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. The company is committed to strong
ESG practices and giving back to the communities
where Wheaton and its mining partners operate.
Wheaton creates sustainable value through streaming
for all of its stakeholders.
Letter from
the President & CEO
I’d like to start by thanking you, our stakeholders, for your
continued support and investment in Wheaton in a year
where the aftereffects of the pandemic, and global conflicts,
had an impact on each of our lives, our society and the
economy. Because of this, it has become more important
than ever to create value for and provide support to our
full range of stakeholders, including our mining partners,
host communities and, of course, our shareholders.
While gold held at historically high levels throughout the
year, inflationary pressures had a significant impact on mining
companies, resulting in their margins being compressed.
Wheaton, however, continued delivering high margin
precious metals production as our streaming model provides
cost certainty from what we believe is one the strongest
portfolios of mines globally. In 2022, our cash operating
margin per gold equivalent ounce was approximately
$1,300 per ounce, or 75%.1
Riding the tailwinds of one of our most successful years
on record in terms of the accretive growth of our asset
base in 2022, we remained extremely active by adding four
additional streams, optimizing our portfolio, and making
several industry leading commitments on the sustainability
front. I am pleased to reflect on these highlights and share
our vision for the year ahead.
Financial Performance
By the end of 2022, our streaming agreements had
generated $9.4 billion2 in total cash flow, paying back almost
all of the $9.6 billion invested capital in metal streaming since
Wheaton’s inception. On average, the annual return for our
portfolio over this period is approximately 16%3 compared to
bullion which would have delivered only 2% annually4 over
the same time period. These metrics demonstrate that we
continue to provide shareholders with one of the best options
for investing in the precious metals space.
While the year was not without any setbacks, including
the maintenance related issues at Vale’s Salobo mine and
the effects of severe flooding on Sibanye-Stillwater’s mine in
Montana, the streaming business model proved to be resilient.
Considering the above events, gold equivalent production
from our portfolio of high-quality assets delivered production
of nearly 640,000 gold equivalent ounces, meeting the low
end of our revised guidance range. While our production
was impacted, it is important to note that these previously
forecasted production ounces were not lost, but just
deferred, and will be delivered to Wheaton over time.
RANDY SMALLWOOD,
President & CEO
Precious metals prices meanwhile, remained strong
throughout the year despite some volatility. Wheaton’s
leverage to these commodity prices coupled with our
solid production base resulted in revenue of over $1 billion,
$743 million in cash flow from operations and a record
dividend distribution of approximately $271 million back to
shareholders. We ended the year with a cash balance of
approximately $700 million putting us in a strong position to
continue to take advantage of acquisition opportunities.
Investing in Growth
In 2022, we were again actively deploying capital back into
the ground through accretive acquisitions. We added a gold
and silver stream on Adventus Mining’s Curipamba Project in
Ecuador, a gold and platinum stream on Generation Mining’s
Marathon Project in Canada, a gold stream from the Sabina
Gold & Silver Corp.’s Goose Project in Canada, and amended
the PMPA on Aris Gold Corp.’s Marmato Mine, increasing the
gold stream in exchange for additional upfront consideration.
Combined, these will provide roughly 65 thousand gold
equivalent ounces of annual production to our pipeline
over time. Our strong in-house technical team enables us to
review any and all opportunities expeditiously, and we are
focused on flexible stream structures that create a win-win
situation for all parties.
1. Please refer to non-IFRS measures on page 52 of the 2022 Fourth Quarter and Full Year MD&A. GEOs which are
provided to assist the reader, are based on the following commodity price assumptions: $1800/oz, silver $24/oz,
palladium $2,100/oz and cobalt $33/lb.
2. Includes the proceeds of disposition for various streams, which includes both cash and equity.
3. Average annualized after-tax return from portfolio calculates IRR based on net cash fl ow since start of stream and
applies enterprise value attributable to streams as of December 31, 2022, as a terminal value.
4. If upfront payments were to be invested in physical bullion rather than streaming contracts.
WHEATON PRECIOUS METALS | 2022 ANNUAL REPORT
One comment I received that resonated with me this year
was that Wheaton is “one of the best stewards of capital
in the industry,” and it was in response to a deal that we
did not make. Not every deal is a ‘Wheaton deal’. We only
pursue assets that meet our stringent criteria and have clear
and compelling economics. We carefully select projects that
complement our existing long-life, high-margin portfolio and
production profile, and that satisfy our strict due diligence
stress tests on technical, financial, and environmental, social
and governance (“ESG”) performance. If it is not accretive to
our portfolio, then we are happy to continue building up
our capacity and resources for the next deal that does meet
our standards.
If we look at the streaming cycle, we believe that we have
re-entered the growth phase where we will see more
operators looking to put capital to work to increase their
production. In this environment of high interest rates, a
challenging equity market and increasing demand for metals,
streaming provides an attractive option for accessing capital,
and we continue to see strong engagement from potential
mining partners as we explore more opportunities this year.
Portfolio Overview
Our portfolio has one of the strongest organic growth profiles
in the industry. Based on our estimated 2023 production, we
are forecasting over 40% growth in production over the next
five years. The Salobo III mine expansion, which includes a third
concentrator line that expands Salobo’s throughput capacity
by 50%, was completed in 2022 and is being commissioned
through 2023. In addition, the underground expansion of
Voisey’s Bay is nearing completion. At Constancia, Hudbay
has started mining the Pampacancha deposit, which has
significantly higher grades than the Constancia pit.
Over and above that, we are looking forward to very exciting
times as many of our more recent partner projects are getting
underway in terms of construction and will be delivering
ounces to Wheaton in the near future. This includes the
Blackwater, Marathon, Curipamba and Goose projects.
One aspect I want to highlight is our focus on portfolio
optimization in 2022 and the responsibility to manage our
existing assets. Occasionally, there are times when a stream
on an asset is no longer sustainable for the operator, typically
closer to the end of mine life when grades decline and costs
increase. Consistent with our core principle of working with
partners, we agreed to sell the silver stream on Glencore’s
Yauliyacu mine back to Glencore and the silver stream at
Alexco Resource’s Keno Hill Silver District to the new mine
owner, Hecla Mining Company (“Hecla”).
WHEATON PRECIOUS METALS | 2022 ANNUAL REPORT
As the third stream Wheaton ever entered into, the Yauliyacu
silver stream was integral to the history of our Company, as
it, along with San Dimas and Zinkgruvan, gave us the scale
to grow the streaming business and become the company
we are today. Wheaton acquired the silver stream on
Yauliyacu in 2006 for an upfront payment of $285 million and
it subsequently generated over $500 million in cash flow from
the stream. Combined with the cash termination payment of
$132 million, Wheaton will have generated an absolute return
of over 220% of our original investment.
The Keno Hill silver stream was also terminated as part of the
acquisition of Alexco by Hecla. In addition to approximately
$40 million in operating cash flow generated from the stream
since its inception in 2008, Wheaton received $141 million in
Hecla shares in exchange for the termination. This combined
sum represents an absolute return of over 360% of our
original investment of $50 million.
The sale of these assets positions Wheaton to continue to have
one of the strongest balance sheets in the industry and adds
even more financial capacity to explore new opportunities that
we believe are in the best interests of our shareholders.
A Clear Purpose
At Wheaton, we operate with a clear purpose to create
value for all of our stakeholders through sustainable and
responsible business practices. Strong governance followed
by a commitment to accountability and transparent
reporting on our performance, sets the stage for operational
excellence. I am incredibly honoured that Wheaton is
recognized so favourably by global ESG ratings agencies on
our performance in this area.
In 2022, we took an important step in aligning our ESG and
financial performance by establishing a sustainability-linked
element in connection with the extension to the existing
undrawn $2 billion revolving credit facility. Integrating key
performance indicators that are based on our ambitious
sustainability goals into the renewal of our credit facility
demonstrates that we are accountable and committed to
creating value for our shareholders, mining partners and
our neighbours.
Furthermore, in 2022, we announced our commitment to Net
Zero carbon emissions by 2050. This announcement, which
was released in early 2022, is the product of our enhanced
climate change and environmental policy developed in the
prior year. To appropriately track and measure our success
against this goal, we developed and disclosed a detailed
methodology for calculating Scope 3 financed emissions for
our streaming assets informed by existing guidance from
the Partnership for Carbon Accounting Financials and the
globally recognized GHG Protocol. Wheaton is the only major
streaming company to provide this level of detail on our
Scope 3 financed emissions.
We also announced full support for our mining partners’
decarbonization efforts including an initial $4 million to
support their shift towards renewable energy. Our industry
continues to demonstrate leadership in sustainability, and we
are honoured to work with mining partners considered to be
the best in the world at accelerating the global transition to a
low-carbon economy, by providing the necessary metals that
are essential for clean energy production and storage.
Diversity, equity and inclusion continue to be pressing topics
and of great importance to Wheaton. I am proud that we
achieved our target of 30 percent female representation on
the board two years earlier than anticipated. The progress
does not end there — we look forward to finding more
opportunities to ensure our workforce represents many
diverse backgrounds and that we provide a safe and inclusive
workplace for all.
Commitment to our Communities
Supporting the communities where we live and operate
is a responsibility I take very seriously. It is our duty as
an industry to ensure that we are engaging with our
communities and providing opportunities that would have
not been otherwise available without the presence of the
mine. This is how social licences are earned and maintained.
For over a decade, our Community Investment Program has
been tied to our financial success, and we have contributed
nearly $40 million to hundreds of community programs and
non-profit organizations around the world. The program
is guided by four pillars of giving, focused on the areas of
health, education, environment, and community.
Many of our partner mines are located in communities that
can benefit significantly from the additional support of a
nearby mine. Two-thirds of our Community Investment
Program is directed towards initiatives around these mine
sites. In 2022, we distributed a record amount of financial
support alongside our mining partners that share our
values. Through our partnership with the Vale Foundation,
thousands of students benefited from programs designed
to improve public education and thousands of members
of the local community received access to public health
services. With Hudbay, we continued to support the
Agricultural and Livestock Development Program, which is
dedicated to enhancing the economic opportunities around
the communities residing near the Constancia mine in Peru.
These are just a few of the initiatives Wheaton co-sponsored
with our partners around the world and we continue to find
opportunities to make a positive impact. Locally, we made
a CA$1 million commitment to the British Columbia Institute
of Technology’s Inspire Campaign aimed at transforming the
campus into a dynamic new learning environment as well
as continued support for many charities including the BC
Cancer Foundation, Inclusion Cayman, Nature Trust of BC,
Special Olympics BC and many more.
A Strong Future
As we approach Wheaton’s twentieth anniversary, I am
tremendously proud of the value we have delivered back to
our shareholders, our partners and our communities over the
years. Wheaton’s strongest asset has always been our people
and their extraordinary expertise that has contributed to the
Company’s longstanding success. It is an honour to work
with a team who is dedicated to delivering value through
streaming each and every day.
Our industry is at a crossroads. The need for metals and
mining is more important than ever as we all look to help
decarbonize the global economy while continuing to
progress on sustainable development at the same time.
This paradox can only be addressed by a cumulative effort
and commitment to mine resources responsibly so that we
can produce the metals needed for clean energy, a vital
component if we are to achieve our ambitious climate goals.
None of this can be done without mining.
With continued uncertainty around the world, excessive debt
levels, and increasing interest rates, I believe 2023 will be
the year gold takes the mantle. It is clear the world needs
gold and precious metals as a store of value. And, there is
no better way to get this exposure to precious metals than
through Wheaton Precious Metals. We are in one of the
strongest financial positions in our Company’s history
with a robust growth profile ahead. This coupled with our
high-quality asset base and commitment to sustainability
provides our shareholders with a solid outlook for the future.
I look forward to advancing on all of our initiatives in 2023,
and to continue building a strong, sustainable business,
delivering value and growth to all of our stakeholders. I am
honoured to lead such a strong team at Wheaton Precious
Metals and I am sincerely thankful to each of you for being
part of Wheaton’s successes.
RANDY SMALLWOOD,
President & CEO
March 09, 2023
III
WHEATON PRECIOUS METALS | 2022 ANNUAL REPORT
PART 1
Management’s
Discussion
and Analysis
WHEATON PRECIOUS METALS | 2022 ANNUAL REPORT
Management’s Discussion and Analysis of Results of Operations and Financial Condition for the Year Ended
December 31, 2022
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, 2022 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 64 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 9, 2023.
Table of Contents
Operational Overview ..................................................................................................................................................... 4
Highlights ....................................................................................................................................................................... 5
Outlook ........................................................................................................................................................................... 5
Mineral Stream Interests ................................................................................................................................................ 7
Mineral Royalty Interests .............................................................................................................................................. 10
Long-Term Equity Investments .................................................................................................................................... 10
Convertible Notes Receivable ...................................................................................................................................... 12
Quarterly Financial Review 1 ........................................................................................................................................ 16
Results of Operations and Operational Review............................................................................................................ 17
Liquidity and Capital Resources ................................................................................................................................... 28
Share Capital ............................................................................................................................................................... 36
Financial Instruments ................................................................................................................................................... 36
Future Changes to Accounting Policies ....................................................................................................................... 50
Non-IFRS Measures .................................................................................................................................................... 52
Subsequent Events ...................................................................................................................................................... 56
Controls and Procedures ............................................................................................................................................. 56
Attributable Reserves and Resources .......................................................................................................................... 57
Cautionary Note Regarding Forward-Looking Statements ........................................................................................... 64
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - MANAGEMENT DISCUSSION & ANALYSIS [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) and cobalt. The Company is listed on the New York Stock
Exchange (“NYSE”), the Toronto Stock Exchange (“TSX”) and the London Stock Exchange (“LSE”) and trades under
the symbol WPM.
As of December 31, 2022, the Company has 28 long-term purchase agreements (three of which are early deposit
agreements), with 22 different mining companies, for the purchase of precious metals and cobalt (“precious metal
purchase agreements” or "PMPA") relating to 20 mining assets which are currently operating, 12 which are at various
stages of development and 3 which have been placed in care and maintenance or have been closed, located in 13
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 is the metal production
to which Wheaton is entitled pursuant to the various PMPAs. During the year ended December 31, 2022, the per
ounce price paid by the Company for the metals acquired under the agreements averaged $472 for gold, $5.33 for
silver, $377 for palladium and $5.87 per pound for cobalt. 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. Throughout this MD&A, the production and sales volume of gold,
silver and palladium are reported in ounces, while cobalt is reported in pounds.
COVID-19 Update
Partner Operations
Wheaton continues to review our partners’ operations to understand their policies and procedures around the COVID-
19 pandemic. We have been advised that each operation will make decisions according to their local situation and
applicable laws, as well as considering the health and safety of their employees. There can be no assurance that our
partners’ operations will remain operational, or operate at expected levels, for the duration of the COVID-19
pandemic.
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - MANAGEMENT DISCUSSION & ANALYSIS [3]
Operational Overview
Units produced
Gold ounces
Silver ounces
Palladium ounces
Cobalt pounds
Gold equivalent ounces 2
Units sold
Gold ounces
Silver ounces
Palladium ounces
Cobalt pounds
Gold equivalent ounces 2
Change in PBND and Inventory 3
Gold ounces
Silver ounces
Palladium ounces
Cobalt pounds
Gold equivalent ounces 2
Per unit metrics
Sales price
Q4 2022
Q4 2021
Change
2022
2021
Change
70,099
5,352
3,869
128
148,323
68,996
4,935
3,396
187
142,190
87,296
6,356
4,733
381
184,551
79,622
5,116
4,641
228
157,439
286,805
(19.7)%
(15.8)%
23,997
(18.3)% 15,485
(66.4)% 724
638,113
(19.6)%
(13.3)%
(3.5)%
293,234
21,570
(26.8)% 15,076
(18.0)% 1,038
617,450
(9.7)%
341,521
25,999
20,908
2,293
754,591
312,465
22,860
19,344
886
656,074
(16.0)%
(7.7)%
(25.9)%
(68.4)%
(15.4)%
(6.2)%
(5.6)%
(22.1)%
17.2 %
(5.9)%
(2,377)
(624)
58
(68)
(11,870)
4,170
356
10
127
11,252
(21,388)
6,547
980
(1,380)
(48) (531)
195 (363)
(47,055)
23,122
14,434 35,822
(286) 1,094
33 564
1,253 1,616
33,628 80,683
Gold per ounce
Silver per ounce
Palladium per ounce
Cobalt per pound
Gold equivalent per ounce 2
$
$
$
$
$
Cash costs 4
Gold per ounce 4
$
Silver per ounce 4
$
Palladium per ounce 4
$
Cobalt per pound 4, 5
$
Gold equivalent per ounce 2, 4 $
Cash operating margin 4
1,725 $
21.52 $
1,939 $
22.62 $
1,660 $
475 $
5.00 $
357 $
16.52 $
434 $
1,798
23.36
1,918
28.94
1,767
472
5.47
340
4.68
433
(4.1)% $
(7.9)% $
1.1 % $
(21.8)% $
(6.1)% $
(0.6)% $
8.6 % $
(5.0)% $
(253.0)% $
(0.2)% $
1,806 $
21.84 $
2,133 $
31.00 $
1,725 $
472 $
5.33 $
377 $
8.10 $
433 $
1,798
25.08
2,369
23.11
1,832
459
5.78
433
4.67
439
Total revenue
1,250 $
16.52 $
1,582 $
6.10 $
1,226 $
Gold revenue
Silver revenue
Palladium revenue
Cobalt revenue
Gold per ounce 4
1,326
$
Silver per ounce 4
17.89
$
Palladium per ounce 4
1,578
$
Cobalt per pound 4
24.26
$
Gold equivalent per ounce 2, 4 $
1,334
236,051 $ 278,197
$
119,051 $ 143,187
$
$
106,175 $ 119,504
$ 6,586 $ 8,902
$ 4,239 $ 6,604
166,125 $ 291,822
$
$
0.648
103,744 $ 132,232
$
$
0.293
172,028 $ 195,290
$
0.433
$
$
67,580
$
0.381 $
67,797 $
0.15 $
Per share 4
0.367 $
0.229 $
Per share 4
Dividends paid ⁶
Per share
Net earnings
Per share
Adjusted net earnings 4
Operating cash flows
0.15
1,334 $
16.51 $
1,756 $
22.90 $
1,292 $
1,339
19.30
1,936
18.44
1,393
1,065,053 $ 1,201,665
529,698 $ 561,920
471,003 $ 573,429
(5.7)% $
(7.7)% $
0.3 % $
(74.9)% $
(8.1)% $
(15.1)% $
(16.9)% $
(11.2)% $
(26.0)% $ 32,160 $ 45,834
(35.8)% $ 32,192 $ 20,482
(43.1)% $ 669,126 $ 754,885
(43.4)% $
1.677
504,912 $ 592,079
(21.5)% $
(21.8)% $
1.315
743,424 $ 845,145
(11.9)% $
1.878
(12.0)% $
270,946 $ 256,607
0.3 % $
0.57
0.0 % $
1.118 $
1.482 $
1.646 $
0.60 $
0.4 %
(12.9)%
(10.0)%
34.1 %
(5.8)%
(2.8)%
7.8 %
12.9 %
(73.4)%
1.4 %
(0.4)%
(14.5)%
(9.3)%
24.2 %
(7.3)%
(11.4)%
(5.7)%
(17.9)%
(29.8)%
57.2 %
(11.4)%
(11.6)%
(14.7)%
(15.0)%
(12.0)%
(12.4)%
5.6 %
5.3 %
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 pages 18, 19, 22 and 23 for further information on the methodology of converting production and sales volumes to gold-equivalent ounces
("GEOs").
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 and,
for cobalt, the increase (decrease) of payable pounds PBND and inventory on hand. Payable units 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 52 of this MD&A.
5) Cash cost per pound of cobalt sold during the fourth quarter of 2022 includes an inventory write-down of $1.6 million, resulting in an increase of $8.71 per pound. The
Company reflects the cobalt inventory at the lower of cost and net realizable value, and will continue to monitor the market price of cobalt relative to the carrying of the
inventory at each reporting period.
6) 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 2022 ANNUAL REPORT - MANAGEMENT DISCUSSION & ANALYSIS [4]
Highlights
Operations
•
For the three months ended December 31, 2022 relative to the comparable period of the prior year:
o Production amounted to 148,300 gold equivalent ounces ("GEOs"), a decrease of 20%, primarily due to
lower production from Salobo, Peñasquito and Voisey’s Bay, coupled with the closure of the Stratoni
and 777 mines and the termination of the Keno Hill and Yauliyacu PMPAs.
o Revenue amounted to $236 million (50% gold, 45% silver, 3% palladium and 2% cobalt), with the $42
million decrease being due to the combination of a 10% decrease in sales volumes and a 6% drop in
commodity prices.
o Gross margin amounted to $121 million, with the $29 million decrease being driven by the lower
revenue, partially offset by a lower cost of sales.
o Net earnings amounted to $166 million (including a $51 million gain realized on the disposal of the
Yauliyacu mineral stream interest), with the $126 million decrease being due primarily to the prior year
results including the $157 million impairment reversal on the Voisey’s Bay PMPA.
o Adjusted net earnings amounted to $104 million, with the $28 million decrease being due primarily to
the lower gross margin.
o Operating cashflow amounted to $172 million, with the $23 million decrease being due primarily to the
lower adjusted net earnings.
•
For the year ended December 31, 2022 relative to the comparable period of the prior year:
o Production amounted to 638,100 GEOs, a decrease of 15%, primarily due to lower production at Salobo
and Voisey’s Bay (with prior year production from Voisey’s Bay including 12,000 GEOs produced in
prior periods) coupled with the closure of the 777 and Stratoni mines.
o Revenue amounted to $1,065 million (50% gold, 44% silver, 3% palladium and 3% cobalt), with the
$137 million decrease being due to a 6% decrease in sales volumes and a 6% decrease in commodity
prices.
o Gross margin amounted to $565 million, with the $93 million decrease being driven by the lower
revenue, partially offset by a lower cost of sales.
o Net earnings amounted to $669 million (including $156 million of gains realized on the disposal of the
Yauliyacu and Keno Hill mineral stream interests, compared to 2021 results which included a $157
million impairment reversal on the Voisey’s Bay PMPA), with the $86 million decrease being due
primarily to the lower gross margin.
o Adjusted net earnings amounted to $505 million, with the $87 million decrease being due primarily to
the lower gross margin.
o Operating cashflow amounted to $743 million, with the $102 million decrease being due primarily to the
lower gross margin.
• On March 9, 2023, the Board of Directors declared a dividend in the amount of $0.15 per common share.
Corporate Development
• On January 17, 2022, the Company entered into a PMPA with Adventus Mining Corporation (“Adventus”) in
respect of gold and silver production from the Curipamba Project (“Curipamba”) located in Ecuador.
• On January 26, 2022, the Company entered into a PMPA with Generation Mining Limited (“Gen Mining”) in
respect of gold and platinum production from the Marathon Project located in Ontario, Canada.
• On February 8, 2022, the Company entered into a PMPA with Sabina Gold & Silver Corp. (“Sabina”) in
respect of gold production from the Goose Project, part of Sabina’s Back River Gold District located in
Nunavut, Canada.
• On March 21, 2022, the Company amended its PMPA with Aris Gold Corporation (“Aris Gold”) in respect of
the Marmato PMPA, with the amendment including an increase to the Company’s entitlement to gold under
the contract from 6.5% to 10.5%.
Other
• On September 7, 2022, Hecla Mining Company (“Hecla”) completed its acquisition of all the outstanding
common shares of Alexco Resource Corp (“Alexco”). In conjunction with this acquisition, the Company
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - MANAGEMENT DISCUSSION & ANALYSIS [5]
entered an agreement with Hecla to terminate the Keno Hill PMPA effective September 7, 2022 in exchange
for $141 million of Hecla common stock.
• On December 6, 2022, the Company closed the previously announced transaction whereby the Yauliyacu
PMPA was terminated for a cash payment of $132 million, with $18 million having been realized on the
deliveries of silver produced in 2022 prior to the termination of the stream.
• During the fourth quarter of 2022, the Company made upfront cash payments totaling $44 million relative to
the Goose PMPA ($31 million) and the Curipamba PMPA ($13 million).
Outlook1
Wheaton's estimated attributable production in 2023 as well as the 5-year average and 10-year annual gold
equivalent production is as follows:
Metal
Gold Ounces
Silver Ounces (‘000s)
Other Metals (Palladium & Cobalt)
(GEOsi)
Gold Equivalent Ounces based on:
$1,850 / oz gold, $24 / oz silver,
$1,800 / oz palladium, $1,100 / oz
platinum and $18.75 / lb cobalt
5-year Annual
Average
(2023-2027)2
10-year Annual
Average
(2023-2032)2
2023
Forecast1
320,000 to 350,000
20,000 to 22,000
22,000 to 25,000
600,000 to 660,000
810,000
850,000
1) Ounces produced represent the quantity of silver, gold, palladium and cobalt contained in concentrate or doré prior to smelting or refining deductions
2)
Five- and ten-year guidance do not include optionality production from Pascua Lama, Navidad, Cotabambas, Metates or additional expansions at Salobo outside of the
project currently in construction. In addition, five-year guidance also does not include any production from Kutcho, or the Victor project at Sudbury.
In 2023, gold equivalent production is forecast to be slightly higher than 2022 as expected stronger attributable
production from Salobo and Constancia is forecast to be offset by weaker production from Antamina and the
termination of the silver stream on Yauliyacu. Attributable production is forecast to increase at Salobo as a result of
uninterrupted operations as well as the start-up of the Salobo III mine expansion and at Constancia due to higher
grades associated with the mining of the Pampacancha deposit. Attributable production is forecast to decrease at
Antamina due to lower grades as per the mine plan.
Average forecast production over the next five years is expected to increase primarily due to anticipated continued
production growth from Salobo, Stillwater, Constancia, Voisey’s Bay and Marmato as well as incremental production
ounces from Blackwater, Toroparu, Marathon, Copper World Complex (formerly referred to as Rosemont in this
MD&A) and Santo Domingo towards the latter end of the forecast period. Average forecast production over the next
ten years includes additional incremental production from the Fenix project, Kutcho project and the Victor mine in
Sudbury. Vale S.A. has indicated the potential for an additional expansion after the Salobo III expansion, but
Wheaton does not currently include this in its forecast. Lastly, although Barrick Gold Corp. continues to advance a
comprehensive review of the Pascua Lama project, Wheaton does not include any production from the project in its
estimated average ten-year production guidance.
From a liquidity perspective, the $696 million of cash and cash equivalents as at December 31, 2022 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 2022 ANNUAL REPORT - MANAGEMENT DISCUSSION & ANALYSIS [6]
Mineral Stream Interests1
The following table summarizes the mineral stream interests currently owned by the Company:
Mineral Stream
Interests
Mine
Owner ¹ Location¹
Attributable
Production
Per Unit
Production
Payment 2,3
Total Upfront
Consideration
Paid to Date ³
Cash Flow
Generated to
Date ³
Units
Received &
Sold to Date ³
Q4-2022
Inventory &
PBND 3, 4
Term ¹
Date of
Original
Contract
Gold
Salobo
Sudbury ⁵
Constancia
San Dimas
Stillwater ⁷
Other
Vale
Vale
Hudbay
FM
Sibanye
MNTO
Minto
Hudbay
Copper World ⁹
Marmato ¹⁰
Aris
Santo Domingo Capstone
Fenix
Rio2
Artemis
Blackwater
Adventus
Curipamba
Gen Mining
Marathon
Sabina
Goose
BRA
CAN
PER
MEX
USA
CAN
USA
CO
CHL
CHL
CAN
ECU
CAN
CAN
Silver
Peñasquito
Antamina
Constancia
Other
Los Filos
Zinkgruvan
Stratoni
Neves-Corvo
Aljustrel
Minto
Pascua-Lama
Copper World ⁹
Navidad
Marmato ¹⁰
Cozamin
Blackwater
Curipamba
Newmont
Glencore
Hudbay
MEX
PER
PER
MEX
Equinox
SWE
Lundin
GRC
Eldorado
PRT
Lundin
PRT
Almina
MNTO
CAN
Barrick CHL/ARG
USA
Hudbay
ARG
PAAS
CO
Aris
MEX
Capstone
CAN
Artemis
ECU
Adventus
75%
70%
$420
$400
$416
$624
100% 18% of spot
50%
variable ⁶
100% ⁸ 65%² of spot
100%
$450
10.5% ¹⁰ 18% of spot
100% ¹¹ 18% of spot
6% ¹² 18% of spot
8% ¹³ 35% of spot
50% ¹⁴ 18% of spot
100% ¹⁵ 18% of spot
4.15% ¹⁶ 18% of spot
25%
$4.43
33.75% ¹⁷ 20% of spot
$6.14
100%
100%
$4.60
100%
$4.60
100%
$11.54
$4.42
100%
100% ¹⁸ 50% of spot
$4.39
100%
$3.90
25%
100%
$3.90
$4.00
12.5%
100% ¹⁰ 18% of spot
50% ²⁰ 10% of spot
50% ¹³ 18% of spot
75% ¹⁴ 18% of spot
$ 3,059,360 $ 1,849,811 1,766,180 38,758 LOM 28-Feb-13
259,545 259,481 10,042 20 years 28-Feb-13
145,607 129,281 6,045 LOM
8-Aug-12
200,142 195,089 2,927 LOM 10-May-18
16-Jul-18
68,505 51,169 4,972 LOM
623,572
135,000
220,000
237,880
545,595
231,408 232,968 857
LOM 20-Nov-08
LOM 10-Feb-10
LOM
5-Nov-20
LOM 24-Mar-21
LOM 15-Nov-21
LOM 13-Dec-21
LOM
17-Jan-22
LOM
26-Jan-22
LOM 08-Feb-22
$ 4,821,407 $ 2,755,018 2,634,168 63,601
$ 485,000 $ 1,306,440 75,796 355 LOM
616,131 40,562 1,653 LOM
188,207 15,069 342 LOM
24-Jul-07
3-Nov-15
8-Aug-12
900,000
294,900
609,347
1,267,181 59,090 470
25 years 15-Oct-04
LOM
8-Dec-04
LOM
23-Apr-07
50 years 5-Jun-07
50 years 5-Jun-07
LOM 20-Nov-08
LOM
8-Sep-09
LOM 10-Feb-10
LOM
n/a ¹⁹
LOM
5-Nov-20
LOM 11-Dec-20
LOM 13-Dec-21
17-Jan-22
LOM
$ 2,289,247 $ 3,377,959 190,517 2,820
Palladium
Stillwater ⁷
Platinum
Marathon
Cobalt
Voisey's Bay
Total
Sibanye
USA
4.5% ²¹ 18% of spot $ 262,120 $ 133,704 83,869 5,098 LOM
16-Jul-18
Gen Mining
CAN
22% ¹⁵ 18% of spot $ 9,367 $ - - - LOM
26-Jan-22
Vale
CAN
42.4% ²² 18% of spot $ 390,000 $ 31,865 1,925 890 LOM
11-Jun-18
$ 7,772,141 $ 6,298,546
1) Abbreviations as follows: FM = First Majestic Silver Corp; MNTO = Minto Metals Corp.; PAAS = Pan American Silver Corp; ARG = Argentina; BRA = Brazil; CAN =
Canada; CHL = Chile; CO = Colombia; ECU = Ecuador; GRC = Greece; MEX = Mexico; PER = Peru; PRT = Portugal; SWE = Sweden; USA = United States; and LOM =
Life of Mine.
2) Please refer to the section entitled “Contractual Obligations and Contingencies – Mineral Stream Interests” on page 32 of this MD&A for more information.
3) All figures in thousands except gold and palladium ounces 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 33 of this MD&A for details of when the
remaining upfront consideration is forecasted to be paid.
4) Payable gold, silver, palladium and cobalt PBND are based on management estimates. These figures may be updated in the future 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, 2022, the Company has received approximately $260 million of operating cash flows from the Sudbury stream. 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. As a result of a labour disruption that lasted from June 1, 2021 to August 9, 2021, the term of the
agreement was extended by 69 days.
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 2022 ANNUAL REPORT - MANAGEMENT DISCUSSION & ANALYSIS [7]
6) 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. The current ratio is 70:1.
7) Comprised of the Stillwater and East Boulder gold and palladium interests.
8) The Company is entitled to acquire 100% of the first 30,000 ounces of gold produced per annum and 50% thereafter.
9) Copper World Complex (formerly referred to as Rosemont in this MD&A).
10) Once the Company has received 310,000 ounces of gold and 2.15 million ounces of silver under the Marmato PMPA, the attributable gold and silver production will be
reduced to 5.25% and 50%, respectively.
11) Once the Company has received 285,000 ounces of gold under the Santo Domingo PMPA, the Company’s attributable gold production will be reduced to 67%.
12) Once the Company has received 90,000 ounces of gold under the Fenix PMPA, the attributable gold production will reduce to 4% until 140,000 ounces have been
delivered, after which the stream drops to 3.5%.
13) Once the Company has received 279,908 ounces of gold under the Blackwater gold PMPA, the attributable gold production will be reduced to 4%. Once the Company has
received 17.8 million ounces of silver under the Blackwater silver PMPA, the attributable silver production will be reduced to 33%.
14) Once the Company has received 145,000 ounces of gold under the Curipamba PMPA, the attributable gold production will be reduced to 33%, and once the Company has
received 4.6 million ounces of silver, the attributable silver production will be reduced to 50%.
15) Once the Company has received 150,000 ounces of gold and 120,000 ounces of platinum under the Marathon PMPA, the attributable gold and platinum production will be
reduced to 67% and 15%.
16) Once the Company has received 130,000 ounces of gold under the Goose PMPA, the Company’s attributable gold production will be 2.15%, and once the Company has
received 200,000 ounces of gold under the agreement, the Company’s attributable gold production will be reduced to 1.5%.
17) 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%.
18) Wheaton only has the rights to silver contained in concentrate containing less than 15% copper at the Aljustrel mine.
19) Wheaton and PAAS have not yet finalized the definitive terms of the agreement.
20) Once Wheaton has received 10 million ounces of silver under the Cozamin PMPA, the Company’s attributable silver production will be reduced to 33%.
21) 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%.
22) 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%.
Updates on the Operating Mineral Stream Interests
Salobo – Mill Throughput Expansion
The Salobo mine historically had a mill throughput capacity of 24 million tonnes per annum (“Mtpa”). Vale reports the
Salobo III mine expansion project successfully commenced at the end of 2022. The project consists of two lines,
which will increase the mill throughput by 50%, the first of which started up in the fourth quarter of 2022 and the
second expected to start in the first quarter of 2023.
Subsequent to the quarter, Wheaton and Vale agreed to amend the Salobo PMPA (“Amended Salobo PMPA”) to
adjust the expansion payment terms. If actual throughput is expanded above 32 Mtpa by January 1, 2031, then under
the terms of the Amended Salobo PMPA, Wheaton will be required to make additional set payments to Vale based on
the size of the expansion and the timing of completion. The set payments range from a total of $283 million if
throughput is expanded beyond 32 Mtpa by January 1, 2031, to up to $552 million if throughput is expanded beyond
35 Mtpa by January 1, 2024. In addition, Wheaton will be required to make annual payments of between $5.1 million
to $8.5 million for a 10-year period following payment of the expansion payments if the Salobo mine implements a
high-grade mine plan.
Voisey’s Bay – Underground Mine Extension
Vale reports that physical completion of the Voisey’s Bay underground mine extension was 81% at the end of the
fourth quarter. In the second quarter of 2021, Vale achieved the first ore production from the Reid Brook deposit, the
first of two underground mines to be developed in the project. Eastern Deeps, the second deposit, has started to
extract development ore from the deposit and is scheduled to start the main production ramp-up in the second half of
2023.
Yauliyacu
On August 18, 2022, the Company announced that it had entered into an agreement with Glencore plc ("Glencore")
to terminate its silver stream on the Yauliyacu mine in Peru for a cash payment of $150 million, less the aggregate
value of any deliveries to Wheaton, prior to closing, of silver produced subsequent to December 31, 2021. The
transaction closed on December 6, 2022 and the Company received a cash payment of $132 million. The Yauliyacu
PMPA was terminated on December 14, 2022.
777
On August 8, 2012, the Company entered into a PMPA with Hudbay Minerals Inc. (“Hudbay”) in respect to the 777
mine. Under the terms of 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 is entitled to a refund of the difference (the “Refundable Deposit”) at the conclusion of
the 40 year term. On June 22, 2022, Hudbay announced that mining activities at the 777 mine have concluded after
the reserves were depleted and closure activities have commenced.
At December 31, 2022, the balance of the Refundable Deposit was $79 million. The Company has estimated that a
credit facility with similar terms and conditions would have an interest rate of 8%, resulting in the Refundable Deposit
having a fair value of $8 million at December 31, 2022, resulting in a $2 million impairment on the 777 PMPA. The
Company has derecognized the 777 PMPA and recognized a long-term receivable, with interest to be accreted on a
quarterly basis until maturity which is August 8, 2052.
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - MANAGEMENT DISCUSSION & ANALYSIS [8]
Updates on the Development Mineral Stream Interests
Fenix – Environmental Impact Assessment (“EIA”)
Under the terms of the Fenix PMPA related to the Fenix Gold project (“Fenix Gold”) in Chile, the Company is
committed to pay total cash consideration of $50 million to Rio2 Limited (“Rio2”), of which $25 million was paid on
March 25, 2022.
On July 5, 2022, Rio2 announced that the Regional Evaluation Commission voted to not approve the EIA. On
September 7, 2022, Rio2 further announced that it had identified numerous discrepancies with the factual and
procedural matters in the Environmental Qualification Resolution (“RCA”), resulting in the filing of an administrative
appeal on August 31, 2022. In parallel with the administrative appeal process, Rio2 indicated that they will work
closely with regional authorities to address any remaining concerns. On September 7, 2022, Rio2 stated that the
estimated timing for obtaining EIA approval is approximately one and a half to two years.
The Company’s management has determined that no indicator of impairment existed as of the balance sheet date
and will continue to monitor Rio2’s response to the Regional Evaluation Commission decision.
Copper World Project
Hudbay reports that it has executed a new strategy at the Copper World Project focused on project de-risking and a
two-phase mine plan with the first phase located on private land claims. The pre-feasibility study for Phase I of
Copper World is well-advanced with the main facility engineering completed and metallurgical test work being
analyzed as part of the concentrate leaching trade off evaluations. The pre-feasibility study is expected to be released
in the second quarter of 2023.
Blackwater Project
Artemis Gold Inc. (“Artemis”) announced that it had executed an order for construction equipment required for major
construction activities with the initial fleet expected to be delivered in early Q2 2023. In addition, plant site preparation
is well advanced with the majority of the bulk earth works completed, and work on the construction camp is
proceeding on schedule with 150 rooms and kitchen facilities on track to be ready for occupation by the end of
February. Artemis also announced that it has closed the $385 million project loan facility to fund a significant
component of the estimated construction costs of the Blackwater project. On March 9, 2023, Artemis announced the
approval of its BC Mines Act Permit for the Blackwater project. The approval of the BC Mines Act Permit is the final
step required to allow Artemis to commence major works construction activities at the Blackwater Mine in Q1 2023
with the expectation of an initial gold pour in the second half of 2024.
Marathon Project
Gen Mining announced that the Marathon Project was approved by the joint Federal and Provincial Environmental
Assessment process, and that they will now proceed to obtain the necessary permits for construction and operation.
Curipamba Project
Adventus announced that the Government of Ecuador has signed the Investment Contract in support of the
development of the El Domo deposit, which is part of the Curipamba Project.
Goose Project
Subsequent to the quarter, Sabina announced that it had entered into a definitive agreement (the “Agreement”)
pursuant to which B2Gold Corp. has agreed to acquire all of the issued and outstanding shares of Sabina.
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.
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - MANAGEMENT DISCUSSION & ANALYSIS [9]
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
Aris Mining
Panoro
Kutcho
Location
of
Mine
Guyana $
Peru
Canada
Upfront
Consideration
Paid to Date 1
Upfront
Consideration
to be Paid 1, 2
15,500 $
13,000
16,852
138,000 $
127,000
58,000
Total
Upfront
Consideration¹ Gold
153,500
140,000
10%
25%
74,852 100%
³
Term of
Agreement
Date of
Original
Silver
Contract
50% Life of Mine 11-Nov-13
Life of Mine 21-Mar-16
Life of Mine 14-Dec-17
100%
100%
³
$
45,352 $
323,000 $
368,352
1) Expressed in thousands; excludes closing costs and capitalized interest, where applicable.
2) Please refer to the section entitled “Other Contractual Obligations and Contingencies” on page 33 of this MD&A for details of when the remaining upfront consideration is
forecast to be paid.
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.
Kutcho – Contract Modifications
As discussed in the Convertible Notes Receivable section of this MD&A, on February 18, 2022, the Company agreed
to modify the Kutcho Early Deposit Agreement, including the elimination of the drop-down in attributable gold and
silver to 66.7% once certain thresholds had been achieved, and eliminating the requirement 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.
Mineral Royalty Interests
On January 5, 2021, the Company paid $3 million for an existing 2.0% net smelter return royalty interest on the first
600,000 ounces of gold mined from ore extracted from the Brewery Creek quartz mineral claims located in the Yukon
Territories, Canada owned by Golden Predator Exploration Ltd., a subsidiary of Sabre Gold Mines Corp. (“Golden
Predator”) and any mineral tenure derived therefrom, and a 2.75% net smelter returns royalty interest thereafter (the
“Brewery Creek Royalty”). The Brewery Creek Royalty agreement provides, among other things, that Golden
Predator may reduce the 2.75% net smelter returns royalty interest to 2.125%, on payment of the sum of Cdn$2
million to Wheaton.
Additionally, the Company has a 0.5% net smelter return royalty interest in the Metates properties (the “Metates
Royalty”) located in Mexico from Chesapeake Gold Corp. (“Chesapeake”) for the life of mine. The carrying cost of the
Metates Royalty is $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 these royalty agreements.
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, 2022 and
December 31, 2021:
(in thousands)
Common shares held
Warrants held
Total long-term equity investments
December 31 December 31
2022
2021
$
255,535 $
59,941
560
1,536
$
256,095 $
61,477
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.
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - MANAGEMENT DISCUSSION & ANALYSIS [10]
By holding these long-term investments, the Company is inherently exposed to various risk factors including currency
risk, market price risk and liquidity risk.
A summary of the fair value of these equity investments and the fair value changes recognized as a component of the
Company’s OCI during the three and twelve months ended December 31, 2022 and 2021 is presented below:
Common Shares Held
Shares
Owned
(000's)
% of
Outstanding
Shares
Owned
(in thousands)
Fair Value at
Sep 30, 2022
Cost of
Additions
Proceeds of
Disposition
Three Months Ended December 31, 2022
Fair Value
Adjustment
Gains
(Losses) 1
Fair Value at
Dec 31, 2022
Realized Loss
on Disposal
Bear Creek
13,264
8.65% $ 5,613 $ - $ - $ 1,830 $ 7,443 $ -
Sabina
Kutcho
Hecla
Other
31,095
5.58%
18,640
14.83%
24,727
3,332
35,012
5.78%
137,948
18,360
-
-
-
-
-
-
-
-
5,808
(235)
30,535
3,097
56,720
194,668
1,432
19,792
-
-
-
-
Total
1) Fair Value Gains (Losses) are reflected as a component of Other Comprehensive Income (“OCI”).
$ 189,980 $ - $ - $ 65,555 $ 255,535 $ -
Shares
Owned
(000's)
% of
Outstanding
Shares
Owned
(in thousands)
Fair Value at
Sep 30, 2021
Cost of
Additions
Proceeds of
Disposition 1
Three Months Ended December 31, 2021
Fair Value
Adjustment
Gains
(Losses) 2
Fair Value at
Dec 31, 2021
Realized Gain
on Disposal
Bear Creek
13,264
10.67% $ 10,931 $ - $ - $ 1,833 $ 12,764 $ -
Sabina
Other
Total
11,700
2.82%
13,407
46,157
-
-
-
(17,565)
(26)
5,204
13,381
33,796
-
13,048
$ 70,495 $ - $ (17,565) $ 7,011 $ 59,941 $ 13,048
1) Disposals during 2021 were made in order to capitalize on share appreciation resulting from the strong commodity price environment.
2) 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, 2021
Cost of
Additions
Proceeds of
Disposition 1
Year Ended December 31, 2022
Fair Value
Adjustment
Gains
(Losses) 2
Fair Value at
Dec 31, 2022
Realized Loss
on Disposal
Bear Creek
13,264
8.65% $ 12,764 $ - $ - $ (5,321) $ 7,443 $ -
Sabina
Kutcho
Hecla
Other
31,095
5.58%
13,381
18,640
14.83%
35,012
5.78%
-
-
19,833
11,721
141,450
-
-
-
(2,679)
(8,624)
30,535
3,097
53,218
194,668
-
-
-
33,796
6,139
(4,601)
(15,542)
19,792
(3,797)
Total
1) Disposals during 2022 were made as a result of the acquisition of the companies to which the shares relate by unrelated third-party entities.
2) Fair Value Gains (Losses) are reflected as a component of OCI.
$ 59,941 $ 179,143 $ (4,601) $ 21,052 $ 255,535 $ (3,797)
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - MANAGEMENT DISCUSSION & ANALYSIS [11]
Shares
Owned
(000's)
% of
Outstanding
Shares
Owned
(in thousands)
Fair Value at
Dec 31, 2020
Cost of
Additions
Proceeds of
Disposition 1
Year Ended December 31, 2021
Fair Value
Adjustment
Gains
(Losses) 2
Fair Value at
Dec 31, 2021
Realized Gain
on Disposal
Bear Creek
13,264
10.67% $ 32,609 $ - $ - $ (19,845) $ 12,764 $ -
Sabina
11,700
First Majestic
-
2.82%
0.00%
Other
30,233
95,984
37,415
-
-
-
(16,852)
13,381
(112,188)
7,453
(17,565)
16,204
6,493
-
33,796
-
60,530
13,048
Total
1) Disposals during 2021 were made in order to capitalize on the share appreciation resulting from the strong commodity price environment.
2) Fair Value Gains (Losses) are reflected as a component of OCI.
$ 196,241 $ 7,453 $ (129,753) $ (14,000) $ 59,941 $ 73,578
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 had
a seven year term to maturity, carried interest at 10% per annum, compounded and payable semi-annually. Kutcho
elected to defer the first seven interest payments. The deferred interest carried interest at 15% per annum, compounded
semi-annually.
In addition to the Kutcho Convertible Note, on November 25, 2019, the Company entered into a non-revolving term loan
with Kutcho, under which Kutcho had drawn $0.8 million (Cdn$1.0 million). The credit facility carried interest at 15% per
annum, compounded monthly.
Effective February 18, 2022, the Company agreed to settle and terminate the Kutcho Convertible Note and the non-
revolving term loan with Kutcho in exchange for shares of Kutcho valued at $6.7 million in addition to certain other
modifications to the Kutcho Early Deposit Agreement, including the elimination of the drop-down in attributable gold and
silver to 66.7% once certain thresholds had been achieved, and eliminating the requirement 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.
A summary of the fair value of the Kutcho Convertible Note and the fair value changes recognized as a component of
the Company’s net earnings during the years ended December 31, 2022 and 2021 is presented below:
(in thousands)
Kutcho
Fair Value at
Dec 31, 2021
$ 17,086
Amount
Advanced
$ -
Termination
$ (15,706)
Year Ended December 31, 2022
Fair Value
Adjustment
Gains
(Losses)
$ (1,380)
Fair Value at
Dec 31, 2022
$ -
Year Ended December 31, 2021
Fair Value at
Dec 31, 2020
Amount
Advanced
Termination
Fair Value
Adjustment
Gains
(Losses)
Fair Value at
Dec 31, 2021
$ 11,353
$ - $ -
$ 5,733
$ 17,086
(in thousands)
Kutcho
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - MANAGEMENT DISCUSSION & ANALYSIS [12]
Summarized Financial Results
Attributable precious metal production
Gold ounces
Silver (000’s) ounces
Palladium ounces
Cobalt pounds
GEOs 1
Precious metal sales
Gold ounces
Silver (000’s) ounces
Palladium ounces
Cobalt pounds
GEOs 1
Average realized price
Gold per ounce
Silver per ounce
Palladium per ounce
Cobalt per pound
GEO 1
Average cash cost 2
Gold per ounce
Silver per ounce
Palladium per ounce
Cobalt per pound
GEO 1
Average depletion
Gold per ounce
Silver per ounce
Palladium per ounce
Cobalt per pound
GEO 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, 2022
Dec 31, 2021
Dec 31, 2020
286,805
23,997
15,485
724
638,113
293,234
21,570
15,076
1,038
617,450
1,806
21.84
2,133
31.00
1,725
472
5.33
377
8.10
433
350
5.22
399
10.26
376
1,065,053
669,126
1.482
1.479
504,912
1.118
1.116
743,424
270,946
0.60
6,759,906
11,349
30,882
6,717,675
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
341,521
25,999
366,322
22,893
20,908
22,186
2,293
-
754,591
697,440
312,465
22,860
19,344
369,553
19,231
20,051
886
-
656,074
649,363
1,798
25.08
2,369
23.11
1,832
459
5.78
433
4.67
439
361
5.52
442
8.17
388
1,201,665
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
1,767
20.78
2,183
n.a.
1,688
426
5.28
389
n.a.
411
399
4.58
428
n.a.
376
1,096,224
754,885 $
507,804
1.677
1.673
592,079
1.315
1.312
845,145
256,607
0.57
6,296,151
16,243
29,791
6,250,117
$
$
$
$
$
$
$
$
$
$
$
$
1.132
1.128
503,328
1.122
1.118
765,442
188,486
0.42
5,957,272
211,318
31,383
5,714,571
452,318,526
450,863,952
449,458,394
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
1) GEOs, which are provided to assist the reader, are based on the following commodity price assumptions: $1,800 per ounce gold; $24.00 per ounce silver; $2,100 per ounce
palladium; and $33.00 per pound cobalt; consistent with those used in estimating the Company's production guidance for 2022.
2) Refer to discussion on non-IFRS measure (iii) on page 54 of this MD&A.
3) Refer to discussion on non-IFRS measure (i) on page 52 of this MD&A.
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - MANAGEMENT DISCUSSION & ANALYSIS [13]
Summary of Units Produced
Gold ounces produced
Q4 2022
Q3 2022
Q2 2022
Q1 2022 Q4 2021 Q3 2021 Q2 2021 Q1 2021
Salobo
Sudbury
3
Constancia
San Dimas
Stillwater 5
4
Other
Minto
777
6
Marmato
²
37,939 44,212 34,129 44,883 48,235 55,205 55,590 46,622
6,342 3,437 5,289 5,362 4,379 148 4,563 7,004
10,496 7,196 8,042 6,311 9,857 8,533 5,525 2,453
10,037 11,808 10,044 10,461 13,714 11,936 11,478 10,491
2,185 1,833 2,171 2,497 2,664 2,949 2,962 3,041
2,567 3,182 2,480 4,060 3,506 1,703 3,206 2,638
- - 3,509 4,003 4,462 4,717 5,035 6,280
533 542 778 477 479 433 1,713 -
Total Other
3,100 3,724 6,767 8,540 8,447 6,853 9,954 8,918
Total gold ounces produced
70,099 72,210 66,442 78,054 87,296 85,624 90,072 78,529
Silver ounces produced
2
Peñasquito
Antamina
Constancia
Other
Los Filos
7
Zinkgruvan
Yauliyacu 8
Stratoni
9
Minto
Neves-Corvo
Aljustrel
Cozamin
Marmato
Keno Hill
777
6
10
Total Other
1,761 2,017 2,089 2,219 2,145 2,180 2,026 2,202
1,107 1,377 1,379 1,260 1,366 1,548 1,558 1,577
655 564 584 506 578 521 468 406
23 23 23 42 37 17 26 31
664 642 739 577 482 658 457 420
261 463 756 637 382 372 629 737
- - - - 129 18 164 165
33 42 25 45 44 25 33 21
369 323 345 344 522 362 408 345
313 246 292 287 325 314 400 474
157 179 169 186 213 199 183 230
9 7 8 11 7 10 39 -
- - 48 20 30 44 55 27
- - 80 91 96 81 83 130
1,829 1,925 2,485 2,240 2,267 2,100 2,477 2,580
Total silver ounces produced
5,352 5,883 6,537 6,225 6,356 6,349 6,529 6,765
Palladium ounces produced ²
Stillwater 5
Cobalt pounds produced ²
Voisey's Bay
GEOs produced
3,869 3,229 3,899 4,488 4,733 5,105 5,301 5,769
128 226 136 234 381 370 380
1,162 ¹¹
148,323 158,554 160,646 170,590 184,551 183,012 190,272 196,756
Average payable rate
2
12
Gold
Silver
Palladium
Cobalt
GEO 12
94.9%
83.5%
91.7%
93.3%
89.2%
95.0%
85.5%
95.0%
93.3%
90.2%
95.1%
85.5%
94.6%
93.3%
90.1%
95.2%
86.1%
92.7%
93.3%
90.5%
96.0%
86.0%
92.2%
93.3%
91.4%
96.0%
86.6%
94.5%
93.3%
91.3%
95.8%
86.9%
95.0%
93.3%
91.8%
95.0%
86.6%
91.6%
93.3%
90.7%
1) All figures in thousands except gold and palladium ounces produced.
2) Quantity produced represent the amount of gold, silver, palladium and cobalt contained in concentrate or doré prior to smelting or refining deductions. Production figures and
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 and 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. Operations at the Sudbury mines were suspended from June 1, 2021 to August 9,
2021 as a result of a labour disruption by unionized employees.
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 2022 - 348,000 ounces; Q3 2022 - 412,000 ounces; Q2 2022 - 382,000 ounces; Q1 2022 - 408,000 ounces; Q4 2021 - 544,000 ounces; Q3 2021 - 472,000
ounces; Q2 2021 - 467,000 ounces; Q1 2021 - 429,000 ounces.
5) Comprised of the Stillwater and East Boulder gold and palladium interests.
6) On June 22, 2022, Hudbay announced that mining activities at 777 have concluded and closure activities have commenced.
7) Operations at Los Filos were temporarily suspended from June 22, 2021 to July 26, 2021 as the result of illegal blockades by a group of unionized employees and members
of the Xochipala community.
8) On December 14, 2022 the Company terminated the Yauliyacu PMPA in exchange for a cash payment of $132 million.
9) The Stratoni mine was placed into care and maintenance during Q4-2021.
10) On September 7, 2022, the Company terminated the Keno Hill PMPA in exchange for $141 million of Hecla common stock.
11) Effective January 1, 2021, the Company was entitled to cobalt production from the Voisey's Bay mine. As per the PMPA with Vale, Wheaton is entitled to any cobalt
processed at the Long Harbour Processing Plant as of January 1, 2021, resulting in reported production in the first quarter of 2021 including some material produced at the
Voisey's Bay mine in the previous quarter.
12) GEOs, which are provided to assist the reader, are based on the following commodity price assumptions: $1,800 per ounce gold; $24.00 per ounce silver; $2,100 per ounce
palladium; and $33.00 per pound cobalt; consistent with those used in estimating the Company's production guidance for 2022.
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - MANAGEMENT DISCUSSION & ANALYSIS [14]
Summary of Units Sold
Gold ounces sold
Salobo
Sudbury
2
Constancia
San Dimas
Stillwater
3
Other
Minto
777
Marmato
Q4 2022
Q3 2022
Q2 2022
Q1 2022 Q4 2021 Q3 2021 Q2 2021 Q1 2021
41,029 31,818 48,515 42,513 47,171 35,185 57,296 51,423
4,988 5,147 7,916 3,712 965 1,915 6,945 3,691
6,013 6,336 7,431 10,494 6,196 8,159 2,321 1,676
10,943 10,196 10,633 10,070 15,182 11,346 11,214 10,273
1,783 2,127 2,626 2,628 2,933 2,820 2,574 3,074
2,982 2,559 2,806 3,695 2,462 1,907 2,359 2,390
785 3,098 3,629 4,388 4,290 5,879 5,694 2,577
473 719 781 401 423 438 1,687 -
Total Other
4,240 6,376 7,216 8,484 7,175 8,224 9,740 4,967
Total gold ounces sold
68,996 62,000 84,337 77,901 79,622 67,649 90,090 75,104
Silver ounces sold
Peñasquito
Antamina
Constancia
Other
Los Filos
Zinkgruvan
Yauliyacu
Stratoni
Minto
2,066 1,599 2,096 2,188 1,818 2,210 1,844 2,174
1,114 1,155 1,177 1,468 1,297 1,502 1,499 1,930
403 498 494 644 351 484 295 346
16 24 41 42 17 12 42 27
547 376 650 355 346 354 355 293
337 1,005 817 44 551 182 601 1,014
- - (2)
133 42 41 167 117
23 22 21 31 27 24 29 26
Neves-Corvo
80 105 167 204 259 193 215 239
Aljustrel
Cozamin
Marmato
Keno Hill
777
156 185 123 145 133 155 208 257
150 154 148 177 174 170 168 173
7 8 11 8 8 10 35 -
1 30 30 27 24 51 33 12
35 73 75 87 69 99 109 49
Total Other
1,352 1,982 2,081 1,253 1,650 1,291 1,962 2,207
Total silver ounces sold
4,935 5,234 5,848 5,553 5,116 5,487 5,600 6,657
Palladium ounces sold
Stillwater
3
Cobalt pounds sold
Voisey's Bay
GEOs sold
4
Cumulative payable units PBND 5
3,396 4,227 3,378 4,075 4,641 5,703 3,869 5,131
187 115 225 511 228 131 395 132
142,190 138,824 170,371 166,065 157,439 149,862 176,502 172,271
Gold ounces
Silver ounces
63,601 65,978 59,331 81,365 84,989 80,819 66,238 70,072
2,820 3,444 3,543 3,910 4,200 3,845 3,802 3,738
Palladium ounces
5,098 5,041 6,267 5,535 5,629 5,619 6,822 5,373
Cobalt pounds
GEO
4
Inventory on hand
Cobalt pounds
257 402 280 550 596 637 777 820
111,867 125,151 119,009 150,032 158,477 150,317 139,145 141,206
633 556 582 410 657 488 134 132
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) GEOs, which are provided to assist the reader, are based on the following commodity price assumptions: $1,800 per ounce gold; $24.00 per ounce silver; $2,100 per ounce
palladium; and $33.00 per pound cobalt; consistent with those used in estimating the Company's production guidance for 2022.
5) Payable gold, silver and palladium ounces PBND and cobalt pounds PBND are based on management estimates. These figures may be updated in future periods as
additional information is received.
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - MANAGEMENT DISCUSSION & ANALYSIS [15]
Quarterly Financial Review 1
xxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxx
Gold ounces sold
Realized price 2
x
x
$
Q4 2022
x
x
68,996
Q3 2022
x
x
62,000
Q2 2022
x
x
84,337
Q1 2022
Q4 2021
Q3 2021
Q2 2021
Q1 2021
77,901
xx
79,622
xx
67,649
xx
90,090
xx
75,104
1,725 $
1,728 $
1,872 $
1,870 $
1,798 $
1,795 $
1,801 $
1,798
Gold sales
$ 119,051 $
107,128 $
157,842 $
145,675 $
143,187 $
121,416 $
162,293 $
135,025
Silver ounces sold
Realized price 2
4,935
5,234
5,848
5,553
5,116
5,487
5,600
6,657
$
21.52 $
19.16 $
22.27 $
24.19 $
23.36 $
23.80 $
26.69 $
26.12
Silver sales
$ 106,175 $
100,270 $
130,228 $
134,332 $
119,504 $
130,587 $
149,455 $
173,883
Palladium ounces sold
3,396
4,227
3,378
4,075
4,641
5,703
3,869
5,131
Realized price 2
Palladium sales
Cobalt pounds sold
Realized price 2
Cobalt sales
Total sales
Cash cost 2, 3
Gold / oz
Silver / oz
Palladium / oz
Cobalt / lb 4
Depletion 2
Gold / oz
Silver / oz
Palladium / oz
Cobalt / lb
Net earnings
Per share
Basic
Diluted
$
$
$
$
1,939 $
2,091 $
2,132 $
2,339 $
1,918 $
2,426 $
2,797 $
2,392
6,586 $
8,838 $
7,203 $
9,533 $
8,902 $
13,834 $
10,822 $
12,275
187
115
225
511
228
131
395
132
22.62 $
22.68 $
34.01 $
34.61 $
28.94 $
23.78 $
19.82 $
22.19
4,239 $
2,600 $
7,649 $
17,704 $
6,604 $
3,120 $
7,823 $
2,936
$ 236,051 $
218,836 $
302,922 $
307,244 $
278,197 $
268,957 $
330,393 $
324,119
$
$
$
$
$
$
$
$
475 $
474 $
465 $
5.00 $
5.59 $
5.61 $
357 $
353 $
408 $
477
5.10
394
$
$
$
472
5.47
340
$
$
$
464
5.06
468
$
$
$
450
6.11
503
$
$
$
16.52
$
7.21 $
6.86 $
5.76 $
4.68 $
5.15 $
4.41 $
357 $
353 $
369 $
4.98 $
5.84 $
5.28 $
399 $
399 $
399 $
321
4.78
399
$
$
$
338
5.57
442
$
$
$
337
5.21
442
$
$
$
390
5.40
442
$
$
$
13.72 $
13.63 $
10.40 $
8.17 $
8.17 $
8.17 $
8.17 $
450
6.33
427
4.98
374
5.82
442
8.17
$ 166,125 $
196,460 $
149,074 $
157,467
$
291,822
$
134,937
$
166,124
$
162,002
$
$
0.367 $
0.435 $
0.330 $
0.349
$
0.648
$
0.300
$
0.369
$
0.360
0.367 $
0.434 $
0.330 $
0.348 $
0.646 $
0.299 $
0.368 $
0.360
Adjusted net earnings 3
$ 103,744 $
93,878 $
149,283 $
158,007
$
132,232
$
137,087
$
161,626
$
161,133
Per share
Basic
Diluted
$
$
0.229 $
0.208 $
0.331 $
0.350
$
0.293
$
0.304
$
0.359
$
0.358
0.229 $
0.208 $
0.330 $
0.350 $
0.293 $
0.303 $
0.358 $
0.358
Cash flow from operations
$ 172,028 $
154,497 $
206,359 $
210,540
$
195,290
$
201,287
$
216,415
$
232,154
Per share 3
Basic
Diluted
Dividends declared
Per share
Total assets
$
$
$
$
0.381 $
0.342 $
0.457 $
0.467
$
0.433
$
0.447
$
0.481
$
0.516
0.380 $
0.342 $
0.456 $
0.466 $
0.432 $
0.446 $
0.480 $
0.515
67,797 $
67,754 $
67,708 $
67,687
$
67,580
$
67,541
$
63,009
$
58,478
0.15 $
0.15 $
0.15 $
0.15 $
0.15 $
0.15 $
0.14 $
0.13
$ 6,759,906 $ 6,587,595 $ 6,448,695 $ 6,470,033 $ 6,296,151 $ 6,046,740 $ 5,981,466 $ 5,928,412
Total liabilities
$
42,231 $
38,783 $
31,894 $
120,572 $
46,034 $
42,387 $
38,202 $
104,985
Total shareholders' equity
$ 6,717,675 $ 6,548,812 $ 6,416,801 $ 6,349,461 $ 6,250,117 $ 6,004,353 $ 5,943,264 $ 5,823,427
1) All figures in thousands except gold and palladium ounces produced and sold, per unit amounts and per share amounts.
2) Expressed as dollars per ounce and for cobalt per pound.
3) Refer to discussion on non-IFRS beginning on page 52 of this MD&A.
4) Cash cost per pound of cobalt sold during the fourth quarter of 2022 includes an inventory write-down of $1.6 million, resulting in an increase of $8.71 per pound. The
Company reflects the cobalt inventory at the lower of cost and net realizable value, and will continue to monitor the market price of cobalt relative to the carrying of the
inventory at each reporting period.
Changes in sales, net earnings and cash flow from operations from quarter to quarter are affected primarily by
fluctuations in production at the mines, the timing of shipments, changes in the price of commodities, the
commencement of operations of mines under construction, as well as acquisitions of PMPAs and any related capital
raising activities.
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - MANAGEMENT DISCUSSION & ANALYSIS [16]
Results of Operations and Operational Review
The operating results of the Company’s reportable operating segments are summarized in the tables and
commentary below.
Average
Realized
Price
($'s
Per Unit)
Average
Cash
Cost
($'s Per
Unit) 3
Average
Depletion
($'s Per
Unit)
Impairment
(Charges)
Reversals /
Gain on
Disposal 4
Sales
Units
Produced²
Units
Sold
Net
Earnings
Cash Flow
From
Operations
Total
Assets
Three Months Ended December 31, 2022
37,939 41,029 $ 1,728 $
416 $
334 $ 70,878 $
- $ 40,110 $ 53,800 $ 2,383,262
6,342 4,988
10,496 6,013
10,037 10,943
2,185 1,783
3,100 4,240
1,712
1,728
1,728
1,728
1,713
400
416
624
309
894
1,092
271
260
429
59
8,538
10,388
18,903
3,080
7,264
70,099 68,996 $ 1,725 $
475 $
357 $ 119,051 $
-
-
1,095
6,255
7,809
7,885
283,416
95,583
-
-
9,231
155,865
215,852
494,143
(1,719) $ 59,961 $ 88,792 $ 3,628,121
12,071
2,530
(1,719)
1,765
1,505
4,697
1,761 2,066 $ 21.28 $
4.36 $
3.57 $ 43,949 $
- $ 27,577 $ 34,943 $ 293,674
1,107 1,114
655
403
1,829 1,352
21.28
21.28
22.15
4.33
6.14
6.19
5,352 4,935 $ 21.52 $
5.00 $
-
6.35
7.06
23,701
8,572
545,368
192,947
453,096
4.98 $ 106,175 $ 51,443 $ 108,352 $ 80,196 $ 1,485,085
11,009
3,538
18,872
6,098
66,228
51,443
20,283
29,953
5.03
-
3,869 3,396 $ 1,939 $
357 $
399 $
6,586 $
- $
4,018 $
5,373 $ 226,812
-
- $
n.a. $
n.a. $
n.a. $
- $
- $
- $
- $
9,428
128
187 $ 22.62 $ 16.52 ⁸ $ 13.72 $
4,239 $
- $
(1,426) $
3,766 $ 357,573
$ 236,051 $ 49,724 $ 170,905 $ 178,127 $ 5,707,019
Gold
Salobo
Sudbury 5
Constancia
San Dimas
Stillwater
Other 6
Silver
Peñasquito
Antamina
Constancia
Other 7
Palladium
Stillwater
Platinum
Marathon
Cobalt
Voisey's Bay
Operating results
Other
General and administrative
Share based compensation
Donations and community investments
Finance costs
Other
Income tax
Total other
$
(8,383) $
(6,399)
(8,474)
(2,916)
(1,377)
4,000
12,370
-
(2,742)
(1,028)
4,100
(30)
$
(4,780) $
(6,099) $ 1,052,887
$ 166,125 $ 172,028 $ 6,759,906
1) Units of gold, silver and palladium produced and sold are reported in ounces, while cobalt is reported in pounds. All figures in thousands except gold and palladium ounces
produced and sold and per unit amounts.
2) Quantity produced represent the amount of gold, silver, palladium and cobalt 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 54 of this MD&A.
4) Refer to page 25 of this MD&A for more information.
5) Comprised of the operating Coleman, Copper Cliff, Garson, Creighton and Totten gold interests and the non-operating Stobie and Victor gold interests.
6) Comprised of the operating Minto and Marmato gold interests as well as the non-operating 777, Copper World Complex (formerly referred to as Rosemont in this MD&A),
Santo Domingo, Blackwater, Fenix, Goose, Marathon and Curipamba gold interests. On June 22, 2022, Hudbay announced that mining activities at 777 have concluded and
closure activities have commenced.
7) Comprised of the operating Los Filos, Zinkgruvan, Neves-Corvo, Aljustrel, Minto, Cozamin and Marmato silver interests, the non-operating 777, Loma de La Plata, Stratoni,
Pascua-Lama, Copper World Complex (formerly referred to as Rosemont in this MD&A), Blackwater and Curipamba silver interests and the previously owned Yauliyacu and
Keno Hill silver interests. The Stratoni mine was placed into care and maintenance during Q4-2021. On June 22, 2022, Hudbay announced that mining activities at 777 have
concluded and closure activities have commenced. On September 7, 2022, the Keno Hill PMPA was terminated in exchange for $141 million of Hecla common stock (see
page 26 of this MD&A). On December 14, 2022 the Yauliyacu PMPA was terminated in exchange for a cash payment of $132 million (see page 26 of this MD&A).
8) Cash cost per pound of cobalt sold during the fourth quarter of 2022 includes an inventory write-down of $1.6 million, resulting in an increase of $8.71 per pound. The
Company reflects the cobalt inventory at the lower of cost and net realizable value, and will continue to monitor the market price of cobalt relative to the carrying of the
inventory at each reporting period.
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - MANAGEMENT DISCUSSION & ANALYSIS [17]
On a GEO basis, results for the Company for the three months ended December 31, 2022 were as follows:
Gold equivalent basis 4
Ounces
Produced 1
148,323
Ounces
Sold
142,190
Three Months Ended December 31, 2022
Average
Realized
Price
($'s Per
Ounce)
$ 1,660
Average
Cash Cost
($'s Per
Ounce) 2
$ 434
Cash
Operating
Margin
($'s Per
Ounce) 3
$ 1,226
Average
Depletion
($'s Per
Ounce)
$ 374
Gross
Margin
($'s Per
Ounce)
$ 852
1) Quantity produced represent the amount of gold, silver, palladium and cobalt 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) Refer to discussion on non-IFRS measure (iii) on page 54 of this MD&A.
3) Refer to discussion on non-IFRS measure (iv) on page 55 of this MD&A.
4) GEOs, which are provided to assist the reader, are based on the following commodity price assumptions: $1,800 per ounce gold; $24.00 per ounce silver; $2,100 per ounce
palladium; and $33.00 per pound cobalt; consistent with those used in estimating the Company's production guidance for 2022.
Average
Realized
Price
($'s
Per Unit)
Average
Cash Cost
($'s Per
Unit) 3
Average
Depletion
($'s Per
Unit)
Units
Produced²
Units
Sold
Sales
Impairment
Reversal 4
Net
Earnings
(Loss)
Cash Flow
From
Operations
Total
Assets
Three Months Ended December 31, 2021
48,235 47,171 $ 1,799 $
412 $
374 $ 84,849 $
- $
47,781 $ 63,659 $ 2,437,939
4,379
965
9,857 6,196
13,714 15,182
2,664 2,933
8,447 7,175
1,795
1,799
1,799
1,799
1,795
400
412
618
319
676
1,024
315
322
397
1,732
11,147
27,309
5,275
42
12,875
-
-
-
-
-
87,296 79,622 $ 1,798 $
472 $
338 $ 143,187 $
- $
357
6,642
1,346
8,398
13,030
307,169
103,789
166,723
219,785
364,792
78,707 $ 104,129 $ 3,600,197
17,923
4,340
3,176
8,463
7,721
2,145 1,818 $ 23.28 $
4.29 $
3.55 $ 42,314 $
- $
28,064 $ 34,515 $ 322,018
1,366 1,297
578
351
2,267 1,650
23.33
23.28
23.48
4.73
6.08
7.22
7.53
7.56
5.83
30,250
8,170
38,770
-
-
-
6,356 5,116 $ 23.36 $
5.47 $
5.57 $ 119,504 $
- $
3,383
14,351
25,091
5,739
580,052
205,884
593,195
63,024 $ 91,463 $ 1,701,149
26,118
17,226
4,733 4,641 $ 1,918 $
340 $
442 $
8,902 $
- $
5,268 $
7,323 $ 232,830
381
228 $ 28.94 $
4.68 $
8.17 $
6,604 $ 156,717 $ 160,390 $
2,443 $ 371,621
$ 278,197 $ 156,717 $ 307,389 $ 205,358 $ 5,905,797
Gold
Salobo
Sudbury 5
Constancia
San Dimas
Stillwater
Other 6
Silver
Peñasquito
Antamina
Constancia
Other 7
Palladium
Stillwater
Cobalt
Voisey's Bay
Operating results
Other
General and administrative
Share based compensation
Donations and community investments
Finance costs
Other
Income tax
Total other
$
(8,547) $
(6,043)
(5,519)
(2,889)
(1,508)
3,581
(685)
-
(3,067)
(1,026)
296
(228)
$ (15,567) $ (10,068) $ 390,354
$ 291,822 $ 195,290 $ 6,296,151
1) Units of gold, silver and palladium produced and sold are reported in ounces, while cobalt is reported in pounds. All figures in thousands except gold and palladium ounces
produced and sold and per unit amounts.
2) Quantity produced represent the amount of gold, silver, palladium and cobalt 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 54 of this MD&A.
4) Refer to page 25 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, 777 and Marmato gold interests as well as the non-operating Copper World Complex gold interest (formerly referred to as Rosemont in
this MD&A). On June 22, 2022, Hudbay announced that mining activities at 777 have concluded and closure activities have commenced.
7) Comprised of the operating Los Filos, Zinkgruvan, Stratoni, Neves-Corvo, Aljustrel, Minto, 777, Marmato and Cozamin silver interests, the non-operating Loma de La Plata,
Copper World Complex (formerly referred to as Rosemont in this MD&A) and Pascua-Lama silver interests and the previously owned Keno Hill and Yauliyacu silver
interests. The Stratoni mine was placed into care and maintenance during Q4-2021. On June 22, 2022, Hudbay announced that mining activities at 777 have concluded and
closure activities have commenced. On September 7, 2022, the Keno Hill PMPA was terminated in exchange for $141 million of Hecla common stock (see page 26 of this
MD&A). On December 14, 2022 the Yauliyacu PMPA was terminated in exchange for a cash payment of $132 million (see page 26 of this MD&A).
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - MANAGEMENT DISCUSSION & ANALYSIS [18]
On a GEO basis, results for the Company for the three months ended December 31, 2021 were as follows:
Gold equivalent basis 4
Ounces
Produced 1
184,551
Ounces
Sold
157,439
Three Months Ended December 31, 2021
Average
Realized
Price
($'s Per
Ounce)
$ 1,767
Average
Cash Cost
($'s Per
Ounce) 2
$ 433
Cash
Operating
Margin
($'s Per
Ounce) 3
$ 1,334
Average
Depletion
($'s Per
Ounce)
$ 377
Gross
Margin
($'s Per
Ounce)
$ 957
1) Quantity produced represent the amount of gold, silver, palladium and cobalt 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) Refer to discussion on non-IFRS measure (iii) on page 54 of this MD&A.
3) Refer to discussion on non-IFRS measure (iv) on page 55 of this MD&A.
4) GEOs, which are provided to assist the reader, are based on the following commodity price assumptions: $1,800 per ounce gold; $24.00 per ounce silver; $2,100 per ounce
palladium; and $33.00 per pound cobalt; consistent with those used in estimating the Company's production guidance for 2022.
GEO Production
For the three months ended December 31, 2022, attributable GEO production was 148,300 ounces, with the 36,300
ounce decrease from the comparable period in 2021 being primarily attributable to the following factors:
•
•
•
•
•
•
11,200 ounce or 29% decrease from the Other mines (comprised of 5,300 gold ounces and 438,000 silver
ounces), primarily due to the placement of Stratoni into care and maintenance, the closure of the 777 mine
and the disposal of the Keno Hill and Yauliyacu PMPAs;
10,300 ounce or 21% decrease from Salobo resulting from a decrease in throughput and grades due to
changes in maintenance routines, with the two 12 mtpa lines operating at approximately 67% of capacity
during Q4-2022 as compared to 73% during Q4-2021;
5,100 ounce or 18% decrease from Peñasquito (385,000 silver ounces), primarily due to lower recovery and
grades consistent with their mine plan;
4,600 ounce or 66% decrease from Voisey's Bay (253,000 cobalt pounds), primarily attributable to lower
grades during the ongoing transitional period between the depletion of the Ovoid open-pit mine and ramp-up
to full production of the Voisey’s Bay underground project;
3,700 ounce or 27% decrease from San Dimas, primarily due to lower grades, with First Majestic reporting
that this was primarily the result of processing lower grade development ores from the Perez vein and higher
tonnages from underground areas with challenging ground conditions within the Jessica and Regina veins in
the Noche Buena area; and
3,400 ounce or 19% decrease from Antamina (259,000 silver ounces), primarily due to lower grades,
consistent with their mine plan.
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - MANAGEMENT DISCUSSION & ANALYSIS [19]
Net Earnings
For the three months ended December 31, 2022, net earnings amounted to $166 million, with the $126 million
decrease relative to the comparable period of the prior year being attributable to the following factors:
Net earnings for the three months ended December 31, 2021
$
291,822
Variance in gross margin
Variance in revenue due to:
Payable gold production
Payable silver production
Payable palladium production
Payable cobalt production
Total payable production
Changes in inventory and PBND
Prices realized per ounce sold
Total decrease 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 decrease to gross margin
Other variances
Impairment (impairment reversal) of mineral stream interests (see page 25)
General and administrative expenses (see page 26)
Gain on disposal of mineral stream interests (see page 26)
Share based compensation (see page 27)
Donations and community investment (see page 27)
Other income / expense (see page 27)
Finance costs (see page 28)
Income taxes (see page 28)
Total decrease in net earnings
Net earnings for the three months ended December 31, 2022
$
(31,091)
(23,347)
(2,297)
(6,830)
$
$
$
$
$
$
$
(63,565)
36,643
(15,224)
(42,146)
12,110
(696)
(1,313)
2,554
12,655
(29,491)
(158,436)
164
51,443
(2,955)
(27)
419
131
13,055
(125,697)
166,125
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - MANAGEMENT DISCUSSION & ANALYSIS [20]
Average
Realized
Price
($'s
Per Unit)
Average
Cash
Cost
($'s Per
Unit) 3
Average
Depletion
($'s Per
Unit)
Impairment
(Charges)
Reversals /
Gain on
Disposal 4
Sales
Units
Produced²
Units
Sold
Net
Earnings
Cash Flow
From
Operations
Total
Assets
Year Ended December 31, 2022
161,163 163,875 $ 1,807 $
416 $
334 $ 296,145 $
- $ 173,257 $ 227,933 $ 2,383,262
20,430 21,763
32,045 30,274
42,350 41,842
8,686 9,164
22,131 26,316
1,802
1,812
1,798
1,810
1,811
400
414
623
325
760
1,091
271
260
429
48
39,211
54,868
75,238
16,583
-
-
-
-
6,752
34,142
38,327
9,667
47,653
(1,719)
24,687
30,789
42,348
49,186
13,600
27,610
283,416
95,583
155,865
215,852
494,143
286,805 293,234 $ 1,806 $
472 $
350 $ 529,698 $ (1,719) $ 286,832 $ 391,466 $ 3,628,121
8,086 7,949 $ 21.97 $
4.36 $
3.57 $ 174,635 $
- $ 111,634 $ 139,978 $ 293,674
5,123 4,914
2,309 2,039
8,479 6,668
21.94
21.97
21.56
4.40
6.10
6.95
23,997 21,570 $ 21.84 $
5.33 $
-
7.06
6.35
107,794
44,798
545,368
192,947
453,096
5.22 $ 471,003 $ 166,198 $ 409,538 $ 354,411 $ 1,485,085
51,488
19,421
226,995
85,824
32,358
96,251
143,776
166,198
5.50
-
15,485 15,076 $ 2,133 $
377 $
399 $
32,160 $
- $ 20,455 $ 26,472 $ 226,812
-
- $
n.a. $
n.a. $
n.a. $
- $
- $
- $
- $
9,428
724 1,038 $ 31.00 $ 8.10 ⁸ $ 10.26 $
32,192 $
- $ 13,134 $ 28,449 $ 357,573
$ 1,065,053 $ 164,479 $ 729,959 $ 800,798 $ 5,707,019
Gold
Salobo
Sudbury 5
Constancia
San Dimas
Stillwater
Other 6
Silver
Peñasquito
Antamina
Constancia
Other 7
Palladium
Stillwater
Platinum
Marathon
Cobalt
Voisey's Bay
Operating results
Other
General and administrative
Share based compensation
Donations and community investments
Finance costs
Other
Income tax
Total other
$ (35,831) $ (35,332)
(18,161)
(5,718)
(20,060)
(6,296)
(5,586)
7,449
(509)
(4,135)
6,143
(171)
$ (60,833) $ (57,374) $ 1,052,887
$ 669,126 $ 743,424 $ 6,759,906
1) Units of gold, silver and palladium produced and sold are reported in ounces, while cobalt is reported in pounds. All figures in thousands except gold and palladium ounces
produced and sold and per unit amounts.
2) Quantity produced represent the amount of gold, silver, palladium and cobalt 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 54 of this MD&A.
4) Refer to page 25 of this MD&A for more information.
5) Comprised of the operating Coleman, Copper Cliff, Garson, Creighton and Totten gold interests and the non-operating Stobie and Victor gold interests.
6) Comprised of the operating Minto and Marmato gold interests as well as the non-operating 777, Copper World Complex (formerly referred to as Rosemont in this MD&A),
Santo Domingo, Blackwater, Fenix, Goose, Marathon and Curipamba gold interests. On June 22, 2022, Hudbay announced that mining activities at 777 have concluded and
closure activities have commenced.
7) Comprised of the operating Los Filos, Zinkgruvan, Neves-Corvo, Aljustrel, Minto, Cozamin, Marmato silver interests, the non-operating 777, Loma de La Plata, Stratoni,
Pascua-Lama, Copper World Complex (formerly referred to as Rosemont in this MD&A), Blackwater and Curipamba silver interests and the previously owned Keno Hill and
Yauliyacu silver interests. The Stratoni mine was placed into care and maintenance during Q4-2021. On June 22, 2022, Hudbay announced that mining activities at 777
have concluded and closure activities have commenced. On September 7, 2022, the Keno Hill PMPA was terminated in exchange for $141 million of Hecla common stock
(see page 26 of this MD&A). On December 14, 2022 the Yauliyacu PMPA was terminated in exchange for a cash payment of $132 million (see page 26 of this MD&A).
8) Cash cost per pound of cobalt sold during the fourth quarter of 2022 includes an inventory write-down of $1.6 million, resulting in an increase of $1.60 per pound. The
Company reflects the cobalt inventory at the lower of cost and net realizable value, and will continue to monitor the market price of cobalt relative to the carrying of the
inventory at each reporting period.
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - MANAGEMENT DISCUSSION & ANALYSIS [21]
On a GEO basis, results for the Company for the year ended December 31, 2022 were as follows:
Gold equivalent basis 4
Ounces
Produced 1
638,113
Ounces
Sold
617,450
Year Ended December 31, 2022
Average
Realized
Price
($'s Per
Ounce)
$ 1,725
Average
Cash Cost
($'s Per
Ounce) 2
$ 433
Cash
Operating
Margin
($'s Per
Ounce) 3
$ 1,292
Average
Depletion
($'s Per
Ounce)
$ 376
Gross
Margin
($'s Per
Ounce)
$ 916
1) Quantity produced represent the amount of gold, silver, palladium and cobalt 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) Refer to discussion on non-IFRS measure (iii) on page 54 of this MD&A.
3) Refer to discussion on non-IFRS measure (iv) on page 55 of this MD&A.
4) GEOs, which are provided to assist the reader, are based on the following commodity price assumptions: $1,800 per ounce gold; $24.00 per ounce silver; $2,100 per ounce
palladium; and $33.00 per pound cobalt; consistent with those used in estimating the Company's production guidance for 2022.
Average
Realized
Price
($'s
Per Unit)
Average
Cash
Cost
($'s Per
Unit) 3
Average
Depletion
($'s Per
Unit)
Units
Produced²
Units
Sold
Impairment
Reversal 4
Net
Earnings
Sales
Cash Flow
From
Operations
Total
Assets
Year Ended December 31, 2021
205,652 191,075 $ 1,797 $
412 $
374 $ 343,398 $
- $ 193,247 $ 264,652 $ 2,437,939
16,094 13,516
26,368 18,352
47,619 48,015
11,616 11,401
34,172 30,106
1,811
1,797
1,797
1,797
1,804
400
411
617
325
607
1,024
315
322
397
61
24,475
32,974
86,290
20,487
54,296
341,521 312,465 $ 1,798 $
459 $
361 $ 561,920 $
-
-
-
5,221
307,169
103,789
166,723
219,785
364,792
- $ 305,776 $ 419,065 $ 3,600,197
19,068
25,438
56,679
16,784
36,444
19,658
41,199
12,259
34,192
-
-
8,553 8,046 $ 25.07 $
4.29 $
3.55 $ 201,688 $
- $ 138,616 $ 167,169 $ 322,018
6,049 6,228
1,973 1,476
9,424 7,110
25.17
24.91
25.07
5.04
6.05
8.06
7.53
7.56
5.56
156,735
36,775
178,231
25,999 22,860 $ 25.08 $
5.78 $
5.52 $ 573,429 $
-
-
78,458
16,689
81,393
580,052
205,884
593,195
- $ 315,156 $ 444,064 $ 1,701,149
125,688
27,848
123,359
-
20,908 19,344 $ 2,369 $
433 $
442 $
45,834 $
- $ 28,891 $ 37,450 $ 232,830
Gold
Salobo
Sudbury 5
Constancia
San Dimas
Stillwater
Other 6
Silver
Peñasquito
Antamina
Constancia
Other 7
Palladium
Stillwater
Cobalt
Voisey's Bay
2,293
886 $ 23.11 $
4.67 $
8.17 $
20,482 $ 156,717 $ 165,819 $
3,687 $ 371,621
Operating results
Other
General and administrative
Share based compensation
Donations and community investments
Finance costs
Other
Income tax
Total other
$ 1,201,665 $ 156,717 $ 815,642 $ 904,266 $ 5,905,797
$ (35,119) $ (31,931)
(16,926)
(6,323)
(19,265)
(6,601)
(5,817)
(4,271)
5,776
269
609
(279)
$ (60,757) $ (59,121) $ 390,354
$ 754,885 $ 845,145 $ 6,296,151
1) Units of gold, silver and palladium produced and sold are reported in ounces, while cobalt is reported in pounds. All figures in thousands except gold and palladium ounces
produced and sold and per unit amounts.
2) Quantity produced represent the amount of gold, silver, palladium and cobalt 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 54 of this MD&A.
4) Refer to page 25 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, 777 and Marmato gold interests as well as the non-operating Copper World Complex gold interest (formerly referred to as Rosemont in
this MD&A). On June 22, 2022, Hudbay announced that mining activities at 777 have concluded and closure activities have commenced.
7) Comprised of the operating Los Filos, Zinkgruvan, Stratoni, Neves-Corvo, Aljustrel, Minto, 777, Marmato and Cozamin silver interests, the non-operating Loma de La Plata,
Copper World Complex (formerly referred to as Rosemont in this MD&A) and Pascua-Lama silver interests and the previously owned Keno Hill and Yauliyacu silver
interests. The Stratoni mine was placed into care and maintenance during Q4-2021. On June 22, 2022, Hudbay announced that mining activities at 777 have concluded and
closure activities have commenced. On September 7, 2022, the Keno Hill PMPA was terminated in exchange for $141 million of Hecla common stock (see page 26 of this
MD&A). On December 14, 2022 the Yauliyacu PMPA was terminated in exchange for a cash payment of $132 million (see page 26 of this MD&A).
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - MANAGEMENT DISCUSSION & ANALYSIS [22]
On a GEO basis, results for the Company for the year ended December 31, 2021 were as follows:
Gold equivalent basis 4
Ounces
Produced 1
754,591
Ounces
Sold
656,074
Year Ended December 31, 2021
Average
Realized
Price
($'s Per
Ounce)
$ 1,832
Average
Cash Cost
($'s Per
Ounce) 2
$ 439
Cash
Operating
Margin
($'s Per
Ounce) 3
$ 1,393
Average
Depletion
($'s Per
Ounce)
$ 388
Gross
Margin
($'s Per
Ounce)
$ 1,005
1) Quantity produced represent the amount of gold, silver, palladium and cobalt 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) Refer to discussion on non-IFRS measure (iii) on page 54 of this MD&A.
3) Refer to discussion on non-IFRS measure (iv) on page 55 of this MD&A.
4) GEOs, which are provided to assist the reader, are based on the following commodity price assumptions: $1,800 per ounce gold; $24.00 per ounce silver; $2,100 per ounce
palladium; and $33.00 per pound cobalt; consistent with those used in estimating the Company's production guidance for 2022.
GEO Production
For the year ended December 31, 2022, attributable GEO production was 638,100 ounces, with the 116,500 ounce
decrease from the comparable period in 2021 being primarily attributable to the following factors:
•
•
•
•
•
•
•
44,500 ounce or 22% decrease from Salobo, resulting from the mining grades and throughput due to
changes in maintenance routines, with the two 12 mtpa lines operating at approximately 74% of capacity
during 2022 as compared to 81% during 2021;
28,800 ounce or 68% decrease from Voisey's Bay (1,569,000 cobalt pounds), primarily attributable to the
comparable period in the prior year including approximately 12,400 GEOs (676,000 pounds of cobalt) which
had been produced in prior periods and the mining of lower grade material during the ongoing transitional
period between the depletion of the Ovoid open-pit mine and ramp-up to full production of the Voisey’s Bay
underground project;
24,600 ounce or 15% decrease from the Other mines (comprised of 12,000 gold ounces and 945,000 silver
ounces), primarily due to the placement of Stratoni into care and maintenance, the closure of the 777 mine
and the disposal of the Keno Hill and Yauliyacu PMPAs;
12,300 ounce or 15% decrease from Antamina (926,000 silver ounces), primarily due to lower grades,
consistent with their mine plan;
9,300 ounce or 26% decrease from Stillwater (comprised of 2,900 gold ounces and 5,400 palladium
ounces), primarily attributable to lower throughput resulting from the effect of significant weather events in
June; and
6,200 ounce or 5% decrease from Peñasquito (468,000 silver ounces), primarily due to lower recovery and
grades consistent with their mine plan; partially offset by
10,200 ounce or 19% increase from Constancia (comprised of 5,700 gold ounces and 336,000 silver
ounces), primarily due to the mining of higher grades resulting from the commencement of ore production
from the Pampacancha satellite deposit and, for gold production, the increase in fixed recoveries from 55%
to 70%, both occurring during Q2-2021.
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - MANAGEMENT DISCUSSION & ANALYSIS [23]
Net Earnings
For the year ended December 31, 2022, net earnings amounted to $669 million, with the $86 million decrease relative
to the comparable period of the prior year being attributable to the following factors:
Net earnings for the year ended December 31, 2021
$
754,885
Variance in gross margin
Variance in revenue due to:
Payable gold production
Payable silver production
Payable palladium production
Payable cobalt production
Total payable production
Changes in inventory and PBND
Prices realized per ounce sold
Total decrease 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 decrease to gross margin
Other variances
Impairment (impairment reversal) of mineral stream interests (see page 25)
Gain on disposal of mineral stream interests (see page 26)
General and administrative expenses (see page 26)
Donations and community investment (see page 27)
Share based compensation (see page 27)
Other income / expense (see page 27)
Finance costs (see page 28)
Income taxes (see page 28)
Total decrease in net earnings
Net earnings for the year ended December 31, 2022
$
(97,718)
(51,416)
(11,450)
(33,817)
$
$
$
$
$
$
$
(194,401)
120,854
(63,065)
(136,612)
32,126
(4,266)
2,426
12,881
43,167
(93,445)
(148,106)
155,868
(712)
305
(795)
1,673
231
(778)
(85,759)
669,126
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - MANAGEMENT DISCUSSION & ANALYSIS [24]
Reversal of Impairment of Mineral Stream Interests
Based on the Company’s analysis, there was an indicator of impairment (impairment reversals) identified at December
31, 2022 and December 31, 2021 for the following PMPAs:
(in thousands)
Gold Interests
Other gold interests
777 1
Silver interests
Other silver interests
Keno Hill
Cobalt Interests
Voisey's Bay
Total impairment reversal
1) Refer to page 8 of this MD&A for more information.
Three Months Ended
December 31
Years Ended
December 31
2022
2021
2022
2021
$
1,719 $
- $
1,719 $
$
$
$
- $
- $
(10,330) $
- $
(156,717)
-
(156,717)
1,719 $
(156,717) $
(8,611) $
(156,717)
-
-
Voisey’s Bay – Impairment Reversal
At June 30, 2019, the Company determined there to be an impairment charge relative to the Voisey’s Bay cobalt
interest (“Voisey’s Bay PMPA”) due to a significant decline in market cobalt prices and a sale of a similar PMPA by a
third-party group at a price significantly below Wheaton’s comparable carrying value for the Voisey’s Bay PMPA. At
June 30, 2019, management estimated that the recoverable amount under the Voisey’s Bay PMPA was $227 million,
representing its FVLCD and resulting in an impairment charge of $166 million.
At December 31, 2021, an indicator of impairment reversal was identified relative to the Voisey’s Bay PMPA as a
result of significant and sustained increases in the market prices of cobalt over the year ended December 31, 2021
compared to market prices of cobalt at the time the original impairment was recorded. Management estimated that
the recoverable amount at December 31, 2021 of the Voisey’s Bay PMPA exceeded the carrying amount that would
have been determined, net of depletion, had no impairment charge been recognized for the PMPA in prior years. The
recoverable amount represented its FVLCD and resulted in an impairment reversal of $157 million at December 31,
2021 which represented a full reversal of the impairment charge recorded in the year ended December 31, 2019, net
of depletion that otherwise would have been recorded. The recoverable amount of the Voisey’s Bay PMPA was
estimated using a discounted cash flow model with an average discount rate of 8% and an average projected market
price of cobalt of $23.97 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.
Keno Hill – Impairment Reversal
At December 31, 2015, the Company determined there to be an impairment charge of $10.5 million relative to the
Keno Hill silver interest (“Keno Hill PMPA”) due to the suspension of operations at the Bellekeno mine.
On September 7, 2022, the Company terminated the Keno Hill PMPA in exchange for 34,800,989 common shares of
Hecla valued at $141 million. This value exceeded the carrying amount of the Keno Hill PMPA that would have been
determined, net of depletion, had no impairment charge been recognized for the PMPA. As a result, an impairment
reversal of $10.3 million has been recorded for the year ended December 31, 2022, which represents a full reversal
of the impairment charge recorded in the year ended December 31, 2015, net of depletion that otherwise would have
been recorded. The recoverable amount of the Keno Hill PMPA was determined based on the value of the
consideration received in exchange for its termination, and as such is classified within Level 1 of the fair value
hierarchy.
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - MANAGEMENT DISCUSSION & ANALYSIS [25]
Gain on Disposal of Mineral Stream Interest
Keno Hill
With the receipt of $141 million of Hecla common shares on September 7, 2022, the Company has reflected a gain
on disposal of the Keno Hill PMPA in the amount of $104 million, calculated as follows:
(in thousands)
Fair value of Hecla Mining Company shares received
Less: carrying value after impairment reversal, plus closing costs
Gain on disposal of the Keno Hill PMPA
$ 140,596
(36,201)
$ 104,395
Yauliyacu
With the receipt of $132 million in proceeds on December 14, 2022, the Company has reflected a gain on disposal of
the Yauliyacu PMPA in the amount of $51 million, calculated as follows:
(in thousands)
Proceeds received on disposal of Yauliyacu
Less: carrying value plus closing costs
Gain on disposal of the Yauliyacu PMPA
General and Administrative
(in thousands)
Corporate
$ 131,937
(80,464)
$ 51,473
Three Months Ended
December 31
Years Ended
December 31
2022
2021
2022
2021
Salaries and benefits
Depreciation
Professional fees
Business travel
Director fees
Employer health tax
Audit and regulatory
Insurance
Other
General and administrative - corporate
$ 3,195
289
582
264
258
92
505
550
821
$ 6,556
$ 3,606
275
519
105
281
75
656
517
787
$ 6,821
$ 14,895
1,154
1,680
950
1,109
840
2,845
2,135
3,469
$ 29,077
$ 14,205
1,102
3,376
219
1,096
750
2,937
1,771
3,100
$ 28,556
Subsidiaries
Salaries and benefits
Depreciation
Professional fees
Business travel
Director fees
Insurance
Other
General and administrative - subsidiaries
$ 992
107
131
118
50
10
419
$ 1,827
$ 1,012
111
264
10
50
7
272
$ 1,726
$ 4,327
434
539
242
200
44
968
$ 6,754
$ 4,039
408
797
33
200
36
1,050
$ 6,563
Consolidated general and administrative
$ 8,383
$ 8,547
$ 35,831
$ 35,119
General and administrative expenses for the year ended December 31, 2022 were virtually unchanged relative to
2021, with the cost of business travel increasing as Covid-19 travel restrictions were eased, and the cost of
professional fees decreasing, primarily due to lower costs on project evaluation as well as legal costs recognized in
2021 related to the ATM program.
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - MANAGEMENT DISCUSSION & ANALYSIS [26]
Share Based Compensation
Three Months Ended
December 31
Years Ended
December 31
(in thousands)
2022
2021
2022
2021
Equity settled share based compensation
Stock options
Restricted share units
$ 578
861
$ 518
797
$ 2,366
3,480
$ 2,065
3,196
Cash settled share based compensation
PSUs
7,035
4,204
14,214
14,004
Total share based compensation
$ 8,474
$ 5,519
$ 20,060
$ 19,265
For the three months and year ended December 31, 2022, share based compensation increased by $3 million and $1
million, respectively, relative to the comparable periods in the previous year, with the increase during the three month
period being primarily due to differences in accrued costs associated with the Company’s performance share units
(“PSUs”).
Donations and Community Investments
Three Months Ended
December 31
Years Ended
December 31
(in thousands)
Local donations and community investments 1
Partner donations and community investments 2
COVID-19 and community support and response fund
2021
2022
2021
$ 987 $ 954 $ 2,333 $ 1,953
3,204
1,444
1,935
-
1,929
-
3,798
165
2022
Total donations and community investments
$ 2,916 $ 2,889 $ 6,296 $ 6,601
1) The Local Community Investment Program supports organizations in Vancouver and the Cayman Islands, where Wheaton’s offices are located.
2) The Partner Community Investment Program supports the communities influenced by Mining Partners' operations.
Other (Income) Expense
(in thousands)
Interest income
Dividend income
Foreign exchange (gain) loss
(Gain) loss on fair value adjustment of share
purchase warrants held
(Gain) loss on fair value adjustment of convertible
notes receivable
Other
Three Months Ended
December 31
Years Ended
December 31
2022
$ (3,946)
(131)
179
2021
$ (76)
(111)
154
2022
$ (6,321)
(453)
(890)
2021
$ (241)
(221)
275
(67)
-
(35)
(290)
1,033
2,101
(1,597)
(1,661)
1,380
(2,198)
(5,733)
(1,957)
Total other (income) expense
$ (4,000)
$ (3,581)
$ (7,449)
$ (5,776)
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - MANAGEMENT DISCUSSION & ANALYSIS [27]
Finance Costs
Three Months Ended
December 31
Years Ended
December 31
(in thousands)
Average principal outstanding during period
2022
$ -
2021
$ -
2022
$ -
2021
$ 19,506
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
n.a.
$ -
1,311
20
46
n.a.
$ -
1,328
28
152
n.a.
$ -
5,262
91
233
1.17%
$ 229
5,313
123
152
Total finance costs
$ 1,377
$ 1,508
$ 5,586
$ 5,817
Income Tax Expense (Recovery)
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)
Total income tax expense (recovery) recognized in
Three Months Ended
December 31
Years Ended
December 31
2022
2021
2022
2021
$ (3,367) $ (1,012) $ 8,746 $ (7,117)
2,388
47,922 $ 32,430 $ 65,866
(11,391)
(59,018)
$ (9,003) $ 1,697 $ (8,237) $ 6,848
(40,667)
(46,225)
net earnings
$ (12,370) $ 685 $ 509 $ (269)
Income tax recognized directly in equity1 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)
Total income tax expense (recovery) recognized in
Three Months Ended
December 31
Years Ended
December 31
2022
2021
2022
2021
$ - $ (534) $ (5,932) $ (1,705)
-
534 $ 5,932 $ 1,705
(1,811)
$ - $ (440) $ 1,789 $ (106)
(4,143)
(974)
-
equity
$ - $ (974) $ (4,143) $ (1,811)
1)
Income tax expense (recovery) in shareholders’ equity relates to share financing fees. Share financing fees are deducted over a five-year period for Canadian income tax
purposes. For accounting purposes, share financing fees are charged directly to issued capital.
For the year ended December 31, 2022, current income tax expense in net earnings of $9 million was partially offset
by a current income tax recovery of $6 million in the Statement of Shareholders’ Equity. The current income tax is
primarily the result of income tax expense associated with the disposition of the Keno Hill PMPA, partially offset by
the full utilization of $97 million of previously unrecognized non-capital loss carryforwards available to the Company.
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - MANAGEMENT DISCUSSION & ANALYSIS [28]
The movement in current income taxes payable for the year ended December 31, 2022 is as follows:
(in thousands)
Current taxes payable - December 31, 2021
Current income tax expense - income statement
Current income tax recovery - shareholders' equity
Income taxes paid
Foreign exchange adjustments
Current taxes payable - December 31, 2022
Current Taxes
Payable
$ 132
8,746
(5,932)
(171)
(12)
$ 2,763
Liquidity and Capital Resources1
As at December 31, 2022, the Company had cash and cash equivalents of $696 million (December 31, 2021 - $226
million) and no debt outstanding under its Revolving Facility (December 31, 2021 - $NIL).
A summary of the Company’s cash flow activity is as follows:
Three Months Ended December 31, 2022
Cash Flows From Operating Activities
During the three months ended December 31, 2022, the Company generated operating cash flows of $172 million,
with the $23 million decrease relative to the comparable period of the prior year being attributable to the following
factors:
Operating cash inflow for the three months ended December 31, 2021
Variance attributable to revenue (see page 20):
Decrease in accounts receivable
Total decrease to cash inflows attributable to sales
Variance attributable to cost of sales, excluding depletion:
Sales volume
Sales mix differences
Cost per ounce
Changes in working capital, excluding accounts receivable
Total decrease to cash outflows attributable to cost of sales
Total decrease to net cash inflows attributable to gross margin
Other variances:
General and administrative
Donation and community investment
Finance costs
Income taxes
Other
Total decrease to net cash inflows
Operating cash inflow for the three months ended December 31, 2022
$
$
$
$
$
$
$
$
195,290
(42,146)
2,727
(39,419)
6,620
1,152
(1,313)
5,729
12,188
(27,231)
(356)
325
(2)
198
3,804
(23,262)
172,028
Other Variance
The increase to cash inflows relative to Other during the period was due to amounts of interest earned on the
Company’s cash deposits.
Cash Flows From Financing Activities
During the three months ended December 31, 2022, the Company had net cash outflows from financing activities of
$58 million, which was primarily the result of the quarterly dividend payment totaling $60 million, partially offset by
proceeds from the exercise of stock options in the amount of $3 million. During the three months ended December
31, 2021, the Company had net cash outflows from financing activities of $55 million, which was primarily the result of
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.
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - MANAGEMENT DISCUSSION & ANALYSIS [29]
the quarterly dividend payment of $57 million, partially offset by proceeds from the exercise of stock options in the
amount of $2 million.
Cash Flows From Investing Activities
During the three months ended December 31, 2022, the Company had net cash inflows from investing activities of
$87 million, which was primarily the result of $132 million received relating to the disposal of the Yauliyacu PMPA
partially offset by payments for the acquisitions of new PMPAs, including a $31 million payment to Sabina for the
Goose PMPA and a $13 million payment to Adventus for the Curipamba PMPA. During the three months ended
December 31, 2021, the Company had net cash outflows from investing activities of $286 million which was primarily
the result of a payment of $300 million to New Gold for the Blackwater Gold PMPA and an additional deposit payment
of $4 million to Hudbay for the Constancia PMPA related to the Pampacancha deposit, partially offset by $18 million
received as proceeds on the disposal of long-term equity investments.
Year Ended December 31, 2022
Cash Flows From Operating Activities
During the year ended December 31, 2022, the Company generated operating cash flows of $743 million, with the
$102 million decrease relative to the comparable period of the prior year being attributable to the following factors:
Operating cash inflow for the year ended December 31, 2021
Variance attributable to revenue (see page 24):
Decrease in accounts receivable
Total decrease to cash inflows attributable to sales
Variance attributable to cost of sales, excluding depletion:
Sales volume
Sales mix differences
Cost per ounce
Changes in working capital, excluding accounts receivable
Total decrease to cash outflows attributable to cost of sales
Total decrease to net cash inflows attributable to gross margin
Other variances:
General and administrative
Donation and community investment
Share based compensation - PSUs
Finance costs
Income taxes
Other
Total decrease to net cash inflows
Operating cash inflow for the year ended December 31, 2022
$
$
$
$
$
$
$
$
845,145
(136,612)
6,469
(130,143)
17,416
485
2,426
6,348
26,675
(103,468)
(3,401)
605
(1,235)
136
108
5,534
(101,721)
743,424
General and Administrative Variance
The increase to cash outflows relative to General and Administrative costs during the period was due to higher
payments under the Company’s annual performance-based cash incentive plan.
Share Based Compensation Variance
The increase to cash outflows relative to Share Based Compensation costs during the period was due to higher
payouts under the Company’s PSU plan, with the realized price on maturity being 25% higher in 2022 as compared
to 2021.
Other Variance
The increase to cash inflows relative to Other during the period was due to amounts of interest earned on the
Company’s cash deposits.
Cash Flows From Financing Activities
During the year ended December 31, 2022, the Company had net cash outflows from financing activities of $229
million, which was primarily the result of dividend payments totaling $237 million, partially offset by proceeds from the
exercise of stock options in the amount of $10 million. During the year ended December 31, 2021, the Company had
net cash outflows from financing activities of $408 million, which was primarily the result of repayments under the
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - MANAGEMENT DISCUSSION & ANALYSIS [30]
Company’s now fully repaid Revolving Facility in the amount of $195 million and dividend payments totaling $218
million, partially offset by proceeds from the exercise of stock options in the amount of $8 million.
Cash Flows From Investing Activities
During the year ended December 31, 2022, the Company had net cash outflows from investing activities of $44
million, which was primarily the result of (i) payments for the acquisition of new PMPAs, including payments totaling
$31 million to Gen Mining for the Marathon PMPA, a $25 million payment to Rio2 for the Fenix PMPA, payments
totaling $62 million payment to Sabina for the Goose PMPA, a $13 million payment to Adventus for the Curipamba
PMPA and payments totaling $19 million to Aris Mining for the Marmato PMPA; (ii) a $2 million advance to Panoro in
connection with the Cotabambas Early Deposit agreement; and (iii) payments totaling $23 million for the acquisition
of long-term equity investments partially offset by $132 million received relating to the disposal of the Yauliyacu
PMPA. During the year ended December 31, 2021, the Company had net cash outflows from investing activities of
$404 million, which was primarily the result of (i) payments for the acquisition of new PMPAs, including a $150 million
payment to Capstone for the acquisition of the Cozamin PMPA, a $34 million payment to Aris Gold representing the
first installment for the acquisition of the Marmato PMPA, a $30 million payment to Capstone representing the first
installment for the acquisition of the Santo Domingo PMPA, a $300 million payment to New Gold for the acquisition of
the Blackwater Gold PMPA, a $4 million payment to Hudbay representing an additional payment for the Constancia
PMPA related to the Pampacancha deposit and a $3 million payment to Alexco for the acquisition of the Brewery
Creek Royalty; (ii) payments totaling $7 million for the acquisition of long-term equity investments; partially offset by
(iii) $130 million received as proceeds on the disposal of long-term equity investments.
Conclusion
In the opinion of management, the $696 million of cash and cash equivalents as at December 31, 2022, 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 32 and 33 of this MD&A,
as well as providing flexibility to acquire additional accretive mineral stream interests.
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - MANAGEMENT DISCUSSION & ANALYSIS [31]
Contractual Obligations and Contingencies1
Mineral Stream Interests
The following table summarizes the Company’s commitments to make per-ounce cash payments for gold, silver,
palladium and platinum 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
Term of
Agreement
Date of
Original
Contract
Gold
Silver Palladium Cobalt Platinum
Gold
Silver Palladium Cobalt Platinum
0%
25%
0%
0%
0% n/a $
4.43
n/a
n/a
n/a Life of Mine
24-Jul-07
50%
100%
0%
0%
0% $ 416 ² $
6.14 ²
n/a
n/a
n/a Life of Mine
8-Aug-12
75%
70%
0%
0%
0%
0%
0% $ 420
0%
0%
0% $ 400
0% 33.75%
0%
0%
0% n/a
variable
100%
³
0%
100%
⁸
0%
0%
³
0%
0%
0%
0%
0% $ 624
4.5%
0%
0% 18%
0% 42.4%
⁴
0%
0%
⁶
0% n/a
⁵
22% ⁸ 18% ⁵
0% 100%
0%
0%
0% n/a $
0% 100%
0%
0%
0% n/a $
n/a
n/a
20%
n/a
n/a
n/a
n/a
4.60
4.60
n/a
n/a
n/a Life of Mine 28-Feb-13
n/a
n/a
n/a
20 years 28-Feb-13
n/a
n/a
n/a Life of Mine
3-Nov-15
n/a
n/a
n/a Life of Mine 10-May-18
18%
n/a
n/a Life of Mine
16-Jul-18
n/a
⁵
18%
n/a
n/a
⁷
n/a Life of Mine 11-Jun-18
18%
Life of Mine 26-Jan-22
⁵
n/a
n/a
n/a
25 years 15-Oct-04
n/a
n/a
n/a Life of Mine
8-Dec-04
0% 100%
0%
0%
0% n/a $
11.54
n/a
n/a
n/a Life of Mine 23-Apr-07
Mineral Stream
Interests
Peñasquito
Constancia
Salobo
Sudbury
Antamina
San Dimas
Stillwater
Voisey's Bay
Marathon
Other
Los Filos
Zinkgruvan
Stratoni
Aljustrel
Minto
Neves-Corvo
0% 100%
0%
0%
0% n/a $
0% 100%
0%
0%
0% n/a
4.42
50%
n/a
n/a
n/a
n/a
n/a
n/a
50 years
5-Jun-07
50 years
5-Jun-07
100%
100%
⁹
0%
0%
0% 65%
$
4.39 ¹¹
n/a
n/a
n/a Life of Mine 20-Nov-08
Pascua-Lama
0%
¹⁰
25%
0%
0%
0% n/a $
¹¹
Copper World
100% 100%
0%
0%
0% $ 450 $
0% 12.5%
0%
0%
0% n/a $
3.90
3.90
4.00
n/a
n/a
n/a Life of Mine
8-Sep-09
n/a
n/a
n/a Life of Mine 10-Feb-10
n/a
n/a
n/a Life of Mine
n/a ¹³
10.5%
100%
0%
0%
0% 18%
18%
n/a
n/a
n/a Life of Mine
5-Nov-20
Loma de La Plata
¹²
Marmato
Cozamin
0%
¹⁴
Santo Domingo
100%
Fenix
Blackwater
Curipamba
Goose
Early Deposit
Toroparu
6%
¹⁷
8%
¹⁸
50%
¹⁹
4.15%
²⁰
²¹
10%
50%
¹⁴
0%
¹⁶
0%
50%
75% ²⁰
¹⁹
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0% n/a
¹⁵
0% 18%
0% 18%
⁵
0% 35%
⁵
0% 18%
0% 18%
⁵
⁵
50%
0%
0%
0% $ 400 $
Cotabambas
25%
100% ²²
0%
0%
0% $ 450 $
Kutcho
100%
²²
100%
0%
0%
0% 20%
10%
¹⁵
n/a
n/a
18%
18%
⁵
n/a
⁵
3.90
5.90
20%
n/a
n/a
n/a Life of Mine 11-Dec-20
n/a
n/a
n/a Life of Mine 24-Mar-21
n/a
n/a
n/a Life of Mine 15-Nov-21
n/a
n/a
n/a Life of Mine 13-Dec-21
n/a
n/a
n/a Life of Mine 17-Jan-22
n/a
n/a
n/a Life of Mine
8-Feb-22
n/a
n/a
n/a Life of Mine 11-Nov-13
n/a
n/a
n/a Life of Mine 21-Mar-16
n/a
n/a
n/a Life of Mine 14-Dec-17
1) The production payment is measured as either a fixed amount per unit 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 unit 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 unit cash payment will be reduced to the
prevailing market price, 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. Currently, the fixed gold to
silver exchange ratio is 70:1.
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% once the market value of metal 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% once the market value of cobalt delivered to Wheaton, net of the per pound cash payment, exceeds the initial upfront cash deposit. Additionally, on
each sale of cobalt, the Company is committed to pay a variable commission depending on the market price of cobalt.
8) Once the Company has received 150,000 ounces of gold and 120,000 ounces of platinum under the Marathon PMPA, the attributable gold and platinum production will be
reduced to 67% and 15%, respectively.
9) Wheaton only has the rights to silver contained in concentrate containing less than 15% copper at the Aljustrel mine.
10) The Company is committed to acquire 100% of the first 30,000 ounces of gold produced per annum and 50% thereafter.
11) Effective January 12, 2023, the cash payment per ounce of gold and silver delivered was at 90% of the spot price until February 28, 2023. The parties are currently in
discussions in connection with a possible restructuring of the Minto PMPA and as a result, the cash payment per ounce of gold delivered will be maintained at 90% during
the negotiation period, with the production payment for silver reverting to the price under the existing Minto PMPA. In the event that the parties are unable to agree to terms
for the restructuring, the production payment for gold will remain as set out in the existing Minto PMPA, being 65% of spot price of gold.
12) Copper World Complex (formerly referred to as Rosemont in this MD&A).
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 2022 ANNUAL REPORT - MANAGEMENT DISCUSSION & ANALYSIS [32]
13) Terms of the agreement not yet finalized.
14) Once Wheaton has received 310,000 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 5.25% and 50%, respectively.
15) 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.
16) Once Wheaton has received 10 million ounces under the Cozamin PMPA, the Company’s attributable silver production will be reduced to 33% of silver production for the
life of the mine.
17) Once the Company has received 285,000 ounces of gold under the Santo Domingo PMPA, the Company’s attributable gold production will be reduced to 67%.
18) Once the Company has received 90,000 ounces of gold under the Fenix PMPA, the Company attributable gold production will be reduced to 4% until 140,000 ounces have
been delivered, after which the stream drops to 3.5%.
19) Once the Company has received 279,908 ounces of gold under the Blackwater gold PMPA, the attributable gold production will be reduced to 4%. Once the Company has
received 17.8 million ounces of silver under the Blackwater silver PMPA, the attributable silver production will be reduced to 33%.
20) Once the Company has received 145,000 ounces of gold under the Curipamba PMPA, the attributable gold production will be reduced to 33%, and once the Company has
received 4.6 million ounces of silver, the attributable silver production will be reduced to 50%.
21) The Company is committed to purchase 4.15% of Goose gold production until 130,000 ounces are delivered to the Company, thereafter 2.15% of Goose gold production
until 200,000 ounces are delivered to the Company and 1.5% of Goose gold production thereafter for the life of mine.
22) Once 90 million silver equivalent ounces attributable to Wheaton have been produced under the Cotabambas PMPA, the attributable production will decrease to 16.67% of
gold production and 66.67% of silver production for the life of mine.
Other Contractual Obligations and Contingencies
Projected Payment Dates 1
2023
2024 - 2025
2026 - 2027
After 2027
Total
-
-
76,000
-
552,000
-
70,500
59,061
30,375
62,500
-
1,000
-
876
$
-
-
46,000
260,000
-
-
70,500
88,591
131,625
-
138,000
-
29,000
1,178
$
-
-
-
-
-
-
-
-
-
-
-
-
29,000
-
$
231,150
32,400
-
-
-
25,000
-
-
-
-
-
126,000
-
-
$
231,150
32,400
122,000
260,000
552,000
25,000
141,000
147,652
162,000
62,500
138,000
127,000
58,000
2,054
(in thousands)
Payments for mineral
stream interests
$
Copper World 2
Loma de La Plata
Marmato
Santo Domingo
Salobo 3
Fenix Gold
Blackwater
Marathon
Curipamba
Goose
Payments for early
deposit mineral
stream interest
Toroparu
Cotabambas
Kutcho
Leases liabilities
Total contractual
obligations
$
852,312
$
764,894
$
29,000
$
414,550
$ 2,060,756
1) Projected payment date based on management estimate. Dates may be updated in the future as additional information is received.
2) Copper World Complex (formerly referred to as Rosemont in this MD&A). Figure includes contingent transaction costs of $1 million.
3) As more fully explained on the following page, assuming the Salobo III expansion project results in throughput being expanded beyond 35 Mtpa by January 1, 2024, the
Company would expect to pay an expansion payment of $552 million.
Copper World Complex
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 Copper World Complex (formerly referred
to as Rosemont in this MD&A) and other customary conditions and the balance of $180 million being advanced once
project costs incurred on the Copper World Complex exceed $98 million and certain other customary conditions.
Under the Copper World Complex 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.
As per Hudbay’s press release of May 12, 2022, the Ninth Circuit affirmed the U.S. District Court for Arizona’s
previous decision to vacate and remand the Final Record of Decision for the Rosemont deposit within the Copper
World Complex in Arizona. This decision does not impact the development of deposits within the Copper World
Complex on private lands.
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - MANAGEMENT DISCUSSION & ANALYSIS [33]
Loma de La Plata
Under the terms of 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
Under the terms of the Marmato PMPA, the Company is committed to pay Aris Mining total upfront cash payments of
$110 million. Of this amount, $34 million was paid on April 15, 2021; $4 million was paid on February 28, 2022; and
the remaining amount is payable during the construction of the Marmato Lower Mine development portion of the
Marmato mine, subject to customary conditions. Under the amended terms of the Marmato PMPA, the Company is
committed to pay Aris Mining additional upfront cash consideration of $65 million, $15 million of which was paid to
Aris Mining on April 11, 2022 and the remaining $50 million is payable during the construction and development of
the Lower Mine.
Santo Domingo
Under the terms of the Santo Domingo PMPA, the Company is committed to pay Capstone total upfront cash
payments of $290 million, $30 million of which was paid on April 21, 2021 and the remaining portion of which is
payable during the construction of the Santo Domingo project, subject to customary conditions being satisfied,
including Capstone attaining sufficient financing to cover total expected capital expenditures.
Salobo
The Salobo mine historically had 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 reports the Salobo Expansion successfully commenced at the end of 2022. The
project consists of two lines, which will increase the mill throughput by 50%, the first of which started up in the fourth
quarter of 2022 and the second expected to start in the first quarter of 2023.
Subsequent to year end, Wheaton and Vale agreed to amend the Salobo PMPA (“Amended Salobo PMPA”) to adjust
the expansion payment terms. If actual throughput is expanded above 32 Mtpa by January 1, 2031, then under the
terms of the Amended Salobo PMPA, Wheaton will be required to make additional set payments to Vale based on the
size of the expansion and the timing of completion. The set payments range from a total of $283 million if throughput
is expanded beyond 32 Mtpa by January 1, 2031, to up to $552 million if throughput is expanded beyond 35 Mtpa by
January 1, 2024. In addition, Wheaton will be required to make annual payments of between $5.1 million to $8.5
million for a 10-year period following payment of the expansion payments if the Salobo mine implements a high-grade
mine plan.
Fenix
Under the terms of the Fenix PMPA, the Company is committed to pay total cash consideration of $50 million, of
which $25 million was paid on March 25, 2022. The remaining $25 million is payable subject to Rio2’s receipt of its
Environmental Impact Assessment for the Fenix Project, and certain other conditions.
On June 28, 2022, Rio2 provided an update on the Fenix Gold environmental assessment process. The
Environmental Assessment Service (“SEA”) published the Consolidation Evaluation Report with the recommendation
to reject the EIA as it has been alleged that Rio2 has not provided enough information during the evaluation process
to eliminate adverse impacts over the chinchilla, guanaco, and vicuña. On July 5, 2022, Rio2 announced that the
Regional Evaluation Commission has voted to not approve the EIA. On September 7, 2022, Rio2 announced that on
review of the Environmental Qualification Resolution (“RCA”), Rio2 identified numerous discrepancies with factual
and procedural matters in the RCA and Rio2 has filed an administrative appeal on August 31, 2022. In parallel with
the administrative appeal process, Rio2 indicate that they will work closely with regional authorities to address any
remaining concerns. On September 7, 2022, Rio2 stated that the estimated timing for obtaining EIA approval is
approximately one and a half to two years.
The Company’s management has determined that no indicator of impairment existed as of the balance sheet date
and will continue to monitor Rio2’s response to the Regional Evaluation Commission decision.
Blackwater
Under the terms of the Blackwater Silver PMPA, the Company is committed to pay total upfront consideration of $141
million, which is payable in four equal installments during the construction of the Blackwater Project, subject to
customary conditions being satisfied.
Marathon
Under the terms of the Marathon PMPA, the Company is committed to pay total upfront cash consideration of $178
million (Cdn$240 million), $16 million (Cdn$20 million) of which was paid on March 31, 2022 and $15 million (Cdn$20
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - MANAGEMENT DISCUSSION & ANALYSIS [34]
million) was paid on September 7, 2022. The remainder is to be paid in four staged installments during construction,
subject to various customary conditions being satisfied.
Curipamba
Under the terms of the Curipamba PMPA, the Company is committed to pay total upfront cash consideration of
$175.5 million, $13 million of which is available pre-construction and $500,000 of which will be paid to support certain
local community development initiatives around the Curipamba Project. The initial payment of $13 million was paid on
December 6, 2022. The remainder will be payable in four staged installments during construction, subject to various
customary conditions being satisfied.
Goose
Under the terms of the Goose PMPA, the Company is committed to pay total upfront cash consideration of $125
million in four equal installments during construction of the Goose Project, subject to customary conditions. The initial
payment of $31.25 million was paid on September 28, 2022 and the second installment of $31.25 million was paid on
December 6, 2022.
Toroparu
Under the terms of the Toroparu Early Deposit Agreement, the Company is committed to pay a subsidiary of Aris
Mining, an additional $138 million, payable on an installment basis to partially fund construction of the mine. Aris
Mining is to deliver certain feasibility documentation. Prior to the delivery of this feasibility documentation, Wheaton
may elect to (i) not proceed with the agreement or (ii) 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 option (i) is chosen,
Wheaton will be entitled to a return of the amounts advanced less $2 million. If Wheaton elects option (ii), Aris Mining
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.
Cotabambas
Under the terms of the Cotabambas Early Deposit Agreement, the Company is committed to pay Panoro a total cash
consideration of $140 million, of which $13 million has been paid to date. Once certain conditions have been met, the
Company will advance an additional $1 million to Panoro. 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
Under the terms of 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.
Taxes - Canada Revenue Agency – 2013 to 2016 Taxation Years - Domestic Reassessments 1
The Company received Notices of Reassessment in 2018, 2019, and 2022 for the 2013 to 2016 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 Company expects the Domestic Reassessments to have assessed tax, interest and other penalties of
approximately $2 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.
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.
1 The assessment by management of the expected impact of the Domestic Reassessments on the Company is “forward-looking
information”. 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 2022 ANNUAL REPORT - MANAGEMENT DISCUSSION & ANALYSIS [35]
Under the terms of the settlement with the CRA of the transfer pricing dispute relating to the 2005 to 2010 taxation
years (the “CRA Settlement”), income earned outside of Canada by the Company’s foreign subsidiaries will not be
subject to 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. The CRA is not restricted
under the terms of the CRA Settlement from issuing reassessments on some basis other than transfer pricing which
could result in some or all of the income of the Company’s foreign subsidiaries being subject to tax in Canada.
It is not known or determinable by the Company when the currently 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 those 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 the current or prior periods, 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, 2022, the Company received proceeds of $11 million from the exercise of
493,129 share purchase options at a weighted average exercise price of Cdn$28.76 per option. During the year
ended December 31, 2021, the Company received proceeds of $8 million from the exercise of 398,880 share
purchase options at a weighted average exercise price of Cdn$24.96 per option.
During the year ended December 31, 2022, the Company released 87,838 RSUs, as compared to 116,880 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 three months ended December 31,
2022, there were 192,351 common shares issued under the DRIP (twelve months - 873,607). During the three
months ended December 31, 2021, there were 254,600 common shares issued under the DRIP (twelve months -
889,798).
As of March 9, 2023, there were 452,318,526 outstanding common shares, 1,477,000 share purchase options and
349,916 restricted share units. The 10,000,000 share purchase warrants expired on February 28, 2023 unexercised.
At the Market Equity Program
The Company has 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. 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.
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, 2022, 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) 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. 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.
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - MANAGEMENT DISCUSSION & ANALYSIS [36]
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 Markets: Changes in the market price of commodities that we purchase under our
PMPAs and in the commodities markets will affect the our profitability
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 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 Loma de La
Plata zone of the Navidad project, gold at the Toroparu project, Marmato mine, Fenix project, Blackwater Project and
Goose 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.
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 no direct involvement in the operation of the Mining
Operations and as a result the activities of third-party operators at these Mining Operations could negatively
affect the cash flows generated by the Company
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.
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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.
Taxes: New or changed tax legislation, or changes to the interpretation of existing tax legislation or
jurisprudence, could impact the profitability of the Company
The majority of the Company’s income generating activities is conducted by its 100% owned subsidiary, Wheaton
Precious Metals International Ltd., which operates in the Cayman Islands and is not subject to 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.
On December 20, 2021, the Organisation for Economic Co-operation and Development (“OECD”) issued model rules
for the Pillar Two initiative (“Pillar Two”) which provided a framework for the imposition, by individual countries, of a
15% global minimum tax on the adjusted financial statement income of large multinational companies, such as the
Company. On April 7, 2022, as part of the Canadian Federal Budget, the Canadian federal government confirmed its
commitment to implementing in 2023 a 15% global minimum tax in line with Pillar Two, which would seek to apply a
15% minimum tax on the Company’s non-Canadian subsidiaries. If legislation is released in a jurisdiction in which
the Company operates, then management can fully evaluate the impact to the Company. Nevertheless, while
awaiting legislation, the Company continues to evaluate the OECD model rules, guidance and clarifications as
published. If such rules are enacted in a jurisdiction in which the Company operates, it could materially increase the
amount of taxes the Company owes thereby negatively affecting the results of operations and cash flows from
operations.
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.
Counterparty Credit and Liquidity: The inability of the Company’s counterparties to perform their obligations
under agreements with the Company or the inability of the Company to meet operating expenditure
requirements could adversely impact the Company’s cash flows
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; (vi) through companies that owe a refund of the Refundable Deposit under the terms of the
respective PMPA; and (vii) 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
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - MANAGEMENT DISCUSSION & ANALYSIS [38]
operations could be adversely impacted and the trading price of the Company’s securities 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 40 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 counterparties 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
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, 2022, in 2019 the SAT issued
reassessments for the 2010 to 2012 tax years in the amount of $253.4 million inclusive of interest, inflation, and
penalties. In 2021, the SAT also issued a reassessment against PEM for the 2013 tax year in the total amount of
$139.7 million. The major items in the reassessments include determination of revenue based on silver spot market
prices, denial of the deductibility of interest expense and service fees, SAT technical error related to double counting
of taxes, and interest and penalties.
First Majestic indicates in its MD&A for the period ended December 31, 2022, that it continues to defend the APA in
the Mexican legal proceedings, and also requested resolution of the transfer price dispute pursuant to the Mutual
Agreement Procedure (“MAP”), under the relevant avoidance of double taxation treaties, between the competent tax
authorities of Mexico, Canada, Luxembourg and Barbados.
First Majestic also indicates that SAT has frozen a PEM bank account with cumulative funds of $79.1 million, as a
guarantee against certain disputed tax assessments, with these balances consisting of VAT refunds that PEM
received which were previously withheld by the tax authority.
First Majestic has indicated that it continues to pursue all available domestic and international remedies under the
laws of Mexico and under the relevant tax treaties. In September 2020, First Majestic was served with a decision
made by the Mexican Federal Tax Court on Administrative Matters ("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.
Since two writs of certiorari were filed before the Mexican Supreme Court of Justice, on April 15, 2021, the Plenary of
the Supreme Court i) admitted one of those writs, ii) requested the Circuit Court to send the appeal file and iii)
assigned such writ to the Second Chamber of the Supreme Court for issuing the corresponding decision. Both writs
of certiorari were withdrawn in December 2022. The challenge filed by First Majestic has been returned to the
Mexican Circuit Courts and a decision may be issued within the first quarter of 2023.
First Majestic, in addition to challenging the SAT's actions in the Mexican courts, is also pursuing resolution of its
dispute through Mexico's Federal Taxpayer Defense Attorney's Office (known as "PRODECON").
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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 enforcing 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 2010-2019 would be
approximately $257.3 million, before interest or penalties.
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”). 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 that in December 2021,
Vale and Xikrin do Cateté Indigenous community signed an extrajudicial agreement for social and economic
compensation to these communities. The agreement with Xikrin do Cateté was ratified by the Court of Marabá and it
is in a regular execution with the transfer of funds by Vale (BLR 1.3M/M) and application by the indigenous
community. The Xikrin Trincheira Bacajá Indigenous Community presented a request for clarification against the
decision that extinguished the action in relation to this community, alleging that the closing of the case disagreed with
the legal and procedural provisions applied to the case. The Public Prosecutor's Office presented a request for
clarification to the Court of Marabá regarding the non-analysis of the request for the conviction of Vale and Salobo
Metais to execute a “Degraded Area Recovery Program”, since it was a request that was not the subject of the
agreement signed between Vale and the Xikrin do Cateté Indigenous Community. Vale awaits to be subpoenaed
from the Court of Marabá to present the counterarguments to the requests for clarifications made by the Xikrin
Trincheira Bacajá Indigenous Community and the Public Prosecutor, reaffirming the regularity of the agreement
entered; the inexistence of impacts from the Salobo mine undertaking on the Xikrin Trincheira Bacajá Indigenous
Community and the inexistence of mandatory implementation of the reparation program indicated by the Public
Prosecutor due to the non-existence of the alleged damage. In August 2022, the Xikrin Indigenous Community of TI
Bacajá filed an appeal against the decision, not agreeing with the terms presented by the judge. Vale is summoned to
present its counterarguments, reiterating the terms and theses already presented in the defense. 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: If mine operators or counterparties are unwilling or unable
to fulfill their obligations to the Company, the Company’s cash flows could be adversely impacted
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, 2022 were 35%
of the Company’s total revenue;
The counterparty obligations under the Antamina PMPA is guaranteed by the parent company Glencore and
its subsidiary. Total revenues relative to Glencore during the year ended December 31, 2022 were 14% of
the Company’s total revenue (inclusive of revenues from the previously owned Yauliyacu PMPA); and
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, 2022 were 16% 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.
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In particular, total revenues relative to PMPAs with Vale were 35% and 32% of the Company’s total revenue for the
years ended December 31, 2022 and December 31, 2021, respectively; operating cash flows from the PMPAs with
Vale represented approximately 39% and 34% of the Company’s operating cash flows for the years ended December
31, 2022 and December 31, 2021, respectively; and as at December 31, 2022, the PMPAs with Vale proven and
probable precious metal and cobalt reserves represented approximately 50% of the Company’s total proven and
probable GEO reserves, measured and indicated precious metals and cobalt resources represented approximately
23% of the Company’s GEO measured and indicated precious metals and cobalt resources and inferred precious
metals and cobalt resources represented approximately 18% 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 2023 and average five year
forecasted gold equivalent production for 2023-2027 would be lowered by 38% 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 communities of Xikrin do Cateté and Xikrin do Bacajá
in Brazil (“Indigenous Associations”) 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
and operation of the Salobo Mine. Vale has reported that the Indigenous 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 Itacaiúnas 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 for each association until the defendants conclude the studies. Vale
notes that 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. Vale also notes that a
subsequent decision of the court determined the inclusion of the Indigenous community of Xikrin do Bacajá in the scope
of the studies. Vale has reported that in December 2021 it entered into an extrajudicial agreement with the Indigenous
Associations, pursuant to which Vale agreed to provide certain social and economic compensation to these
communities. Vale notes that the December 2021 settlement agreement remains subject to approval by the court of
Marabá. Once approved by the court, Vale has indicated that this settlement agreement is expected to terminate the
Salobo litigation. 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 – Counterparty Credit and Liquidity Risk”, “Risks Relating to the Company –
Security Over Underlying Assets”, “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: If the Company and its subsidiaries are unable to meet debt repayment
obligations or covenants, the Company’s business and operations could be adversely impacted
As of December 31, 2022, the Company had no debt outstanding under the Revolving Facility. Any future draws on
the Revolving Facility will require the Company 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 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
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - MANAGEMENT DISCUSSION & ANALYSIS [41]
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. See “Description of the Business – Operations – Amended Revolving Credit Facility” in the Annual
Information Form for further details. 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: The Company’s hedging policy may not reduce the risks associated with foreign exchange, interest
rate or commodity fluctuations, which could adversely impact the Company’s cash flows
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 competition for PMPAs and similar transactions could adversely impact the Company’s
ability to acquire desirable PMPAs
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 for PMPAs and similar
transactions could materially adversely affect the Company’s prospects for entering into additional PMPAs in
the future. In addition, competition from companies with substantial resources could impact the Company’s ability to
acquire PMPAs and similar transactions at acceptable valuations, which could adversely impact the Company’s cash
flows, results of operations and financial condition.
Litigation Claims and Proceedings: Litigation against the Company may result in the diversion of
management and resources and substantial costs to the Company, impacting the Company’s financial
position
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 securities class action complaints in
the United States and in Canada. See “Description of the Business – Litigation” in the Annual Information Form.
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.
Security Over Underlying Assets: The Company’s security interests in its PMPAs may not be enforceable
which may have a material adverse effect on the Company
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
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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: The Company’s acquisition strategy for PMPAs may not be successful, which may
have a material adverse effect on the Company
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.
As part of the Company’s portfolio optimization, the Company may consider opportunities to restructure or dispose of
PMPAs where it believes such a restructuring or disposition may provide a long-term benefit to the Company, even if
such restructuring or disposition may reduce near-term operating revenues, reduced mineral reserves and/or mineral
resources or result in the Company incurring transaction related costs. In connection with a restructuring or
disposition, the Company may receive different forms of consideration, including long-term equity investments in
other companies.
The Company may enter into one or more acquisitions, restructurings, dispositions or other streaming transactions at
any time.
Impact of Epidemics: The COVID-19 pandemic and similar public health emergencies may significantly
adversely impact Mining Operations and the Company
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 COVID-19 virus pandemic that
commenced in early 2020. 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.
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - MANAGEMENT DISCUSSION & ANALYSIS [43]
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.
As at the date of this MD&A, all of the Company’s partners’ operations are currently running, though we are closely
monitoring and still 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 should there be a resurgence in 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.
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, including, but not limited to, risks relating to the Company such
as risks related to commodity prices and 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.
Market Price of the Common Shares: The trading price of the Common Shares fluctuates and is often
unrelated to the operating performance of the Company
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, 2022, the trading price of the Common Shares has fluctuated as follows:
Exchange
TSX
NYSE
LSE
Low
C$39.11
$29.08
£25.40
High
C$64.70
$51.71
£39.95
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.
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 was previously the subject of
litigation in securities class action complaints in the United States and in Canada. See “Description of the Business –
Litigation” in the Annual Information Form.
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Multiple Listings: 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.
Trading: The Common Shares may be suspended from trading which will limit shareholders ability to
dispose of Common Shares
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.
ATM Program: The Company may not raise the anticipated proceeds from the ATM Program and may not use
any proceeds effectively
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.
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Management of the Company will have broad discretion in the application of the net proceeds from the ATM Program
if any 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.
Long-Term Equity Investments: The Company’s long-term equity investments are exposed to equity price
risk as well as the risks in each investee Company, and the Company may lose the value of such
investments
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, including the loss of the
full value of these investments. The Company generally does not actively trade these investments. See “Description
of the Business – Long Term Investments” in the Annual Information Form.
Interest Rates: Fluctuations in interest rates applicable to the Company could have a material adverse effect
on the Company’s results of operations and cash flows
The Company is exposed to interest rate risk on its outstanding borrowings and short-term investments. Presently,
the Company has no outstanding borrowings, and historically all borrowings have been 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, 2022, the weighted average effective interest rate paid by the Company on
its outstanding borrowings was Nil (2021 – 1.17%).
During the years ended December 31, 2022 and December 31, 2021, a fluctuation in interest rates of 100 basis
points (1 percent) would have impacted the amount of interest expensed by approximately $Nil and $0.2 million,
respectively. In addition, during the year ended December 31, 2022, central banks in Canada and the United States
increased borrowing rates by over 400 basis points, and such rates may be held for an extended period of time and
increase further. 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 Company’s ability to pay dividends is dependent on the Company’s financial condition
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.
Key Personnel: The Company may experience difficulty in recruiting and retaining qualified personnel and
we are dependent upon our personnel being able to perform their jobs in a safe and healthy work
environment, free from discrimination
The Company and its subsidiaries have an aggregate of 42 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 and other key employees who are highly skilled and experienced. If Wheaton loses key executives or
other key employees or Wheaton fails to develop adequate succession plans, or if Wheaton fails to attract, hire, retain
and develop qualified employees, including executives, it could impact its business, financial condition, results of
operations and cash flows.
Wheaton is committed to creating and maintaining a work environment in which each employee, officer and director is
treated with professional courtesy, dignity and respect in a fair and non-discriminatory manner. Wheaton is also
committed to supporting and respecting human rights in its operations. However, Wheaton’s policies and procedures
may not prevent or detect all potential harmful workplace situations. If Wheaton is unable to maintain a respectful and
non-discriminatory workplace, it could impact the Company’s ability to attract and retain skilled employees, including
executives.
Wheaton’s operations are dependent upon its workforce being able to safely perform their jobs. If Wheaton’s
employees are unable to perform their jobs for any reason (including due to physical or psychological illness or
injuries related to an unsafe or unhealthy workplace), it may adversely impact employee engagement, performance
and productivity, result in legal or human rights claims, or damage Wheaton’s reputation. This could impact
Wheaton’s business, financial condition, results of operations, cash flows, or the trading price of the Company’s
securities.
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Activist Shareholders: Campaigns by activist shareholders could adversely impact the Company’s business
and operations
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, environmental, social and
governance 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.
Climate Change: The Company’s operations may be adversely affected by physical risks related to climate
change, including acute weather events
Wheaton’s own operations are exposed to acute and chronic physical climate-related risks as a result of geographical
location. Wheaton has sought to reduce its environmental footprint and located its operations in appropriate facilities,
however acute weather events such as higher intensity storms, flooding and fire as well as chronic weather and
physical conditions such as rising temperatures and changes in precipitation patterns may disrupt operations. Acute
weather events may result in extended loss of power, global supply route disruption and reduced worker productivity
related to safety protocols at our operations and worker transportation to our operations. Wheaton has developed and
implemented a business continuity plan in the event of an acute weather event, however this plan may not fully
mitigate the risks associated with such acute weather event, and Wheaton’s operations may be impacted (including
the ability of its employees to travel to the Mining Operations) or have to be relocated, which could have an adverse
effect on the Company’s business and results of operations.
To the extent that climate change adversely affects Wheaton's business and financial position, it may also have the
effect of heightening many of the other risk factors for the Company, including, but not limited to, risks related to
commodity prices and markets, counterparty credit and liquidity risk, mine operator and counterparty concentration,
Wheaton's indebtedness and guarantees, competition, litigation claims and proceedings, Wheaton's ability to enforce
security interests, acquisition strategy, market price of Common Shares, equity price risk associated with the
Company's equity investments, interest rate risk, dividends, industry analysts, reputational damage 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 and availability of infrastructure and
employees.
In addition, the Company’s Mining Operations are subject to climate change risk factors, as more fully described in
the Company’s Annual Information Form.
Climate Change: The Company’s operations are subject to risks related to transitioning to a low-carbon
economy
Both climate change and the anticipated transition to a low-carbon economy are expected to impact Wheaton.
Governments are moving to introduce and implement new and more stringent climate change legislation with respect
to disclosure. While some of the costs associated with reducing emissions can be offset by increased energy
efficiency and technological innovation, Wheaton expects that continued efforts to address climate change, including
complying with enhanced regulatory requirements, may result in increased costs for Wheaton.
Investors are increasingly seeking enhanced disclosure on the risks, challenges, governance implications and
financial impacts of climate change faced by companies. If Wheaton is unable to respond to such disclosure
requirements, or meet the expectations of investors and other stakeholders, it could have a material adverse effect on
Wheaton’s ability to access, and the costs of accessing, debt and equity markets for capital required for its
operations.
Shifts in demand and supply of commodities, products and services as a result of evolving consumer and investor
sentiments will create challenging market conditions. Changes in consumer demand for metals and minerals that are
required in a low-carbon economy or increases or decreases in commodity prices and markets may also impact the
Company’s ability acquire accretive PMPAs or to sell precious metals or cobalt that it acquires. There may be
increased competition for PMPAs on Mining Operations that are considered to be low carbon emitting or less subject
to climate-related physical risks, which may impact the Company’s ability to enter into desirable PMPAs or similar
transactions or to acquire the capital necessary to fund its PMPAs. These impacts could have a material adverse
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effect on the Company’s business and financial position, the Company’s reputation and the trading price of the
Company’s securities. In addition, market perceptions of the mining sector and the role of particular metals or
minerals in a transition to a low-carbon economy remain uncertain. There could be a material adverse effect on the
Company’s business and financial position, the Company’s reputation and the trading price of the Company’s
securities where there is significant negative market perception of the mining sector.
In connection with Wheaton’s ESG strategy, Wheaton has adopted the Climate Change and Environmental
Commitments. These Climate Change and Environmental Commitments may not be achievable or may not be
achieved partially or at all, by Wheaton. Should the Commitments not be achieved, it could have an adverse effect
on the Company’s business and financial position, the Company’s reputation and the trading price of the Company’s
securities. In addition, the Revolving Facility interest rate paid on drawn amounts and standby fees will be adjusted
based upon the Company’s performance in three sustainability-related areas, including in respect of the Company’s
attributable emissions from Mining Operations covered by science-based emissions targets. As such, a failure to
meet our Climate Change and Environmental Commitments can result in increased costs for Wheaton and impact our
results of operations.
Further, as there is currently no defined methodology for calculating financed emissions for metals streaming and
royalty companies, Wheaton has developed its own methodology, using an attribution factor based on Wheaton’s
attributable production relative to the overall production of the Mining Operations in a given year. This methodology
relies upon the calculations and estimates of emissions by the Mining Operations, which is necessarily imprecise
because it depends upon the judgment of the individuals who operate the Mining Operations as well as those who
review and assess the emissions information. As a result, no assurance can be given that the calculated financed
emissions are fully accurate.
If Wheaton does not respond quickly enough to meet accepted climate change reduction targets, Wheaton may be
subject to increased risks of climate litigation. Climate-related impact litigation has been advanced in Canada, the
United States and Europe, and may be broadened if there are failures to meet long-term reduction targets. Adverse
publicity or climate-related litigation could result in significant costs, which could have a material adverse effect on the
Company’s business and financial position, the Company’s reputation and the trading price of the Company’s
securities.
Reputation Damage: Reputational loss could have a material adverse effect on the Company’s business and
operations
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, growth prospects and the trading price of the Company’s securities.
Industry Analysts: The Company’s trading price and volume may be negatively impacted by the views
expressed by 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, issue opinion which are not in line with the Board of Director’s view or not even cover the
Company in their publications and reports. Such actions by analysts could have an adverse impact on the trading
price and volume of the Common Shares.
Defects and Impairments: A defect or impairment in a PMPA may defeat or impair the claim of the Company
which may have a material adverse effect on the Company
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: Compromises or breaches of the Company’s data or information
systems could result in material losses to the Company
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 information systems and 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.
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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,
applications 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 and remediation expenditures.
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,
unauthorized transactions, inappropriate disclosures, 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 $5.8 billion at December 31,
2022, inclusive of early deposit agreements. 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 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
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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
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. Please refer to page 25 of this MD&A for details of the
indicators of impairment (impairment reversal) during the years ended December 31, 2022 and December 31, 2021,
respectively.
The price of precious metals and cobalt has been 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. In
addition, the Company also monitors the resource and reserve levels and operational developments at the
counterparties for indications of impairment and 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.
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.
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.
Future Changes to Accounting Policies
The International Accounting Standards Board ("IASB") has issued the following new or amended standards:
Amendment to IAS 12 - Deferred Tax related to Assets and Liabilities arising from a Single Transaction
The amendments to IAS 12 clarify that the initial recognition exemption does not apply to transactions in which equal
amounts of deductible and taxable temporary differences arise on initial recognition. The amendments are effective
for annual reporting periods beginning on or after January 1, 2023. Early application of the amendments is permitted.
The amendments apply to transactions that occur on or after the beginning of the earliest comparative period
presented. In addition, at the beginning of the earliest comparative period the following would be recognized:
•
a deferred tax asset to the extent that it is probable that taxable profit will be available against which the
deductible temporary difference can be utilized and a deferred tax liability for all deductible and taxable
temporary differences associated with right-of-use assets and lease liabilities; and
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - MANAGEMENT DISCUSSION & ANALYSIS [50]
•
the cumulative effect of initially applying the amendments as an adjustment to the opening balance of
retained earnings (or other component of equity, as appropriate) at that date.
The implementation of this amendment is not expected to have a material impact on the Company.
Amendment to IAS 1- Presentation of Financial statements
The amendments to IAS 1, clarify the presentation of liabilities. The classification of liabilities as current or non-
current is based on contractual rights that are in existence at the end of the reporting period and is affected by
expectations about whether an entity will exercise its right to defer settlement. A liability not due over the next twelve
months is classified as non-current even if management intends or expects to settle the liability within twelve months.
The amendment also introduces a definition of ‘settlement’ to make clear that settlement refers to the transfer of
cash, equity instruments, other assets, or services to the counterparty. The amendment issued in October 2022 also
clarifies how conditions with which an entity must comply within twelve months after the reporting period affect the
classification of a liability. Covenants to be compiled with after the reporting date do not affect the classification of
debt as current or non-current at the reporting date. The amendments are effective for annual reporting periods
beginning on or after January 1, 2024. The implementation of this amendment is not expected to have a material
impact on the Company.
Amendments to IAS 1 and IFRS Practice Statement 2 – Disclosure of Accounting policies
The amendments require that an entity discloses its material accounting policies, instead of its significant accounting
policies. Further amendments explain how an entity can identify a material accounting policy. Examples of when an
accounting policy is likely to be material are added. To support the amendment, the IASB has also developed
guidance and examples to explain and demonstrate the application of the ‘four-step materiality process’ described in
IFRS Practice Statement 2. The amendments are effective for annual reporting periods beginning on or after January
1, 2023. The Company is currently evaluating the impact of the amendment on its financial statements.
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - MANAGEMENT DISCUSSION & ANALYSIS [51]
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 and cobalt on a per pound basis; and (iv) cash operating
margin.
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 (reversals) (if any), 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).
Three Months Ended
December 31
Years Ended
December 31
(in thousands, except for per share amounts)
2022
2021
2022
2021
Net earnings
Add back (deduct):
$ 166,125 $ 291,822 $
669,126 $
754,885
Impairment charge (reversal)
Gain on disposal of Mineral Stream Interest
(Gain) loss on fair value adjustment of
1,719
(51,443)
(156,717)
-
(8,611)
(155,868)
(156,717)
-
share purchase warrants held
(67)
(290)
(Gain) loss on fair value adjustment of
convertible notes receivable
Income tax (expense) recovery recognized
in the Statement of Shareholders' Equity
Income tax (expense) recovery recognized
in the Statement of OCI
Income tax expense (recovery) resulting
from disposal of Mineral Stream Interest,
net of above
Other
-
-
(1,597)
974
1,033
1,380
4,143
2,101
(5,733)
1,811
(7,214)
(325)
(6,513)
(2,314)
(5,376)
-
-
(1,635)
2,404
(2,182)
-
(1,954)
Adjusted net earnings
$ 103,744 $ 132,232 $
504,912 $
592,079
Divided by:
Basic weighted average number of shares
outstanding
Diluted weighted average number of
shares outstanding
Equals:
452,070
450,614
451,570
450,138
452,778
451,570
452,344
451,170
Adjusted earnings per share - basic
Adjusted earnings per share - diluted
$
$
0.229 $
0.229 $
0.293 $
0.293 $
1.118 $
1.116 $
1.315
1.312
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - MANAGEMENT DISCUSSION & ANALYSIS [52]
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)
2022
2021
2022
2021
Cash generated by operating activities
$ 172,028 $ 195,290 $
743,424 $
845,145
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:
452,070
450,614
451,570
450,138
452,778
451,570
452,344
451,170
Operating cash flow per share - basic
Operating cash flow per share - diluted
$
$
0.381 $
0.380 $
0.433 $
0.432 $
1.646 $
1.643 $
1.878
1.873
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - MANAGEMENT DISCUSSION & ANALYSIS [53]
iii.
Average cash cost of gold, silver and palladium on a per ounce basis and cobalt on a per pound basis is
calculated by dividing the total cost of sales, less depletion, by the ounces or pounds 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 and cobalt on a per pound basis.
Three Months
Ended
December 31
Years Ended
December 31
(in thousands, except for gold and palladium ounces sold
and per unit amounts)
2022
2021
2022
2021
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
Total cash cost of cobalt sold
$ 114,870 $ 127,525 $
(53,139) (59,335)
499,573 $
(231,952)
542,740
(254,793)
$ 61,731 $ 68,190 $
267,621 $
287,947
$ 32,749 $ 37,550 $
24,674 27,993
1,213 1,580
3,095 1,067
138,468 $
115,058
5,687
8,408
143,272
132,151
8,384
4,140
Total cash cost of sales
$ 61,731 $ 68,190 $
267,621 $
287,947
Divided by:
Total gold ounces sold
Total silver ounces sold
Total palladium ounces sold
Total cobalt pounds sold
Equals:
68,996 79,622
4,935 5,116
3,396 4,641
228
187
293,234
21,570
15,076
1,038
312,465
22,860
19,344
886
Average cash cost of gold (per ounce)
Average cash cost of silver (per ounce)
Average cash cost of palladium (per ounce)
Average cash cost of cobalt (per pound)
475 $
$
5.00 $
$
$
357 $
$ 16.52 $
472 $
5.47 $
340 $
4.68 $
472 $
5.33 $
377 $
8.10 $
459
5.78
433
4.67
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - MANAGEMENT DISCUSSION & ANALYSIS [54]
iv.
Cash operating margin is calculated by subtracting the average cash cost of gold, silver and palladium on a
per ounce basis and cobalt on a per pound basis from the average realized selling price of gold, silver and
palladium on a per ounce basis and cobalt on a per pound 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
unit amounts)
Total sales:
Gold
Silver
Palladium
Cobalt
Divided by:
Total gold ounces sold
Total silver ounces sold
Total palladium ounces sold
Total cobalt pounds sold
Equals:
Three Months Ended
December 31
Years Ended
December 31
2022
2021
2022
2021
$ 119,051 $ 143,187 $ 529,698 $ 561,920
$ 106,175 $ 119,504 $ 471,003 $ 573,429
8,902 $ 32,160 $ 45,834
$
6,604 $ 32,192 $ 20,482
$
6,586 $
4,239 $
68,996
4,935
3,396
79,622 293,234
5,116 21,570
4,641 15,076
187
228
1,038
312,465
22,860
19,344
886
Average realized price of gold (per ounce)
Average realized price of silver (per ounce)
Average realized price of palladium (per ounce)
Average realized price of cobalt (per pound)
$
$
$
$
1,725 $
21.52 $
1,939 $
22.62 $
1,798 $
23.36 $
1,918 $
28.94 $
1,806 $
21.84 $
2,133 $
31.00 $
1,798
25.08
2,369
23.11
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)
Average cash cost of cobalt 1 (per pound)
Equals:
(475)
(5.00)
$
$
$
$
$
$
$ (16.52) $
(357)
(472) $
(5.47) $
(340) $
(4.68) $
(472)
(5.33)
$
$
$
(377)
(8.10) $
(459)
(5.78)
(433)
(4.67)
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
Cash operating margin per cobalt pound sold
$
As a percentage of realized price of cobalt
1,250 $
72%
16.52 $
77%
1,582 $
82%
6.10 $
27%
1,326 $
74%
17.89 $
77%
1,578 $
82%
24.26 $
84%
1,334 $
74%
16.51 $
76%
1,756 $
82%
22.90 $
74%
1,339
74%
19.30
77%
1,936
82%
18.44
80%
1) Refer to discussion on non-IFRS measure (iii) on page 54 of this MD&A.
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - MANAGEMENT DISCUSSION & ANALYSIS [55]
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 for the duration of 2023 equal to the dividend per
common share declared in the prior quarter. The declaration, timing, amount and payment of future dividends remain
at the discretion of the Board of Directors.
On March 9, 2023, the Board of Directors declared a dividend in the amount of $0.15 per common share, with this
dividend being payable to shareholders of record on March 24, 2023 and is expected to be distributed on or about
April 6, 2023. The Company has implemented a dividend reinvestment plan (“DRIP”) whereby shareholders can elect
to have dividends reinvested directly into additional Wheaton common shares based on 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, 2022.
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, 2022.
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, 2022.
There have been no changes in the Company’s internal control over financial reporting during the three months
ended December 31, 2022 that would materially affect, or is reasonably likely to materially affect, the Company’s
internal control over financial reporting.
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
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - MANAGEMENT DISCUSSION & ANALYSIS [56]
potential future 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, 2022, 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.
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - MANAGEMENT DISCUSSION & ANALYSIS [57]
Mineral Reserves Attributable to Wheaton Precious Metals (1,2,3,8,31)
December 31, 2022 (6)
Proven
Probable
Tonnage Grade Contained Tonnage Grade Contained Tonnage Grade Contained
Moz /
Mlbs
Proven & Probable
Moz /
Mlbs
Moz /
Mlbs
Mt g/t / %
Mt g/t / %
Mt g/t / %
Asset
Gold
Salobo (10)
Stillwater (13)
Constancia
Sudbury (11)
San Dimas (14)
Marmato (11,15)
Blackwater (11,27)
Toroparu (12,16)
Santo Domingo (11,25)
Marathon (11,28)
Curipamba (11,29)
Goose (11,30)
Kutcho (12)
Fenix (11,26)
Interest
75%
100%
50%
70%
25%
10.5%
8%
10%
100%
100%
50%
4.15%
100%
6%
Total Gold
Silver
Peñasquito (10)
Constancia
Antamina (10,11,18)
Copper
Copper-Zinc
Zinkgruvan
Zinc
Copper
Neves-Corvo
Copper
Zinc
Aljustrel (19)
San Dimas (14)
Cozamin (11,20)
Copper
Zinc
Los Filos
Marmato (11,15)
Copper World
Complex (21)
Rosemont
Blackwater (11,27)
Kutcho (12)
Curipamba (11,29)
Total Silver
Palladium
Stillwater (11,13)
Total Palladium
Platinum
Marathon (11,28)
Total Platinum
Cobalt
Voisey's Bay (11,22)
Total Cobalt
25%
100%
33.75%
100%
100%
100%
25%
50%
100%
100%
100%
50%
100%
75%
38.6
7.0
13.8 13.0
3.7 73.2
1.6 33.4
3.1 32.7
3.4 69.4
10.2 45.2
0.6 348.0
-
-
21.7
-
-
5.0
2.1 16.4
408.6
161.9
5.0
5.8
6.8 24.5
2.4 41.4
4.5%
0.3 10.5
22%
18.7
0.2
42.4%
5.5 0.12
188.8 0.40
10.0 0.36
231.3 0.07
8.4 0.50
0.6 4.42
0.2 4.31
19.3 0.74
3.0 1.10
65.4 0.08
85.1 0.07
1.6 2.83
0.3 5.54
6.8 0.37
3.1 0.52
645.5 0.34
50.3 0.37
29.2 0.05
22.1 0.26
0.4 3.02
3.0 3.07
0.5 0.80
9.7 0.98
326.9 0.03
32.6 0.06
1.7 2.23
0.4 6.29
10.6 0.39
3.8 0.47
2.43
0.12
0.50
0.13
0.08
0.03
0.46
0.10
0.17
0.19
0.14
0.06
0.08
0.05
4.55
834.3 0.35
60.2 0.37
260.5 0.07
30.4 0.33
1.0 3.87
3.3 3.16
19.8 0.74
12.7 1.00
392.3 0.04
117.7 0.07
3.2 2.52
0.8 5.97
17.4 0.38
6.9 0.49
7.06
0.60
0.05
0.19
0.04
0.30
0.01
0.31
0.34
0.06
0.12
0.09
0.13
0.06
9.35
26.1 38.0
3.1
462.6
31.9
45.8
53.0 32.0
3.1
58.4
54.6
5.9
79.1 34.0
3.1
521.0
8.7
5.8
8.6
1.7
3.3
7.5
14.8
6.5
-
-
3.5
1.1
66.2
30.1
5.4
3.1
244.0
0.10
0.10
0.13
0.13
14.1
14.1
24.9
8.0
17.9 15.0
6.4
8.6
63.6
7.4
31.7 14.1
5.6 66.0
0.1 38.9
18.1 33.3
18.9 61.8
25.3 44.2
0.4 264.7
5.4 45.6
0.7 44.5
7.1
5.3
96.5
28.1
108.0
4.6
3.0
5.8
10.6 30.1
2.5 49.7
1.5 10.6
7.2
0.2
7.5 0.12
9.3 68.9
1.7 33.6
21.2 33.2
22.3 62.9
35.5 44.5
1.0 315.3
5.4 45.6
0.7 44.5
6.7
6.1
118.2
30.2
516.6
166.5
4.6
5.8
17.4 27.9
4.9 45.7
1.8 10.6
25.9
0.2
13.0 0.12
12.0
0.1
19.4
37.6
35.9
3.2
8.0
1.0
22.1
4.8
10.4
0.9
10.2
4.0
245.1
0.50
0.50
0.04
0.04
19.1
19.1
December 31, 2021
Process
Recovery %
(7)
Proven & Probable
Tonnage Grade Contained
Moz /
Mlbs
Mt g/t / %
9.48
0.72
0.55
0.32
0.12
0.33
0.47
0.41
0.51
0.26
0.26
0.14
0.21
0.11
13.90
86.5
51.7
15.1
14.4
20.6
1.8
22.6
45.1
50.7
9.7
8.0
1.0
25.6
5.9
76.7
31.0
15.6
7.1
489.2
0.60
0.60
0.17
0.17
33.2
33.2
76%
69%
61%
75%
95%
90%
91%
89%
61%
71%
53%
93%
41%
75%
850.1 0.35
68.3 0.34
260.5 0.07
22.8 0.45
1.0 3.87
2.1 3.19
19.8 0.74
12.7 1.00
392.3 0.04
117.7 0.07
3.2 2.52
0.8 5.97
17.4 0.38
6.9 0.49
86%
70%
90.5 33.8
3.1
521.0
75%
75%
83%
70%
24%
30%
26%
94%
86%
86%
10%
34%
76%
61%
46%
63%
72.5
7.6
40.9 14.0
10.3 85.6
2.2 32.3
25.1 31.4
24.8 63.1
37.2 47.1
1.0 315.3
5.4 45.6
0.7 44.5
8.5
6.9
104.2
19.7
516.6
166.5
4.6
5.8
17.4 27.9
4.9 45.7
90%
2.0
9.7
84%
25.9
0.2
84%
11.4 0.12
9.60
0.74
0.55
0.33
0.12
0.21
0.47
0.41
0.51
0.26
0.26
0.14
0.21
0.11
13.93
98.5
51.7
17.7
18.4
28.3
2.3
25.3
50.2
56.2
9.7
8.0
1.0
28.5
4.4
76.7
31.0
15.6
7.1
530.4
0.63
0.63
0.17
0.17
31.4
31.4
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - MANAGEMENT DISCUSSION & ANALYSIS [58]
Mineral Resources Attributable to Wheaton Precious Metals (1,2,3,4,5,9,31)
Measured
Indicated
Measured & Indicated
Inferred
December 31, 2022 (6)
Tonnage
Grade Contained Tonnage
Interest
Mt
g/t / % Moz / Mlbs
Mt
Grade Contained Tonnage
Moz /
Mlbs
g/t / %
Mt
Grade Contained Tonnage
Moz /
Mlbs
g/t / %
Mt
Grade Contained
Moz /
Mlbs
g/t / %
75%
100%
50%
70%
25%
10.5%
100%
8%
10%
100%
100%
50%
4.15%
100%
6%
25%
2%
0.5%
28.2
19.3
66.5
2.3
0.1
0.1
-
4.1
3.5
1.4
19.4
-
0.04
0.4
2.9
-
0.3
0.2
25%
100%
33.75%
11.9
133.0
29.7
12.8
100%
100%
25%
100%
50%
50%
100%
75%
25%
12.5%
50%
100%
0.5%
2.9
1.9
5.3
6.4
0.1
7.4
0.2
-
0.7
-
-
112.2
-
33.7
0.4
-
10.7
-
55.4
-
0.2
0.15
0.27
0.06
1.16
5.95
5.04
-
0.35
2.33
0.05
0.08
-
4.94
0.20
0.34
-
1.06
0.86
23.9
2.3
8.0
21.0
56.1
32.0
48.3
62.6
413.8
56.6
53.4
-
25.3
-
-
3.9
-
4.7
28.0
-
57.2
-
1.1
-
18.2
Gold
Salobo (10)
Stillwater (13)
Constancia
Sudbury (11)
San Dimas (14)
Marmato (11,15)
Minto
Blackwater (11,27)
Toroparu (12,16)
Santo Domingo (11,25)
Marathon (11,28)
Curipamba (11,29)
Goose (11,30)
Kutcho (12)
Fenix (11,26)
Cotabambas (12,23)
Brewery Creek Royalty (24)
Metates Royalty (17)
Total Gold
Silver
Peñasquito (10)
Constancia
Antamina (10,11,18)
Copper
Copper-Zinc
Zinkgruvan
Zinc
Copper
Neves-Corvo
Copper
Zinc
San Dimas (14)
Aljustrel (19)
Cozamin (11,20)
Copper
Zinc
Rosemont
Copper World
Blackwater (11,27)
Kutcho (12)
Curipamba (11,29)
Pascua-Lama
Loma de La Plata
Toroparu (12,16)
Cotabambas (12,23)
Metates Royalty (17)
Total Silver
Palladium
Stillwater (11,13)
Total Palladium
Platinum
Marathon (11,28)
Total Platinum
Cobalt
Voisey's Bay (11,22)
Total Cobalt
Marmato (11,15)
Minto
Stratoni
Copper World Complex (21)
100%
100%
100%
100%
0.23
0.25
0.05
0.74
4.27
2.40
0.53
0.44
2.33
0.03
0.07
1.63
5.13
0.37
0.33
0.23
1.03
0.57
24.0
2.2
8.8
18.6
63.3
32.5
48.8
58.3
325.7
50.2
35.7
32.4
6.8
4.7
153.0
3.0
2.7
7.1
25.9
38.4
52.7
169.0
1.0
2.7
14.3
0.24
0.22
0.04
0.48
2.87
2.28
0.53
0.49
2.33
0.03
0.06
1.63
5.18
0.38
0.33
0.23
1.02
0.56
24.0
2.1
9.0
18.0
66.3
34.9
48.9
57.5
252.3
45.5
35.1
32.4
6.0
4.7
153.0
2.7
2.7
8.7
25.7
38.4
52.2
169.0
0.8
2.7
14.2
369.1
19.1
59.9
3.5
0.1
1.7
11.1
6.4
2.3
120.1
66.6
1.2
0.1
5.0
9.3
29.3
0.5
4.5
0.14
0.17
0.12
0.08
0.02
0.01
-
0.05
0.26
0.002
0.05
-
0.01
0.003
0.03
-
0.01
0.004
0.95
9.1
9.9
65.9
119.7
7.6
8.7
108.2
54.0
5.2
1.9
6.7
0.4
30.5
37.4
0.1
10.3
4.8
1.8
16.3
11.1
1.4
358.0
180.0
52.9
5.0
1.8
97.9
3.6
37.0
117.1
4.5
8.2
12.9
1.6
13.4
0.3
-
0.6
-
-
14.1
-
5.1
0.4
-
19.7
-
2.0
-
0.1
120.7
0.05
0.05
0.03
0.03
1.5
1.5
397.3
38.3
126.4
5.8
0.3
1.8
11.1
10.5
5.8
121.5
86.0
1.2
0.2
5.4
12.3
29.3
0.8
4.6
2.85
0.13
0.08
0.05
0.01
0.13
0.19
0.10
0.17
0.11
0.13
0.06
0.02
0.06
0.10
0.22
0.02
0.08
4.52
50.8
8.2
77.7
252.7
31.3
31.2
137.9
66.8
9.6
2.3
35.7
43.8
0.3
17.7
4.9
1.8
17.0
11.1
1.4
470.2
180.0
86.6
5.4
1.8
108.6
3.6
92.5
117.1
4.6
14.3
0.5
47.9
69.1
1.1
15.1
5.4
1.9
3.1
1.7
6.6
31.5
15.6
14.8
4.1
2.2
164.4
19.8
1.0
10.3
2.0
554.1
0.04
0.04
0.07
0.07
-
-
0.30
0.34
0.09
0.47
3.54
2.43
0.49
0.45
2.74
0.02
0.05
1.62
6.64
0.25
0.32
0.17
0.88
0.47
27.2
3.5
9.2
16.0
91.0
27.0
29.1
64.1
310.4
40.8
39.9
38.0
3.2
4.5
162.2
1.7
3.8
12.8
20.0
31.6
17.8
76.0
0.4
2.3
13.2
162.1
114.0
32.1
2.0
1.0
1.9
13.0
0.7
1.4
31.8
22.7
0.4
0.2
12.9
4.8
151.3
1.0
0.7
2.98
0.30
0.19
0.14
0.04
0.14
0.19
0.15
0.43
0.12
0.18
0.06
0.03
0.06
0.13
0.22
0.03
0.08
5.47
59.9
18.1
21.2
64.3
38.9
39.9
207.4
94.9
19.5
2.4
17.6
0.3
14.2
3.9
1.0
12.2
2.4
2.2
17.7
13.0
1.7
68.7
91.0
5.6
12.9
0.7
3.8
0.2
6.9
605.3
0.7
56.1
82.0
2.7
28.5
5.7
1.9
3.7
1.7
6.6
45.6
15.6
19.9
4.5
2.2
184.1
19.8
3.0
10.3
2.1
674.8
0.09
0.09
0.10
0.10
1.5
1.5
1.56
1.25
0.09
0.03
0.12
0.14
0.21
0.01
0.12
0.03
0.04
0.02
0.04
0.10
0.05
0.84
0.03
0.01
4.69
18.6
7.3
61.2
48.8
51.6
0.2
13.3
8.0
10.2
16.0
3.1
2.6
1.8
1.9
8.9
3.7
11.1
2.3
8.3
0.7
2.2
0.4
0.1
45.4
0.3
327.9
0.35
0.35
0.02
0.02
7.8
7.8
4.5%
0.19
8.1
22.0%
4.39
0.2
42.4%
1.6
0.05
0.2
6.1
15.0
0.1
-
-
0.4
7.1
19.4
0.2
1.6
0.05
1.1
9.5
5.1
0.1
2.4
0.15
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - MANAGEMENT DISCUSSION & ANALYSIS [59]
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,
palladium and platinum, percent (“%”) for cobalt, millions of ounces (“Moz”) for gold, silver, palladium and platinum 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. (Vice President, 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, Aljustrel mines, Santo Domingo project, Blackwater project, Kutcho project, Marathon project, Fenix project,
Curipamba project, Goose project 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, 2022 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 2022, Moinho & St João mines as of June 2022 and the Estação
project as of July 2018. Mineral Reserves for the Feitais, Moinho and St João mines are reported as of December 2021 and the Estação
project as of April 2022.
b. Mineral Resources for the Blackwater project are reported as of May 5, 2020 and Mineral Reserves as of September 10, 2021.
c. Mineral Resources for the Brewery Creek project are reported as of January 18, 2022.
d. Mineral Resources and Mineral reserves for the Constancia, Cozamin and San Dimas mines are reported as of December 31, 2021.
e. Mineral Resources for the Cotabambas project are reported as of June 20, 2013.
f.
Mineral Resources for the Curipamba project are reported as of October 26, 2021 and Mineral Reserves as of October 22, 2021.
g. Mineral Resources and Mineral Reserves for the Fenix project are reported as of August 15, 2019.
h. Mineral Resources for the Goose project are reported as of December 31, 2020 and Mineral Reserves as of January 15, 2021.
i.
j.
Mineral Resources for the Kutcho project are reported as of July 20, 2021 and Mineral Reserves are reported as of November 8, 2021.
Mineral Resources for the Loma de La Plata project are reported as of May 20, 2009.
k. Mineral Resources and Mineral Reserves for the Los Filos mine are reported as of June 30, 2022.
l.
Mineral Resources for the Marathon project are reported as of June 30, 2020 and Mineral Reserves as of September 15, 2020.
m. Mineral Resources and Mineral Reserves for the Marmato mine are reported as of June 30, 2022.
n. Mineral Resources Metates royalty are reported as of January 28, 2023.
o. Mineral Resources for the Minto mine are reported as of March 31, 2021.
p. Mineral Resources and Mineral Reserves for the Copper World Complex Rosemont project are reported as of March 30, 2017 and Mineral
Resources for Copper World as of December 1, 2021.
q. Mineral Resources for the Santo Domingo project are reported as of February 13, 2020 and Mineral Reserves as of November 14, 2018.
r.
Mineral Resources and Mineral Reserves for the Stratoni mine are reported as of September 30, 2022.
s. Mineral Resources for the Toroparu project are reported as of November 1, 2021 and Mineral Reserves are reported as of March 31,
2013.
7.
Process recoveries are the average percentage of gold, silver, palladium, platinum, 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.
g.
h.
i.
Aljustrel mine – 3.0% zinc cut-off for the Feitais, Moinho and St João mines and the Estação project.
Antamina mine - $6,000 per hour of mill operation cut-off assuming $3.30 per pound copper, $1.10 per pound zinc, $9.30 per pound
molybdenum and $20.70 per ounce silver.
Blackwater project – NSR cut-off of Cdn $13.00 per tonne assuming $1,400 per ounce gold and $15.00 per ounce silver.
Constancia mine – NSR cut-off of $6.40 per tonne assuming $1,500 per ounce gold, $20.00 per ounce silver, $3.45 per pound copper and
$11.00 per pound molybdenum.
Copper World Complex Rosemont project – NSR cut-off of $6.00 per ton assuming $18.00 per ounce silver, $3.15 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.
Curipamba project - NSR cut-off of $32.99 per tonne assuming $1,630 per ounce gold, $21 per ounce silver, $3.31 per pound copper,
$0.92 per pound lead and $1.16 per pound zinc.
Fenix project – 0.24 grams per tonne gold cut-off assuming $1.250 per ounce gold.
Goose project:
i. Umwelt – 1.72 grams per tonne for open pit and 3.9 grams per tonne for underground.
ii. Llama – 1.74 grams per tonne for open pit and 4.1 grams per tonne for underground.
iii. Goose Main – 1.70 grams per tonne for open pit and 4.1 grams per tonne for underground.
iv. Echo – 1.60 grams per tonne for open pit and 3.5 grams per tonne for underground.
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - MANAGEMENT DISCUSSION & ANALYSIS [60]
j.
k.
l.
Kutcho project – NSR cut-offs of Cdn $38.40 per tonne for oxide ore and Cdn $55.00 per tonne for sulfide for the open pit and Cdn $129.45
per tonne for the underground assuming $3.50 per pound copper, $1.15 per pound zinc, $20.00 per ounce silver and $1,600 per ounce
gold.
Los Filos mine – Variable breakeven cut-offs for the open pits depending on process destination and metallurgical recoveries and NSR
cut-offs of $65.80 - $96.60 per tonne for the underground mines, assuming $1,450 per ounce gold and $18.00 per ounce silver.
Marathon project - NSR cut-offs ranging from of Cdn $18.00 per tonne to Cdn $21.33 per tonne assuming $1,500 per ounce palladium,
$900 per ounce platinum, $2.75 per pound copper, $1,300 per ounce gold and $16.00 per ounce silver.
m. Marmato mine – 2.05 grams per tonne gold cut-off for the Upper Mine and 1.62 grams per tonne gold cut-off for the Lower Mine, all
assuming $1,500 per ounce gold.
n.
o.
p.
q.
r.
s.
t.
u.
v.
Neves-Corvo mine – NSR cut-offs ranging EUR 44 - 60 per tonne depending on area and mining method for both the copper and zinc
Mineral Reserves assuming $3.35 per pound copper, $0.90 per pound lead and $1.15 per pound zinc.
Peñasquito mine - $1,400 per ounce gold, $20.00 per ounce silver, $1.00 per pound lead and $1.20 per pound zinc.
Salobo mine – 0.25% copper equivalent cut-off assuming $1,450 per ounce gold and $3.40 per pound copper.
San Dimas mine – $1,750 per ounce gold and $22.50 per ounce silver.
Santo Domingo project - variable throughput rates and cut-offs assuming $3.00 per pound copper,$1,290 per ounce gold and $100 per
tonne iron.
Stillwater mines - combined platinum and palladium cut-off of 6.86 grams per tonne for Stillwater and East Boulder sub-level extraction
and 1.71 grams per tonne for Ramp & Fill at East Boulder.
Sudbury mines - $1,450 per ounce gold, $8.16 per pound nickel, $3.40 per pound copper, $1,200 per ounce platinum, $1,400 per ounce
palladium and $22.68 per pound cobalt.
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.
Voisey’s Bay mines – NSR cut-offs of Cdn $32 per tonnes for Ovoid and Southeast Extension, Cdn $230 per tonne for Reid Brook, Cdn
$250 per tonne for Eastern Deeps and Cdn $28 per tonne for Discovery Hill, all assuming $3.40 per pound copper, $8.16 per pound nickel
and $22.68 per pound cobalt.
w.
Zinkgruvan mine – NSR cut-offs ranging from SEK 750 - 950 per tonne depending on area and mining method for both the copper and
zinc Mineral Reserves assuming $3.35 per pound copper and $0.90 per pound lead and $1.15 per pound zinc.
9. Mineral Resources are estimated using appropriate recovery rates and the following commodity prices:
a.
b.
c.
d.
e.
f.
g.
h.
i.
j.
Aljustrel mine – 3.0% zinc cut-off for Feitais, Moinho and St João mines and the Estação project.
Antamina mine - $3.30 per pound copper, $1.20 per pound zinc, $13.10 per pound molybdenum and $24.50 per ounce silver.
Blackwater project – 0.2 grams per tonne gold equivalent cut-off assuming $1,400 per ounce gold and $15.00 per ounce silver.
Brewery Creek project – 0.37 grams per tonne gold cut-off assuming $1,500 per ounce gold.
Constancia mine – NSR cut-off of $6.40 per tonne for open pit and 0.65% copper cut-off for underground, both assuming $1,500 per ounce
gold, $20.00 per ounce silver, $3.45 per pound copper and $11.00 per pound molybdenum.
Copper World Complex – NSR cut-off of $5.70 per ton assuming $18.00 per ounce silver, $3.15 per pound copper and $11.00 per pound
molybdenum for the Rosemont project and 0.1% copper cut-off assuming $3.45 per pound copper, $20.00 per ounce silver, $11.00 per
pound molybdenum for the Copper World project.
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 – NSR cut-off of $50 per tonne assuming $3.25 per pound copper, $20.00 per ounce silver, $1.00 per pound lead and $1.20
per pound zinc.
Curipamba project - NSR cut-off of $29.00 per tonne for the open pit and $105 per tonne for the underground assuming $1,800 per ounce
gold, $24 per ounce silver, $4.00 per pound copper, $1.05 per pound lead and $1.30 per pound zinc.
Fenix project – 0.15 grams per tonne gold cut-off assuming $1,500 per ounce gold.
k. Goose project - 1.4 grams per tonne gold cut-off for open pit and 3.0 grams per tonne for underground for all deposits, assuming a gold
price of $1,550 per ounce.
l.
Kutcho project – 0.45% copper equivalent cut-off for the Main open pit and underground copper equivalent cut-offs of 1.05%, 0.95% and
1.05% for Main, Esso and Sumac respectively, all assuming $3.50 per pound copper, $1.15 per pound zinc, $20.00 per ounce silver and
$1,600 per ounce gold.
m.
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.
n.
Los Filos mine – 0.2 grams per tonne gold cut-off for the open pits, 1.71 grams per tonne gold cut-off for Los Filos South underground,
2.05 grams per tonne gold cut-off for Los Filos North underground and 2.71 grams per tonne gold cut-off for Bermejal underground, all
assuming $1,550 per ounce gold and $18.00 per ounce silver.
o. Marathon project - NSR cut-off of Cdn $13.00 per tonne assuming $1,600 per ounce palladium, $900 per ounce platinum, $3.00 per
pound copper, $1,500 per ounce gold and $18.00 per ounce silver.
p. Marmato mine – 1.8 grams per tonne gold cut-off for the Upper Mine and 1.3 grams per tonne gold cut-off for the Lower Mine, all assuming
$1,700 per ounce gold.
q. Metates royalty – 0.26 grams per tonne gold equivalent cut-off assuming $1,600 per ounce gold and $20.00 per ounce silver.
r.
s.
t.
u.
v.
Minto mine – NSR cut-off of Cdn $35.00 per tonne for open pit and Cdn $70 per tonne for underground, assuming $1,500 per ounce gold,
$18.00 per ounce silver and $3.10 per pound copper.
Neves-Corvo mine – 1.0% copper cut-off for the copper Mineral Resource and 4.5% zinc cut-off for the zinc Mineral Resource, both
assuming $3.35 per pound copper, $0.90 per pound lead and $1.15 per pound zinc.
Pascua-Lama project – $1,500 per ounce gold, $18.75 per ounce silver and $3.50 per pound copper.
Peñasquito mine - $1,600 per ounce gold, $23.00 per ounce silver, $1.20 per pound lead and $1.45 per pound zinc.
Salobo mine – 0.25% copper equivalent cut-off assuming $1,450 per ounce gold and $3.40 per pound copper.
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - MANAGEMENT DISCUSSION & ANALYSIS [61]
w. San Dimas mine – 165 grams per tonne silver equivalent cut-off assuming $1,800 per ounce gold and $25.00 per ounce silver.
x.
y.
z.
Santo Domingo project - 0.125% copper equivalent cut-off assuming $3.50 per pound copper, $1,300 per ounce gold and $99 per tonne
iron.
Stillwater mines – combined platinum and palladium cut-off of 3.77 grams per tonne for Stillwater, 6.86 grams per tonne for East Boulder
sub-level extraction and 1.71 grams per tonne for East Boulder Ramp & Fill.
Stratoni mine – NSR cut-off of $200 per tonne assuming $2.75 per pound copper, $0.91 per pound lead, $1.04 per pound zinc and $17.00
per ounce silver.
aa. Sudbury mines - $1,200 to $1,373 per ounce gold, $6.07 to $8.16 per pound nickel, $2.38 to $3.18 per pound copper, $1,150 to $1,225
per ounce platinum, $750 to $1,093 per ounce palladium and $12.47 to $20.41 per pound cobalt.
bb. Toroparu project – 0.40 grams per tonne gold cut-off for open pit and 1.8 grams per tonne for underground assuming $1,630 per ounce
gold.
cc. Voisey’s Bay mines – NSR cut-off of Cdn $28 per tonne for Discovery Hill and Cdn $230 per tonne for Reid Brook, all assuming $3.40 per
pound copper, $8.16 per pound nickel and $22.68 per pound cobalt.
dd. Zinkgruvan mine – NSR cut-offs ranging from SEK 515 to 710 per tonne depending on area and mining method for the zinc Mineral
Resources and NSR cut-offs ranging from SEK 580 to 600 per tonne NSR cut-off for the copper Mineral Resources assuming $3.35 per
pound copper and $0.90 per pound lead and $1.15 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.
b.
c.
Antamina – Teck Resources Annual Information Form dated February 21, 2023.
Peñasquito – Newmont’s December 31, 2022 Resources and Reserves press release dated February 23, 2023 and
Salobo – Vale has
https://www.sec.gov/Archives/edgar/data/0000917851/000110465922040322/tm2210823d1_6k.htm.
the Salobo Mine, which
report summary
technical
filed a
for
is available on Edgar at
The Company QP’s have approved this partner disclosed scientific and technical information in respect of the Company’s Mineral Resource and
Mineral Reserve estimates for the Antamina mine, Peñasquito mine and Salobo mine.
11. The Company’s attributable Mineral Resources and Mineral Reserves for the Antamina silver interest, Cozamin silver interest, Marmato gold and
silver interests, Santo Domingo gold interest, Blackwater gold and silver interests, Marathon gold and platinum interests, Sudbury gold interest,
Fenix gold interest, Goose gold interest, Curipamba gold and silver interests, Stillwater palladium interest and Voisey’s Bay cobalt interest have
been constrained to the production expected for the various contracts.
12. 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.
13. 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) / (1/3.51 + 1) and Au = (Pd + Pt) x 0.0238
East Boulder mine: Pd = (Pt + Pd) / (1/3.60 + 1) and Au = (Pd + Pt) x 0.0323
14. 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.
15. The Marmato PMPA provides that Aris Gold Corp will deliver 10.5% of the gold production until 310 thousand ounces are delivered and 5.25% 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 10.5% / 5.25% basis for gold and 100% / 50% basis for silver.
16. The Company’s PMPA with Aris 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.
17. 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.
18. The Antamina PMPA in respect to the Antamina mine (November 3, 2015) provides that Glencore will deliver silver equal to 33.75% of the silver
production until 140 million ounces are delivered and 22.5% of silver production thereafter. Attributable reserves and resources have been
calculated on the 33.75% / 22.5% basis.
19. The Company only has the rights to silver contained in concentrates containing less than 15% copper at the Aljustrel mine.
20. The Cozamin PMPA provides that Capstone will deliver silver equal to 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.
21. The Rosemont mine Mineral Resources and Mineral Reserves do not include the Oxide material from Rosemont or the Leach material from Copper
World.
22. The Voisey’s Bay cobalt PMPA provides that 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.
23. The Company’s PMPA 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.
24. The Company’s PMPA with Golden Predator Exploration Ltd., a subsidiary of Sabre Gold Mines Corp., 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 from the Brewery Creek mine, above which the NSR
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - MANAGEMENT DISCUSSION & ANALYSIS [62]
will increase to 2.75%. Sabre 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.
25. The Santo Domingo PMPA provides that Capstone will deliver gold equal to 100% of the gold production until 285,000 ounces are delivered and
67% thereafter for the life of the mine. Attributable reserves and resources have been calculated on the 100% / 67% basis.
26. The Fenix PMPA provides that Rio2 will deliver gold equal to 6% of the gold production until 90,000 ounces are delivered, then 4% of the gold
production until 140,000 ounces are delivered and 3.5% thereafter for the life of the mine. Attributable reserves and resources have been
calculated on this 6% / 4% / 3.5% basis.
27. The Blackwater silver and gold stream agreements provide that Artemis will deliver respectively silver and gold equal to (i) 50% of the payable
silver production until 17.8 million ounces are delivered and 33% thereafter for the life of the mine, and (ii) 8% of the payable gold production until
279,908 ounces are delivered and 4% thereafter for the life of the mine. Attributable reserves and resources have been calculated on the 50% /
33% basis for silver and 8% / 4% basis for gold.
28. The Marathon PMPA provides that Generation will deliver 100% of the gold production until 150 thousand ounces are delivered and 67%
thereafter for the life of the mine and 22% of the platinum production until 120 thousand ounces are delivered and 15% thereafter for the life of
the mine. Attributable reserves and resources have been calculated on the 100% / 67% basis for gold and 22% / 15% basis for platinum.
29. The Curipamba PMPA provides that Adventus will deliver silver and gold equal to 75% of the silver production until 4.6 million ounces are
delivered and 50% thereafter for the life of the mine and 50% of the gold production until 150 thousand ounces are delivered and 33% thereafter
for the life of the mine. Attributable reserves and resources have been calculated on the 75% / 50% basis for silver and 50% / 33% basis for
gold.
30. The Goose PMPA provides that Sabina will deliver gold equal to 4.15% of the gold production until 130 thousand ounces are delivered, then
2.15% until 200 thousand ounces are delivered and 1.5% thereafter for the life of the mine. Attributable reserves and resources have been
calculated on the 4.15% / 2.15% / 1.5% basis.
31. Precious metals and cobalt are by-product metals at all of the Mining Operations, other than gold at the Marmato mine, Toroparu project, Fenix
project, Goose project and Blackwater project, silver at the Loma de La Plata zone of the Navidad 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 2022 ANNUAL REPORT - MANAGEMENT DISCUSSION & ANALYSIS [63]
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 future price of commodities;
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 payment of upfront cash consideration to counterparties under PMPAs, the satisfaction of each party's
obligations in accordance with PMPAs and royalty arrangements and the receipt by the Company of
precious metals and cobalt production in respect of the applicable Mining Operations under PMPAs or
other payments under royalty arrangements;
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;
future payments by the Company in accordance with PMPAs, including any acceleration of payments;
the costs of future production;
the estimation of produced but not yet delivered ounces;
the impact of epidemics (including the COVID-19 virus pandemic), including the potential heightening of
other risks;
the future sales of Common Shares under, the amount of net proceeds from, and the use of the net
proceeds from, the ATM Program;
continued listing of the Common Shares on the LSE, NYSE and TSX;
any statements as to future dividends;
the ability to fund outstanding commitments and the ability to continue to acquire accretive PMPAs;
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;
possible CRA domestic audits for taxation years subsequent to 2016 and international audits;
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;
the Company’s climate change and environmental commitments; and
assessments of the impact and resolution of various legal and tax matters, including but not limited to
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 Company’s PMPAs or
royalty arrangements;
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 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 associated 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 2022 ANNUAL REPORT - MANAGEMENT DISCUSSION & ANALYSIS [64]
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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 (including whether there will be any material change
in the Company's facts or change in law or jurisprudence);
risks relating to the potential implementation of a 15% global minimum tax;
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;
risks related to 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 supplies, 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;
risks associated with environmental, social and governance matters;
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 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 market price of the Common Shares of Wheaton;
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;
risks associated with the ability to achieve climate change and environmental commitments at Wheaton
and at the Mining Operations;
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;
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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
other risks discussed in the section entitled “Description of the Business – Risk Factors” in Wheaton’s
most recent Annual Information Form available on SEDAR at www.sedar.com, and in Wheaton’s Form
40-F and Form 6-Ks, all on file with the U.S. Securities and Exchange Commission in Washington, D.C.
and 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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that there will be no material adverse change in the market price of commodities;
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 neither Wheaton nor the Mining Operations will suffer significant impacts as a result of an epidemic
(including the COVID-19 virus pandemic);
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 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 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 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);
that any sale of Common Shares under the ATM Program will not have a significant impact on the market
price of the Common Shares and that the net proceeds of sales of Common Shares, if any, will be used
as anticipated;
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, 2021 and other continuous disclosure
documents filed by Wheaton since January 1, 2022, available on SEDAR at www.sedar.com. Wheaton’s Mineral
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - MANAGEMENT DISCUSSION & ANALYSIS [66]
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.
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 Definition Standards"). NI 43-101 differs
significantly from the disclosure requirements of the SEC generally applicable to U.S. companies. For example, 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 of the SEC generally applicable to U.S. companies. 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 2022 ANNUAL REPORT - MANAGEMENT DISCUSSION & ANALYSIS [67]
PART 2
Financial
Statements
WHEATON PRECIOUS METALS | 2022 ANNUAL REPORT
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 9, 2023
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - FINANCIAL STATEMENTS [2]
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, 2022 and December 31, 2021, the related consolidated
statements of earnings, comprehensive income, shareholders' equity, and cash flows, for each of the two years in
the period ended December 31, 2022, 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, 2022 and December 31, 2021, and its financial performance and its cash flows for each of the
two years in the period ended December 31, 2022, in accordance 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, 2022, 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 9, 2023, 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.
Impairment - Assessment of Whether Indicators of Impairment or Impairment Reversal Exist within the
Mineral Stream Interests - Refer to Note 4.3 to the financial statements
Critical Audit Matter Description
The Company considers each precious metals purchase agreement (“PMPA”) to be a separate cash generating
unit (“CGU”). The Company’s determination of whether or not an indicator of impairment or impairment reversal
exists at the CGU level requires significant management judgment. Changes in metal price forecasts, discount
rates, reductions or increases in the amount of future recoverable ounces of metals attributable to the Company
and/or adverse or favorable operational, political or regulatory developments impacting the mining properties in
respect of which the Company has PMPAs can result in a write-down or write-up of the carrying amounts of the
Company’s mineral stream interests.
While there are several factors that are required to determine whether or not an indicator of impairment or
impairment reversal exists, the judgments with the highest degree of subjectivity are evaluating the impact of (1)
changes to future metal prices for gold, silver, palladium and cobalt, and (2) changes in the amount of future
recoverable ounces of metals attributable to the Company. Auditing these estimates and factors required 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.
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - FINANCIAL STATEMENTS [3]
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures to evaluate the impact of changes to (1) future metal prices for gold, silver, palladium and
cobalt and (2) changes in the amount of future recoverable ounces of metals attributable to the Company in the
assessment of indicators of impairment or impairment reversal included the following, among others:
• Evaluated the effectiveness of the Company's controls over management's assessment of indicators of
impairment or impairment reversal.
• Evaluated management's ability to accurately forecast future recoverable ounces of metals attributable to
the Company by:
o Assessing the methodology used in management's determination of the future recoverable
ounces of attributable metals;
o Completing retrospective analysis comparing the Company’s historical forecasts to actual
results;
o Comparing management's expected future recoverable ounces of attributable metals to reserve
and resource estimates prepared by the third-party mining property operators; and
o Considering the professional qualifications and objectivity of management’s specialists.
• With the assistance of fair value specialists, evaluated the significance of movements in future metal
prices for gold, silver, palladium and cobalt by comparing historical forecasts to current third-party
forecasts.
/s/ Deloitte LLP
Chartered Professional Accountants
Vancouver, Canada
March 9, 2023
We have served as the Company's auditor since 2004.
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - FINANCIAL STATEMENTS [4]
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,
2022, 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, 2022, Wheaton’s internal control over financial reporting was effective.
The effectiveness of Wheaton’s internal control over financial reporting, as of December 31, 2022, 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, 2022, 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 9, 2023
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - FINANCIAL STATEMENTS [5]
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, 2022, 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, 2022, 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, 2022, of the
Company and our report dated March 9, 2023, 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 9, 2023
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - FINANCIAL STATEMENTS [6]
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
Share based compensation
Donations and community investments
Impairment (impairment reversal) of mineral stream interests
Earnings from operations
Gain on disposal of mineral stream interest
Other (income) expense
Earnings before finance costs and income taxes
Finance costs
Earnings before income taxes
Income tax (expense) recovery
Net earnings
Basic earnings per share
Diluted earnings per share
Weighted average number of shares outstanding
Basic
Diluted
1) Presentation of historical figures have been revised to conform with current year classifications – see Note 2.
Years Ended December 31
Note
2022
2021 ¹
6 $ 1,065,053 $ 1,201,665
$
267,621 $
231,952
287,947
254,793
13
$
499,573 $
542,740
$
7
8
9
14
565,480 $
35,831
20,060
6,296
(8,611)
658,925
35,119
19,265
6,601
(156,717)
$
511,904 $
(155,868)
(7,449)
$
$
675,221 $
5,586
669,635 $
(509)
13
10
21.3
27
754,657
-
(5,776)
760,433
5,817
754,616
269
$
669,126 $
754,885
$
$
1.482 $
1.479 $
1.677
1.673
25
25
451,570
452,344
450,138
451,170
The accompanying notes form an integral part of these consolidated financial statements.
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - FINANCIAL STATEMENTS [7]
Consolidated Statements of Comprehensive Income
(US dollars in thousands)
Net earnings
Other comprehensive income
Items that will not be reclassified to net earnings
Gain (loss) on LTIs¹
Income tax recovery (expense) related to LTIs
Total other comprehensive income (loss)
Total comprehensive income
1)
LTIs = long-term investments – common shares held.
Years Ended December 31
Note
2022
2021
$
669,126 $
754,885
18 $
27
$
21,052 $
(6,513)
(14,000)
(2,314)
14,539 $
(16,314)
$
683,665 $
738,571
The accompanying notes form an integral part of these consolidated financial statements.
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - FINANCIAL STATEMENTS [8]
Consolidated Balance Sheets
(US dollars in thousands)
Assets
Current assets
Cash and cash equivalents
Accounts receivable
Cobalt inventory
Other
Total current assets
Non-current assets
Mineral stream interests
Early deposit mineral stream interests
Mineral royalty interest
Long-term equity investments
Refundable deposit - 777 PMPA
Convertible notes receivable
Property, plant and equipment
Other
Total non-current assets
Total assets
Liabilities
Current liabilities
Accounts payable and accrued liabilities
Current taxes payable
Current portion of performance share units
Current portion of lease liabilities
Total current liabilities
Non-current liabilities
Performance share units
Lease liabilities
Deferred income taxes
Pension liability
Total non-current liabilities
Total liabilities
Shareholders' equity
Issued capital
Reserves
Retained earnings
Total shareholders' equity
Total liabilities and shareholders' equity
/s/ Randy Smallwood
Randy Smallwood
Director
As at
December 31
As at
December 31
Note
2022
2021
26 $
696,089 $
226,045
11
12
28
10,187
10,530
3,287
11,577
8,712
3,390
$
720,093 $
249,724
13 $ 5,707,019 $ 5,905,797
34,741
15
6,606
16
61,477
18
-
19
17,086
17
5,509
20
15,211
29
46,092
6,606
256,095
8,073
-
4,210
11,718
$ 6,039,813 $ 6,046,427
$ 6,759,906 $ 6,296,151
$
27
24.1
21.2
12,570 $
2,763
14,566
818
13,939
132
14,807
813
$
30,717 $
29,691
24.1
21.2
27
31
6,673
1,152
165
3,524
11,498
2,060
100
2,685
$
$
11,514 $
16,343
42,231 $
46,034
22 $ 3,752,662 $ 3,698,998
47,036
23
2,504,083
66,547
2,898,466
$ 6,717,675 $ 6,250,117
$ 6,759,906 $ 6,296,151
/s/ Marilyn Schonberner
Marilyn Schonberner
Director
The accompanying notes form an integral part of these consolidated financial statements.
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - FINANCIAL STATEMENTS [9]
Consolidated Statements of Cash Flows
(US dollars in thousands)
Operating activities
Net earnings
Adjustments for
Depreciation and depletion
Gain on disposal of mineral stream interest
Impairment (reversal of impairment) of mineral stream interests
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
2022
2021
$
669,126 $
754,885
13
14
21.3
24.1
31
27
10
17
26
$
233,539
(155,868)
(8,611)
91
5,846
(4,196)
1,033
509
1,033
1,380
(6,774)
(1,313)
1,573
737,368 $
(171)
(93)
6,320
256,685
-
(156,717)
352
5,262
(2,925)
1,014
(269)
2,101
(5,733)
(462)
(510)
(8,072)
845,611
(279)
(429)
242
Cash generated from operating activities
$
743,424 $
845,145
Financing activities
Bank debt repaid
Credit facility extension fees
Share purchase options exercised
Lease payments
Dividends paid
21.1 $
21.1
23.2
21.2
22.2, 26
- $
(1,357)
10,368
(800)
(237,097)
(195,000)
(1,727)
7,953
(780)
(218,052)
Cash (used for) generated from financing activities
$
(228,886) $
(407,606)
Investing activities
Mineral stream interests
Early deposit mineral stream interests
Mineral royalty interest
Net proceeds on disposal of mineral stream interests
Acquisition of long-term investments
Proceeds on disposal of long-term investments
Dividends received
Other
Cash (used for) generated from 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
13 $
15
16
13, 26
18, 26
18, 26
10
(151,929) $
(1,500)
-
131,763
(22,768)
-
453
(316)
(520,891)
(1,500)
(3,571)
-
(7,453)
129,753
221
(775)
$
$
$
(44,297) $
(404,216)
(197) $
39
470,044 $
226,045
33,362
192,683
Cash and cash equivalents, end of year
26 $
696,089 $
226,045
The accompanying notes form an integral part of these consolidated financial statements.
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - FINANCIAL STATEMENTS [10]
Consolidated Statements of Shareholders’ Equity
(US dollars in thousands)
Number of
Shares
(000's)
Share
Purchase
Warrants
Reserve 2
Share
Purchase
Options
Reserve
Restricted
Share Units
Reserve
LTI 1
Revaluation
Reserve
(Net of Tax)
Issued
Capital
Total
Reserves
Retained
Earnings
Total
At January 1, 2021
449,458 $ 3,646,291 $ 83,077 $ 21,855 $
6,815 $ 15,135 $ 126,882 $ 1,941,398 $ 5,714,571
Reserves
- $
-
- $
- $
- $
-
- $
- $
-
-
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 22.2)
Realized gain on disposal of
LTIs ¹ (Note 23.4)
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 22.2)
Realized loss on disposal of
LTIs ¹ (Note 23.4)
$
$
$
- $
-
- $
1,811 $
-
399
9,525
117
2,815
890
38,556
- $
-
- $
- $
-
-
-
-
- $
- $
- $ 754,885 $ 754,885
-
(16,314)
(16,314)
-
(16,314)
- $ (16,314) $ (16,314) $ 754,885 $ 738,571
- $
2,066
3,196
(1,572)
-
(2,815)
-
-
- $
-
- $
5,262
-
(1,572)
-
(2,815)
- $
-
-
-
1,811
5,262
7,953
-
-
-
- (256,607)
(218,051)
At December 31, 2021
450,864 $ 3,698,998 $ 83,077 $ 22,349 $
7,196 $ (65,586) $ 47,036 $ 2,504,083 $ 6,250,117
-
-
-
-
(64,407)
(64,407)
64,407
-
$
$
$
- $
-
- $
4,143 $
-
493
13,138
88
2,534
874
33,849
- $
-
- $
- $
-
-
-
-
- $
- $
- $ 669,126 $ 669,126
-
14,539 14,539
-
14,539
- $ 14,539 $ 14,539 $ 669,126 $ 683,665
- $
2,366
3,480
(2,137)
-
(2,534)
-
-
- $
-
- $
5,846
-
(2,137)
-
(2,534)
- $
-
-
-
4,143
5,846
11,001
-
-
- (270,946)
(237,097)
3,797
3,797
(3,797)
-
-
-
-
At December 31, 2022
1) Definitions as follows: “OCI” = Other Comprehensive Income (Loss); “SBC” = Equity Settled Stock Based Compensation; “Options” = Share Purchase Options; “RSUs” =
452,319 $ 3,752,662 $ 83,077 $ 22,578 $
8,142 $ (47,250) $ 66,547 $ 2,898,466 $ 6,717,675
Restricted Share Units; “LTI’s” = Long-Term Investments; “Warrants” = Share Purchase Warrants.
2) Refer to Note 23.1.
The accompanying notes form an integral part of these consolidated financial statements.
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - FINANCIAL STATEMENTS [11]
Notes to the Consolidated Financial Statements
Years Ended December 31, 2022 and 2021 (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) and cobalt. 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”), the New York Stock Exchange
(“NYSE”) and the London Stock Exchange (“LSE”) under the symbol WPM.
As of December 31, 2022, the Company has 28 long-term purchase agreements (three of which are early deposit
agreements), with 22 different mining companies, for the purchase of precious metals and cobalt (“precious metal
purchase agreements” or "PMPA") relating to 20 mining assets which are currently operating, 12 which are at various
stages of development and 3 which have been placed in care and maintenance or have been closed, located in 13
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 either a fixed price or fixed
percentage of the market price by contract, generally at or below the prevailing market price.
The consolidated financial statements of the Company for the year ended December 31, 2022 were authorized for
issue as of March 9, 2023 in accordance with a resolution of the Board of Directors.
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.
Effective January 1, 2022, the Company changed the classification for stock option expense (Note 23.2), RSU
expense (Note 23.3), and PSU expense (Note 24.1) within the Consolidated Statement of Earnings from General and
Administrative expense to Share Based Compensation. Additionally, the Company changed the classification for
donations and community investments within the Consolidated Statement of Earnings from General and
Administrative expense to Donations and Community Investments (Note 9). Management believes these
classification changes provide more useful information to the readers of the financial statements.
These changes have been retrospectively applied to all periods presented.
3.
Significant Accounting Policies
3.1. New Accounting Standards Effective in 2022
The Company considers that there are no new standards, interpretations and amendments effective in 2022 that
impacted the Company’s significant accounting policies.
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.
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - FINANCIAL STATEMENTS [12]
Notes to the Consolidated Financial Statements
Years Ended December 31, 2022 and 2021 (US Dollars)
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 precious metal credits, which
is then sold through bullion banks. 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. 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 are not significant and do not constrain the
recognition of revenue.
Title to but not control of cobalt is transferred to a third-party sales agent who then onsells the cobalt to Wheaton
approved third party customers. Revenue from the sale of cobalt is recognized when the third party customer and
sales terms have been agreed to between Wheaton and the third-party sales agent, which is also the date that
control of the cobalt is transferred to the third-party sales agent.
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.
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - FINANCIAL STATEMENTS [13]
Notes to the Consolidated Financial Statements
Years Ended December 31, 2022 and 2021 (US Dollars)
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 17) are classified as FVTNE and are measured at fair value at the end of each
reporting period. 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,
•
•
•
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).
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - FINANCIAL STATEMENTS [14]
Notes to the Consolidated Financial Statements
Years Ended December 31, 2022 and 2021 (US Dollars)
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.
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 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 recoverable amount of each PMPA is the higher of fair value less cost of disposal
(“FVLCD”) and value in use (“VIU”). The FVLCD represents the amount that could be received from each PMPA in an
arm’s length transaction at the measurement date.
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
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - FINANCIAL STATEMENTS [15]
Notes to the Consolidated Financial Statements
Years Ended December 31, 2022 and 2021 (US Dollars)
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.
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.
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - FINANCIAL STATEMENTS [16]
Notes to the Consolidated Financial Statements
Years Ended December 31, 2022 and 2021 (US Dollars)
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.
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
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - FINANCIAL STATEMENTS [17]
Notes to the Consolidated Financial Statements
Years Ended December 31, 2022 and 2021 (US Dollars)
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.
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:
Amendment to IAS 12 - Deferred Tax related to Assets and Liabilities arising from a Single Transaction
The amendments to IAS 12 clarify that the initial recognition exemption does not apply to transactions in which equal
amounts of deductible and taxable temporary differences arise on initial recognition. The amendments are effective
for annual reporting periods beginning on or after January 1, 2023. Early application of the amendments is permitted.
The amendments apply to transactions that occur on or after the beginning of the earliest comparative period
presented. In addition, at the beginning of the earliest comparative period the following would be recognized:
•
•
a deferred tax asset to the extent that it is probable that taxable profit will be available against which the
deductible temporary difference can be utilized and a deferred tax liability for all deductible and taxable
temporary differences associated with right-of-use assets and lease liabilities; and
the cumulative effect of initially applying the amendments as an adjustment to the opening balance of
retained earnings (or other component of equity, as appropriate) at that date.
The implementation of this amendment is not expected to have a material impact on the Company.
Amendment to IAS 1- Presentation of Financial statements
The amendments to IAS 1, clarify the presentation of liabilities. The classification of liabilities as current or non-
current is based on contractual rights that are in existence at the end of the reporting period and is affected by
expectations about whether an entity will exercise its right to defer settlement. A liability not due over the next twelve
months is classified as non-current even if management intends or expects to settle the liability within twelve months.
The amendment also introduces a definition of ‘settlement’ to make clear that settlement refers to the transfer of
cash, equity instruments, other assets, or services to the counterparty. The amendment issued in October 2022 also
clarifies how conditions with which an entity must comply within twelve months after the reporting period affect the
classification of a liability. Covenants to be compiled with after the reporting date do not affect the classification of
debt as current or non-current at the reporting date. The amendments are effective for annual reporting periods
beginning on or after January 1, 2024. The implementation of this amendment is not expected to have a material
impact on the Company.
Amendments to IAS 1 and IFRS Practice Statement 2 – Disclosure of Accounting policies
The amendments require that an entity discloses its material accounting policies, instead of its significant accounting
policies. Further amendments explain how an entity can identify a material accounting policy. Examples of when an
accounting policy is likely to be material are added. To support the amendment, the IASB has also developed
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - FINANCIAL STATEMENTS [18]
Notes to the Consolidated Financial Statements
Years Ended December 31, 2022 and 2021 (US Dollars)
guidance and examples to explain and demonstrate the application of the ‘four-step materiality process’ described in
IFRS Practice Statement 2. The amendments are effective for annual reporting periods beginning on or after January
1, 2023. The Company is currently evaluating the impact of the amendment on its financial statements.
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 $5.8 billion at December 31,
2022, inclusive of early deposit agreements. 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 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 14, 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 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
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - FINANCIAL STATEMENTS [19]
Notes to the Consolidated Financial Statements
Years Ended December 31, 2022 and 2021 (US Dollars)
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. In
addition, the Company also monitors the estimated recoverable reserves and resources as well as operational
developments and other matters at the mining properties in respect of which the Company has PMPAs for indications of
impairment or 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.
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 23.2,
23.3, and 24.1, respectively.
Critical Accounting Judgments
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 32. 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 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 judgement 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.
Income Taxes
4.6.
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 32 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.
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 21) and equity attributable to common shareholders,
comprising of issued capital (Note 22), accumulated reserves (Note 23) 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 21).
The Company is in compliance with the debt covenants at December 31, 2022, as described in Note 21.1.
5.2. Categories of Financial Assets and Liabilities
The previously outstanding non-revolving term loan, which required regularly scheduled payments of interest and
principal and the refundable deposit on the 777 PMPA, are carried at amortized cost. Trade receivables from sales of
cobalt and 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
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - FINANCIAL STATEMENTS [20]
Notes to the Consolidated Financial Statements
Years Ended December 31, 2022 and 2021 (US Dollars)
with the Company’s long-term investments in common shares held. As these long-term 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
Note
December 31
2022
December 31
2021
Cash and cash equivalents
26
$
696,089 $
226,045
Trade receivables from provisional concentrate sales, net of fair
value adjustment
Long-term investments - warrants held
Convertible note receivable
Investments in equity instruments designated at FVTOCI 1
Long-term investments - common shares held
Financial assets measured at amortized cost
Non-revolving term loan
Trade receivables from sales of cobalt
Refundable deposit - 777 PMPA
Other accounts receivable
6, 11
17
18
17, 28
11
19
2,516
560
-
1,716
1,536
17,086
255,535
59,941
-
6,642
8,073
1,029
816
9,488
-
373
Total financial assets
$
970,444 $
317,001
Financial liabilities
Financial liabilities at amortized cost
Accounts payable and accrued liabilities
Pension liability
Total financial liabilities
$
$
12,570 $
3,524
13,939
2,685
16,094 $
16,624
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. Additionally, the
outstanding accounts receivable from the sales of cobalt are supported by a $10 million letter of credit. Finally,
counterparties used to sell precious metals are all large, international organizations with strong credit ratings and the
balance of trade receivables on these sales in the ordinary course of business is not significant. Therefore, credit risk
associated with trade receivables at December 31, 2022 is considered to be negligible.
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - FINANCIAL STATEMENTS [21]
Notes to the Consolidated Financial Statements
Years Ended December 31, 2022 and 2021 (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
Trade receivables from sales of cobalt
Refundable Deposit - 777 PMPA
Other accounts receivables
Non-revolving term loan
Convertible notes receivable
December 31 December 31
Note
26
$
2022
696,089 $
2021
226,045
11
11
19
11
17, 28
17
2,516
6,642
8,073
1,029
-
-
1,716
9,488
-
373
816
17,086
Maximum exposure to credit risk related to financial assets
$
714,349 $
255,524
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, 2022, the
Company had cash and cash equivalents of $696 million (December 31, 2021 - $226 million) and working capital of
$689 million (December 31, 2021 - $220 million).
The Company holds equity investments of several companies (Note 18) with a combined market value at December 31,
2022 of $256 million (December 31, 2021 - $61 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, where applicable.
As at December 31, 2022
(in thousands)
2022
2023 - 2024
2025 - 2026
After 2026
Total
Accounts payable and accrued
liabilities
Performance share units 1
$ 12,570 $
14,566
-
6,673
$
$
-
-
-
-
$ 12,570
21,239
Total
$ 27,136
$
6,673
$
-
$
-
$ 33,809
1) See Note 24.1 for estimated value per PSU at maturity and anticipated performance factor at maturity.
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - FINANCIAL STATEMENTS [22]
Notes to the Consolidated Financial Statements
Years Ended December 31, 2022 and 2021 (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
2022
December 31
2021
$
311 $
739
60,443
560
-
-
3,308
1,567
155
59,517
1,536
17,086
816
3,534
Total Canadian dollar denominated monetary assets
$
65,361 $
84,211
Monetary liabilities
Accounts payable and accrued liabilities
Performance share units
Lease liability
Pension liability
$
8,180 $
16,971
1,315
3,524
9,001
21,079
1,919
2,685
Total Canadian dollar denominated monetary liabilities
$
29,990 $
34,684
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, 2022
Change in Canadian Dollar
10%
Increase
10%
Decrease
$
(2,507) $
6,044
2,507
(6,044)
$
3,537 $
(3,537)
As at December 31, 2021
Change in Canadian Dollar
10%
Increase
10%
Decrease
$
(999) $
5,952
999
(5,952)
$
4,953 $
(4,953)
Interest Rate Risk
5.6.
The Company is exposed to interest rate risk on its outstanding borrowings and short-term investments. Presently,
the Company has no outstanding borrowings, and historically all borrowings have been at floating interest rates. The
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - FINANCIAL STATEMENTS [23]
Notes to the Consolidated Financial Statements
Years Ended December 31, 2022 and 2021 (US Dollars)
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, 2022, the weighted average effective interest rate paid by the Company on
its outstanding borrowings was Nil (2021 - 1.17%).
During the years ended December 31, 2022 and December 31, 2021, a fluctuation in interest rates of 100 basis
points (1 percent) would have impacted the amount of interest expensed by approximately $Nil and $0.2 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, 2022 and 2021 would have increased/decreased by approximately $25 million and $6 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.
(in thousands)
Note
Total
Level 1
Level 2
Level 3
Cash and cash equivalents
26 $ 696,089 $
696,089 $
- $
Trade receivables from provisional concentrate
sales, net of fair value adjustment
Long-term investments - common shares held
Long-term investments - warrants held
11
18
18
2,516
255,535
560
-
255,535
-
2,516
-
560
$ 954,700 $
951,624 $
3,076 $
-
-
-
-
-
December 31, 2022
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - FINANCIAL STATEMENTS [24]
Notes to the Consolidated Financial Statements
Years Ended December 31, 2022 and 2021 (US Dollars)
December 31, 2021
(in thousands)
Note
Total
Level 1
Level 2
Level 3
Cash and cash equivalents
26 $ 226,045 $
226,045 $
- $
-
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
11
18
18
17
1,716
59,941
1,536
17,086
-
59,941
-
-
1,716
-
1,536
-
-
-
-
17,086
$ 306,324 $
285,986 $
3,252 $
17,086
The Refundable Deposit on the 777 PMPA (Note 19) as well as the previously outstanding non-revolving term loan
are carried at amortized cost. Trade accounts receivables, other accounts receivables and accounts payables and
accrued liabilities are non-interest bearing and are stated at amortized cost, which approximate fair values due to the
short terms to maturity. Where necessary, other receivables are reported net of allowances for uncollectable
amounts.
When balances are outstanding, the Company’s bank debt (Note 21.1) 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 significantly affect the Company’s results.
5.8.3. Valuation Techniques for Level 3 Assets
Convertible Note Receivable
At February 18, 2022 (the date the Kutcho Convertible Note was terminated) and December 31, 2021, the fair value
of the Kutcho Convertible Note (Note 17), which is not traded in an active market, was determined by reference to the
value of the shares the Company would receive if the right to convert the note into shares was exercised. This
convertible note receivable was classified within Level 3 of the fair value hierarchy and any changes in fair value were
reflected on the Consolidated Statement of Earnings under the classification Other (Income) Expense (Note 10).
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - FINANCIAL STATEMENTS [25]
6.
Revenue
(in thousands)
Sales
Gold credit sales
Silver
Silver credit sales
Concentrate sales
Total silver sales
Palladium credit sales
Cobalt sales
Total sales revenue
Notes to the Consolidated Financial Statements
Years Ended December 31, 2022 and 2021 (US Dollars)
Years Ended December 31
2022
2021
$
529,698 50% $
561,920 47%
$
400,372 38% $
70,631
6%
$
$
$
471,003 44% $
3% $
3% $
32,160
32,192
83,493
489,936 41%
7%
573,429 48%
4%
1%
45,834
20,482
$ 1,065,053 100% $ 1,201,665 100%
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 bullion banks. 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, 2022, sales to three financial institutions accounted for 29%, 24% and 20% of
the Company’s revenue as compared to sales to four financial institutions accounted for 28%, 25%, 11% and 10% 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. 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.
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 are not significant and do not
constrain the recognition of revenue.
Cobalt Sales
Cobalt is sold to a third-party sales agent who generally on-sells the cobalt to Wheaton approved third party
customers. Revenue from the sale of cobalt is recognized once the third-party customer and sales terms have been
agreed to between Wheaton and the third-party sales agent, which is also the date that control of the cobalt is
transferred to the third-party sales agent. Should the sales agent retain the cobalt for their own use, revenue is
recognized once the sales terms have been agreed to between Wheaton and the third-party sales agent and the
product has been delivered, which is also the date that control of the cobalt is transferred to the third-party sales
agent.
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - FINANCIAL STATEMENTS [26]
7.
General and Administrative
(in thousands)
Corporate
Salaries and benefits
Depreciation
Professional fees
Business travel
Director fees
Employer health tax
Audit and regulatory
Insurance
Other
General and administrative - corporate
Subsidiaries
Salaries and benefits
Depreciation
Professional fees
Business travel
Director fees
Insurance
Other
General and administrative - subsidiaries
Consolidated general and administrative
8.
Share Based Compensation
(in thousands)
Equity settled share based compensation 1
Stock options
RSUs
Cash settled share based compensation
PSUs
Total share based compensation
1) Equity settled stock based compensation is a non-cash expense.
Notes to the Consolidated Financial Statements
Years Ended December 31, 2022 and 2021 (US Dollars)
Years Ended December 31
2022
2021
$
$
$
$
$
14,895 $
1,154
1,680
950
1,109
840
2,845
2,135
3,469
29,077 $
4,327 $
434
539
242
200
44
968
6,754 $
14,205
1,102
3,376
219
1,096
750
2,937
1,771
3,100
28,556
4,039
408
797
33
200
36
1,050
6,563
35,831 $
35,119
Years Ended December 31
Note
2022
2021
23.2 $
23.3
2,366 $
3,480
2,065
3,196
24.1 $
14,214 $
14,004
$
20,060 $
19,265
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - FINANCIAL STATEMENTS [27]
9.
Donations and Community Investments
(in thousands)
Local donations and community investments 1
Partner donations and community investments 2
COVID-19 and community support and response fund
Notes to the Consolidated Financial Statements
Years Ended December 31, 2022 and 2021 (US Dollars)
Years Ended December 31
$
2022
2,333 $
3,798
165
2021
1,953
3,204
1,444
Total donations and community investments
$
6,296 $
6,601
1) The Local Community Investment Program supports organizations in Vancouver and the Cayman Islands, where Wheaton’s offices are located.
2) The Partner Community Investment Program supports the communities influenced by Mining Partners' operations.
10. Other (Income) Expense
(in thousands)
Interest income
Dividends received from equity investments designated as FVTOCI ¹
relating to investments held at the end of the period
Foreign exchange (gain) loss
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
17
Other
Years Ended December 31
Note
2022
(6,321) $
$
2021
(241)
(221)
275
2,101
(5,733)
(1,957)
(453)
(890)
1,033
1,380
(2,198)
Total other (income) expense
$
(7,449) $
(5,776)
1) FVTOCI refers to Fair Value Through Other Comprehensive Income
2) FVTPL refers to Fair Value Through Profit or Loss
11. Accounts Receivable
(in thousands)
Trade receivables from provisional concentrate sales, net of fair value
adjustment
Trade receivables from sales of cobalt
Other accounts receivable
Total accounts receivable
December 31 December 31
Note
2022
2021
$
6
6
2,516 $
6,642
1,029
1,716
9,488
373
$
10,187 $
11,577
The trade receivables from sales of cobalt generally have extended payment terms with outstanding amounts being
supported by a $10 million letter of credit.
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - FINANCIAL STATEMENTS [28]
Notes to the Consolidated Financial Statements
Years Ended December 31, 2022 and 2021 (US Dollars)
12. Cobalt Inventory
The Company carries its cobalt inventory, which is recorded using weighted average costing, at the lower of cost or
net realizable value. A summary of the inventory on hand at December 31, 2022 and 2021 is as follows:
(in thousands)
Cobalt Inventory, carried at:
Cost
Net realizable value
Total cobalt inventory
December 31 December 31
2022
2021
$
$
- $
10,530
8,712
-
10,530 $
8,712
At December 31, 2022, the Company recorded an inventory write down of $2 million compared to an inventory write
down of $NIL for the comparable period of the prior year.
13. Mineral Stream Interests
Cost
Additions
Balance
Jan 1, 2022
(Reductions) Disposal
Year Ended December 31, 2022
Accumulated Depletion & Impairment 1
Balance
Dec 31,
2022
Balance
Jan 1, 2022 Depletion Disposal
Impairment
(Charge)
Reversal
Balance
Dec 31, 2022
Carrying
Amount
Dec 31,
2022
$ 3,059,876 $
623,864
140,058
220,429
239,352
761,334
-
-
-
-
-
- $ 3,059,876 $
(621,937) $
(54,677)
- $
- $
(676,614) $ 2,383,262
- 623,864
(316,695)
(23,753)
- 140,058
(36,269)
(8,206)
- 220,429
(53,706)
(10,858)
- 239,352
(19,567)
(3,933)
-
-
-
-
-
(340,448) 283,416
-
-
-
(44,475)
95,583
(64,564) 155,865
(23,500) 215,852
138,515 (354,458) 545,391
(396,542)
(1,252)
348,265
(1,719)
(51,248) 494,143
(in thousands)
Gold interests
Salobo
Sudbury 2
Constancia
San Dimas
Stillwater 3
Other 4
$ 5,044,913 $ 138,515 $ (354,458) $ 4,828,970 $ (1,444,716) $ (102,679) $ 348,265 $ (1,719) $ (1,200,849) $ 3,628,121
Silver interests
Peñasquito
$ 524,626 $
Antamina
Constancia
Other 5
900,343
302,948
1,438,974
- $
-
-
- 524,626 $
(202,608) $
(28,344) $
- $
- $
(230,952) $ 293,674
- 900,343
(320,291)
(34,684)
- 302,948
(97,064)
(12,937)
-
-
-
(354,975) 545,368
-
(110,001) 192,947
4,519 (425,294) 1,018,199
(845,779)
(36,640)
306,986
10,330
(565,103) 453,096
$ 3,166,891 $
4,519 $ (425,294) $ 2,746,116 $ (1,465,742) $ (112,605) $ 306,986 $ 10,330 $ (1,261,031) $ 1,485,085
Palladium interests
Stillwater 3
$ 263,721 $
-
- $ 263,721 $
(30,891) $
(6,018)
- $
- $
(36,909) $ 226,812
Platinum interests
$
Marathon
Cobalt interests
- $
9,428
- $
9,428 $
- $
-
- $
- $
- $
9,428
Voisey's Bay 6 $ 393,422 $
-
- $ 393,422 $
(21,801) $
(14,048)
- $
- $
(35,849) $ 357,573
$ 8,868,947 $ 152,462 $ (779,752) $ 8,241,657 $ (2,963,150) $ (235,350) $ 655,251 $ 8,611 $ (2,534,638) $ 5,707,019
1) Includes cumulative impairment charges to December 31, 2022 as follows: Pascua-Lama silver interest - $338 million; and Sudbury gold interest - $120 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, Copper World Complex (formerly referred to as Rosemont in these financial statements), 777, Marmato, Santo Domingo, Fenix, Blackwater
Marathon, Goose and Curipamba gold interests. As the 777 mine has been permanently closed, the 777 PMPA has been reflected as a disposition, with the carrying value
transferred to a long-term receivable (Note 19).
5) Comprised of the Los Filos, Zinkgruvan, Yauliyacu, Stratoni, Keno Hill, Neves-Corvo, Minto, Aljustrel, Loma de La Plata, Pascua-Lama, Copper World Complex (formerly
referred to as Rosemont in these financial statements), 777, Marmato, Cozamin, Blackwater and Curipamba silver interests. The Keno Hill PMPA and the Yauliyacu PMPA
were terminated on September 7, 2022 and December 14, 2022, respectively. As the 777 mine has been permanently closed, the 777 PMPA has been reflected as a
disposition, with the carrying value transferred to a long-term receivable (Note 19).
6) When cobalt is delivered to the Company it is recorded as inventory until such time as it is sold and the cost of the cobalt is recorded as a cost of sale. Depletion in this table
for the Voisey’s Bay cobalt interest is inclusive of depletion relating to inventory.
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - FINANCIAL STATEMENTS [29]
Notes to the Consolidated Financial Statements
Years Ended December 31, 2022 and 2021 (US Dollars)
Cost
Accumulated Depletion & Impairment 1
Year Ended December 31, 2021
Balance
Jan 1, 2021
Additions
(Reductions)
Balance
Dec 31, 2021
Balance
Jan 1, 2021
Depletion
Impairment
Reversal
Balance
Dec 31, 2021
Carrying
Amount
Dec 31, 2021
$ 3,059,876 $
- $ 3,059,876 $
(550,532) $
(71,405) $
- $
(621,937) $ 2,437,939
623,864
136,058
220,429
239,352
-
623,864
(302,848)
(13,847)
4,000
140,058
-
-
220,429
239,352
(30,489)
(38,227)
(15,042)
(5,780)
(15,479)
(4,525)
(1,836)
402,232
359,102
761,334
(394,706)
-
-
-
-
-
(316,695)
(36,269)
(53,706)
(19,567)
(396,542)
307,169
103,789
166,723
219,785
364,792
$ 4,681,811 $ 363,102 $ 5,044,913 $ (1,331,844) $ (112,872) $
- $ (1,444,716) $ 3,600,197
(in thousands)
Gold interests
Salobo
Sudbury 2
Constancia
San Dimas
Stillwater 3
Other 4
Silver interests
Peñasquito
$
524,626 $
- $
524,626 $
(174,054) $
(28,554) $
- $
(202,608) $
322,018
Antamina
Constancia
Other 5
900,343
302,948
-
-
900,343
(273,409)
302,948
(85,904)
(46,882)
(11,160)
1,281,228
157,746
1,438,974
(806,253)
(39,526)
-
-
-
(320,291)
(97,064)
(845,779)
580,052
205,884
593,195
$ 3,009,145 $ 157,746 $ 3,166,891 $ (1,339,620) $ (126,122) $
- $ (1,465,742) $ 1,701,149
Palladium interests
Stillwater 3
$
263,721 $
- $
263,721 $
(22,332) $
(8,559) $
- $
(30,891) $
232,830
Cobalt interests
Voisey's Bay 6 $
393,422 $
- $
393,422 $
(165,912) $
(12,606) $ 156,717 $
(21,801) $
371,621
$ 8,348,099 $ 520,848 $ 8,868,947 $ (2,859,708) $ (260,159) $ 156,717 $ (2,963,150) $ 5,905,797
1) Includes cumulative impairment charges to December 31, 2021 as follows: Keno Hill silver interest - $11 million; Pascua-Lama silver interest - $338 million; 777 silver
interest - $64 million; 777 gold interest - $151 million; and Sudbury gold interest - $120 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, Copper World Complex (formerly referred to as Rosemont in these financial statements), 777, Marmato, Santo Domingo, Fenix and Blackwater gold
interests.
5) Comprised of the Los Filos, Zinkgruvan, Yauliyacu, Stratoni, Keno Hill, Neves-Corvo, Minto, Aljustrel, Loma de La Plata, Pascua-Lama, Copper World Complex (formerly
referred to as Rosemont in these financial statements), 777, Marmato, Cozamin and Blackwater silver interests. The Keno Hill PMPA and the Yauliyacu PMPA were
terminated on September 7, 2022 and December 14, 2022, respectively.
6) When cobalt is delivered to the Company it is recorded as inventory until such time as it is sold and the cost of the cobalt is recorded as a cost of sale. Depletion in this table
for the Voisey’s Bay cobalt interest is inclusive of depletion relating to inventory.
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - FINANCIAL STATEMENTS [30]
Notes to the Consolidated Financial Statements
Years Ended December 31, 2022 and 2021 (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, 2022
December 31, 2021
Depletable
Non-
Depletable
Total
Depletable
Non-
Depletable
Total
$ 1,990,789 $
392,473 $ 2,383,262 $ 2,045,466 $
392,473 $ 2,437,939
239,002
89,097
51,459
191,051
44,414
6,486
104,406
24,801
19,248
474,895
283,416
244,109
95,583
155,865
215,852
494,143
96,808
60,574
196,853
28,025
63,060
6,981
106,149
22,932
336,767
307,169
103,789
166,723
219,785
364,792
$ 2,580,646 $ 1,047,475 $ 3,628,121 $ 2,671,835 $
928,362 $ 3,600,197
$
219,969 $
198,294
73,705 $
347,074
293,674 $
545,368
237,720 $
232,977
84,298 $
347,075
182,171
139,424
10,776
313,672
192,947
453,096
194,364
272,620
11,520
320,575
322,018
580,052
205,884
593,195
$
739,858 $
745,227 $ 1,485,085 $
937,681 $
763,468 $ 1,701,149
$
218,104 $
8,708 $
226,812 $
222,859 $
9,971 $
232,830
(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
Platinum interests
Marathon
$
- $
9,428 $
9,428 $
- $
- $
-
Cobalt interests
Voisey's Bay
$
316,749 $
40,824 $
357,573 $
330,795 $
40,826 $
371,621
$ 3,855,357 $ 1,851,662 $ 5,707,019 $ 4,163,170 $ 1,742,627 $ 5,905,797
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, Copper World Complex (formerly referred to as Rosemont in these financial statements), 777, Marmato, Santo Domingo, Fenix, Blackwater,
Marathon, Goose and Curipamba gold interests. As the 777 mine has been permanently closed, the 777 PMPA has been reflected as a disposition, with the carrying value
transferred to a long-term receivable (Note 19).
4) Comprised of the Los Filos, Zinkgruvan, Yauliyacu, Stratoni, Keno Hill, Neves-Corvo, Minto, Aljustrel, Loma de La Plata, Pascua-Lama, Copper World Complex (formerly
referred to as Rosemont in these financial statements), 777, Marmato, Cozamin, Blackwater and Curipamba silver interests. The Keno Hill PMPA and the Yauliyacu PMPA
were terminated on September 7, 2022 and December 14, 2022, respectively. As the 777 mine has been permanently closed, the 777 PMPA has been reflected as a
disposition, with the carrying value transferred to a long-term receivable (Note 19).
Constancia – Pampacancha Additional Upfront Payment
On May 10, 2021, Wheaton and Hudbay Minerals Inc. (“Hudbay”) agreed to amend the Constancia streaming
agreement so that Hudbay would no longer be required to deliver an additional 8,020 ounces of gold to Wheaton for not
mining four million tonnes of ore from Pampacancha by June 30, 2021. As part of that amendment, Hudbay agreed to
increase the fixed gold recoveries that apply to Constancia ore production from 55% to 70% during the reserve life of
Pampacancha. Additionally, as Hudbay mined and processed four million tonnes of ore from the Pampacancha deposit
by December 31, 2021, the Company was required to make an additional deposit payment of $4 million to Hudbay,
which was paid on December 23, 2021.
Acquisition of Santo Domingo Precious Metals Purchase Agreement
On March 24, 2021, the Company entered into a PMPA with Capstone in respect to the Santo Domingo project
located in the Atacama Region of Chile. Under the terms of the agreement, the Company will purchase an amount of
gold equal to 100% of the payable gold production until 285,000 ounces have been delivered, thereafter dropping to
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - FINANCIAL STATEMENTS [31]
Notes to the Consolidated Financial Statements
Years Ended December 31, 2022 and 2021 (US Dollars)
67% of payable gold production for the life of the mine. The Company will pay Capstone a total upfront cash
consideration of $290 million, $30 million of which was paid on April 21, 2021 and the remainder of which is payable
during construction of the Santo Domingo project, subject to customary conditions being satisfied, including Capstone
attaining sufficient financing to cover total expected capital expenditures. In addition, Wheaton will make ongoing
production payments for gold ounces delivered equal to 18% of the spot gold price until the market value of gold
delivered to the Company, net of the per ounce production payment, exceeds the initial upfront cash deposit, and
22% of the spot gold price thereafter.
Acquisition of Fenix Precious Metals Purchase Agreement
On November 15, 2021, the Company entered into a PMPA (the “Fenix PMPA”) with Rio2 Limited (“Rio2”) in respect
of gold production from the Fenix Project located in Chile (the “Fenix Project”). Under the terms of the Fenix PMPA,
the Company will acquire an amount of gold equal to 6% of the gold production until 90,000 ounces have been
delivered, 4% of the gold production until the delivery of a further 140,000 ounces, and 3.5% gold production
thereafter for the life of mine. In addition, under the Fenix PMPA, the Company will pay total upfront cash
consideration of $50 million, $25 million of which was paid on March 25, 2022. The remaining $25 million is payable
subject to Rio2’s receipt of its Environmental Impact Assessment for the Fenix Project, and certain other conditions.
In addition, the Company will make ongoing production payments equal to 18% of the spot price until the value of
gold delivered, net of the production payment, is equal to the upfront consideration of $50 million, at which point the
production payment will increase to 22% of the spot gold price.
Acquisition of Blackwater Precious Metals Purchase Agreements
On December 13, 2021, the Company entered into a PMPA (the “Blackwater Silver PMPA”) with Artemis Gold Inc.
(“Artemis”) in respect of silver production from the Blackwater Project located in British Columbia in Canada (the
“Blackwater Project”). Under the Blackwater Silver PMPA, Wheaton will acquire an amount of silver equal to 50% of
the payable silver production until 17.8 million ounces have been delivered and 33% of payable silver production
thereafter for the life of the mine. The Company is committed to pay total upfront cash consideration of approximately
$141 million for this stream, payable in four equal installments during the construction of the Blackwater Project,
subject to customary conditions. In addition, Wheaton will make ongoing cash payments equal to 18% of the spot
silver price per ounce of silver delivered under the Blackwater Silver PMPA until the value of silver delivered, net of
the per ounce production payment for silver, is equal to the upfront consideration of $141 million, and 22% of the spot
price of silver thereafter.
Additionally, on December 13, 2021, the Company announced that it had entered into a definitive agreement to
acquire the existing gold stream held by New Gold Inc. (“New Gold”) in respect of gold production from the
Blackwater Project (the “Blackwater Gold PMPA”). Wheaton is entitled to purchase an amount of gold equal to 8% of
the payable gold production until 279,908 ounces have been delivered, thereafter dropping to 4% of payable gold
production for the life of the mine. The Company paid $300 million to New Gold for the Blackwater Gold PMPA. In
addition, Wheaton will make ongoing production payments equal to 35% of the spot gold price per ounce of gold
delivered under the agreement.
Acquisition of Curipamba Precious Metals Purchase Agreement
On January 17, 2022, the Company entered into a PMPA (the “Curipamba PMPA”) with Adventus Mining Corporation
(“Adventus”) in respect of gold and silver production from the Curipamba Project located in Ecuador (the “Curipamba
Project”). Under the Curipamba PMPA, Wheaton will purchase an amount of gold equal to 50% of the payable gold
production until 145,000 ounces have been delivered, thereafter dropping to 33% of payable gold production for the
life of the mine and an amount of silver equal to 75% of the payable silver production until 4.6 million ounces have
been delivered, thereafter dropping to 50% for the life of mine. Under the terms of the Curipamba PMPA, the
Company is committed to pay Adventus total upfront cash consideration of $175.5 million, $13 million of which is
available pre-construction and $500,000 of which will be paid to support certain local community development
initiatives around the Curipamba Project. The initial payment of $13 million was paid on December 6, 2022. The
remainder will be payable in four staged installments during construction, subject to various customary conditions
being satisfied. In addition, Wheaton will make ongoing production payments for the gold and silver ounces delivered
equal to 18% of the spot prices until the value of gold and silver delivered, net of the production payment, is equal to
the upfront consideration of $175.5 million, at which point the production payment will increase to 22% of the spot
prices.
Acquisition of Marathon Precious Metals Purchase Agreement
On January 26, 2022, the Company entered into a PMPA (the “Marathon PMPA”) with Generation Mining Limited
(“Gen Mining”) in respect of gold and platinum production from the Marathon Project located in Ontario, Canada (the
“Marathon Project”). Under the Marathon PMPA, Wheaton will purchase an amount of gold equal to 100% of the
payable gold production until 150,000 ounces have been delivered, thereafter dropping to 67% of payable gold
production for the life of the mine and an amount of platinum production equal to 22% of the payable platinum
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - FINANCIAL STATEMENTS [32]
Notes to the Consolidated Financial Statements
Years Ended December 31, 2022 and 2021 (US Dollars)
production until 120,000 ounces have been delivered, thereafter dropping to 15% for the life of mine. Under the terms
of the Marathon PMPA, the Company is committed to pay Gen Mining total upfront cash consideration of $178 million
(Cdn$240 million), $16 million (Cdn$20 million) of which was paid on March 31, 2022 and $15 million (Cdn$20
million) was paid on September 7, 2022. The remainder is to be paid in four staged installments during construction,
subject to various customary conditions being satisfied and pre-determined completion tests. In addition, Wheaton
will make ongoing production payments for the gold and platinum ounces delivered equal to 18% of the spot prices
until the value of gold and platinum delivered, net of the production payment, is equal to the upfront consideration of
Cdn$240 million, at which point the production payment will increase to 22% of the spot prices.
Acquisition of Goose Precious Metals Purchase Agreement
On February 8, 2022, the Company entered into a PMPA (the “Goose PMPA”) with Sabina Gold & Silver Corp.
(“Sabina”) in respect of gold production from the Goose Project, part of Sabina’s Back River Gold District located in
Nunavut, Canada (the “Goose Project”). Under the Goose PMPA, Wheaton will purchase an amount of gold equal to
4.15% of the payable gold production until 130,000 ounces have been delivered, dropping to 2.15% until 200,000
ounces have been delivered, and thereafter dropping to 1.5% of the payable gold production for the life of mine.
Under the terms of the Goose PMPA, the Company is committed to pay Sabina an upfront payment of $125 million in
four equal installments during construction of the Goose Project, subject to customary conditions. The initial payment
of $31.25 million was paid on September 28, 2022 and the second installment of $31.25 million was paid on
December 6, 2022.
In addition, Wheaton will make ongoing production payments for the gold ounces delivered equal to 18% of the spot
gold price until the value of gold delivered, net of the production payment, is equal to the upfront consideration of
$125 million, at which point the production payment will increase to 22% of the spot gold price.
Amendment to the Marmato PMPA
On March 21, 2022, the Company amended its PMPA with Aris Mining Corporation (“Aris Mining”) in respect of the
Marmato PMPA. Under the terms of the amended agreement, Wheaton will purchase 10.5% of the gold production
and 100% of the silver production from the Marmato Upper and Lower mines until 310,000 ounces of gold and 2.15
million ounces of silver have been delivered, after which the stream drops to 5.25% of the gold production and 50% of
the silver production for the life of mine. This increases the gold stream from the original Marmato PMPA under which
Wheaton was entitled to purchase 6.5% of the gold production until 190,000 ounces were delivered, after which the
stream was to drop to 3.25% of the gold production. The silver stream is unchanged. Under the terms of the
amended Marmato PMPA, the Company is committed to pay Aris Mining total upfront cash payments of $175 million
($65 million relating to the increase in the gold stream). Of this amount, $53 million ($15 million relating to the
increase in the gold stream) has been paid and the remaining amount is payable during the construction of the
Marmato Lower Mine, subject to customary conditions.
Termination of the Keno Hill PMPA
On October 2, 2008, the Company entered into a PMPA (the “Keno Hill PMPA”) with Alexco Resource Corp.
(“Alexco”) to acquire an amount equal to 25% of the silver produced by Alexco’s Keno Hill mine in Canada. On
September 7, 2022, Hecla Mining Company (“Hecla”) completed the previously announced acquisition of all of the
outstanding common shares of Alexco. In connection with this acquisition, the Company entered an agreement with
Hecla to terminate the Keno Hill PMPA effective September 7, 2022 in exchange for 34,800,989 common shares of
Hecla valued at $141 million (the “Hecla shares”1), resulting in a gain on disposal of the Keno Hill PMPA in the
amount of $104 million, calculated as follows:
(in thousands)
Fair value of Hecla Mining Company shares received
Less: carrying value after impairment reversal, plus closing costs
Gain on disposal of the Keno Hill PMPA
$
140,596
(36,201)
$
104,395
Termination of the Yauliyacu PMPA
On March 23, 2006, the Company entered into a PMPA (the “Yauliyacu PMPA”) with Glencore plc (“Glencore”) in
respect of the mine in Peru. Under the terms of the amended agreement, per annum the Company purchased an
amount equal to 100% of the first 1.5 million ounces of silver for which an offtaker payment is due, and 50% of any
excess. On August 18, 2022, the Company announced that it had entered into an agreement with Glencore to
1 The Hecla shares represent approximately 6% of Hecla’s current issued and outstanding shares and are subject to
a six month hold period from the closing date of September 7, 2022.
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - FINANCIAL STATEMENTS [33]
Notes to the Consolidated Financial Statements
Years Ended December 31, 2022 and 2021 (US Dollars)
terminate the Yauliyacu PMPA for a cash payment of $150 million, less the aggregate value of any deliveries to
Wheaton, prior to closing, of silver produced subsequent to December 31, 2021. On December 14, 2022 the
Company received a cash payment of $132 million resulting in a gain on disposal of the Yauliyacu PMPA in the
amount of $51 million, calculated as follows:
(in thousands)
Proceeds received on disposal of Yauliyacu
Less: carrying value plus closing costs
Gain on disposal of the Yauliyacu PMPA
$
131,937
(80,464)
$
51,473
14.
Impairment (Impairment Reversal) 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 was an
indicator of impairment and indicators of impairment reversal identified at December 31, 2022 and December 31, 2021
for the following PMPAs:
(in thousands)
Gold interests
Other gold interests
777
Silver interests
Other silver interests
Keno Hill
Cobalt Interests
Voisey's Bay
Total net impairment reversal
Years Ended December 31
Note
2022
2021
19 $
1,719 $
$
(10,330) $
-
-
-
(156,717)
$
(8,611) $
(156,717)
Voisey’s Bay – Impairment Reversal
At June 30, 2019, the Company determined there to be an impairment charge relative to the Voisey’s Bay cobalt
interest (“Voisey’s Bay PMPA”) due to a significant decline in market cobalt prices and a sale of a similar PMPA by a
third-party group at a price significantly below Wheaton’s comparable carrying value for the Voisey’s Bay PMPA. At
June 30, 2019, management estimated that the recoverable amount under the Voisey’s Bay PMPA was $227 million,
representing its FVLCD and resulting in an impairment charge of $166 million.
At December 31, 2021, an indicator of impairment reversal was identified relative to the Voisey’s Bay PMPA as a
result of significant and sustained increases in the market prices of cobalt over the year ended December 31, 2021
compared to market prices of cobalt at the time the original impairment was recorded. Management estimated that
the recoverable amount at December 31, 2021 of the Voisey’s Bay PMPA exceeded the carrying amount that would
have been determined, net of depletion, had no impairment charge been recognized for the PMPA in prior years. The
recoverable amount represented its FVLCD and resulted in an impairment reversal of $157 million at December 31,
2021 which represented a full reversal of the impairment charge recorded in the year ended December 31, 2019, net
of depletion that otherwise would have been recorded. The recoverable amount of the Voisey’s Bay PMPA was
estimated using a discounted cash flow model with an average discount rate of 8% and an average projected market
price of cobalt of $23.97 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.
Keno Hill – Impairment Reversal
At December 31, 2015, the Company determined there to be an impairment charge of $10.5 million relative to the
Keno Hill PMPA due to the suspension of operations at the Bellekeno mine.
As discussed in Note 13, on September 7, 2022, the Company terminated the Keno Hill PMPA in exchange for
34,800,989 common shares of Hecla valued at $141 million. This value exceeded the carrying amount of the Keno Hill
PMPA that would have been determined, net of depletion, had no impairment charge been recognized for the Keno Hill
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - FINANCIAL STATEMENTS [34]
Notes to the Consolidated Financial Statements
Years Ended December 31, 2022 and 2021 (US Dollars)
PMPA. As a result, an impairment reversal of $10.3 million has been recorded for the year ended December 31, 2022,
which represents a full reversal of the impairment charge recorded in the year ended December 31, 2015, net of
depletion that otherwise would have been recorded. The recoverable amount of the Keno Hill PMPA was determined
based on the value of the consideration received in exchange for its termination, and as such is classified within Level
1 of the fair value hierarchy.
15.
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 32 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.
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
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
Aris Mining
Panoro
Kutcho
Guyana $
Peru
Canada
15,500 $
13,000
16,852
138,000 $
127,000
58,000
153,500
140,000
74,852
10%
25% ³
100%
50% Life of Mine
100% ³ Life of Mine
100% Life of Mine
$
45,352 $
323,000 $
368,352
1) Expressed in thousands of United States dollars; excludes closing costs and capitalized interest, where applicable.
2) Please refer to Note 32 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.
Kutcho – Contract Modifications
As discussed in Note 17, on February 18, 2022, the Company agreed to modify the Kutcho Early Deposit Agreement,
including the elimination of the drop-down in attributable gold and silver to 66.7% once certain thresholds had been
achieved, and eliminating the requirement 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.
16. Mineral Royalty Interests
On January 5, 2021, the Company paid $3 million for an existing 2.0% net smelter return royalty interest on the first
600,000 ounces of gold mined from ore extracted from the Brewery Creek quartz mineral claims located in the Yukon
Territories, Canada owned by Golden Predator Exploration Ltd., a subsidiary of Sabre Gold Mines Corp. (“Golden
Predator”) and any mineral tenure derived therefrom, and a 2.75% net smelter returns royalty interest thereafter (the
“Brewery Creek Royalty”). The Brewery Creek Royalty agreement provides, among other things, that Golden
Predator may reduce the 2.75% net smelter returns royalty interest to 2.125%, on payment of the sum of Cdn$2
million to Wheaton.
Additionally, the Company has a 0.5% net smelter return royalty interest in the Metates properties (the “Metates
Royalty”) located in Mexico from Chesapeake Gold Corp. (“Chesapeake”) for the life of mine. The carrying cost of the
Metates Royalty is $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 these royalty agreements.
17. 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 had
a seven year term to maturity, carried interest at 10% per annum, compounded and payable semi-annually. Kutcho
elected to defer the first seven interest payments. The deferred interest carried interest at 15% per annum, compounded
semi-annually.
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - FINANCIAL STATEMENTS [35]
Notes to the Consolidated Financial Statements
Years Ended December 31, 2022 and 2021 (US Dollars)
In addition to the Kutcho Convertible Note, on November 25, 2019, the Company entered into a non-revolving term loan
with Kutcho, under which Kutcho had drawn $0.8 million (Cdn$1.0 million). The credit facility carried interest at 15% per
annum, compounded monthly.
Effective February 18, 2022, the Company agreed to settle and terminate the Kutcho Convertible Note and the non-
revolving term loan with Kutcho in exchange for shares of Kutcho valued at $6.7 million in addition to certain other
modifications to the Kutcho Early Deposit Agreement, including the elimination of the drop-down in attributable gold and
silver to 66.7% once certain thresholds had been achieved, and eliminating the requirement 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.
Convertible Notes Receivable Valuation Summary
The fair value of the Kutcho Convertible Note, which was not traded in an active market, was determined by
reference to the value of the shares the Company would receive if the right to convert the note into shares was
exercised.
A summary of the fair value of the Kutcho Convertible Note and the fair value changes recognized as a component of
the Company’s net earnings during the years ended December 31, 2022 and 2021 is presented below:
Fair Value at
Dec 31, 2021
Amount
Advanced
Termination
Year Ended December 31, 2022
Fair Value
Adjustment
Gains
(Losses)
Fair Value at
Dec 31, 2022
$ 17,086
$ -
$ (15,706)
$ (1,380)
$ -
Year Ended December 31, 2021
Fair Value at
Dec 31, 2020
$ 11,353
Amount
Advanced
$ -
Termination
$ -
Fair Value
Adjustment
Gains
(Losses)
$ 5,733
Fair Value at
Dec 31, 2021
$ 17,086
(in thousands)
Kutcho
(in thousands)
Kutcho
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - FINANCIAL STATEMENTS [36]
18.
Long-Term Equity Investments
(in thousands)
Common shares held
Warrants held
Total long-term equity investments
Common Shares Held
Notes to the Consolidated Financial Statements
Years Ended December 31, 2022 and 2021 (US Dollars)
December 31 December 31
2022
2021
$
255,535 $
59,941
560
1,536
$
256,095 $
61,477
Shares
Owned
(000's)
% of
Outstanding
Shares
Owned
(in thousands)
Fair Value at
Dec 31, 2021
Cost of
Additions
Proceeds of
Disposition 1
Year Ended December 31, 2022
Fair Value
Adjustment
Gains
(Losses) 2
Fair Value at
Dec 31, 2022
Realized Loss
on Disposal
Bear Creek
13,264
8.65% $ 12,764 $ - $ - $ (5,321) $ 7,443 $ -
Sabina
Kutcho
Hecla
Other
31,095
5.58%
13,381
18,640
14.83%
35,012
5.78%
-
-
19,833
11,721
141,450
-
-
-
(2,679)
(8,624)
30,535
3,097
53,218
194,668
-
-
-
33,796
6,139
(4,601)
(15,542)
19,792
(3,797)
Total
1) Disposals during 2022 were made as a result of the acquisition of the companies to which the shares relate by unrelated third party entities.
2)
Fair Value Gains (Losses) are reflected as a component of OCI.
$ 59,941 $ 179,143 $ (4,601) $ 21,052 $ 255,535 $ (3,797)
Shares
Owned
(000's)
% of
Outstanding
Shares
Owned
(in thousands)
Fair Value at
Dec 31, 2020
Cost of
Additions
Proceeds of
Disposition 1
Year Ended December 31, 2021
Fair Value
Adjustment
Gains
(Losses) 2
Fair Value at
Dec 31, 2021
Realized Gain
on Disposal
Bear Creek
13,264
10.67% $ 32,609 $ - $ - $ (19,845) $ 12,764 $ -
Sabina
11,700
First Majestic
-
2.82%
0.00%
Other
Total
30,233
95,984
37,415
-
-
-
(16,852)
13,381
(112,188)
7,453
(17,565)
16,204
6,493
-
33,796
-
60,530
13,048
$ 196,241 $ 7,453 $ (129,753) $ (14,000) $ 59,941 $ 73,578
1) Disposals during 2021 were made in order to capitalize on the share appreciation resulting from the strong commodity price environment.
2)
Fair Value Gains (Losses) are reflected as a component of OCI.
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.
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 2022 ANNUAL REPORT - FINANCIAL STATEMENTS [37]
Notes to the Consolidated Financial Statements
Years Ended December 31, 2022 and 2021 (US Dollars)
19. Refundable Deposit – 777 PMPA
On August 8, 2012, the Company entered into a PMPA with Hudbay in respect to the 777 mine (Note 13). Under the
terms of 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 is entitled to a refund of the difference (the “Refundable Deposit”) at the conclusion of the 40 year term.
On June 22, 2022, Hudbay announced that mining activities at the 777 mine have concluded after the reserves were
depleted and closure activities have commenced.
At December 31, 2022, the balance of the Refundable Deposit was $79 million. The Company has estimated that a
credit facility with similar terms and conditions would have an interest rate of 8%, resulting in the Refundable Deposit
having a fair value of $8 million at December 31, 2022, resulting in a $2 million impairment on the 777 PMPA. The
Company has derecognized the 777 PMPA and recognized a long-term receivable, with interest to be accreted on a
quarterly basis until maturity which is August 8, 2052.
20.
Property, Plant and Equipment
(in thousands)
Cost
Balance - January 1, 2022
Additions
Disposals
Balance - December 31, 2022
Accumulated Depreciation
Balance - January 1, 2022
Disposals
Depreciation
Balance - December 31, 2022
Net book value - December 31, 2022
(in thousands)
Cost
Balance - January 1, 2021
Additions
Disposals
Balance - December 31, 2021
Accumulated Depreciation
Balance - January 1, 2021
Disposals
Depreciation
Balance - December 31, 2021
Net book value - December 31, 2021
Leasehold
Improvements
$
$
$
$
$
4,382
-
(378)
4,004
(3,226)
378
(320)
(3,168)
836
Leasehold
Improvements
$
$
$
$
$
4,382
-
-
4,382
(2,906)
-
(320)
(3,226)
1,156
December 31, 2022
Right of Use
Assets -
Property
$
$
$
$
$
4,793
-
-
4,793
(2,196)
-
(769)
(2,965)
1,828
Other
4,856
289
(228)
4,917
(3,100)
228
(499)
(3,371)
1,546
$
$
$
$
$
December 31, 2021
Right of Use
Assets -
Property
$
$
$
$
$
4,793
-
-
4,793
(1,444)
-
(752)
(2,196)
2,597
Other
4,131
730
(5)
4,856
(2,667)
5
(438)
(3,100)
1,756
$
$
$
$
$
Total
$ 14,031
289
(606)
$ 13,714
$
$
$
(8,522)
606
(1,588)
(9,504)
4,210
Total
$ 13,306
730
(5)
$ 14,031
$
$
$
(7,017)
5
(1,510)
(8,522)
5,509
21. Credit Facilities
21.1. Sustainability-Linked Revolving Credit Facility
On July 18, 2022, the term of the Company’s undrawn $2 billion revolving term loan (“Revolving Facility”) was
extended by an additional year, with the facility now maturing on July 18, 2027.
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
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - FINANCIAL STATEMENTS [38]
Notes to the Consolidated Financial Statements
Years Ended December 31, 2022 and 2021 (US Dollars)
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, 2022.
At the Company’s option, amounts drawn under the Revolving Facility incur interest based on the Company’s
leverage ratio at either (i) the Secured Overnight Financing Rate (“SOFR”) plus 1.10% to 2.30%; or (ii) the Bank of
Nova Scotia’s Base Rate plus 0.00% to 1.05%. Under both options, the interest rate shall not be less than 0%. In
connection with the extension, the interest rate paid on drawn amounts will be adjusted by up to +/- 0.05% based
upon the Company’s performance in three sustainability-related areas including climate change, diversity and overall
performance in sustainability. During the year ended December 31, 2022 and December 31, 2021, the stand-by fee
rate was 0.20%.
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. In connection with the Revolving Facility, there is $6 million unamortized debt issue costs which have been
recorded as a long-term asset under the classification Other (see Note 29).
21.2. Lease Liabilities
The lease liability on 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, on an undiscounted basis, 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
2022
818 $
1,152
2021
813
2,060
1,970 $
2,873
$
$
December 31
$
2022
870
1,182
-
$
2,052
21.3. Finance Costs
A summary of the Company’s finance costs associated with the above facilities during the period is as follows:
(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
Years Ended December 31
Note
2022
2021
$
$
21.1
21.1
21.2
5.3
- $
n.a.
- $
5,262
91
233
19,506
1.17%
229
5,313
123
152
$
5,586 $
5,817
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - FINANCIAL STATEMENTS [39]
22. Issued Capital
(in thousands)
Issued capital
Notes to the Consolidated Financial Statements
Years Ended December 31, 2022 and 2021 (US Dollars)
December 31 December 31
2021
2022
Note
Share capital issued and outstanding: 452,318,526 common shares
(December 31, 2021: 450,863,952 common shares)
22.1
$ 3,752,662 $ 3,698,998
22.1. 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, 2022, the Company had no preference shares
outstanding.
A continuity schedule of the Company’s issued and outstanding common shares from January 1, 2021 to December
31, 2022 is presented below:
At January 1, 2021
Share purchase options exercised 1
Restricted share units released 1
Dividend reinvestment plan 2
At December 31, 2021
Share purchase options exercised 1
Restricted share units released 1
Dividend reinvestment plan 2
At December 31, 2022
Number
of
Shares
Weighted
Average
Price
449,458,394
398,880
Cdn$24.96
116,880
Cdn$0.00
889,798
450,863,952
US$43.33
493,129
Cdn$28.76
87,838
Cdn$0.00
873,607
US$38.75
452,318,526
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%.
At the Market Equity Program
The Company has 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. 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.
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, 2022, the Company has not issued any shares under the ATM program.
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - FINANCIAL STATEMENTS [40]
22.2. Dividends Declared
(in thousands, except per share amounts)
Dividends declared per share
Average number of shares eligible for dividend
Total dividends paid
Paid as follows:
Cash
DRIP 1
Total dividends paid
Notes to the Consolidated Financial Statements
Years Ended December 31, 2022 and 2021 (US Dollars)
Years Ended December 31
2022
$
2021
0.57
450,188
0.60
$
451,577
$ 270,946
$ 256,607
$ 237,097
33,849
88% $ 218,052
38,555
12%
85%
15%
$ 270,946 100% $ 256,607 100%
Shares issued under the DRIP
874
890
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, 2022, cumulative dividends of $1,795 million have been declared and paid by the Company.
23. 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
2021
2022
Note
$
23.1
23.2
23.3
23.4
83,077 $
22,578
8,142
(47,250)
83,077
22,349
7,196
(65,586)
$
66,547 $
47,036
23.1. 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
Each warrant entitled the holder the right to purchase one of the Company’s common shares. The warrants expired
unexercised on February 28, 2023.
23.2. 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 to seven 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 or three 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.
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - FINANCIAL STATEMENTS [41]
Notes to the Consolidated Financial Statements
Years Ended December 31, 2022 and 2021 (US Dollars)
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
2022
2021
Cdn$60.00
1.32%
35%
1.72%
3.0
Cdn$13.84
283,440
Cdn$49.86
1.53%
35%
0.51%
3.0
Cdn$10.69
317,560
$ 3,069
$ 2,720
The following table summarizes information about the options outstanding and exercisable at December 31, 2022:
Exercise Price (Cdn$)
$26.24
$27.64¹
$30.82
$32.61¹
$32.93
$33.25¹
$33.47
$49.86
$54.11¹
$60.00
$63.60¹
Exercisable
Options
114,610
3,660
4,477
53,435
358,050
35,375
327,495
83,596
19,650
-
-
Non-Exercisable
Options
-
-
-
-
-
-
-
160,386
40,176
224,520
52,870
Total Options
Outstanding
114,610
3,660
4,477
53,435
358,050
35,375
327,495
243,982
59,826
224,520
52,870
Weighted
Average
Remaining
Contractual Life
0.2 years
0.2 years
1.5 years
2.2 years
1.2 years
1.2 years
2.2 years
5.2 years
5.2 years
6.2 years
6.2 years
1,000,348
477,952
1,478,300
3.2 years
1) US$ share purchase options converted to Cdn$ using the exchange rate of 1.3544, being the Cdn$/US$ exchange rate at December 31, 2022.
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - FINANCIAL STATEMENTS [42]
A continuity schedule of the Company’s outstanding share purchase options from January 1, 2021 to December 31,
2022 is presented below:
Notes to the Consolidated Financial Statements
Years Ended December 31, 2022 and 2021 (US Dollars)
At January 1, 2021
Granted (fair value - $3 million or Cdn$10.69 per option)
Exercised
At December 31, 2021
Granted (fair value - $3 million or Cdn$13.84 per option)
Exercised
Forfeited
At December 31, 2022
Number of
Options
Outstanding
Weighted
Average
Exercise Price
1,786,817
317,560
(398,880)
1,705,497
283,440
(493,129)
(17,508)
Cdn$29.54
49.86
24.96
Cdn$34.40
60.00
28.76
53.73
1,478,300
Cdn$41.37
As it relates to share purchase options, during the year ended December 31, 2022, the weighted average share price
at the time of exercise was Cdn$57.96 per share, as compared to Cdn$51.50 per share during the comparable period
in 2021.
23.3. 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 to three 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.
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 Share Based Compensation.
A continuity schedule of the Company’s restricted share units outstanding from January 1, 2021 to December 31,
2022 is presented below:
At January 1, 2021
Granted (fair value - $4 million)
Released
At December 31, 2021
Granted (fair value - $4 million)
Released
Forfeited
At December 31, 2022
Number of
RSUs
Outstanding
370,258
96,680
(116,880)
350,058
91,780
(87,838)
(3,794)
350,206
Weighted
Average
Intrinsic Value
at Date
Granted
$22.40
39.95
24.09
$26.69
46.72
28.85
39.95
$31.25
23.4. Long-Term Investment Revaluation Reserve
The Company’s long-term investments in common shares (Note 18) are held for long-term strategic purposes and not
for trading purposes. The Company has chosen to designate these long-term investments in common shares as
financial assets with fair value adjustments being recorded as a component of OCI as it believes that this provides a
more meaningful presentation for long-term strategic investments, rather than reflecting changes in fair value as a
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - FINANCIAL STATEMENTS [43]
Notes to the Consolidated Financial Statements
Years Ended December 31, 2022 and 2021 (US Dollars)
component of net earnings. As some of these long-term investments are denominated in Canadian dollars, changes in
their fair value is affected by both the change in share price in addition to changes in the Cdn$/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.
A continuity schedule of the Company’s long-term investment revaluation reserve from January 1, 2021 to December
31, 2022 is presented below:
(in thousands)
At January 1, 2021
Unrealized gain (loss) on LTIs 1
Reallocate reserve to retained earnings upon disposal of LTIs 1
18
At December 31, 2021
Unrealized gain (loss) on LTIs 1
Reallocate reserve to retained earnings upon disposal of LTIs 1
Deferred
Tax
Recovery
Change in
(Expense)
Fair Value
$ 22,103 $ (6,968)
Total
$ 15,135
(14,000)
(73,578)
$ (65,475)
21,052
(2,314)
9,171
$ (111)
(6,513)
(16,314)
(64,407)
$ (65,586)
14,539
18
3,797
-
3,797
At December 31, 2022
$ (40,626)
$ (6,624)
$ (47,250)
1) LTIs refers to long-term investments in common shares held.
24.
Share Based Compensation
The Company’s share based compensation consists of share purchase options (Note 23.2), restricted share units
(Note 23.3) and performance share units (Note 24.1). 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.
24.1. 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.
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - FINANCIAL STATEMENTS [44]
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, 2021 to December 31, 2022 is presented
below:
Notes to the Consolidated Financial Statements
Years Ended December 31, 2022 and 2021 (US Dollars)
(in thousands, except for number of PSUs outstanding)
At January 1, 2021
Granted
Accrual related to the fair value of the PSUs outstanding
Foreign exchange adjustment
Paid
At December 31, 2021
Granted
Accrual related to the fair value of the PSUs outstanding
Foreign exchange adjustment
Paid
Forfeited
Number of
PSUs
Outstanding
PSU accrual
liability
593,150 $
134,180
-
-
(213,820)
513,510 $
129,140
-
-
(186,730)
(11,300)
29,081
-
14,004
149
(16,929)
26,305
-
14,414
(870)
(18,411)
(199)
At December 31, 2022
444,620 $
21,239
A summary of the PSUs outstanding at December 31, 2022 is as follows:
Year
of Grant
2020
2021
2022
Year of
Maturity
2023
2024
2025
Estimated Value
Per PSU at
Maturity
$40.73
$40.24
$39.63
Number
outstanding
191,980
126,590
126,050
444,620
Anticipated
Performance
Factor
at Maturity
200%
175%
100%
Percent of
PSU
Vesting Period
Liability at
Complete at
Dec 31, 2022
Dec 31, 2022
14,566
93%
60% 5,345
27% 1,328
$ 21,239
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - FINANCIAL STATEMENTS [45]
Notes to the Consolidated Financial Statements
Years Ended December 31, 2022 and 2021 (US Dollars)
25.
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
2022
451,570
2021
450,138
425
349
676
356
Diluted weighted average number of shares outstanding
452,344
451,170
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$50.55, compared to Cdn$52.94 for the comparable period in 2021.
(in thousands)
Share purchase options
Share purchase warrants
Total
26.
Supplemental Cash Flow Information
Change in Non-Cash Working Capital
(in thousands)
Change in non-cash working capital
Accounts receivable
Cobalt inventory
Accounts payable and accrued liabilities
Other
Years Ended December 31
2022
2021
337
-
10,000
10,000
10,337
10,000
Years Ended December 31
2022
2021
$
$
2,023
1,579
(1,318)
(711)
(5,695)
(4,444)
1,095
972
Total change in non-cash working capital
$
1,573
$
(8,072)
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - FINANCIAL STATEMENTS [46]
Notes to the Consolidated Financial Statements
Years Ended December 31, 2022 and 2021 (US Dollars)
Non-Cash Transactions – Receipt of Shares as Consideration for Termination of Keno Hill PMPA
As more fully described in notes 13 and 18, on September 7, 2022, the Company terminated the Keno Hill PMPA in
exchange for 34,800,989 common shares of Hecla valued at $141 million.
Non-Cash Transactions – Termination of Convertible Note Receivable and Non-Revolving Term Loan
As more fully described in notes 15, 17 and 18, on February 18, 2022, the Company terminated the Kutcho
Convertible Note and non-revolving term loan in exchange for shares of Kutcho valued at $6.7 million in addition to
certain other modifications to the Kutcho Early Deposit Agreement (Note 15).
Non-Cash Transactions – Payment of Dividends Under DRIP
As more fully described in Note 22.2, during the year ended December 31, 2022, the Company declared and paid
dividends to its shareholders in the amount of $0.60 per common share for total dividends of $271 million.
Approximately 12% 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, $237 million of dividend payments were made
in cash and $34 million in common shares issued. For the comparable period in 2021, the Company declared and
paid dividends to its shareholders in the amount of $0.57 per common share for total dividends of $257 million, with
the payment being comprised of $218 million in cash and $39 million in common shares issued.
Non-Cash Transactions – Receipt of Shares as Consideration for Disposal of Long-Term Equity Investments
During 2022, the Company received common shares valued at $4.6 million as consideration for the disposal of long-
term equity investments.
Cash and Cash Equivalents
(in thousands)
Cash and cash equivalents comprised of:
Cash
Cash equivalents
Total cash and cash equivalents
December 31 December 31
2022
2021
$
170,155 $
525,934
126,053
99,992
$
696,089 $
226,045
Cash equivalents include short-term deposits, treasury bills, commercial paper, bankers’ depository notes and
bankers’ acceptances with terms to maturity at inception of less than three months.
27.
Income Taxes
A summary of the Company’s income tax expense (recovery) is as follows:
Income Tax Expense (Recovery) in Net Earnings
(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)
Total income tax expense (recovery) recognized in net earnings
Years Ended December 31
2022
8,746
$
2021
(7,117)
$
$
32,430 $
65,866
(40,667)
(8,237) $
(59,018)
6,848
509
$
(269)
$
$
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - FINANCIAL STATEMENTS [47]
Income Tax Expense (Recovery) in Other Comprehensive Income
Notes to the Consolidated Financial Statements
Years Ended December 31, 2022 and 2021 (US Dollars)
(in thousands)
2022
Income tax expense (recovery) related to LTIs - common shares held
$
6,513
$
2021
2,314
Years Ended December 31
Income Tax Expense (Recovery) in Shareholders’ Equity1
(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
2022
(5,932)
$
2021
(1,705)
$
$
$
$
5,932 $
1,705
(4,143) $
1,789 $
(1,811)
(106)
Total income tax expense (recovery) recognized in equity
$
(4,143)
$
(1,811)
1) Income tax expense (recovery) in shareholders’ equity relate to share financing fees. Share financing fees are deducted over a five-year period for Canadian income tax
purposes. For accounting purposes, share financing fees are charged directly to issued capital.
Income Tax Rate Reconciliation
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:
(in thousands)
Earnings before income taxes
Canadian federal and provincial income tax rates
Years Ended December 31
2022
2021
$
669,635 $
27.00%
754,616
27.00%
Income tax expense (recovery) based on above rates
$
180,781 $
203,746
Non-deductible portion of capital losses (non-taxable portion of capital
gains)
Non-deductible stock based compensation and other
Differences in tax rates in foreign jurisdictions 1
Current period unrecognized temporary differences
Write down (reversal of write down) or recognition of prior period
temporary differences
(1,052)
1,529
(142,869)
2,787
-
1,549
(151,037)
4,491
(40,667)
(59,018)
Total income tax expense (recovery) recognized in net earnings
$
509 $
(269)
1) During the year ended December 31, 2022, the Company's subsidiaries generated net earnings of $532 million, as compared to $564 million during the comparable period of
the prior year.
The majority of the Company’s income generating activities 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.
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - FINANCIAL STATEMENTS [48]
Current Income Taxes Payable
The movement in current income taxes payable for the twelve months ended December 31, 2022 is as follows:
Notes to the Consolidated Financial Statements
Years Ended December 31, 2022 and 2021 (US Dollars)
(in thousands)
Current taxes payable - December 31, 2021
Current income tax expense - income statement
Current income tax recovery - shareholders' equity
Income taxes paid
Foreign exchange adjustments
Current taxes payable - December 31, 2022
Current Taxes
Payable
$ 132
8,746
(5,932)
(171)
(12)
$ 2,763
Deferred Income Taxes
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, 2022 and December 31, 2021, respectively, is shown below:
Recognized deferred income tax assets and
liabilities
Deferred tax assets
Non-capital loss carryforward 1
Capital loss carryforward
Other 2
Deferred tax liabilities
Interest capitalized for accounting
Debt financing fees 3
Kutcho Convertible Note
Unrealized gains on long-term investments
Mineral stream interests 4
Foreign withholding tax
Year Ended December 31, 2022
Recovery
(Expense)
Recognized In
Net Earnings
Recovery
(Expense)
Recognized
In OCI
Opening
Balance
Recovery
(Expense)
Recognized
In
Shareholders'
Equity
$
6,967 $
-
1,325
(5,178) $
277
2,739
(87)
(737)
-
(170)
(7,298)
(100)
87
(37)
112
(728)
11,030
(65)
- $
(1,789) $
515
192
-
-
(112)
(7,108)
-
-
-
-
-
-
-
-
-
-
Closing
Balance
-
792
4,256
-
(774)
-
(8,006)
3,732
(165)
Total
$
(100) $
8,237 $
(6,513) $
(1,789) $
(165)
1) As at December 31, 2022, the Company had no non-capital losses available to recognize against deferred tax liabilities.
2) Other includes capital assets, cobalt inventory, charitable donation carryforward, and PSU and pension liabilities.
3) 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.
4) 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 2022 ANNUAL REPORT - FINANCIAL STATEMENTS [49]
Notes to the Consolidated Financial Statements
Years Ended December 31, 2022 and 2021 (US Dollars)
Year Ended December 31, 2021
Recovery
(Expense)
Recognized
In Net
Earnings
Recovery
(Expense)
Recognized
In OCI
Recovery
(Expense)
Recognized
In
Shareholders'
Equity
Opening
Balance
Closing
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
$
5,894 $
761
5,500
967 $
-
(4,175)
(87)
(728)
(7,808)
(3,532)
(214)
-
(9)
20
(3,766)
114
- $
(761)
-
-
-
7,618
-
-
Total
$
(214) $
(6,849) $
6,857 $
106 $
Deferred income tax assets in Canada not recognized are shown below:
106 $
-
-
6,967
-
1,325
-
-
-
-
-
(87)
(737)
(170)
(7,298)
(100)
(100)
(in thousands)
Non-capital loss carryforward 1
Mineral stream interests
Other
Kutcho Convertible Note
Unrealized losses on long-term investments
Total
December 31 December 31
2022
$
- $
7,369
1,575
-
13,069
2021
19,293
41,642
8,149
901
9,593
$
22,013 $
79,578
1) As at December 31, 2022, the Company had fully recognized the tax effect of non-capital losses.
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 $1.8 billion as at December 31, 2022, all of which is anticipated to
reverse in the future and be exempt from tax on repatriation, leaving $Nil that would taxable on repatriation.
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - FINANCIAL STATEMENTS [50]
28. Other Current Assets
The composition of other current assets is shown below:
(in thousands)
Non-revolving term loan
Prepaid expenses
Other
Total other current assets
29. 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
.
30. Related Party Transactions
Notes to the Consolidated Financial Statements
Years Ended December 31, 2022 and 2021 (US Dollars)
December 31 December 31
Note
17
$
2022
- $
2,856
431
2021
816
2,525
49
$
3,287 $
3,390
December 31 December 31
Note
21.1
$
2022
2,270 $
5,757
3,691
2021
2,652
5,620
6,939
$
11,718 $
15,211
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
$
2022
8,666 $
829
8,557
3,537
2021
8,779
801
8,160
3,367
Total executive compensation
$
21,589 $
21,107
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 24.1, 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 23.2 and 23.3, equity settled stock based compensation expense is recorded on a straight-line basis over the vesting period.
31.
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.
The Company has 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.
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - FINANCIAL STATEMENTS [51]
Notes to the Consolidated Financial Statements
Years Ended December 31, 2022 and 2021 (US Dollars)
A summary of the Company’s post-employment benefit costs during the years ended December 31, 2022 and 2021 is
summarized below:
(in thousands)
Post-employment benefits
Supplemental Employee Retirement Plan (SERP)
Group RRSP
Total post-employment benefits
Years Ended December 31
2022
2021
$
$
1,033 $
360
1,014
297
1,393 $
1,311
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - FINANCIAL STATEMENTS [52]
Notes to the Consolidated Financial Statements
Years Ended December 31, 2022 and 2021 (US Dollars)
32. Commitments and Contingencies
Mineral Stream Interests
The following table summarizes the Company’s commitments to make per-ounce cash payments for gold, silver,
palladium and platinum 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
Term of
Agreement
Date of
Original
Contract
Gold
Silver Palladium Cobalt Platinum
Gold
Silver Palladium Cobalt Platinum
0%
25%
0%
0%
0% n/a $
4.43
n/a
n/a
n/a Life of Mine
24-Jul-07
50%
100%
0%
0%
0% $ 416 ² $
6.14 ²
n/a
n/a
n/a Life of Mine
8-Aug-12
75%
70%
0%
0%
0%
0%
0% $ 420
0%
0%
0% $ 400
0% 33.75%
0%
0%
0% n/a
variable ³
0% ³
0%
0%
0% $ 624
100%
0%
100% ⁸
0%
0%
0%
4.5% ⁴
0%
0% 18% ⁵
0% 42.4% ⁶
0% n/a
0%
0%
22% ⁸ 18% ⁵
0% 100%
0%
0%
0% n/a $
0% 100%
0%
0%
0% n/a $
n/a
n/a
20%
n/a
n/a
n/a
n/a
4.60
4.60
n/a
n/a
n/a Life of Mine 28-Feb-13
n/a
n/a
n/a
20 years 28-Feb-13
n/a
n/a
n/a Life of Mine
3-Nov-15
n/a
n/a
n/a Life of Mine 10-May-18
18% ⁵ n/a
n/a Life of Mine
16-Jul-18
n/a
18% ⁷
n/a Life of Mine 11-Jun-18
n/a
n/a
18% ⁵ Life of Mine 26-Jan-22
n/a
n/a
n/a
25 years 15-Oct-04
n/a
n/a
n/a Life of Mine
8-Dec-04
0% 100%
0%
0%
0% n/a $
11.54
n/a
n/a
n/a Life of Mine 23-Apr-07
Mineral Stream
Interests
Peñasquito
Constancia
Salobo
Sudbury
Antamina
San Dimas
Stillwater
Voisey's Bay
Marathon
Other
Los Filos
Zinkgruvan
Stratoni
Neves-Corvo
0% 100%
0%
0%
0% n/a $
0% 100% ⁹
0%
0%
0% n/a
4.42
50%
n/a
n/a
n/a
n/a
n/a
n/a
50 years
5-Jun-07
50 years
5-Jun-07
100% ¹⁰ 100%
0%
0%
0% 65% ¹¹ $ 4.39 ¹¹
n/a
n/a
n/a Life of Mine 20-Nov-08
Pascua-Lama
0%
25%
0%
0%
0% n/a $
Copper World ¹²
100% 100%
0%
0%
0% $ 450 $
Loma de La Plata
0% 12.5%
0%
0%
0% n/a $
3.90
3.90
4.00
n/a
n/a
n/a Life of Mine
8-Sep-09
n/a
n/a
n/a Life of Mine 10-Feb-10
n/a
n/a
n/a Life of Mine
n/a ¹³
10.5% ¹⁴ 100% ¹⁴
0%
0%
0% 18% ¹⁵
18% ¹⁵
n/a
n/a
n/a Life of Mine
5-Nov-20
0%
50% ¹⁶
0%
0%
0% n/a
Santo Domingo
100% ¹⁷
6% ¹⁸
0%
0%
0%
0%
0% 18% ⁵
0%
0%
0% 18% ⁵
8% ¹⁹
50% ¹⁹
0%
0%
0% 35%
50% ²⁰
75% ²⁰
0%
0%
0% 18% ⁵
10%
n/a
n/a
18% ⁵
18% ⁵
n/a
n/a
n/a Life of Mine 11-Dec-20
n/a
n/a
n/a Life of Mine 24-Mar-21
n/a
n/a
n/a Life of Mine 15-Nov-21
n/a
n/a
n/a Life of Mine 13-Dec-21
n/a
n/a
n/a Life of Mine 17-Jan-22
4.15% ²¹
0%
0%
0%
0% 18% ⁵
n/a
n/a
n/a
n/a Life of Mine
8-Feb-22
Aljustrel
Minto
Marmato
Cozamin
Fenix
Blackwater
Curipamba
Goose
Early Deposit
Toroparu
10%
50%
0%
0%
0% $ 400 $
Cotabambas
25% ²² 100% ²²
0%
0%
0% $ 450 $
Kutcho
100%
100%
0%
0%
0% 20%
3.90
5.90
20%
n/a
n/a
n/a Life of Mine 11-Nov-13
n/a
n/a
n/a Life of Mine 21-Mar-16
n/a
n/a
n/a Life of Mine 14-Dec-17
1) The production payment is measured as either a fixed amount per unit 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 unit 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 unit cash payment will be reduced to the
prevailing market price.
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. Currently, the fixed gold to
silver exchange ratio is 70:1.
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% once the market value of metal 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% once the market value of cobalt delivered to Wheaton, net of the per pound cash payment, exceeds the initial upfront cash deposit. Additionally, on
each sale of cobalt, the Company is committed to pay a variable commission depending on the market price of cobalt.
8) Once the Company has received 150,000 ounces of gold and 120,000 ounces of platinum under the Marathon PMPA, the attributable gold and platinum production will be
reduced to 67% and 15%, respectively.
9) Wheaton only has the rights to silver contained in concentrate containing less than 15% copper at the Aljustrel mine.
10) The Company is committed to acquire 100% of the first 30,000 ounces of gold produced per annum and 50% thereafter.
11) Effective January 12, 2023, the cash payment per ounce of gold and silver delivered was at 90% of the spot price until February 28, 2023. The parties are currently in
discussions in connection with a possible restructuring of the Minto PMPA and as a result, the cash payment per ounce of gold delivered will be maintained at 90% during
the negotiation period, with the production payment for silver reverting to the price under the existing Minto PMPA. In the event that the parties are unable to agree to terms
for the restructuring, the production payment for gold will remain as set out in the existing Minto PMPA, being 65% of spot price of gold.
12) Copper World Complex (formerly referred to as Rosemont in these financial statements).
13) Terms of the agreement not yet finalized.
14) Once Wheaton has received 310.000 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 5.25% and 50%, respectively.
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - FINANCIAL STATEMENTS [53]
Notes to the Consolidated Financial Statements
Years Ended December 31, 2022 and 2021 (US Dollars)
15) 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.
16) Once Wheaton has received 10 million ounces under the Cozamin PMPA, the Company’s attributable silver production will be reduced to 33% of silver production for the
life of the mine.
17) Once the Company has received 285,000 ounces of gold under the Santo Domingo PMPA, the Company’s attributable gold production will be reduced to 67%.
18) Once the Company has received 90,000 ounces of gold under the Fenix PMPA, the Company attributable gold production will be reduced to 4% until 140,000 ounces have
been delivered, after which the stream drops to 3.5%.
19) Once the Company has received 279,908 ounces of gold under the Blackwater gold PMPA, the attributable gold production will be reduced to 4%. Once the Company has
received 17.8 million ounces of silver under the Blackwater silver PMPA, the attributable silver production will be reduced to 33%.
20) Once the Company has received 145,000 ounces of gold under the Curipamba PMPA, the attributable gold production will be reduced to 33%, and once the Company has
received 4.6 million ounces of silver, the attributable silver production will be reduced to 50%.
21) The Company is committed to purchase 4.15% of Goose gold production until 130,000 ounces are delivered to the Company, thereafter 2.15% of Goose gold production
until 200,000 ounces are delivered to the Company and 1.5% of Goose gold production thereafter for the life of mine.
22) Once 90 million silver equivalent ounces attributable to Wheaton have been produced under the Cotabambas PMPA, the attributable production will decrease to 16.67% of
gold production and 66.67% of silver production for the life of mine.
Other Contractual Obligations and Contingencies
Projected Payment Dates 1
2023
2024 - 2025
2026 - 2027
After 2027
Total
-
-
76,000
-
552,000
-
70,500
59,061
30,375
62,500
-
1,000
-
876
$
-
-
46,000
260,000
-
-
70,500
88,591
131,625
-
138,000
-
29,000
1,178
$
-
-
-
-
-
-
-
-
-
-
-
-
29,000
-
$
231,150
32,400
-
-
-
25,000
-
-
-
-
-
126,000
-
-
$
231,150
32,400
122,000
260,000
552,000
25,000
141,000
147,652
162,000
62,500
138,000
127,000
58,000
2,054
(in thousands)
Payments for mineral
stream interests
$
Copper World 2
Loma de La Plata
Marmato
Santo Domingo
Salobo 3
Fenix Gold
Blackwater
Marathon
Curipamba
Goose
Payments for early
deposit mineral
stream interest
Toroparu
Cotabambas
Kutcho
Leases liabilities
Total contractual
obligations
$
852,312
$
764,894
$
29,000
$
414,550
$ 2,060,756
1) Projected payment date based on management estimate. Dates may be updated in the future as additional information is received.
2) Copper World Complex (formerly referred to as Rosemont in these financial statements). Figure includes contingent transaction costs of $1 million.
3) As more fully explained on the following page, assuming the Salobo III expansion project results in throughput being expanded beyond 35 Mtpa by January 1, 2024, the
Company would expect to pay an expansion payment of $552 million.
Copper World Complex
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 Copper World Complex (formerly referred
to as Rosemont in these financial statements) and other customary conditions and the balance of $180 million being
advanced once project costs incurred on the Copper World Complex exceed $98 million and certain other customary
conditions. Under the Copper World Complex 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.
As per Hudbay’s press release of May 12, 2022, the Ninth Circuit affirmed the U.S. District Court for Arizona’s
previous decision to vacate and remand the Final Record of Decision for the Rosemont deposit within the Copper
World Complex in Arizona. This decision does not impact the development of deposits within the Copper World
Complex on private lands.
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - FINANCIAL STATEMENTS [54]
Notes to the Consolidated Financial Statements
Years Ended December 31, 2022 and 2021 (US Dollars)
Loma de La Plata
Under the terms of 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
Under the terms of the Marmato PMPA, the Company is committed to pay Aris Mining total upfront cash payments of
$110 million. Of this amount, $34 million was paid on April 15, 2021; $4 million was paid on February 28, 2022; and
the remaining amount is payable during the construction of the Marmato Lower Mine development portion of the
Marmato mine, subject to customary conditions. Under the amended terms of the Marmato PMPA, the Company is
committed to pay Aris Mining an additional cash consideration of $65 million, $15 million of which was paid to Aris
Mining on April 11, 2022 and the remaining $50 million is payable during the construction and development of the
Lower Mine.
Santo Domingo
Under the terms of the Santo Domingo PMPA, the Company is committed to pay Capstone total upfront cash
payments of $290 million, $30 million of which was paid on April 21, 2021 and the remaining portion of which is
payable during the construction of the Santo Domingo project, subject to customary conditions being satisfied,
including Capstone attaining sufficient financing to cover total expected capital expenditures.
Salobo
The Salobo mine historically had 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 reports the Salobo Expansion successfully commenced at the end of 2022. The
project consists of two lines, which will increase the mill throughput by 50%, the first of which started up in the fourth
quarter of 2022 and the second expected to start in the first quarter of 2023.
Subsequent to year end, Wheaton and Vale agreed to amend the Salobo PMPA (“Amended Salobo PMPA”) to adjust
the expansion payment terms. If actual throughput is expanded above 32 Mtpa by January 1, 2031, then under the
terms of the Amended Salobo PMPA, Wheaton will be required to make additional set payments to Vale based on the
size of the expansion and the timing of completion. The set payments range from a total of $283 million if throughput
is expanded beyond 32 Mtpa by January 1, 2031, to up to $552 million if throughput is expanded beyond 35 Mtpa by
January 1, 2024. In addition, Wheaton will be required to make annual payments of between $5.1 million to $8.5
million for a 10-year period following payment of the expansion payments if the Salobo mine implements a high-grade
mine plan.
Fenix
Under the terms of the Fenix PMPA, the Company is committed to pay total cash consideration of $50 million, of
which $25 million was paid on March 25, 2022. The remaining $25 million is payable subject to Rio2’s receipt of its
Environmental Impact Assessment for the Fenix Project, and certain other conditions.
On June 28, 2022, Rio2 provided an update on the Fenix Gold environmental assessment process. The
Environmental Assessment Service (“SEA”) published the Consolidation Evaluation Report with the recommendation
to reject the EIA as it has been alleged that Rio2 has not provided enough information during the evaluation process
to eliminate adverse impacts over the chinchilla, guanaco, and vicuña. On July 5, 2022, Rio2 announced that the
Regional Evaluation Commission has voted to not approve the EIA. On September 7, 2022, Rio2 announced that on
review of the Environmental Qualification Resolution (“RCA”), Rio2 identified numerous discrepancies with factual
and procedural matters in the RCA and Rio2 has filed an administrative appeal on August 31, 2022. In parallel with
the administrative appeal process, Rio2 indicate that they will work closely with regional authorities to address any
remaining concerns. On September 7, 2022, Rio2 stated that the estimated timing for obtaining EIA approval is
approximately one and a half to two years.
The Company’s management has determined that no indicator of impairment existed as of the balance sheet date
and will continue to monitor Rio2’s response to the Regional Evaluation Commission decision.
Blackwater
Under the terms of the Blackwater Silver PMPA, the Company is committed to pay total upfront consideration of $141
million, which is payable in four equal installments during the construction of the Blackwater Project, subject to
customary conditions being satisfied.
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - FINANCIAL STATEMENTS [55]
Notes to the Consolidated Financial Statements
Years Ended December 31, 2022 and 2021 (US Dollars)
Marathon
Under the terms of the Marathon PMPA, the Company is committed to pay total upfront cash consideration of $178
million (Cdn$240 million), $16 million (Cdn$20 million) of which was paid on March 31, 2022 and $15 million (Cdn$20
million) was paid on September 7, 2022. The remainder is to be paid in four staged installments during construction,
subject to various customary conditions being satisfied.
Curipamba
Under the terms of the Curipamba PMPA, the Company is committed to pay total upfront cash consideration of
$175.5 million, $13 million of which is available pre-construction and $500,000 of which will be paid to support certain
local community development initiatives around the Curipamba Project. The initial payment of $13 million was paid on
December 6, 2022. The remainder will be payable in four staged installments during construction, subject to various
customary conditions being satisfied.
Goose
Under the terms of the Goose PMPA, the Company is committed to pay total upfront cash consideration of $125
million in four equal installments during construction of the Goose Project, subject to customary conditions. The initial
payment of $31.25 million was paid on September 28, 2022 and the second installment of $31.25 million was paid on
December 6, 2022.
Toroparu
Under the terms of the Toroparu Early Deposit Agreement, the Company is committed to pay a subsidiary of Aris
Mining an additional $138 million, payable on an installment basis to partially fund construction of the mine. Aris
Mining is to deliver certain feasibility documentation. Prior to the delivery of this feasibility documentation, Wheaton
may elect to (i) not proceed with the agreement or (ii) 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 option (i) is chosen,
Wheaton will be entitled to a return of the amounts advanced less $2 million. If Wheaton elects option (ii), Aris Mining
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.
Cotabambas
Under the terms of the Cotabambas Early Deposit Agreement, the Company is committed to pay Panoro a total cash
consideration of $140 million, of which $13 million has been paid to date. Once certain conditions have been met, the
Company will advance an additional $1 million to Panoro. 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
Under the terms of 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.
Canada Revenue Agency – Canada Revenue Agency – 2013 to 2016 Taxation Years - Domestic
Reassessments
The Company received Notices of Reassessment in 2018, 2019, and 2022 for the 2013 to 2016 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 Company expects the Domestic Reassessments to have assessed tax, interest and other penalties of
approximately $2 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.
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - FINANCIAL STATEMENTS [56]
Notes to the Consolidated Financial Statements
Years Ended December 31, 2022 and 2021 (US Dollars)
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 settlement with the CRA of the transfer pricing dispute relating to the 2005 to 2010 taxation
years (the “CRA Settlement”), income earned outside of Canada by the Company’s foreign subsidiaries will not be
subject to 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. The CRA is not restricted
under the terms of the CRA Settlement from issuing reassessments on some basis other than transfer pricing which
could result in some or all of the income of the Company’s foreign subsidiaries being subject to tax in Canada.
It is not known or determinable by the Company when the currently 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 those 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 the current or prior periods, 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 2022 ANNUAL REPORT - FINANCIAL STATEMENTS [57]
Notes to the Consolidated Financial Statements
Years Ended December 31, 2022 and 2021 (US Dollars)
33.
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:
Year Ended December 31, 2022
Sales
Cost
of Sales
Depletion
Impairment
Charge
(Reversal /
Gain on
Disposal) 1
Net
Earnings
Cash Flow
From
Operations
$
296,145 $
68,211 $
39,211
54,868
75,238
16,583
47,653
8,706
12,520
26,053
2,983
19,995
54,677 $
23,753
8,206
10,858
3,933
1,252
- $
-
-
-
-
1,719
173,257 $
6,752
34,142
38,327
9,667
24,687
227,933 $
30,789
42,348
49,186
13,600
27,610
Total
Assets
2,383,262
283,416
95,583
155,865
215,852
494,143
(in thousands)
Gold
Salobo 5
Sudbury 2, 5
Constancia
San Dimas
Stillwater
Other 3
Total gold interests
$
529,698 $
138,468 $
102,679 $
1,719 $
286,832 $
391,466 $
3,628,121
Silver
Peñasquito 5
Antamina 5
Constancia
Other 4, 5
$
174,635 $
107,794
44,798
143,776
34,657 $
21,622
12,440
46,339
28,344 $
34,684
12,937
36,640
- $
-
-
(166,198)
111,634 $
139,978 $
51,488
19,421
226,995
85,824
32,358
96,251
293,674
545,368
192,947
453,096
Total silver interests
$
471,003 $
115,058 $
112,605 $
(166,198) $
409,538 $
354,411 $
1,485,085
Palladium
Stillwater
Platinum
Marathon
Cobalt
Voisey's Bay
Total mineral stream
interests
Other
$
$
$
32,160 $
5,687 $
6,018 $
- $
20,455 $
26,472 $
226,812
- $
- $
- $
- $
- $
- $
9,428
32,192 $
8,408 $
10,650 $
- $
13,134 $
28,449 $
357,573
$ 1,065,053 $
267,621 $
231,952 $
(164,479) $
729,959 $
800,798 $
5,707,019
General and administrative
Share based compensation
Donations and community investments
Finance costs
Other
Income tax
Total other
Consolidated
$
(35,831) $
(20,060)
(6,296)
(5,586)
7,449
(509)
(35,332)
(18,161)
(5,718)
(4,135)
6,143
(171)
$
$
(60,833) $
(57,374) $
1,052,887
669,126 $
743,424 $
6,759,906
1) See Notes 13 and 14 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, Minto and Marmato gold interests as well as the non-operating Copper World Complex (formerly referred to as Rosemont in these financial statements),
Santo Domingo, Fenix, Blackwater, Marathon, Curipamba and Goose gold interests. On June 22, 2022, Hudbay announced that mining activities at 777 have concluded
and closure activities have commenced.
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, Neves-Corvo, Aljustrel, Minto, Cozamin, Marmato and 777 silver interests, the non-operating Loma de La Plata, Stratoni, Pascua-Lama,
Copper World Complex (formerly referred to as Rosemont in these financial statements), Blackwater and Curipamba silver interests and the previously owned Keno Hill and
Yauliyacu silver interests. On June 22, 2022, Hudbay announced that mining activities at 777 have concluded and closure activities have commenced. The Stratoni mine
was placed into care and maintenance during Q4-2021. On September 7, 2022, the Keno Hill stream was terminated in exchange for $141 million of Hecla common stock
(see Note 13). On December 14, 2022 the Company terminated the Yauliyacu PMPA in exchange for a cash payment of $132 million (see Note 13).
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
PMPAs during the year ended December 31, 2022 were 35% 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 PMPAs during the year ended December 31, 2022 were 14% 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, 2022 were 16% 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 2022 ANNUAL REPORT - FINANCIAL STATEMENTS [58]
Notes to the Consolidated Financial Statements
Years Ended December 31, 2022 and 2021 (US Dollars)
(in thousands)
Gold
Salobo 5
Sudbury 2, 5
Constancia 5
San Dimas
Stillwater
Other 3, 5
Sales
Cost
of Sales
Depletion
Impairment
Reversal 1
Year Ended December 31, 2021
Net
Earnings
(Loss)
Cash Flow
From
Operations
Total
Assets
$
343,398 $
24,475
78,746 $
5,407
71,405 $
13,847
- $
-
193,247 $ 264,652 $ 2,437,939
307,169
19,068
5,221
32,974
86,290
20,487
54,296
7,536
29,612
3,703
18,268
5,780
15,479
4,525
1,836
-
-
-
-
19,658
41,199
12,259
34,192
25,438
56,679
16,784
36,444
103,789
166,723
219,785
364,792
Total gold interests
$
561,920 $ 143,272 $ 112,872 $
- $
305,776 $ 419,065 $ 3,600,197
Silver
Peñasquito
Antamina 5
Constancia 5
Other 4, 5
$
201,688 $
34,518 $
28,554 $
- $
138,616 $ 167,169 $
322,018
156,735
36,775
178,231
31,395
8,926
57,312
46,882
11,160
39,526
-
-
-
78,458
16,689
125,688
27,848
81,393
123,359
580,052
205,884
593,195
Total silver interests
$
573,429 $ 132,151 $ 126,122 $
- $
315,156 $ 444,064 $ 1,701,149
Palladium
Stillwater
Cobalt
$
45,834 $
8,384 $
8,559 $
- $
28,891 $
37,450 $
232,830
Voisey's Bay 5
$
20,482 $
4,140 $
7,240 $
(156,717) $
165,819 $
3,687 $
371,621
Total mineral stream interests $ 1,201,665 $ 287,947 $ 254,793 $
(156,717) $
815,642 $ 904,266 $ 5,905,797
Other
General and administrative
Share based compensation
Donations and community investments
Finance costs
Other
Income tax
Total corporate
Consolidated
$
(35,119) $
(31,931)
(19,265)
(6,601)
(5,817)
5,776
269
(16,926)
(6,323)
(4,271)
609
(279)
$
(60,757) $
(59,121) $
390,354
$
754,885 $ 845,145 $ 6,296,151
1) See Note 14 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, Minto and Marmato gold interests as well as the non-operating Copper World Complex gold interest (formerly referred to as Rosemont in these financial
statements). On June 22, 2022, Hudbay announced that mining activities at 777 have concluded and closure activities have commenced.
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, Stratoni, Aljustrel, Neves-Corvo, Minto, 777, Marmato and Cozamin silver interests, the non-operating Loma de La Plata, Copper World
Complex (formerly referred to as Rosemont in these financial statements) and Pascua-Lama silver interests and the previously owned Keno Hill and Yauliyacu silver
interests. The Stratoni mine was placed into care and maintenance during Q4-2021. On June 22, 2022, Hudbay announced that mining activities at 777 have concluded and
closure activities have commenced. On September 7, 2022, the Keno Hill stream was terminated in exchange for $141 million of Hecla common stock (see Note 13). On
December 14, 2022 the Company terminated the Yauliyacu PMPA in exchange for a cash payment of $132 million (see Note 13).
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
PMPAs during the year ended December 31, 2021 were 32% of the Company’s total revenue.
b. The counterparty obligations under the Antamina PMPA and the previously owned 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 PMPAs during the year ended December 31,
2021 were 18% 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, 2021 were 17% 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 2022 ANNUAL REPORT - FINANCIAL STATEMENTS [59]
Notes to the Consolidated Financial Statements
Years Ended December 31, 2022 and 2021 (US Dollars)
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:
Sales
Year Ended
Dec 31, 2022
(in thousands)
North America
Carrying Amount at
December 31, 2022
Gold
Interests
Silver
Interests
Palladium
Interests
Platinum
Interests
Cobalt
Interests
Total
Canada
$
124,710 12% $
668,011 $
450 $
- $
9,428 $ 357,573 $ 1,035,462
United States
Mexico
Europe
Greece
Portugal
Sweden
South America
Argentina/Chile 1
Argentina
Chile
Brazil
Peru
Ecuador
Colombia
48,743
5%
266,367 25%
215,852
566
155,863
423,103
226,812
-
3,291
25,728
41,613
0%
2%
4%
-
-
0%
0%
-
0%
296,145 28%
253,441 24%
0%
-
5,015
0%
-
-
-
-
-
56,536
2,383,263
-
18,366
29,108
253,514
10,889
-
-
95,584
10,181
42,831
738,310
3,671
7,108
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
443,230
578,966
-
18,366
29,108
253,514
10,889
56,536
2,383,263
833,894
13,852
49,939
Consolidated
$ 1,065,053 100% $ 3,628,121 $ 1,485,085 $ 226,812 $
9,428 $ 357,573 $ 5,707,019
1) Includes the Pascua-Lama project, which straddles the border of Argentina and Chile.
Sales
Year Ended
Dec 31, 2021
Gold
Interests
Silver
Interests
Palladium
Interests
Platinum
Interests
Cobalt
Interests
Total
Carrying Amount at
December 31, 2021
(in thousands)
North America
Canada
$ 108,594
9% $
614,733 $
28,138 $
- $
- $
566
232,830
United States
Mexico
Europe
Greece
Portugal
Sweden
South America
Argentina/Chile 1
Argentina
Chile
Brazil
Peru
Colombia
66,321
6%
307,639 26%
219,785
166,722
9,154
41,320
33,018
-
-
-
1%
3%
3%
0%
0%
0%
-
-
-
-
-
31,349
343,398 28%
2,437,938
462,627
-
19,001
31,152
253,514
10,889
-
-
286,285 24%
103,789
888,730
5,936
0%
25,881
6,532
-
-
-
-
-
-
-
-
-
-
371,621 $ 1,014,492
453,181
629,349
-
-
-
-
-
-
-
-
-
-
-
-
19,001
31,152
253,514
10,889
31,349
2,437,938
992,519
32,413
-
-
-
-
-
-
-
-
-
-
-
Consolidated
$ 1,201,665 100% $ 3,600,197 $ 1,701,149 $
232,830 $
- $
371,621 $ 5,905,797
1) Includes the Pascua-Lama project, which straddles the border of Argentina and Chile.
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - FINANCIAL STATEMENTS [60]
Notes to the Consolidated Financial Statements
Years Ended December 31, 2022 and 2021 (US Dollars)
34.
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 for the duration of 2023 equal to the dividend per
common share declared in the prior quarter. The declaration, timing, amount and payment of future dividends remain
at the discretion of the Board of Directors.
On March 9, 2023, the Board of Directors declared a dividend in the amount of $0.15 per common share, with this
dividend being payable to shareholders of record on March 24, 2023 and is expected to be distributed on or about
April 6, 2023. The Company has implemented a dividend reinvestment plan (“DRIP”) whereby shareholders can elect
to have dividends reinvested directly into additional Wheaton common shares based on the Average Market Price, as
defined in the DRIP.
WHEATON PRECIOUS METALS 2022 ANNUAL REPORT - FINANCIAL STATEMENTS [61]
Notes
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
George Brack, Chairman
John Brough
Jaimie Donovan
Peter Gillin
Chantal Gosselin
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,
Sustainability and
Investor Relations
Haytham Hodaly
Senior Vice President,
Corporate Development
TSX 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: shareholderinquiries@tmx.com
Auditors
Deloitte LLP
Vancouver, BC
Investor Relations
Patrick Drouin
Senior Vice President,
Sustainability and
Investor Relations
T: 1 604 684 9648
TF: 1 844 288 9878
E: info@wheatonpm.com
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