Wheaton Precious Metals Corp. (WPM) Earnings Call Transcript & Summary

Hello, and welcome to the Annual Meeting of Stockholders of Wheaton Precious Metals Corporation. Please note that today's meeting is being recorded. [Operator Instructions] It is now my pleasure to turn the meeting over to Mr. Randy Smallwood, Chair of the meeting. The floor is yours.

Thank you, operator, and good morning, ladies and gentlemen, and welcome to the annual and Special Meeting of the shareholders of Wheaton Precious Metal Corp. The meeting will now come to order. My name is Randy Smallwood, and I am the President and Chief Executive Officer of the company, and I will chair this meeting. I would like to acknowledge that this meeting is taking place on the traditional territory of the Muslim, Spanish and First Nations. At this time, our governments and public health authorities continue to recommend that all Canadians do not congregate in large groups. And that we continue to practice social distancing to assist the -- with reducing the impact of COVID-19 on our communities. As a result, in-person attendance at our meeting today is limited and appropriate measures have been put in place to facilitate physical distancing and other precautions to ensure the health and safety of attendees. The Board recognizes the importance of in-person engagement with its shareholders, while also being mindful of the health and safety of Wheaton shareholders, employees and the community. As a result, for this year's meeting, Wheaton has adopted an online virtual meeting platform, and we have strongly encouraged all of our shareholders to participate in the meeting using this online platform. I am happy to welcome our shareholders that are joining this meeting today through the virtual meeting platform. We are excited to have your virtual participation in this meeting. Please note that following the formal part of our meeting, there will be an opportunity for questions. Please input your questions through the virtual meeting platform. Let us now proceed with the business of the meeting. For the purposes of this meeting, Wheaton Precious Metals has appointed on behalf of AST Trust company of Canada to act as Scrutineer. Curt Bernardi, the Senior Vice President, Legal and Corporate Secretary of the company, will act as Secretary for this meeting. I have been advised that the notice calling this meeting, together with the notice and access notification and the form of proxy were mailed to shareholders of record as of March '19, 2021, in accordance with applicable law. AST Trust company Canada has filed with me proof of service of such mailing, and I direct that a copy of such proof of service be to the minutes of this meeting as a schedule. The scrutineers have also advised me that prior to the meeting, proxies were received from the holders of a sufficient number of common shares to constitute a quorum. I, therefore, declare the meeting to be regularly called and properly constituted for the transaction of business. I direct that the formal report of the scrutineers be next to the minutes of this meeting as a schedule. I would like to take a moment to comment on the voting procedures to be used at today's meeting. Voting for the directors of the company and the company's approach to executive compensation will proceed by way of ballot. Otherwise, voting will proceed by way of a show of hands and voting through the virtual meeting platform. If you are a registered shareholder or a proxy holder who is attending in person at the meeting, you should have received a ballot on blue paper and a ballot on yellow paper upon checking in with AST Trust Company Canada. If you are a registered shareholder or proxy holder and do not have these ballots, please raise your hand. If you're a registered shareholder or a proxy holder, attending the meeting through the virtual meeting platform, you will not acquire the valet, but it will instead record your votes through that platform. There will be a short pause on each manner to allow registered shareholders and proxy holders to record their goals. With respect to each matter to be considered in today's meeting, I will ask for a motion and a second. Only registered shareholders or duly appointed proxy holders can make or second the motion. Or address the meeting with respect to the pending motion. Once the matter has been seconded, I will ask for a discussion as to the pending matter. In order to allow for timely and orderly consideration of the business to come before today's meeting, each registered shareholder or duly appointed proxy holder wishing to speak as to a pending motion will be allocated 2 minutes to present their petition. As the first item of business of this meeting, I now present to the meeting the company's financial statements as at and for the year ended December 31, 2020. The copies of the financial statements were mailed to those shareholders who requested to receive properties of them in accordance with applicable law. And unless there is an objection, I do not oppose to [ read ] them to the meeting. The next item of business is the election of directors by the company's shareholders to hold office until the close of the first annual meeting of shareholders following such election or until their successors are elected or appointed. The company's bylaws include an advanced notice requirement for the nomination of directors by shareholders in certain circumstances. The company did not receive notice of any director nominations in connection with this meeting. Accordingly, the only persons eligible to be nominated for election to the Board at this meeting are the management nominees. Management dominates, George Brack, John Brough, Peter Gillin, Chantal Gosselin, Glen Ives, Charles Jeannes. Douglas Holtby, Eduardo Luna, Marilyn Schonberner and Randy Smallwood as directors for the ensuing year for its alter successors are elected or appointed. I declare the nominations closed as a result of the company's majority voting policy, it is necessary to vote by ballot for the election of each director. And therefore, I direct that a poll be taken. Each shareholder or proxy nominee should record your vote in respect of the election of each director nominee. If you are participating in the meeting through the virtual meeting platform, please record your vote now. For those registered shareholders and proxy nominees here in person, please record your vote by marking the appropriate box beside each director's name and by signing and printing your name on the Blue ballot. Once you have done so, please raise your hand and the ballot will be collected from you. I will now pause briefly to allow for online and in person voting. I have been advised by the scrutineers that the proxies deposited for the meeting have overwhelmingly voted for the election of each of the directors. Therefore, I declare George Brack, John Brough, Peter Gillin, Chantal Gosselin, Glenn Ives, Charles Jeannes, Douglas Holtby, Eduardo Luna, Marilyn Schonberner and Randy Smallwood to be elected as your Board of Directors to serve in that capacity until the company's next annual general meeting or until their successors are elected or appointed. Rather than hold up the business of this meeting for the final tabulation of votes cast, I direct that the results of the poll for the election of the directors be included with the minutes of this meeting and be filed on SEDAR and EDGAR. The next item of business is the appointment of auditors for the ensuing year and the authorization for the Board to fix their remuneration. I ask that someone move and someone second the following resolution. Results at Deloitte LLP, independent registered public accounting firm, be and they are hereby appointed as auditors of the company to hold office until the close of the next annual General Meeting of Shareholders or intelligent successors are appointed at such remuneration as may be fixed by the directors and the directors be and they are hereby authorized to affect such remuneration. Will someone move that resolution?

I so move.

Will someone second the emotion? I second the motion. Is there any discussion? If you're participating in the meeting through the virtual meeting platform, please record your vote now for those registered shareholders and proxy nominees here in person and in favor of the resolution, please so signify by raising your hand. I will now pause briefly to allow for online and in-person voting. [Voting]

Are there any votes to the contrary? I declare the resolution carried. The next item of business is the approval of the company's approach to executive compensation, as more particularly described in the management information circular. The resolution to approve the company's approach to executive compensation is set out on Page 88 of the management information circular. In order to be effective, this resolution must be approved by the affirmative vote of not less than a majority of the votes cast at this meeting. I'm advised by the scrutineer that over 5% of the shares already voted by proxy were voted against the resolution to approve the company's approach to executive compensation as set out on Page 91 of the management information circular. So we will proceed to vote by way of ballot. Each shareholder or proxy nominee should record your vote in respect to the company's approach to executive compensation. If you are participating in the meeting through the virtual meeting platform, please record your vote now. Those registered shareholders and proxy nominees here in person, please record your vote by marking the appropriate box and by signing and printing your name on the yellow ballot. Once you have completed your ballot, please raise your hand and the ballot will be collected from you. I will now pause briefly to allow our online and in-person voting. [Voting]

I've been advised by the scrutineers that the proxies deposited for the meeting have been voted for the confirmation of the company's approach to executive compensation. As sufficient votes have been cast in favor of this resolution, I declare the resolution carried. Rather than hold up the business of the meeting for the final tabulation of votes cast, I direct the results of the poll be included with the minutes of this meeting and filed on SEDAR and EDGAR. Before proceeding with the termination of the formal part of this meeting, I would ask all shareholders and registered proxy holders, so please take a moment to ensure that you have inputted your votes into the virtual meeting platform before online balloting is closed. I will now pause briefly to allow for online and in-person voting to be completed. [Voting]

As there is no further business, I ask that someone to move and someone to second the resolution that this meeting now terminate.

I so move.

Will someone second the motion? I second the motion. I declare that the formal portion of this meeting is now terminated. We will now proceed to answer any questions proceeds through the virtual meeting platform. We will now pause briefly to give shareholders a moment to input questions through the virtual meeting platform.

Mr. Chair, we have received the following question. You're generating close to $1 billion at current commodity prices. What do you plan to do with it in terms of capital allocation?

Thank you, Mr. Secretary. Yes, this is -- this year looks very promising. It looks like we will be producing close to $1 billion in free cash flow in course of this year, a combination of strong commodity prices and good organic growth in our portfolio. And so we are very, very active on the corporate development front. And in fact, have those 3 transactions in the last 9 months, and we're very, very busy looking at new opportunities to continue putting it in. So our primary focus is to try and put that cash flow back into the ground, and continue growing our company and our portfolio of top tier, low cost, long-life assets. And we do have a real strong focus on ensuring that these acquisitions are accretive to our shareholders, though. So we won't just chase deals for the sake of deals. We will make sure that they are attractive and that they're good quality assets that definitely add to our portfolio of what I consider one of the best portfolios of mining assets in the world from a quality perspective. So if we're not effective in terms of being able to put all that cash back towards, it goes to the dividend. Currently, 30% of our cash flow goes to shareholders. That's delivered on a quarterly basis, averaged over the previous 4 quarters. And so we've seen some good strong growth with both the organic growth and the commodity prices pushing that up on a per share basis. But that 30% is a number that is open for being moved. And so if we start building up too much cash on the balance sheet, we will increase the amount of money that goes back to our shareholders, we can't put it back into the ground. Our preference is to continue growing the company and adding new assets and expanding our portfolio. But if we can't effectively do that in an accretive manner that delivers value to our shareholders, then we will return the capital to our shareholders through the dividend. Is there any other questions?

Mr. Chair, we have no further questions from shareholders.

Well, thank you. On behalf of everyone here at Wheaton, thank you to our shareholders for attending and participating in our meeting today. As we have no further questions, this concludes our meeting today. So please, everyone, stay safe and stay healthy.

This concludes the meeting. You may now disconnect.