The world’s largest precious metals streaming firm Wheaton Precious Metals has reported a 9% increase in adjusted net earnings and an 8% increase in cash flow from operations during the second quarter, on higher revenue as a result of more gold ounces being sold at a higher average price.
Wheaton reported adjusted net earnings of $73-million, or $0.16 a share, and cash flow from operations of $125-million, or $0.28 a share, during the quarter ended June.
Revenue increased from $200-million in the June 2017 quarter, to $212-million in the quarter under review reflecting a 21% increase in the gold ounces sold and a 3% increase in the average gold price, although it was partially offset by a 6% decrease in the silver ounces sold and a 3% decrease in the average realised silver price.
During the second quarter of 2018, attributable production was 6.1-million ounces of silver and 85 300 oz of gold, representing a decrease of 15% and an increase of 7%, compared with the second quarter of 2017.
The decrease in attributable silver output and the increase in attributable gold production was mainly owing to the termination of the San Dimas silver purchase agreement and the entering into of a new San Dimas precious metals purchase agreement, Silver Wheaton explained.
On May 10, First Majestic Silver announced that it had closed the previously announced acquisition of Primero Mining. In connection with this acquisition, the company has terminated the San Dimas silver purchase agreement and entered into a new agreement with First Majestic, resulting in a gain on disposal of $246-million.
The gain led to Wheaton posting net earnings of $318-million.
During the second quarter, Wheaton completed the acquisition of a cobalt stream on Vale's Voisey's Bay mine, and subsequent to the quarter, the company closed a gold and palladium stream on Sibanye-Stillwater's Stillwater and East Boulder mines.
With the addition of the streams on Voisey's Bay and Stillwater, Wheaton's estimated attributable production in 2018 is forecast to be about 355 000 oz of gold, 22.5-million ounces of silver, and 10 400 oz of palladium.
Its estimated average yearly attributable production over the next five years, including 2018, is anticipated to be about 385 000 oz of gold, 25-million ounces of silver, 27 000 oz of palladium, and starting in 2021, 2.1-million pounds a year of cobalt.