Good morning, ladies and gentlemen. Thank you for standing by. Welcome to Wheaton Precious Metals 2023 First Quarter Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions]. Thank you. I would like to remind everyone that this conference call is being recorded on Friday, May 5, 2023 at 11:00 AM Eastern Time. I will now turn the conference over to Mr. Patrick Drouin, Senior Vice President of Investor Relations and Sustainability. Please go ahead.

Thank you, operator. Good morning, ladies and gentlemen, and thank you for participating in today's call. I'm joined today by Randy Smallwood, Wheaton Precious Metals' President and Chief Executive Officer; Gary Brown, Senior Vice President and Chief Financial Officer; Haytham Hodaly, Senior Vice President, Corporate Development; and Wes Carson, Vice President, Mining Operations. Please note that, for those not currently on the webcast, the slide presentation accompanying this conference call is available in PDF format on the Presentations page of the Wheaton Precious Metals website. I'd like to bring to your attention that some of the commentary on today's call may contain forward-looking statements and I would direct everyone to review Slide 2 of the presentation, which contains important cautionary notes regarding forward-looking statements. It should be noted, all figures referred to on today's call are in U.S. dollars unless otherwise noted. Now, I'd like to turn the call over to Randy Smallwood, our President and Chief Executive Officer.

Thank you, Patrick, and good morning, everyone. Thank you for joining us today to discuss Wheaton's first quarter results of 2023. I am pleased to announce that our high-quality portfolio of long-life low-cost assets delivered a solid performance to start the year. First quarter production came in ahead of company expectations, positioning us very well to achieve our previously announced annual guidance of 600,000 to 660,000 gold equivalent ounces. And as we continue to see positive developments and a number of our key assets, including Salobo and Constancia, we expect to see a significant production growth through 2023 culminating in a strong second half of the year. Notably, implicit in our five-year annual average production guidance is an impressive organic growth profile of over 40%, with two-thirds of that growth coming from assets that are already in operation. While inflationary pressures are still impacting all sectors of the economy, Wheaton has maintained the cash operating margin per ounce of over 75%, highlighting the resiliency of the streaming model in an inflationary world. And we achieved a key milestone in this first quarter as Wheaton's total stream cashflow to date has now exceeded 100% of its total upfront investments deployed since inception. This achievement highlights our disciplined and accretive growth to our approach to capital deployment, in particular, given that our portfolio still has over 30 years of mine life remaining based on reserves in addition to a healthy resource base. In this environment of high interest rates and increasing demand for metals, our corporate development team remains very busy as we continue to see a healthy appetite for streaming as a source of capital for the mining industry and we are actively pursuing several new accretive opportunities. And lastly, Wheaton continues to maintain our leadership and sustainability, with sector leading scores, including a AA rating from MSCI and a genuine number one rating in precious metals by Sustainalytics. I would now like to turn the call over to Wes Carson, our Vice President of Operations, who will provide more details on our results. Wes?

Thanks, Randy. Good morning. Overall production in the first quarter came in higher than expected, with strong production from Salobo and Constancia, partially offset by weaker than expected performance from Stillwater. In the first quarte,r Salobo produced 43,700 ounces of attributable gold virtually unchanged relative to the first quarter of 2022. Despite the strong quarter, Vale reported that production during the quarter was affected by reduced plant availability caused by additional plant and corrective maintenance. Additionally, the Salobo three mine expansion project, which will increase the mill throughput by 50%, successfully began production at the end of 2022. The project is expected to ramp up to full capacity by the fourth quarter of 2024. During the quarter, Constancia produced 600,000 ounces of attributable silver and 66,900 ounces of attributable gold, an increase of approximately 21% and 9%, respectively, relative to the first quarter of 2022. The increase in both silver and gold production was due to higher grades resulting from additional ore production from the Pampacancha's satellite deposit. For mining activities resumed in the Pampacancha pit in February, and the period of high stripping from March to June is progressing well, with mining of higher grade ore now expected in the second quarter of 2023 ahead of schedule. During the quarter, Artemis Gold announced the approval of its BC mines act permits, the final step required to allow Artemis to commence major works construction activities of the Blackwater mine, with the expectation of an initial gold port in the second half of 2024. Additionally, during the quarter, Artemis announced that it has issued a purchase order to fund in Canada for primary and ancillary mining fleet required for the initial phase one of operations. Equipment deliveries to sites are planned to commence late in the fourth quarter of 2023 and continue throughout the first half of 2024 in preparation for the pre-strip mining phase. Wheaton's estimated attributable production in 2023 is forecast to be 320,000 to 350,000 ounces of gold, 20 million to 22 million ounces of silver, and 22,000 to 25,000 GEOs of other metals, resulting in production of approximately 600,000 to 660,000 GEOs. For the five-year period ending in 2027, the company estimates that average production will amount to 810,000 ounces. And for the 10-year period ending in 2032, the company estimates that average annual production will amount to 850,000 GEOs. This includes organic growth of over 40%, with total production from our current portfolio increasing to over 900,000 GEOs by 2027. That concludes the operations overview. And with that, I'll turn the call over to Gary.

Thank you, Wes. I am pleased to present the financial highlights resulting from our solid operational performance to kick off the year. As described by Wes, production in the first quarter amounted to 142,000 GEOs, above company expectations and consistent with the fourth quarter of 2022. Sales volumes amounted to over 117,000 GEOs, a decrease from the first quarter of the prior year, primarily due to the cessation of production from 777 Yauliyacu and Keno Hill in 2022, coupled with relative changes to ounces produced but not yet delivered, or PBND. Strong commodity prices, which remain near historical highs, coupled with our steady production base, resulted in revenue of $214 million and gross margin of $118 million. Of this revenue, 56% was attributable to gold, 40% to Silver, 2% to palladium and 2% to cobalt. As of March 31, 2023, approximately 124,000 GEOs were in PBND and cobalt inventory, representing approximately 2.4 months of payable production, which is a level that is consistent with the preceding four quarters. G&A expenses and donations amounted to $11.5 million for the first quarter, resulting in adjusted net earnings of $104 million. The company continues to anticipate the G&A and donation expenses will amount to $47 million to $50 million for the year. Despite the persistent inflationary environment and thanks to our low and predictable cost structure, Wheaton continued to deliver robust cash operating margins in the first quarter, resulting in cash flow from operations of $135 million, which in turn resulted in a quarterly dividend of $0.15 per share, consistent with the first quarter of 2022. In the quarter, Wheaton dispersed its fourth and final installment of $32 million relative to the Goose project, which continues to make advancements under the new ownership of B2Gold. It should be noted that subsequent to the quarter, B2Gold exercised the option to repurchase 33% of the stream out of the Goose PMPA and exchange for a cash payment in the amount of $46 million, resulting in a gain on the partial disposal of the PMPA in the amount of $5 million, which will be reflected in our Q2 results. Overall, net cash inflows amounted to $104 million, resulting in cash and cash equivalents at March 31 of $800 million. This notable cash balance coupled with the fully undrawn $2 billion revolving credit facility and the strength of our forecasted operating cash flows positions the company exceptionally well to satisfy its funding commitments and provides us with the financial flexibility to acquire additional accretive mineral stream interest. That concludes the financial summary and with that, I'll turn the call back over to Randy.

Thank you, Gary. In summary, Wheaton's first quarter was distinguished by several key highlights. We achieved solid three-month revenue, earnings and cash flow and declared a $0.15 quarterly dividend. First quarter production came in ahead of our expectations positioning as well, to achieve our previously announced annual guidance of 600,000 to 660,000 gold equivalent ounces. Wheaton has now recouped 100% of its total upfront investments deployed since inception, highlighting our disciplined and accretive approach to capital deployment. We reiterated our forecast organic production growth profile of over 40%. Over the next five years, with approximately two-thirds of that growth coming from mines already in operation, therefore at lower risk of delivery. Our balance sheet remains one of the strongest in the industry, providing ample capacity to add accretive high-quality streams into our portfolio and we continue to be very busy on that front. And lastly, we continue to demonstrate leadership and sustainability with sector leading ESG ratings. So with that, I would like to open up the call for questions operator, please.

Thank you. [Operator Instructions]. Your first question comes from Ralph Profiti with Eight Capital. Please go ahead.

Sorry about that. Thanks, operator. Randy, B2Gold and Sabina is now closed, just wondering if you've had conversations with the new management team. And whether or not you're comfortable with the original guidance of when first production is first quarter 2025, I believe and is that factored into your guidance?

We haven't made any adjustments based on B2 operating it. I do have confidence in Clive and B2, they've got a very strong track record. I have known Clive and the B2 team for a very long time, have a lot of respect for what they're doing. The one advantage that they're going to have is, of course, a much stronger balance sheet than Sabina had originally. The negative to that, as we were always hoping to be able to add a bit more financing through growing the stream a bit. But clearly, B2 has the capacity to deliver this project from a capital perspective. And so I think that what we're going to see is an even better project out of B2Gold, or sort of out of the Goose project with B2Gold.

Good. Yes. I wanted to see some of that optionality come in?

Yes, definitely. Wes, you want to do something?

Also worth noting, it is in the five-year and 10-year guidance and the new – the five-year and 10-year guidance is reflective of the buyback as well.

Okay, good, good. And just factoring in taken us a little bit of a step back from the buyback on that stream. The team at Wheaton make a risk factor adjustment for stream negotiations when they do have the buyback option in place. And can you sort of quantify, some of the decisions that you make on discount rates when that's factored in. Is this sort of two separate pieces of analysis or one that you sort of commingle into looking at how you risk adjust for the buyback optionality?

Well, I mean, the way we structured the buybacks is that we get a reasonable rate of return. We recognized that a lot of these partners that we're working with right now, single asset development companies, and we don't want to get in the way of them eventually being acquired. And so it is something that we're seeing a lot more of is, the need for it. And what we're looking for is just a reasonable rate of return on that part of the risk capital that we're putting up. We are long-term investors into these projects. And so we do want to make sure that we maintain a reasonable return for our shareholders at the bare minimum with respect to any of the capital that we're putting up. And so, I think the structure works well. I don't know Haytham, you want to add anything to that.

Yes. Thanks. Ready. Ralph, what we've also done when we structured these things as we limit our buyback to a 1/3 buyback and we want the stream to be perceived as a quality type of financing that doesn't deter M&A transactions. And I think that that was very well proven here with the systems effectively of our two-thirds of the remainder of our stream, and then some of the private equity stuff didn't remain, which shows you that, we're very -- the way we structured things, we're very capable of putting in place something that actually appeals even to a potential acquire one of these development stage opportunities.

So we're excited about partnering with Clive.

Jackie Przybylowski with BMO Capital Markets. Please go ahead.

Thanks very much. My question is on Hudbay Copper World Project, I know you guys said it before about restructuring that stream financing. And I was just wondering if you could give us any update on that if there's been any progress in discussions with the operator thing.

There hasn't Jackie, they're still working on finalizing their plans on a go-forward basis. And so, I think, we just have to be patient, wait for them to come up with a firmer framework on how Copper World is going to compare relative to the original Rosemont structure. Hudbay is a longtime partner of ours. And we've done a lot of work with him in the past and Peter and the team very well. And so we look forward to sitting down with them at that stage. It's just - it's not at that stage in terms of us being able to fine tune how that stream will come into play.

Your next question comes from Martin Pradier with Veritas. Please go ahead.

I have two questions. My first question is that why Antamina production was weak. And why Salobo, we see a very different sales than the production. I mean, production was similar than last year, but sales were like 20% lower. That's my first question.

Sure. Wes, do you want to take that?

Yes. Thanks for the question, Martin. So Antamina really is just a function of where they're mining in the pit. So there's different grades in the various different areas of the pits. And we did see higher grade coming out in the latter end of last year. And really, they're just into a lower grade area of the pit in this year, so that's really what we're seeing. As they move around within the pit, the different areas of ore body are going to have different amounts of production to them. So not unexpected, basically, what we would expect to see from that one. And on Salobo really, that is a lag between the production and the sales. So we get a copper concentrate from Salobo is what's produced there. And there is a lag between what's produced on the mine site, and then what we see in sales. So and that's what's reflected in our produce, but not delivered.

And it will say that, typically amongst all of our assets, in the first quarter, we tend to wind up building up a bit of an inventory. And I think that just comes from the fact that a lot of our partners will sort of squeeze the pipeline to try and get a bit more sales in before year-end. And then that whole sort of production flow fills up again in the first quarter. So it wasn't a surprise to us in terms of seeing a bit more inventory build up over the course of the first quarter. And I would say that typically in the fourth quarters, we tend to see that drop as companies push up sales. So second question.

Yes. Could you comment about the global tax impact? I mean, you mentioned that that's going to come into play very soon. So what is the company view on this?

It's Gary Brown here. It's heartened to give you a detailed response given that we don't have any legislation to refer to at this point. All we can say is that, based upon the comments made by the Government of Canada that we do -- they do seem to be committed to implementing a GMT, a 15%, global minimum tax rate. That seems to be applicable to 2024 and onwards. Again, there's no legislation at this point. So, there's a lot of work that would need to be done in order to implement that by Jan 1 of next year, but we're assuming that's going to happen. And the vast majority, 90-plus percent of our income is generated outside of Canada. So we expect that, that it would have about a 10% impact to our NAV calculations. Once implemented, that being said, I think the market is well aware of this new tax, and has already reflected that in our valuation.

But in terms of 2024, if it goes ahead, you expect to pay how much in taxes that year, like a 10% or 15% or?

Well, if you assume that 90% of our income is generated outside of Canada and is subject to a 0% tax, multiply that by 15%, to estimate what we would pay in 2024.

The challenge is that, without the legislation, we're not sure -- we weren't -- we don't have clarity in terms of what's deductible. What are goes against that tax? We're not -- there's not a framework yet, within which we can paint it against right now. And so if you're going to, it's really tough to sort of firm numbers on that. I think, what we have seen and it's been talked about quite a bit is that the overall estimated impact or net asset value should be somewhere around 8% to 10%. And then, until we get further clarity in the tone, that I think everyone gets further clarity on what's actually coming into play. We're not quite sure what we'll be able to -- how we'll be able to, work with that legislation.

Your next question comes from Richard Hatch with Berenberg. Please go ahead.

Good quarter. Gary, I've got -- my questions are mainly sort of aimed towards you. First one is just on page 24 of the MD&A. You've got your contractual obligations and contingencies. I just wonder if you might be able to just help us out a little bit, just in terms of just thinking about next quarter? What are the ones that we should start to, like put into our models? Just to make sure that we're right on the cash flow? That's the first one.

Yes. I mean, I don't know that we can get that granular. So I think we've tried to outline what we are. And this is a conservative picture, the contractual obligation schedule that we put out, showing $700 million being paid between March 31, and December 31. That's assuming all of the projects and the biggest one of that is Salobo, and that may slip into 2024. But we're assuming that Vale achieves, the full completion test of the Salobo 3 in that $552 million number but, so, I am not prepared to break down what we expect to be dispersed next quarter, at this point.

We can speak offline as well and kind of walk through our best expectations. That being said, I think Richard it's important to highlight, we have no concerns with respect to paying those. We ended the quarter with $800 million of cash on hand. And we've got the $2 billion revolving credit facility there as well. So we're extraordinarily well positioned to make those disbursements as and when they come due.

I'm sure, Not worried about the balance sheet or was just getting them model little tight. Just and, then, on Navis, Cove a last couple of quarters, volume -- sales volumes have really lagged. Production. I appreciate it's one of the smaller streams, but have you got any color on what's going on there? And when we should think about when that kind of elastic bands back into the sales?

Yes. we did see that Nevis score this quarter actually came in quite a bit ahead of our expectations on that. So it is starting to come back. I think some of it certainly is the ramp up of that expansion project and where they've gotten to there. But overall, we've seen the performance improving at nevus Corbeau. Over the last several quarters. If you look at the site, for example, key four, you got 369,000 ounces, key one, you got 352 The sales were at and 171. So the kind of the question is what what's when do we start to see some of those volume production volumes translate into sales?

For example, you got 368 ounces, key one you got 352. The sales were 80 & 181. The connection of the question when do we start see some of those volume productions into sales. Yes. One of the things you have to remember on Navish is that the silver in the zinc concentrate is not payable, so there is always going to be a fairly significant gap between sales and, and the production on Novo [indiscernible]. So it's not a direct comparison, so you won't be able to see that full amount come in. But that being said, there is a lag on the copper and the lead concentrate. So as that production starts to ramp up, then we should see the sales reign behind it's usually about a three-month lag on that.

Pay abilities on silver and zinc concentrates are very low. And there's quite a bit of a silver here that is contained in the concentrates. And so I think that's a bigger discrepancy between the between that we definitely have recovery rates in our reserve and resource. Yes, so there should be some happy to provide a bit more detail on that. But I think the challenge is that a lot of the silver out of [indiscernible] comes out in zinc concentrate.

Yes, okay. Yes. Understood. All right. Cool. And then on the depletion number that was quite a bit lower, “It's already, I guess you got a couple of strings sort of all the way. But is there anything that anything there that that we should be thinking about as we exhale further out, just in terms of patient numbers?

I think the main driver for the lower depletion this quarter was lower sales volume, which in turn was due to the cessation of flows from 3 mines that were no longer receiving deliveries from. So depletion rates for any changes that. We observe in the reserve and resources of the assets that we have interest in, that didn't change our overall depletion rate by more than 1%. So it's a very nominal impact on our depletion rates going forward. So, I think, I guess the other factor would be that, some of the mindset we disposed of last year were a higher depletion rate mines than then the ones that we're currently receiving deliveries from, but overall, deletion less than a 1% adjustment to depletion rates?

Okay, all right. Thanks, guys. And last ones just on them. Again, like it's bit of a weird one, but in the cash flow statement, acquisition of long-term investments $8 million out the door, it sits in other in common shares held. Are you able to disclose what that was?

That was the Integra investment.

Your next question comes from Tanya Jakusconek with Scotiabank. Please go ahead.

I have two, if I could just -- start just the 2023 guidance. I just want to make sure I have how you're Europe [access] [ph]. So I'm thinking, you've mentioned that you're going to have a stronger second half. I'm just wondering if I look at it holistically, does a 45 first half versus 55 second half seem reasonable with over quarter-over-quarter improvement?

That sounds about right. I mean, what we see over the course of this year is just continued improvement. I mean, both the Constancia and Salobo as line three ramps up, and as they continue to improve line one, and line two at Salobo. And try and get production up to former levels. We see continued improvement there. And we've just finished another site visit down to Salobo. And we're happy with the progress that is being made at the site. And so, what I can tell you is the production for the first quarter was at the very top end of our guidance right now. So, if we keep on this trend, we would be at the 660,000 gold equivalent ounces level. We were right at that, that top-end of our guidance range. And so that's kind of probably the best way to set it up in terms of how we see it. Every quarter, in fact, if I sit and look at it, I think that every quarter for the next five years should probably be better than the last one. There might be a few blips in there, but we are going to see continued improvement all the way across the portfolio, Tanya?

Okay. And so just for 2023 just that we have Salobo ramping up that's right kind of stands here, getting into the higher grades. So that should be better a second half. What about Voisey Bay and Peñasquito, are you seeing any improvement in Q2 Or should I find a put them all in into Q3,

Not a significant improvement at either Peñasquito or Voisey's bay in the second half that they'll be fairly, the big kind of step up at Boise's Bay is really in Q4 and into next year, once they get into the underground's there. And Peñasquito, is fairly static across the year. Yes.

Voisey's Bay is going to be, they're still pulling for open pit material to supply and the underground is substantially higher grade cobalt for us. And so, so once that underground does phase in, we should see a pretty rapid uptick in terms of production from Voisey's bay.

Tanya, I don't know we can't hear you anymore. Operator, do you know if Tanya is still on the line for questions?

Okay, I'm back. I didn't know if you wanted to hear me or didn't want to hear me. Anyways, here.

It depends on the question.

Okay. Well, it is about transactions. That's why I thought maybe you didn't want to hear me. So maybe if I hate them, I should just ask, I'm always interested with the volatility and pricing in both gold and other metals. And what does the deal environment look like? Has it changed from last quarter? I know, we had talked about the 150 million to 350 million range level in terms of financing of development projects. I'm just wondering, if that's still the case, or are you seeing anything different out there, including the structure of the deals?

Yes. Good morning, Tanya. Thanks for the question. Yes, we're still seeing as opportunities to fall in the $150 million to $350 million range, still, to be honest with you a very healthy number of opportunities in our pipeline. And, the majority of our development stage, but we are starting to see some operating assets as well. So that's a positive. The focus for us is always on precious metals, gold, silver, platinum, palladium. So that's the areas that we're looking at this point in time. And we're actually quite optimistic about the outlook for the remainder of this year. So we were hoping to show you some things as time goes on.

And when you mentioned operating assets, how do you define that that companies that need to fix balance sheets on their operating assets?

No, I'm talking specifically about assets that are actually operating and if stream could contribute immediately to Wheaton's bottom line.

Okay. I was just thinking of it from the operator why they would need you, was it just the fixed balance sheets on their side?

We don't see a lot of stress balance sheets, but we do see those the need for funding capital, right. So it's growth. Typically either expansions and stuff we're looking at is either expenses or funding another acquisition into an operating company and it's -- even in today's equity market the way it stands for a lot of these smaller companies, even though they've got operations, the streaming capital from the streaming agreement is still very, very attractive. So we are seeing stuff along that line.

Thank you and thanks, everyone for dialing in today. In closing, we believe Wheaton is very well positioned to continue delivering value to all of our stakeholders for a number of different reasons. Firstly, by offering our shareholders exposure to our diversified portfolio of long-life, low-cost assets that we believe has one of the best organic growth profiles in the mining industry. Secondly, by having low and predictable costs, which are resilient to inflationary pressures, resulting in some of the highest margins in the entire precious metal space, which has allowed us to consistently return value to shareholders through our dividend policy. And lastly, by being a leader amongst precious metal streamers in sustainability, and by supporting our partners and the communities in which we live and operate. So with that, I'd like to finish off by saying that after nearly 20 years at this company, since we've created it, I personally have never been more excited about our future prospects. We believe that now is a great time to own more Wheaton. I do look forward to speaking with all of you again soon. Thank you.

This concludes this conference call for today. Thank you for participating. Please disconnect your lines.