Wheaton Precious Metals Corp (NYSE:WPM) silver streams outperformed our expectations in Q118, while its gold streams performed closely in line. However, after demonstrating the traditional ‘flush through’ effect in Q417, sales of silver and gold in Q118 reverted to close to their long-term trends, with an (albeit temporary) 14.6% under-sale of silver and a 12.2% under-sale of gold relative to production. Nevertheless, adjusted net earnings of US$69.9m and EPS of 16 cents were within 10% of our previous expectations of US$77.0m and our forecasts for FY18 remain, to all intents and purposes, unchanged (see page 7).
First Majestic takeover of Primero concluded
On 10 May, First Majestic announced that it had closed the acquisition of Primero and hence we have adjusted our forecasts for Q218 to reflect 1.5 months under the old silver purchase agreement and 1.5 months under the new precious metals purchase agreement (cf 0 months and three months, respectively, previously). We estimate that the conclusion of the transaction could also result in an exceptional gain in the order of US$271.5-365.5m (61-83 US cents/share), pre-tax, in Q218.
To read the entire report Please click on the pdf File Below: