Hot Commodity Stock to Watch: Wheaton Precious Metals Corp (NYSE: WPM)

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Wheaton Precious Metals Corp (NYSE: WPM) stock rose over 2.9% (as of 11:00:37 AM UTC-4 · USD; Source: Google finance) after the company posted decent results for the second quarter of FY 21 and maintained its full-year production guidance.

Pretax profit grew 64% to USD165.2 million from USD101.0 million. Production attributable to Wheaton’s investments grew 32% to 194,140 gold equivalent ounces, up from 146,857 ounces. From a liquidity perspective, the $235 million of cash and cash equivalents as at June 30, 2021 combined with the liquidity provided by the available credit under the $2 billion revolving term loan.

WPM in the second quarter of FY 21 has reported the adjusted earnings per share of 36 cents, missing the analysts’ estimates for the adjusted earnings per share of 37 cents, according to the Zacks Consensus Estimate. The company had reported the adjusted revenue growth of 33 percent to $330.39 million in the second quarter of FY 21, beating the analysts’ estimates for revenue by 3.09%.

Additionally, the company declared a quarterly dividend of 15 cents per share, which is the fourth consecutive quarterly increase and up from 10 cents per share a year ago.

Wheaton’s estimated attributable production in 2021 is forecast to be 370,000 to 400,000 ounces of gold, 22.5 to 24.0 million ounces of silver, and 40,000 to 45,000 gold equivalent ounces (GEOs) of other metals. The company remains well on track to achieve 2021 guidance of 720,000 to 780,000 gold equivalent ounces. For the five-year period ending in 2025, the Company estimates that average production will amount to 810,000 GEOs, while for the ten-year period ending in 2030, the Company estimates that average annual production will amount to 830,000 GEOs.

Meanwhile, the company also announced a precious metals purchase agreement with Rio2 Ltd for the Fenix Gold project in Chile. As per the agreement, Wheaton will get 6% of gold production up to 90,000 ounces, 4% up to 140,000 ounces, and 3.5% thereafter. In return, Rio2 will get USD50 million upfront, followed by ongoing delivery payments. As of June 30, 2021, the Company has signed into 26 long-term purchase agreements (three of which are early deposit agreements), with 19 different mining companies, for the purchase of precious metals and cobalt (“precious metal purchase agreements” or “PMPA”) relating to 24 mining assets which are currently operating, 8 which are at various stages of development and 1 which has been placed in care and maintenance, located in 12 countries.

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