Wheaton Precious Metals — Adjusting for ‘major maintenance’ at Salobo in Q4

Wheaton Precious Metals (TSX: WPM)

Currency in CAD

Last close As at 21/09/2023

CAD58.48

−1.65 (−2.74%)

Market capitalisation

CAD26,662m

Research: Metals & Mining

Wheaton Precious Metals — Adjusting for ‘major maintenance’ at Salobo in Q4

On 21 February 2023, Wheaton Precious Metals (WPM) announced that it had produced and sold 286,985oz and 293,234oz gold, respectively, and 23,979koz and 21,570koz silver, respectively in FY22. Subject to any historical restatements in its FY22 financial results next week (possible but unlikely and very unlikely to be material), this implies that it produced and sold 66,025oz and 68,996oz gold and 5,353koz and 4,935koz silver, respectively, in Q4. In the case of gold, in particular, this was below our prior forecast (see Exhibit 1), but is consistent with the 14.7% quarter-on-quarter decline in copper production at Salobo announced by Vale on 31 January on account of ‘major maintenance’. This note updates our forecasts for Q422 and FY22 in the light of WPM’s actual production and sales numbers and for FY23 in the light of maiden, detailed guidance.

Lord Ashbourne

Written by

Lord Ashbourne

Director, Energy & Resources

Wheaton-Precious-Metals_resized

Metals & Mining

Wheaton Precious Metals

Adjusting for ‘major maintenance’ at Salobo in Q4

Q4 and FY22 production

Metals and mining

3 March 2023

Price

C$56.54

Market cap

C$25,556m

C$1.3561/US$, US$1.2078/£

Cash (US$m) at end-September
(excluding US$2.2m in lease liabilities)

494.6

Shares in issue

452.0m

Free float

100.0%

Code

WPM

Primary exchange

TSX

Secondary exchanges

LSE, NYSE

Share price performance

%

1m

3m

12m

Abs

(5.1)

6.0

(1.2)

Rel (local)

(3.2)

6.7

3.3

52-week high/low

C$64.70

C$39.11

Business description

Wheaton Precious Metals (WPM) is the world’s pre-eminent ostensibly precious metals streaming company, with over 30 high-quality precious metals streams and early deposit agreements over mines in Mexico, Canada, Brazil, Chile, the US, Argentina, Peru, Sweden, Greece, Portugal and Colombia.

Next events

Q4/FY22 results

9 March 2023

Q123 results

4 May 2023

Q223 results

10 August 2023

Q423 results

9 November 2023

Analyst

Lord Ashbourne

+44 (0)20 3077 5700

Wheaton Precious Metals is a research client of Edison Investment Research Limited

On 21 February 2023, Wheaton Precious Metals (WPM) announced that it had produced and sold 286,985oz and 293,234oz gold, respectively, and 23,979koz and 21,570koz silver, respectively in FY22. Subject to any historical restatements in its FY22 financial results next week (possible but unlikely and very unlikely to be material), this implies that it produced and sold 66,025oz and 68,996oz gold and 5,353koz and 4,935koz silver, respectively, in Q4. In the case of gold, in particular, this was below our prior forecast (see Exhibit 1), but is consistent with the 14.7% quarter-on-quarter decline in copper production at Salobo announced by Vale on 31 January on account of ‘major maintenance’. This note updates our forecasts for Q422 and FY22 in the light of WPM’s actual production and sales numbers and for FY23 in the light of maiden, detailed guidance.

Year
end

Revenue
(US$m)

PBT*
(US$m)

EPS*
(c)

DPS
(c)

P/E
(x)

Yield
(%)

12/20

1,096.2

503.2

112

42

37.2

1.0

12/21

1,201.7

592.1

132

57

31.6

1.4

12/22e

1,064.5

494.6

111

60

37.7

1.4

12/23e

1,063.8

480.3

108

60

38.8

1.4

Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles and exceptional items.

Adjusting EPS forecasts

Our revisions have caused us to reduce our Q4 and FY22 EPS forecast by 2.4c/share. The decline in our FY23 forecast EPS number appears larger (from US$1.47/share to US$1.08/share), being a combination of price and volume reductions. In our last report on Wheaton however (see Results closely in line with prior expectations, published on 8 November), we noted that, ‘In the event of precious metals prices remaining at current levels for the whole of FY23, then we estimate that this figure [EPS] would instead moderate to approximately US$1.19/share.’ As such, our revised EPS of US$1.08/share is only 9.7% below our comparable prior forecast of US$1.19/share at prevailing metals prices.

Valuation: US$42.85, or C$58.11, per share

Using a CAPM-type method to value WPM and applying a nominal discount rate of 9.0% to cash flows implies a ‘terminal’ valuation for WPM at end-FY26 of US$53.71 (C$72.83) per share assuming zero subsequent long-term growth in real cash flows and 4% inflation and a valuation now of US$41.52 (C$56.30) per share. To this should then be added our estimate of end-FY22 net cash of US$1.33/share (C$1.81/share) to take the total to US$42.85 (or C$58.11) per share. Otherwise, assuming no purchases of additional streams in the foreseeable future (which we think unlikely), we calculate a value per share for WPM of US$54.12, or C$73.40 or £44.81 in FY26, based on a 30.1x historical multiple of contemporary earnings. In the meantime, WPM’s shares are trading on near-term financial ratios that are lower than those of its peers on 52–55% of common valuation measures (see Exhibit 14). If WPM’s shares were instead to trade at the average level of its peers, then we calculate that its FY23 share price should be US$42.86, or C$58.13 or £35.49 (based on Edison forecasts).

Investment summary

On 21 February 2023, WPM announced that it had produced and sold 286,985oz and 293,234oz gold, respectively, and 23,979koz and 21,570koz silver, respectively (among others), in FY22. A summary of its full production and sales results for all metals for the year, relative to both prior guidance and Edison’s prior expectations, is as follows:

Exhibit 1: Wheaton Precious Metals’ FY22 production and sales by metal cf prior Edison forecast

Metal (units)

Wheaton (actual)

Implied Q4

Edison prior estimate

Variance*

Production guidance

Actual FY22 production

Actual FY22 sales

Production

Sales

Q4 prodn

Q4 sales

FY22 production

FY22 sales

Prodn
(units)

Sales (units)

Gold (koz)

300–320

286.985

293.234

66.025

68.996

85.393

85.361

306.353

309.599

-19.368

-16.365

Silver (Moz)

22.5–24.0

23.979

21.570

5.353

4.935

5.392

5.252

24.018

21.887

-0.039

-0.317

Other (k GEO)

35–40

31.347

36.625

Palladium (koz)

15.485

15.076

3.869

3.396

4.750

4.731

16.366

16.411

-0.881

-1.335

Cobalt (klb)

724

1.038

0.128

0.187

0.347

0.347

943

1,198

-0.219

-0.160

GEO (k GEO)

640–680

638.048

617.450

Source: Wheaton Precious Metals, Edison Investment Research. Note: GEO = gold equivalent ounce, based on US$1,800/oz Au, US$24.00/oz Ag, US$2,100/oz Pd and US$33/lb Co. *Actual minus forecast.

In addition to adjusting our forecasts to reflect actual compared to expected production and sales levels (see Exhibit 2, below), Edison has also adjusted them to reflect actual metals prices prevailing during the fourth quarter compared to those expected at the time of our last note, published in November 2022. These are similarly summarised below:

Exhibit 2: Metals prices, actual compared to forecast, Q422

Metal

Prior forecast

Actual

Change

(%)

Current

Silver (US$/oz)

20.19

21.29

+5.4

21.03

Gold (US$/oz)

1,668

1,731

+3.8

1,826

Palladium (US$/oz)

1,922

1,939

+0.9

1,453

Cobalt (US$/lb)

23.36

23.56

+0.9

15.50

Simple average

+2.8

Source: Edison Investment Research, Bloomberg

While metals prices were generally higher than our expectations at the time of our November note, it is nevertheless worth noting the relatively sharp falls in palladium and cobalt prices since then (albeit these, combined, accounted for less than 5% of Wheaton’s total gold equivalent production in FY22 and less than 6% of its sales – see Exhibit 1, above).

In the light of these disclosures therefore, as well as recent moves in metals prices, forex rates and WPM’s share price, Edison has updated its quarterly estimates for WPM for FY22 as follows:

Exhibit 3: WPM FY22 forecast, by quarter*

US$000s
(unless otherwise stated)

Q122

Q222

Q322

Q422e

(prior)

Q422e

FY22e

(current)

FY22e

(prior)

Silver production (koz)

6,206

6,537

5,883

5,392

5,353

23,979

24,018

Gold production (oz)

79,087

68,365

73,508

85,393

66,025

286,985

306,353

Palladium production (oz)

4,488

3,899

3,229

4,750

3,869

15,485

16,366

Cobalt production (klb)

234

136

226

347

128

724

943

Silver sales (koz)

5,553

5,848

5,234

5,252

4,935

21,570

21,887

Gold sales (oz)

77,901

84,337

62,000

85,361

68,996

293,234

309,599

Palladium sales (oz)

4,075

3,378

4,227

4,731

3,396

15,076

16,411

Cobalt sales (klb)

511

225

115

347

187

1,038

1,198

Avg realised Ag price (US$/oz)

24.19

22.27

19.16

20.19

21.29

21.78

21.51

Avg realised Au price (US$/oz)

1,870

1,872

1,728

1,668

1,731

1,808

1,786

Avg realised Pd price (US$/oz)

2,339

2,132

2,091

1,922

1,939

2,133

2,112

Avg realised Co price (US$/lb)

34.61

34.01

22.68

23.36

23.56

31.18

30.10

Avg Ag cash cost (US$/oz)

5.10

5.61

5.59

5.45

5.49

5.45

5.44

Avg Au cash cost (US$/oz)

477

465

474

446

461

469

464

Avg Pd cash cost (US$/oz)

394

408

353

300

349

376

372

Avg Co cash cost (US$/lb)

5.76

6.86

7.21

4.20

4.24

5.89

5.66

Sales

307,244

302,922

218,836

265,582

235,481

1,064,483

1,094,584

Cost of sales

Cost of sales, excluding depletion

69,994

74,943

60,955

69,801

60,904

266,795

275,692

Depletion

57,402

65,682

55,728

69,095

56,474

235,285

247,907

Total cost of sales

127,396

140,625

116,683

138,895

117,377

502,080

523,598

Earnings from operations

179,848

162,297

102,153

126,686

118,104

562,403

570,985

Expenses and other income

– General and administrative**

20,118

12,453

9,843

17,438

19,843

62,257

59,852

– Foreign exchange (gain)/loss

0

0

0

– Net interest paid/(received)

1,422

1,389

1,398

1,357

1,357

5,566

5,566

– Other (income)/expense

229

-974

(3,003)

(2,069)

(2,069)

(5,817)

(5,817)

Total expenses and other income

21,769

12,868

8,238

16,726

19,131

62,006

59,601

Earnings before income taxes

158,079

149,429

93,915

109,960

98,973

500,397

511,384

Income tax expense/(recovery)

72

144

37

250

250

503

503

Marginal tax rate (%)

0.0

0.1

0.0

0.2

0.3

0.1

0.1

Net earnings

158,007

149,285

93,878

109,710

98,723

499,894

510,881

Average no. shares in issue (000s)

450,915

451,524

451,757

451,757

451.757

451,488

451,488

Basic EPS (US$)

0.350

0.331

0.208

0.243

0.219

1.11

1.13

Diluted EPS (US$)

0.350

0.330

0.208

0.243

0.218

1.08

1.10

DPS (US$)

0.15

0.15

0.15

0.15

0.15

0.60

0.60

Source: WPM accounts, Edison Investment Research. Note: *Excluding impairments, impairment reversals and exceptional items. **Forecasts now include stock-based compensation costs. Totals may not add up owing to rounding.

Our basic EPS forecast of US$1.11/share for FY22 is 3.5% below the consensus forecast of US$1.15/share (source: Refinitiv, 1 March 2023).

Exhibit 4: WPM FY22 consensus EPS forecasts (US$/share), by quarter

Q122

Q222

Q322

Q422e

Sum Q1–Q422e

FY22e

Edison forecasts

0.350

0.331

0.208

0.219

1.108

1.11

Mean consensus

0.350

0.331

0.208

0.250

1.139

1.15

High consensus

0.350

0.331

0.208

0.290

1.179

1.35

Low consensus

0.350

0.331

0.208

0.220

1.109

1.11

Source: Refinitiv, Edison Investment Research. Note: As at 1 March 2023.

Ounces produced but not yet delivered

At 7.8% the degree of under-sale of silver during Q422, relative to production, was below the long-run average of 11.9% (from Q112 until Q322) and below the level of the previous six quarters, back to Q121, demonstrating some evidence of its counterparties ‘flushing through’ sales before the year end. The 4.5% over-sale of gold relative to production was also above its long-run average of a 6.7% shortfall and similarly indicative of ‘flushing through’:

Exhibit 5: Over/(under) sale of silver and gold as a percentage of production, Q112–Q422

Source: Edison Investment Research, WPM. Note: As reported.

Gold and silver ounces produced but not yet delivered as at 30 September amounted to 67,247oz and 3.6Moz respectively (cf 59,331oz and 3.7Moz at end-Q222). In the light of the under-sale and over-sale of silver and gold, respectively, during Q422, we estimate that ounces produced but not yet delivered will have amounted to 4.0Moz Ag and 64,275oz Au as at 31 December 2022. These equate to 2.69 months and 1.99 months of FY22 gold and silver production, respectively (cf 2.63 months and 1.77 months estimated as at end-Q222) and compare with WPM’s target of two to three months for gold and palladium and two months for silver.

Exhibit 6: WPM ounces produced but not yet delivered, Q316–Q422e (months of production)

Source: Edison Investment Research, WPM. Note: As reported.

FY23 and five-year and 10-year guidance

In addition to its FY22 production and sales results, Wheaton also provided detailed production guidance for FY23 (for the first time), as well as for the five years from FY23–27 (inclusive) and the 10 years from FY23–32 (inclusive). These are presented in the exhibit below compared with Edison’s equivalent forecasts. Note that both include the Marathon, Curipamba and Goose streams (but not yet the Fenix stream) and exclude the Keno Hill and Yauliyacu streams (which have now been sold).

Exhibit 7: WPM precious metals production – Edison forecasts cf guidance

FY23e

FY23–27 average*

FY23–32 average

Edison forecast

Silver production (Moz)

20.0

Gold production (koz)

339.3

Cobalt production (klb)

980

Palladium production (koz)

15.5

Gold equivalent (koz)

623.7

777

792

WPM guidance

Silver production (Moz)

20.0–22.0

Gold production (koz)

320–350

Cobalt & palladium production (koz AuE)

22–25

Gold equivalent (koz)

600–660

810

850

Source: WPM, Edison Investment Research forecasts. Note: *Edison forecasts include Salobo III from FY23, Rosemont/Copper World from FY27 and Antamina extension from FY28.

WPM’s updated five-year and 10-year guidance is based on standardised pricing assumptions of US$1,800/oz gold (unchanged), US$24.00/oz silver (unchanged), US$1,800/oz palladium (cf US$2,100/oz previously) and US$18.75/lb cobalt (cf US$33.00/lb previously). Of note in this context is an implied gold/silver ratio of 75x, which compares with its current ratio of 84.9x, but a long-term average of 61.5x (since gold was demonetised in August 1971). Self-evidently, at the standardised prices indicated, our gold equivalent production forecast of 623.7koz gold equivalent (AuE) for FY23e lies well within WPM’s guidance range of 600–660koz AuE.

Otherwise, readers will note that Edison’s medium-term production forecasts are within 5% of WPM’s guidance for the period FY23–27 and within 7% of its longer-term guidance for FY23–32. However, we regard this as within an acceptable range of variance, especially given WPM’s traditional under-sale of metal relative to production of this order of magnitude. In addition, these estimates necessarily exclude potential future stream acquisitions.

Growth opportunities

Short term

In the short term, production of palladium and gold at Stillwater (operated by Sibanye-Stillwater) will increase under the influence of the Fill-the-Mill project at East Boulder (although the Blitz project has now been delayed to 2024, following the suspension of growth capital activities owing to COVID-19). Similarly, the Voisey’s Bay underground project is in the process of ramping up to full production, while First Majestic is in the process of increasing production at San Dimas by restarting mining operations at the past-producing Tayoltita mine to add another 300tpd (12%) to throughput. In addition, it is investigating the installation of a 3,000tpd high-intensity grinding mill circuit and an autogenous grinding mill to improve recoveries and reduce operating costs.

Medium term

In the medium term, Wheaton has four projects that are progressing on their route to production:

Sabina Gold & Silver Corp (in the process of being acquired by B2Gold) has announced a formal construction decision for the Goose project with the intention of commencing full construction early this year with first production anticipated in 2025.

Artemis Gold has confirmed that its BC Mines Act permit for the Blackwater project has been referred to the BC Ministry of Energy, Mines and Low Carbon Innovation Statutory Decision Maker for a decision. This is the last major permit required ahead of major construction work anticipated later this quarter. Last year, the company announced the start of site preparation work at the plant site, including site clearing, bulk earthworks and sediment/erosion control.

In November, Generation Mining received the final environmental approvals for its Marathon palladium-copper project in northern Ontario. This year, it is aiming to secure key provincial permits, related to species at risk, tree harvesting and water quality, etc, so that early construction works can commence. The start of construction is anticipated in Q323 and production in Q3–Q425, to which end it has already purchased an unused, surplus SAG mill and a ball mill.

Adventus Mining signed the investment contract for the Curipamba project with the Ecuadoran government in December and is planning for the start of formal construction of the project in Q223.

Long term

Salobo

On 24 October 2018, Vale announced the approval of the Salobo III brownfields mine expansion, intended to increase processing capacity at Salobo from 24Mtpa to 36Mtpa, with start-up at that point scheduled for H222 and an estimated ramp-up time of 15 months. According to its agreement with Vale, depending on the grade of the material processed, WPM will be required to make a payment to Vale for this expansion, which WPM estimates will be in the range US$550–670m in FY23–25, in return for which it will be entitled to its full 75% attributable share of expanded gold production. Note, however, that the timing of this payment is dependent upon Salobo III successfully concluding a 90-day completion test, based largely on throughput, the start of which is at Vale’s discretion. The payment also compares to WPM’s purchase of a 25% stream from Salobo in August 2016 for a consideration of US$800m (see our note Going for gold, published on 30 August 2016), the US$900m it paid for a similar stream in March 2015 (when the gold price averaged US$1,179/oz) and the US$1.33bn it paid for its original 25% stream in February 2013.

As at the end of Q422, the Salobo III mine expansion was reported to be 99% complete:

Exhibit 8: Physical completion of Salobo III, by quarter, Q219–Q422

Q219

Q319

Q419

Q120

Q220

Q320

Q420

Q121

Q221

Q321

Q421

Q122

Q222

Q322

Q422

Physical completion (%)

15

27

40

47

54

62

68

73

77

81

85

90

95

98

99

Implied quarterly completion (%)

8

12

13

7

7

8

6

5

4

4

4

5

5

3

1

Source: Vale, Edison Investment Research

According to Vale, the project successfully commenced at the end of 2022 and is expected to achieve full capacity in Q424. Once Salobo III has been completed, however, WPM believes that reserves and resources there could support a further 33% capacity increase at Salobo, from 90ktpd to 120ktpd (denoted Salobo IV). In addition to its long-term underground potential, WPM believes such an expansion could nevertheless still be supported by open-pit mining alone. Under the terms of its agreement with Vale, there would be no additional payment due from WPM in respect of the Salobo IV expansion, although Vale could exercise a right to alter the timing of the incremental payment due for Salobo III.

Rosemont/Copper World

Another major project with which WPM has a streaming agreement for attributable gold and silver production is Rosemont in Arizona (now part of the wider Copper World complex).

Rosemont/Copper World is near a number of large porphyry-type producing copper mines and will be one of the largest copper mines in the United States, with initial output of c 86,000t copper per year from mined sources, accounting for c 8% of total US copper production, rising to c 101,000tpa after 16 years. Total by-product production of silver attributable to WPM is estimated to be c 1.7Moz Ag pa for Phase I, followed by c 2.4Moz Ag pa for Phase II.

The evolution of the project from Rosemont to Copper World

Rosemont/Copper World’s operator, Hudbay, received both a Mine Plan of Operations from the US Forest Service and a Section 404 Water Permit from the US Army Corps of Engineers (ACOE) in March 2019, which was effectively the final material administrative step before the Rosemont mine could start development. Subsequently, Hudbay indicated it would seek board approval to start construction work by the end of CY19, which would have enabled first production ‘by the end of 2022’. In the meantime, it started early works to run concurrently with financing activities (including a potential joint venture partner).

A legal challenge, lunched in July 2019, has since delayed the project. However, Hudbay has continued to explore in and around the area of the mine and, on 22 September 2021, announced the intersection of additional high-grade copper sulphide and oxide mineralisation predominantly located on its wholly owned patented mining claims (denoted Copper World). To date, seven deposits have been identified at Copper World with a combined strike length of over 7km and, on 15 December 2021, Hudbay announced a maiden mineral resource at Copper World of 272Mt in the indicated category and 142Mt in the inferred category, both at an average grade of 0.36% copper. The mineralisation consists of both skarn and porphyry copper sulphides with a significant oxidised component along a regional fault along the west side of the Rosemont, Bolsa and Broad Top Butte deposits known as the Backbone Fault. As a consequence of this exploration, it was determined that approximately 33Mt of inferred mineral resources at the Bolsa deposit, which were previously considered to be waste in the resource pit shell used for Rosemont’s NI 43–101 feasibility study, could now potentially be converted into reserves, which would result in less waste being mined at Rosemont, thereby reducing costs and energy consumption per tonne of ore mined. In addition, the Rosemont deposit also contains oxide mineralisation that was previously classified as waste, which could be processed with the oxide mineralisation at Copper World, and it is expected that further synergies will be identified as Hudbay explores the gap between Bolsa and Rosemont. Note, the Copper World discovery is included in WPM’s area of interest under its precious metals purchase agreement (PMPA) with Hudbay.

A new development plan

As a result of these discoveries, Hudbay has adjusted its plan to develop the district. Among other things, it has now acquired a private land package totalling approximately 4,500 acres to support an operation on private lands. The initial technical studies for Copper World were incorporated into a preliminary economic assessment (PEA) investigating the development of the Copper World deposits in conjunction with an alternative plan for the Rosemont deposit, which was announced to the market on 8 June 2022, and proposed a two-phase mine development plan. The first phase of the mine plan requires only state and local permits and reflects an approximate 16-year mine life. The second phase then extends the mine life to 44 years and incorporates an expansion onto federal lands to mine the entire Rosemont and Copper World deposits. The second phase of the mine plan would be subject to the federal permitting process and the company expects that it will be able to pursue the federal permits within the constraints imposed by the courts’ most recent legal decisions if any subsequent appeals are not successful.

In this context, on 24 May 2022, Hudbay received a favourable decision from the US District Court for the District of Arizona on all issues relating to the development of Copper World, including that Copper World and Rosemont are not connected under the National Environmental Policy Act (NEPA) and, therefore, that the ACOE does not have an obligation to include Copper World as part of its NEPA review of Rosemont. The District Court also granted Hudbay’s motion to dismiss the Copper World preliminary injunction request filed by the plaintiffs in the two lawsuits challenging the Section 404 Clean Water Act permit for Rosemont on the basis that the lawsuits were moot after the company surrendered its 404 permit back to the ACOE in April 2022. The ACOE has never determined that there are jurisdictional waters of the United States on the Copper World site and Hudbay has independently concluded through its own scientific analysis that there are no such waters in the area. In this respect, Hudbay believes the District Court’s decision, together with the 12 May 2022 decision, clarifies the permitting path for Copper World, including the requirements to receive federal permits for the second phase only (ie years 16 to 44 of the project) under existing mining regulations.

PEA completed and PFS underway ahead of potential project sanctioning in 2024

Resources were reported to have expanded materially to 792Mt in the measured category, 381Mt in the indicated category and 262Mt in the inferred category at the time of Hudbay’s PEA at an average grade of 0.40% copper. In April 2022, the company commenced early works at Copper World with initial grading and clearing activities at site – albeit Hudbay is having to contest an ACOE order to stop grading and land clearing on a portion of the site, while also being under a law enforcement investigation by the San Francisco regional office of the US Environmental Protection Agency (EPA) for ‘unauthorized activities’. Nevertheless, Hudbay expects to conclude a pre-feasibility study for Phase I of the Copper World project this year, which will focus on converting the remaining inferred mineral resources to measured and indicated status and the evaluation of many of the project’s optimisation and upside opportunities. It will then complete a definitive feasibility study as well as receiving all required state and local permits over the next 12 months, while simultaneously evaluating a variety of financing options, including a potential minority joint venture partner, prior to project sanction potentially as early as 2024. As such, Edison is continuing to forecast production from Rosemont/Copper World attributable to WPM in FY27. However, readers should note that any acceleration in the process of being granted federal permits could allow Hudbay earlier access to higher-grade areas of the orebody, especially at Rosemont. In the meantime, it is continuing exploration and technical work at site with seven drill rigs conducting infill drilling to support its feasibility studies.

Antamina

In April 2022, Antamina announced a US$1.6bn investment that will lengthen the mine’s useful life from 2028 to 2036. Currently, the mine is carrying out a third and final ‘public participation’ with residents of the northern Andean region of Ancash, where the mine is located, and is awaiting a response from the local authority, Senace, regarding the company’s request to modify its environmental impact assessment to allow the mine to extend its operating life by eight years. Production and the mine’s operational footprint would remain the same and it hopes to achieve mine extension approval early this year. The mine, which is co-owned by Glencore, BHP, Teck and Mitsubishi Corp, is Peru’s largest, and the world’s second-largest, copper mine.

Pascua-Lama

WPM’s contract with Barrick provided for a completion test that, if unfulfilled by 30 June 2020, would result in WPM being entitled to the return of its upfront cash consideration of US$625m less a credit for any silver delivered up to that date from three other Barrick mines (at which point it would have no further streaming interest in the mine). Given the test was unfulfilled, WPM had the right to an estimated US$252.3m (the carrying value of Pascua-Lama in WPM’s accounts) repayment from Barrick in FY20. Given the long-term optionality provided by the Pascua-Lama project, however, WPM instead opted not to enforce the repayment of its entitlement and to instead maintain its streaming interest in the project (which was originally expected to deliver an attributable 1.7–12.0Moz silver pa, averaging 5.2Moz Ag pa, to WPM at a cost of US$3.90/oz inflating at 1% per year). A Chilean court ordered Pascua-Lama to close in 2020, but Barrick has raised the possibility that the orebody could be developed in a different manner, with an investment decision anticipated in 2024.

Other potential future growth opportunities

In general, WPM expects to be conducting due diligence processes on approximately 10–12 projects at any one time, which it expects to narrow to three to four target projects over the course of approximately 12 months. Most of the opportunities currently being evaluated by WPM are reported to be the precious metal by-product streams of base metal mines, although there are also reported to be some high-margin, purely precious metals mines included as well. In the first instance, WPM would fund any such transactions via the US$2bn available under its revolving credit facility, plus the US$494.6m in cash that it has on its balance sheet (at end-Q322) and, potentially, its US$300m at-the-market equity programme.

While it is difficult, or impossible, to predict potential future stream acquisition targets with any degree of certainty, it is possible to highlight two that may be of interest to WPM in due course for which it already has strong, existing counterparty relationships, being:

the platinum group metal by-product stream at Sudbury (operated by Vale); and

the 30% of the gold output at Constancia that is not currently subject to any streaming arrangement.

FY23 guidance and forecasts

In the light of WPM’s FY23 guidance, and recent moves in metals prices, forex rates and WPM’s share price, Edison has calculated the following maiden quarterly forecasts for Wheaton for FY23:

Exhibit 9: WPM FY23 forecast, by quarter*

US$000s
(unless otherwise stated)

Q123e

Q223e

Q323e

Q423e

FY23e

FY23

(prior)

Silver production (koz)

5,000

5,000

5,000

5,000

20,000

19,219

Gold production (oz)

69,371

85,746

87,149

97,005

339,271

450,017

Palladium production (koz)

3,871

3,871

3,871

3,871

15,484

27,000

Cobalt production (klb)

113

201

289

377

980

2,100

Silver sales (koz)

4,405

5,000

5,000

5,000

19,404

19,219

Gold sales (oz)

64,743

85,725

87,128

96,984

334,580

449,872

Palladium sales (oz)

3,298

3,856

3,856

3,856

14,865

27,000

Cobalt sales (klb)

104

201

289

377

971

1,959

Avg realised Ag price (US$/oz)

22.22

21.03

21.03

21.03

21.30

24.55

Avg realised Au price (US$/oz)

1,860

1,826

1,826

1,826

1,833

1,749

Avg realised Pd price (US$/oz)

1,577

1,453

1,453

1,453

1,480

1,851

Avg realised Co price (US$/lb)

18.24

15.50

15.50

15.50

15.79

23.36

Avg Ag cash cost (US$/oz)

5.15

5.09

5.09

5.10

5.10

5.45

Avg Au cash cost (US$/oz)

468

459

457

453

459

448

Avg Pd cash cost (US$/oz)

284

262

262

262

269

333

Avg Co cash cost (US$/lb)

3.28

2.79

2.79

2.79

2.84

4.21

Sales

225,421

270,399

274,327

293,691

1,063,837

1,354,192

Cost of sales

Cost of sales, excluding depletion

54,279

66,320

67,101

71,497

259,197

323,402

Depletion

49,888

62,938

65,281

71,420

249,527

309,001

Total cost of sales

104,167

129,258

132,382

142,917

508,725

632,402

Earnings from operations

121,253

141,140

141,945

150,774

555,112

721,790

Expenses and other income

– General and administrative**

18,118

16,944

16,944

16,944

68,950

59,852

– Foreign exchange (gain)/loss

0

– Net interest paid/(received)

1,454

1,454

1,454

1,454

5,817

(891)

– Other (income)/expense

-2,315

-1,816

-895

-1,283

-6,310

Total expenses and other income

17,257

16,582

17,504

17,115

68,458

58,961

Earnings before income taxes

103,996

124,558

124,442

133,658

486,655

662,828

Income tax expense/(recovery)

250

250

250

250

1,000

1,000

Marginal tax rate (%)

0.2

0.2

0.2

0.2

0.2

0.0

Net earnings

103,746

124,308

124,192

133,408

485,655

661,828

Average no. shares in issue (000s)

451,757

451,757

451,757

451,757

451,757

451,757

Basic EPS (US$)

0.230

0.275

0.275

0.295

1.08

1.47

Diluted EPS (US$)

0.223

0.268

0.267

0.287

1.05

1.43

DPS (US$)

0.15

0.15

0.15

0.15

0.60

0.62

Source: WPM accounts, Edison Investment Research. Note: *Excluding impairments, impairment reversals and exceptional items. **Forecasts now include stock-based compensation costs. Totals may not add up owing to rounding.

Readers should note that the majority of the decline in our estimates for gold production and sales in FY23 relates to our assumption of a relatively slow recovery in output at Salobo and the fact that the Salobo III expansion is not now expected to achieve full capacity until Q424 (see above). Otherwise, our basic EPS forecast of US$1.08/share for FY23 is 15.0% below the consensus forecast of US$1.27/share (source: Refinitiv, 1 March 2023). In this context, it is worth noting that our gold and silver price forecasts for the remainder of the year are US$1,826/oz and US$21.03/oz, respectively, which are those prevailing at the time of writing.

Exhibit 10: WPM FY23 consensus EPS forecasts (US$/share), by quarter

Q123e

Q223e

Q323e

Q423e

Sum Q1–Q423e

FY23e

Edison forecasts

0.230

0.275

0.275

0.295

1.075

1.08

Mean consensus

0.310

0.300

0.310

0.300

1.220

1.27

High consensus

0.360

0.340

0.350

0.350

1.400

1.47

Low consensus

0.250

0.250

0.260

0.260

1.020

1.02

Source: Refinitiv, Edison Investment Research. Note: As at 1 March 2023.

Our EPS forecast of US$1.08/share for FY23 is lower than our previous (formal) forecast of US$1.47/share. In part, this is a result of lower forecast production in FY23, in particular, at Salobo. However, it is also the result of lower metals prices for silver, palladium and cobalt (see Exhibit 9, above). In our last report on Wheaton (see Results closely in line with prior expectations, published on 8 November), we noted that, ‘In the event of precious metals prices remaining at current levels for the whole of FY23, then we estimate that this figure [EPS] would instead moderate to approximately US$1.19/share.’ As such, our revised EPS of US$1.075/share is only 9.7% below our comparable prior forecast of US$1.19/share at prevailing metals prices.

Valuation

Absolute

WPM is a multi-asset company that has shown a willingness and desire to buy streams in the past to maintain production and maximise shareholder returns. As a result, rather than our customary method of discounting maximum potential dividends over the life of operations back to FY23, in the case of WPM (as with Newmont and Endeavour), we discount forecast cash flows back over four years from the start of FY23 and then apply an ex-growth terminal multiple to forecast cash flows in that year (ie FY26) based on an appropriate discount rate.

In this case, our estimate of WPM’s ‘terminal’ pre-financing cash flow in FY26 is ostensibly unchanged at US$2.59/share (cf US$2.67/share previously), as shown below:

Exhibit 11: WPM cash flow per share and related valuation (US$/share), FY22–26

Source: Edison Investment Research. Note: Valuation line assumes ex-growth cash flow per share growth rate of 4.0% pa post-FY26 in nominal terms, which equals the average US rate of CPI inflation since 1972 (ie 0% per annum growth in real terms).

Note that the negative cash flow that we calculate in FY23 arises almost solely as a result of the assumption that Wheaton will pay Vale US$603m in consideration of the Salobo III expansion over the course of the next 10 months (NB this is unchanged since our last note). In reality, this could equally occur in FY24 or FY25 or later. Otherwise, assuming 4% growth in nominal cash flows beyond FY26 (ie 0% growth in real cash flows) and applying a discount rate of 9.0% (being the expected long-term required nominal equity return), our terminal valuation of the company at end-FY26 is US$53.71/share (cf US$55.35/share previously), which, when discounted back to FY23 in combination with intervening cash flows, results in a valuation at the start of FY23 of US$41.52/share (cf US$40.24/share previously), or C$56.30/share (cf C$54.43/share previously). To this should then be added our estimate of FY22 end net cash of US$1.33/share (C$1.81/share) to take the total to US$42.85 (or C$58.11) per share. However, this valuation is inherently conservative in that it is based on the assumption of zero growth in (real) cash flows beyond FY26. This is inconsistent with the gold price, which has risen at a compound average annual growth rate of 7.6% per annum since 1968 and at a simple average annual growth rate of 9.7% per annum (as depicted below).

Exhibit 12: Gold price annual performance, 1968–2021

Source: Edison Investment Research (underlying data: US Bureau of Labor Statistics, Bloomberg, kitco.com, South African Chamber of Mines)

It is also inconsistent with WPM’s longer-term historical performance, wherein operational cash flows have increased at a compound average annual growth rate of 23.2% pa for the 16 years between FY05 and FY21, while its operational cash flows per share have increased at compound average annual growth rate of 15.8% pa.

Historical

Excluding FY04 (part-year), WPM’s shares have historically traded on an average P/E multiple of 30.1x current year basic underlying EPS, excluding impairments (cf 37.7x Edison or 36.2x Refinitiv consensus FY22e – see Exhibit 13).

Exhibit 13: WPM’s historical current year P/E multiples, 2005–21

Source: Average share price data Bloomberg, Edison Investment Research calculations

Applying this 30.1x multiple to our (ostensibly unchanged) EPS forecast of US$1.80 in FY26 (cf US$1.88 previously) implies a potential value per share for WPM of US$54.12 or C$73.40 in that year. However, the graph above suggests that the investing environment post-2017 has been able to support an enhanced WPM multiple relative to earlier years (which we would ascribe to macroeconomic uncertainty creating a supportive environment for precious metals). As such, we believe that a multiple of 38.6x (the average of FY18–21) may still be supported in the event of a return to favour of precious metals and precious metals stocks. In this case, applying a 38.6x earnings multiple to our EPS forecast of US$1.08 in FY23 implies a potential value per share for WPM of US$41.45 or C$56.22.

Relative

From a relative perspective, it is notable that WPM is cheaper than its peers on at least 52% (19 out of 36) of the valuation measures observed in Exhibit 14 if Edison estimates are used or 55% (20 out of 36) of the same valuation measures if consensus forecasts are used.

Exhibit 14: WPM comparative valuation versus a sample of operating and royalty/streaming companies

P/E (x)

Yield (%)

P/CF (x)

Year 1

Year 2

Year 3

Year 1

Year 2

Year 3

Year 1

Year 2

Year 3

Royalty companies

Franco-Nevada

35.3

34.3

34.1

1.0

1.0

1.1

25.0

24.1

23.4

Royal Gold

31.0

31.6

29.0

1.1

1.1

1.3

17.1

16.2

15.6

Sandstorm Gold

15.7

70.3

44.2

1.2

1.2

1.2

11.5

13.9

11.9

Osisko

19.7

35.5

30.1

1.4

1.2

1.2

26.8

17.2

16.1

Average

25.4

42.9

34.4

1.2

1.1

1.2

20.1

17.8

16.8

WPM (Edison forecasts)

37.7

38.8

29.9

1.4

1.4

1.5

24.7

25.6

19.3

WPM (consensus)

36.2

32.7

30.8

1.4

1.4

1.3

25.0

22.8

20.1

Implied WPM share price (US$)*

28.14

46.15

47.96

51.28

53.45

51.28

33.96

28.99

36.19

Source: Refinitiv, Edison Investment Research. Note: Peers priced on 1 March 2023. *Derived using Edison forecasts and average consensus multiples.

Exhibit 15: Financial summary

$000s

 

2020

2021

2022e

2023e

2024e

Dec

IFRS

IFRS

IFRS

IFRS

IFRS

PROFIT & LOSS

Revenue

 

 

1,096,224

1,201,665

1,064,483

1,063,837

1,357,577

Cost of Sales

(266,763)

(287,947)

(266,795)

(259,197)

(314,406)

Gross Profit

829,461

913,718

797,688

804,640

1,043,170

EBITDA

 

 

763,763

852,733

735,432

735,689

974,220

Operating profit (before amort. and excepts.)

 

 

519,874

597,940

500,146

486,162

632,704

Exceptionals

4,469

162,806

103,333

0

0

Other

387

190

5,817

6,310

0

Operating Profit

524,730

760,936

609,296

492,472

632,704

Net Interest

(16,715)

(5,817)

(5,566)

(5,817)

(1,186)

Profit Before Tax (norm)

 

 

503,159

592,123

494,580

480,345

631,519

Profit Before Tax (FRS 3)

 

 

508,015

755,119

603,730

486,655

631,519

Tax

(211)

(234)

(503)

(1,000)

(1,000)

Profit After Tax (norm)

503,335

592,079

499,894

485,655

630,519

Profit After Tax (FRS 3)

507,804

754,885

603,227

485,655

630,519

Average Number of Shares Outstanding (m)

448.7

450.1

451.5

451.8

451.8

EPS - normalised (c)

 

 

112

132

111

108

140

EPS - normalised and fully diluted (c)

 

 

112

131

108

105

136

EPS - (IFRS) (c)

 

 

113

168

134

108

140

Dividend per share (c)

42

57

60

60

61

Gross Margin (%)

75.7

76.0

74.9

75.6

76.8

EBITDA Margin (%)

69.7

71.0

69.1

69.2

71.8

Operating Margin (before GW and except.) (%)

47.4

49.8

47.0

45.7

46.6

BALANCE SHEET

Fixed Assets

 

 

5,755,441

6,046,427

5,923,543

6,769,506

6,827,611

Intangible Assets

5,521,632

5,940,538

5,817,654

6,663,617

6,721,722

Tangible Assets

33,931

44,412

44,412

44,412

44,412

Investments

199,878

61,477

61,477

61,477

61,477

Current Assets

 

 

201,831

249,724

613,989

8,332

285,238

Stocks

3,265

12,102

2,505

2,503

3,194

Debtors

5,883

11,577

5,833

5,829

7,439

Cash

192,683

226,045

605,651

0

274,604

Current Liabilities

 

 

(31,169)

(29,691)

(42,070)

(67,777)

(46,766)

Creditors

(30,396)

(28,878)

(41,257)

(40,508)

(45,953)

Short term borrowings

(773)

(813)

(813)

(27,269)

(813)

Long Term Liabilities

 

 

(211,532)

(16,343)

(16,343)

(16,343)

(16,343)

Long term borrowings

(197,864)

(2,060)

(2,060)

(2,060)

(2,060)

Other long term liabilities

(13,668)

(14,283)

(14,283)

(14,283)

(14,283)

Net Assets

 

 

5,714,571

6,250,117

6,479,118

6,693,719

7,049,740

CASH FLOW

Operating Cash Flow

 

 

784,843

851,686

768,969

741,255

977,365

Net Interest

(16,715)

(5,817)

(5,566)

(5,817)

(1,186)

Tax

(2,686)

(503)

(503)

(1,000)

(1,000)

Capex

149,648

(404,437)

(112,401)

(1,095,491)

(399,620)

Acquisitions/disposals

0

0

0

0

0

Financing

22,396

7,992

0

0

0

Dividends

(167,212)

(218,052)

(270,893)

(271,054)

(274,498)

Net Cash Flow

770,274

230,869

379,606

(632,107)

301,060

Opening net debt/(cash)

 

 

774,766

5,954

(223,172)

(602,778)

29,329

Other

(1,462)

(1,743)

0

0

0

Closing net debt/(cash)

 

 

5,954

(223,172)

(602,778)

29,329

(271,731)

Source: company sources, Edison Investment Research.


General disclaimer and copyright

This report has been commissioned by Wheaton Precious Metals and prepared and issued by Edison, in consideration of a fee payable by Wheaton Precious Metals. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2023 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

General disclaimer and copyright

This report has been commissioned by Wheaton Precious Metals and prepared and issued by Edison, in consideration of a fee payable by Wheaton Precious Metals. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2023 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

More on Wheaton Precious Metals

View All

Metals & Mining

Wheaton Precious Metals — Peerless

Wheaton-Precious-Metals_resized

Metals & Mining

Wheaton Precious Metals — Honing Q223 forecasts

Wheaton-Precious-Metals_resized

Metals & Mining

Wheaton Precious Metals — Refining forecasts

Latest from the Metals & Mining sector

View All Metals & Mining content

Research: Investment Companies

Princess Private Equity Holding — Planning to resume dividend payments in June

During its Q422 results release, Princess Private Equity (PEY) announced the discontinuation of its foreign exchange (FX) hedging strategy from 1 April 2023 and an upsizing of its credit facility from €110m to €140m in response to the holding-level liquidity constraints it faced in late 2022. We believe investors should welcome these measures, as they facilitate PEY’s balance sheet management while allowing it to stay close to fully invested (investment level at 101.3% at end-January 2023) and to resume its dividend payments in line with the policy of paying out 5% of opening net asset value (NAV).

Continue Reading

Subscribe to Edison

Get access to the very latest content matched to your personal investment style.

Sign up for free