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Gold price lifts Wheaton to records

Streaming company Wheaton Precious Metals announced record revenue and sales volumes for the first half of 2020, despite some production being impacted by COVID-19 shutdowns which has prompted a guidance revision.
Gold price lifts Wheaton to records Gold price lifts Wheaton to records Gold price lifts Wheaton to records Gold price lifts Wheaton to records Gold price lifts Wheaton to records

Newmont’s Peñasquito mine in Mexico

Staff reporter

The company also declared a quarterly dividend of US10c per share.

Wheaton is among the "royalty" of the royalty-streaming sector, which has evolved rapidly over the past decade and is dominated by five companies. 

It reported revenue of about $500 million, nearly $330 million in operating cash flow and a record 322,000oz gold-equivalent ounces sold in the first half.

It said revenue for the June quarter was $248 million, a 31% increase on the previous corresponding period, mainly due to the 24% increase in the average realised Au-eq price and a 6% increase in the number of ounces sold.

Wheaton issued revised 2020 production guidance, now all its mining partners had resumed operations which were previously suspended as a result of the COVID-19 pandemic.

It reduced its forecast from 685-725,000oz Au-eq to 655,000-685,000oz but kept its long-term forecast of 750,000oz per year on average between 2020-2024. 

Among its assets, it said Newmont's Peñasquito mine had produced 1Moz of attributable silver in the June quarter, a 39% increase on the 2019 period which had been impacted by an illegal blockade, and despite a temporary suspension in line with Mexico's COVID-19 regulations.

Vale's Salobo in Brazil produced 59,100oz of attributable gold for the June quarter, a 12% drop, which Wheaton said was due to lower throughput stemming from increased absenteeism resulting from the COVID-19 pandemic.

Wheaton ended June with $132 million cash on hand and said it had reduced its net debt position by almost $80 million to $509 million.

It also noted it had launched a $5 million Community Support and Response Fund, to support global efforts to combat the COVID-19 pandemic and its impacts on communities, and said it had made donations totalling $2 million.

"At Wheaton, our success is not only measured in terms of financial results, but also in our ability to make a difference," president and CEO Randy Smallwood said.

Its shares (TSX: WPM) have risen from about C$40 at the start of this year to a peak of $76.70 earlier this month.

They closed at $65.62 to capitalise it at $29.5 billion (US$22.3 billion).