Wheaton Precious Metals Stock

Wheaton Precious Metals Corp. (Wheaton), a mining company, engages in the sale of precious metals and cobalt.

The company enters into purchase agreements (precious metal purchase agreements or PMPAs) to purchase all or a portion of the precious metals or cobalt production from mines located around the globe for an upfront payment and an additional payment upon the delivery of the precious metal or cobalt.

The company’s active subsidiaries are Wheaton Precious Metals International Ltd. (Wheaton International) and Wheaton Precious Metals (Cayman) Co. (Wheaton Cayman), each of which is wholly-owned by the company and is governed by the laws of the Cayman Islands; and Silver Wheaton Luxembourg S.a.r.l. (Silver Wheaton Luxembourg), which is wholly-owned by Wheaton International and is governed by the laws of Luxembourg.

As of December 31, 2021, the company had entered into 28 long-term purchase agreements (three of which are early deposit precious metal purchase agreements), with 21 different mining companies, for the purchase of precious metals and cobalt (PMPA) relating to 23 mining assets, which are operating, 10 which are at various stages of development and two which have been placed in care and maintenance, located in 12 countries. Subsequent to December 31, 2021, the company acquired three new PMPAs related to mining assets, which are at various stages of development. The company is actively pursuing future growth opportunities, primarily by way of entering into additional long-term precious metal purchase agreements. The company has a diversified portfolio of interests in the 23 operating mines and 13 development projects consisting of its high-quality asset base. The company’s principal products are precious metals and cobalt that it has agreed to purchase pursuant to PMPAs.

San Dimas Mine (Gold & Silver)

On October 15, 2004, the company entered into a precious metal purchase agreement (the San Dimas SPA) with Goldcorp Inc. (Goldcorp) to acquire an amount equal to 100% of the silver produced by Goldcorp’s Luismin mining operations in Mexico (owned at the date of the transaction) for a period of 25 years. The Luismin operations consisted primarily of the San Dimas mine (the San Dimas mine) and Los Filos mine (the Los Filos mine). During the second quarter of 2020, operations at the San Dimas mine were temporarily suspended due to government restrictions focused on reducing the impacts of COVID-19.

Los Filos Mine (Silver)

The Los Filos mine is located in the Nukay mining district of central Guerrero State in southern Mexico. Wheaton Precious Metals International Ltd. entered into an agreement with Goldcorp to acquire 100% of the silver production from the Los Filos mine for a period of 25 years, commencing October 15, 2004 (the Los Filos PMPA). On April 7, 2017, Leagold Mining Corporation (Leagold) completed the acquisition of the Los Filos mine from Goldcorp Inc. (Goldcorp). In connection with the acquisition, the Los Filos PMPA was amended to include a corporate guarantee from Leagold. Goldcorp’s guarantee of deliveries in respect of the Los Filos mine remains in place. On March 10, 2020, Leagold and Equinox Gold Corp. (Equinox) announced that they had completed their previously announced arrangement pursuant to which Equinox acquired all of the issued and outstanding shares of Leagold and assumed Leagold’s obligations under the Los Filos PMPA. During the second quarter of 2020, operations at the Los Filos mine were temporarily suspended due to government restrictions focused on reducing the impacts of COVID-19. On May 13, 2020, the federal government of Mexico announced the designation of mining as an essential activity beginning May 18, 2020, and the Los Filos operations resumed during the third quarter.

Zinkgruvan Mine (Silver)

On December 8, 2004, Wheaton Precious Metals International Ltd. entered into an agreement with Lundin Mining Corporation (Lundin) and Zinkgruvan Mining AB (Zinkgruvan AB) to acquire 100% of the payable silver produced by Lundin’s Zinkgruvan mining operations (the Zinkgruvan mine) in Sweden.

Yauliyacu Mine (Silver)

On March 23, 2006, Wheaton Precious Metals International Ltd. entered into a PMPA with Glencore International AG (Glencore International) and its subsidiary, Anani Investments Ltd. (Anani), to acquire an amount equal to 100% of the payable silver produced from the Yauliyacu mining operations (the Yauliyacu mine) in Peru.

On November 30, 2015, Wheaton International amended the Yauliyacu mine PMPA. The term of the agreement, which was set to expire in 2026, was extended to the life of mine. Additionally, effective January 1, 2016, Anani will deliver to Wheaton a per annum amount equal to the first 1.5 million ounces of payable silver produced at the Yauliyacu mine and 50% of any excess.

Stratoni Mine (Silver)

On April 23, 2007, Wheaton International entered into a PMPA (the Stratoni PMPA) with European Goldfields Limited (European Goldfields) (which was acquired by Eldorado on February 24, 2012), and Hellas Gold S.A. (Hellas Gold), a 95%-owned subsidiary of European Goldfields, pursuant to which Wheaton International agreed to purchase 100% of the payable silver produced by Hellas Gold from the Stratoni mine (the Stratoni mine) located in Greece over its entire mine life.

Peñasquito Mine (Silver)

On July 24, 2007, Silver Wheaton Luxembourg entered into a PMPA (the Peñasquito PMPA) with Goldcorp and Minera Peñasquito, S.A. de C.V. (Minera Peñasquito), a wholly-owned subsidiary of Goldcorp, pursuant to which Silver Wheaton Luxembourg agreed to purchase 25% of the payable silver produced by Minera Peñasquito from the Peñasquito mine located in Mexico (the Peñasquito mine) over its entire mine life.

Silver Wheaton Luxembourg and Wheaton International entered into a back to back PMPA in respect of the Peñasquito mine. The area of interest for the stream is limited to specific concessions set out in the Peñasquito PMPA. In connection with the Peñasquito PMPA, Goldcorp also provided Silver Wheaton Luxembourg with a corporate guarantee.

Keno Hill Mines (Silver)

In October 2, 2008, the company entered into a PMPA (the Alexco PMPA) with Alexco and Elsa Reclamation & Development Company Ltd. and Alexco Keno Hill Mining Corp., each of which are wholly-owned subsidiaries of Alexco Resources Corp. (Alexco), pursuant to which the company agreed to pay, subject to the completion of certain conditions in order to acquire 25% of all payable silver produced from the Keno Hill district, including the producing Bellekeno mine in the Yukon Territory, Canada (the Keno Hill mines), over its entire mine-life. On September 14, 2021, the company agreed to extend the outside completion date to December 31, 2022.

Silverstone Acquisition

On May 21, 2009, the company completed the acquisition of all of the outstanding common shares of Silverstone Resources Corp. (Silverstone).

Minto Mine (Canada) – A PMPA (the Minto PMPA) to acquire 100% of the silver produced from the Minto mine (the Minto mine) in Canada and 100% of the first 30,000 ounces of gold produced per annum. In October 2017, in order to incentivize Capstone Copper Corp. (Capstone) to extend to Minto mine life, the company agreed to amend the Minto PMPA.

Cozamin Mine (Mexico) (Completed) – A PMPA to acquire 100% of the silver produced from the Cozamin mine (the Cozamin mine) in Mexico, owned by Capstone and the then prevailing market price per ounce of silver. Capstone had also provided Wheaton International with a corporate guarantee under the Cozamin mine agreement. The company has subsequently entered into a new PMPA with Capstone in respect of the Cozamin mine.

Neves-Corvo Mine (Portugal) – A PMPA to acquire 100% of the silver produced from the Neves-Corvo mine (the Neves-Corvo mine) in Portugal, owned by Lundin for the life of mine. Lundin has also provided Wheaton International with a corporate guarantee under the Neves-Corvo mine agreement. In March 2022, Lundin reported a fatality at the Neves-Corvo mine, which resulted in operations being temporarily suspended.

Aljustrel Mine (Portugal) – A PMPA to acquire 100% of the silver produced from the Aljustrel mine (the Aljustrel mine) in Portugal, owned by I’M SGPS for the life of mine (nominal term of 50 years).

Loma de La Plata Project (Argentina) – A debenture with PAAS convertible into an agreement to purchase 12.5% of the life of mine silver production from the Loma de La Plata (the Loma de La Plata project) zone of the Navidad project in Argentina.

Barrick Mines and Pascua-Lama Project (Silver)

On September 8, 2009, the company entered into a PMPA (the Pascua-Lama PMPA) with Barrick pursuant to which the company agreed to purchase an amount of silver equivalent to 25% of the life of mine payable silver production from Barrick’s Pascua-Lama project (the Pascua-Lama project) located on the border of Chile and Argentina, as well as an amount of silver equivalent to 100% of the silver production from its Lagunas Norte mine (the Lagunas Norte mine) and Pierina mine (the Pierina mine), which are both located in Peru, and its Veladero mine (the Veladero mine) (Wheaton’s attributable silver production is subject to a maximum of 8% of the silver contained in the ore processed at the Veladero mine during the period), which is located in Argentina, until the end of 2015 (the Barrick Transaction).

Rosemont Transaction (Gold & Silver)

On February 10, 2010, Wheaton International entered into a PMPA (the Rosemont PMPA) with Hudbay Minerals Inc. (Hudbay) to acquire an amount equal to 100% of the life of mine silver and gold production from its Rosemont copper project (the Rosemont project) located in Pima County, Arizona. The payable rate for silver and gold has been fixed at 92.5% of production.

Constancia Mine (including Pampacancha Deposit) (Gold & Silver)

On August 8, 2012, Wheaton International entered into a PMPA with Hudbay and its subsidiary, Hudbay (BVI) Inc. to acquire 100% of the life of mine payable silver production from the Constancia mine in Peru (the Constancia mine). On November 4, 2013, Wheaton International amended the PMPA with Hudbay to include the acquisition of an amount equal to 50% of the life of mine payable gold production from the Constancia mine (as amended, the Constancia PMPA).

777 Mine (Gold & Silver)

On August 8, 2012, the company entered into a PMPA (the 777 PMPA) with Hudbay to acquire 100% of the life of mine payable silver and gold production from its producing 777 mine (the 777 mine), located in Canada. Wheaton’s share of gold production at the 777 mine remained at 100% until the satisfaction of a completion test relating to the Constancia mine, after which it was reduced to 50% for the remainder of the mine life.

Hudbay has granted Wheaton a right of first refusal on any future streaming agreement, royalty agreement or similar transaction related to the production of silver or gold from the 777 mine. In connection with the 777 PMPA, certain supplier subsidiaries of Hudbay provided Wheaton with a corporate guarantee and certain other security over their assets and the 777 mine.

Sudbury Mines (Gold)

On February 28, 2013, the company entered into an agreement to acquire from Vale Switzerland SA (Vale Switzerland), a subsidiary of Vale S.A. (Vale), an amount of gold equal to 70% of the payable gold production from certain of its producing Sudbury mines located in Canada, including the Coleman mine, Copper Cliff mine, Garson mine, Stobie mine, Creighton mine, Totten mine and the Victor project (the Sudbury mines) for a period of 20 years.

Salobo Mine (Gold)

On February 28, 2013, Wheaton International entered into a PMPA (the Salobo PMPA) to acquire from Vale an amount of gold equal to 25% of the life of mine gold production from its producing Salobo mine (the Salobo mine), located in Brazil. Vale also provided Wheaton International with a corporate guarantee.

On March 2, 2015, Wheaton International agreed to amend the Salobo PMPA with Vale Switzerland (the First Amended Salobo PMPA) to acquire from Vale Switzerland an additional amount of gold equal to 25% of the life of mine gold production from any minerals from the Salobo mine that enter the Salobo mineral processing facility from and after January 1, 2015.

On August 2, 2016, Wheaton International agreed to further amend the First Amended Salobo PMPA (the Second Amended Salobo PMPA) to acquire an additional amount of gold equal to 25% of the life of mine gold production in respect of gold production for which an off-taker payment is received after July 1, 2016.

Salobo III Expansion – Vale is undertaking the Salobo III mine expansion (the Salobo Expansion), which is proposed to include a third concentrator line and will use Salobo’s existing infrastructure. Vale anticipates that the Salobo Expansion will result in an increase of throughput capacity from 24 Mtpa to 36 Mtpa once fully ramped up. Assuming the Salobo III expansion project achieves 12 Mtpa of additional processing capacity (bringing total processing capacity at Salobo to 36 Mtpa) by the end of 2022.

Early Deposit Gold and Silver Interest – Toroparu Project

On November 11, 2013, Wheaton International entered into a life of mine early deposit precious metal purchase agreement (the Toroparu Early Deposit Agreement) to acquire from Gold X Mining Corp. (Gold X) an amount of gold equal to 10% of the gold production from its Toroparu project (the Toroparu project) located in the Republic of Guyana, South America.

Antamina Mine (Silver)

On November 3, 2015, Wheaton International entered into a PMPA (the Antamina PMPA) to acquire from Anani, a subsidiary of Glencore plc (Glencore), an amount of silver equal to 33.75% of the silver production from the Antamina mine in Peru until the delivery of 140 million ounces of silver and 22.5% of silver production thereafter for the life of mine at a fixed 100% payable rate. During the second quarter of 2020, the Antamina operations were temporarily suspended in response to the Peruvian emergency decree related to the COVID-19 virus pandemic.

Early Deposit Gold and Silver Interest – Cotabambas Project

On March 21, 2016, Wheaton International entered into an early deposit precious metal purchase agreement with Panoro Minerals Ltd. and its wholly owned subsidiary Cordillera Copper Ltd. (Panoro) (the Cotabambas Early Deposit Agreement) for the Cotabambas project located in Peru (the Cotabambas project). Panoro and its subsidiaries have provided Wheaton with corporate guarantees and certain other security over their assets.

Under the terms of the Cotabambas Early Deposit Agreement, Wheaton International is entitled to purchase 100% of the payable silver production and 25% of the payable gold production from the Cotabambas project until 90 million silver equivalent ounces attributable to Wheaton International have been delivered, at which point the stream would decrease to 66.67% of payable silver production and 16.67% of payable gold production for the life of mine.

Early Deposit Gold and Silver Interest – Kutcho Project

On December 14, 2017, Wheaton entered into an early deposit PMPA with Kutcho Copper Corp (Kutcho) (the Kutcho Early Deposit Agreement) for the Kutcho project located in British Columbia, Canada (the Kutcho project). Kutcho and its subsidiaries have provided Wheaton with corporate guarantees and certain other security over their assets.

Under the terms of the Kutcho Early Deposit Agreement, Wheaton is entitled to purchase 100% of the payable silver production and 100% of the payable gold production from the Kutcho project until 5.6 million ounces of silver and 51,000 ounces of gold have been delivered to Wheaton, at which point the stream would decrease to 66.67% of payable silver production and payable gold production for the life of mine.

Vale made the decision on March 17, 2020, to temporarily suspend operations at the Voisey’s Bay mine to ensure the safety of local communities, which have limited to access to healthcare given their remoteness as a result of the COVID-19 virus pandemic.

Stillwater and East Boulder Mines (Gold & Palladium)

In July 2018, Wheaton International entered into an agreement to acquire from Sibanye Gold Limited (Sibanye-Stillwater) from the Stillwater and East Boulder mines located in Montana, the United States (collectively referred to as the Stillwater mines) an amount of gold equal to 100% of the gold production and an amount of palladium equal to 4.5% of Stillwater mines palladium production until 375 Koz delivered to Wheaton; thereafter, 2.25% of Stillwater mines palladium production until 550 Koz delivered to Wheaton; and 1% of Stillwater mines palladium production thereafter for the life of mine.

Marmato Mine (Gold and Silver)

On November 5, 2020, Wheaton International entered into a PMPA (the Marmato PMPA) with Aris Gold Corporation (Aris Gold) in respect of the Marmato mine located in Colombia (the Marmato mine). The Marmato mine comprises an operating Upper Mine and the Marmato Deeps zone development (Lower Mine), both of which are covered by the Marmato PMPA. Aris Gold Corporation and its subsidiaries have provided Wheaton with corporate guarantees and certain other security over their assets.

Under the terms of the Marmato PMPA, Wheaton International is entitled to purchase an amount of precious metals equal to 6.5% of the gold production and 100% of the silver production until 190,000 ounces of gold and 2.15 million ounces of silver have been delivered, after which the stream drops to 3.25% of the gold production and 50% of the silver production for the life of mine.

Cozamin Mine (Silver)

On December 11, 2020, Wheaton International entered into a new PMPA (the New Cozamin PMPA) with Capstone in respect of the Cozamin mine. Under the terms of the New Cozamin PMPA, Wheaton International is entitled to purchase an amendment of silver equal to 50% of the silver production until 10 Moz have been delivered, thereafter dropping to 33% of silver production for the life of the mine. On March 23, 2022, Capstone completed a plan of arrangement transaction with Mantos Copper (Bermuda) Limited.

Santo Domingo Project (Gold)

On March 24, 2021, Wheaton International entered into a PMPA (the Santo Domingo PMPA) with Capstone in respect to the Santo Domingo project located in the Atacama region, Chile (the Santo Domingo project). Capstone has provided Wheaton International with a corporate guarantee and certain other security over the Santo Domingo project.

Under the terms of the Santo Domingo PMPA, Wheaton International is entitled to purchase an amount of gold equal to 100% of the gold production until 285,000 gold ounces have been delivered, after which the stream drops to 67% of the gold production for the life of mine.

On March 23, 2022, Capstone completed a plan of arrangement transaction with Mantos Copper (Bermuda) Limited.

Fenix Project (Gold)

On November 15, 2021, the company entered into a PMPA with Rio2 Limited (Rio2) (the Fenix PMPA) in respect of the Fenix gold project in located in Chile (the Fenix project). Under the PMPA, Wheaton International will purchase 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 140,000 ounces of gold and 3.5% of gold production thereafter for the life of mine. Rio2 and its subsidiaries will provide Wheaton International with corporate guarantees and certain other security over the Fenix project.

Blackwater Project (Gold)

On December 13, 2021, the company entered into a purchase agreement to acquire the existing gold purchase agreement between Artemis Gold Inc. (Artemis) and New Gold Inc. (New Gold) (the Blackwater Gold PMPA) in respect of gold production from the Blackwater project, located in British Columbia in Canada (the Blackwater project). Under the terms of the Blackwater Gold PMPA, Wheaton is entitled to purchase an amount of gold equal to 8% of the gold production until 279,908 gold ounces have been delivered, after which the stream drops to 4% of the gold production for the life of mine. In connection with the Blackwater Gold PMPA, Artemis has provided a corporate guarantee and certain other security over the Blackwater project. This Artemis corporate guarantee and certain security will be released on completion of construction of the Blackwater project.

Blackwater Project (Silver)

On December 13, 2021, the company entered into a PMPA with Artemis (the Blackwater Silver PMPA) 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 from the Blackwater project, until 17.8 million ounces of silver have been delivered and 33% of payable silver production thereafter for the life of mine. Artemis and its subsidiaries will provide Wheaton with corporate guarantees and certain other security over the Blackwater project.

Curipamba Project (Gold and Silver)

On January 17, 2022, the company entered into a PMPA with Adventus Mining Corporation (Adventus) (the Curipamba PMPA) in respect of gold and silver production from the Curipamba project located in Ecuador (the Curipamba project). Under the terms of the Curipamba PMPA, Wheaton is entitled to purchase an amount of gold equal to 50% of the gold production until 150,000 refined gold ounces have been delivered, after which the stream drops to 33% of the gold production for the life of mine and an amount of silver equal to 75% of the silver production until 4.6 million refined silver ounces have been delivered, after which the stream drops to 50% of silver production for the life of mine. Adventus and its subsidiaries will provide Wheaton with corporate guarantees and other security over their assets, including over the Curipamba project.

Marathon Project (Gold and Platinum)

On January 26, 2022, the company entered into a PMPA with Generation Mining Limited (Gen Mining) (the Marathon PMPA) in respect of gold and platinum production from the Marathon project located in Ontario, Canada (the Marathon project). Under the terms of the Marathon PMPA, Wheaton is entitled to purchase an amount of gold equal to 100% of the gold production until 150,000 gold ounces have been delivered, after which the stream drops to 67% of the gold production for the life of mine and an amount of platinum equal to 22% of the platinum production until 120,000 platinum ounces have been delivered, after which the stream drops to 15% of platinum production for the life of mine.

Goose Project (Gold)

On February 7, 2022, the company entered into a PMPA (the Goose PMPA) in respect of gold production from the Goose project, part of Sabina Gold & Silver Corp.’s (Sabina) 100% owned Back River Gold District located in Nunavut, Canada (the Goose project). Under the Goose PMPA, Wheaton is entitled to acquire from Sabina an amount of gold equal to 4.15% of the gold production from its, until the delivery of approximately 130,000 ounces of gold, 2.15% of gold production thereafter until the delivery of 200,000 ounces of gold and 1.5% of gold production thereafter for the life of mine.

Metates Royalty

On August 7, 2014, the company, through its wholly owned subsidiary, Wheaton Precious Metals (Cayman) Co., purchased a 1.5% net smelter return royalty interest (the Metates Royalty) in the Metates properties located in Mexico from Chesapeake Gold Corp. (Chesapeake). The company also has a right of first refusal on any silver streaming, royalty or any other transaction on the Metates properties. In connection with the Metates Royalty, American Gold Metates, S. de R.L. de C.V., the owner of the Metates properties, granted Wheaton a mortgage on the Metates properties.

The Sale of Principal Product

There are worldwide markets into which the company can sell the precious metals and cobalt purchased under its PMPAs, and as a result, the company will not be dependent on a particular purchaser with regard to the sale of the precious metals or cobalt that it acquires pursuant to its PMPAs. 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.

Precious Metal Credit Sales

Under certain PMPAs, precious metal is acquired from the mine operator in the form of precious metal credits. During the year ended December 31, 2021, sales to four financial institutions accounted for 30% of the company’s revenue.

Cobalt Sales

Cobalt acquired from Vale is sold under an exclusive agency agreement with Traxys North America LLC (Traxys). Revenue from cobalt sales is recognized at the time payment for the cobalt is received, which is also the date that control of the cobalt is transferred to the customer.

Long-Term Investments

As of December 31, 2021, Wheaton owned approximately 10.7% of Bear Creek Mining Corporation (Bear Creek).

Significant Events

During 2021, the company disposed of its remaining First Majestic Silver Corp. (First Majestic) common shares in market sales.

History

The company was founded in 2004. It was formerly known as Silver Wheaton Corp. and changed its name to Wheaton Precious Metals Corp. in 2017.