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Wheaton (WPM) to Buy Gold & Silver Stream In Blackwater
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Wheaton Precious Metals Corp. (WPM - Free Report) entered into an agreement with New Gold Inc. (NGD - Free Report) to acquire the existing gold stream from the latter’s British Columbia-based Blackwater Gold Project. Additionally, the company inked a deal with Artemis Gold Inc. to acquire the silver stream from the project.
Under the gold stream, Wheaton will receive 8% of the mine’s payable gold production until 279,908 ounces have been delivered. Following this, the company will receive 4% of payable gold production for the life of the mine. Wheaton will pay New Gold an upfront consideration of $300 million after the gold stream deal’s closure. Attributable gold production is estimated to average nearly 26 thousand ounces annually for the first five years of production and 28 thousand ounces per year for the first 10 years.
Per the silver stream deal, Wheaton will receive 50% of the payable silver production until 17.8 million ounces have been delivered. Subsequently, the company will get 33% of payable silver production for the life of the mine. The company will pay Artemis a total cash consideration of $141 million, payable in four equal installments during the construction of the Blackwater Project. For the first five years of production, the average attributable silver production is expected to be more than 480 thousand ounces per year and above 670 thousand ounces annually for the first 10 years, given silver recovery rate of 61%.
Wheaton will make cash payments at 35% of the gold spot price for all gold ounces delivered. The company will make cash payments corresponding to 18% of the spot silver price until the difference of the value of silver delivered and the silver production payment is equal to the upfront cash consideration. After this, the silver production payment will increase to 22% of the spot silver price.
The latest gold and silver stream purchase will increase Wheaton's estimated Proven and Probable gold reserves by 0.47 million ounces and silver reserves by 31 million ounces. Measured and Indicated gold resources will increase by 0.15 million ounces. The same for silver resources will rise 19.9 million ounces. Inferred gold resources will grow 0.01 million ounces and silver resources will increase by 2.3 million ounces.
The latest buyout further strengthens Wheaton’s diversified portfolio of low-cost, high-quality, long-life mines. The company expects that Blackwater Project has significant exploration potential. As of Sep 30, 2021, Wheaton had nearly $372 million of cash in hand with no outstanding debt. It has revolving credit facility of $2 billion with immediate liquidity of $2.4 billion. This provides flexibility to acquire additional accretive precious metals.
Wheaton is focused on adding additional production capacity from high-quality accretive metals. Its business model focuses on reducing risk while leveraging higher commodity prices. The company remains active on corporate development front and focused on growing a high-quality portfolio of assets. On Jul 20, the company entered into an agreement with Rio2 Limited to purchase a gold stream from the latter’s Fenix Gold mine in Chile for a cash payment of $50 million. Per the agreement, Wheaton will purchase 6% of the gold production until 90,000 ounces have been delivered and 4% of the gold production, until 140,000 ounces have been delivered.
Price Performance
Shares of Wheaton have declined 0.6% in the past year compared with the industry’s loss of 1%.
Olin’s third-quarter 2021 adjusted earnings beat the Zacks Consensus Estimate, while revenues missed the same. It has an expected earnings growth rate of around 740% for the current fiscal year. The Zacks Consensus Estimate for current-year earnings has been revised 20.5% upward in the past 60 days.
Olin’s shares have surged 229% in the past year. The company has a long-term earnings growth of 56%.
Bunge’s third-quarter 2021 earnings and sales beat the respective Zacks Consensus Estimate. It has a trailing four-quarter earnings surprise of 105.7%, on average. The company has an estimated earnings growth rate of around 45% for the current year. In the past 60 days, the Zacks Consensus Estimate for current-year earnings has been revised upward by 36%.
Bunge’s shares have appreciated 60% in the past year. It has a long-term earnings growth of 6.7%.
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Wheaton (WPM) to Buy Gold & Silver Stream In Blackwater
Wheaton Precious Metals Corp. (WPM - Free Report) entered into an agreement with New Gold Inc. (NGD - Free Report) to acquire the existing gold stream from the latter’s British Columbia-based Blackwater Gold Project. Additionally, the company inked a deal with Artemis Gold Inc. to acquire the silver stream from the project.
Under the gold stream, Wheaton will receive 8% of the mine’s payable gold production until 279,908 ounces have been delivered. Following this, the company will receive 4% of payable gold production for the life of the mine.
Wheaton will pay New Gold an upfront consideration of $300 million after the gold stream deal’s closure. Attributable gold production is estimated to average nearly 26 thousand ounces annually for the first five years of production and 28 thousand ounces per year for the first 10 years.
Per the silver stream deal, Wheaton will receive 50% of the payable silver production until 17.8 million ounces have been delivered. Subsequently, the company will get 33% of payable silver production for the life of the mine. The company will pay Artemis a total cash consideration of $141 million, payable in four equal installments during the construction of the Blackwater Project. For the first five years of production, the average attributable silver production is expected to be more than 480 thousand ounces per year and above 670 thousand ounces annually for the first 10 years, given silver recovery rate of 61%.
Wheaton will make cash payments at 35% of the gold spot price for all gold ounces delivered. The company will make cash payments corresponding to 18% of the spot silver price until the difference of the value of silver delivered and the silver production payment is equal to the upfront cash consideration. After this, the silver production payment will increase to 22% of the spot silver price.
The latest gold and silver stream purchase will increase Wheaton's estimated Proven and Probable gold reserves by 0.47 million ounces and silver reserves by 31 million ounces. Measured and Indicated gold resources will increase by 0.15 million ounces. The same for silver resources will rise 19.9 million ounces. Inferred gold resources will grow 0.01 million ounces and silver resources will increase by 2.3 million ounces.
The latest buyout further strengthens Wheaton’s diversified portfolio of low-cost, high-quality, long-life mines. The company expects that Blackwater Project has significant exploration potential. As of Sep 30, 2021, Wheaton had nearly $372 million of cash in hand with no outstanding debt. It has revolving credit facility of $2 billion with immediate liquidity of $2.4 billion. This provides flexibility to acquire additional accretive precious metals.
Wheaton is focused on adding additional production capacity from high-quality accretive metals. Its business model focuses on reducing risk while leveraging higher commodity prices. The company remains active on corporate development front and focused on growing a high-quality portfolio of assets. On Jul 20, the company entered into an agreement with Rio2 Limited to purchase a gold stream from the latter’s Fenix Gold mine in Chile for a cash payment of $50 million. Per the agreement, Wheaton will purchase 6% of the gold production until 90,000 ounces have been delivered and 4% of the gold production, until 140,000 ounces have been delivered.
Price Performance
Shares of Wheaton have declined 0.6% in the past year compared with the industry’s loss of 1%.
Zacks Rank & Stocks to Consider
Wheaton currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the basic materials space are Olin Corporation (OLN - Free Report) and Bunge Limited (BG - Free Report) . Both Olin and Bunge flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Olin’s third-quarter 2021 adjusted earnings beat the Zacks Consensus Estimate, while revenues missed the same. It has an expected earnings growth rate of around 740% for the current fiscal year. The Zacks Consensus Estimate for current-year earnings has been revised 20.5% upward in the past 60 days.
Olin’s shares have surged 229% in the past year. The company has a long-term earnings growth of 56%.
Bunge’s third-quarter 2021 earnings and sales beat the respective Zacks Consensus Estimate. It has a trailing four-quarter earnings surprise of 105.7%, on average. The company has an estimated earnings growth rate of around 45% for the current year. In the past 60 days, the Zacks Consensus Estimate for current-year earnings has been revised upward by 36%.
Bunge’s shares have appreciated 60% in the past year. It has a long-term earnings growth of 6.7%.