Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the Wheaton Precious Metals Annual and Special Meeting of Shareholders conference call. All lines have been placed on mute to prevent any background noise. I would now like to turn the call over to Doug Holtby, Chairman of the Board of Directors. Please go ahead, Mr. Holtby.
Thank you very much. Good morning, ladies and gentlemen. Welcome to the Annual and Special Meeting of Shareholders of Wheaton Precious Metals Corp. Welcome those of you who are joining us today on our webcast. As you just heard, my name is Doug Holtby, and I am Chairman of the Board, and I will chair this meeting. Before we begin the formal business of the meeting, I would like to introduce certain members of Wheaton's Board of Directors and Senior Management Team who are here this morning. Our board members that are here is John Brough and Eduardo Luna, two lifers. They've been with the company since day one, so they are wonderful directors. With me is Randy Smallwood, our President and CEO, and Randy's also a director of the company. Gary Brown, Senior Vice President and Chief Financial Officer. Curt Bernardi, Senior Vice President, Legal and Corporate Secretary.
Haytham Hodaly, Senior Vice President, Corporate Development, Patrick Drouin, Senior Vice President, Investor Relations. 2018 was a very successful year for Wheaton on many fronts. We generated over $475 million in cash flow, bonded on the production of 370,000 ounces of gold, 24 million ounces of silver, and 14,000 ounces of palladium, all of which were in excess of the company's 2018 guidance. Our 2018 gold production and sales were records for the company. Randy will provide more details of Wheaton's other significant accomplishments in 2018 following the formal portion of the AGM. Let us now proceed with the business of the meeting. For the purposes of this meeting, Wheaton Precious Metals has appointed Leslie McFarlane and Dan Bach on behalf of AST Trust Company Canada to act as scrutineers.
Curt Bernardi, the Senior Vice President, Legal and Corporate Secretary of the company, will act as Secretary of this meeting. I have been advised that the notice calling this meeting, together with notice and access notification and the form of proxy, were mailed to shareholders of record as of March 20th, 2019, in accordance with applicable law. AST Trust Company Canada has filed with me proof of service of such mailing. I direct that a copy of such proof of service be annexed 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 that the meeting to be regularly called and properly constituted for the transaction of business.
I direct that a formal report of the scrutineers be annexed 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 will proceed by way of show of hands. However, voting for the directors of the company and the company's approach to executive compensation will proceed by way of ballot. If you are a registered shareholder proxy holder, you should have received a ballot on blue paper and a ballot on yellow paper upon checking in with AST Trust Company. If you are a registered shareholder or proxy holder and do not have these ballots, please raise your hand and a representative on behalf of AST Trust Company will bring you the ballots. Only registered shareholders and duly appointed proxy holders can address the meeting.
I don't think we have any registered shareholders here, do we? As the first item of business of this meeting, I present to the meeting the company's financial statements as at and for the year ended December 31st, 2018. Copies of the financial statements were mailed to those shareholders who requested to receive copies of them in accordance with applicable law. Unless there is any objection, I do not propose 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 advance 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 nominates George Brack, John Brough, Peter Gillin, Chantal Gosselin, Charles Jeannes, Douglas Holtby, Eduardo Luna, Marilyn Schonberner, and Randy Smallwood as directors for the ensuing year or until their 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. I therefore direct that the poll be taken. Each shareholder or proxy nominee should record his or her vote in respect to the election of each director nominee by marking the appropriate box beside each director's name, and by signing and printing his or her name on the blue ballot. Once you have done so, please raise your hand and the scrutineers will collect the ballot from you.
I've been advised by the scrutineers that the proxies deposited for the meeting have overwhelmingly voted for the election of each of the directors. I declare George Brack, John Brough, Peter Gillin, Chantal Gosselin, 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 the meeting for the final tabulation of votes cast, I direct that the results of the poll for the election of the directors be included in the minutes of this meeting and 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. Resolved, that 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 until their successors are appointed, at such remuneration as may be fixed by the directors, and the directors be, and they are hereby authorized to fix such remuneration. Will someone move this resolution?
I so move.
Thank you, John. Someone second this motion?
Second.
Thank you, Eduardo. Any discussion? All shareholders and proxy holders in favor of this resolution, please so signify by raising your hand. Contrary if any. 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 85 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 am advised by the scrutineer that just 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 85 of the management information circular.
We will proceed to vote by way of ballot. Each shareholder or proxy nominee should record his or her vote in respect to the company's approach to executive compensation by marking the appropriate box and by signing and printing his or her name on the yellow ballot. Once you've completed your ballot, please raise your hand and the scrutineers will collect them from you. I've been advised by the scrutineers that the proxies deposited for this meeting have been overwhelmingly 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 further tabulation of votes cast, I direct that the results of the poll be included in the minutes of this meeting and filed on SEDAR and EDGAR.
Is there any further business? I ask that someone move and someone second the resolution that this meeting now terminate.
I so move.
Thank you, John. Will someone second the motion?
Second.
Thank you, Eduardo. Any discussion? All shareholders and proxy holders in favor of this resolution, please so signify by raising your hand. Contrary if any. I declare the formal portion of the meeting now terminated. I will now turn the floor over to our President and CEO, Randy Smallwood. Following Randy's comments, there will be a chance for questions.
Thank you, Doug. My name's Randy Smallwood. I'm President and CEO of the company. Just like to thank the directors and management for coming out. I am honored to lead such a strong team. I'm going to do a bit of a presentation just summarizing what I consider one of the best, if not the best years of our company's history in 2018, in terms of our accomplishments and how it has set us up for an incredibly strong position going forward. There will be some forward-looking statements in this presentation. As you understand the risks associated with those forward-looking statements, they are in here and in the fine print. Please make sure you understand those risks associated with those forward-looking statements. 2018, as I mentioned, was an incredibly successful year for our company in terms of our accomplishments over the course of that year.
You can see four main transactions or main events that helped us build such a strong foundation, what I call a foundation year. The first one was the restructuring, announcing the restructured San Dimas stream. San Dimas was the first asset we streamed way back when we created this company in 2004. We knew that we have learned a lot since that time and the opportunity to apply that learned wisdom to a restructured deal to create value not only for us but also for our new partner at San Dimas. Of course, an acquisition, cobalt on Voisey's Bay with Vale, a long-time partner of ours. We closed that in June of last year. It's our first-ever cobalt stream. We're very excited about the future for that as a commodity.
I think that by the time we start receiving production of cobalt, it may be a precious metal, but definitely increases in demand over time. Shortly after that, announcing a transaction on the Stillwater mine down in Montana, gold and palladium, the first palladium that we've ever brought into our company, but also a very healthy gold component to the value of that transaction. The Stillwater mine, one of the most incredible geological ore bodies, potential ore bodies that I have seen, over 45-kilometer strike length, still so underdeveloped and so unoptimized. There's all sorts of opportunity for that mine to continue to grow and deliver value to us going forward.
Of course, the transaction probably having the biggest effect on us is the settlement with the Canada Revenue Agency in December, a long-standing tax dispute that we've had that essentially clearly defines the fact that our business model, which we created back in 2004, is sound and that we are not taxable in Canada on our foreign earned income. A very, very strong and sound decision that provides tax confidence and tax clarity to our company on a go-forward basis. Unlocking the value, a little bit more detail on this. The new stream on San Dimas with First Majestic Silver Corp. First off, having First Majestic Silver Corp., a long-standing operator with plenty of experience in Mexico itself, being able to take on San Dimas.
I think this mine is perfectly suited for a company of this skillset, very used to underground, narrow vein, low sulfidation, epithermal vein systems, selective mining, and et cetera. The old stream was for 100% of the silver with a cap of 6 million ounces and 50% of anything over that. We've changed it to now being 25% of the gold and 25% of the silver, but we also increased the production payment. Essentially the size of the new stream is about 40% of the value of the original stream in terms of metal value being delivered to us. We also became the largest shareholder of First Majestic Silver Corp. and a supportive shareholder as they continue to advance this. San Dimas is their flagship, and they've put a lot of effort into it, and we're excited about where they're going to take this asset over time.
We still haven't seen long-term forecasts in terms of the work there, but changing this stream to allow First Majestic Silver Corp. to explore not only just for the gold in the past, but now for the entire deposit, the entire district, both the silver-rich areas and the gold-rich areas. We know there's going to be a benefit delivered back to us and our shareholders, along with First Majestic Silver Corp. and their shareholders. The type of transaction that we like doing, a win-win situation. Voisey's Bay, of course, an incredible asset located up in Newfoundland, owned by Vale. Basically, we've funded a portion of the $190 million, a portion of the underground development. We don't start receiving cobalt from Voisey's Bay until January 1st of 2021, and we will receive any cobalt produced from the site as of that date.
Irrespective of whether it comes from the new underground operations or the continuing open pit operations, which will run beyond that. 2021, we expect to start receiving. We'll get about 42.4% of the cobalt that this mine produces over time. Voisey's Bay, the underground deposits are very underexplored. There's excellent exploration potential, deep drill holes that have already showed a continuity in terms of deeper extension. I think this is a mine that's going to be delivering metals to us for a very long time, so very excited. In addition, working with Vale. Vale is a good partner. We've had great relations with them on a number of different assets, and so the opportunity to work with Vale on this one is something that's exciting.
One of the main appeals to this asset is the fact that not only is the mine in Canada and probably one of the most socially conscious and most environmentally responsible operations in the world with respect to cobalt production, we also ship the concentrate to a dedicated smelting facility down at Long Harbor, which means that we can differentiate this product from most cobalt produced in the world. We can guarantee clear provenance on this product and deliver it. That is something that is becoming more and more important to end consumers, knowing where the metal comes from that's in the products that they're consuming.
This is an added benefit that we see out of this Voisey's Bay Long Harbor, where we think we can differentiate and actually deliver a bit of extra value because of the quality of the product that we're delivering and because of the clarity that we have on the provenance behind this product. Very excited about this one. Even more excited about Stillwater. This is, as I mentioned, a deposit that's got about a 45-kilometer strike length. It's got two different mining operations that are about 20, 25 kilometers apart, and when you look at the district as a whole scale, there's minimal development just around those two operating mine sites and all sorts of opportunities for growth. Sibanye is a relatively new owner on this asset and continues to put focus on it. It has definitely become a flagship in their entire portfolio.
This is, as you can see in the cost curve, this is where we like investing into assets right down on the bottom decile, the lowest cost and the third lowest cost assets in the world. This is an asset that the mills aren't even being fully utilized. The mill capacity isn't even being fully utilized. Sibanye is on a campaign to try and maximize that production and try and, for additional working phase developments, the Blitz project is starting off. There's going to be some deeper work over the East Boulder operations to try and take those mills and get them from a 70%-75% utilization up over 100%. Their target is to get this mine up over a million ounces of PGMs per year in production. Currently, it's between 500,000 and 600,000 ounces a year.
We'll, of course, get the benefit of growth with this as that continues moving forward. A very good mine. Timing-wise, picking up palladium. Palladium, of course, has done very well price-wise, so we're definitely ahead of the curve on that one. We see continued increased demand for palladium. It is generally a catalyst for gasoline engines. There's definitely been a shift away from diesel into gasoline engines, and we don't see that changing definitely for quite a while. Then, of course, the tax settlement in December. This was a burden that we and our shareholders have been carrying since 2012 when we first received notice of audit. To finally see the business model that we created back in 2004 verified and proven to be correct, was incredibly rewarding.
We still are working to deliver this value back to our shareholders. Quite clearly, from a potential risk in excess of billions of dollars to ultimately settle it for about a $4 million tax change, the approach was no taxes on our foreign income and a slight adjustment in how we charge for the services that we do provide out of the Vancouver office. A net cost to us of a little bit over $4 million in taxes and then an interest fee on top of that, well below $10 million in total cost in terms of settling this liability. The clarity that we provide on a go-forward basis and the confidence that we provide, I would argue, it puts us ahead of our peer group now in terms of tax risk versus constantly being at the bottom of the peer group from that perspective.
We have definite tax confidence on a go-forward basis. That being said, we still have to get this message out. We still get questions on the CRA and the tax risk and so on. There's something that I can tell you, ever since this settlement, we've had a very aggressive marketing campaign to try and get out there and make sure we do get the message out there. 2018, a foundation year. You can see what we've got in our company, 19 different operating mines and nine different development assets. What I always like on this slide is highlighting the fact that streaming works for everyone. You can see the list of partners that we have here, Vale, Glencore, Newmont, all the way down to Panoro, Leagold, Futura Copper.
Streaming is a viable source of capital for everyone in the mining industry, no matter the size, no matter the scale, no matter the scope. We've got an incredible portfolio of assets, Americas-focused, mainly because we started in the silver space. We're constantly looking around the world. We've looked at assets in Africa and Australia and Asia, just haven't found anything that quite meets the Wheaton criteria level there yet. We continue to pursue those jurisdictions. Very comfortable with where we are right now. This slide probably differentiates us from our peers more than any other slide. You can see here, and it's one of the things that we test whenever we're looking at new opportunities. Where do these assets fit within their respective cost curves? If we're taking gold from a copper mine, where does that copper mine fit on the worldwide copper cost curve?
We're only interested in assets in the bottom half of the cost curve. We're really interested in assets in the bottom quartile of the cost curve. You can see 68% of our production comes from the bottom quartile of the respective cost curves, be it copper cost curve, nickel cost curve, or the zinc cost curve for lead zinc mines, or even the gold cost curve when we pull silver from gold mines. 68%. I would argue that with 19 different assets delivering us metal over this time, there's not another portfolio of precious metals production anywhere in the world that has this high of a quality profile, quality characteristics. To add in the second quartile itself, you can see 87% of production from the bottom half of the respective cost curves. We've been successful in focusing on the best assets out there. On top of that, mine life.
You can see our current reserves and resources, 32 years of reserves, another 34 years of resources on a go-forward basis. These are high quality, high margin mines that not only are profitable for us and our shareholders, they're also profitable for our partners and their shareholders. That's the type of assets that we should be investing into because they're the first ones that our partners reinvest back into to look for exploration, to look for expansion potential, to drive going forward. If they're making lots of money at these assets, it drives reinvestment into these assets going forward. A very, very strong portfolio. I think this one really differentiates us from our peer group. Our production profile, as I've described earlier on, 2018 is a foundation year.
We did have a couple of term contracts. There'll be adjustments to the San Dimas contract that has dropped us down. 2018 was a bit lower than 2017 in terms of production. I think we've hit the bottom. In fact, looking at our production guidance on a go-forward basis, we're already seeing good growth this year. We did 688,000 gold equivalent ounces back in 2018. Our guidance this year is 690,000, which isn't a lot higher than what our actuals were. I can tell you that we have a reputation of always exceeding our guidance. We're very conservative in terms of giving guidance, and so very comfortable with that. In fact, our average production over the next 5 years, counting the 690 that we've got in 2019, is 750,000 gold equivalent ounces per year. Good, healthy growth.
I need to highlight that although that's all coming from Peñasquito having higher grades, from Constancia, the Pampacancha zone, eventually it will deliver extra production to us. From Stillwater growth, the Rich project coming on, from the cobalt team coming on at Voisey's Bay. What it doesn't include, that 750,000 ounces, it doesn't include the Rosemont project, which of course Hudbay has just received permits for that and will be going forward. We should be getting somewhere around 60,000 gold equivalent ounces per year just from that asset itself. It doesn't include the third phase of expansion at Salobo, where Vale is pushing that project going forward. We've got really good optionality in terms of that on a go-forward basis. Boy, that kind of looks so Yeah, it looks all kind of messy, doesn't it?
That production, that upside, the optionality, that's even over and above that 750,000 gold equivalent ounces per year. We expect that will be delivering extra metal to us. That Salobo expansion, it's a 50% increase in throughput capacity at the mill. They still haven't finalized their mine plans in terms of a go-forward basis, but we're very excited about that organic growth, and that's just from within our own portfolio. This is the beauty of the streaming business. Fixed costs, operating costs, capital cost basis, very predictable costs. We take the cost risk out of a traditional mining investment.
We still give you all the optionality of investing into the geological upside and the potential of these mines. We deliver When we see movements in commodity price, that movement gets delivered right back to our shareholders because our cost base is fixed on an operating cost and a capital cost basis. It's a very strong and healthy business model that we initiated back in 2004, and it's getting widely copied, the ultimate compliment. The other advantage, of course, is that we don't have a lot of G&A. I see probably about 30% of our company sitting here in this room in terms of bench strength. Our G&A costs are quite low, and especially when you compare it to some of the fees.
If you look at our G&A and you compare it to the fees that the different ETFs or the bullion holding banks and such charge, really for not delivering a heck of a lot. All they're doing is holding whatever you've got in there. Whereas we, of course, manage the portfolio. We deliver organic growth. We deliver leverage. We've actually got a base cost. We deliver accretive growth opportunities, and we pay a dividend. We actually pay you to own the stock. Relative to any of the It's clear that the streaming model is, I would argue, the best way to invest into the resource sector, period. Our exploration, the other advantage, this organic growth, we've typically replaced pretty well every ounce that gets mined.
I would argue that a lot of our assets aren't anywhere near maturity, so there's all sorts of additional upside as we see here. We've got a good track record of replacing pretty well every ounce that's ever been mined in our asset on a go-forward basis and expect additional growth on this on a go-forward basis. In fact, one of the ways that we have mentioned accretive growth opportunities when we go out and make acquisitions, we always test it to make sure it delivers real value back to our shareholders on a per share basis. You can see here, back in 2004, our reserves and measured indicated resources, less than one gold equivalent ounce per 100 shares in the company. We're now up well over seven, close to eight ounces per 100 shares in the company.
That's hard value being delivered back to our shareholders on a per share basis, not diluted. Our balance sheet is strong. We've got a $2 billion revolver. We've got incredibly strong cash flows, should be somewhere between $500 million and $600 million in cash flows this year. The first priority, of course, is the dividend that we pay to our shareholders. After that, it goes into the ground. If it's not going into the ground, it chews back this revolver, the debt that we have in this revolver. Net debt as of the end of March, I think it was around $1.1 billion, and we'll be chewing that down, unless we make acquisitions. We're always out there busy on that front, too.
The revolver has worked very well for us to balance out the very lumpy acquisition schedule that we have to the very consistent cash flows that we receive from our operations. That revolver has been very effective at minimizing any type of dilution effects for their current shareholders, which is who we work for, have to suffer through it. I mentioned the dividend. We have a guidance of at least 30% of our cash flow being returned to our shareholders. That was raised in mid-2017 from 20%. We've decided to provide a bit more stability to it. This year, we've decided to maintain it at a CAD 0.09 per share basis. As long as it's higher than 30% of our cash flow, we'll maintain it at CAD 0.09 for the rest of this year.
Definitely the highest yield in the space and a pretty good track record of returning some of that value back to our shareholders. This is one of the things that also differentiates us, and it is more and more important all the time. It's something that I'm particularly proud of because I come from the mining industry and understand how important social license is. I've always felt uncomfortable with the fact that royalty companies, traditionally, which have been around forever, they get value for all the production from these assets, but they don't contribute anything back into those local communities. They leave it to the operator itself. I understand that social license at the operator level is incredibly important. If you don't have it, the mine doesn't operate, it doesn't produce.
We kickstarted a program probably five to six years ago that has had great success in terms of delivering just a bit of value back to those communities to help make them more sustainable, to help share some of the benefits of the resource that we're all getting a benefit of going forward. This is a good, strong program that I'm proud of, being able to support health facilities down in rural parts of Brazil, around the Salobo mine, to improve overall access to quality health. Education facilities around the San Dimas operation, education facilities around the Antamina operation. Agricultural and business opportunities around Veladero in Argentina and also at Salobo, around Pascua- Lama and around Salobo in Brazil. Those are things that do make a difference. It's one of the reasons why we've got incredibly strong relationships with our partners.
It's why a lot of times when it comes to doing transactions, they want to talk to us and us first, see how we can continue to grow our relationship together. It's all about good partnerships. Very proud of what this program has done. Obviously, it also requires the community's work, we and our employees' work, too. We've got a good, strong program in terms of supporting initiatives here in Vancouver and our international offices to, again, just leave a positive benefit to the community and make the world a better place. The last slide here, 2018. When I add up what we accomplished, I think 2018 is a good, solid foundation here.
I think we have an incredible organic growth profile that will deliver real hard value back to us and our shareholders over the next while, even without new acquisitions, although I assure you we are very busy on that front itself, too. I do think that 2018 has provided us a good, firm foundation that we will build from and build real good, hard value on a go-forward basis, and I'm very excited about where we're going. That's my last slide. Thank you very much for listening to me. Is there any questions? Thank you.
Very good.
I think you've already closed it off.
Do you have to hang it up?
I don't know.
Yes. That concludes our call.
That concludes our call. Thank you.
Ladies and gentlemen, this concludes the conference call for today. Thank you for participating. Please disconnect your lines.
I had some reason for that. Waiting for days for somebody to say that.
What script? I don't have a script. Oh, you were supposed to say that.