Management's Responsibility for Financial Reporting
The accompanying consolidated financial statements of Wheaton Precious Metals Corp. ("Wheaton") were prepared by management, which is responsible for the integrity and fairness of the information presented, including the many amounts that must of necessity be based on estimates and judgments. These consolidated financial statements were prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board ("IFRS"). Financial information appearing throughout our Management's Discussion and Analysis ("MD&A") is consistent with these consolidated financial statements.
In discharging our responsibility for the integrity and fairness of the consolidated financial statements and for the accounting systems from which they are derived, we maintain and rely on a comprehensive system of internal controls designed to ensure that transactions are authorized, assets are safeguarded and proper records are maintained. These controls include business planning; delegation of authority; careful selection and hiring of staff; accountability for performance within appropriate and well-defined areas of responsibility; and the communication of policies and guidelines of business conduct throughout the company.
The Board of Directors oversees management's responsibilities for financial reporting through the Audit Committee, which is composed entirely of directors who are neither officers nor employees of Wheaton. The Audit Committee reviews Wheaton's interim and annual consolidated financial statements and MD&A and recommends them for approval by the Board of Directors. Other key responsibilities of the Audit Committee include monitoring Wheaton's system of internal controls, monitoring its compliance with legal and regulatory requirements, selecting the external auditors and reviewing the qualifications, independence and performance of the external auditors.
Deloitte LLP, Independent Registered Public Accounting Firm, appointed by the shareholders of Wheaton upon the recommendation of the Audit Committee and the Board of Directors, have performed an independent audit of the consolidated financial statements and their report follows. The auditors have full and unrestricted access to the Audit Committee to discuss their audit and related findings.
/s/ Randy Smallwood | /s/ Gary Brown |
Randy Smallwood | Gary Brown |
President & Chief Executive Officer | Senior Vice President & Chief Financial Officer |
March 14, 2024 |
WHEATON PRECIOUS METALS 2023 ANNUAL REPORT - FINANCIAL STATEMENTS [2]
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of Wheaton Precious Metals Corp. Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Wheaton Precious Metals Corp. and subsidiaries (the "Company") as of December 31, 2023 and 2022, the related consolidated statements of earnings, comprehensive income, shareholders' equity, and cash flows, for each of the two years in the period ended December 31, 2023, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and its financial performance and its cash flows for each of the two years in the period ended December 31, 2023, in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 14, 2024, expressed an unqualified opinion on the Company's internal control over financial reporting.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Impairment - Assessment of Whether Indicators of Impairment or Impairment Reversal Exist within the Mineral Stream Interests - Refer to Note 4.3 to the financial statements
Critical Audit Matter Description
The Company considers each precious metals purchase agreement ("PMPA") to be a separate cash generating unit ("CGU"). The Company's determination of whether or not an indicator of impairment or impairment reversal exists at the CGU level requires significant management judgment. Changes in metal price forecasts, discount rates, reductions or increases in the amount of future recoverable ounces of metals attributable to the Company and/or adverse or favorable operational, political or regulatory developments impacting the mining properties in respect of which the Company has PMPAs can result in a write-down or write-up of the carrying amounts of the Company's mineral stream interests.
While there are several factors that are required to determine whether or not an indicator of impairment or impairment reversal exists, the judgments with the highest degree of subjectivity are evaluating the impact of (1) changes to future metal prices for gold, silver, palladium and cobalt, and (2) changes in the amount of future recoverable ounces of metals attributable to the Company. Auditing these estimates and factors required a high degree of subjectivity in applying audit procedures and in evaluating the results of those procedures. This resulted in an increased extent of audit effort, including the involvement of fair value specialists.
WHEATON PRECIOUS METALS 2023 ANNUAL REPORT - FINANCIAL STATEMENTS [3]
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures to evaluate the impact of changes to (1) future metal prices for gold, silver, palladium and cobalt and (2) changes in the amount of future recoverable ounces of metals attributable to the Company in the assessment of indicators of impairment or impairment reversal included the following, among others:
- Evaluated the effectiveness of the Company's controls over management's assessment of indicators of impairment or impairment reversal.
- Evaluated management's ability to accurately forecast future recoverable ounces of metals attributable to the Company by:
- Assessing the methodology used in management's determination of the future recoverable ounces of attributable metals;
- Completing retrospective analysis comparing the Company's historical forecasts to actual results;
- Comparing management's expected future recoverable ounces of attributable metals to reserve and resource estimates prepared by the third-party mining property operators; and
- Considering the professional qualifications and objectivity of management's specialists.
- With the assistance of fair value specialists, evaluated the significance of movements in future metal prices for gold, silver, palladium and cobalt by comparing historical forecasts to current third-party forecasts.
/s/ Deloitte LLP
Chartered Professional Accountants
Vancouver, Canada
March 14, 2024
We have served as the Company's auditor since 2004.
WHEATON PRECIOUS METALS 2023 ANNUAL REPORT - FINANCIAL STATEMENTS [4]
Management's Report on Internal Control Over Financial Reporting
Management of Wheaton Precious Metals Corp. ("Wheaton") is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is a process designed by, or under the supervision of the Chief Executive Officer and the Chief Financial Officer and effected by the Board of Directors, management and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board. It includes those policies and procedures that:
- pertain to the maintenance of records that accurately and fairly reflect, in reasonable detail, the transactions related to Wheaton's assets;
- provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with IFRS, and Wheaton receipts and expenditures are made only in accordance with authorizations of management and Wheaton's directors; and
- provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of Wheaton's assets that could have a material effect on Wheaton's financial statements.
Due to its inherent limitations, internal control over financial reporting may not prevent or detect misstatements on a timely basis. Also, projections of any evaluation of the effectiveness of internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Management assessed the effectiveness of Wheaton's internal control over financial reporting as of December 31, 2023, based on the criteria set forth in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this assessment, management has concluded that, as of December 31, 2023, Wheaton's internal control over financial reporting was effective.
The effectiveness of Wheaton's internal control over financial reporting, as of December 31, 2023, has been audited by Deloitte LLP, Independent Registered Public Accounting Firm, who also audited the Company's consolidated financial statements as of and for the year ended December 31, 2023, as stated in their report.
/s/ Randy Smallwood | /s/ Gary Brown |
Randy Smallwood | Gary Brown |
President & Chief Executive Officer | Senior Vice President & Chief Financial Officer |
March 14, 2024 |
WHEATON PRECIOUS METALS 2023 ANNUAL REPORT - FINANCIAL STATEMENTS [5]
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of Wheaton Precious Metals Corp.
Opinion on Internal Control over Financial Reporting
We have audited the internal control over financial reporting of Wheaton Precious Metals Corp. and subsidiaries (the "Company") as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by COSO.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2023, of the Company and our report dated March 14, 2024, expressed an unqualified opinion on those financial statements.
Basis for Opinion
The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the
PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Deloitte LLP
Chartered Professional Accountants
Vancouver, Canada
March 14, 2024
WHEATON PRECIOUS METALS 2023 ANNUAL REPORT - FINANCIAL STATEMENTS [6]
Consolidated Statements of Earnings
Years Ended December 31
(US dollars and shares in thousands, except per share amounts) | Note | 2023 | 2022 | ||
Sales | 6 | $ | 1,016,045 | $ | 1,065,053 |
Cost of sales | |||||
Cost of sales, excluding depletion | $ | 228,171 | $ | 267,621 | |
Depletion | 214,434 | 231,952 | |||
Total cost of sales | $ | 442,605 | $ | 499,573 | |
Gross margin | $ | 573,440 | $ | 565,480 | |
General and administrative expenses | 7 | 38,165 | 35,831 | ||
Share based compensation | 8 | 22,744 | 20,060 | ||
Donations and community investments | 9 | 7,261 | 6,296 | ||
Impairment reversal of mineral stream interests | 13, 25 | - | (8,611) | ||
Earnings from operations | $ | 505,270 | $ | 511,904 | |
Gain on disposal of mineral stream interests | 13 | 5,027 | 155,868 | ||
Other income (expense) | 10 | 34,271 | 7,449 | ||
Earnings before finance costs and income taxes | $ | 544,568 | $ | 675,221 | |
Finance costs | 17.3 | 5,510 | 5,586 | ||
Earnings before income taxes | $ | 539,058 | $ | 669,635 | |
Income tax expense | 23 | 1,414 | 509 | ||
Net earnings | $ | 537,644 | $ | 669,126 | |
Basic earnings per share | $ | 1.187 | $ | 1.482 | |
Diluted earnings per share | $ | 1.186 | $ | 1.479 | |
Weighted average number of shares outstanding | |||||
Basic | 21 | 452,814 | 451,570 | ||
Diluted | 21 | 453,463 | 452,344 |
The accompanying notes form an integral part of these consolidated financial statements.
WHEATON PRECIOUS METALS 2023 ANNUAL REPORT - FINANCIAL STATEMENTS [7]
Consolidated Statements of Comprehensive Income
Years Ended December 31
(US dollars in thousands) | Note | 2023 | 2022 | ||
Net earnings | $ | 537,644 | $ | 669,126 | |
Other comprehensive income | |||||
Items that will not be reclassified to net earnings | |||||
(Loss) gain on LTIs¹ | 16 | $ | (26,632) | $ | 21,052 |
Income tax (recovery) expense related to LTIs | 23 | (3,719) | 6,513 | ||
Total other comprehensive (loss) income | $ | (22,913) | $ | 14,539 | |
Total comprehensive income | $ | 514,731 | $ | 683,665 |
- LTIs = long-term investments - common shares held.
The accompanying notes form an integral part of these consolidated financial statements.
WHEATON PRECIOUS METALS 2023 ANNUAL REPORT - FINANCIAL STATEMENTS [8]
Consolidated Balance Sheets
(US dollars in thousands)
As at | As at | |
December 31 | December 31 | |
Note | 2023 | 2022 |
Assets | ||||||
Current assets | ||||||
Cash and cash equivalents | 22 | $ | 546,527 | $ | 696,089 | |
Accounts receivable | 11 | 10,078 | 10,187 | |||
Cobalt inventory | 12 | 1,372 | 10,530 | |||
Income taxes receivable | 23 | 5,935 | - | |||
Other | 24 | 3,499 | 3,287 | |||
Total current assets | $ | 567,411 | $ | 720,093 | ||
Non-current assets | ||||||
Mineral stream interests | 13 | $ | 6,122,441 | $ | 5,707,019 | |
Early deposit mineral stream interests | 14 | 47,093 | 46,092 | |||
Mineral royalty interests | 15 | 13,454 | 6,606 | |||
Long-term equity investments | 16 | 246,678 | 256,095 | |||
Property, plant and equipment | 7,638 | 4,210 | ||||
Other | 25 | 26,470 | 19,791 | |||
Total non-current assets | $ | 6,463,774 | $ | 6,039,813 | ||
Total assets | $ | 7,031,185 | $ | 6,759,906 | ||
Liabilities | ||||||
Current liabilities | ||||||
Accounts payable and accrued liabilities | $ | 13,458 | $ | 12,570 | ||
Income taxes payable | 23 | - | 2,763 | |||
Current portion of performance share units | 20.1 | 12,013 | 14,566 | |||
Current portion of lease liabilities | 17.2 | 604 | 818 | |||
Total current liabilities | $ | 26,075 | $ | 30,717 | ||
Non-current liabilities | ||||||
Performance share units | 20.1 | $ | 9,113 | $ | 6,673 | |
Lease liabilities | 17.2 | 5,625 | 1,152 | |||
Deferred income taxes | 23 | 232 | 165 | |||
Pension liability | 4,624 | 3,524 | ||||
Total non-current liabilities | $ | 19,594 | $ | 11,514 | ||
Total liabilities | $ | 45,669 | $ | 42,231 | ||
Shareholders' equity | ||||||
Issued capital | 18 | $ | 3,777,323 | $ | 3,752,662 | |
Reserves | 19 | (40,091) | 66,547 | |||
Retained earnings | 3,248,284 | 2,898,466 | ||||
Total shareholders' equity | $ | 6,985,516 | $ | 6,717,675 | ||
Total liabilities and shareholders' equity | $ | 7,031,185 | $ | 6,759,906 |
/s/ Randy Smallwood | /s/ Marilyn Schonberner | |
Randy Smallwood | Marilyn Schonberner | |
Director | Director |
The accompanying notes form an integral part of these consolidated financial statements.
WHEATON PRECIOUS METALS 2023 ANNUAL REPORT - FINANCIAL STATEMENTS [9]
Consolidated Statements of Cash Flows
Years Ended December 31
(US dollars in thousands) | Note | 2023 | 2022 | ||
Operating activities | |||||
Net earnings | $ | 537,644 | $ | 669,126 | |
Adjustments for | |||||
Depreciation and depletion | 215,926 | 233,539 | |||
Gain on disposal of mineral stream interest | 13 | (5,027) | (155,868) | ||
Impairment reversal of mineral stream interests | - | (8,611) | |||
Interest expense | 17.3 | 207 | 91 | ||
Equity settled stock based compensation | 20 | 6,438 | 5,846 | ||
Performance share units - expense | 20.1 | 16,306 | 14,214 | ||
Performance share units - paid | 20.1 | (16,675) | (18,410) | ||
Pension expense | 1,122 | 1,033 | |||
Pension paid | (116) | - | |||
Income tax expense (recovery) | 23 | 1,414 | 509 | ||
Loss (gain) on fair value adjustment of share purchase warrants held | 10 | 31 | 1,033 | ||
Investment income recognized in net earnings | (37,178) | (6,774) | |||
Other | 1,227 | 67 | |||
Change in non-cash working capital | 22 | 1,912 | 1,573 | ||
Cash generated from operations before income taxes and interest | $ | 723,231 | $ | 737,368 | |
Income taxes paid | (6,192) | (171) | |||
Interest paid | (187) | (93) | |||
Interest received | 33,957 | 6,320 | |||
Cash generated from operating activities | $ | 750,809 | $ | 743,424 | |
Financing activities | |||||
Credit facility extension fees | 17.1 | $ | (859) | $ | (1,357) |
Share purchase options exercised | 19.2 | 12,415 | 10,368 | ||
Lease payments | 17.2 | (691) | (800) | ||
Dividends paid | 18.2 | (265,109) | (237,097) | ||
Cash used for financing activities | $ | (254,244) | $ | (228,886) | |
Investing activities | |||||
Mineral stream interests | 13 | $ | (663,528) | $ | (151,929) |
Early deposit mineral stream interests | 14 | (1,000) | (1,500) | ||
Mineral royalty interest | 15 | (6,833) | - | ||
Net proceeds on disposal of mineral stream interests | 13 | 46,400 | 131,763 | ||
Acquisition of long-term investments | 16, 22 | (17,447) | (22,768) | ||
Proceeds on disposal of long-term investments | 16, 22 | 202 | - | ||
Investment in subscription rights | 25 | (4,510) | - | ||
Dividends received | 2,317 | 453 | |||
Other | (2,247) | (316) | |||
Cash (used for) generated from investing activities | $ | (646,646) | $ | (44,297) | |
Effect of exchange rate changes on cash and cash equivalents | $ | 519 | $ | (197) | |
(Decrease) increase in cash and cash equivalents | $ | (149,562) | $ | 470,044 | |
Cash and cash equivalents, beginning of year | 696,089 | 226,045 | |||
Cash and cash equivalents, end of year | 22 | $ | 546,527 | $ | 696,089 |
The accompanying notes form an integral part of these consolidated financial statements.
WHEATON PRECIOUS METALS 2023 ANNUAL REPORT - FINANCIAL STATEMENTS [10]
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Wheaton Precious Metals Corp. published this content on 14 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 14 March 2024 21:56:03 UTC.