Wheaton Precious Metals Corp. WPM has announced that its fully owned subsidiary, Wheaton Precious Metals International Ltd. (“WPMI”) inked a definitive Precious Metals Purchase Agreement with Allied Gold Corporation and its wholly owned subsidiary, Allied Gold Services Inc., for the Kurmuk Project. The acquisition of the Kurmuk Project is expected to boost Wheaton Precious Metals' gold reserves and resources.
Details on the Wheaton Precious Metals-Allied Deal
Wheaton Precious Metals signed a streaming agreement with Allied to proceed with the construction of the Kurmuk project. Located in the Benishangul-Gumuz region of Ethiopia, the Kurmuk Project is an advanced-stage development project that has significant exploration potential.
The mine is fully permitted and is set to become the first commercial gold mine in Ethiopia.
Under the agreement, Wheaton Precious Metals has acquired a share position in Allied through their recent overnight marketed equity financing.
WPMI will acquire a percentage of the payable gold, starting at 6.7% until 220 thousand ounces are delivered. Thereafter, the percentage will decrease to 4.8% for the life of the mine.
The company will give Allied a total upfront cash consideration of $175 million, paid in four equal installments during construction. Ongoing payments for delivered gold ounces will be made at 15% of the spot gold price, with a fixed payable factor of 99.95%.
The first production from the Kurmuk Project is expected to commence in mid 2026.
WPM’s Benefits From Kurmuk Project
Wheaton Precious Metals’ Proven and Probable Mineral gold reserves are expected to increase by 0.18 million ounces, and its Measured and Indicated Mineral gold resources by 0.03 million ounces with the addition of the Kurmuk Project. Adding the project to WPM’s portfolio is also expected to aid its Inferred gold resources by 0.02 million ounces.
The project is anticipated to generate an average of over 16,000 ounces of gold per year for the first 10 years of production and has a forecasted mine life of 11 years based on current reserves. The company expects additional upside from resources and exploration potential.
Wheaton Precious Metals’ Q3 Performance
Wheaton Precious Metals reported adjusted earnings per share of 34 cents in the third-quarter 2024, in line with the Zacks Consensus Estimate. The bottom line increased 32.7% year over year. It generated revenues of around $308 million in the quarter, which rose 38.1% on a year-over-year basis. The year-over-year increase was attributed to a higher average realized gold equivalent price and higher gold equivalent ounces (GEOs) sold in the quarter. The top line, however, missed the Zacks Consensus Estimate of $325 million.
WPM Stock Price Performance
WPM shares have gained 33.1% in the past year against the industry’s 3.8% fall.
Image Source: Zacks Investment Research
Wheaton Precious Metals’ Zacks Rank & Stocks to Consider
The company currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the basic materials space are CF Industries Inc. CF, Carpenter Technology Corporation CRS and Ingevity Corporation NGVT. While CF sports a Zacks Rank #1 (Strong Buy) at present, CRS and NGVT each carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
CF Industries has an average trailing four-quarter earnings surprise of 10.3%. The Zacks Consensus Estimate for CF’s 2024 earnings is pegged at $6.32 per share. CF’s shares gained 20.6% in the last year.
Carpenter Technology has an average trailing four-quarter earnings surprise of 14.1%. The Zacks Consensus Estimate for CRS’s fiscal 2025 earnings is pegged at $6.61 per share. Its shares skyrocketed 162.7% in the last year.
Ingevity has an average trailing four-quarter earnings surprise of 95.4%. The Zacks Consensus Estimate for NGVT’s 2024 earnings is pegged at $2.55 per share. Its shares gained 25.7% in the last year.
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