Wheaton Precious Metals Corp

TSX:WPM

Earnings Call Transcript 2020-Q1

[Operator]

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to Wheaton Precious Metal 2020 First Quarter Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session.[Operator Instructions] I will now turn the conference over to Mr. Patrick Drouin, Senior Vice President of Investor Relations. Please go ahead.

[Patrick Eugene Drouin, Senior Vice President of Investor Relations]

Thank you, operator. Good morning, ladies and gentlemen, and thank you for participating in today's call. I'm joined on the line today by Randy V. Smallwood, Wheaton Precious Metals,' President and Chief Executive Officer, Gary Brown, Senior Vice President, and Chief Financial Officer, and Haytham Hodaly, Senior Vice President, Corporate Development.I'd like to bring to your attention that some of the commentary in today's call may contain forward-looking statements. There can be no assurances that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. In addition to our financial results, cautionary note regarding forward-looking statements, please refer to the section entitled Description of the business Risk Factors. And Wheaton's annual information form and the risks identified under risks and uncertainties in management's discussion and analysis both available on SEDAR and in Wheaton's Form 40-F and Wheaton's Form 6-K both on file with US Securities and Exchange Commission.These documents together with the Q1 2020 MD&A and the press release from last night, set out the material assumptions and risk factors that could cause actual results to differ including among others fluctuation in the price of commodities impacts on Wheaton ore or mining operations from which Wheaton purchases precious metals as a result of an epidemic, including the COVID-19 pandemic, which related to mining operations from which Wheaton purchases precious metals, they continued ability of Wheaton's Counterparties to satisfy their obligations under precious metal purchase agreements. And the impact of material change in fact largest jurisprudence in the CRA Settlement. It should be noted that all figures referred to on today's call are in US dollars, unless otherwise noted.In addition, reference to Wheaton or Wheaton Precious Metals on this call includes, Wheaton's Precious Metals Corp and-or its wholly-owned subsidiaries as applicable.Now, I'd like to turn the call over to Randy Smallwood, our President and Chief Executive Officer.

[Randy V. J. Smallwood, President, CEO & Director]

Thank you, Patrick, and good morning ladies and gentlemen. Thank you for joining us today to discuss Wheaton's first quarter results of 2020. Before I begin, I would like to start off by saying that, I hope everyone has been keeping healthy and safe during these challenging times. It's hard to believe how much the world has changed since our last quarterly conference call.At Wheaton our top priority remains the health and safety of our employees and the communities in which we operate. In response to the COVID-19 virus pandemic we have made several changes to our business to ensure a seamless transition to working remotely, as well as launching initiatives to help support our communities and the communities around the mines from, which we receive our precious metals.I will provide further details and updates on Wheaton's response to COVID-19, including the effects on our partner operations and guidance after Gary discusses our first quarter results.On that note, I am pleased to report that Wheaton had a very strong start to 2020, with over 177 million generated in operating cash flow in the first quarter, an increase of 50% relative to 2019 driven by the strength in precious metal prices. And we declared a quarterly dividend of $0.10 per common share in line with the minimum quarterly dividend set by the Board of Directors for the duration of 2020. So now, I'd like to turn the call over to Gary Brown, Senior Vice President and Chief Financial Officer, who will provide more detail on our results. Gary.

[Gary D. Brown, Senior VP & CFO]

Thank you Randy, and good morning ladies and gentlemen. The company's precious metal interests produced 182,200 gold equivalent ounces in the first quarter of 2020, comprised of 94,700 ounces of gold, 6.7 million ounces of silver, and 5,300 ounces of palladium. Relative to the first quarter of the prior year, this represented an 8% increase in gold equivalent production, we've got production being virtually unchanged while silver and palladium production increased by 19% and 12% respectively.Although gold production in Q1, 2020 was consistent with the prior year Salobo production increased by 3% despite the throughput be negatively affected by the rainy season, and unscheduled maintenance. San Dimas has produced 10% more gold with mill operating at over 2,200 tonnes per day during the quarter, and Minto contributed over 2,000 ounces of gold production, having been in care and maintenance during the comparable quarter of the prior year. These positive variances were offset by lower gold production from Sudbury and Constancia due to the mining of lower grade material, and in the case of Constancia lower throughput.The increase in silver production was primarily the result of a significant increase in grades and recovery at Penasquito, resulting in record attributable production. The increase in palladium production is reflective of the Blitz project ramping up, and the fill the mill campaign at the East Boulder operation.Global equivalent sales amounted to 166,100 ounces in the quarter representing of 4% decrease from Q1, 2019 primarily due to the sale of a significantly large amount of gold produced in prior quarters, occurring in the first quarter of 2019 relative to Salobo. This was partially offset by a 15% increase in silver sales volumes driven by the increased silver production in Q1 2020.As at March 31, 2020 approximately 88,400 payable gold ounces, 5.3 million payable silver ounces, and 4,900 payable palladium ounces have been produced, but not yet delivered to the company. We have made a normal level for payable ounces produced, but not delivered to equate to approximately three months for gold, two months for silver, and three months for palladium, with the balances at the end of Q1, being consistent with these levels.Revenue for the first quarter of 2020, amounted to $255 million representing a 13% increase relative to Q1 2019, primarily due to an 18% increase in the realized selling price on a gold equivalent basis with this price increase being totally outset by a 4% decrease in gold equivalent sales volumes. Of this revenue 63% of the both gold, 33% was attributable to silver, and 4% was attributable to palladium. Driven by this increase in sales prices gross margin for the first quarter of 2020, increased 41% to $123 million, highlighting the leverage our business model provides to increases in precious metal prices.Cash-based G&A expenses amounted to $12 million in the first quarter of 2020, representing a decrease of $4 million from Q1 2019, with the decrease being primarily related to lower crude cost associated with the performance share units or PSUs. Interest costs for the first quarter of 2020 amounted to $6 million, resulting in an effective interest rate and outstanding debt of 3.0% as compared to $13 million of interest costs, i mean, attractive interest rate of 4.28% incurred in Q1 2019.Net earnings amounted to $95 million in the first quarter of 2020, compared to $57 million in Q1 2019. Basic earnings per share increased 62% to $0.21 compared to the $0.13 per share in the prior year. Operating cash flow for the first quarter of 2020 amounted to $178 million or $0.40 per share compared to $118 million or $0.27 per share in the prior year, representing a 48% increase on a per share basis.Based on the company's dividend policy, the company's board has declared a dividend of $0.10 a share payable to shareholders of record on May 22, 2020 and I know the dividend reinvestment plan, the Board has elected to offer shareholders, the option of having their dividends reinvested in newly issued common shares of the company at a 1% discount to market.For 2020, the company currently estimates that non-stock based G&A expenses, which exclude expenses relating to the value of stock options and PSUs, will amount to approximately $40 to $43 million. This represents the $2 to $3 million increase from our previous guidance reflecting the recently announced $5 million community support and response fund, designed to address the immediate needs of the communities in, which Wheaton operates as well as the communities around the mines in which the company has a precious metal interests.During the first quarter of 2020, the company repaid a $159 million of the revolving facility, and we are seeing proceeds from the exercise the stock options and the amount of $7 million. Overall, net cash increased by $23 million in Q1 2020, resulting in cash and cash equivalents at March 31 of $127 million. This combined with the $715 million outstanding under the $2 billion revolving credit facility, resulted in a net debt position as at March 31st of $589 million.As announced, the company established a $300 million at-the-market or ATM program on April 16, 2020 under which capital can be raised through the modest issuance of common shares, ensuring that the company has sufficient offsets to this formal capital shouldn't require such to execute other accretive growth strategy.Now concludes, the financial summary with that, I turn the call about over to Randy.

[Randy V. J. Smallwood, President, CEO & Director]

Thank you, Gary. The company is keeping up-to-date on development surrounding COVID-19, and has taken steps to protect the health and safety of our employees and the community as well as measures to minimize any impact to our business. In accordance with local government restrictions and guidelines, Wheaton closed its physical offices in mid-March and successfully transitioned to telecommuting for all of its employees. We have always maintained digital or detailed business continuity plans and as such the transition to telecommuting has been seamless resulting in uninterrupted flow of business.And that includes continuing to pursue additional accretive acquisitions. Our corporate development team is very active and has been advancing a number of opportunities, some of which we were fortunate enough to have completed site due diligence trips prior to this pandemic.We may be locked down, but we aren't locked out of growing our high quality portfolio of assets. With regard to our current portfolio, in late March, we completed a thorough review of operations with our counterparties to better understand their policies and procedures around COVID-19 and they've continued to closely monitor operations ever since. As of May 5th 2020, six partner operations located in Mexico, and Peru were temporary suspended subject to government restrictions focused on reducing the spread of COVID-19. These include the Constancia, Yauliyacu, San Dimas, Los Filos, Penasquito, and Antamina mines.The restrictions on non-essential activities in Mexico, and Peru are currently scheduled to be lifted by the end of May and given the low cost high margin nature of our portfolio. Our assets generally provide the maximum economic benefits to not only our partners, but to all stakeholders, including governments and communities. Especially during these challenging times the benefits of these mines are needed the most, which is why we are confident there will be a focus on getting these mines back up and running.Given the temporary suspensions and the uncertainty surrounding timing on April 1, Wheaton withdrew its production guidance for 2020. We are regularly assessing the impact of the COVID-19 pandemic on our partners mining operations and we will provide an update on our guidance when we have more confidence on the restart schedule for these mines that are under temporary suspensions. And although both Wheaton and our partners have been impacted as a result of this pandemic, it is clear that many of our neighbors in the community face even greater challenges and we'll continue to do so over the coming months.In response, we launched a $5 million community support, and response fund, the CSR fund for short, to support global efforts to combat the COVID-19 virus pandemic, and its impacts on our neighbors. The majority of the CSR fund around $4 million will be targeted to the communities that are directly influenced by the mines in which we have precious metal streaming agreements. And the remainder will be allocated to local charities here in Vancouver and in Grand Cayman. We are working closely with our partners to identify the needs of these community, to of the community and to assess where these funds could help fill an immediate gap.We have already identified initiatives with our partners around the SaloboSalobo, San Dimas, Constancia, Sudbury, Stillwater, 777, Voiseys Bay, Aljustrel, and Stratoni mines that will target providing resources, such as mobile lab facilities ventilators and personal protective equipment to those local communities, as well as providing support to local food banks and charities. It is during challenging times like this, when charity is most important, it is just the right thing to do.In summary, the first quarter of 2020 with a strong start to the year. We have no doubt the COVID-19 will have an impact on our second quarter and thus 2020 as a whole, but the strength of our business model, coupled with the quality of our existing portfolio, gives us confidence that we will rebound from this. Not only that, but we remain optimistic that we will be able to continue growing the company, and add additional production from long-life assets producing in the lowest half of their respective cost curves. While, we are well positioned we grow our portfolio should there be any accretive opportunities. Our top priority is the health and safety of our employees and the communities in which we and our partners operate.So, with that, I would like to open up the call to questions, operator.

[Operator]

[Operator Instruction] And your first question here comes from the line of Cosmos Chiu with CIBC.

[Cosmos Chiu]

Thanks Randy, Gary and Patrick for the conference call here. Maybe, my first question is on the acquisition pipeline and due diligence on the Franco-Nevada conference call earlier today. They talked about unique or novel sort of alternatives to doing due diligence.I'm just wondering, if you're also looking at potential alternatives to doing due diligence and I guess the second part of my question is Randy as we mentioned, some of the potential targets you had the opportunity to actually do due diligence before COVID-19. Have you done at those assets enough due diligence for you to be comfortable to pull the trigger at this point in time?And then, I have a follow-up question as well.

[Randy V. J. Smallwood, President, CEO & Director]

Sure, Cosmos. I'll start off and then let Haytham step in, but I'm going to start off by saying I will say that going through this pandemic and the response that we've had, there are things that we are learning here that we will probably take out of this and help us improve our overall operations, and one of them is the ability to digitally connect amongst businesses and amongst people not having to be face to face and being able to sort of audit data and the likes, we really had to sort of step-up on that front out of necessity. But, their skills and benefits that we are gaining out of this whole process that will help and overall performance in the future,And so, I don't know, Haytham, you want to add a bit more to that?

[Haytham H. Hodaly, Senior Vice President of Corporate Development]

Yes, you bet. Hey, Cosmos, good morning. Thanks for the question.

[Cosmos Chiu]

Hi, Haytham.

[Haytham H. Hodaly, Senior Vice President of Corporate Development]

Cosmos, the primary hurdle to consummating new transactions in the near term is typically an inability to complete for onsite due diligence due to travel restrictions. We did spend a significant portion of our time, As Randy mentioned earlier in the fourth quarter of last year, and the first quarter of this year on the road visiting sites, which does provide us with an advantage over others you didn't get to those sites before the travel restrictions came into place.I would hope, that will allow us to consummate transactions for opportunities that meet our stringent and I think obviously the most important of which is accretion.Now, hopefully by the time we need to visit new sites for new opportunities that are coming forward here in the near future is virus has been eradicated and everything else is back to normal. If not, we'll continue to find ways to get comfortable with new high quality transactions to further grow this company, and if there is various options, one of the options that people are considering our virtual tours others are utilizing onsite consultants other options are continuing to utilize our early deposit structure, which provides us with an option to move forward once the feasibility study has been completed and the remaining funding is in place, so it allows us to put up just only a small amount of front, especially for the developers state project.So, we're looking at all avenues. But, I can tell you everything we're looking at right now. We've been to those sites and we're very comfortable moving forward from a technical perspective. Assuming, i am sorry, let’s go back, we're very comfortable moving forward assuming it passes our overall technical review the technical aspects of the site visit has been completed.

[Cosmos Chiu]

Of course.

[Randy V. J. Smallwood, President, CEO & Director]

But, you're going to be sure, Cosmos -- Cosmos, you can be sure, I love I love getting my hands dirty these projects and I'll be getting under the ground as fast as I can just a smell and get the sense of what's really there so.

[Cosmos Chiu]

Of course. And Randy, I guess my follow-on question is, are you seeing more opportunities in gold or are you seeing more opportunities in silver?

[Randy V. J. Smallwood, President, CEO & Director]

I would have to say, and again I'll let Haytham chime in too. But, I would have to say that what we're seeing opportunities develop in here right now is by products from the base metal section. Base metal operations, base metal companies not doing as well as the precious metal companies out there. And so, now it comes down to byproduct from both lead, zinc mines or copper, nickel mines, copper nickel tends to be biased more towards the gold space lead zinc seems to be biased more towards the silver space.Currently, I -- I would say, we're about 50-50, but Haytham, I'll let you clarify that one.

[Haytham H. Hodaly, Senior Vice President of Corporate Development]

Yeah, that's exactly right. What we're seeing is base metal company is looking for ways to strengthen their balance sheet, as Randy said, and the majority of the -- I'm sorry all the opportunities we're looking at in our precious metals and they're about 50-50 split.

[Cosmos Chiu]

For sure. Maybe, switching gears a little bit here. Just I see that Pampacancha for Constancia of course they couldn't reach some of the minimum requirements in 2019, hence you're getting additional 8,000 ounces in 2020. Could you walk me through that contract again. And then in terms of, is there any other minimum is coming up in 2021. In terms of additional ounces you can receive.

[Randy V. J. Smallwood, President, CEO & Director]

Well, and as it was reported, we did defer we gave them an extra six months to satisfy the completion test. So instead of being at the end of the year, And again this is a matter of just supporting our partner Hudbay, and we've got multiple agreements with them, and -- and providing them support in terms of that. And so, we did extend the completion test for the country zone until June 30 of 2021. It was originally scheduled for December 31. And so, yeah, the way that works is that we get 2000 ounces per quarter if they haven't satisfied. I mean I can't remember the specific tonnage, but it's a --certain amount of tonnage, there has to be mined from the public conscious zone by that time. I want to say 4 million tons of words at -- myself, but I'm not sure the exact number. And that's how that specify -- that's the only criteria on it.Pampacancha is very important for us and very important for them. We get 50% of the gold from that -- the other 50% of course stays with Hudbay and it is a very gold rich zone on that deposit. And so, there is a real strong incentive. We know that Peter and his team over it Hudbay are very, very focused on getting that thing moving forward. To be honest there was no physical work planned over this period on Pampacancha, they still have to get through the final government approval process. Now that they've got the community on board, they have to make sure that the government in agreement. And -- so it is sort of, it's still a paperwork session.It's not physical work that's being missed. And so, I'm pretty comfortable, I mean it's a very fluid situation obviously, but I'm pretty comfortable with their capability of satisfying their completion test before the end of June.

[Cosmos Chiu]

Great, thanks, Randy. Those are all the questions I have. Thanks a lot.

[Randy V. J. Smallwood, President, CEO & Director]

Thank you. Cosmos. Thanks for the call.

[Operator]

Your next question here comes from the line of Ralph Profiti with Eight Capital.

[Ralph M. Profiti, Principal]

So, good morning. Thanks for taking my questions. Randy, I'd love to get your perspective on labor force take up at the operator level of your partnerships. Has there been any regions or mines, where you think that's a particular risk that returning labor force would be less than optimal whether that we, because the mine is deemed essential or they are seeing gradual restart about some of those operations.

[Randy V. J. Smallwood, President, CEO & Director]

Yeah, I would say that is going to be a challenge at a pretty well every operation -- our rough vision in terms of how these mines that are under temporary suspension would be that it will be a three to four 4-month gradual take up -- as sites are successful in terms of restarting and obviously everyone will be watching closely in terms of the overall performance.And if there's any type of a negative response from restarting these things if all of a sudden we have a virus outbreak or something like that, that's going to really things back. And so it's, it's a sensitive and very fluid time in that situation. And in fact, we feel that there is probably going to be and we've seen this at some of our other operations that aren't under temporary suspension there is higher absenteeism rates as people that aren't comfortable with that environment stay -- stay away. And so, this is going to be a challenge at the industry faces.I think time is going to be the issue that that that provides that comfort that provides that -- that that's belief in the safe environment. And so, what -- what we hope to do is make sure that what the industry has to do as a whole is make sure we have the proper policies and procedures in place to maintain strong physical distancing to minimize exposures through a number of different concepts and get rid of common lunch areas like there is all sorts of strategies that can be put in place to minimize risk. And then as long as the industry keeps -- keep focusing on that.Hopefully it's not as bad as even we've as what we expect in terms of that, but it's going to be the track record that actually shows that it can be done that will provide comfort to some of the employees that have that may be either of a higher risk group or just maybe comfortable about this our expectations are. It's probably going to be about a 10% to 2% impact on assets that that aren't suspended, but time is time is going to provide that answer.It's one of the reasons that we haven't even though we've got sort of announced dates with respect to restart. We're not going to give updated guidance in 2020, until we have confidence about that we start projection about how these assets look like going forward. So I don't expect to be giving updated guidance for at least a couple of months, as we watch and monitor how these restarts move forward.

[Ralph M. Profiti, Principal]

And Randy, on the CSR fund that you just launched, you did mention some of the operations where it's not ending is concentrated. And it sounded to me like most of the spending around the communities for -- is for testing and health-related matters. But, also some of these areas you talked about are pretty remote. I'm wondering if you're seeing in these communities stresses uneven basic human needs food, water, shelter that type of stuff.

[Randy V. J. Smallwood, President, CEO & Director]

Yeah, well, and I did list off a bunch of the stuff in terms of health focus. But we've also food banks are very, very important part of our contributions. And in fact, I think in the quantum, it's probably about a little bit less than half of the money that's gone out has gone towards food banks in frontline charities that are providing direct support. And so -- so we've been really sort of focused on that side, this is not this fund that we, the CSR fund that, we put that we came up with. It's not there to sort of support research it's there to support the front line to try and help our partners be more successful in managing the risks at these sites and minimizing the impact and really I think that's what it comes down to is just the stronger, we have this underlying belief in Wheaton that the stronger our partners are the stronger, we are. So everything we can do to help our partners, be successful in managing risks, and moving forward will deliver returns to us. And it's just -- it's the right thing to do. It's -- it's area that we're proud to provide that focus. I think it's, what makes you Wheaton unique in the in the streaming space is the fact that we do put a lot of effort in terms of trying to provide additional support to our partners.

[Haytham H. Hodaly, Senior Vice President of Corporate Development]

And Ralph, just to follow up on what Randy said. I mean some of the programs we're sponsoring one of them is providing food to 4,000 families in the Amazon, another one that we're looking at right now in addition to the medical side, and then the food side, is even the socio-economic where we're looking potentially to help fund mask manufacturing in a remote community just to give them somewhat additional income coming in besides the mine. So we're looking at a pretty broad based response for the fund.

[Ralph M. Profiti, Principal]

Well done. Thank you.

[Randy V. J. Smallwood, President, CEO & Director]

Thank you, Ralph.

[Operator]

Your next question comes from the line of George Topping with Industrial Alliance.

[George Justice Topping, Equity Research Analyst]

Great, thanks. Hello, everyone, the Voisey's Bay currently on care and maintenance, any thoughts on what Vale needs to see obviously higher prices probably but also anything else that is that they're looking for before the restart the operation up to three months.

[Haytham H. Hodaly, Senior Vice President of Corporate Development]

Yeah, George on Voisey's Bay, there's a couple of things, they want to restart they shut down, they didn't have to Canada has mandated [indiscernible] province that they shut down, this was more in response to protecting the local indigenous communities nearby, what they're going to want to make sure they see that any kind of viral outbreak is controlled, and not threatening the indigenous community. As Randy said, part of that will come with time and also bolstering and making sure that those local and digital communities do have adequate access to health care you right now. They said it was a four months shut down that they announced that about a month, month and a half ago, as we're looking at another two to three months, and we wouldn't anticipate at this point, any reason why they wouldn't restarted according to Timeline.

[Randy V. J. Smallwood, President, CEO & Director]

Georgia, one of the things you have to recognize is that remote northern communities if you go back 100 years, they suffered seriously through the Spanish Flu, Influenza that happened about 100 years ago. And there is still pretty strong memories of that and a lot of these remote northern communities. And so the matter of just being sensitive towards those concerns, and I think Vale, Vale has given us lots of examples as to why we think there is one of our strongest partners, and this is a good example of them respecting the -- the needs of the local community.

[George Justice Topping, Equity Research Analyst]

Right, yeah. I have closely understood. There's some unlikely that comes into play, but I was just interested and you probably even use it, but the for the late penalties if for whatever reason they cannot deliver January 1, 21 like Pampacancha.

[Randy V. J. Smallwood, President, CEO & Director]

Pampacancha, this is now Constancia down in Hudbays. So, it's not [indiscernible]

[George Justice Topping, Equity Research Analyst]

So, that's the meaning for Vale, on the Cobalt, for whatever reason they don't deliver.

[Randy V. J. Smallwood, President, CEO & Director]

All right, so on the [indiscernible] right. Okay, so what, if there is a suspension of operations from COVID if there is no late penalties for that. We get we get our percentage of our Cobalt from the Voisey's Bay operation, irrespective of, and if it's not operating for something like this there is no penalties. I will in a perverse way sort of highlight the fact that the suspended our substandard operations. Of course, the Cobalt that would normally being produced now is being pushed back, and will actually now fall into our contract term. So, -- so we will wind up with ultimately more metal out of -- out of this as a result of this suspension immediately.I have a hard time believing that when I look at what's happening in the rest of Canada with respect to the mining industry. I'm pretty comfortable that that Vale will find a way to restart operations before the end of this year at Voisey's Bay. And I know that they'll find a way to do it with minimize risk, as much as possible. We've seen that -- we've seen Vale being very successful down at Salobo in terms of managing that risk.We've seen them at Sudbury taking good initiatives there. So, I'm confident that they'll find a way to provide that comfort to those communities and have that operation up and running as January 1st gets closer.

[Gary D. Brown, Senior VP & CFO]

And George, I guess, I would just add to that, it's Gary there. The part of the protection we get from the Voisey's Bay contract is that we receive Cobalt regardless of whether it comes from the underground or the open pit. And so, the open pit operation there is expected to be up and running by January 1. And so, that would be ounces that we hadn't or Cobalt rounds that we hadn't anticipated receiving in -- in the first place when we, when we value of that opportunity.

[George Justice Topping, Equity Research Analyst]

Got it, great. Okay, thanks a lot.

[Randy V. J. Smallwood, President, CEO & Director]

Thank you, George. Stay healthy.

[Operator]

Your next question comes from the line of Jackie Przybylows with BMO Capital Markets.

[Jackie Przybylowski, Analyst]

Thanks very much. I just wanted to sort of go back to your comments on growth. With these -- the equity markets being a solid notes there are -- does this change your view at all on looking at other maybe smaller the streaming companies or packages of royalties from private companies. And how would the due diligence for that kind of situation differ from asset level due diligence?

[Randy V. J. Smallwood, President, CEO & Director]

Yeah, Jackie. I'll start off, and then not Haytham chime in. If don't mind, so -- we, in terms of consolidation within the industry, we constantly are monitoring that to keep an eye on it. But, I will say this is a strong business model. And when we can make acquisitions that about one times now, it's tough to sort of compete with going out and actually sourcing the new opportunities. And I do believe that we're going to see a wealth of opportunities over the next couple of months as people get the way through this pandemic and especially in the base metal side with the weakness in base metal pricing. We're comfortable we're going to see a lot of opportunities in that space.Obviously, if it did come to a consolidation opportunity, most of those assets that we've seen that other competitors or peers would have acquired our assets that we would have looked at during the original due diligence process, anyways. The most effective pretty well every opportunity out there has been a competitive process. And so, we've had a crack at some of this, some of these opportunities. And I will say that if there were a good, quality opportunities, and a lot of them don't meet our criteria from a quality perspective. But, then after that we have to be cognizant of the of some of the weakness is the structural weaknesses that particularly the private capital, the private equity money has been pushing into their contracts, which dramatically lower the value of their for opportunities and we've seen some pretty dramatic failures on several fronts over the last six to eight months. Where they tried to term different forms of a liquidity event in terms of trying to crystallize that, and the market was intelligent enough to realize that there were structural weaknesses that dramatically dropped the value of those opportunities relative to traditional streaming portfolio like we have. And so, so we always have to measure it that way and I think there has been some good signals from the market, back to those private equity groups. About the impact of some of their decisions, and how that does impact value on an overall basis. So, we're constantly open for that, and we have had success on that front in the past, and so we'll continue to monitor but I would predict that it's unlikely over the next while mainly because, we see better value in terms of new opportunities out in the out in the mining space. Haytham, you got anything you want to add to that.

[Haytham H. Hodaly, Senior Vice President of Corporate Development]

Yeah, thanks, good morning. Jackie, just I guess the only thing I'll add with regards to consolidation in the streaming space. Specifically, is that we're always monitoring for these things, we've got our own internal models that we go through and do the analysis on. I can tell you it's only recently that our share price is actually starting to recover. So we're not there yet. Everything we do has to be accretive, we're not looking at growth for the sake of growth. So, that's the one thing to keep in mind. Secondly, with your second question, with regards to due diligence on royalty [indiscernible] you have Randy. It's the nail right on the head. We've been to a lot of these sites already, and the one thing you have to recognize when these royalty packages come up you typically don't get the ability to actually go to these sites anyway because it's somebody holding a royalty from another corporate from another company.So, you do a lot of the desktop due diligence and you -- you make sure that you're comfortable from that perspective. There is a reason we haven't done a lot of these royalty packages. We refused to pay higher than what they're worth whereas others are willing to use their paper to do so. We're going to focus on high quality streaming transactions. That's where we see them the biggest, the best growth in this environment, and that's where we make the best return for our shareholders.

[Jackie Przybylowski, Analyst]

That sounds great. Thanks a lot. But, -- that does all the questions I have.

[Randy V. J. Smallwood, President, CEO & Director]

Thank you, Jackie, and stay healthy. Thank you everyone for dialing in today. In closing, we believe Wheaton is well positioned to continue delivering value to our shareholders for a number of different reasons. Firstly, by having low and predictable costs that result in some of the highest margins in the entire precious metal space and strong operating cash flow.Secondly, through a growing dividend that we increased by over 10% from 2019. Thirdly, through our steady organic growth profile over the next several years, and proven track record of accretive quality acquisitions Fourthly, by offering our shareholders exposure to some of the best mines in the world, through our high quality portfolio of long life, low cost assets. And lastly, by being a leader amongst precious metal companies in sustainability through initiatives such as the CSR fund, and supporting our partners and the communities in, which we live and operate. I do look forward to speaking with you all again soon. Stay healthy and stay safe. Thank you.

[Operator]

This concludes this conference call for today. Thank you for participating. Please disconnect your lines.