Wheaton Precious Metals Corp. Q3 FY2026 earnings call

• Production Momentum: Delivered record production of 231,000 GEOs in Q3, a 13% YoY increase, driven by the new BHP Antamina stream and contributions from Hemlo, Phoenix, Platte Reef, and Mineral Park.
• Solobo Development: Valley Base Metals announced plans for a coarse particle flotation circuit at Solobo, adding 6 million tons to annual processing capacity, targeting 42 million tons per annum by 2029.
• New Production Milestones: Montage Gold achieved first gold pour at its Kony project in Cote d'Ivoire; Allied Gold began production at its Kermuk mine in Ethiopia; Ivanhoe’s Slavenky project in South Africa made first deliveries.
• Pipeline De-risking: Copper World Project in Arizona received FID approval; Gervois Project in Australia approved FID; Generation Mining’s Marathon project commenced construction after securing final funding.
• Financial Strength: Strong balance sheet with ~$3 billion liquidity ($146M cash + credit facility). Net debt decreased from $1.9B to $1.5B due to robust operating cash flows ($645M) and debt repayments ($372M).
• Capital Allocation: Repaid $372M under revolving credit facility; paid $88M dividend; made $87M upfront payments for El Domo and Armato. Targeting return to net cash position by early 2028.

Total revenue for the third quarter was $772 million, representing a 62% year-over-year increase driven by a 90% rise in gold equivalent ounces (GEOs) sold and a 36% increase in average realized price. Net earnings increased 12% to $410 million, while adjusted net earnings rose 46% to $410 million. Revenue composition was approximately 51% attributable to gold, 46% to silver, with the remainder from palladium and cobalt. Operating cash flow generated was approximately $645 million.

• Maintained 2026 full-year production guidance range of 860,000 to 940,000 GEOs.
• Long-term organic growth profile remains sector-leading at 50% by 2030, targeting 1.2 million GEOs annually from 2031–2035.
• Fourth Quarter Outlook: Expecting strong Q4 production driven primarily by improved grades at Solobo as operations move to deeper pit levels; other assets also setting up well.
• No upward or downward revisions to current full-year guidance provided.

• Commodity Price Volatility: Management noted that while production certainty is high, gold and silver price volatility remains a key risk factor affecting revenue.
• Asset Grade Depletion: Solobo experienced lower grades in Q3 due to mine sequencing; Penasquito facing significant silver production decreases in Q4/2027 due to pit setup and carbon-rich stockpiles.
• Operational Timing Risks: Potential delays in ramp-up of new projects like Kony and Kermuk, though currently on budget/schedule.
• Leverage Constraints: Management indicated comfort with ~1.5x leverage but implied this is a strategic ceiling rather than a hard limit, dependent on market conditions.

Q: Analyst asked about Q4 gold guidance pickup, specifically Solobo grades and contribution from Kony/Kermuk.

A: Wes Carson explained Q4 improvement is mainly Solobo returning to bottom-of-pit higher grades after Q3 low-grade phase five shift. Kony/Kermuk may have tiny Q4 output but not forecasted; significant contribution expected in Q1 2027.

Q: Analyst asked if Solobo CPF restructuring removed $8M high-grade option payments and if Syllable 4 expansion is planned.

A: Wes confirmed $8M payments were removed; only two $20M payments remain tied to CPF completion. Haytham stated no current plan for Syllable 4, but would consider if it became economic for Wheaton given long reserve life.

Q: Analyst questioned if CPF $40M payment correlates to half the benefit of previous $80M high-grade proposal.

A: Wes clarified payments are not directly correlated; $40M reflects capital cost and Wheaton’s benefit, with a 1.5-year payback. High-grade plan changed significantly with throughput increases.

Q: Analyst asked about potential buy-downs in portfolio compared to competitors.

A: Haytham emphasized Wheaton resists buy-downs except for limited one-third change-of-control clauses. No near-term triggers expected; comfortable with current portfolio structure.

Q: Analyst asked about Penasquito silver decline impact on Q4/2027 and PB&D unwind timing.

A: Wes confirmed Penasquito silver drop is integrated into plans due to pit setup and carbon stockpiles. Vincent noted PB&D is 2.6 months; slight build expected in Q4, no significant unwind anticipated.