Vancouver, British Columbia – Wheaton Precious Metals™ Corp. (“Wheaton” or the “Company”) is pleased to announce its results for the second quarter ended June 30, 2018. All figures are presented in United States dollars unless otherwise noted.
In the second quarter of 2018, Wheaton had net earnings of $318 million, which included a $246 million gain on the disposal of the San Dimas silver stream. In the first half of 2018, Wheaton had record gold production from Salobo and generated over $260 million in cash flow. During the second quarter, Wheaton completed the acquisition of a cobalt stream on Vale’s Voisey’s Bay mine, and subsequent to the quarter, Wheaton closed a gold and palladium stream on Sibanye-Stillwater’s Stillwater and East Boulder mines.
Operational Overview
Q2 2018 Q2 2017 Change Ounces produced
Silver 6,091 7,192 (15.3)%
Gold 85,292 79,636 7.1 %
Ounces sold Silver 5,972 6,369 (6.2)%
Gold 87,140 71,965 21.1 %
Sales price per ounce Silver $ 16.52 $ 17.09 (3.3)%
Gold $ 1,305 $ 1,263 3.3 %
Cash costs per ounce 1
Silver 1 $ 4.54 $ 4.51 0.7 %
Gold 1 $ 407 $ 393 3.6 %
Cash operating margin per ounce 1
Silver 1 $ 11.98 $ 12.58 (4.8)%
Gold 1 $ 898 $ 870 3.2 %
Revenue $ 212,400 $ 199,684 6.4 %
Net earnings $ 318,142 $ 67,612 370.5 %
Per share $ 0.72 $ 0.15 380.0 %
Adjusted net earnings 1 $ 72,722 $ 66,624 9.2 %
Per share 1 $ 0.16 $ 0.15 8.8 %
Operating cash flows $ 135,200 $ 124,681 8.4 %
Per share 1 $ 0.31 $ 0.28 10.7 %
Dividends declared 1 $ 39,888 $ 30,926 29.0 %
Per share $ 0.09 $ 0.07 28.6 %
All amounts in thousands except gold ounces produced and sold, per ounce amounts and per share amounts.

Highlights
• The decrease in attributable silver production and the increase in attributable gold production for the three months ended June 30, 2018, was primarily due to the termination of the San Dimas silver purchase agreement and the entering into of the new San Dimas precious metals purchase agreement effective May 10, 2018, with the silver production being further impacted by the expiry of the streaming agreement relative to the Lagunas Norte, Veladero and Pierina mines on March 31, 2018, and lower production at Antamina primarily resulting from mine sequencing.
• The decrease in silver sales volume for the three months ended June 30, 2018, was due to the lower production levels, partially offset by positive changes in the balance of payable silver produced but not yet delivered to Wheaton.
• The increase in gold sales volume for the three months ended June 30, 2018, was primarily the result of increased production levels coupled with positive changes in the balance of payable gold produced but not yet delivered to Wheaton.
• Declared quarterly dividend of $0.09 per common share. This represents an increase of 29% relative to the comparable period in 2017.
• On May 10, 2018, First Majestic Silver Corp. ("First Majestic") announced that they had closed the previously announced acquisition of Primero Mining Corp. ("Primero"). In connection with this acquisition, the Company has terminated the San Dimas silver purchase agreement and entered into a new San Dimas precious metal purchase agreement with First Majestic, resulting in a gain on disposal of $246 million.
• On June 28, 2018, Wheaton completed the acquisition from Vale S.A. (“Vale”) of a fixed percentage of cobalt production from the Voisey’s Bay mine starting in January 2021.
Subsequent to the Quarter
• On July 25, 2018, the Company, through its wholly owned subsidiary Wheaton Precious Metals International Ltd. (“Wheaton International”), completed the acquisition from Sibanye Gold Limited ("Sibanye-Stillwater") of a fixed percentage of gold and palladium production from the Stillwater and East Boulder mines (collectively “Stillwater”) effective July 1, 2018.
• On July 17, 2018, the Company acquired 9.99% of the common shares of Adventus Zinc Corporation ("Adventus") and acquired a right of first refusal on any new streaming or royalty transactions on precious metals on the Adventus existing properties in Ecuador.
Reconfirming Production Guidance
• With the addition of the streams on Voisey’s Bay and Stillwater, Wheaton’s estimated attributable production in 2018 is forecast to be approximately 355,000 ounces of gold, 22.5 million ounces of silver, and 10,400 ounces of palladium.
• Estimated average annual attributable production over the next five years (including 2018) is anticipated to be approximately 385,000 ounces of gold, 25 million ounces of silver, 27,000 ounces of palladium, and starting in 2021, 2.1 million pounds of cobalt per year.
“Wheaton’s high-quality portfolio and strong margins generated over $260 million of operating cash flow in the first half of 2018,” said Randy Smallwood, President and Chief Executive Officer of Wheaton Precious Metals. “Since the beginning of the year, Wheaton made two substantial acquisitions with new streams on Voisey’s Bay and Stillwater. We expect Stillwater to contribute production and cash flow starting in the third quarter of 2018 and Voisey’s Bay starting in 2021.
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These additions ideally fit within our existing portfolio as they are both high-margin and long-life mines with significant exploration potential. Given our sector-leading cash flow and revolving credit facility, Wheaton was able to consummate these transactions on an accretive basis for shareholders without having to access additional sources of capital. Over the past eight years, we have only raised $1.6 billion in equity, while at the same time invested over $6.5 billion into new streams and paid over $800 million in dividends.”
Financial Review
Revenues
Revenue was $212 million in the second quarter of 2018, on sales volume of 6.0 million ounces of silver and 87,100 ounces of gold. This represents a 6% increase from the $200 million of revenue generated in the second quarter of 2017 due primarily to (i) a 21% increase in the number of gold ounces sold; (ii) a 3% increase in the average realized gold price ($1,305 in Q2 2018 compared with $1,263 in Q2 2017); partially offset by (iii) a 6% decrease in the number of silver ounces sold; and (iv) a 3% decrease in the average realized silver price ($16.52 in Q2 2018 compared with $17.09 in Q2 2017).
Costs and Expenses
Average cash costs¹ in the second quarter of 2018 were $4.54 per silver ounce sold and $407 per gold ounce sold, as compared with $4.51 per silver ounce and $393 per gold ounce during the comparable period of 2017. This resulted in a cash operating margin¹ of $11.98 per silver ounce sold and $898 per gold ounce sold, a decrease of 5% per silver ounce sold and an increase of 3% per ounce of gold sold as compared with Q2 2017. The decrease in the silver cash operating margin was primarily due to a 3% decrease in the average realized silver price in Q2 2018 compared with Q2 2017 while the increase in the gold cash operating margin was primarily due to a 3% increase in the average realized gold price during the same period.
Earnings and Operating Cash Flows
Adjusted net earnings¹ and cash flow from operations in the second quarter of 2018 were $73 million ($0.16 per share) and $135 million ($0.31 per share¹), compared with adjusted net earnings¹ of $67 million ($0.15 per share) and cash flow from operations of $125 million ($0.28 per share¹) for the same period in 2017, an increase of 9% and 8%, respectively.
Balance Sheet
At June 30, 2018, the Company had approximately $93 million of cash on hand and $957 million outstanding under the Company's $2 billion revolving term loan (the "Revolving Facility"). Subsequent to June 30, 2018, the Company used its Revolving Facility to fund the $500 million for the acquisition of the stream on Stillwater.
Second Quarter Asset Highlights
During the second quarter of 2018, attributable production was 6.1 million ounces of silver and 85,300 ounces of gold, representing a decrease of 15% and an increase of 7%, as compared with the second quarter of 2017.
Operational highlights for the quarter ended June 30, 2018, based upon counterparties’ reporting, are as follows:
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Salobo
In the second quarter of 2018, Salobo produced 63,900 ounces of attributable gold, an increase of approximately 11% relative to the second quarter of 2017 as higher recovery and throughput were partially offset by lower grades. The Salobo plant operated at 100% of capacity in the quarter.
Peñasquito
In the second quarter of 2018, Peñasquito produced 1.3 million ounces of attributable silver, a decrease of approximately 15% relative to the second quarter of 2017 due to lower production from the oxide heap leach. According to Goldcorp Inc.’s (“Goldcorp”) second quarter of 2018 MD&A, lower production was a result of the planned transition from high-grade ore in Phase 5D at the bottom of the Peñasco pit, to lower grade ore from stockpiles and the remnants of Phase 5D. Production in Phase 5D was reportedly completed during the second quarter of 2018, and equipment was refocused on accelerating stripping activities in Phase 6D and in the Chile Colorado pit.
According to Goldcorp, construction of the Pyrite Leach Project ("PLP") at Peñasquito has been completed with commissioning further accelerated to the third quarter of 2018, now two quarters ahead of schedule. As a result, Goldcorp has modified the production plan for the third quarter with lower than planned mill throughput and low mill head grades, exclusively from the surface stockpile, to accommodate the commissioning of a new major circuit, which is the preferred material to be processing during the commissioning phase where lower recoveries are expected. Goldcorp further notes that a resequencing to higher grades and mill tonnage in the fourth quarter, subsequent to the commissioning, is expected to allow the mine to meet its full year gold production objectives.
Antamina
In the second quarter of 2018, Antamina produced 1.5 million ounces of attributable silver, a decrease of approximately 23% relative to the second quarter of 2017 as expected due to mine sequencing in the open pit.
San Dimas
In the second quarter of 2018, San Dimas produced 5,700 ounces of attributable gold and 0.6 million ounces of attributable silver. On May 10, 2018, First Majestic announced that they had completed the previously announced acquisition of Primero. In connection with this acquisition, Wheaton International terminated the existing San Dimas silver purchase agreement with Primero (the “Primero SPA”) and entered into a new precious metals purchase agreement with First Majestic relating to the San Dimas mine (the "San Dimas PMPA"). Attributable silver production in the quarter was in relation to the Primero SPA, and attributable gold production was attributable to the San Dimas PMPA. Under the San Dimas PMPA, Wheaton is entitled to 25% of gold production plus an additional amount of gold equal to 25% of silver production converted to gold at a fixed gold to silver exchange ratio of 70:1 from the San Dimas mine2, and for each ounce of gold delivered, Wheaton will pay to First Majestic a delivery payment equal to the lesser of $600/oz, subject to a 1% annual inflationary adjustment, and the prevailing market price. First Majestic has provided a corporate guarantee and security limited to San Dimas assets. As part of the transaction, in addition to the new stream, Wheaton received 20,914,590 First Majestic common shares with a fair value of $151 million. As reflected in the Company’s second quarter financial results, the termination of the Primero SPA has resulted in a gain on disposal of $246 million to Wheaton.
Sudbury
In the second quarter of 2018, Vale’s Sudbury mines produced 4,900 ounces of attributable gold, a decrease of approximately 34% relative to the second quarter of 2017 primarily due to
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lower grades and throughput. According to Vale’s second quarter of 2018 MD&A, the Coleman mine was in a maintenance shutdown from November 2017 to April 2018.
Constancia
In the second quarter of 2018, Constancia produced 0.6 million ounces of attributable silver and 3,200 ounces of attributable gold, an increase of approximately 9% and 37%, respectively, relative to the second quarter of 2017. Increased silver and gold production was primarily due to higher throughput and grades.
Other Silver
In the second quarter of 2018, total Other Silver attributable production was 2.2 million ounces, a decrease of approximately 6% relative to the second quarter of 2017. The decrease was driven primarily by the cessation of attributable production from the Lagunas Norte, Veladero, and Pierina mines as the silver purchase agreement with Barrick Gold Corp. (“Barrick”) related to these mines expired on March 31, 2018.
Other Gold
In the second quarter of 2018, total Other Gold attributable production was 7,500 ounces, a decrease of approximately 39% relative to the second quarter of 2017. The decrease was due primarily to lower production at both the Minto and 777 mines.
Produced But Not Yet Delivered 31
As at June 30, 2018, payable ounces attributable to the Company produced but not yet delivered³ amounted to 4.3 million payable silver ounces and 75,600 payable gold ounces, representing a decrease of 0.6 million payable silver ounces and 6,400 payable gold ounces during the three month period ended June 30, 2018. Payable silver ounces produced but not yet delivered decreased primarily as a result of decreases related to the San Dimas and Peñasquito silver interests partially offset by an increase related to the Yauliyacu silver interest. Payable gold ounces produced but not yet delivered decreased primarily as a result of a decrease related to the Salobo gold interest partially offset by increases related to the San Dimas and 777 gold interests. Payable ounces produced but not yet delivered to the Wheaton group of companies are expected to average approximately two months of annualized production for silver and two to three months for gold but may vary from quarter to quarter due to a number of mining operation factors including mine ramp-up and timing of shipments.
Detailed mine-by-mine production and sales figures can be found in the Appendix to this press release and in Wheaton’s consolidated MD&A in the ‘Results of Operations and Operational Review’ section.
Voisey’s Bay
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