
68,519
22,353
36,442
11,085
5,812
23,541
4,003
8,443
23,027
4,837
12,165
5,684
5,642
15,679
14,907
32,813
12,666
22,357
38,609
19,744
44,978
18,351
28,007
321,016
105,569
182,202
224,310
7,526
$
$
$
$
$
$
652,827 $
157,429 $
147,268 $
348,130 $
495,310 $
3,349,967
150,720 $
102,241
31,704 $
20,053
24,130 $
41,876
94,886 $
40,312
31,285
115,379
8,745
41,027
11,143
10,892
11,397
63,460
119,016 $
82,188
22,541
74,159
350,572
626,934
217,044
474,975
399,625 $
101,529 $
88,041 $
210,055 $
297,904 $
1,669,525
43,772 $
7,805 $
8,580 $
27,387 $
35,967 $
241,389
- $
- $
- $
- $
- $
227,510
1,096,224 $
266,763 $
243,889 $
585,572 $
829,181 $
5,488,391
$
(65,698)
(16,715)
$
(46,914)
(17,551)
2,170
2,475
677
49
$
$
(77,768)
$
(63,739)
$
468,881
507,804 $
765,442 $
5,957,272
1) Comprised of the operating Coleman, Copper Cliff, Garson, Creighton and Totten gold interests as well as the non-operating Stobie and Victor gold interests.
2) Where a gold interest represents less than 10% of the Company’s sales, gross margin or aggregate asset book value and is not evaluated on a regular basis by the
Company’s CEO for the purpose of assessing performance, the gold interest has been summarized under Other gold interests. Other gold interests are comprised of the
operating 777 and Minto gold interests, the non-operating Rosemont gold interest and the newly acquired Marmato gold interest.
3) Where a silver interest represents less than 10% of the Company’s sales, gross margin or aggregate asset book value and is not evaluated on a regular basis by the
Company’s CEO for the purpose of assessing performance, the silver interest has been summarized under Other silver interests. Other silver interests are comprised of the
operating Los Filos, Zinkgruvan, Yauliyacu, Stratoni, Neves-Corvo, Aljustrel, Minto, Keno Hill and 777 silver interests, the non-operating Loma de La Plata, Pascua-Lama
and Rosemont silver interests and the newly acquired Marmato and Cozamin silver interests.
4) As it relates to mine operator concentration risk:
a. The counterparty obligations under the Salobo, Sudbury and Voisey’s Bay PMPAs are guaranteed by the parent company Vale. Total revenues relative to Vale during
the year ended December 31, 2020 were 46% of the Company’s total revenue.
b. The counterparty obligations under the Antamina PMPA and the Yauliyacu PMPA (which is included as part of Other silver interests) are guaranteed by the parent
company Glencore plc (“Glencore”) and its subsidiary. Total revenues relative to Glencore during the year ended December 31, 2020 were 12% of the Company’s
total revenue.
c. The counterparty obligations under the Peñasquito PMPA are guaranteed by the parent company Newmont Corporation (“Newmont”). Total revenues relative to
Newmont during the year ended December 31, 2020 were 14% of the Company’s total revenue.
Should any of these mine operators become unable or unwilling to fulfill their obligations under their agreements with the Company, there could be a material adverse impact
on the Company including, but not limited to, the Company’s revenue, net income and cash flows from operations.
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [116]
Notes to the Consolidated Financial Statements
Years Ended December 31, 2020 and 2019 (US Dollars)
(in thousands)
Gold
Salobo 5
Sudbury 2, 5
Constancia 5
San Dimas
Stillwater
Other 3, 5
Cost
Sales
of Sales Depletion
Gross
Margin
Impairment
Charges 1
Year Ended December 31, 2019
Net
Earnings
(Loss)
Cash Flow
From
Operations
Total
Assets
$ 365,448 $ 106,282 $ 100,803 $ 158,363 $
- $
158,363 $ 259,166 $ 2,605,257
38,234
27,613
62,528
17,303
29,919
10,946
7,945
26,994
3,094
8,736
22,420
7,141
13,828
6,433
8,191
4,868
12,527
21,706
7,776
12,992
-
-
-
-
-
4,868
12,527
21,706
7,776
12,992
27,385
19,668
35,534
14,209
21,561
344,043
110,406
194,367
229,994
13,168
Total gold interests
$ 541,045 $ 163,997 $ 158,816 $ 218,232 $
- $
218,232 $ 377,523 $ 3,497,235
Silver
Peñasquito
Antamina 5
Constancia 5
Other 4, 5
$ 74,578 $ 19,267 $ 14,020 $ 41,291 $
- $
41,291 $
55,310 $
374,702
76,328
38,895
98,600
15,322
14,258
40,059
41,267
18,044
14,960
19,739
6,593
43,581
-
-
-
19,739
6,593
43,581
61,007
24,637
55,509
668,810
228,187
487,693
Total silver interests
$ 288,401 $ 88,906 $ 88,291 $ 111,204 $
- $
111,204 $ 196,463 $ 1,759,392
Palladium
Stillwater
Cobalt
$ 31,886 $
5,656 $
9,719 $ 16,511 $
- $
16,511 $
26,230 $
249,969
Voisey's Bay 5
$
- $
- $
- $
- $ 165,912 $ (165,912) $
- $
227,510
Total mineral stream interests $ 861,332 $ 258,559 $ 256,826 $ 345,947 $ 165,912 $
180,035 $ 600,216 $ 5,734,106
Other
General and administrative
Finance costs
Other
Income tax
Total corporate
Consolidated
$
(48,730)
(54,507) $ (46,292)
(44,733)
(2,191)
(5,380)
274
9,066
$
(93,897) $ (98,596) $
543,901
$
86,138 $ 501,620 $ 6,278,007
1) See Note 11 for more information.
2) Comprised of the operating Coleman, Copper Cliff, Garson, Creighton and Totten gold interests as well as the non-operating Stobie and Victor gold interests.
3) Where a gold interest represents less than 10% of the Company’s sales, gross margin or aggregate asset book value and is not evaluated on a regular basis by the
Company’s CEO for the purpose of assessing performance, the gold interest has been summarized under Other gold interests. Other gold interests are comprised of the
operating 777 and Minto gold interests and the non-operating Rosemont gold interest. The Minto mine was placed into care and maintenance from October 2018 to October
2019.
4) Where a silver interest represents less than 10% of the Company’s sales, gross margin or aggregate asset book value and is not evaluated on a regular basis by the
Company’s CEO for the purpose of assessing performance, the silver interest has been summarized under Other silver interests. Other silver interests are comprised of the
operating Los Filos, Zinkgruvan, Yauliyacu, Stratoni, Aljustrel, Neves-Corvo, Minto, and 777 silver interests, the non-operating Keno Hill, Loma de La Plata, Pascua-Lama
and Rosemont silver interests. The Minto mine was placed into care and maintenance from October 2018 to October 2019.
5) As it relates to mine operator concentration risk:
a. The counterparty obligations under the Salobo, Sudbury and Voisey’s Bay PMPAs are guaranteed by the parent company Vale. Total revenues relative to Vale
during the year ended December 31, 2019 were 47% of the Company’s total revenue.
b. The counterparty obligations under the Antamina PMPA and the Yauliyacu PMPA (which is included as part of Other silver interests) are guaranteed by the parent
company Glencore plc (“Glencore”) and its subsidiary. Total revenues relative to Glencore during the year ended December 31, 2019 were 12% of the Company’s
total revenue.
c. The counterparty obligations under the Constancia PMPA and the 777 PMPA (which is included as part of Other gold and silver interests) are guaranteed by the
parent company Hudbay Minerals Inc. (“Hudbay”). Total revenues relative to Hudbay during the year ended December 31, 2019 were 11% of the Company’s total
revenue.
Should any of these mine operators become unable or unwilling to fulfill their obligations under their agreements with the Company, there could be a material adverse impact
on the Company including, but not limited to, the Company’s revenue, net income and cash flows from operations.
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [117]
Geographical Areas
The Company’s geographical information, which is based on the location of the mining operations to which the
mineral stream interests relate, are summarized in the tables below:
Notes to the Consolidated Financial Statements
Years Ended December 31, 2020 and 2019 (US Dollars)
Carrying Amount at December 31, 2020
Sales:
Year Ended
Dec 31, 2020
Gold
Interests
Silver
Interests
Palladium
Interests
Cobalt
Interests
Total
- $ 227,510 $
$
94,239
66,125
9% $
6%
220,768 20%
328,543 $
224,310
182,201
11,488
33,460
34,486
1%
3%
3%
-
-
-
-
0%
450,166 41%
185,492 17%
0%
-
-
2,509,344
105,569
-
28,412 $
566
351,974
241,389
-
-
20,261
32,956
264,402
-
970,614
340
-
-
-
-
-
-
-
584,465 10%
466,265
8%
534,175 10%
-
20,261
32,956
0%
0%
1%
264,402
5%
2,509,344 46%
1,076,183 20%
0%
340
-
-
-
-
-
-
-
-
-
(in thousands)
North America
Canada
United States
Mexico
Europe
Greece
Portugal
Sweden
South America
Argentina/Chile 1
Brazil
Peru
Colombia
Consolidated
$ 1,096,224 100% $ 3,349,967 $ 1,669,525 $ 241,389 $ 227,510 $ 5,488,391 100%
1) Includes the Pascua-Lama project, which straddles the border of Argentina and Chile.
Carrying Amount at December 31, 2019
Sales:
Year Ended
Dec 31, 2019
Gold
Interests
Silver
Interests
Palladium
Interests
Cobalt
Interests
Total
(in thousands)
North America
Canada
$
74,307
9% $
357,212 $
32,124 $
- $
227,510 $
616,846 11%
United States
Mexico
Europe
Greece
Portugal
Sweden
South America
Argentina/Chile 1
Brazil
Peru
566
249,969
49,189
6%
139,275 16%
229,994
194,365
9,339
28,012
25,250
1%
3%
3%
-
-
-
376,020
1,990
21,355
35,059
-
0%
365,448 42%
170,512 20%
-
2,605,258
110,406
264,403
-
1,027,875
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
480,529
8%
570,385 10%
1,990
21,355
35,059
0%
0%
1%
264,403
5%
2,605,258 45%
1,138,281 20%
Consolidated
$ 861,332 100% $ 3,497,235 $ 1,759,392 $
249,969 $
227,510 $ 5,734,106 100%
1) Includes the Pascua-Lama project, which straddles the border of Argentina and Chile.
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [118]
Notes to the Consolidated Financial Statements
Years Ended December 31, 2020 and 2019 (US Dollars)
30.
Subsequent Events
Declaration of Dividend
Under the Company’s dividend policy, the quarterly dividend per common share is targeted to equal approximately
30% of the average cash flow generated by operating activities in the previous four quarters divided by the
Company’s then outstanding common shares, all rounded to the nearest cent. To minimize volatility in quarterly
dividends, the Company has set a minimum quarterly dividend of $0.13 per common share for the duration of 2021.
The declaration, timing, amount and payment of future dividends remain at the discretion of the Board of Directors.
On March 11, 2021, the Board of Directors declared a dividend in the amount of $0.13 per common share, with this
dividend being payable to shareholders of record on March 26, 2021 and is expected to be distributed on or about
April 13, 2021. The Company has implemented a dividend reinvestment plan (“DRIP”) whereby shareholders can
elect to have dividends reinvested directly into additional Wheaton common shares at a discount of 1% of the
Average Market Price, as defined in the DRIP.
WHEATON PRECIOUS METALS 2020 ANNUAL REPORT [119]
CORPORATE INFORMATION
CANADA - HEAD OFFICE
DIRECTORS
TRANSFER AGENT
Wheaton Precious Metals Corp.
Suite 3500
1021 West Hastings Street
Vancouver, BC V6E 0C3
Canada
T: 1 604 684 9648
F: 1 604 684 3123
CAYMAN ISLANDS OFFICE
Wheaton Precious Metals
International Ltd.
Suite 300, 94 Solaris Avenue
Camana Bay
P.O. Box 1791 GT, Grand Cayman
Cayman Islands KY1-1109
STOCK EXCHANGE LISTING
Toronto Stock Exchange: WPM
New York Stock Exchange: WPM
London Stock Exchange: WPM
AST Trust Company
1600 - 1066 West Hastings Street
Vancouver, BC V6E 3X1
Toll-free in Canada and the
United States:
1 800 387 0825
Outside of Canada and the
United States:
1 416 682 3860
E: inquiries@canstockta.com
AUDITORS
Deloitte LLP
Vancouver, BC
INVESTOR RELATIONS
Patrick Drouin
Senior Vice President,
Investor Relations
T: 1 604 684 9648
TF: 1 844 288 9878
E: info@wheatonpm.com
George Brack
John Brough
Peter Gillin
Chantal Gosselin
Douglas Holtby, Chairman
Glenn Ives
Charles Jeannes
Eduardo Luna
Marilyn Schonberner
Randy Smallwood
OFFICERS
Randy Smallwood
President & Chief Executive Officer
Curt Bernardi
Senior Vice President,
Legal & Corporate Secretary
Gary Brown
Senior Vice President
& Chief Financial Officer
Patrick Drouin
Senior Vice President,
Investor Relations
Haytham Hodaly
Senior Vice President,
Corporate Development
Wheaton Precious Metals is a trademark of Wheaton Precious Metals Corp. in Canada,
the United States and certain other jurisdictions.
Wheaton Precious Metals Corp.
Suite 3500 - 1021 West Hastings St.
Vancouver, BC Canada V6E 0C3
T: 1 604 684 9648
F: 1 604 684 3123