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spk09: Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the Wheaton Precious Metals 2023 fourth quarter and full year results conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star, then the number one on your telephone keypad. If you'd like to withdraw your question, please press star too. Thank you. I would like to remind everyone that this conference call is being recorded on Friday, March 15, 2024, at 11 a.m. Eastern Time. I will now like to turn the conference over to Emma Murray, Vice President of Investor Relations. Please go ahead.
spk00: 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, Katham Hodelay, Senior Vice President, Corporate Development, Kurt Bernardi, Senior Vice President, Legal, and Wes Carson, Vice President, Mining Operations. Please note that for those not currently on the webcast, a slide presentation accompanying this conference call is available in PDF format on the presentations page of the Wheaton Precious Metals website. Some of the commentary in today's call may contain forward-looking statements, and I would direct everyone to review slide two of the presentation, which contains important cautionary notes regarding forward-looking statements. It should be noted that all figures referred to on today's call are in U.S. dollars, unless otherwise noted. With that, I'd like to turn the call over to Randy Smallwood, our President and Chief Executive Officer.
spk07: Thank you, Emma, and good morning, everyone. Thank you for joining us today to discuss Wheaton's fourth quarter and full year results of 2023. I am pleased to announce that our portfolio of long-life, low-cost assets delivered another solid quarter, allowing us to meet our annual production guidance, achieving 620,000 gold equivalent ounces in 2023. Our strong quarterly performance was underscored by Solobo, which reached its highest production level in the last four years. We were very excited to see Vale Base Metals successfully complete the throughput test for the first phase of the Slobo III expansion project in November, marking a significant milestone that demonstrates increased reliability and continued operational excellence. We look forward to further advances as that expansion project continues to ramp up through 2024. In 2023, we also achieved a milestone in our growth strategy with the announcement of a record eight acquisitions totaling just over $1 billion in commitments. Hatham will discuss in further detail these recent acquisitions, which include a silver stream on Waterton's Mineral Park project, gold, palladium, and platinum streams on Ivanhoe's Platte Reef project, which is our first foray into Africa, gold and silver streams on BMC's Kutsutakaya project, a Gold Stream on Dalradian's Kernel project, and lastly, a Royalty on Vista's Mount Todd project, marking our first foray into Australia. We are excited to welcome our new mining partners and look forward to supporting them as they advance these projects, the largest being Ivanhoe's rapidly advancing Platte Reef project. We are very pleased to have Ivanhoe as partners who have had long-standing relationships in South Africa and and have done an immense amount of work to de-risk one of the highest-grade, undeveloped precious metals assets in the world. Each of these acquisitions further diversifies our portfolio in terms of geographic presence and strategic partnerships, and once ramped up, our forecast to contribute meaningful production and further strengthen Wheaton's already prominent position as the leader in the sector's growth landscape. Our growth pipeline of development projects was also further de-risked in the quarter as Adventus Mining received multiple key permits for the Curripamba project and conveyed that a construction decision is expected within the year. In addition, Rio 2 announced that they have received approval of their environmental impact assessment, allowing them to advance the Phoenix project through permitting, financing, and into construction activities in 2024. During this quarter, we are also proud to have been recognized as one of the world's 100 most sustainable corporations by corporate nights, an achievement reflective of our commitment to operating responsibly in all areas of our business and representing the quality of the mining partners that we work with to deliver society its much-needed commodities. To reinforce our confidence in the sustainability and the growth potential of Wheaton, We are pleased to announce a transition to a new progressive dividend policy. This new approach is marked by an increase to our 2024 annual dividend. Under our new policy, Wheaton's payout ratio is expected to remain the highest within the entire precious metal space. And with that, I would like to turn the call over to Wes Carson, our Vice President of Operations, who will provide more details on our operating results.
spk02: Wes. Thanks, Randy. Good morning. Overall production in the fourth quarter came in higher than expected, driven by strong outperformances at both Solobo and Constantia and a steady ramp-up at Penasquito, highlighting the strength of our diversified portfolio of long-life, low-cost assets. In the fourth quarter of 2023, Solobo produced 71,800 ounces of attributable gold, an increase of approximately 89% relative to the fourth quarter of 2022, driven by higher throughput and higher gold recoveries. Slobo reached its highest quarterly production level since 2019 as the ramp-up of Slobo 3 expansion continued to advance, and overall improvements were realized at both Slobo 1 and 2. As mentioned by Randy, in November, Valley Base Metals reported the successful completion of the three-foot test for the first phase of the Slobo 3 project, with the Slobo complex exceeding an average of 32 million tons per annum over a 90-day period. Under the terms of the agreement, the company paid Slobo $370 million for the completion of the first phase of Slobo 3 expansion on December 1, 2023. Slobo 3 is expected to achieve a sustained throughput capacity of 36 million tons per annum by the fourth quarter of 2024. The remaining balance of the expansion payment is dependent on the timing of completion and will be triggered once Valley Base Metals expands actual throughput above 35 million tons per annum for a period of 90 days. In the fourth quarter of 2023, Constantia produced 840,000 ounces of attributable silver and 22,300 ounces of attributable gold, an increase of approximately 28% and 112% relative to the fourth quarter of 2022. Record quarterly gold production combined with strong silver production are a result of significantly higher grades for mining of high-grade zones in the Papacanchi deposit than associated higher recoveries. In the fourth quarter of 2023, Penesquito produced 1 million ounces of attributable silver, a decrease of approximately 41% relative to the fourth quarter of 2022, primarily due to lower throughput resulting from the labor strike, which began on June 7th of 2023 and ended on October 13th. Newmont reports that operations have since safely ramped up after the October 13th resolution was reached. Newmont has indicated that Penesquito is expected to deliver higher coproduct production in 2024 due to higher silver, lead, and zinc content in the Chile, Colorado pit. In the fourth quarter of 2023, Antamina produced 1 million ounces of attributable silver, a decrease of approximately 3% relative to the fourth quarter of 2022, resulting from lower grades due to the mine sequencing. On February 15th of 2024, Peru's National Environmental Certification Service for Sustainable Investments approved, after a detailed evaluation process, the modification of the environmental impact study which allows the extension of Antamina's reserve mine life from 2028 to 2036. Wheaton's overall attributable reserves and resources saw solid growth across all mineral categories, with the most noteworthy being 10% growth in our proven and probable reserves. This was driven by a 12% increase in gold reserves, primarily due to new acquisitions in 2023, combined with the results of a pre-feasibility study at Copper World, which now incorporates gold for the first time. Attributable measured and indicated mineral resources also saw good growth at 15% on a GEO basis and overall attributable inferred resources grew by 3%. In 2024, Gold equivalent ounce production is forecast to be consistent with the levels achieved in 2023. As expected, stronger production from Penasquito and Boise's Bay is forecast to be offset by anticipated lower production from Slovo, the suspension of operations at Minto, and the halting of production at El Distro. Wien's estimated attributable annual production is forecast to be 325,000 to 370,000 ounces of gold, 18.5 to 20.5 million ounces of silver, and 12,000 to 15,000 gold equivalent ounces of other metals, resulting in production of approximately 550,000 to 620,000 gold equivalent ounces using our updated 2024 Camargo price assumptions. Production is forecast to increase at Penesquito as a result of uninterrupted operations and at Boise's Bay due to the ongoing transition from the ovoid pit to the underground mines. Production is forecast to decrease slightly at Salobo due to lower grades as per the mine plan, which are expected to be partially offset by increasing throughput as the Slow Book 3 expansion project continues toward completion. Historically, Wheaton has provided 5- and 10-year averages for its long-term guidance. However, in 2024, the company is elected to introduce a 5-year target in addition to an annual average for years 6 through 10, with a goal of providing increased granularity and further transparency of our expected growth trajectory. As such, we are forecasting growth of approximately 40% over the next five years to over 800,000 gold equivalent ounces by 2028, and averaging over 850,000 gold equivalent ounces per year from 2029 to 2033. We believe this industry-leading five-year growth profile to be significantly de-risked, with over 70% of the growth coming from assets that are either operating, in construction, and or permitted. We expect growth from operating assets to come from Salobo, Antamina, Penasquito, Boise's Bay, and Maramato, with expected growth from development projects including Blackwater, Platte Reefs, Goose, Mineral Park, Phoenix, Curripamba, and Santo Domingo. That concludes the operations review, and with that, I will turn the call over to Gary. Thank you, Wes.
spk03: As just described, production in the fourth quarter amounted to 174,000 GEOs, a 13% increase relative to the prior quarter, and a 22% increase from the fourth quarter of the prior year, primarily due to the throughput expansion at Salobo, which achieved the highest quarterly production level since 2019. Relative to the fourth quarter of 2022, gold production increased 64%, primarily due to outperformances at Salobo and Constantia, partially offset by a 21% decrease in silver production due primarily to the now-resolved labor dispute at Penasquito, the divestment of the Yaliac pimpa, the closure of the Minto mine, and the temporary suspension of attributable production from Algestral. Sales volumes amounted to 162,000 GEOs, a 36% increase relative to the third quarter of 2023, and an 18% increase relative to the comparable period of the prior year, with the year-over-year variance being primarily due to higher production levels being partially offset by relative changes in ounces produced but not yet delivered, or PB&D. Strong commodity prices coupled with our solid production base resulted in revenue of $313 million and gross margin of $177 million, an increase over the comparable period of the prior year of 33% and 46% respectively. Of this revenue, 74% was attributable to gold, 24% to silver, 1% to palladium, and 1% to cobalt. As at December 31st, 2023, approximately 134,000 GEOs were in PB&D and Cobalt inventory, representing approximately two and a half months of payable production, slightly lower than the preceding quarter and within our expected range of two to three months. G&A expenses amounted to $9.2 million for the fourth quarter of 2023, and total G&A for the year amounted to $38 million, slightly below the low end of our original forecast due primarily to lower compensation costs. For 2024, the company expects that G&A expenses will amount to $41 to $45 million, with the anticipated increase from 2023 being attributable primarily to higher marketing and due diligence costs. Adjusted net earnings in the quarter amounted to $165 million, with the $61 million increase from the prior year due primarily to the higher gross margin. Adjusted earnings per share amounted to $0.36 per share, an increase of 59% over the comparable period of the prior year. Revenue for 2023 amounted to $1 billion, representing a 5% decrease relative to 2022 due primarily to lower gold equivalent sales, partially offset by a 6% increase in the average realized gold equivalent price. Of this revenue, 99% was derived from precious metals, with 65% attributable to gold, 32% to silver, 2% to palladium, and 1% to cobalt. Gross margin for 2023 increased 1% from the prior year to $573 million, with adjusted net earnings increasing by 6% to $533 million. Despite the persistent inflationary environment, Wheaton continued to deliver robust cash operating margins in the fourth quarter, resulting in cash flow from operations of over $242 million. an increase of over 40% relative to the fourth quarter of 2022. During the quarter, Wheaton made total upfront cash payments of approximately $452 million relative to mineral stream interests, including $45 million relative to Blackwater and $370 million relative to the Slobo III expansion, along with dividend payments totaling $67 million. Overall, net cash outflows amounted to $287 million in Q4 2023, resulting in cash and cash equivalents at December 31st of $547 million. This cash balance, combined 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 interests. It is worth noting that subsequent to the quarter, on February 27, 2024, an additional $450 million was paid to Orion relative to the closing of the acquisition of the Platte Reef and the Kudzukaya Streams. As mentioned by Randy, we have transitioned to a new progressive dividend policy marked by an increase in our first quarterly dividend of 2024. The board has declared a dividend of 15.5 cents a share payable to shareholders of record on April 3rd, 2024. To date, the company has now returned more than $2 billion to investors through dividends, which notably represents more than 50% of the amount of equity ever raised by the company. That concludes the financial summary, and with that, I turn the call back over to Haytham.
spk04: Thank you, Gary. The corporate development team was exceptionally busy in 2023, announcing a record eight precious metals transactions on a number of assets and over $1 billion in commitments, resulting in the addition of multiple top-tier assets, adding strong accretive growth to our development project pipeline. I'll take this opportunity to focus on streams relating to three new assets that were acquired in November, when we entered into an agreement with entities advised by Orion Resource Partners to purchase existing streams on the Platte Reef and Kutsukaya projects, along with a new stream that was created on the Kernel project for total cash consideration of $525 million. The Kernel stream closed in December 2023, with the Platte Reef and Kutsukaya streams closing on February 27, 2024. Ivanhoe's Platte Reef project is the world's largest undeveloped precious metals project. and is currently projected to become one of the lowest cost producers of palladium, platinum, rhodium, nickel, copper, and gold globally. For the existing Platinum Extreme Agreements, Wheaton will receive 62.5% of the payable gold and 5.25% of the payable palladium and platinum until certain delivery thresholds have been met, at which point the percentage of payable metal will be reduced as set forth in the pre-existing agreements. Attributable annual production is forecast to average over 21,000 gold-equivalent ounces for the first 10 years, almost doubling to over 37,000 gold-equivalent ounces for years 10 through 20. Weedon expects to begin receiving ounces in early 2025. On slide 8, in addition to Platte Reef, the company also acquired a stream on BMC Minerals' Kudzukaya project, a polymetallic feasibility study stage development project projected to be one of Canada's top producers of zinc and silver. and a top 10 copper producer. Wheaton is expected to receive payable gold and silver deliveries ranging from 5% to 7.375% of produced metal for the life of mine, with the state's percentages depending on the timing of deliveries. The life of mine attributable production is expected to average 3,900 ounces of gold and over 530,000 ounces of silver per year. Moving over to slide 9. The third stream acquired is a newly created gold stream with Dalradian on its kernel project in Northern Ireland. Wheaton will receive gold production of 3.05%, dropping to 1.5% for the life of mine after 125,000 ounces of gold has been delivered. Attributable production will equal 4,400 ounces of gold per year for the first 10 years of production. We are excited to be partnering with Delradian and supporting the build of this state-of-the-art modern underground mine. In addition to the streams acquired from Ryan in the fourth quarter, Wheaton acquired a silver stream on the Mineral Park mine for $115 million, which was presented on our last conference call, in addition to 1% royalty on Vista Gold's Mount Todd Gold Project for $20 million. While 2023 was a record year for corporate development activity at Wheaton, we continue to see strong appetite for streaming capital in the mining space and see opportunities to continue adding accretive acquisitions to our portfolio in 2024. With that, I will hand the call back over to Randy.
spk07: Thank you, Hatham. In summary, 2023 was a very strong year for Wheaton, distinguished by several key highlights. With production of 620,000 gold equivalent ounces, we achieved our annual guidance, generating robust cash flows of over $750 million and distributing record dividends of over $270 million. Our pipeline of development projects was further de-risked. by construction advancements and the receipt of various key permits by our partners, supporting our impressive organic growth profile of over 40% in the next five years. We continue to grow our asset base, welcoming seven new assets into our portfolio, adding further diversification by commodity, operator, region, and development stage. Our balance sheet remains one of the strongest in the industry, providing ample capacity to add accretive, high-quality streams into our portfolio. We announced a new progressive dividend policy. And lastly, we continue to demonstrate leadership and sustainability with sector-leading ESG ratings and external recognition. So with that, I would like to open up the call for questions. Operator?
spk09: Thank you. Ladies and gentlemen, we will now conduct the question and answer session. If you'd like to ask a question, please press the star followed by the number 1 on your telephone keypad. If you'd like to retry a question, please press star 2. One moment please while we compile the Q&A roster. Your first question comes from Richard Hatch from Barenburg. Please go ahead.
spk01: Thanks very much. Yeah, good morning, Randy and team, and thanks for the presentation, and congrats on a good set of numbers. Thank you. Three questions. The first one is just on Salobo. I think perhaps the market's sort of struggled a bit to get clarity on select volumes over recent years, and I just wonder whether you can perhaps give us a little bit more colour and comfort over the estimates that the market should be using and sort of more reading into this, the comfort you've got over your own guidance, given that Salobo is such a core asset. The second one is just on Newmont. Obviously, they've come out and said that they want to sell some assets, and I just wonder if you might be able to talk a little bit about whether you're seeing a bit of interesting business development opportunities there whether you can be part of a funding structure on some companies that are looking to try and do some deals for some non-core assets and get some streams on some interesting assets in some good jurisdictions. And then the last one is just, funnily enough, one I had from an investor today, just talking about Wheaton, and it's about the IRR evolution of the streams. If you were to look at a stream that you would have done at the point of actually doing it and then you know, fast forward, you know, five, 10 years or whatever it may be. And can you just talk about the additional value you've created, you know, in that IRR as the years have gone by, you know, for example, through exploration upside or whatever that may be? It's just a question I'm just curious to get your views on. Thanks.
spk07: Sure, Richard. And hopefully I'll remember all three questions or we will remember all three questions. I'll start off with Salobo. So, you know, Salobo is just finishing off last year their Phase 4 of that pit design and kicking into Phase 5. And as is expected, I mean, you know, these pits are always designed around the higher-grade core, and so they're always chasing down. And whenever you're starting a new phase, you chase out to the perimeter, which is a little bit lower grades. And so, you know, that's what we're looking at is through the course of this year, we're going to see – The bulk of it is just going to be the start of mining in phase five as they work their way down. The phase five is expected to last probably about four or five years. And so what we're going to see is gradually increasing grades, again, as they work towards the core of the deposit in phase five. But I'll make a prediction. Five years out from now when they shift over to phase six, we'll probably see a bit of a kickover in grade again. Now, you know, the reason that the third phase of the expansion was sort of timed to come on, this third phase of Slobo, was to sort of coincide with this hit in lower grade. And so we will see an offset. It's not as hard as it would have been because we are ramping up this third phase. And so, you know, we do expect that they'll be running the operation at its full capacity by the end of this year. Their objective is to satisfy the next phase of the expansion test. before the end of this year. I'm hoping it happens earlier than expected. They showed really good progress last year. I do think that Vale has taken a little bit of a conservative approach in terms of scheduling that towards the end of this year, but fingers crossed that they can actually get there a little bit earlier. But we will see improved grades over the next four or five years as Phase V works its way back down into the core of the ore body. But, you know, this is going to be something that's a natural cycle with respect to the open pit. I don't know, Wes, you got anything to add to that?
spk02: Yeah, probably the only other thing I would add is just that they do have an optimized stockpiling strategy there where they are building up lower-grade stockpiles as they mine ore out of the pit. We will see that variability over the next several years in grade. But as Randy said, as you get deeper down into the pit in phase five and phase six, you will see that grade start to come back up. And really, we're really excited to see that higher throughput coming through. And we're really just seeing the beginning of it as that ramps up over the next year here. We'll see the actual overall production come up with that throughput.
spk07: I think your second question, Richard, was on Newmont. I don't know, Haitham, do you have anything to add on that?
spk04: Yeah, happy to take that question, Richard, and thank you for the question. Yeah, Newmont obviously has indicated that almost half of their portfolio is considered non-world class or non-tier one, and they've indicated that they would look to sell probably seven of those assets. We have been in discussions, not with Newmont, but with other parties to see if there's interest out there to, you know, a way that streaming could actually help fund some of those assets. Now, keep in mind, There's only one or two of those assets that we would consider interesting from a Wheaton perspective, given the long mine lives and the resources and reserves that are in place. Many of the others are very, very short mine lives and wouldn't really be amenable to a good stream.
spk07: The other aspect is operating costs and margins. We do focus on first and second quartile assets, and so a lot of times when we see opportunities like this, These assets, one of the reasons they are for sale is because they're not very high-margin assets. Their costs have climbed up, and so it is something that we're not willing to stretch as far for in terms of doing that, but there's definitely going to be some activity on that front. Richard, I think the third question was related to IRR and what kind of an IRR we look at. One of the huge benefits of this business model is the fact that You know, we have pure commodity price exposure. Our costs are defined in the contracts. And so, you know, a lot of it comes down to what happens to commodity prices over that period. I think you suggested about four or five-year period. You know, we deliver the bulk of that right back to our shareholders in terms of, you know, cash flows and profits. It's a real key difference in the streaming model versus the traditional mining model where higher prices quite often mean lower grades get processed and costs go up because of that. We don't suffer from that. Our costs actually are defined by our contracts and our And we still deliver very, very strong margins all the way back up when we see those higher prices. And so, I don't know, Gary, you got something to add? We've got a pretty good track record on the IRR side.
spk03: Yeah, we do. Richard, we distill the required returns associated with the opportunities that we're looking at. based upon the risks inherent in that opportunity relative to the risks inherent in our existing portfolio. And so we look at how well-defined the resource is, what the counterparty credit risk looks like, what the political risk looks like, whether we're dealing with a first quartile asset or a second quartile, and we're really only focused on assets that operate in the lowest half of their respective cost curves. And then we look at whether we're taking development stage risk or whether it's a currently operating asset. And then we look at the ESG track record or what we expect to be the commitment of the counterparty to ESG, high level of ESG practices. And we come up with an appropriate discount rate associated with that. We also do what we call a post-mortem every year where we look at every deal that we've ever done and we compare how it performed to how we expected it to perform. And when you look at that, you know, we've put just over $10 billion into streams. We've already recovered all of that money. We have an average mine life of roughly – 25 years, when you include resources which our assets have shown a high propensity to deliver on, you know, that mine life more than doubles. So, you know, when you look at the returns that we've generated on the over $10 billion We estimate that at being just over 17%. So, you know, and that's over a 20-year history. We're celebrating our 20th anniversary. So, you know, I think we feel we've been pretty good stewards of capital.
spk01: That's incredibly helpful, Gary, and team, thanks. And just for reference, Normally, when you would do a deal, if we would see one tomorrow, the IRR that the market probably would calculate would be high single digits, low double digits IRR. So really, there's a good 50% upside on return potentially through whether it's commodity price upside or life and mine upside. Is that a good way to think about it?
spk07: Yeah. I mean, it comes down. Every project is unique, right? Because each project has varying risks. If you're going into... Small countries where you're the only asset running, you assign a higher risk to it and you take that risk when you're going into it. You make sure you structure it to protect yourself so you don't have those kind of problems. The expiration risk, the metallurgical risk, all of those factors come in. The ESG risk, all of those factors come into what kind of return that we need. to satisfy us investing into the project. And as Gary highlighted there, we've got a pretty good track record of making sure that we deliver on those returns. Cool.
spk01: Very helpful. I'll get out of the way. Thanks for your time. Thanks, Richard.
spk09: Ladies and gentlemen, as a reminder, should you have a question, please press star 1. Your next question comes from Tanya Jakuskonek from Scotiabank. Please go ahead.
spk08: Good morning, everyone. Thank you for taking my questions, and thank you, operator, for getting my name right. That's awesome. Yeah, I've been called Annie and Natasha on two other calls, so this is a good one. I have actually four questions, if I could, so I'm just going to go through them one by one. So the first one may be just on the global minimum tax. Just your interpretation, because my understanding is that you know, if implemented or when implemented in the Canadian government implements it, it would be retroactive back to January 1st, 2024. So I just want to understand your view. Are you seeing it as retroactive going back or are you seeing it just being implemented when, you know, the Canadian government implements it?
spk03: We expect it to be retroactive, Tanya.
spk08: Okay. Okay. So we should think of it that maybe you don't pay it in Q1, but if it's implemented in Q2, then you would have it obviously take through the income statement and going forward in Q2 onwards, retroactive back to Jan 1st. Would that be a fair way of thinking about it?
spk03: Yeah, I don't think there's much of a chance of the GMT being enacted by the time that we release our Q1 results. we'll be very transparent as to what that accrued liability would be expected to be by disclosing it in our MD&A, but we likely will take two quarters of GMT, reflect two quarters of it in our second quarter results. So just keep that in mind. assuming that the Canadian government enacts it.
spk08: Yeah, no, no, no. Okay, that's helpful. Thank you very much for that. My second question has to do with dividends. So, you know, I'm just, and maybe this is for Randy. Randy, just on the dividend policy, you know, you've gone to a progressive dividend. Can you just, you know, talk me through, you know, why the move? Is it made because your peers have progressive dividends? Is it made, like, is it just being reviewed once a year? And so, like your peers, every year we sort of have, you know, a slight increase. And just remind me your minimum cash balance on your balance sheet that you need to run your business so that I can think about what else, how I model this dividend going forward.
spk07: Sure. Well, so as a refresher, the previous dividend was, it had as a reference, a minimum of 30% of our cash flows. the average over the previous four quarters. The challenge that we've had with that is that it's one that had a climbing basement. And so we've been actually holding it relatively constant. And to be honest, we're paying currently somewhere around, I think it's 37% of our cash flows. And so when we looked at our growth profile coming forward, we realized that with the current framework, we actually wouldn't be raising the dividend even though we're going to see some growth. Of course, current commodity prices would accelerate that, but we wouldn't have seen that growth for a couple of years. And we just felt that having been flat for a couple of years, it was time to add some growth. We've had substantive growth in our dividend, peer group leading growth in our dividend over the last five, six years. But it has actually been held flat for a couple of years, and we just felt it was time to give it a bump. And so the commitment towards the progressive, the scale, I mean, what we're committing to is that there will be an increase on an annual basis on a go forward. The scale of that increase is going to be up to us and up to our board, and it's going to be subjective to, you know, what kind of a cash balance are we looking at right now? In terms of a minimum cash balance, this is a very G&A-lite company. We don't have much need. There's a total of 40 employees in the whole company, and so our G&A, as Gary detailed in his numbers, our G&A numbers are very, very small. And we've got healthy access to very, very attractively priced debt, if required. That's all going to only be touched if we, you know, with the strong cash flows and with the production growth we've got over the next few years, that's only going to be, you know, we're only going to be using that revolver if we're seeing access to, you know, larger scale world class streaming opportunities, which, you know, we're always hopeful for. But currently, what we've been looking at is stuff that's 500 million or less, which which is something that's easily handleable. We can handle that with our current expected cash flows. So I don't see any risks on that side at all. The commitment is it's been flat for close to two years now since we've seen a bump up on that. And because of that 30% number being well below what we're actually paying in the 37% range, looking forward, we didn't see that actually impacting our dividend on a go-forward basis. And so we just felt it was time to deliver, bring some of that growth forward and start giving it, even adding more back to what we already delivered to our shareholders. We're already by far the biggest in the entire precious metal space in terms of the percentage of revenue back to shareholders. And so we want to make sure that we continue showing that growth that we have shown for the last four or five years.
spk08: And the minimum cash, I should think about on the balance sheet,
spk03: I don't, you know, we don't really look at there being a minimum cash balance required on our balance sheet. You know, we've got this five-year, $2 billion revolving credit facility, which is fully undrawn should we need to access that to fund some of the opportunity sets that Hatham will hopefully be bringing in. But... When we look at the current commitments that we have outstanding, we don't even see ourselves, even with this new dividend policy, we don't see ourselves even accessing the $2 billion revolving credit facility to fund those commitments over the next three years.
spk07: We've shown a strong track record of just adding to that dividend policy. And so, you know, when you keep on talking, you know, the reference to minimum balance, I mean, we're not going to drop the dividend. So, you know, we've got a strong enough balance sheet with all the tools that we have at hand and all the growth we have. You know, that's not something that's a concern to us.
spk08: Yeah. Okay. Well, I'll continue with Gary then on my next question. Just wanted to review, Gary, with you just the payments, just to make sure I have all of the payments that you are going to be paying this year. You did mention, obviously, the $450 million that went out on Feb 27. I think it was when you mentioned. Can you just remind me all of the other ones that are coming so I have them all captured?
spk03: Yep. And I would point you to the table that we have of our commitments on Feb page 39 of our MD&A. So you've got the Salobo payment that we, you know, is contingent upon Valet achieving the 35 million ton per annum throughput test, which, you know, we think they should satisfy this year. So that's $163 million. We expect to start making payments relative to Cangrejos, so we've got about $19 million relative to them. We've got about $15 million that we hope to be making to Generation Mining relative to the Marathon project. Marmotto is expected to move forward with the development of the deeper zone. And so we've got $80 million there. We've got the $115 million for the mineral park stream. We paid the $450 million relative to Platte Reef and Kuzukaya. Phoenix Gold, we would hope they move forward with a construction decision later this year, so that's $25 million. We've got $17 million that we will pay relative to the Mount Todd royalty, and that's pretty much everything that we expect this year.
spk07: There is a possibility that... that Curripamba might move forward a bit. We've got that scheduled in next year, but with the success they've had on permitting and they are considering going into a construction decision, we might see that move forward. That's a great news story. And that would be 162 mil. Unlikely we pay all of that, but we might be paying a bit of that here in this year if they may go ahead and make a construction decision, which they're seriously looking at.
spk08: Thanks for that. I just want to make sure I have the big ticket ones definitely in the model. And then I just wanted to ask just also on guidance, depreciation we're getting with you too, but maybe G&A that you usually provide for us, and then also an understanding of the quarterly guidance. Should I be thinking 4852, first half, second half?
spk07: I guess, I mean, from the G&A perspective, what we've got is $41 to $45 million over the course of the year and spread out evenly across that. In terms of production, there's no doubt that Slobo is a key influence, and they expect to be running that. It's a 90-day completion test to get that second phased. And that's going to be, their current schedule has that being satisfied during the fourth quarter, but they're going to have to start that in the third quarter to go forward. And that'll be running at a minimum of 35 million tons per annum. Keep in mind the asset has a capacity of 36 million tons per annum. So I would probably lean it a little bit towards you're probably not too far off the 48-52, 48% first half, 52% second half. It might even be 47-53. There's definitely going to be a little bit of a bias towards the tail end of the year, mainly because Slowbo is ramping up through the course of the year. The other area we're going to see gains over the course of the year is Boise's Bay on the cobalt side, you know, every quarter there's going to be a higher percentage of underground feed, you know, satisfying, and that stuff is much higher grade than what we're currently, you know, currently using from the open pit.
spk08: Yeah, no, I appreciate that. And then my final question maybe for Hatem is, again, coming back to the transaction activity or the M&A activity out there, I'm just kind of curious whether now are you switching back to focusing on production over development? Or, you know, are you happy to take a mix? I'm just wondering, you know, again, size-wise and development over production, how do you see that in your portfolio?
spk04: Sure. And I think you're right. For the last few years, it has been focused on development. What we've seen is a little bit of focus on balance sheets strengthening by some of the potential diversified and other producers out there. So I think it's probably a 50-50 mix, I'd say, right now. 50% is probably still looking at development stage opportunities, and the other 50% is looking at, you know, balance sheet strengthening. I don't want to say balance sheet repair, but people are trying to shore up their balance sheets to be able to add and to increase, acquire, et cetera, in this environment. And that's an area that they're coming to us and looking for guidance on. I would say that the majority of the opportunities we're looking at are still, you know, sub-300, but as always, there's a couple that are, you know, greater than 500 that take some time to foster, and hopefully we can get those across the line. I'll also add, Tanya, one thing you've got, I mean, 17 years as an analyst, I don't think anybody ever got my name right on a conference call, so you're already up on me there.
spk08: Oh, my God, that's excellent. Thank you so much for taking all my questions. I'll give it to somebody else to ask. I could go on for a long time here otherwise.
spk07: Thank you. Always happy to talk to you, Tanya. Thanks.
spk09: Your next question comes from Brian McArcher from Raymond James. Please go ahead.
spk06: Good morning, and thank you for taking my questions. Can I go back to the GMT? You talked about how you're going to book it, you know, first quarter low, second quarter higher. But can you go through on a cash basis when you'll actually make payments? Because you also talk about there's some credits about G&A.
spk03: financing etc and you just walk through how you think that'll evolve over the next few years when you think you'll actually have to start making cash payments related to the gmt yeah um we for for the amounts accrued in 2024 we won't actually disperse those until uh 2026 And, you know, I think what we've been guiding people to is, you know, you take our non-Canadian income and you apply a 15% tax rate to that. So, you know, we don't – there won't be much, like, additional deductions there. We will, yeah, it's income. So it does reflect the depletion of the upfront payment.
spk06: So if I roll forward then, if I'm paying my 2024 on a cash basis in 26, does it keep going that way that your 25 will be paid in 27? So we're always like on an 18-month lag or does it get trued up and eventually you start paying on a run rate? I'm trying to figure out whether it's actually just deferred the payment on a leg basis or you actually get full credit and shelter some of the cash up front?
spk03: Yeah, you know, at this point, I think we're operating on the basis that it will be, you know, on that kind of two-year deferral basis or year and a half deferral basis.
spk07: Brian, given that it's what I would call a sweep tax, I think it needs to operate like that in a sense to allow any other taxes that have been paid to be sort of deducted off of what that works. I'm just looking at the mechanics of it. But, you know, until we see legislation, it's really tough to be firm on that, but... But, you know, that sounds like it makes sense in terms of them having to wait the subsequent year so they get that 18-month lag before you actually calculate it because it's going to look at whatever, you know, as I said, it's like a sweet tax.
spk06: Oh, great. That's very helpful to think of it that way. And the other thing is in the MDAA, you talk about, you know, how it works in Luxembourg. There's also, I guess, you have stuff in Netherlands and Barbados. Is there anything there that changes going forward? I mean, you talked about Cayman and Luxembourg, but I didn't mention the other two.
spk03: No, I think we've outlined all of the potentially applicable jurisdictions.
spk06: Great. Thanks very much. Sorry to go through tax, but just trying to get this clear on a cash basis is very helpful. Yeah. Thanks, Brian. That's the only question, Brian, on tax? Okay, thanks. I don't think we want to do more tax, do we? No. Thanks. Thanks, Brian.
spk09: Your next question comes from John Tumasos from John Tumasos Independent. Please go ahead.
spk05: Congratulations on the page 39 table. laying out the next $2 billion to invest in such good projects, and the good projects you invested in in 2023, I wish I could shine the shoes of your corporate development guys. Maybe they deserve an extra big bonus.
spk07: Well, I will tell you that it's an entire team effort here. It's not... Hatham doesn't get all the credit.
spk04: But I do like how you think, John.
spk05: So, Randy, when I was sitting in the new discoveries seminar last Wednesday at PDAC, and a year ago, maybe half of the discoveries I thought weren't discoveries are not documented yet. And Maybe one big discovery is Anglo Gold, Silica, Northwest and Vegas, which Aldius and Origin have the royalty on. The East Goldie of Cisco has the royalty on. And in the context of sort of not a great stream of new discoveries, your accomplishments in locking up all these deals is even more superhuman. If you can't sustain this pace of deal generation, you're getting bigger and generating so much cash, do you think you'd simply let cash accumulate on the balance sheet or increase the dividend or buy back shares or buy royalties or other royalty companies? What will you do if you can't sustain the deal generation pace. I don't think you're going to lower your quality standards.
spk07: Well, and that's John's excellent point. And I strongly agree with you. One of the challenges, this isn't a number that's out there, but what we have run into over the last few years is we're putting out a lot less IOVs, indications of value. And so for an asset to actually make it to the IOV level for us at Wheaton, it has to show clear standards in terms of operating margins and responsible site and suitable risks all the way across the board in terms of getting to that stage. And I can tell you, for the last four years, it's less and less and less. We're not seeing as many good quality projects out there. And I'm fearful for the industry in the sense that there's just not a lot of risk capital out there, so there's not a lot of exploration, and that means there's just not a lot of good new discoveries that we see coming down the pipe. It's getting to be a tighter and tighter market. I think in that space, the number of, the success that we had last year where we, more acquisitions than ever before. I just really do hand that to the team in terms of the work that we did on pushing that forward. A lot of those transactions were with people or companies that we've worked with in the past. And that really does come down to, you know, working on being a partner of choice. It's something that we really strive to be here at Wheaton. And so, you know, I don't know, Haytham, you want to add any more on the opportunity set, and then I'll come back in and talk about where the cash is going.
spk04: Sure. Thanks, Randy. And good questions, John. I think I will say what you're seeing now, John, in terms of a lack of quality is something we actually saw a few years ago. So about half a dozen years ago, we had a a definite focus to try and find the best development stage opportunities that we could actually get involved in. And as you saw over the last five years, we've got like 14 or 15 development stage opportunities right now that we're actually involved in. And there's three or four of them coming into production here in the next 12 to 24 months. So we did have a timeline where we looked and said, okay, let's work on our near-term growth. Let's work on our medium-term growth. Let's have some optionality in our longer-term growth. and we've accomplished that. So we do think that there's still opportunities out there. They're far and few between. You are right, but Randy's comment is exactly right. You know, building the relationships and getting that repeat business, and that's going to be the key going forward is to be a partner for us.
spk07: And with respect to the cash on hand, you know, it's been a pretty consistent message. If we can't put it back into the ground effectively, it goes back to shareholders. You know, I don't see us ever, you know, if we ever bump up over a billion dollars cash on hand, that to me is a pretty lazy balance sheet. And that's the point that if you ever see a cash balance kicking up at those kind of levels, we'll start ramping up that dividend and start feeding even more of that back to our shareholders. We already, you know, we already lead the entire precious metal space on that front in terms of how much we, you know, what percentage we give back to our And my hope is, and what we're always trying to do, is manage our existing portfolio and grow it and continue to add quality assets. And that's what we'll keep doing. But we're going to do it for accretive prices. For us, it's important that we are strong stewards of our shareholders' capital. And so if we can't put it to work effectively, it will go back to shareholders. Our first choice is always going to be to grow the dividend. I think it's the best way. It's a commitment on a longer-term basis to go out, and so I just think that that's always going to be our preferred choice.
spk05: Thank you, and congratulations once again.
spk07: Thanks, John. And thank you, everybody. Go ahead.
spk09: I was just going to turn back the call over to yourself, ladies and gentlemen. This concludes the Q&A portion of today's conference call. I will now turn the call over to Mr. Randy Smallwood for closing remarks.
spk07: Thank you, everyone, for your time today. As we at Wheaton here celebrate our 20th anniversary here in 2024, I'm just incredibly grateful for the partnerships that we have forged over the years and the strong support of our shareholders. Together, we have provided the industry with an innovative solution to project finance that truly unlocks value for all stakeholders. Wheaton's high-quality portfolio of assets, sector-leading growth profile and commitment to sustainability provides our shareholders with a solid outlook for the future and is one of the best vehicles for investing into the gold and precious metal space. So as we celebrate our 20th year, I'm just sincerely thankful for all of our stakeholders for their part in our success, in Wheaton's success, and I do look forward to a golden future ahead. So we look forward to speaking to all of you again soon. Thank you.
spk09: This concludes your conference call for today. Thank you for participating. You may now disconnect your lines.
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