Wheaton Precious Metals profit down 29% in Q1

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Wheaton Precious Metals Corp.’s (WPM-TSX, WPM-NYSE) asset portfolio delivered a strong performance to start the year, resulting in revenue of $214 million in the first quarter of 2023 and robust cash operating margins, the company said.

But profit and revenue were down 29.3% and 30.2% in the first quarter respectively from year ago levels.

“First quarter production was ahead of company expectations, as we continue to see positive developments at a number of our key assets including Salobo and Constancia, we expect to see significant production growth throughout 2023, culminating in strong second half of the year,’’ said Wheaton President and CEO Randy Smallwood.

Wheaton Precious Metals is a leading precious metals streaming company. Unlike traditional mining companies, Wheaton makes upfront payments and in return it purchases a fixed percentage of the future silver and/or gold production from a mine at a predetermined price. It can then sell the metal in the open market. In many cases, these agreements are for the life of the mine.

The company has streaming agreements covering 20 operating mines and 12 development stage projects. These include Vale’s Salobo mine in Brazil, Glencore AG’s Antamina mine in Peru and Newmont Corp’s [NGT-TSX, NEM-NYSE] Penasquito mine in Mexico.

Production from Salobo in the first quarter of 2023 was 43,700 ounces of gold, an increase of over 15% relative to the fourth quarter of 2022, due to a steady ramp up of the Salobo III expansion.

Located in Peru, Constancia is one of the lowest cost open-pit sulphide copper mines in South America. The Constancia operations also include the nearby Pampcancha satellite pit, a high-grade copper-gold deposit where mining activities began in 2021.

In the first quarter of 2023, Constancia produced 0.6 million ounces of attributable silver and 6,900 ounces of attributable gold, an increase of approximately 9.0% for both metals relative to the first quarter of 2022. The increase in both metals was attributed to higher throughput and grades.

Full mining activities resumed in the Pampcancha pit in February and the period of higher stripping from March to June is progressing well, with mining of higher-grade ore now expected in the second quarter of 2023, ahead of schedule.

Meanwhile, in the first quarter, Wheaton posted US$135 million in cash flow, and US$111. 4 million in net earnings (24.6 cents a share), down 29% from $157.46 million or 34.9 cents in the first quarter of 2022.

First quarter revenue of US$214.5 million (56% gold, 40% silver, 2.0% palladium and 2.0% cobalt) was down from US$307.2 million in the equivalent 2022 period.

The company’s cash balance stood at US$800 million on March 31, 2023.

On April 4 ,2023, Wheaton shares closed at $69.60 and currently trade in a 52-week range of $71.39 and $39.05.

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