Back to top

Image: Bigstock

Wheaton (WPM), Hecla Ink Deal to End Keno Hill's Silver Stream

Read MoreHide Full Article

Wheaton Precious Metals Corp. (WPM - Free Report) entered into an agreement with Hecla Mining Company (HL - Free Report) to terminate its existing silver stream on Alexco Resource Corp.'s Keno Hill Silver property for $135 million. The termination is conditional upon the completion of Hecla's acquisition of Alexco.

Wheaton will have a 5.6% shareholding interest in Hecla’s shares after the Keno Hill silver stream deal ends. The move supports WPM’s focus on boosting shareholders’ value by strategically identifying opportunities inside and outside of its portfolio.  

Yesterday, America’s largest silver producer Hecla signed an all-stock deal to buy all of the outstanding shares of Canadian Alexco that Hecla does not already own. Per the deal, Hecla will issue 0.116 shares to Alexco shareholders for consideration of 47 cents per share of Alexco. The figure represents a 23% premium on Alexco’s five-day volume-weighted average price on the New York Stock Exchange on July 1.

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 the corporate development front and is focused on growing a high-quality portfolio of assets.

In the first quarter, the company added two new streams and increased interest in a third stream from the existing mine. On Jan 17, 2022, Wheaton entered into a Precious Metals Purchase Agreement (PMPA) with Alliance Metals International, a subsidiary of Adventus Mining Corporation, to acquire gold and silver streams from the Adventus Curipamba Project.

On Feb 8, the company entered another PMPA with Sabina Gold & Silver Corp to buy gold stream from its Goose Project. On Mar 21, the company amended its PMPA with Aris Gold Corporation to buy gold and silver streams from Marmato mines. Including these projects, Wheaton has added eight new streams in the past year, which have brought immediate production and medium and longer-term growth to its robust portfolio of assets. Wheaton is committed to deploying more than $1 billion over the next three to five years on streams that will further boost its outlook.

Wheaton anticipates achieving current-year production of between 700,000 GEOs and 760,000 GEOs. It produced 752,958 GEOs in 2021. Gold production is expected in the band of 350,000-380,000 ounces. It produced 342,546 ounces of gold in 2021. Production of other metals is expected in the range of 44,000 to 48,000 GEOs for 2022.

Price Performance

Shares of Wheaton have lost 9.2% in six months compared with the industry’s fall of 16.6%.

Zacks Investment Research
Image Source: Zacks Investment Research

Zacks Rank & Stock to Consider

Wheaton currently carries a Zacks Rank #3 (Hold).

A better-ranked stock in the basic materials space includes Albemarle Corporation (ALB - Free Report) , which flaunts a Zacks Rank #1 (Strong Buy). Albemarle has a projected earnings growth rate of 231.7% for the current year. The Zacks Consensus Estimate for ALB's current-year earnings has been revised 112.4% upward in the past 60 days. You can see the complete list of today's Zacks #1 Rank stocks here.

Albemarle's earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 20%. ALB has rallied roughly 22% in a year. The company flaunts a Zacks Rank #1.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Albemarle Corporation (ALB) - free report >>

Hecla Mining Company (HL) - free report >>

Wheaton Precious Metals Corp. (WPM) - free report >>

Published in