Last close As at 05/08/2026
CAD175.79
▲ 3.31 (1.92%)
Market capitalisation
CAD78,334m
Research: Metals & Mining
On 15 November, Wheaton Precious Metals acquired three streams from Ivanhoe’s Platreef project in South Africa, BMC Minerals’ Kudz Ze Kayah project in the Yukon and Dalradian’s Curraghinalt project in Northern Ireland. In summary, the streams allow for varying purchases of precious metals by Wheaton at varying prices and we calculate that the trio will add an initial c 26.3koz of gold equivalent ounces (GEOs) to WPM’s production profile from FY25, rising to c 35.4koz GEOs when all three are in production from FY27 (Edison assumption).
Wheaton Precious Metals |
Putting net cash to work |
Trio of streams acquired |
Metals and mining |
20 November 2023 |
Share price performance
Business description
Next events
Analyst
Wheaton Precious Metals is a research client of Edison Investment Research Limited |
|||||||||||||||||||||||||||||||||||||||||||||||||||
On 15 November, Wheaton Precious Metals acquired three streams from Ivanhoe’s Platreef project in South Africa, BMC Minerals’ Kudz Ze Kayah project in the Yukon and Dalradian’s Curraghinalt project in Northern Ireland. In summary, the streams allow for varying purchases of precious metals by Wheaton at varying prices and we calculate that the trio will add an initial c 26.3koz of gold equivalent ounces (GEOs) to WPM’s production profile from FY25, rising to c 35.4koz GEOs when all three are in production from FY27 (Edison assumption).
Year end |
Revenue |
PBT* |
EPS* |
DPS |
P/E |
Yield |
12/21 |
1,201.7 |
592.1 |
132 |
57 |
32.6 |
1.3 |
12/22 |
1,065.1 |
497.7 |
112 |
60 |
38.4 |
1.4 |
12/23e |
955.3 |
461.4 |
110 |
60 |
39.0 |
1.4 |
12/24e |
1,385.8 |
657.9 |
145 |
62 |
28.3 |
1.4 |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles and exceptional items.
US$530m consideration fully covered by net cash
The detailed terms of the streams are here. The total consideration for all three streams is US$530m, with the majority (c 78% in our estimation) likely to relate to the Platreef stream, on which investment we calculate Wheaton will generate an internal rate of return (IRR) of 9.7%. We estimate that the IRR from its other two investments will be 9.5% for Kudz Ze Kayah and 7.3% for Curraghinalt. For the purposes of our financial modelling, we have assumed that consideration for the streams will be paid early in FY24. However, we note that Wheaton has enough cash on its balance sheet as at end-Q323 to satisfy the full consideration in Q423 should it fall due before the year’s end. As a result of paying the full consideration in FY24, our forecast for net cash at the end of that year reduces from US$916.6m to US$435.6m.
Production to exceed 900koz GEOs in FY27
As a consequence of these three investments, we calculate that WPM’s production profile will rise to 920,000oz GEOs in FY27. It also cements our EPS forecast for FY26 in excess of US$2.00/share and increases our estimate of cash flows per share in that year by 9c/share, from US$2.88/share to US$2.96/share.
Valuation: Moving ever upwards
Using a capital asset pricing model (CAPM)-type method, whereby we discount cash flows at a nominal 9% per year, our ‘terminal’ valuation of WPM in FY26 has risen by 2.8% to US$61.41 (cf US$59.74 previously) per share, assuming zero subsequent longterm growth in real cash flows (which we think is unlikely) and to US$50.28 (C$69.02) per share at the start of FY24. Alternatively, assuming no purchases of additional streams, we calculate a value per share for WPM of US$61.19 or C$84.00 or £49.26 in FY26, based on a 30.4x historical multiple of contemporary earnings.
Exhibit 1: Financial summary
$000s |
|
2020 |
2021 |
2022 |
2023e |
2024e |
2025e |
|
Year end 31 December |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
||
PROFIT & LOSS |
||||||||
Revenue |
|
|
1,096,224 |
1,201,665 |
1,065,053 |
955,320 |
1,385,785 |
1,610,193 |
Cost of Sales |
(266,763) |
(287,947) |
(267,621) |
(217,735) |
(307,256) |
(345,904) |
||
Gross Profit |
829,461 |
913,718 |
797,432 |
737,585 |
1,078,529 |
1,264,289 |
||
EBITDA |
|
|
763,763 |
852,733 |
735,245 |
667,613 |
1,008,557 |
1,194,317 |
Operating profit (before amort. and excepts.) |
|
|
519,874 |
597,940 |
503,293 |
466,981 |
656,924 |
787,351 |
Exceptionals |
4,469 |
162,806 |
164,214 |
(13,192) |
0 |
0 |
||
Other |
387 |
190 |
7,680 |
36,787 |
0 |
0 |
||
Operating Profit |
524,730 |
760,936 |
675,187 |
490,576 |
656,924 |
787,351 |
||
Net Interest |
(16,715) |
(5,817) |
(5,586) |
(5,591) |
991 |
784 |
||
Profit Before Tax (norm) |
|
|
503,159 |
592,123 |
497,707 |
461,390 |
657,914 |
788,135 |
Profit Before Tax (FRS 3) |
|
|
508,015 |
755,119 |
669,601 |
484,985 |
657,914 |
788,135 |
Tax |
(211) |
(234) |
(475) |
(576) |
(1,000) |
(1,000) |
||
Profit After Tax (norm) |
503,335 |
592,079 |
504,912 |
497,601 |
656,914 |
787,135 |
||
Profit After Tax (FRS 3) |
507,804 |
754,885 |
669,126 |
484,409 |
656,914 |
787,135 |
||
Average Number of Shares Outstanding (m) |
448.7 |
450.1 |
451.6 |
452.8 |
453.0 |
453.0 |
||
EPS - normalised (c) |
|
|
112 |
132 |
112 |
110 |
145 |
174 |
EPS - normalised and fully diluted (c) |
|
|
112 |
131 |
112 |
109 |
144 |
173 |
EPS - (IFRS) (c) |
|
|
113 |
168 |
148 |
107 |
145 |
174 |
Dividend per share (c) |
42 |
57 |
60 |
60 |
62 |
76 |
||
Gross Margin (%) |
75.7 |
76.0 |
74.9 |
77.2 |
77.8 |
78.5 |
||
EBITDA Margin (%) |
69.7 |
71.0 |
69.0 |
69.9 |
72.8 |
74.2 |
||
Operating Margin (before GW and except.) (%) |
47.4 |
49.8 |
47.3 |
48.9 |
47.4 |
48.9 |
||
BALANCE SHEET |
||||||||
Fixed Assets |
|
|
5,755,441 |
6,046,427 |
6,039,813 |
6,423,709 |
6,915,884 |
7,007,726 |
Intangible Assets |
5,521,632 |
5,940,538 |
5,753,111 |
6,128,896 |
6,621,071 |
6,712,913 |
||
Tangible Assets |
33,931 |
44,412 |
30,607 |
32,377 |
32,377 |
32,377 |
||
Investments |
199,878 |
61,477 |
256,095 |
262,436 |
262,436 |
262,436 |
||
Current Assets |
|
|
201,831 |
249,724 |
720,093 |
559,982 |
448,437 |
801,178 |
Stocks |
3,265 |
12,102 |
13,817 |
2,248 |
3,261 |
3,789 |
||
Debtors |
5,883 |
11,577 |
10,187 |
5,235 |
7,593 |
8,823 |
||
Cash |
192,683 |
226,045 |
696,089 |
552,500 |
437,583 |
788,567 |
||
Current Liabilities |
|
|
(31,169) |
(29,691) |
(30,717) |
(28,586) |
(32,878) |
(34,731) |
Creditors |
(30,396) |
(28,878) |
(29,899) |
(27,768) |
(32,060) |
(33,913) |
||
Short term borrowings |
(773) |
(813) |
(818) |
(818) |
(818) |
(818) |
||
Long Term Liabilities |
|
|
(211,532) |
(16,343) |
(11,514) |
(11,514) |
(11,514) |
(11,514) |
Long term borrowings |
(197,864) |
(2,060) |
(1,152) |
(1,152) |
(1,152) |
(1,152) |
||
Other long term liabilities |
(13,668) |
(14,283) |
(10,362) |
(10,362) |
(10,362) |
(10,362) |
||
Net Assets |
|
|
5,714,571 |
6,250,117 |
6,717,675 |
6,943,591 |
7,319,928 |
7,762,659 |
CASH FLOW |
||||||||
Operating Cash Flow |
|
|
784,843 |
851,686 |
749,429 |
720,625 |
1,009,478 |
1,194,413 |
Net Interest |
(16,715) |
(5,817) |
(5,586) |
(5,591) |
991 |
784 |
||
Tax |
(2,686) |
(503) |
34 |
(576) |
(1,000) |
(1,000) |
||
Capex |
149,648 |
(404,437) |
(44,750) |
(586,362) |
(843,809) |
(498,809) |
||
Acquisitions/disposals |
0 |
0 |
0 |
0 |
0 |
0 |
||
Financing |
22,396 |
7,992 |
10,171 |
0 |
0 |
0 |
||
Dividends |
(167,212) |
(218,052) |
(237,097) |
(271,685) |
(280,577) |
(344,404) |
||
Net Cash Flow |
770,274 |
230,869 |
472,201 |
(143,589) |
(114,917) |
350,984 |
||
Opening net debt/(cash) |
|
|
774,766 |
5,954 |
(223,172) |
(694,119) |
(550,530) |
(435,613) |
Other |
(1,462) |
(1,743) |
(1,254) |
0 |
0 |
0 |
||
Closing net debt/(cash) |
|
|
5,954 |
(223,172) |
(694,119) |
(550,530) |
(435,613) |
(786,597) |
Source: Company sources, Edison Investment Research
|
|
Research: TMT
Tinexta’s Q323 results showed continued strong underlying revenue and profit growth in what is typically a relatively small quarter from a revenue and profit perspective due to the inherent seasonality of its Cyber Security (CS) and Business Innovation (BI) divisions. Management’s reiteration of its previous financial guidance, albeit with different growth drivers than originally anticipated, is reassuring given the dependence of the full year results on the performance of the current, final quarter, in which more than 40% of annual profit is typically generated. Our DCF-based valuation of €30/share suggests significant upside from the current share price.