Thank you everyone for joining us today. My name is Patrick Drew and I'm the Senior Vice President for Wheaton Precious Metals. I'm joined today by Randy Smallwood, our President and CEO, who will be walking you through the investment thesis for Wheaton Precious Metals. I would like to bring to your attention that we will be making forward looking statements on this call and I would urge you to understand the risks associated with these statements. You can find a thorough description of those risk factors at the end of this presentation.
With that, I'd like to turn the call over to Randy Smallwood, our President and Chief Executive Officer.
Thank you, Patrick, and thank you, everyone, for having a listen. These are challenging times as you can imagine. I'd much prefer to be doing this face to face and meeting you meeting with all of you, but this will have to do for now. This is a tough time with the impacts of COVID-nineteen and this pandemic around the world. Just as an update from a Wheaton Precious Metals perspective, of course, our health and safety of our own employees and the communities where we get our metal from is a top priority for us.
So our offices have been closed now for 2 weeks and all of our employees are telecommuting. However, we've had good strong business continuity plans in place. And so we've had, I would say, a relatively seamless transition and definitely an uninterrupted flow of our business. The company is in great shape. We've got ample liquidity and capacity in terms of going forward and very, strong cash flows coming over the course of this year.
Obviously, partner operations are something that we are monitoring on a very consider very regular basis. Daily, we get updates from our partners. To date, we haven't seen any issues. And again, we've had a few of the smaller mines go into standby mode. But with 88 percent of our production coming from mines in the first half of their respective cost curves, we do feel that our partners are going to be very incentivized to do whatever they can to keep those operations running.
They are the most profitable assets in their own portfolios. And so it definitely helps to these are the times when high quality really shines through, and I think we'll see that with our own portfolio in terms of how performs over the year while. So I do hope that everyone is staying safe and healthy and our company is fortunate and I think that in times like this, we as a company, we as human beings have to think about the impacts around us and the impacts to our neighbors and communities around us. And I urge everyone to consider what kind of capacity they have for charity because there will be a need for in terms of coming through this pandemic as well as we can. I know we will get through this and I know that in the end we'll be a stronger community, a stronger company, a stronger planet because of this, but it's going to take everyone taking their time to do that.
So please do whatever you can to help those most that need. So who is Wheaton Precious Metals? We started the streaming model back in 2004, and our vision at that time was to build this into the to become the world's premier precious metals investment option. Our mandate, of course, is to deliver that value through the streaming model. We think it's a very good strong business model that delivers low risk high value back to our stakeholders.
And our stakeholders are multiple. Of course, our shareholders that's who I work directly for and that's who our team works directly for. And it's important that we focus on low risk, high quality assets to deliver that profitable precious metals production back to our shareholders on a regular basis. To our partners, of course, we supply capital to the mining industry, but we do more than supply capital. We look at our agreements as partnerships where we try and find ways to continue delivering value through strong support of CSR programs and community programs around the mines that deliver us metal and etcetera.
And of course that is our neighbors. It's the people around our mines. It's the people around our offices. We as human beings have a responsibility to try and deliver sustainable benefits to everything that we do in this world and it's something that we take very, very seriously here at Wheaton Precious Metals. I've mentioned the streaming model on Slide 6 now.
The streaming model, of course, delivers a lot of benefits to our shareholders and at the same time reduces risks to our shareholders. Of course, you get strong commodity price leverage. We deliver exploration upside expansion potential. We've also got optionality a number of projects that aren't part of our current production pipeline that could deliver close to a quarter 1000000 gold equivalent ounces in annual production if they ever or when they come to fruition. On the risk side, we have very predictable costs, which is something that's unique from a resource perspective.
We have a good strong sustainable dividend because of those predictable costs that always gives us a healthy operating margins. And so a very strong sustainable dividend back to our shareholders. And I would argue the highest quality asset base. All of this is built on highest quality asset base in the entire precious metals industry, not just the streaming industry, the entire precious metals industry. We have 20 different mines delivering us metal and 88% of that production sorry, 87% of that production comes from the bottom half of the respective cost curves.
This is the highest quality, highest margin assets not only for us, but for our partners. So we provide investors with upside associated with mining companies, but with the risk profile that is comparable to owning bullion or ETFs. There's so much more benefits than bullion or ETFs though. I mentioned the high quality asset base. Slide 7 highlights the portfolio of assets.
There's 20 different mines delivering us metal to date and another 9 development projects. You can see there's a real strong Americas focus, well, it's really Americas and Europe. And we have looked around the world and we're not ruling out other opportunities, but there has been with our silver history, Mexico and Peru were very, very important countries for us. But of course, Brazil and Canada and other jurisdictions have now become much more important. What I'd like to highlight in this slide though is the partner list on the side.
Streaming works as a source of capital for everyone in the mining industry from the largest diversified mining companies in the world to the smallest. This is a competitive source of capital in terms of helping to build companies and to build projects on a go forward basis. Partners, the scale of Vale and Glencore Newmont all the way down to partners, the scale of Alexco and Goldex Mining. So really a well diversified portfolio of assets, very low political risk when you look at these jurisdictions. If there's a slide that highlights, slide 8.
This slide shows, 1st off the quality of the assets, but then also the mine life of our assets. As I've mentioned several times, 88% of our production does come from the 1st quartile of or sorry, from the bottom half of the respective cost curves. It's important to keep in mind that most of our precious metals production does come from the base metal space, from copper mines and from lead zinc mines and even from nickel mines. And so we get strong gold production, strong silver production from all of these assets on a go forward basis. Out of that 88%, 73% is the 1st quartile.
Now this is a reflection of how much profit our partners are making from these mines, not how much profit we're making. I mean all of our costs are fixed and controlled and scalable. These are really highlights the strength of the quality of the assets that we have. And then on the other half of this slide, the mine life. We have 33 years of reserves and another 33 years of resources on top of that.
So over 60 years of reserves and resources backing this high quality portfolio, this high margin portfolio. So a good strong portfolio, I would argue one of the best, if not the best in the precious metals industry. With respect to our production profile, you can see last year we exceeded our production guidance of 6 190,000 gold equivalent ounces. We actually produced 707,000 gold equivalent ounces. Our guidance for 2020 remains unchanged as of today, 685,000 to 725,000 ounces of production.
And we can see that's going to wind up averaging or climbing over the next 5 years to average 750,000 ounces per year over that period. Now as I say today, it is important to note that these are volatile times right now, a very fluid environment. But to date, even with a couple of mines put on standby, they're small enough in terms of their influence that we still feel comfortable with our current forecast, our current production guidance for the year. But I urge everyone to stay tuned on that. This is a very fluid environment right now and we wait and see how that moves forward.
But good strong production as you can see dominated by gold. Gold is going to generate about 53% of our revenue over the next 5 years. Silver will be about 40% of the revenue and palladium and cobalt to a lesser extent 5% 2%. So but definitely a gold focused company. The next slide here shows the beauty of the streaming model in terms of the cost risk that you might actually have.
The gold price itself, we've got fixed costs on a per ounce basis going forward. We have even on silver prices, you can see the healthy margins that we have. But the beauty of the streaming model is the fact that our costs are predictable. They're defined by our contracts and they are predictable on a go forward basis. And so when we see commodity prices climb substantially, just about all of that increase is delivered right back to us and to our shareholders.
And so it's a good strong business model with very, very healthy operating margins. And that of course has given us a very strong balance sheet. Slide 11 highlights the fact that we've got over $1,000,000,000 in capacity on our $2,000,000,000 revolver. And we have this is all as of December 31, 2019. And we have healthy cash on hand.
We are generating this year should be close to $700,000,000 $675,000,000 at current commodity prices in cash flow this year. And so a gain should continue to chew down that debt unless we see opportunities and we have seen opportunities. We are active on that front. We've seen plenty of action. Some exciting opportunities had presented themselves ahead of this pandemic, this breakthrough.
So we are still working on the corporate development front. And as you can see, we have plenty of capacity to put those dollars back into the ground. And in fact, if you climb up to a price that I don't think is unreasonable in today's world, you can see how much of an impact it has on our cash flows over the next 5 years. Good strong balance sheet. Our focus is on trying to put those dollars back into the ground, but looking for the right reasons or right opportunities.
Slide 12 again highlights the benefits of this reinforces the benefits of this. If we go back to the last financial crisis that we had back in 2010, 2011, 2012, 2012, 2008, 2009 and the after effects of that, we saw commodity prices, gold specifically and silver prices jump substantially. You can see the extra $2,000,000,000 in cash flow that we generated over that period of time over and above what we were expecting. We are now what I'd like to highlight now is that we're producing more than twice the metal that we were back in those years. And so I know that with a 60 plus year reserve and resource mine life in front of us, we will see a few more of these bumps.
In fact, I think we may be starting one. So very, very well positioned to reap benefits for us and our shareholders. We do have a very unique and sustainable dividend policy. Our dividend is based on we have a basement that's defined by 30% of our cash flow. And so we did just increase it here earlier this year from $0.09 a share to $0.10 a share to about 11% bump.
And that will form the basement for this year. If we see continued increases in commodity prices and with our production growth that will deliver back some value additional value over time. So we do see a good strong dividend policy and good potential for it to continue improving up. So let me go over the benefits to partner mining companies. Why would mining companies consider coming into a streaming agreement?
And really Slide 15 lists off a number of different reasons. But I think the first the most important aspects are the second and the third one on this which is the initial value creation and the improvement to project internal rate of return, the return on invested capital. You can see how we compare relative to debt. We deliver so much more back versus debt. But if you go to slide 16, the top half of slide 16 shows the arbitrage and value.
When we take precious metals and bring them into our company, it's worth more. And so we see that strong arbitrage and value and we share that with our partners on a go forward basis. The bottom half of this slide highlights the benefits of internal rate of return. 78 we supplied 78 percent of the capital to build the first two phases of Salobo. We only take away about 16% of the mine revenue.
And so there was a total of $4,000,000,000 spent on that project. So the total net CapEx that Vale spent on the project was about 860,000,000 dollars which you can imagine their EBITDA in 2018 was $882,000,000 from this asset, their share of the profit. So a very, very excellent example of why streaming can take a good mine and make it a great mine. Benefits to the community, as I mentioned earlier on, CSR and sustainability is and social license is something that we have long, long believed in, back from my own operating background when I've built and run a few different gold operations. I know how important this is.
And so one of the things that we have is a good strong focus on sustainability through our own due diligence process where it is an aspect that we look at and see if there's ways that first off that our partners are satisfying minimum criteria, but also if there's ways we can help them improve. We have community investment programs. We've got strong policies and practices in place and of course a real strong focus on making sure that we even personally spend time giving back to what we have around us. The community investment program that we have is focused on 4 pillars health, education, environment and community. And what we do is 1.5% of our average net income gets focused gets invested back into the ground, about 0.5% of that.
A third of that goes to local CSR around our offices, where our employees, our own Wheaton employees live and work. But the other 1%, 2 thirds of it actually gets put into the mining communities around the sites where we get our metal from. And this is a way of not only helping us be more successful, but more importantly helping our partners be more successful within and maintain stronger social license. It's the right thing to do and it helps us overall do much better from that perspective. And of course this has led to some top ESG ratings and we did in 2019 made some commitments.
We signed on one of the signing members of the World Gold Council's Responsible Gold Mining Principles And we're the 1st streaming company to join the UN and commit to the UN Global Compact. This is something that we feel even holds us to a little bit of a higher standard and we're very focused on doing our best on that front. It is the right thing to do. It's what we as an industry need to do to improve our own performance. So why invest into Wheaton Precious Metals?
You can see on slide 22 a number of different reasons as we compare. I think it's clear why what we deliver in preference to bullion and ETFs and so much to the traditional precious metal mining industry. So I'd like to focus on the other streamers and why Wheaton, we feel Wheaton is the best way to invest into precious metals and the best of the streamers to supply that. On Slide 23, it highlights our revenues. We in 2019, we are 100% precious metals revenue.
So when you invest into Wheaton, it is an investment into precious metals, not other stuff, not oil and gas, not base metals. We are focused on precious metals. We are 100% precious metals revenue for 2019 2020. We do trade at a discount to our peers. As you can see on slide 24, typical market metrics that we look at comparisons.
You can see that we are trading at a discount across the panel here to our peers. And so PNAV is a number that I really focus on and think that it's an important number from a comparative perspective. And so you can see that we've got some room for improvement in terms of catching up to our peer group. And in fact, if you look on Slide 25, you can see that the average upside if we traded comparable to our peers would be around $2,000,000,000 And that's just taking the average of these very normal market metrics and saying that if we traded similar to our peer group, we would fit in. So still plenty of upside.
To conclusion, we currently are trading at a very compelling valuation relative to our peers. And we do consistently deliver relative to gold and silver. So with respect to bullion and other forms of investing into this space, you can see how we have out delivered on many different horizons, time horizons, multiple year return comparison is much stronger as shown on Slide 26. So what we've accomplished as of December 31, so as of the end of last year, it was our 15th year. We started this company in 2004 and since then we have invested $9,000,000,000 in the streams.
But we've already seen $6,600,000,000 in cash flow generated back. And when you consider the reserves and resources that we have in front of us, we still have plenty to deliver back to our shareholders. In fact, we've been doing that through the dividend. We only started the dividend about 7 years ago and we've already paid over $1,000,000,000 out in dividends. Our cash flow is currently at about $635,000,000 expected at current commodity prices.
This is a volatile market, so stay tuned in terms of where we go on that. But I am bullish on where we see commodity prices, especially precious metal prices going. So stay tuned on that. As I mentioned, a very good strong reserve and resource life. And in fact, if you look at this portfolio today, this has delivered around 18% average annualized after tax return from our portfolio.
And so a good strong track record of building value for us and more importantly for our shareholders. So in conclusion, the last slide, I mean, what we deliver, we check all these boxes predictable costs high quality, high margin asset base very sustainable operations, good strong social license made stronger by our contributions to our partners on a go forward basis. We provide leverage to increasing precious metal prices. We do have a compelling valuation relative to our peers. We also have tax confidence.
We have a good strong agreement with the CRA here in Canada and we're very confident about our position. We also have a competitive dividend. So if you like precious metals, you should really like Wheaton Precious Metals.
Thank you, Randy. We'll now move into a Q and A period. We have a number of questions that have been submitted via email from our investors. I'd like to start off with the first question to you, Randy. What has been the impact of COVID-nineteen on countries where we have operations currently?
Well, I mean, as everyone is familiar here, there's not a country in the world that hasn't been impacted by COVID-nineteen. We're seeing the spread into the Americas. We've seen lockdowns applied in Peru and Chile and Argentina. And we've seen, of course, Brazil more local lockdowns put in place in the United States, major cities have been locked down. All I can say is that we stay on top of all of our partners, all of our operations and on our partners' plans and we're impressed with what's been put forth.
But we continue to monitor this on a regular basis and are comfortable with the efforts being made by our partners.
Thank you, Eddie. The next question we have some of the investors have asked is whether or not we consider withholding or hoarding gold and silver and waiting for higher prices.
Short answer, no. And I'll expand on the no. Our business model is to deliver profitable precious metals production to our shareholders. If some of our shareholders feel that it would make sense to hold metal, there is plenty of opportunities for them to actually hold metal. And for me to force that diversity of portfolio upon all of our shareholders when some of them are only interested in that is not fair to the rest of the shareholders.
We have a simple business model deliver profitable, high quality, low cost precious metals production to our shareholders and not hoard or hold any gold and silver.
Thanks for that Randy. The next question we have and this is relative to the dividend. We have an investor asking us, would we consider actually dividending out physical silver as opposed to a monetary payment?
As I've said several times in this presentation, I think the best way to invest in the precious metals is owning stock in Wheaton Precious Metals. And so for us to actually supply metal as opposed to that would go counter to what we believe again is the best way to invest in the precious metals. That's one of the reasons we have a dividend reinvestment plan in place is we think that it's better to put more shares into our shareholders' hands than the actual metal itself.
Thanks, Randy. Now a little more in detail questions. The next question is how has COVID-nineteen actually impacted our current production base?
Well, and again, this is one of the points in time that I think it reinforces how important operating margins are in terms of the quality of our assets. The bulk of our production nearly 3 quarters of our production comes from the 1st quartile of the respective cost curves, which means that our partners, these assets are also very, very profitable for our partners on a go forward basis. And so we know that they're very motivated to do everything they can to keep these operations up and running and to prevent shutdowns or slowdowns on these operations because they do have a dramatic impact. And so given the operating margins, we know that there's strong incentive to do that and we've seen that. We monitor our partners.
We talk to them on a daily basis to find out how risks are being managed. And we've been impressed at what's been done at most of the sites in terms of moving minimizing the amount of non core personnel on-site and controlling access to these sites, limiting travel, limiting travelers to come in and so on. We have 2 mines that have gone into standby mode, the Constancia and Yalayaku. But both those mines are actually relatively small in terms of overall contribution. And so it hasn't that's still not enough for us to back off of our guidance, our production guidance for the year 2020 again stand firm at our 685000 to 725000 gold equivalent ounces over the course of 2020.
It's important when it comes to cash flow too to recognize that the 2 mines that have been shut down mines and even for us our production payments are a bit higher. And so they don't make a large part of our cash flow on a go forward basis. So our portfolio to date, and I say to date this is a very fluid situation, but to date our portfolio has withstood the impact of COVID-nineteen relatively well. I can't guarantee where we're going to go in the next couple of weeks, but I can assure you that this portfolio is going to withstand it as good or better than any of the other portfolios out there.
Thank you, Randy. The next question we have is what your view is on precious metal prices and in particular silver which has lagged as of late?
Well, look, I think we are going to see unprecedented, like by magnitudes, helicopter money applied around the world. The euros will be printed. U. S. Dollars will be printed.
It's astounding to me how the word trillions is just being flipped around. 10 years ago, billions was being flipped around. Now we're talking trillions being flipped around. And so I don't know how anyone can actually be concerned or have confidence in terms of long term store value from any of the fiat currencies in the world, including the U. S.
Dollar. However, whenever there is a crisis, we do see a push towards the U. S. Dollar and trying to increase liquidity and delever themselves. Usually that's followed by a shift towards some good long term stores of value like precious metals, like gold.
So we have seen gold hold some strength through here and we're seeing some current strength here just this week. So I think we are starting to see the bull run that always follows a crisis. By no means, I don't think we're we haven't seen the worst of this crisis yet. So I still think we have some strength. But I and we are very bullish on precious metals as a whole.
But even more so on the silver side, the fundamentals behind silver are better than they've ever been. We have declining production. Production global mine production has dropped off. You have to remember that the bulk of silver is produced as a byproduct from base metal operations and we're seeing record low prices in the base metal space. And so we're seeing low production of silver on a worldwide basis combined with higher and higher demand from an industrial perspective, high efficiency electronics and perhaps even more importantly in today's world antibacterial applications and water purification systems and the likes of which are going to become more and more important all over the world.
And so I just see strong fundamentals and yet what we're looking at right now is a gold silver ratio that is unheard of. We haven't seen numbers this high as long as I can remember. And so it's just not natural. I expect that this should normalize. We can see it shows that strength in terms of historically, which should normalize.
This is a very unusual situation where we see silver priced so low relative to gold. And so we're very bullish on gold. Gold has traditionally always provided support through crises like this, we're very, very bullish on silver. Silver always lags, but then it outperforms. And so I think this is a great time to be investing in the silver space.
Thanks for that, Randy. Now we've had some questions. A number of our investors have reached out and asked how this was going to impact our corporate development. We had been saying earlier this year that
we had a very strong pipeline for corporate development, even some larger sized deals. So they're curious to see how this recent crisis has impacted that pipeline. Well, and prior to this pandemic taking root on a worldwide basis, we were very busy on that front. And we had some very exciting opportunities. We still have those exciting opportunities in front of us.
However, I'm going to caution everyone the travel restrictions have made it very tough to complete the site due diligence. And I assure our investors, our shareholders that we will not invest in something without myself putting my feet on the ground to actually and our technical team putting our feet on the ground to be comfortable with what these projects deliver will deliver to us on a go forward basis. And so we have and we still are active on some projects where the site due diligence has been checked off and working our way forward and hopeful on something being closed over the next while. But with respect to new opportunities and there will be new opportunities. The one aspect that's going to come out of this catastrophe, this pandemic and the after effects, the economic effects is that there's going to be a need for capital, even a bigger need for capital in the mining space to restart and to build up capacity again.
We will be ready to supply that capacity on a go forward basis. And so if it doesn't mean site visits are possible, it means we're going to go through the technical review and go as far as we can. And as soon as travel is as soon as things are safer and travel is able, then we will, of course hit the ground running and I expect there will be additional opportunities as a result of this.
And following up on that, if we do see good opportunities both in the near term and once this crisis alleviates itself, we do have questions about how we could finance this. If we have the balance sheet, we kind of shape the balance sheets in And also, is this crisis going to impact the dividend?
Well, as I mentioned, we use we've got a $2,000,000,000 revolver available to us that we have used extensively over the last 6.5 years to fund our growth. We don't like issuing shares. Issuing shares means we're diluting our existing shareholders. And so we're not in favor of that. And in fact, if we had funded all of our $6,500,000,000 of investment over the last 6 years by issuing shares, we would have issued we'd have 14% more shares outstanding than we do today.
That is a permanent dilution. That's a permanent cost to our existing shareholders. So the revolver has been a very, very effective way of us building and growing our company without delivering real value back to our shareholders on a per share basis. And so that revolver we're still very comfortable with that. Interest rates are very attractive anywhere between 2% to 4% and definitely shifting to the low side of that range right now.
Current capacity on that revolver as of December 31 was $1,100,000,000 We had over $100,000,000 in cash on hand. And so at the end of December had $1,200,000 there. We also just announced an ATM program, but that's really only just another tool in the toolbox. We have no intent of issuing shares as I've just stated. We're not a fan of that.
And so the only time we would ever use that is if we have exhausted or gotten to the limit of our capacity on the debt side. We are very comfortable with the debt. And reason the reason behind that is because of our cash flows, well over $600,000,000 in cash flow coming this year. Good strong cash flows and good strong growth climbing by 10% over the next 5 years, averaging over the next 5 years. And that's just with our existing asset portfolio that's now not counting in some of the other optionality that we provide.
And so our dividend, of course, is functioned or designed around being 30% of our average cash generated by the operating activities. And I see as commodity prices climb and as our production grows, I actually see a good chance for our dividend to even climb higher as we have production growth and strong commodity prices over the next few years. Very strong balance sheet, very ample capacity to grow.
Randy, that brings us to the end of our questions.
Great. Well, thank you everyone for listening and I wish everyone the best possible. Stay healthy through this process, through this pandemic. I can assure you that we at Wheaton are doing our best to try and minimize risk and try and maintain our strong profile and we're also doing our best to try and help our partners and our neighbors around us to survive through this. We will come out of this stronger and it's just the right thing to do.
But our company is in a good strong position and I thank those that have invested into us and I look forward to bringing on any new investors. Thank you.