Wheaton Precious Metals Sees Strong Growth in Q4 2023 Despite Challenges

Wheaton Precious Metals reported significant growth in production and financial performance for the fourth quarter of 2023, driven by increased gold production and higher commodity prices, despite some operational setbacks. The company achieved a 22% increase in gold equivalent ounces (GEOs) produced, totaling 174,200 GEOs, compared to the same period in the previous year.

The rise in gold production was largely due to the expansion of mill throughput at the Salobo mine, reaching its highest production levels since the fourth quarter of 2019. However, this was partially offset by a 20% decline in silver production, which was affected by a labor strike at Peñasquito, the sale of the Yauliyacu streaming agreement, the closure of the Minto mine, and the temporary suspension of production at Aljustrel.

Sales volumes increased by 17% to 162,360 GEOs, while revenue grew by 33%, or $77 million, to $313 million. This boost in revenue was mainly due to a 13% rise in realized commodity prices and higher sales volumes, although changes in product mix and delivery (PBND) partially offset these gains.

The company's gross margin rose by $56 million to $177 million, and net earnings increased by $2 million to $168 million. Adjusted net earnings saw a significant rise of 59%, or $61 million, reaching $165 million, primarily due to the higher gross margin. Operating cash flow climbed to $242 million, a $70 million increase, driven by the improved gross margin and increased interest income on the company's cash holdings.

For the full year ending December 31, 2023, Wheaton Precious Metals produced 619,600 GEOs, maintaining production levels comparable to the previous year. The increased output from the Salobo and Constancia mines was counterbalanced by the cessation of production from Yauliyacu, 777, Keno Hill, and Minto, along with lower-grade mining at Antamina and disruptions at Peñasquito due to labor strikes.

Annual revenue totaled $1,016 million, down by $49 million due to a 10% decrease in sales volumes resulting from changes in PBND, partially offset by a 6% rise in realized commodity prices. The gross margin increased by $8 million to $573 million, while net earnings fell by $131 million to $538 million, largely because the prior year's results included $156 million in income from the sale of the Yauliyacu and Keno Hill streaming agreements.

Adjusted net earnings for the year rose by $28 million to $533 million, thanks to a higher gross margin and increased interest income. Operating cash flow also saw a modest increase of $7 million, reaching $751 million, primarily due to higher interest income.