Column: Electric dreams turn into a nightmare for battery metals
A sector that was once racing to build new supply has been closing mines and deferring projects as low prices bite into the cost curve.
Wheaton Precious Metals (TSX, NYSE: WPM) counted 2021 production and declared it to be within guidance for all metals – 342,564 oz. gold, 25,801 oz. silver, 20,908 oz. palladium, and 2.2 million lb. cobalt. The gold-equivalent guidance was 735,000 to 765,000 oz., and the actual number, 750,220 oz., was comfortably within that range.
“Strong performances from Peñasquito, Antamina and Constancia more than offset challenges at some of our other mines and resulted in Wheaton’s production meeting our guidance range yet again,” said CEO Randy Smallwood.
In 2021, Wheaton went on a shopping spree that totalled over C$1.3 billion ($1bn), adding streams from six separate mines to its portfolio.
It made upfront payments of C$290 million to Capstone Mining (TSX: CS) for gold from the Santo Domingo mine in Chile and a further C$150 million for silver from the company’s Cozamin mine in Mexico. Wheaton paid C$50 million to Rio2 (TSXV: RIO) for gold from the Fenix mine in Chile, C$240 million to Generation Mining (TSX: GENM) for gold and platinum from its Marathon mine in Ontario, C$441 million to Artemis Gold (TSXV: ARTG) for gold and silver from the Blackwater mine in BC, and C$175.5 million to Adventus Mining (TSXV: ADZN) for gold and silver from its Curipamba mine in Ecuador.
These additions bring the number of streams from operating mines to 24 and from development projects to 12.
This year, gold-equivalent is forecast to remain relatively unchanged (700,000 to 760,000 oz.). However, Wheaton plans to increase its streams by 20% over the long term. It projects the five-year average from 2022 through 2026 will rise to approximately 850,000 oz., and the 10-year average from 2022 through 2031 will be about 900,000 oz.
The increase over the next five years is expected to grow due to continued growth form the Salobo, Stillwater, Constancia, Voisey’s Bay and Marmato as well as incremental growth from Blackwater, Toroparu, Fenix, Marathon, Rosemont and Santo Domingo.
Forecast production over the 10-year period include incremental growth from the Kutcho project and the Victor mine.
(This article first appeared in the Canadian Mining Journal)
