Wheaton Precious Metals (WPM) Q2 FY25 earnings call: guidance and Q&A

Given strong organic growth, how aggressive is Wheaton's stance on new deals, or does it make them more selective?

Wheaton remains focused on accretive transactions with strong security structures. They are currently evaluating 12-15 opportunities (2/3 development, 1/3 operating, some M&A support) and have a solid war chest, but will remain selective as 'not every stream is a Wheaton stream'.

“We're looking at lots of opportunities. We are probably sitting between 12 and 15 opportunities that we're looking at right now. I would say 2/3 of those are development stage opportunities, 1/3 are probably operating and there's also some M&A opportunities in there as well.”

asked by Matthew Murphy · answered by Haytham Hodaly

What is the expected quantum and timing of cash tax payments related to the Global Minimum Tax?

The GMT is applicable to the 2024 period, with the first payment of approximately $112 million expected in Q2 or Q3 2026. Payments will be an annual sequence thereafter, staggered by two years after the revenue year, as it functions as a sweep tax.

“The GMT is applicable to the 2024 period, and we're going to make the first payment in 2026, I believe, in Q2 or Q3. So on our balance sheet, we have that characterized as a current liability now. So that's the amount that will go out in 2026.”

asked by Matthew Murphy · answered by Vincent Lau

If US gold tariffs create a price differential between COMEX and LME, can Wheaton benefit from this arbitrage given their delivery mechanics?

Wheaton is insulated from tariffs as they take delivery of credits in London. They would achieve the LME price at minimum but would look to capitalize on higher prices in New York if an arbitrage opportunity arises. It's early days, and they are monitoring the situation.

“We're insulated from any of the tariffs. We take delivery of credits of gold and silver in mainly London. So we're not subject to any of these tariffs. So at minimum, we would achieve the LME price. If there is a higher price in New York, we'll look to capitalize on that.”

asked by Brian MacArthur · answered by Vincent Lau

Are deal terms becoming more restrictive due to increased competition, and what are the typical deal size ranges being observed?

The deal environment is 'more competitive' but not restrictive, with Wheaton seeing and bidding on more opportunities than in the last decade. Approximately 80% of opportunities are sub-$400 million, with a few larger transactions in the $750 million to $1 billion+ range.

“It's definitely more competitive, not restrictive. We're still seeing opportunities coming in daily and bidding on opportunities on a regular basis. We'll probably bid on more opportunities this year and larger opportunities than we have in any other year in the last 10 years.”

asked by Tanya Jakusconek · answered by Haytham Hodaly

Given increased cash generation, should investors expect a higher rate of dividend growth, or will capital deployment for accretive deals remain the primary focus?

Dividend growth is balanced against accretive deal opportunities. If fewer well-structured agreements are found, more cash will be returned to shareholders via dividends. If successful in finding good opportunities, capital will be deployed there, potentially leading to slower dividend growth. The balance reflects market conditions.

“If we don't see accretive well-structured agreements that are available for us to continue growing the portfolio, then you're going to see more cash go back to the shareholders through the dividend. You'll see higher growth on an annual basis if we are successful in terms of finding well structured, high-margin, good quality opportunities, accretive assets to add to our portfolio.”

asked by Daniel Major · answered by Randy Smallwood