Hello. Good morning, everyone. Welcome to Wheaton's 2024 Investor Day. We are thrilled to have you here, whether it be in person or tuning in online. My name is Emma Murray. I'm the Vice President of Investor Relations here at Wheaton. Before we begin, I would like to acknowledge that we are gathered here in Toronto. We are on the treaty lands of the Mississaugas of the Credit and the traditional territory of the Anishinaabe, the Haudenosaunee, and the Wendat peoples. We express, or we recognize their long-standing stewardship of this land and express our gratitude for the opportunity to gather here today. I would also like to remind you that today's presentations will include forward-looking statements. They include our expectations and forecasts and are subject to various risks and uncertainties, so I'd encourage you to reference our latest filings to familiarize yourself with those.
On the agenda today, you will hear from members of Wheaton's management team, alongside some of our key partners, who will present updates on the assets on which we have streaming agreements. The depth and range of our partnerships, as you know, are essential to Wheaton's business, and we extend our gratitude to Ivanhoe, Hudbay, and Vale for taking the time to be here today. In terms of management's presentations, they have been carefully crafted to provide both a broad overview and also a deep dive onto some of the nuanced aspects of our business. Our key objective today is for even those of you who've been following Wheaton for years to walk away with some fresh perspectives and a deeper understanding, particularly in the realm of both our approach to valuation and overall risk management.
We do have two bespoke Q&A sessions, so for those online, feel free to type your questions into the Q&A box, and we will address those here in the room. For those newer to our story, we encourage you to check out our latest guidebook that was published last week and is now available on our website. It provides both, you know, a comprehensive introduction to both streaming in general and Wheaton's unique approach, and I would highly encourage you to take a look. With that, it is my pleasure to introduce to the stage our President and Chief Executive Officer, Randy Smallwood.
Thank you, Emma, and again, thank you everyone for joining us today. It's pretty special, 20 years since we came up with this concept of streaming and, of course, you know, what we've created is worth celebrating. You know, it's become a major force in the mining industry in terms of supplying capital to an ever-hungry industry that does need a lot of capital. So I'm really honored to be able to take the stage here and share some of this with you, along with the rest of the team. We do have a very big team here. We brought a lot of our specialists, a lot of our team out.
So just everyone put your hand up if you're part of the Wheaton team, just so that you can get a sense of scale. There's a lot of people here to answer questions, and so this is really about getting out there and taking the time to actually meet with us and dive deep in terms of the detail of why I think we've had such great success and what we're celebrating here today. So I think this first slide really does kind of highlight one of the differences that we have at Wheaton. We really do put a lot of focus on all the stakeholders. This is, you know, shareholders, of course, are a very important stakeholder in terms of...
That's who. That's where my paycheck comes from, right? It's the shareholders' capital that we're using and investing and such, but you can't stay focused just on the shareholders in this business. You need to have a broader focus, and I think that's one of the things that we at Wheaton recognized probably ahead of a lot of the others in the traditional royalty business, in terms of how important relationships are and how this is about providing capital up front to help partners be successful, but it's about doing everything we can afterwards to continue to deliver value. And that is really the second group of stakeholders that is incredibly important to us, is the partners that we're working with and trying to find ways to continue to deliver value.
We have an overlying mantra in our company: The stronger our partners are, the stronger we are. And so we have to do everything we can to help our partners be strong and successful 'cause we ride that same wave that they ride in terms of moving these projects forward. And of course, none of this happens without the support of the communities, the neighbors, the people around us, and that doesn't, you know, that's not just around our offices. Most importantly, it's around the actual assets that are delivering us our metal.
We need to help our partners ensure that there is good, sustainable benefits for all the neighbors around that, and we put a real strong focus on that in this company, and I think that's been one of the keys to our success in terms of what differentiates Wheaton as a potential streaming partner, potential financing partner in building projects, is that we put a lot of focus in trying to deliver that on a go-forward basis. The streaming model, you know, most of you, it's been around long enough. I do remember the first probably eight, nine years of operations where we're, you know, trying to explain what the streaming model was, and everyone, "It's a black box, and it's..." The simplicity is actually confusing.
It's an upfront payment for a portion of the metal that gets produced, which means that we do share some of that operating risk, but we deliver so much better. We don't have the cost risk. You know, we focus on high-quality assets. We don't have cost risk and we've got a good, strong progressive dividend that we pay back to our shareholders. But on the upside is we do deliver that same potential upside. So as long as we continue to select good assets run by good partners, we're gonna see exploration and expansion potential. We're gonna see that commodity price leverage, you know, the fact that we do have a production payment on a per ounce basis makes us stream more attractive than bullion or than a royalty, where you just get a straight NSR.
We do have some leverage on the commodity price and, of course, optionality. We've got a great portfolio of assets, most of which are delivering or on track to deliver to us, but there is some good optionality in the portfolio, too, in terms of good long-term investments, and so. So, you know, all of that really adds up to, especially in today's world, this, and we, we've seen this in the last month of different conferences that we've been to and such, a lot of appetite, a lot of interest from generalists that are coming back into the space. This is an excellent way for a generalist to dip their toe into the actual resource sector and get good exposure to high quality precious metals or precious metals byproducts, at least precious metal production, so.
It's been a pretty successful couple of years. The company is doing very well. We had 2023 was a record year in terms of the number of transactions that we completed. They were relatively small in size, but when you add them all up, we put over $1 billion back to work. I consider any year where we commit more than our cash flow, which was the case last year, as being a successful year from a growth perspective, and that will ultimately deliver growth to the overall portfolio, and you'll see that in one of the later slides. You know, good, strong balance sheet still. You know, I just sit and look at the capacity that we have to continue growing the company.
It's definitely still, you know, top of line in terms of capacity to continue to look for great opportunities. The key organic growth, and I think that's a game for a company of our size and scale to have 40% to 50%. Actually, if you go out six years, it's about a 50% growth profile. To have that kind of a growth profile organically with no further acquisitions, and I'm pretty confident that our team is gonna be able to chase down some additional acquisitions, as you'll probably hear from some of them later on today. We're very active on that front, but even without another transaction, we have 40% to 50% growth over the next five to six years and a good, stable, long-term production.
It's not like it climbs and then falls off of a cliff. It climbs and stays up there for a good long time. So incredible assets in the portfolio and a lot of the activity that we've had over the last four or five years is going to be delivering that growth over the next four or five years. So, on the ESG front, and Patrick's gonna get up and spend some time on the stage and talk about that, but, you know, again, leaders in this space, you know, this is,
I think one of the things that I'm probably most proud of in terms of what we've done as a, as the Wheaton team, is the fact that just about every streaming and royalty agreement now, whenever it's written, has a sustainability component into it, where the, where that company is doing that. And so to, to have changed the industry to the point to where it's a requirement, even though you don't have to operate the property. I, I remember back when I was an operator, how the royalty companies would boast about, "I don't have to worry about any of that stuff." Yeah, we all have to worry about it. We're all part of one industry.
It's an incredibly important part of it, and so, you know, it's something that we intend to stay on top of and in front of, and continue leading the way there. I do think it shows. In fact, this shows our performance over the last five years. But if you go over this entire, you know, history of this company, if you look at multiple periods, one year, three year, five years, Wheaton has continually outperformed in its space. It's continually delivered in its space, and you can see that over the last five years, up 130%, which is slightly better than the S&P 500.
You know, anyone can pick a window in time, but when we test it all the way through, we have always been one of the top performing companies out there, and so we continue to strive for that. We don't, you know. We're never gonna rest on that. You know, we're gonna continue to try and do better. It's just something that's built into our DNA. The portfolio is one that I'm proud of. It is America-centric, but that's really because we spent the first ten years of our company chasing silver. And silver, of course, is really Mexico and Peru and a few other peripheral places, but that's where the bulk of the free world silver comes from, at least. China, of course, produces a bunch of silver, but it's not investable for us.
You can see we have expanded into Europe, and you know, proud to say we're finally into Africa. We closed the deal earlier this year. Announced it last year, but closed it earlier this year, and you're gonna hear a bit more about that from Marna. You know, a great portfolio of what I would say pretty low-risk jurisdictions, but a very diversified portfolio. You sit and look at the number of assets altogether, you know, over 40 assets, and 18 of them producing, and a large number of these things will be coming into production and delivering that 40%-50% growth. So it's a really good high quality portfolio, and I guess I should probably highlight Australia for the few.
We do have one asset in Australia also last year, Mount Todd, so our first investment into the Australian space. These next two slides are really what I think differentiates Wheaton in not only just the streaming space, but the entire precious metal space. You know, 18 assets delivering us production, 93% of that production comes from the first or second quartile, and you can see the bulk of it is first quartile. That's important. It's important because those assets aren't gonna have financial problems, so we don't expect interruptions from them because they are the most profitable ones. And keep in mind, we're not talking about the production cost. This is the partner's production cost, not ours. Our cost is fixed, and we're always gonna be down in the first quartile with our cost range... it's their cost.
How much does it cost for Vale to produce copper at the Salobo mine, right? How much does it cost, Hudbay to produce copper at Constancia? That's a real key differentiator, and as I said, because those aren't the assets that aren't gonna have, you know, they won't have any financial issues at the asset itself. They'll continue to deliver. But the most important aspect of it is that it's also the first asset that our partners will reinvest into. They're gonna spend their exploration dollars in, 'cause these are high-margin assets that deliver high margins to them also.
You know, one of the aspects I don't think it's captured in this slide base, but I find incredible is that if you sum up all the ounces that we have bought, reserves and resources, over the 20-year life of this company, and you knock out the production over that 20 years, and you add back in the exploration success, we're down less than a year of production. We're down about 500,000 ounces. Annual production this year is gonna be somewhere around 600,000 ounces. We're down less than a year. In 20 years of existence, we have lost less than one year's production.
That's exploration success at these high-margin assets that has continued to replace the ounces that have been produced, and it just gives you a sense of the longevity, which is, again, highlighted on the side by the fact that we have 28 years of reserves in front of us, another twelve of M&I, another 24 of inferred. Sum that up. That is one of the longest reserve and resource lives in the precious metal space. Again, another advantage of the Wheaton model is that most of our investments are into base metal mines. Base metal mines being more capital-intensive means they need a bigger, stronger reserve and resource base before that decision is made to invest into those mines.
We get the advantage of those long-life base metal operations into a precious metal space, where there's nowhere near that level of investment in terms of reserve and resource definition. So it's another benefit that we deliver: good, strong, long-life reserves and resources. And then there's this slide. We talked about this already, the 40%-50% growth over the next five, six years. What's beautiful about this is that it's not coming from one or two assets or three assets. The growth feeders are listed there. We've got a number of assets that are actually already producing, and this relates to expansions or grade scheduling or shifts in operations or exploration success coming into play. Salobo, Antamina, Peñasquito, all, you know, rigidly scheduled. Boy, it's already flashing red. Am I already out of time?
Okay, I'll speed this up. Yep. It's just such good, strong... And what I love about it is that it's layer-caked. It's gonna be a number of different assets feeding into that growth over the next five, six years, you know, each taking its turn in terms of the sequence and stuff like that. Next year, we're gonna see great production. You know, Blackwater, Goose, and Platreef will all start delivering to us. Mineral Park by the end of next year, possibly the year following. Fenix, the year following. Salobo, of course, phase three ramping up. Antamina, grade scheduling. They're moving the in-pit crusher. It's all really happening, and so good, strong production growth all the way across the board. I don't know where the time went. It's... I thought I had, like, five minutes here.
And, you know, that has set us up to be such a strong company in terms of that production growth. You can see that, you know, ever since we created the streaming business model back in 2004 and shifted into the precious metal space in 2013, 'cause we were only focused on silver up until that point there, but 2013 was our first investment into the gold space, we have maintained a dominant share of this, of this market. We still have over 40% of the cumulative investments into the streaming space and still lots of other opportunities coming down the pipe. In fact, and very active.
If you look at, you know, the largest precious metal streaming deals over the last five years, we've completed four of the highest seven, I guess it is, over the last five years and, and again, constantly looking for that. You know, every one of these deals, size irrelevant, takes about the same amount of time. You're still gonna go through rigorous due diligence with a $100 million deal, or it's a $1 billion deal. So we definitely are putting as much as we can into that, but, you know, we're not seeing a lot of the bigger deals. We are seeing a bit of a shift towards slightly larger deals than what we've seen in the past, but Haytham will feed a bit more on that. And, the, the millions here.
Future of Mining Challenge, we announced this over the Denver Gold Show. It's funny 'cause my book says it's $1 will be awarded, not $1 million, and so I was concerned what was gonna come up on the screen. Yeah, it's... This is interesting, and this is, again, a way for us to, you know, recognize that we are part of a broader industry, and I'm really excited about this. At our Tuesday evening event at the PDAC, we will be awarding a prize to, you know, someone that contributes a clean technology idea. We, as an industry, have to continue to, well, take advantage of the fact that, you know, society's given us a bit of a, an opportunity here to prove that we can responsibly deliver critical minerals as a broader industry.
I do consider gold a critical mineral. This is something that's very important, is trying to support these new technologies as they come into play and give people the steps to actually help this industry produce more with less, more efficiently, less of a footprint left behind. And so it's something that's very important to us. Very excited about it. It's wide open. It doesn't have to be... It's not related to our partners. We're hoping that the benefits from this is something that we can deliver to our partners, but also the broader industry itself, and so really excited about that. Patrick's gonna spend some time talking about it later on. Since this is flashing red, I better get through this. So up next, we've got an interesting panel.
We're gonna have the senior SVPs of the company come up and talk about why I think we are unique in terms of our approach to due diligence, our approach to valuation.
... our approach to protecting our shareholders' capital, which is what we're paid for, and trying to find ways to make sure that that capital grows. And so, since I'm flashing red, I might as well speed this up and welcome the four SVPs up here. Haytham, Gary, Curt, and Patrick, the stage is yours. I'll leave that right there.
Testing. You guys can hear me okay? Perfect. I'd also like to welcome you here today and thank you for taking the time out of your busy schedules to be here. It's, I know with conferences, et cetera, it's a pretty busy time of the year. So what we're hoping to do today is give you guys a bit of a look behind the curtain, just, you know, what the multi-pronged approach we use to evaluate opportunities. And I should flip to the next slide, shouldn't I? So it looks quite sequential here. You know, you got six different steps, but it's actually quite iterative. Every single process is unique. Every time we sit down with a company, it's quite unique. Neil Burns can attest to you, Neil's my right-hand guy.
Every time we sit with a company, we ask them, "Tell me what you want, what you really, really want." Worst case scenario, if they don't want to stream, they're stuck with that song in their head for the next 24 hours. So that works so well. But what we actually do, as you can see from the first column, we start with technical due diligence. That is the key. I'll be talking more about that in future slides. Geology, it all starts with geology. We've got our own, and this is quite important. Everything we do from a technical perspective is done in-house. We don't really typically go outside and hire consultants unless it's an area of expertise we don't have.
But based on our technical team that we've built up over the last dozen years, we can pretty much handle almost every single aspect of technical review. So it all starts with geology, and we do a very, very detailed review, and I'll go through that in a couple of slides of what we actually do on the geology side. But if it doesn't pass from our geological review, or the interpretation that we come up with is not the same as what the company comes up with, we do not move forward with the transaction. That's where it stops, right there. Then we move over-
Yeah, Haytham, just, maybe I can just add, like, having our own technical due diligence team really allows us not only to just focus on, you know, the risks associated with an opportunity that we're looking at, but allows us to look at the potential upside opportunities that if we were hiring third-party outside consultants, they wouldn't be focused on. So I think it's an important aspect-
Absolutely.
That differentiates us.
Yeah. Thank you, Gary. So once we pass through the geology, it's passed the first pass-through, we look at mining and processing, and we look at the strength of the asset. We look at the counterparty strength, which Gary and his team does, and he'll be going into a lot more detail on that going forward. All this is designed so we can come up with a discount rate that we can apply to the overall analysis that we do. Now, this is the corporate development analysis, and once we come up with that discount rate, we also come up with a production profile. This is incredibly important. We don't just take the company's technical report and use what they have in their technical report, come up with a valuation, and that's what we do. That's...
You know, we come up with our own independent production profile that, and we'll go through more detail on when, how we do that in a couple of slides. But, you know, that's, that's key, is we evaluate based on what we think is gonna be there. And then at the same time that all this is going on, Patrick and his team are doing the ESG assessment. And I can tell you, every single site visit we've been on, every project I've worked on since I've been here, it's almost 13 years, has had somebody who's focused on ESG. And Patrick, as I said, will go into more detail on that. From a security and structure perspective, this has obviously been very topical over the last 12-18 months, given some of the things we're seeing in the industry.
Curt Bernardi will go through some of that in his slides. All these things together, when we get to that fourth column, we have to make a decision. Do we move forward? Do we put in an indication of value or not? Probably, you know, 80% plus of the time, we don't even put an indication of value in, and that's where it stops, and we move on to the next opportunity. Now, when we do put an indication of value, and we as a corporate development team, me and my team and Neil and the rest of the team, will go through and come up with a profile that actually makes sense. We use our own discounting, our own commodity price assumptions, our own timing expectations, and we'll put together an indication of value.
Then Gary and his team, and Gary will be talking a little more detail about this, will do their own analysis as well. Then what's very important is here is we sit down in a room after that. Now, it's not just corporate development and finance. It's got accounting, legal, tax, investor relations, ESG. Everybody sits in the same room. We've got almost two-thirds of the company. Every time we go through an opportunity, two-thirds of the company gets into a conference room or by video conferencing, and we hash it out. We try to figure out, okay, does this make sense for Wheaton? Now, that being said, you can see from this slide that ideally it takes about two to three months to get a transaction done.
You know, last year was, as I've already mentioned, a phenomenal year. We did eight transactions. That was the culmination of two, three years of work that all happened to come up in that last year. You know, typically, if we do one or two high-quality transactions a year, we're actually quite ecstatic. And as I said, it takes two or three months. You're probably doing the math going, "Does Haytham only work three to six months a year?" No, I actually work a full year. We actually look at over 60 different opportunities in any given year, and 90%-95% of those don't make the cut, and we just move on to the next one. So, you know, we do look at quite a few opportunities. We start with a desktop review study, but there's a couple of different approaches.
If we're proactive and we go out to conferences, we're going out to talking to companies, I'd say probably 75% of the stuff that we're looking at right now, the opportunities we're looking at, is driven by us. We're out there meeting with companies, and we're continuing to meet with companies every year for the last, you know, thirteen plus fifty... well, 20 years, I guess.... excuse me, as a corporation, 20 years. But we, we're building relationships every time we sit down with those companies and meet with those companies. So when we're proactive, we have to start with what's available, public information that's out there. We start with the technical reports that's out there. We put together our own models based on those technical reports, and we'll lob in an indication of value. That's what IOV stands for there.
And if the company shows interest, then it'll move to the data room stage, et cetera. Now, the other 25% is usually mandated. We typically have bankers coming in, we have corporations themselves approaching us and saying, "Okay, would you consider a stream on this opportunity?" And keep in mind, we're precious metals focused. That's you know where our growth is coming from over the next decade. And if we do decide to consider that opportunity, we'll sign a CA, we'll get access to the data room, and we'll do a deep dive. That's where Neil and the rest of the technical team at that point in time will come in and start doing their deep dive, and we'll go into more detail on the next slide on that.
Once we do that, you know, assuming that we're comfortable, there is interest in looking at that, expanding this transaction further, we'll schedule a site visit. Now, at the same time that we're scheduling a site visit, we will also have the technical and the legal team start working on a term sheet, which highlights, you know, the terms and conditions that go into the larger definitive agreements. That's basically done so that we're not leaving any big surprises when the actual definitive agreements come around. We'll do the site visit. Assuming everything goes well on the site visit, and we'll talk more again about that on the next slide, we'll submit a final LOI. Now, if we're gonna start...
If once we agree to the terms in the term sheet, assuming the company wants to move forward, we'll sign exclusivity, and then we'll begin negotiating a term sheet. Definitive agreements, pardon me. And usually within about, you know, that whole process takes, as we said, two to three months, but we've done it in as little as six weeks, and sometimes it takes years of progress and work and collaboration, et cetera. But we really do try to understand, we try to be fluid. It's an evolving process, and every single transaction that we do has something unique in it. I'd love to be able to say we just wanna do the same transaction over and over, 'cause that would make our life easier, but the market is evolving.
You know, we started with fixed production payments, now we're doing percentage of spot production payments. We started with looking at structures that, you know, with no drop-downs. Now we're doing drop-downs, and that's basically to alleviate the concern of having this big tail-end weighted stream for the life of the asset. Now, this next slide, this is an incredibly important slide 'cause this is where we decide whether to move forward or not. If from a technical due diligence perspective, you know, what we look for is assets that fall in the lowest half of the cost curve. We want assets. Right now, 93% of our assets fall in that lowest half of the cost curve.
Now, that doesn't mean we won't do a stream if an asset falls in the upper half of the cost curve, but we'll risk adjust that accordingly, and that's, that's incredibly important to remember. So if you see us do an asset that's, you know, a third cost quartile, you'll see a return that's probably double-digit return for us on that. And that's, you know, that's something we'll, we'll consider. And obviously, we take into account political risk and everything else. Now, every asset has to be, has to have a meaningful production profile. When we say meaningful production profile, you know, we want at least 500,000 silver equivalent ounces, or call it 500,000 ounces of silver, 8,000-10,000 ounces of gold, a year contribution, double-digit mine life with growth potential. That's, that's what we consider meaningful.
Optimally, we'd love to have a five or 10 million silver equivalent ounce contributor, but you know, you've got to... those opportunities don't come, they're far and few between. And that's why you've seen us looking at all sizes. Sometimes when they're mandated, you get bigger opportunities, and sometimes they're smaller opportunities. And this varies. Sometimes we'll see people doing royalties, sometimes you see people doing streams. You know, when we do royalties, it's typically so we can lock in a stream. What we do is we put in a royalty, we get a ROFR on future transactions, future streaming transactions. That allows us the first look or the last look, I guess more importantly, when there is a process that, excuse me, that goes on.
That doesn't mean we won't look at monster royalties, big royalties that are out there that contribute meaningful, meaningfully to our bottom line. That's definitely something we would do, but you know, our core business is streaming, and that's really what we're tailored towards. Now, when we do a tailored data room review, and I said I'd talk a little bit more about this, we don't just take the company's reserves and resources and do that. We take the entire drill hole database, we put together our own block model, recalculate reserves, resources, vet those against the existing company's reserves and resources. Then we take a look at the economics of these things to come up with the. We just make sure the reserves are where they're at.
We'll run Whittle pits, we'll run Leapfrog, et cetera, and we'll come up with something that looks more realistic. Then when I say we come up with our own production profile earlier, it truly is an independent production profile. That's what we actually bid on. Now, it doesn't mean we don't understand what the market's doing, 'cause we run the same analysis using the actual company's profile so that we understand what the analysts are seeing versus what we're doing. And that's why sometimes you look at this and you see a transaction, you say, "Damn, Wheaton, that looks expensive." A month later, you find out that, okay, I see why. There's a significant expansion in reserves and resources. And once we do all this desktop review, then we go back and we'll do a site visit, assuming it passes that.
Now, when we're doing the site visit, it's not just. A lot of the time we say it's confirmatory in nature. We wanna make sure there's no, you know, we'll look at the tailings, we'll look at environmental, look at ESG, which Patrick will talk more about. But it, what's really important for us is, I ask my team to look at what the vision is. Where's the upside? Where's the improvements in grades? Where's the resource expansion potential? Where's the throughput expansion? Where's the recovery improvements coming? And not only do we look and see what the company has decided, but we look and see with our technical team, how we can actually suggest things that help improve the overall profile of the asset itself.
And there's been a number of times that we've done that, where we've actually gone in and we've actually helped them improve. And as Randy said, our mantra, if our company, the stronger the company is, the stronger our partner is, the stronger we are. So we do everything we can to try and help them using our technical expertise.
... So once we're at the site visit, you know, we go through all the different avenues, whether it's mining, processing, G&A, we look at, you know, the various aspects of the environmental plans. We try to make sure that the company is moving in the right direction. It doesn't mean, from an ESG perspective, it doesn't mean we can't be. A lot of companies are getting up to speed. It doesn't mean they have to be there, but just means they have to be making an effort, and Patrick will talk about that. With that, I'm gonna pass it over to Patrick, who's gonna talk about the community, social, and environmental aspects.
Thank you, Haytham. Obviously, when we look at a new opportunity, ESG is a critical component. More often than not, it's the main reason we walk away from an opportunity. Now, we've established a scorecard, a framework to evaluate a company's or mining projects' ESG, and it's based on international standards. It's based on things like IFC, ICMM, the World Gold Council, RGMPs. Sorry, there's an echo. Anyways, if you look at the scorecard, we've got 11 different topics that we review. Each of these topics are reviewed or scaled on a rating of one to five, with one being poor, five being excellent, and three being satisfactory. If things are scoring below a three, we wanna understand why, and we wanna see a pathway to get them to a satisfactory level.
If we look at the individual topics under environment, we look at things like climate change, air quality, tailings, waste, water management, and then, you know, biodiversity. When we look at the social aspect, we're looking at, you know, human rights, health and safety, labor relations, and we also look at the community, community relations. What are they doing to put investment back into the local communities around the mine site? And that's something that we can help with. If we do end up partnering with them, we can add capacity through our own Partner Community Investment Program. And then we look at governance, and governance is where we take a deep dive on the counterparty.
We wanna understand who's behind the project, what's their track record, and we wanna see what systems they're gonna put into place to track their own ESG performance as they develop or operate the mine. Then how do we go about actually reviewing this? It's a similar process that Haytham said in that we do a document review, a desktop review initially, where we'll look at regulatory filings, we'll look at EISs, we'll do a web search and see if there's any opposition to the project or if there's been any past breaches with the project or mine that we should know about.
If that passes, then we will accompany the technical team on a site visit, and we'll do the ESG due diligence on site, but then we go into the community itself, and we'll talk to community leaders, and we'll get a better understanding of what the sentiment is around the mine or project. Now, along that whole process, there may be that we need to bring in external experts to help understand and evaluate the project. Where we typically see those experts come in is doing the country and regulatory risk. You know, we've got an in-house expert who will look at the macro picture of a country, do a very good job analyzing the trends, the overall risk, but sometimes we need to get really detailed and really get from a regional level even to a local community level.
That's where bringing in somebody with local expertise really benefits us. So we'll bring in consultants. We've got a number of consultants we currently work with, you know, who have expertise, local expertise, all through LATAM, through Africa, through Europe, and they do a very good job, and we have a good ongoing, working relationship with them. So what risks do we look at when we're thinking about country and regulatory risk? The obvious ones are things like political and macro, stability. Regulatory risk, you know, is this a country that's gonna suddenly ban open-pit mining or not? Foreign relations, infrastructure and supply chain, security and conflict risk, and of course, are there any legal issues or risk?
If we're looking at these risks, the best way we get around them is to put a structure in place, and to talk about the structure will be Curt Bernardi.
Thank you, Pat. So I'm going to really highlight the the focus and the attention that we bring to structural deal elements here on this slide. As the architects of the streaming model, we've been in this space for over 20 years, and over that time, we've seen deals start to go off the rails at times. Sometimes they actually do go off the rails, both for ourselves and for our competitors. But we learn from that. We take that into account in our next deal. We look for ways to try to minimize that risk, mitigate that risk, or ideally, eliminate that risk from having an impact on us on our next deal. These are long-term deals, so they are, you know, designed to last 20, 30,40+ years.
And there's a lot of risks and a lot of eventualities that might happen over that timeline that we have to try to take into account. And, you know, we spend a lot of time on this. Nine times out of 10, or maybe more like 98 times out of 100, nothing happens, and it's all good. But that 99th time or that 100th time, something does happen, and we all go to the agreement to see how does it protect our interests. So it's critical that we get these elements right. Now, that said, as was alluded to before, we do, you know, pride ourselves in being creative and helping our partners achieve their objectives while at the same time protecting our interests.
We do come back to some key approaches, some key principles when we're considering what we can and what we can't do in any particular amendment that's being requested. With that, we're gonna turn to some of these here now. Commodity price risk, our mandate to our shareholders is to provide long-term exposure to precious metals, low risk, high quality precious metals. Inherent in that is that we do take price risk. At $2,600 gold, that seems like a pretty good call, but the reality is we take that risk both up and down. On production risk, that is really two elements: one, that the total number of ounces that we think are in the ground, that Haytham and team have come up with, are actually there and can be economically extracted.
And second, the timing with which those ounces come out of the ground. Similar to commodity price, this is both a risk and an opportunity. It's possible that those ounces come out faster or slower out of the ground, or there may be more or less ounces than we think. We do take that risk, but with some important qualifications. It's not a structural deal element, but Haytham did refer to their own independent production profile that we come up with. That's probably our primary avenue to mitigate this risk. But what we do look for is exploration potential to potentially set off the potential delays in extracting the ore from the ground. And the larger the area of interest, the more exploration potential there is, so we look to have as large an area of interest as possible.
If ore from outside that area of interest gets processed at the mill that we helped finance, at the mineral processing facility, we do have a commingling clause that looks to compensate us for any, adverse impact, such as, delay in timing of getting our ounces, or, reduced recoveries that might happen. A few words on buybacks. We're very adverse to buybacks. We, you know, what we don't want to do is finance a mine during its most risky stage of development, during construction, only to then have the stream get bought back, after a project is successfully built. Again, our mandate to our shareholders is to provide long-term exposure to precious metals, and that really isn't accomplished if a stream gets bought back in years three or four.
All right, well, the rest of these risks are-
Sorry, on that basis-
Yeah.
We do provide for a lot of the junior companies buybacks in the event of a change of control, because we don't want to be a deterrent. We recognize that a lot of these junior companies are trying to build it so they can sell it, and they don't have the expertise to build it themselves. So we do provide only a one-third buyback in the event of change of control for a limited time, and that's roughly to when they about, probably when they hit about commercial production. Sorry, Curt.
No, no, that's a good point. Thanks, Haytham. So the rest of these risks here are really just more risks than opportunities, and we do strive to minimize our exposure to these elements here. The first, counterparty credit risk, we spend a lot of time on this, a lot of time. At a minimum, we look for a parent company guarantee. That's a feature that we have on all of our streams, with the exception of one, which is a bit of a historical anomaly, but otherwise, we have a parent company guarantee on all of our deals. We also look to have a guarantee from the mine over which we have the stream that is producing.
Depending on the strength of those guarantees, that might be the end of the matter, but often, if they're not investment grade guarantees, for instance, we do look to have security put in place. Primary focus of security is on the assets that we have the stream on. Again, share pledge of that company, and we may go beyond that and look for additional security. Once we have a security package agreed to, we then have to consider where do we fall in the ranking on the waterfall of distributions relative to debt and other liabilities the company might have. The higher, the more senior we are in that waterfall, the lower the cost of capital, and Gary will talk more about valuation in his section.
We also look to have distribution and debt limits. That's really to avoid the company over-levering itself or stripping the asset of cash. At the time we do a deal, we have a high level of confidence in the management team that's there, that they're gonna do and be a prudent operator. But again, these are long-dated instruments. We have to be able to protect against potential future management changes. ESG, as Patrick mentioned, this has certainly been an evolving area over time. I've been here 16 years, and when we first started doing streams, we did little more than... In terms of the contractual protections, we did little more than require that our partners comply with all applicable laws.
We do now have higher standards, as Patrick referred to, the IFC, 2012 IFC Performance Standards, global standards on tailings management, and our own Supplier Code of Conduct. We'll require that our partners adhere to those. If there's an annual audit that we put in place, if there's a deficiency, there's a corrective action plan put in place with a reasonable timeframe to correct that deficiency. In some cases, if an issue is identified through the due diligence process, we'll actually put in place into the contract a provision to try to be an agent for change in that area. So we have, for instance, required that a portion of the deposit get used to remediate a particular concern.
We have, in other cases, required that ESG initiatives be pursued, either at the mine site or in the neighboring community. On the permitting side, we're not involved in, and we don't control the permitting process, so we really strive to mitigate our exposure to this risk. The most effective way to do that is to not advance any capital until permits have been obtained. In some cases, however, the mine does need some initial capital in order to be able to get through to permitting or to get through to a construction decision, and we will, in that case, provide a portion of the deposit on an early deposit basis, at a higher rate of return, number one, and we'll have delay payments that kick in if those permits aren't obtained by an agreed date.
But for the most part, we do try to provide our capital, once permits are obtained, once there's a complete financing package in place so that we know the mine has enough money to be fully built, and once construction has started, and then we'll advance funds, typically in two or three staged payments, confirming at each stage that those conditions remain satisfied. At the end of a construction period, we'll have a completion test to make sure the asset was built to the original design specs, and there'll be a period of time where we might get delay payments if it's not yet satisfied, and then ultimately, at some outside completion date, we'll look to get back a portion of our deposit, depending on what percentage of completion was achieved. If completion is achieved, we then fall back under production risk.
We share that risk now, side by side with the mining partner in terms of the production profile that happens from that point forward. On operating and capital costs, that's similar to permitting. You know, we're not involved in and we don't control the operations, so we don't look to take this risk. As was mentioned earlier, we have a fixed production payment. Presently, it's a percentage of spot price in around 20%, and that really is our contribution towards the operating cost, the capital cost, the sustaining cost that the mine might have.
You know, in some cases, if there's an expansion project that has been sufficiently defined at the point that we enter into a stream, we'll agree to some expansion-type payment, and Salobo is a good example where we did that. So that's, you know, a very brief summary of, in one page, what is really a hundred-page streaming agreement. So it's high level by necessity, and everything you've heard so far from, you know, the production profile, the technical due diligence, the environmental due diligence, the country risk due diligence, and the structural safeguards, all feed into a valuation. With that, I'll turn it over to Gary.
Thanks, Curt. So, I think one of the things that really sets Wheaton apart is that we have, you know, this, what we refer to as dual track valuation. So, the corp dev group takes all the information that they've aggregated through their very deep dive due diligence and comes up with a production profile and a delivery profile of the gold or silver that we're expecting to receive from this investment. And then they go off, and they do their own valuation, and my team does an independent valuation of that profile. And I'm gonna focus on what the finance team does. So we really look at it in two different ways.
First, we look at the value on an NPV basis, and that's our primary focus. And there we're starting with our weighted average cost of capital. We're looking at the risks inherent in the opportunity that we're evaluating, and we're coming up with what we think is the right discount rate, given those risks, again, relevant relative to the risks inherent in our existing portfolio. Then we look at things on a net asset value basis, and we're doing this primarily because when we do a deal, we wanna know how you guys, the sell side analysts, are going to analyze that deal.
And if there's a difference between, you know, how we valued it and how you guys are gonna perceive it, we need to know about that and try to address that head-on when we announce the transaction. And, you know, at the end of the day, I think as Haytham has said, you know, we say no a lot more than we say yes to these opportunities that we evaluate. And when we decide as a team that we're going to enter into these agreements, you know, we really ensure that the deal is going to be accretive to our existing shareholders on a risk-adjusted basis.
So looking at the NPV approach, when we're looking at coming up with the right discount rate, we really evaluate the risks inherent in the opportunity on five different bases... and again, remember, we're doing this relative to the risks inherent in our existing portfolio. The first and foremost is we assess geologic risk, and really we're relying upon the technical team's due diligence here. And so, you know, we have a lot more confidence in ounces that are coming from proven and probable reserves versus, you know, M&I and inferred resources. We will use a higher discount rate for those ounces that are coming from those other mineral categories.
But it's worth noting that, you know, over 40% of our current resource base fall into the proven and probable category. Then we look at counterparty credit risk and the security structure that we're getting relative to other creditors. And if you look at our current portfolio, you know, about 70% of our production comes from investment-grade counterparties. And on average, we would assess the counterparty credit risk at being about B B high.
So when you look at the deals that we've done over the last couple of years, where they're being done relative to single asset development stage companies, you know, the credit risk is higher in those cases than our existing portfolio, and we need to build that into the discount rates that we're using to evaluate these opportunities. And then, you know, we're generally looking to structure ourselves as being pari passu with senior creditors. There are situations where the margins are so robust for an opportunity that we will be willing to be subordinate to senior creditors, the banks. But we will generally, if we're dealing with a non-investment grade counterparty, we'll always be looking to get security. And then we look at political risk.
Here you know, you look at our existing portfolio, and I would argue that we have a relatively low political risk profile. When we're looking at a new opportunity, we'll look at the way that U.S. dollar-denominated bonds for that country are trading relative to U.S. bonds. We'll look at that spread as a gauge for what we need to build in to compensate us for taking that political risk. Then we look at the quality of the mine that we're investing into. You know, we're really only interested in doing deals relative to mines that fall into the lowest half of their respective cost curves, but we will pay more for a first quartile asset than we would a second quartile asset.
And then we look at whether we're dealing with a mine that's been in operation for a number of years, or we're dealing with a development stage property. And as Curt has outlined, we do contractually protect ourselves in a lot of ways from the development stage risk that we might be exposed to, but it's still higher risk than when you're investing into an operating mine. So we distill all of that down into a discount rate, and we come up with a value for that opportunity. And that, in our eyes, is the most we could ever pay for that asset before we would view ourselves as diluting existing shareholders.
And so we'll bring that value to the table when we get together as a group and compare that to what the corp dev value has come up with. And they'll distill their discount rates down in a similar fashion, but they're really looking at how they've historically valued transactions, whereas the finance team is looking more at, you know, our Bloomberg terminals and how the market is currently pricing these risk elements. And we come to an agreement on what value makes sense as a group. And I mentioned that, you know, we wouldn't do a deal that we didn't feel strongly was going to add value to existing shareholders.
So this is just an illustration of how we would evaluate the accretiveness of transactions. We look at all of these different elements, and we're looking. You'll notice that we start with what percentage of our current enterprise value and upfront payment represents. So we're not doing this just on, like, a per share basis. Like, we're using cash on hand to make these investments these days. So if we were to do it just on a per share basis, then everything would look accretive, right? We're not issuing equity to. And we don't anticipate that we will. Sorry, Laurie. We don't anticipate that we'll ever have to issue equity to pay for any of the opportunities.
So, you know, we do it on an enterprise value basis, and things have got to look accretive on most of the metrics. You'll see that in this illustration, you know, there are a couple of metrics where it doesn't look accretive, but that's probably, you know, in the short term. It's probably underlying this illustration is a development stage asset that's not actually going to be contributing for a number of years. The most important metric in my eyes is how it ranks on an NPO basis, and this is something that I think we invented. NPO stands for Net Present Ounces. So what we do is we take the discount rate that reflects all of the risks associated with that opportunity, and we discount all of the ounces back to today, net present ounces.
And we compare that to the net present ounces of our existing portfolio, discounted at our weighted average cost of capital. And so the deal has got to be accretive on a NPO basis, which reflects, you know, a risk-adjusted assessment of the accretion. So hopefully, what we've conveyed to you is that when we're looking at these opportunities, we're doing a very detailed, deep dive on all the different elements that are important to making a call on value. We, in assessing that, we do take into account the structural integrity of the deal, the security that we're getting, the ranking that we are on relative to other creditors.
We do separate valuations, corp dev and finance, and we're very, very disciplined. We say no way more than we say yes, and when we say yes, you know, we're all very confident that these deals are going to add value to our current shareholders, and then, as Curt mentioned, you know, we do continuously reevaluate and assess our performance, and every year we do what we call a postmortem analysis, so we look at every deal that we've ever done, and we compare it to the original investment thesis that we had, and we evaluate what went right, what went wrong.
You know, I will say that when we, we've done that most recently, we've put just over $10 billion into streams. We've recovered more than that already, and you look at the way that the market is valuing that streaming portfolio today, you run an IRR on that over the 20 years that we've been in business, and we have generated over a 17% IRR on every dollar that we've put into the streaming space. That's 17% compound return over a 20-year investment horizon. I would challenge you to find a portfolio manager that could put that kind of stat in front of you.
But we do always look back and look at ways that we might be able to to improve.
And just on that basis, you know, we are, as Gary said, continuing to improve, continuing to evolve. You know, traditionally, what we've done is put streams up, and that's part of an overall package that the company has arranged, whether it's debt, et cetera. Now, depending on the quality of the asset, we will also not only consider a simple stream, we'll consider a stream, we'll consider equity, we'll consider some debt, whether it's working capital facility, cost overrun facility. Sometimes we'll put in a stream that looks like debt, in other words, has a much shorter tenure, and that helps alleviate the need for them to go out there and source that expensive debt. In the meantime, we're getting an additional stream throughout that period. So we're constantly evolving, and every opportunity is unique.
We don't do this for every opportunity. We do this for the highest quality opportunities, the ones where we feel that it has the lowest risk. We're willing to put up more of our capital. We're willing to do a little bit more to try and get the transaction. So, sorry.
Yeah, no, and just following on that, you know, the ability of us to be able to offer a fully financed package also is very attractive to the mining company 'cause then they have a one-stop shop effectively. Some of those inter-creditor arrangements get simplified if we're providing the full scope of capital. Although our focus, as Haytham said, really is on the streaming side of things. That's the primary piece of the capital structure that we're looking to get out of this out of any fully financed package.
But this is a competitive industry, and if we don't evolve, we'll get left behind. So we're always trying to think of ways to be the front runner in all this, for sure, so.
And I think with that, we would open the floor to questions from you on our valuation. Ralph?
Thanks. Just on your last point, has there ever been a transaction that you've looked at in the recent past, that was actually marginal on the streaming basis, but it's actually the financing package that brought you over the line, whether that's the equity risk or the debt side, actually made it accretive, right? 'Cause those are two different... 'Cause you didn't mention when the debt and equity analysis, you know, takes precedent or, or happens inside the technical due diligence phase. Like, is that separate and or does it come at the end?
I'll start.
Sure. Yeah, please.
You know, I would say that anytime we're bringing, you know, a comprehensive package to the table, the vast majority of the value has got to be
... attached to the stream. You know, these other elements are tertiary to the overall package. No, it would be the starting point of my answer to your question. We would never do a deal where we're getting no return on the stream or a very marginal return on the stream, and we're baking it into the return that we're getting on the debt or equity component. We would evaluate those other two components on their own merits, but the stream would be valued this way.
Yeah, I completely agree. There hasn't been a single opportunity where we've said, "Yeah, we're gonna make some money on the debt and the equity, so we'll, we'll do the stream anyway, even though it doesn't look good." You keep in mind, you know, streaming works best when you're looking at an asset that, the internal rate of return is not always the best internal rate of return because you've got that huge upfront capital expenditure the company has to make. When you put in that, that capital as a streaming company, it always improves the internal rate of return of a project. So, you know, once that capital is out of the way, the economics usually look great, and it's, it's, you know, margins are 70%, 60%, 70%, 80% at that point, so.
Yeah, I have a question. I'm very intrigued about your structural safeguards, and assuming you do a streaming contract that meets all of these structural safeguards, I'm interested more in what other intangible factors do you think are important in your contracts? And for example, and I'm not gonna say these are for you, but what's a no-go for you for some other companies that may be, if the operator doesn't provide them a monthly reports or access to the site every year? So I'm just interested in what other... Your top three factors that are no-gos for you if the operator doesn't provide these for you. Thank you.
Yeah. You know, I think really we come back to our key mandate to our shareholders, I think. So if we've had situations where partners have wanted to have price sharing, for instance, on gold price, and that has historically been a no-fly zone for us. It's like, "Hey, you know what? That's so fundamental to what, why our shareholders invest in us, is to get that exposure to precious metals." So, you know, putting a cap on the price, we're just not prepared to do that. You know, as well, another example would be buybacks. We've had deals come to us that have said, "We want a full buyback." And as I said, you know, that's just not our mandate. Our mandate is to provide long-term exposure to precious metals.
Even if it's a good rate of return on that buyback, that's not really our core wheelhouse. So we, we really do come back to those key principles and say: How aligned is it with these principles? And here's our bid, and you might have asked for price sharing, you might have asked for a buyback. Our bid will go in without those elements or a modified version, like as Haytham said on the buyback, a much more narrow buyback. Just-
Term limits.
Term limits. Yeah, we've historically been asked to provide limits in terms of duration of the stream. We have done some of those, but you know, we no longer do. We strive very hard not to.
I think the parental guarantee is-
Oh, that's another one.
... is another one that would be a really important element.
Yeah.
Yeah
... guarantee that you mentioned. I'm just wondering more, you know, if your operator is not giving you the monthly reports and allowing you access to sites, saying, "No, we don't want to do that for you." Is that something you say, "Well, no"?
We haven't actually had that-
Yeah
... be an issue.
Yeah.
So we haven't had anybody say-
There's never been pushback on-
Yeah
... on that element.
On the monthly report, we are quite flexible, so we do say, "Listen, we don't need to have our own particular monthly report. If you generate your own report internally for management purposes, we can pull the information out of that report, so it's not a big burden on the project." The partner understands that we need to be able to confirm the production, to know that we are getting delivered what we're supposed to be getting delivered. So we haven't had that particular one be an issue. The same with mine site access.
We haven't had anybody really object to that and say, "You're not allowed to access the mine site." I mean, I think, as I say, people understand that we need to be able to verify when we're putting the size of the investment we're putting into these assets, we need to be able to verify that we're getting the return we're supposed to be getting.
Maybe just one final thing before someone else asks. You didn't mention international arbitration. I'm assuming all your contracts would have that.
They don't all have that. We do sometimes have governing law being BC, Ontario. We have had, I think one in London. The reality is, as I said, these are partnerships. They're joint venture agreements. We have to work together with our partner for a very long time. So we haven't had any disputes that actually end up having to go to arbitration or go to litigation because we work very hard to work with our partners to get a satisfactory outcome that is a win-win on both sides. It's also a small space, the streaming industry, and we really need to ensure that our partners are appreciative of what we can do and how flexible we are, rather than being tainted with being difficult to deal with.
Yeah, just, Tanya, I just wanna add sort of one overlying statement there.
We're entering into a partnership, and if we don't get a sense that there's a serious focus on being a good, strong partner from the other side, we're not interested in dancing. Like, so if we're getting a sense during the negotiations that there's gonna be challenges with getting access to full and open operating data and site visits...
... if that's going to be a challenge, then what are we, you know, what are we entering into? So it's a partnership, and it's got to be a good, strong partnership. There has to be a full and open recognition that we're doing this together, and so I would say that that blankets over top of the whole thing. I've had this comment several times. We don't stream political risk. We stream gold, we stream silver. We don't stream political risk, so don't try and shift your political risk onto us because we're not part of that equation. And that's all the protections that you see all the way across what we've got here.
So much of that is related to making sure that we stay focused on the real core investment, which is the metal in the ground as it's getting produced out. And if there's not a full embracing of the concept of a partnership at the early stages, then we'll back off and let some of our competitors take those ones on, 'cause that's not, that's not our way of working together. So, yeah, and-
And the international arbitration was more from a host country perspective, huh?
Yeah. Yeah, I mean-
Sure.
It was, you know, so something like that is where a parent guarantee comes into play. And, you know, we've had companies that have refused to offer the parent guarantee, and we've backed away from the deal. And some of our peers have, you know, specifically the one I'm talking about, have taken that risk. And for many years, I kind of questioned, how important was that parent guarantee? I don't question it now. These guys had it structured and, you know, we stood our ground in terms of what is important for us to make sure that we're not taking on that unnecessary risk. Something that, you know... I mean, we have geologists that can tell us resource risk. We have engineers and metallurgists can tell us processing risk. We have social scientists that can tell us community risk.
But when it comes to political risk, that's really a relationship issue, and, and that's not something that's very easy to forecast. And so it's, it's a risk we try to stay away from as much as we can, and, and a parent guarantee is very effective as-
Sorry, Tanya, were you asking about the host country? You said, like, would we apply host country laws as our governing law? No, we wouldn't do that.
No, it was more of like, you know, you're in Ecuador-
Yeah.
You have an international arbitration in that contract.
Yeah, for sure, we would not allow. We've never had a situation where we've used the local law as our governing law, if that's the basis of your question. Yeah, so we would either use international arbitration or governing law in BC or some other jurisdiction that is common law jurisdiction. As I said, we strive very hard not to let it get to that point where we actually have to do that. That said, as I said before, right? You know, on that 99th time or that 100th time where there is an issue, we all do go to the contract, and that forms the basis of our negotiation. Like, how hard can we negotiate? What can we negotiate based off what the contract terms are? That's the reality of the situation.
But we don't want to let it get to a point where it actually has to go to court or actually go to arbitration. We'd rather negotiate it before it gets to that stage.
Hi, yeah, I have a much simpler question. I asked Randy this question at the Gold Forum as well, but could you maybe comment on the current opportunity set in terms of potential acquisitions pipeline, in terms of, you know, where you're at, and then, as you mentioned, you were very active in the last year, eight transactions. Do we expect that type of activity flow as we look forward?
I think, we'll all turn to Haytham to,
Sure, you know, I'd love to do eight transactions a year, but it just doesn't happen that way. Just, there's too many opportunities where you look at and things just don't make sense, and you're not gonna do an opportunity just because you want to get the numbers up. Typically, I would say, you know, we look to do one to three transactions a year, deploy in excess of $1 billion a year in capital towards these assets, or commit in excess of $1 billion a year towards these assets. I tell you, the opportunity set right now, I've typically said we're looking at anywhere between 12 and 20 opportunities. I think we're probably right now, we've weeded out a lot of opportunities in the last little while.
We're probably working on maybe eight to ten right now opportunities, and hopefully, you know, there's a handful that are fairly advanced, maybe half of those advanced. So if we can get two or three done this year, that would be optimal. But there's obviously no guarantees. You tend to. As you saw when we highlighted the process, you tend to work through every stage, and at every stage, there's an off-ramp. Your ability, if you don't like what you see at that point in time, you get off, and you move on to the next stage. Now, a lot of the time, it's not necessarily an off-ramp, and you never jump back on. It's you provide recommendations to the companies for them to do certain work that will help you get across the line.
And typically, if it's Wheaton providing those recommendations, the lenders, when they come in with their technical team, they're going to do the exact same thing. So we kind of, we provide our knowledge and expertise and feedback to them so that we can eventually stream them. That's why sometimes you get eight transactions in a year, 'cause, you know, people come back, and they've done the work, and suddenly you're more advanced on a bunch, but other times, you're doing none. You know, we're not paid by the number of transactions we do. We really just want to add the highest quality assets to our portfolio. You look at our portfolio, what is it? 43, sorry, 27 and 18, 37, 45 different assets. You know, we're not looking to have the largest number of assets.
We're not looking to add thirty, forty, fifty different royalties. We just want the best quality, highest quality portfolio in the industry, which I think is what we've actually established.
Haytham, let me put it this way: How would you compare the pipeline today to, say, last year?
Last year, as I said, was an anomaly because it was a culmination of, you know, COVID, everything else. We've worked on for three or four years, worked on various projects that needed to advance. You know, I'd say this year, you could probably expect a couple of transactions, not eight transactions.
and then maybe just, you brought up quality in terms of opportunities, and Gary said, you know, you say no more often than you say yes.
Mm-hmm.
Of the four here, who's been saying no the most often, I guess, in terms of where is the risk?
Well, I-
I say no a lot.
I can tell you that a lot of the time, these guys don't even see, like, when I say we look at 60 opportunities, call it 40 of those don't even make it to them because they just don't pass the technical review. So once they do, then we pass it over to Patrick, and security, and with Curt and-
Yeah
... Gary on the finance.
Just to add to that-
Yeah.
Haytham did mention that we do have this group meeting where we discuss...
Yeah
... every opportunity. That slide, for instance, that Gary showed about accretiveness, that'll show up there. There's a whole technical section, there's legal section, EHS section, and so I wouldn't say that any one of us necessarily kills the deal, but we might, and this would be my view, but I think we present the opportunity-
Mm-hmm.
We show the risks, and in some cases, it just becomes a consensus decision. It's like: Okay, well, it's pretty clear that-
Mm-hmm
... we can't get over that EHS hurdle. Like, there's just a no-fly zone. In other cases, you know, it's more of a judgment call, and we'll try to reach consensus, and then ultimately, we have to make a decision whether to move forward or not. But it really is... I think there's real value in having that team approach.
Mm-hmm
... the way we look at it, and you start to get feedback as to what do you think the team will accept and what's acceptable to us, and you kind of know what the boundary is based off that discussion. But I don't know that we'd say any one of us kills a deal.
No, and that's a really important thing. Don't point at me, 'cause I'm like, I'm the guy that's saying no all the time. It's, it isn't a one-person show. It, it's not Randy saying, "We're doing this deal." It's a team, and every element of the team counts, has a voice.
Yeah.
You know, there's four of us sitting up here, but we've got deep teams that are helping us do all of this work, and so they're involved in that group meeting. It's not just, you know, five people that are sitting around the table. It's as Haytham said. You know, it's two-thirds of the company that gets together and is involved in this debate. Randy's done a great job of encouraging everyone to voice their opinion, whether it be, you know, for or against. When people are against, then, you know, we have to convince them, you know, of the merits that we see that mitigate the risk that they're concerned about.
Yeah, and in some cases, that results in a brainstorming session.
Yeah.
What if we did this?
Mm-hmm.
You know, I mentioned, on the ESG side, there's been times where we think, "Well, here's a problem, but what if we put something in the contract that, you know, required them to do an ESG initiative? Would that help alleviate the concern?" "Yeah, that would." "All right, well, you know, we're trying to find a path forward," so it does involve a lot of creativity to try to find solutions as a group.
I think we're well over, aren't we?
Yes.
In an effort to stay on schedule, let's leave it there, and we'll pick back up at the Q&A at the end of the program, so we'll thank you, gentlemen.
Thank you.
Okay, let's make the clicker. Okay, and with that, I'm Wes Carson, VP Operations. Once we've gone through that whole deal concept, it's made it through all those hurdles, then it actually makes it into our portfolio. And then that's when I get to kind of take it over at that point and start managing the relationships kind of from there. Really, I mean, we've now got, as Randy said earlier, there's 45 assets in our portfolio. We've got 18 operating, we've got then 27 that are in that kind of development and other phase. I mean, a fair bit of jurisdictional diversity kind of in there, as Randy mentioned, kind of across the Americas primarily, but then Europe and our new additions in Africa and Australia.
Really, we've got a massive diversity in that kind of partner company as well, though, really, that we've got everything from sort of the large diversified companies of the Vales and Glencores and Newmonts, right down to quite a few small, single-asset companies that are in there as well, and really shows how this model works kind of across the entire industry. A large part of what we do, once we've actually done the deal is monitoring and then working with those partner companies for how do we add value to those companies going forward, and we work with kind of similar team that's working on the deals. We have assistance from kind of the technical side, Patrick's team in the Cayman Islands, legal, finance, as we're monitoring these companies and working with them.
Now, I mean, the obvious things in there, production forecasting, reporting, the annual site visits that we do in that, but we also work really to try to add value back into the companies through things like technical assistance and our sustainability initiatives that we add back in, to really be kind of that partner of choice to our companies that we work with. So, and that's really kind of that core value that we have in working with these companies as a partner and really trying to be that partner of choice, so that as these things come forward and other streams become available with those companies, then we are that partner of choice that they'll go and wanna talk to.
So in the next little while here, we're gonna kind of focus on sort of core assets, really both kind of on the operating and the development side. I'll talk to you about Peñasquito, Antamina, and Stillwater, which are three of obviously our core assets in there that have been in the portfolio for a while. So try to put a bit of a more interesting spin on it. You all know these assets pretty well, so but I'll talk about a few things that maybe you don't know about them. And then Neil will come up, and he's gonna talk about Mineral Park and Blackwater. And then we've got the privilege, as Randy said, of having a few of our partners in here. Marna's gonna come and talk about Platreef, and then we've got Alfredo for Sudbury, Voisey's Bay, and most importantly, Salobo.
And then André is gonna come up and talk about Constancia and Copper World as well. On the year so far, we've had a great start to 2024. We're on track to achieve really kind of the midpoint of our overall guidance of 550,000-620,000 GEOs. So a really strong start to the year, led primarily by our core assets. Really, Salobo, Peñasquito, and Antamina have had a great start to the year, which is always a nice place to be. And really, we're kind of at year-to-date gold production around just under 180,000 ounces, and silver at 10.5 million ounces. Reasonably even balance on the year between the first half and the second half of the year.
The last couple of years, we've been much heavier weighted to the second half of the year. This year, we're about 52% in the first half and about 48% in the second half of the year, and really, that's primarily due to where we are seeing the grades drop down a little bit at both Salobo and Peñasquito in the second half of the year. And for our five-year, I mean, you heard Randy talk about, I mean, industry-leading kind of 40% growth over the next five years. We're moving from 584,000 ounces up to just over 800,000 ounces by 2028, which is really exciting and really led by those core operating assets and the growth at Salobo, Antamina, Peñasquito, and Voisey's Bay.
And then really, we've got kind of close following there in the assets that are currently under construction. So we've got Platreef, Blackwater, Goose, Mineral Park, and the lower mine at Marmato that are all under construction right now and really coming online in the next kind of 12-18 months. And at the tail end of that five-year period, then we have some of those other development assets in Marathon, Fenix, Curipamba, Copper World, and Santo Domingo. So for Peñasquito, I mean, as you all know, Peñasquito is Mexico's largest open-pit mine. It's also the largest gold mine in Mexico, second-largest silver mine, massive operation. You've got two open pits there that feed a large process plant that runs about 110,000 tons a day through that mill, produces zinc and lead concentrates.
Most of what we see where we see our silver from is from that lead concentrate, so it really depends on kind of as you're which pit you're in, so often, you'll hear Newmont talk about moving to a higher grade zone. That'll actually be the opposite for us, really, 'cause there we've got the two pits there, Chile Colorado and Peñasco. Peñasco is kind of the gold-heavy pit, so and so when you hear Newmont talking about they're going to a higher grade, it usually means they're moving back to Peñasco out of Chile Colorado. Chile Colorado is the higher silver pit, so we were there in June this year. They were just kind of starting that transition, and that's why you will see the grades drop off slightly for us as we go into the second part of the year.
Great site visit there this year. We really saw kind of this Full Potential p rogram that Newmont been implementing since the Goldcorp takeover, really kind of coming into its own over the last number of years. You've seen over $700 million in value delivered through that, and about 80% of that is really on the mining and processing side. And really right back to basics, kind of, of how they're doing their mining practices, controlling costs, just driving those kind of both cost and capital efficiencies through these programs. And it's been really great to see over the last several years and watching that progression. And it is one of the kind of neat parts of doing these site visits. I mean, I've been doing these site visits for the better part of eight years now.
Most of these sites I've been to at least six times, some of them eight to 10 times. You really kind of get to see these snapshots every year of how these sites are progressing and where it's going to, and really, you can add a unique kind of view on that site to the partner as you're there, because when you're there in the day-to-day of everything, you don't necessarily see the same things that as you see these kind of when you see a snapshot every year of it, so we do really try to add that kind of perspective when we go on those site visits. Last year, as you're all aware, I mean, Newmont did have a challenging time with some labor issues there on the site with the strike.
They did do a very solid job of managing that through. There was lots of pitfalls that they could have fallen into, and it had previously been a challenge, and they're confident now that they've got that well set up. They've established the way that they're gonna deal with the unions going forward and how that's gonna go, and I think really came out with a win-win solution that everybody can be pretty happy with there. But they are really still focused on managing those relationships with the unions, with the local communities, and how they actually do that kind of going forward. It is a challenging place when you've got such a large operation that really is a lot of communities very, very close.
I mean, as you can see from some of the pictures there, you've got communities that are right in, right next to the mine. So managing those relationships is an essential part of how you have that social license to operate and continue to be able to operate the mine. Newmont's also working on really exploration and continuing to expand out. These pits have been running now for quite a long time. They are looking at the expansion of Chile Colorado with the phase three expansion there. There's another phase in the Peñasco Pit, as well as they're looking at and other kind of near area kind of exploration as well. So lots of good potential to continue to expand the mine life out there over time.
Antamina, we've got really one of the largest base metal mines in the world. I mean, pretty incredible operation to go visit. It probably is my favorite site visit to do of the year. It's an amazing place to go, despite the elevation is not all that much fun. But other than that, it's a fantastic place to go visit. Run by really the joint venture of kinda BHP, Glencore, Teck, and Mitsubishi. Very successfully run there with really a local management team that does a great job of keeping that place going. As I said, a massive open pit that feeds 145,000 tons a day to kind of a standard plant there.
The big news this year for Antamina really was the extension of their environmental impact assessment, and that really allows them to extend the mine life from 2028 to 2036, which is really elevating the tailings dam, which is the principal thing. They've also had significant investment in infrastructure over the last few years. You go to site, and the number of capital projects that they're doing there is really quite incredible right now, and it's pretty impressive to see the amount of work that's going on there on site. We'll start to see the value of that coming in in the next few years, principally around they're moving their primary crusher, which is sitting on a whole bunch of high-grade copper-zinc ore, which has quite a bit of silver in it as well.
So we'll see that bump in silver over the next couple of years, which is exciting. And then really, as that infrastructure kinda comes online here, we will see the grades start to tick up a little bit over the next couple of years. The other great thing to mention on Antamina is our work with Enseña Perú there. So we've been working with Enseña Perú now since 2017. We've invested over $3 million with them. Every year when we go to site, we get to go and visit some of the schools that and see the real impacts of that program. And getting to see the students and the teachers that are impacted by that program every year is really fantastic and very, very much appreciated by the local communities and by Antamina itself.
On to Stillwater. Stillwater, as you all, I'm sure know, has been in the news a little bit recently here. It is still the largest primary producer of PGMs outside of South Africa and the Russian Federation, located in Montana, which is a challenging place right now. The economic situation in Montana has changed quite dramatically in the last several years. They call it the Yellowstone effect there, which really is... I mean, you've seen prices in Big Timber, which is one of the main communities there. Houses that were worth $100,000 five years ago are now worth $700,000 or $800,000. Trying to run a mining operation there when you've had the cost of living go up that much has been a real challenge.
That, coupled with the primary issue of that you've had palladium go from $3,000 down to $1,000, and that's their primary commodity there, has made for some challenging times for Stillwater. Unfortunately, really, I mean, with all the challenges they had the last couple of years, the start of this year has been fantastic. I mean, they've managed to increase PGM production by 16%. They've dropped the their costs by 23%, but unfortunately, that wasn't enough for them to really be able to continue maintaining. So last week, they did mention that they are shutting down the Stillwater Mine, the just the west side of the mine. They will continue to run the east side, which is the new mine, or the Blitz Project and the East Boulder Mine.
We've had great communication with them over the last couple of weeks, just in what's actually happening there, why it's going. They are still viewing this as a short-term, three-to-five-year impact and hoping for the palladium prices to kind of recover from there, and then they'll come back up into really what is a great long-lived asset. But challenging times have called for some pretty dramatic measures there that they've had to put in place. So they are continuing to engage with their employees. Obviously, there is a significant reduction in workforce that comes along with shutting down that mine, which is unfortunate, but they are really working with the communities and with the employees to continue to build on that.
With that, I'm gonna hand it over to Neil to talk about our core development projects.
Thank you, Wes, and good morning, everyone. As you've heard, we've been very busy on the corporate development side. In the past four years alone, we've added 13 development assets to our portfolio, and as Randy and Wes both highlighted, they'll play a large role in our 40% growth profile. We're very excited to have four of those development assets currently in construction: B2Gold's Goose Project, Ivanhoe's Platreef Project, which they'll be speaking to here shortly, and I'm gonna provide some details on Waterton's Mineral Park Project and Artemis Gold's Blackwater Project. Mineral Park is located in northwestern Arizona and is owned by Origin Mining, a Waterton company. Waterton purchased the mine in 2015 after the previous operator, Mercator Minerals, went into bankruptcy. Waterton has since invested significant capital to improve confidence in the data and plans, leading Wheaton to welcome Mineral Park back into our portfolio.
In October 2023, we purchased a 100% silver stream for $150 million dollars as part of the $600 million financing CapEx. Construction is currently approximately 15% or 50% complete, with the start of operations on track for the first half of next year. The mine is forecast to contribute 770,000 ounces of attributable silver production annually to us over the first five years, and 740,000 ounces annually over the remaining life of mine. Mercator's bankruptcy was the result of the company being over-leveraged and production issues at the mine. The plant did not have the proper crushing and grinding equipment to process the harder primary ore, which led Mineral Park, or Mercator, pardon me, to focus on the transition ore, which had poorer recoveries.
With their strained balance sheet, Mercator was operating with an old mining fleet and was not able to properly maintain maintenance. Waterton recognized the reasons for Mercator's shortcomings and has put a lot of effort into preparing the mine restart, including significant drilling to better define the ore body, updated geological and resource estimates, as well as extensive comminution and metallurgical test work. This work led Waterton to deciding to completely revamp the concentrator with a target throughput rate of 50,000 tons per day. They're replacing the crushing, grinding circuits, and the concentrate filters. They're refurbishing and upgrading the flotation cells, and they're going to modernize the plant instrumentation and controls. This slide has a few photos of the amazing progress at site, including the removal of the old SAG mill, installation of the new jaw crusher, and installation of the new fleet.
In 2020, Artemis Gold purchased from New Gold the Blackwater Project, which is located in central British Columbia. In late 2021, we purchased gold and silver streams on Blackwater for $441 million, and in 2023, we increased the gold stream drop-down threshold to provide an additional $40 million in funding. In February of this year, Artemis announced the results of a mine expansion study, which now has throughput increasing from 6 million tons per annum to 15 million tons in year three, and a further increase to 25 million tons in year seven. Our attributable gold-equivalent production is forecast to be 31,000 ounces per year for the first five years and 35,000 ounces for the first full ten years. At the end of Q2, Artemis reported construction was 87% complete, and the first gold production is expected by year-end.
When I reviewed the Blackwater Project, the first two things that really struck me was, first, the strong continuity of the mineralization, and the second was just how well this ore body is drilled off. I was amazed when I loaded the data to see that it's drilled off on 40-meter, 50-meter centers with vertical drill holes, and that large portions of the ore body are covered by angle holes at 25-meter centers. And then Artemis went a further step to running an RC drill, an RC grade control program on 12.5-meter centers, covering the first eight million tons of production. So this is an ore body that is extremely well modeled and understood. The land package is very large, and the ore body itself remains open to the north and to the northwest.
On this other figure here, I wanted to highlight the fact that the reserve pit assumed a gold price of $1,400, and the area between the, that reserve pit and a $2,000 resource pit contains 156 million tons, which grade 0.64 grams per ton gold equivalent, which is equal to 3.2 million ounces, and I'm pretty sure I don't have to mention or remind any of you in this room that gold is currently well above $2,000. With this last slide, I want to highlight some of the impressive construction at site, and with that, I believe we now have five minutes for a quick coffee break, after which we'll welcome Marna Cloete, the President of Ivanhoe Mines, to present on Platreef. Thank you very much.
... Hello? Hello, everyone. If we could ask you to grab your seats, we'll get started in just a minute. All right, maybe I'll just give one minute.
Hello, Marna. How you doing? It's Randy here.
Hi, I'm good. And you, Randy?
Fine. So I just want to introduce Marna Cloete. She's the President of Ivanhoe Mines. As I mentioned earlier on today, our first ever investment into Africa is the Platreef Project down in South Africa. Had the sincere pleasure of visiting the mine site earlier. I think it was June of this year. And just, I had been to the site in times past, and I just can't believe, you know. I mean, the amount of progress being made on what I consider one of the most exciting and I think the largest precious metals investments in the world. And for us to finally have a part of this, a part of this incredible success story in Wheaton, really excited.
And so I'm gonna hand the floor over to you, Marna, and let you tell the story about what Ivanhoe is doing at Platreef. So thank you again for joining us.
Thank you so much, Randy, and apologies I couldn't be there today. I would have loved to be there in person. It's Heritage Day in South Africa, so it's a public holiday, so you're catching me during the graveyard shift at the end of the day, but always excited to talk a bit about what we do in Ivanhoe Mines and in particular at Platreef. I'll be changing my own slides here, so apologies if you see my finger here on my iPad, but first, with the boring stuff, forward-looking statements, and then just diving straight into a little bit about Ivanhoe Mines. Just by way of introduction, my name is Marna Cloete. I've been with Ivanhoe Mines for eighteen years. It feels like a lifetime.
I started off sort of in different capacities and mainly spent my career there as the CFO and most recently as the president of the company. As I, we're a company with a $16.9 billion market cap, and it keeps on increasing, and we really base our success on the ore bodies that we discover. We're well known for discovering tier-one ore bodies across the world. The current version of Ivanhoe Mines really focuses on Africa. What we've achieved at Kamoa-Kakula in the DRC really speaks to our track record and credentials as a company that can discover ore bodies, what it is.
I just spent the past two weeks at Kamoa-Kakula hosting different investor tours, and you know, when I look at when I started there, sort of the story of Platreef, it was just like a couple of drill rigs in the middle of nowhere, and today, Kamoa-Kakula is the third largest copper producer in the world. We planning to replicate the same success at Platreef, and obviously, we are thrilled to have partners such as Wheaton who assisted us in our financing to get this mine underway. The star of the show today is Platreef. I'm gonna dive sort of straight into it, and here you can see a little picture of what Platreef looks like today with the first sort of small plant.
There will be two or three more modules that will be slightly in the next couple of years. We're definitely doing this mine in stages because it's a massive ore body and it will be a multi-generational mine. I'm gonna start with explaining to you why Platreef is so different, and we've tried to sort of capture it on one slide. As I just mentioned, the Platreef ore body is a multi-generational resource, significant exploration upside. We haven't even drilled out the whole ore body. At some point during the development of this mine, it was still already external at some point. It's by far the world's best PGM project with the highest margin and the lowest cash cost, and I'll show that to you later in a slide. It's an industry disruptor. It's safe. It will be mechanized mining.
It's a highly productive mining method that we will use, and we target to become the largest PGM mine. And we do this and de-risk this by developing this mine in phases. We've got a diversified commodity basket of precious metals, but also significant nickel and copper by-products. And then, everything we do at Ivanhoe Mines, we do best in class in terms of our ESG credentials. And one of the things we are most proud of at Platreef is the way we did our ownership structure with our local partners, and I'll talk you through that in just a little bit.
Maybe just to orientate you, in terms of South Africa, so as most of you would be aware, South Africa is responsible for in excess of 70% of global PGMs produced, and most of those PGMs were produced historically on the Western Limb and the Eastern Limb of the Bushveld Complex, but where Platreef is situated is on the Northern Limb, and that's really where the future of PGMs are. It's right next to Anglo's Mogalakwena Mine. It's a very different type of geology that we deal with, compared to what the mines are on the west side as to what we mean when we say that. Maybe just speaking a little about our ownership. So, originally, Ivanhoe Mines owned 100% of the Platreef Project.
But we were fortunate in partnering with a Japanese consortium back in 2011, when they purchased a 10% stake in the Platreef Project for approximately $300 million. And that really enabled us to start with the initial shaft sinking, something that takes a very long period of time to do. And then when we had to apply for our mining license, as part of South African legislation, you have economic empowerment partners. We did a vendor-financed transaction, whereby we gave 20% to a trust that is owned by the communities adjacent to the Platreef Project, and then 3% to the staff of the company and 3% to our vendors. So all the local suppliers that supply services to the mine are also partners in the mine.
This really helps in terms of our social license to operate because we're all pulling the same direction, and we all have the same objective in mind: to make this mine a success. Just speaking a little bit about the geology and the mining method and why it's so different to what we see on the Western Limb, western and Eastern Limbs. That first picture you see on your left-hand side is what conventional mining is about. It's about 0.4 meters to 1.5 meters. If you think about the table you are sitting at, if you look below the table, it's like mining below a table. It's manual, it's labor-intensive, large workforces between 10,000 and 40,000 people. Good grade, but a narrow reef. These mines have been going for the past 50 years.
What makes Platreef so exciting is that the reef is on average between eighteen meters to 26 meters thick. So if you look at the Shaft 1 headframe in that picture on your right-hand side, that is the thickness of the reef that we will be mining. We will use longhole stope and drift and fill mining methods, something that we've successfully implemented in the DRC. That's not really an underground mining jurisdiction. So, we do that through extensive training, but really very efficient and very effective and very safe in terms of mining. So it's an easy mining method, high grade, and a very thick ore body, mechanized, so you don't deal with a large workforce. Just a little bit about the journey, we went through in discovering and developing this ore body.
So we acquired our licenses back in the late nineties, and, as I mentioned, I joined the company in 2006 . And back in 2006 , we were still looking at a large open pit, low-grade open pit, that required a household relocation. And then in 2008 , the landscape really changed when we started with a deep-hole drilling program, and we discovered what is today known as the Platreef, and that's when the Japanese consortium invested their money for the 10% stake. And we really started developing the mine, sinking the first shaft that was first supposed to be an exploration shaft. Then we converted it into our first production shaft, and today that shaft is complete, and we're doing most of our underground development through Shaft 1.
We've completed the feasibility study in 2017, and we started with the early works of Shaft 2. Shaft 2 will be the main production shaft. It's a large shaft that can hoist up to eight million tons per annum. But it is a shaft that takes a long time to sink. Originally, we were going to blind sink it, but with the completion of Shaft 1 and our rethinking of using Shaft 3 to accelerate development, we can now develop Shaft 2 from the bottom. So, that also helps us in accelerating this project. And then another significant milestone was in 2021 when we raised additional funding to enable us to get phase one, which is the production through Shaft 1, up and going through a stream with Wheaton.
A $300 million stream, of which $200 million was linked to the gold and $100 million to platinum and palladium. We are doing an updated feasibility study on this rethink of our phase development plan, and that will be published towards the end of this year. We are still busy with the development of Shaft 2, which is the large production shaft, and we are currently busy with the pilot hole at Shaft 3. We've completed the pilot hole at Shaft 3, and we're currently busy with the reaming of Shaft 3, and the equipping of Shaft 3 will commence throughout next year. So yes, a picture always speaks a thousand words. Here's a picture of the completion of our phase one concentrator.
It's basically production ready, but we have decided to defer feeding ore into it until the second half of next year, while we are hoisting mainly waste through Shaft 1. We've got a bit of hoisting capacity constraints through Shaft 1, because we can only hoist about a million tons through Shaft 1, and it's more important to do some of the waste development so that we can enable ourselves to develop Shaft 3 and get to the ore body as quick as possible and basically start producing at scale. The Platreef ore body is a large-scale ore body, and it's a mine that really needs to be mined in high volumes to ensure efficiency.
Here we talk about our plans for the future, our phase two expansion, and that will be accelerated by a third ventilation shaft. That will enable us to get through the Shaft 1, to get hoisting capacity of approximately five million tons per annum, and that will produce the equivalent. This is by no means a small PGM mine; it will be a large-scale mine. Once we bring online Shaft 2, which will be completed after Shaft 3, and we should really change the sequencing of these shafts because it becomes really confusing, we will produce close to a million, a million ounces of 4PE per annum, the PGM space. Here you can... Just the visual schematic as to how the sequencing will work.
As I mentioned, we've already finished the concentrator for phase one, and that's the picture that you just saw in the previous slide. And once we get sufficient hoisting capacity out of Shaft 3, we will immediately go into a five million tons per annum mine, producing over 400,000 ounces of 4E. And then 4PE, and that's probably about a two-year horizon that will give us the ability to hoist 10 million tons per annum and produce over 1,000 ounces of 4PE per annum. And then, as I mentioned, this ore body is still open in all directions, so it's by no means the end of developing this ore body. It's only the start.
Then just speaking about cash cost, because in a market where PGMs aren't always as attractive as one would hope, you can see that Platreef really sits at the bottom of the cash $14 per pound for 3PE plus gold. So really a game changer in terms of the PGM industry and an exciting project here in South Africa that we're all busy developing using the best sustainability credentials, ensuring that we do everything on an IFC compliant basis. In a couple of years, looking forward to building a mine that will be here for generations to come. Thank you.
Thank you, Marna. I don't know if there's any questions for her. Hopefully, you understood that. The feed was a little bit broken, but I could understand enough of it. Hopefully, you guys all could understand the same. But, is any questions on Platreef?
... I'm gonna get you to speak into the mic so that Marna can hear clearly. You can hear me okay, Marna?
I can hear you, Randy, yes.
Yeah. Okay, we've got one question.
Hi. So do you think the north limb ultimately drives the east and west limb out of business, and how do you see that playing out? Does there need to be a pretty hard, platinum price cycle, and does that help you? Like, it gives you potential refining capacity. How do you see that industry evolving?
It's obviously not something that we wish for, but I think it is something that is inevitable. A lot of the old, older mines are quite unsafe, difficult to mine, difficult to access. So I think there is a transition period that will come, that will sort of lean towards the more mechanized type of mines. It's safer. And yes, it does provide access to processing and to refining capacity, ensure that we have our own plans in place for downstream beneficiation. But I think it will... the industry will sort of reset itself. But it's not a deliberate strategy.
Yeah, it's, I would just add, I mean, it's one of the blessings of the ore body at Platreef is the, you know, one of the things that stands out is the thicknesses of 18-42 meters thick. You know, the concept of mining versus the shallow reefs, there's no doubt that the benefits of Platreef, first in cost, well, firstly in safety, actually, to be honest, one of the most important-
Yeah
... aspects. Safety is one of the most important benefits there. But it's definitely gonna, you know, this is gonna revolutionize platinum palladium production in South Africa, and it will have an impact. You know, the pricing, the commodity pricing itself is really what's gonna drive what happens to the higher cost end of the market. But we're very excited to be invested into, you know, top of class in this space here. So, Marna, I think that's it for questions right now. Thank you so much for joining us, and I look forward to the next time you and I get together, hopefully sometime next year-
Thank-
... you should be down there again.
Thank you for having me.
Yes.
Thanks so much.
Thanks, Marna. Our next guest is... Yeah, that's right. I was trying to remember which one. We've got a couple of more guests here. Alfredo Santana from, from Vale. Vale, of course, a very, very important partner of ours on multiple projects, Salobo being our flagship, it's also the Vale Base Metals flagship. Alfredo is the Interim CEO, I think until, I think you were just saying until the end of this week. I have to say, he stepped in and done a great job over the course of the year as, as Vale's been going through their transitions, and so a really good partner to work with and, happy to have him here in person. We won't have the staticky feed that we just had all the way from, the across the water.
I think she was in South Africa. Welcome, Alfredo, to the stage. Thank you again.
So thank you, Randy, and thank you all for having me here today. It's been quite a journey in VBM, in fact, and we're glad to announce that everybody knows that from October on, Shaun is stepping in, and for the next phase of the Vale Base Metals carve-out, this will be incredibly important, right? So first of all, my idea here today just to actually give you an overview of how we are evolving in Vale Base Metals since we started carving out from Vale SA, right? And in the energy transition metals. So if you can go to the next slide, it's I do here, right? Okay. So first of all, it's extremely important to start with our one page that we call, right? It's what drives everything that we do in the company.
We start this one page five years ago, and our purpose is to improve life and, actually, as you see, is we exist to improve life and transform the future together. This was built inside Vale five years ago, and this is our north as well for Vale Base Metals, and as a energy transition, it's all about to improve life and transform the future together. It fits perfectly with our vision as well. Key value for us, it's life matter the most, as you see, act with integrity. Behaviors that you're going to see here today, obsession with safety and risk management.
It's been a driver for everything that we have done in the last five years, I would say, and we have step changed quite a bit in the risk management in the company. Today, we're gonna talk, and I'm gonna show you a part of our pathway to value and to become the best class and reliable operator. Start with safety. I think, as I said, it's key three metrics for us, right? When you look at the total recordable injury in the company, we have done, I mean, such a great job in terms of bringing our total recordable injuries down to a level that it's not enough yet.
We aim the zero harm in the company, but definitely we are in a completely different level, even when you compare that we have a lots of underground mining in our portfolio as well. So when you look at your process safety events, this is extremely important. Five years ago, we start with this conception, what we call the P-one events. P-two events is when anything that major happens with asset integrity, and you see that we have decreased a lot our events in the company since then, with a lot of investments as well. And then the high potential recordable injuries that in the end of the day, it relates to any injury that could become a fatality or a life changed.
So in terms of safety, we know that we are doing the right actions and going to the right direction, although it's not enough, right? Safety is a journey, and zero is where we need to go. People. If you look at VBM today, we are more than 13,000 employees, with a very knowledgeable technical team. More than 40% of our employees have more than 10 years in the industry. We are very proud to say that 75% of our leadership pipeline is fed by internal talents, and we have increased a lot the diversity, including women in the workforce. Since 2019, we brought in more than 1,800 women to the workforce.
And keep moving on the diversity and inclusion, equity and inclusion, is part of our values, is part of our plan and strategy as well. So how we are located, right? So we have some operations in Canada, so we operate Thompson, Sudbury Basin. Right now, we're gonna talk today a little bit more about Voisey's Bay in Long Harbour, and also we have a refinery in Port Colborne. We also have a carbon-neutral refinery in Clydach, very well located in Europe, and when you look through the future in terms of circularity, we know that Clydach is have great potential to start work with recycling batteries and in the future. Very well located in the market in Europe.
And then we have a refinery in Japan, Matsusaka, that's basically fed by our operations that we have right now divest, but we keep 33% of the PTVI in Indonesia. So although we had our divestment there, we keep it well represented in Indonesia as well. Then when you go to Brazil, we're talking about the tier one assets in copper. Salobo is the cornerstone asset that we're going to talk here today. We also have Sossego. Sossego is basically where we're going to refine, and we're going to concentrate all the ore that we have in the regions.
But I have lots of projects going on, what we call the South Hub in Brazil, that close to Sossego facility, that we're going to increase production in the next five years, considering that we are the actual mine that we have, that we call Sossego Pit, it's depleting. And so tier one asset with a lots of growth in front of us. Onça Puma is our ferro nickel operation, located in Brazil as well.
So if you look at the big numbers that we've seen ahead of us, we have put in place since last year a very well-detailed asset review that probably a few of you have heard about, where we brought specialists to review 100% of our assets across the globe, and we made a plan to achieve the full potential of these assets. So the main goal is safety, as I said the first time, but get higher productivities and returns of the assets. So when you look to the numbers, you see that in copper, we are well located in the cost curve, and in nickel, we are going to go to the first quartile through this next five years.
I'm gonna talk about a little bit what we are doing in Ontario further in the presentation, considering that our operation in Ontario is the leader of driving the productivity with the polymetallics in Canada. Right? So production, we have seen an increase in our production. Our forecast for 2024 is still with our guidance, is 345 copper, 165 in nickel. Next year, we are finalizing our budgets, and we're going to present this in December our guidance to the market. But you can expect a significant increase of production for the next years as well as we're going forward in our plan. A very important point to talk about here is...
During the asset review, we really, we really look at into the assets in a different way, and the key levers here are very, very important for the change that we made in our plan looking forward. So resource endowment, mining methods, asset management, the flow sheet optimization, incredibly important for us in project development. So as a business, we're reviewing our capital allocations and really focus on how we're going to increase our returns in the, in the short, mid-term, and keeping the future protect as well. So I just talked a little bit about this slide right now. When we say that we have the right assets, it's 'cause we are well-positioned in a good jurisdictions.
We already have a very low-carbon products, and if you look at your Voisey's Bay, Long Harbour, this is one of the lowest carbon footprint in the industry. And unique and diverse nickel and copper exposure in a good jurisdictions, right? So right time is because of the transition. Even if we see that this energy transitions metals, it can take a little longer than we first expected, it's something that's gonna happen anyway, right? So, there's no future without electrifying the world, and, and we are very well-positioned to supply, the metals that the world needs for to transition. When you see the right action, I just talked a little bit about this, grow production base, improve productivity, and develop resource and endowment is the key, levers that we are working on.
When you talk about our pathway, right? Our people and safety, this will be always the first priorities that we're gonna have. Being the global benchmark in safety, in the new pact with society, we do believe that without being sustainable, there's no mining anymore. This is key for whatever we do, and that's where we're moving forward. The environmental commitments, right? The climate change urgency and low-carbon mining is part of our strategy as well. If you look at our relationship with Wheaton, I would say it's an incredible, healthy relationship over 10 years right now.
We have start in February 2013 in Salobo, 25% of the gold stream, 7% in Sudbury, and we moved to right now 75% of gold production in Salobo, which is great. When you look at Voisey's Bay, 42.4% of Voisey's Bay cobalt production until 31 million, and then after this, 21.2%. Looking to Salobo 3 that we just completed last year, and we basically right now have already reached 90% of the nameplate capacity of the production in Salobo 3. We are increasing our capacity in Salobo complex as a whole from 24 million tonnes to 36 million tonnes. This would not be possible if it wasn't for the partnership and the relationship with Wheaton Precious Metals.
I'm very glad, as Randy said, it's a very healthy relationship that we want to keep for a long time. So talking about Salobo, my time is almost gone. Just to bring some numbers, it's Salobo, it's a cornerstone asset, right? It's a 1.1 billion tonnes, that's 0.6% copper, 0.35 grams per tonne in gold. I don't know if you all know this, but Salobo is the second-largest gold production in Brazil, right? So sometimes people don't know this because it's known as a copper mine, but in fact, is the second-largest gold mine in Brazil.
With a lot to go, lots of reserves and resource we still have over there, and with the life of mine for more than forty years, and it's been great. I've been in Salobo last week. I was there last week with Vale Investor Tours, and it's incredible to see how the assets and how we are improving over there. So as you see, when we talk about Salobo 3, the importance of Salobo 3 in the Salobo complex, we reach our peak of grades between 2017 , 2019 , with 0.95%, 0.97%, and then we naturally decrease considering the depletion of the mine.
With Salobo 3 coming online in 2023, we are coming back to 220,000 tonnes of production, considering that we are recovering the lowest grade material that we have in Salobo. We still have a lot of room to grow, not only Salobo, but we call the North Hub as well, that includes other facilities that we have in projects for the next years. A few of the good results I would say that we are seeing since we change our strategy, and you see that when you talk about Salobo's Plant One and Two, we have increased 21% of the quarterly throughput in those plants since 2023.
We're going to reach its nameplate capacity in 18-24 months from now. If you look at the resource potential and optionalities that we have in Salobo, as I said, we still have a lot of optionalities in terms of low grade or in terms of the grades that we have in the mine, but also we have underground optionalities in Salobo. It's an amazing asset with, as I said, our current reserves, 1.1 million tonnes, and the current resources, 500 million tonnes at 0.47 and 0.23 at gold. However, we're working to add more resources into the plant and the underground options here. It can change the game in the future as well. Talking a little bit about Sudbury and Voisey's Bay.
Sudbury, we really changed the way we look at the way we worked in Sudbury Basin. The focus on productivity and change mining methods and also cut off grades, it's been great and it's being bringing a lot of good results. If you look at here, if you compare from 2022 to now, we improved 50% the development rates. We are up to 30% in mining rates, and also we are up to 30% in processing tonnes. Only this year, we're going to add 500,000 tonnes of additional ore mined into the processing, the Clarabelle Mill, and this is mainly driven by the Stobie Pit. Probably, you see some announcement that we did recently.
We had a partnership with this, and to start up the Stobie Pit mine, open pit mine in Sudbury. This is the first open pit of the projects that we have in mind in Sudbury, and then Creighton Mine, Garson and Totten. The change of cut-off grades and mining methods, it's increasing our ore mined year to date, and this will be continuously improving through the cycle. Voisey's Bay, good news. I was talking to Randy early today. Voisey's Bay will be completed. VBME, that we call Voisey's Bay Mine Expansion, that basically means two underground mines, so Reid Brook, it's already operational, and Eastern Deeps is the last one that will start up right now in the Q4, so project is basically done.
Main production starts in Q4, 2024 , ramping up from now until 2025 and reaching the capacity of the project through 2026 onwards. So Voisey's Bay. With Voisey's Bay in our portfolio, we are talking about to add Voisey's Bay full capacity. We will add through Long Harbour, 50,000 tonnes of production in the next years. Also, improving a lot our cobalt production through our portfolio. So here it's about the Voisey's Bay, how we are planning to go. You're going to see that from 2025 to 2026 , we. It's a big shift, right?
We are moving from one million tonne to one point nine, and then going to two point five, reaching its capacity in 2027. And we are talking about annual production of 2002 kilotonnes of copper, 42 kilotonnes of nickel, 2,100 tonnes of cobalt. So when you look at the portfolio and how we're going to move on from now on, I would say that as VBM, we are very well positioned to do the next step of the business. So three extremely important things that we have accomplished to this point: We carved out the business. This was completed last year, and right now we are restructuring the business.
We finalized the PTVI transaction, and we did the asset review, and we have already shift our mining methods and our plan that you're going to see public very soon in end of November or December. Right now, we are to a point that our new CEO is arriving this week, and as we said, we are the future-facing commodities and exposure. We are very ready to go as a VBM. We do believe that we have a huge potential with us, and that's basically what I would like to present to you. Thank you, Randy, thank you, Wheaton, to have me here today. Okay?
Is there one question? I think we got time for one question. Right over there.
In the interest of time, do you want me to just yell it out?
The online people don't get to hear it as well then.
We've been hearing from those who attended your site visit last week that there's quite a bit of exploration happening at Salobo. Would you be able to put that into context for us in terms of, like, what's being spent there this year versus last or, or perhaps number of drills there today versus last year? Thank you.
I would say that when we reviewed our plan last year, that we call the asset review, we shift a lot of investment on exploration all over the place. So we basically jumped from what we had planned from now. It's more than 30%. All over the place, not only Salobo, but Sudbury. And our focus, as we said, we are shifting a little bit our focus to close to near mine exploration, the short where we need to have more data about the where the ore body is expanding. We are keeping our exploration in greenfields as well, but we bring a lot of focus to what we have close to us. So Salobo has increased a lot of drilling as well, and not only Salobo.
We have a huge and massive project that is still in phase one, that we call Paulo Afonso in Brazil. That's very close to Salobo, but in the end of the day, we're talking about another Sossego in terms of sizing when this come online. So that's why we are moving. We're really looking to this place to improve drilling and exploration, so we can move faster with these projects. Okay?
Again, thank you so much, Alfredo.
Thank you.
Thank you for everything you've done, and look forward to continue working with you.
Okay. Thank you.
First off, let me just finish off. Really excited about, and then, you know, I know we're doing a tour down at Salobo next week, and so always exciting to get back to that mine site. It's one that we recognized the potential long time ago, and I just think that the way things are developing within Vale and the Base Metals division as it's getting its own identity and it's separating itself, nothing but good things can happen from sharing a flagship with that separate entity, and that's what we have at Salobo. But we also have the benefits, of course, at Sudbury and at Voisey's Bay too, so it's a really strong relationship that we intend to continue growing.
Next up is Hudbay. André Lauzon is the Chief Operating Officer of Hudbay. He’s gonna talk about. Someone reminded me about a year ago, we were actually doing a site visit at Constancia down in Peru, and so it was a great visit, just showed the potential of that. You know, our relationship with Hudbay has been a very long one, and it's covered a multiple of assets across the board. It's a group that we have a lot of respect for. They've done great things. I'm gonna refresh. There's one story, I don't think it gets old, but having the Peruvian Mines Minister tell me that Hudbay set the example for how Canadian companies should invest into a country like Peru.
I still remember that story, and I think it's reflective of the people that are in Hudbay and how much they embrace that. So, the stage is yours.
Thanks, Randy. Okay. So I'm gonna skip through a few of the slides just to keep it going at the beginning. Just to suffice to say, Hudbay is a diversified mining company. We have other operations other than with Wheaton and copper and precious metals. But I'm gonna focus today on Constancia and Copper World. So I'm gonna skip through just ahead to those. It's in your deck if you like. Just the next one. Right there.
I thank you for having me here, and when the team asked me to come and present today, they said they wanted to hear from the operators, and so I sat last night and I thought, "Well, what can I say?" 'Cause a lot of you have heard about us and followed us in a variety of different forums. What can I say and tell you today that would be different than our IR team and perhaps Peter, our CEO, and in more investor relations message? And so if I was to start it off and say, I have a favourite philosopher in around business, and his name is, some of you may know him, his name's Edwards Deming.
He's an American philosopher, born in the early 1900s, and he has this saying, and he says: "Every management system is perfectly designed to get the results it gets." I want you to remember that as I go through this presentation, and I show you some of our results.
And if you take that to the next step, and you say, "Businesses are groups of management systems." And so if you take the next step on that, and you say, "Businesses are perfectly designed to get the results they get." And so as I take you through the areas that we operate, how we design and execute capital projects, which we're very proud of some of our successes, the operational excellence and the productivity that we do, and how we build that into our next phases with Copper World and our future, I want to leave you with the...
You'll see, and I'll touch on some of these management systems as we go through this, so you leave with the confidence that independent of whether I'm in this seat or someone else, management systems are designed to have reproducible results and resilience in companies long into the future, and that's exactly what Hudbay is. So I'll just step through. The next one, so we'll start off with Constancia. Constancia, as Randy had mentioned, is located in Peru. It's in the southern mining corridor, if you look down on the bottom right. We're right smack dab in the middle of some very large operations, Las Bambas and Glencore's Antamina. And we believe that there's way more than Constancia here, and if you...
You know, I skipped over the map of all of our jurisdictions, but one of the things that we purposely design is we always explore in very safe jurisdictions, and we believe where we operate in North and South America meet that criteria, as well as we look for long-life assets, and we invest in areas that will go through multiple cycles, where commodity prices and benefit our investors. If I go into Constancia, the development timeline, and Randy and team, the Wheaton team were involved right from the beginning with us on this journey. It's something we're really proud of, and what I would say is, there's a lot of special things, and there's some things that aren't.
It's a very impressive timeline from when we purchased the asset to a very short build, to delivering a result that was only about 10% above the sanction cost, with about a five-month ramp-up to commercial production, which is just stellar. But in the background, you know, you should know that it's no different than any other project. You know, we had issues with water, we had issues with geotechnical. Three months in, we were at 10% growth on the project, but our process is, and if I go back to what I say about management systems are designed, we design our organization to be with very low bureaucracy.
We are able to salvage that build to the point where we held that 10% growth right through the end of the project with having very close line with the decision-makers to making very quick, smart, and. And we were able to call it fail fast, if you will. But to this day, companies 10 years later, keep coming to see us to see how we did it. "How did you do it?" And so in what we're doing, as we look forward into Copper World, and you'll see in a couple slides as I get to it, obviously, we take some of the learnings on the geotech and water.
We're currently drilling those today at Copper World, but we're setting up Copper World with the exact same philosophy for a very, very non-bureaucratic line of sight management on the floor, making quick decisions. 'Cause it's impossible to design something that's perfect, and you need to course-correct along the way, and we're very good at that. So Constancia, it's a large copper, molybdenum, gold, silver operation, about 100,000 tonnes of fine copper a year. Our mill throughput is around 90,000 tonnes per day. You'll see in some other slides as we come up. By design, it was around 75,000 tonnes per day, and you'll see some productivity slides on that.
It has a long life ahead of it, well into the late 2030s, and lots of exploration potential around and, you know, you'll, you know, it's a very. We're very proud of this asset. As Randy said, in terms of how we operate, we're seen as a mining company of choice in the region. You know, and you saw that a couple of years ago when we had. Unfortunately, there were some uprising in the country. You know, our communities came in around us, and they supported us, and we were able to operate where others were shut down. And so we're really proud of the work that our teams do on the ground and the interactions that we do with the local community. So it's. We feel very comfortable operating there in Peru.
In terms of how we are on the scale, and it's not to point out different names on it, it's more, you know, we're at the lower end on a cost per tonne mined and milled, and so we're very proud about the efficiencies that we build in every day and improvements, and the teams are just a very, very energizing, you know, process improvement machine. And so Constancia, you know, I mentioned the nameplate. If you look on the far graph on the left, the nameplate was around 75,000 tonnes per day. We're currently operating above 90, and we're working on plans.
I was on the phone last night with the Peruvian team around additions of pebble crushers, another mill to grind it a little bit better, optimization around fragmentation, and looking for that extra 10%, beyond that. I'll skip through this, but it's just a standard mine, open pit, primary concentrator to... We ship concentrate to port. In terms of productivity, I think there's two things you can take away from this slide is, you know... So this is from a third-party consulting firm. They reviewed a number of mining companies in South America, and in terms of our grinding and our labor productivity, we're among the top. The mill's outperforming.
The crushing circuit, I think it's a little bit overdesigned, but if you take it back to our design principles and our management systems I talked about at the beginning, we don't overspend on CapEx. We do fit for purpose, and we try and squeeze the asset. And so the results that you see on this slide are a combination of the two, where maybe others may not be showing as utilizing their equipment as much. They in some cases, it was overdesigned, and in others, you know, we are running it with about 95% availability. So we're doing best-in-class maintenance practices as well. From the environmental side, so we've gone. You know, we're really proud of our performance in Peru.
I think we're one of the only companies to go five years without an environmental, call it a write-up from the, from the government agencies. We're, you know, we're very proactive. Our teams are constantly looking at ways to improve, recycling everything to the food that we have at our camp. And so it's something that, you know, it's all part of our social license to operate in Peru, and I think it bodes well for us in terms of as we look to do future expansions and permitting exercises. I think we have three or four different permit applications in the pipeline right now for production increases and mine life extensions.
From a logistics standpoint, you know, we have a top-notch team, so it is, you know, until you actually drive it, so you go from 4,500 meters above sea level down, so it's quite a long drive. It's a two-day journey to bring the concentrate to port and come back. We have about 100 trucks on the road. You'll see on the next slide there's quite a number of logistics and road maintenance along that we work with communities to keep the roads in good shape, and safe, and we work with our community partners as well in terms of hauling the fleet, which will come up on the next slide.
So we work with the Chilloroya community and the community of Uchucarcco, and helping support them and train them with getting up businesses running. And, you know, when we say again, back to, you know, as every system, management system's perfectly designed to get the results it gets. When we had those, you know, with the uprising with the president in Peru, the operators of these trucks that haul our concentrate have a vested interest in our operation continuing. Their livelihoods and their businesses are, you know, come to pass with our operation, and they came to support us. And so these trucks are all. We manage them just like our own fleet. All of them have, you know, fatigue management systems, cameras in there. We use Apple Watch to monitor their sleep conditions the night before.
So all of these are treated as if they're our own employees, and we brought the communities up to a standard that we would call our own. A little touch on where we are and so, you know, it's related to Constancia, so we do have a lot of exploration potential in the vicinity. We're very excited about that, and we've been working on exploration permits, which we hope to get in the near future. What you see on there is a radiometric map that shows our deposit, Constancia. You can see the purple color, Pampacancha, what we're currently mining now, and you can see the large radiometric anomalies to the north, which we're very excited about, and we expect to be drilling there in the near future. I'm gonna jump into Copper World quickly.
We have three minutes. So Copper World is in the United States, again, in a jurisdiction that we quite like. It's a world-class open pit operations in North America. It's a point five four grade. We broke it up into two phases, so this is gonna be a long-life asset. So the first phase is a private land plan. We're very close to completing the final permits on this. We expect that in the very near future. We just recently received an aquifer permit, and we're waiting for the air permit in the next quarter or so.
This operation, although it shows on there the smaller opening, we expect it to go on to be a much bigger operation. Similar to Constancia, you know, you could fully expect this operation to go fifty-plus years. This is an operation that fits with our strategy around meeting multiple long price cycles as we go through. It's a modest CapEx. It's not something that, you know, you see a lot of the major projects at $1.3 billion. We're looking at going into feasibility into next year. We'll be refining that CapEx and hopefully to a project sanction, you know, in mid-2026. Just to keep on track, I'll go through. I think I covered most of that. We'll go to the next one.
In terms of greenhouse gases, we do have greenhouse gas strategies at all of our operations, and this one's no different. We've assessed the greenhouse gas footprint, and in part of it, we look at Scope 1 and Scope 2 greenhouse gases. In this case here, we're contemplating an Albion Process made in America copper. It fits our strategy both from greenhouse gases, but even more so as the world markets are more and more volatile and tensions around the world, we believe that there'll be a strategic advantage for us to make finished product right in the USA, and it also makes more money. In terms of our capital cost intensity, so Copper World is. The initial capital cost is relatively low.
We'll be refining that, but it's, it'll still be in the, in that ballpark. It's a little bit lower than Constancia, but if you picture the difference, Constancia was built at 4,500 meters. The site itself was building a small town, so our camp facilities can house several thousand people with food and sewage treatment and the like. And so here in Tucson, we're 20 minutes away from a million population city, so it's very close. So it's not surprising that the capital cost is much lower. In terms and that just verifies, it shows the elevation and capital costs. I only got 23 seconds? We have a timeline to bring this forward, so we're really excited about about Copper World. It's a world-class deposit.
The first phase will get us into production at about a 60,000 ton a day operation, ramping up. It could ramp up to 90 or 120, or just go for many years at that current rate. You can see the milestones that we've gone through, and we're very close right now. Like I said, we've received the aquifer permit back in end of August, the APP. We're waiting for the air quality permit, which is on track. You know, it's probably, you know, within the next several months, it should come. And then our intention is to initiate a JV process, you know, to balance our financial risk as we go into this project. And Wheaton is a partner with us on this.
They're initial investor in what used to be called the Rosemont Project, and we're happy they're a partner with us on this one here. And so if this last slide was to summarise in terms of Copper World, it's on a series of whether it's grade or cash cost or annual production, it's gonna be a top-tier copper producer in the U.S. And so I think we've gone through the majority of the hurdles. We've learned a lot about permitting in the United States over the last several years, and I think we have a plan that we're very confident on and robust to go through on that. And with that, I think I'll take some questions, if anybody has questions.
Time for one question, if anyone's got one for Copper World or for Constancia, for André. In the back corner there?
Yeah. Just on, from a Wheaton perspective, with the higher grade satellite targets around Constancia, Maria Reyna, Caballito, just wanted to ensure that the land package that you guys have encompass those targets from when Hudbay starts putting out exploration results, it's relevant to you guys. And then, a second question on Copper World. Obviously, that deal was signed with Rosemont. The project's changed a bit, from then. Just wondering on the upfront payment, in terms of that agreement, if there's any negotiation or when we might see a resolution to that matter.
Sure, sure. So the first question, yes, so we have some very exciting targets in and around Constancia. We have a long history with Wheaton. You know, they've been a great partner with us. We've worked on agreements, renegotiated agreements. We've worked together in Manitoba from Triple Seven all the way through. And so with the size of what could potentially there, and we don't know until you put the truth detector and you actually drill the holes into the ground. With the size of what's there, there's no doubt that there's gonna need to be funding and partners, and Wheaton is obviously a have been a very good partner for us. And so we'll deal with that, I guess, once we've discovered it.
We like working with Wheaton. In terms of Copper World, the original agreement was built based on the 90,000 ton per day plan, which was called the Rosemont Plan, back in 2016. The agreement goes way back before that. It is a very different plan than today, but still a very long life, and I'm confident that, you know, together, we're gonna figure out if there's an amendment that's needed, that we'll come up with something that's mutually beneficial for both of us, as we've always done.
Yeah, I'll just add, we've got a strong, very strong partnership with Hudbay, with the entire team. You know, so just to clarify, that deposit is outside of the existing area of interest, the new exploration. It's outside of that area of interest, but we're happy to work with Hudbay to help them advance this on a go-forward basis, and there will be capital needed. And that's the beauty of this industry. And so, we're hoping that we can expand our relationship down there. At Copper World, yes, the original deal, it actually goes back to 2010, I think it was, that we signed the original deal on the original Rosemont project. And the Copper World stuff is captured within the area of interest, and so it is part of the stream itself on a go-forward basis.
You know, we saw that potential, the Copper World potential. I still remember hiking the ridge to the north and to the northwest, mainly because I wanted to see what Tucson could actually see about Rosemont, 'cause, you know, the NGOs were complaining about another mine on the horizon, and in my eyes, there was this ridge in the way. So I climbed up on this ridge, and there was copper staining all over the place, and that is what we now call Copper World, is that whole area that was some old workings there and such, and it's turned into that. So we always felt that that was gonna be the dessert on top of the main meal, which was Rosemont, and we're now looking at probably having some dessert before we actually get to the main meal itself.
But, you know, we haven't sat down there, still firming up some plans in terms of how it will go forward. My hope is, and, you know, maybe call me a little bit naive in this, but common sense should prevail. One of the things that I find so frustrating about permitting down there is the, you know, the design and the plan that Copper World has so many inefficiencies in it in terms of having to fit waste dumps and tailings and storage onto squares that don't... You know, there's an extra cost, and that cost is an environmental impact. That elevates the carbon footprint because you're having to inefficiently operate this site.
And so my hope is ultimately that it would, you know, embellish and collapse into the, you know, being able to operate on federal lands and operate the site efficiently with as little carbon impact as possible, and producing as much copper and maybe a little bit of gold and silver for all parties, right? So, you know, there will be a discussion in terms of how we go forward on that. It's an asset that we're quite happy with in terms of the way it's developed, and so we're gonna be, again, a very supportive partner in that whole process, but that hasn't happened yet, so.
Okay.
With that, great. Thank you so much. Really enjoyed it. We're definitely behind schedule, so we're gonna hotshot a couple more guys up here on stage. Patrick's first up, and enjoy.
Thank you, everyone. I am excited to be able to talk about Wheaton's sustainability program. I will be going pretty quick as we are running a little bit behind. First off, obviously, sustainability is a core value for Wheaton. I've been with the company since 2012, was overseeing the program since then. Picked up the title of Chief Sustainability Officer about a year ago, but again, we've always been focused on this. And when we think about sustainability, we think about it in four distinct areas. First off, having a strong foundation, and that's based on our governance and our policies. Secondly, through the community investment program, which we have talked about at length before, and you'll hear more about it today, but it's something we're exceptionally proud of.
On the ESG due diligence side, you know, we talked about that this morning, so I won't rehash it, but what I will say is ESG due diligence doesn't end once we sign the deal. We look at. We're continually looking at and evaluating our partners' performance. For the key assets, we will actually even visit those assets and do community investments on an annual basis. And lastly, by doing what we think is the, being leaders in the reporting and the disclosure and the voluntary commitment side of things. We were the very first streaming company to sign on to the UN Global Compact. If we look at governance, really, everybody in the company is involved in sustainability.
Straight from the board, the senior management team, at the employee level, there's opportunity to help support my team, as well as participate in one of the four different committees we have down within the company. I will also point out that ESG KPIs are integrated into the corporate and executive remuneration program. I always have a hard time. It's like a tongue twister. So it is well-aligned, everyone's well-aligned with the importance of sustainability. On the reporting side and disclosure, we were the very first streaming company to put out a sustainability report. We are still, I think, the only streaming company to put out a standalone climate report. And when we look at what's material to Wheaton, we do a double materiality assessment.
So we not only look to see what, how things will impact Wheaton, but also how they will impact the environment and society as a whole. So really, that upper right-hand corner are the topics that we really focus on when we're looking at materiality. On our strategy, there are eight specific topics that we typically have, or that we have, under our strategy. Each one of these has individual goals associated with them, and we do assess those on an annual basis to make sure that there's room, if there's room for continued improvement. I will also say that this strategy is aligned with the UN Sustainable Development Goals, the SDGs. Again, that was part of our commitment on the UN Global Compact. Now, this is something we are exceptionally proud of.
This is something we've been doing since 2009. Our community investment program has put over $45 million back into the communities around our offices, but also around those mines that we have an interest in. We have a standard formalized program in which we dedicate 1.5% of the average of the previous four years' net income that goes into the budget each year. Net income's been growing, so our budget has been growing, so we're quite excited about what we're putting in back into the ground. Two-thirds of that does go to our partner program. So again, this goes into the communities around the mine sites. You can see we have four different pillars in which we look to donate: health and well-being, education, climate and nature, and community development.
You can also see the SDGs associated with each of these pillars. As I said, most of the money goes into the mine sites, around the mine sites. This is a snapshot of 2023, in which we put in almost $7 million into the various communities. You can see the global reach throughout the Americas, you know, primarily Latin America, and also up in Canada and North America. I am excited by next year, I think you will see a dot over to the right, given our interest in Africa. We've got some really good projects we're looking at funding there. So what are we gonna do in the future? It's pretty much more of the same. Continue to progress on our sustainability strategy, continue to put money back into the communities.
We are currently in the process of doing a physical and transitional climate risk assessment on a site-by-site basis, so we're working with our partners to really get a good understanding of what the risk associated with the various sites are. We are proactively looking to update our disclosure in line with the IFRS S2, which is a climate change reporting. That is something that's a multi-year commitment, a multi-year process, and we should have initial results showing up in our 2024 climate change report. Finally, on climate change, we do have the Future of Mining Challenge. Again, Randy's already alluded to this. It's something that we're very excited about. You know, improving the efficiency of mining is only gonna benefit everybody. That is my time, and I think Gary is next to talk about financial performance.
... Okay, I will also try and be quick. This is really just a slide that gives you a snapshot of, you know, the extraordinarily strong margins that this business model generates. And at today's commodity prices, we're well over 80% on the cash operating margin side of things. One element that I don't think a lot of you sell side analysts are tuning into is the proportion of our production that's tied to a fixed payment as opposed to a percentage of spot. And a fixed payment gives us much more participation in the upside than a payment that's tied to spot. And right now, almost 90% of our production comes from fixed production payments. So that gives us a lot more leverage.
Just to give you an example of what that means, we've put together this slide that shows you that, you know, when you compare a 20% production payment to a fixed payment, and you vary the price by 25% and then 50%, you can see that our cash flows rise by 31% and 63% on the fixed production payment. And so that's a 25% uplift relative to the floating production payment. And I think that warrants, you know, consideration when you're looking at what our PNAV multiple should be relative to our peers. This slide is one that I think you guys are well aware of.
It really just tracks what our actual cash flows have been, which is the green line, and compares that to what we had anticipated our cash flows to be when we made the investment decisions that we did. And you can see that at every virtually every point along the curve, the actual cash flows that we've generated from our investments have exceeded the expected cash flows, and we're very well positioned to benefit from the current bull market cycle on the precious metal side of things. Our dividend, you know, I would argue that our dividend has been very progressive. This is a snapshot of the last decade, and our dividend has tripled over that period of time.
So on an average basis, it's increased by over 13% a year. And when you look at our current dividend relative to our revenue, we are paying out at the highest level in the space. This slide, I just would point out that the slide in your book is a little bit different than this. We caught an error in the slide, but really what we're showing here is that we have not relied upon equity to finance our growth. We've only relied upon it to the tune of about $3.3 billion, and we've repaid $2.2 billion of that through the dividends. So, we...
And we do not view ourselves as requiring equity to grow. So we will be. We expect to pay for all of our growth through cash flows from operations, or if we had to, drawing down on the $2 billion revolver that we have available to us. This just shows you that we've basically recovered every dollar and then some, that we've put into the streaming space over the life of the company, over the 20 years that we've been in business. This shows you that we have a balance sheet that we can use to execute on our growth strategy, and it also highlights that we're generating over $1 billion of operating cash flow annually at current commodity prices.
And it shows you how those that cash flow changes with increased commodity prices. You can see that, for instance, if commodity prices increase by 10%, our actual cash flows will go up by 13%, and therefore, we're getting about a 30% leverage to commodity prices with the business model that we've got and with the portfolio that we've established. This is another item that I think warrants consideration in coming up with your price targets for Wheaton. You know, you look at our measured resources up to measured and indicated, and we have about 37 million gold equivalent ounces in that category, in those categories, proven probable and measured and indicated. 23 million of those are in relative to operating assets.
I would argue that the market is really in kind of a "We'll believe you when we see it" mode when it comes to giving us value for our development stage properties. So I don't think we're getting full value for those development stage properties. So what I'm trying to show on this slide is that you know, this says $24 billion of enterprise value. We're more like $28 billion today, which just actually puts a bigger exclamation mark on my point. You know, if we're not getting value for our development stage properties, we only have to pay $2 billion of additional investments to bring on another 14 million gold equivalent ounces of resources.
You know, that would suggest that there's very significant upside to our stock price, something in the neighborhood of another $5 billion-$7 billion of value that should be recognized when those development stage properties start producing. This slide really just shows that, you know, what we set out to do as a company was give investors a different way, and we would argue, a better way, to get exposure to precious metals. This just shows you that we've outperformed gold, silver, or any one of the precious metal equity indices over whatever time horizon you wanna look at, and we, we've beaten those indices by a very significant margin. Then, just a snapshot, mic drop type of final statement.
You know, we've put just over $10 billion into streams. We've recovered more than that already. We have 28 years of reserve life, and if you look at resources, that go more than doubles to 60-plus years of average mine life remaining. We're generating over $1 billion of operating cash flow annually. That grows by 40% with our growth profile. And as I said earlier, you know, we do this post-mortem analysis and we've generated over 17% return on every dollar that we've invested into this stream. We have tons of opportunities in our pipeline. We're extraordinarily well-positioned to execute on those opportunities.
And I would also say, you know, that we are a company that cares, and that, I think, has been reflected in our very, very high ESG ratings. And with that, I think I'm turning the mic over to Randy.
Actually, we're gonna bring you guys up, too, and you guys can have a seat. We've got some time for...well, we really don't have time, but we've come a long way, so tough. Might be a little bit late for lunch. So we have some time for some questions to the broader management team. And so, got one over in the corner.
Hello? There we go. Just with the, you guys used to put a chart in the presentations on the timing of deals. You know, when you see a price trough, you're typically more active. Like, in the current environment, you know, there's more competition, there's higher gold price. Do you see some challenges to maintaining that price optionality that you guys like to get in structuring the deals? And then maybe a follow-up on that, you were kind of talking about the competitiveness and providing more, you know, full suites of financing. Do you foresee any challenges, you know, maintaining those necessary safeguards that you've been putting in place on traditional stream financing?
I'll let Haytham... Oh, you go ahead of the mic. Okay.
Sure. Thanks for the question, Tushar. Yeah. It is an incredibly competitive environment right now, and we are having to be quite creative. We're not seeing less deals in this current environment; we're actually seeing more transactions. Surprisingly, you know, we just finished two conferences, and although we're at $2,500-$2,600 gold, it's still very, very, I would say, not an optimistic market out there for a lot of the juniors. You haven't seen the equities perform as well, so they're still struggling, and that's where a lot of the opportunities come for us. In terms of the actual larger diversifies, you know, you are seeing some looking at streaming non-core metal, such as gold and silver, and a lot of the time, platinum and palladium.
We are, I would say, 99% of our time is focused on, on gold and silver at this point in time.
The... Oh, go ahead.
I was just going to respond to the second part of your question there, Shane. You know, I would say that we're still holding the line on those protective measures. You know, I think in light of what's happened to one of our competitors, it just really puts an exclamation mark on how important those elements are, so I don't see that changing.
That said, you know, there... This is on, right?
He's got his mic still.
I've got a mic on right here. You know, we are always faced with that tension. Every time a deal comes forward, if we're in a competitive process and we get a bid sheet that comes to us, and it has price sharing or it doesn't have a parent company guarantee, back to my earlier point, you know, that's when we have to get together as a team and say: What are we gonna do? What goes to our core values? What goes to our core message to our shareholders? And just stick to our guns. And we've ridden this through before.
There was a period of time back when silver price was spiking, where we were getting a lot of pressure to do price sharing, and we really resisted that, potentially at the risk of losing some deals, but we felt strongly about it, and we did that, and that has kinda weathered that. But again, it's a competitive space. We get these challenges all the time, and we just have to focus on our core protective measures.
... The one change that we have seen, and it was highlighted on Gary's presentation, was most of the new transaction, pretty well all the new transactions now will have a production payment that is a function of the spot price, and so there is a measure of price sharing through that mechanism. You know, that does help from a sustainability perspective, although if you're in assets that are first or second quartile, I don't think that really makes a big difference. But that's definitely something that has come into the system, so most, just about every new stream that comes out now will have a production payment that does that. But fortunately, we have a pretty good portfolio, as Gary highlighted, of assets that do have that fixed production payment on a per-ounce basis.
But, you know, I think the other side, I would say, is that there is, and it was mentioned earlier on, there is an increasing appetite for one-stop shop. We'll always be stream heavy in that, but, you know, we'll be competitive in that space. We're not scared of stepping in from the equity side to provide some support. We don't mind a bit of debt, but whatever deal we're going to do will be dominated by the stream being the biggest portion of the value. We think that actually works the best for most of our partners, 'cause, you know, especially if it's a non-core asset within their own portfolio, it unlocks value for everyone the best way, and so that's our whole focus.
I think stay tuned in some of the things we're doing here over the next little while. You'll see a lot of creativity that doesn't get rid of the core stream that we're doing, but provides some flexibility over time.
In terms of single-asset companies, how do you get comfortable that you're not streaming political risk in those situations?
Yeah.
Then, in terms of parent guarantee, as those companies get acquired, how does that guarantee?
Yeah, it's an interesting question because you can't... I mean, if a single-asset company, it's only as good as that asset, and so it means that we need a higher rate of return, so it gets measured into the risk. In terms of taking on that risk, it means we need a higher rate of return to reflect us taking on that risk. You can't avoid - you can't totally avoid all political risk in an industry where the resources are locked in a country, and you can't pick them up and move them, and so you're always gonna have a bit, a measure of exposure. You come up with ways to try and creatively protect yourselves. You know, you'll have completion tests. You'll have completion guarantees in place.
I remember, and I think it's long enough ago I can talk about it now: we had extensive discussions with Rio Tinto about Oyu Tolgoi in Mongolia and the difference in value between doing a stream with Turquoise Hill versus doing and providing the parent guarantee versus Rio Tinto providing a parent guarantee. And there was a very big difference in the cost of capital that would fit into that, right? And so we have to capture that risk. And so a single-asset company will have a higher cost, or it'll, in the end, deliver us a higher rate of return, and you try and structure it through having you know that. You also have to go in there and make an assessment of it. But there's no way around it when it's a single-asset company.
Again, I think, one of the most important things is to focus on assets that are first or second quartile so that they can withstand, you know, cost creep from royalties and taxation and such like that and still be profitable for that single-asset company and support them that way.
Sorry, I was just gonna talk about your second part of your question, which was: what do we do on a change of control if the company gets taken over? We have a provision that requires that the parent company of the Acquisition Co. does provide a replacement guarantee at the top-level company. So for instance, when B2Gold took over Sabina, we now have a B2Gold parent company guarantee that steps in. As I mentioned earlier, you know, we've learned over the years, so that is a newer provision that we've added to our agreements over the last several years. Our original deals don't have that kind of a provision, but we do now incorporate that going forward.
If you look at our entire portfolio right now, you'll see it's a fairly low-risk portfolio. Certain jurisdictions will become, you know, a little hotter in some areas and for year- over- year. But you know, we're. I think our portfolio could probably handle a little bit more higher-risk jurisdictions, but it has to be the right asset. It has to be for a high-quality asset that has the ability to significantly contribute to our overall portfolio.
Yeah, and then I would finish off by highlighting that, you know, we don't have any connective tissue to the jurisdiction that the mine operates in. So, and you have to remember that these mines that we're investing into are low, low-cost mines, so they can, they can bear a whole bunch of what I would refer to as, like, creeping expropriation, increased royalties, increased taxes, before we'd ever be impacted.
One more question.
On still keeping with corporate development, with gold outperforming copper, the degree to which it is, are you seeing more precious metal streaming off base metals assets, right, in that sort of opportunity, portfolio? And how long does it take for a market dynamic like that to start to come into the corporate development department, right? Is it a few months before you start to see these machinations that are in the market, you know, come into sort of the discussions? And then lastly, what are valuations looking like on those precious metals being streamed off base metals assets? 'Cause, you know, running a $2,000 gold price versus a $3,000 gold price, you're gonna get, you know, big differences, obviously.
So to answer your first question, yes, we're seeing a lot of opportunities coming from polymetallic assets, where people are trying to crystallize that precious metal's value. Are we actually starting to pay up for that? Are we using spot pricing? Not a chance. Right? We're still, you know. I think if you look at it, we look at various commodity price assumptions, but I think if you look at consensus, and we're probably somewhere around consensus. But we do take into account where spot prices are. Right now, consensus is probably $900, $1,800, $1,900-dollar long-term commodity price, but we're sitting at $2,600 plus. So we do take that into account in our overall analysis, and when you're looking at it, when we get judged, we get judged in the market the time that the transaction is completed.
So we'll look at that, but we'll also look at it based on consensus pricing, and we're probably somewhere in the middle most of the time.
I would say, though, the one thing with copper prices not performing as well as what most people, we're not seeing as much commitments on the construction side for people needing capital in that space, and that's the one weakness. There's lots of people exploring financing, but nobody's pulling the pin in terms of actually going forward on these projects. They just wanna see a bit more strength in base metal prices before they do that plunge. So you just you know provide that support and be ready, and when it happens, it'll happen.
A lot of the time, the opportunities we're looking at are development stage opportunities. You're competing with debt, you're competing with equity. Equity is not readily available these days. Debt is expensive, so streaming is by far the most competitive cost of capital right now in the industry.
Mm-hmm. So I think, I think we're gonna cut off. We're, I mean, we've got a lunch after this. I've got a couple of closing remarks to make, but I think we'll cut off the Q&A there and then. But please, we're gonna all be around for the lunch, so if there's any additional questions, we'd love to push that forward. I always love how we run out of time on these things. It's, you know, good engaging conversation and stuff like that, so. I do have a couple of slides that I think. Oh, I've got to do the clicker. I'm just used to someone else dealing with that.
And so, you know, the one aspect that I thought, after looking at everything, I just wanted to spend a moment on capital allocation because it is, you know, obviously, we are generating a lot of cash flow. I consider any year where we make more commitments than we have cash flow coming in as being a positive year, a good year, where we continue to grow the company and push forward. You know, keep in mind that those commitments will come with a construction schedule drip-fed over that construction period, and so it adds to that. But, you know, we are focused on accretive growth and, you know, we had some discussion earlier on about this concept of NPO, and it was Gary that was talking about it.
NPO is a real important factor for us, and one of the things that we always look at is the cost per NPO. What are we actually paying on a per ounce basis to make sure that we stay accretive and stay delivering real value back compared to what our shareholders believe the gold is worth in our existing portfolio? And so we put a lot of effort into that and focus on that, and so our number one priority, from a capital allocation perspective, is to continue to manage the existing portfolio, then look for accretive opportunities, to expand and grow that. In times past, we've sold off or collapsed a couple of streams for good returns, mainly because we're focused on trying to keep a high-quality portfolio for our shareholders, for our stakeholders.
If we can't find those opportunities, and let's never forget, you know, we sound like a very deal-driven company. We have to make sure that we recognize that we work in a cyclical industry with, you know, commodities that are cyclical, and there are times to invest into the space, and there are times not to. So, you know, I've had people say, "How many deals are you gonna do this year?" I never wanna put the pressure on the number of deals that we're gonna do this year, 'cause there will be three, four or five-year periods that we will, as I call, harvest, where we will build up the war chest because prices will be there. It'll be frothy. There'll be a strong market. Prices are high.
That's not the time to be investing into the space, 'cause there's no doubt the spot price has an impact on what we're paying today for four ounces in the future. And so we need to be sensitive to that. We make sure to have systems in place that temper us in those frothy periods. And you know, it's a challenge to pick those off. I mean, if it was an easy thing, everyone would do it, right? But and so we need to be cognizant of that. But the beauty about that is that that's when we build up the war chest to sort of go off and fix balance sheets afterwards. But if we don't, we have made a commitment on the dividend side to return more and more back to our shareholders.
We are already, by far, the leading company in the entire precious metal space in terms of the share of our revenue, the share of, you know, the value per ounce that we actually give back to our shareholders in the dividend, and that will grow. Earlier this year, we committed to a progressive dividend, which means that every year you will see a bit of growth, and I... This little graph that we've got here on the side, I think, you know, what the commitment that we made was, that's that straight-up part at the bottom. There will always be a bit of dividend growth on an annual basis. However, the higher our net cash balance, the more that dividend growth will be.
And so you can always sort of look at us and say, "You know, how much cash on hand do they have at the end of the Q3 when we release our results in November?" That's gonna be a rather, you know, and then watch for the activity level and see what else we commit to over the fourth quarter and into the, you know, the early part of the next year. You'll get a sense of where the dividend growth is gonna fall based on that, and that's kinda the commitment that we've made, is that we are going to stay as leaders in that space in terms of returning back to our shareholders, and so, you know, I think it's a real important aspect of that. Focus on accretive acquisitions. They're not always gonna be there.
These acquisitions will be there all the time. The accretive is the challenge. And, you know, the one thing that, you know, we talked about is how we pick the right mines. You know, the real story is how we avoid the wrong mines, right? That's the trick in this business is not so much, you know, picking off the right mines, it's avoiding the ones that will have challenges. And I think we've got a very good track record, thanks to, not these guys, thanks to the entire team. It truly is a team thing. I love our project meetings, where two-thirds of the company sits down and hammers it out and talks it out in terms of whether we should go forward and what should we do, so.
I like Gary's phrase, "This is the last slide," the mic drop slide, you said? Yeah, you know, we've created this business model 20 years ago. What an incredible 20 years it's been. We spent the first 10 years focused on silver, and then expanded into the broader precious metals, and definitely now dominantly a gold company, still have incredible silver optionality. When you add in Pascua- Lama and Navidad, and other stuff, great silver optionality, but really good, strong growth and when we look at the corp dev portfolio, lots of stuff in the gold space. And so I, you know, I...
My prediction is we will stay dominant in gold, probably climb a bit over time, but, but we do have some good silver exposure that could come forward, too. So I think the rest of these just kinda highlight just the strength of what we have as a team and what we've been able to deliver and, so I think with that, I will say thank you again very much. A special call-out to Emma, to Billy, to JC, to there, and the team that works with them in terms of organizing this. Thank you so much for everything you've done. It always go so seamlessly, you know? They do such a good job on that side, so a special thanks to you guys. And, I think there's a lunch scheduled now, right?
I believe it's out the hallway down and two right turns, and you'll be in there, and in this beautiful, balmy... Well, it's not too balmy out there, but I think we've got a tent outside. Thank you for joining us.