Some in person and hopefully some online. Welcome to Wheaton's 2021 Investor Day. Again, while we'd hope that we'd be able to see all of you in person, due to this pandemic, we had to shift hybrid style event, not anything new. I'm sure everyone's having to work around this. But we do have a small group of our sell side analysts joining us here in person in Toronto.
And then the majority of viewers, I guess, are tuning in via the webinar. So to keep the pace of this event, There's going to be 2 designated Q and A sessions for Wheaton Management, and the first is going to follow the presentations from our executive team here at the start of the morning. It will focus on areas of sustainability, corporate development, Finance. The second and final Q and A session will follow the presentations that we have from our partners later on in the event with a specific focus on the assets themselves. In addition, and time permitting, there should be a little bit of Q and A behind each one of our partner presentations.
So if you're with us here in Toronto, please use the microphone, there's 2 mics in the middle, to ask a question so that we can share that question the with the audience that's watching it virtually. And for those that are attending remotely, there is a question box available through the webcast link where you can type and submit your questions. So time permitting, hopefully, we can get those questions answered live as well. So I'm going to start off. There will be some forward looking statements made throughout the course of the day.
This is a blanket forward looking statement that covers everyone's presentation, so you don't have to listen to this every time. So anyways, I urge everyone to understand the cautions associated such forward looking statements buried in the fine print in there. Today's agenda, as you can see, it's been ship it around. We'll go to management presentations at the start, followed by our partner presentations. So my name, Randy Smallwood.
We're here to talk about streaming and Wheaton Precious Metals. The streaming business model is a unique model that we created back in 2004 when I was at Goldcorp at the time. And it's designed to provide capital to the mining industry by selling off a non core ideally, a non core portion of the production. And so you can see the structure is very simple, upfront cash payment made to the operating partner. And for that, we get a percentage metals delivered at a fixed cost on a per ounce basis as that metal is delivered to us.
No, it's not advancing. There we go. So our vision to be the world's premier precious metals investment vehicle, and We're going to deliver that to our partners and to our stakeholders through that streaming business model, deliver that value through the streaming business model. And so as you can see, to our shareholders by delivering low risk, high quality diversified exposure to our partners by crystallizing seeing the value for these precious metals that have yet to be produced. And of course, to our neighbors, all Stakeholder of the Lower Cross, but to our neighbours by promoting responsible mining practices, by providing support in terms of building proper mines and providing that support to the to our communities around the mindsets itself.
We have a very strong ESG program in our company. Wheaton's the real key benefits of the streaming model are sort of really highlighted here. What you've got is real high quality assets in our portfolio. We really do put extra focus. In fact, it's the first criteria that any investment has to satisfy is really high operating margins, good strong operating margins, good long Life assets.
And of course, what that delivers is good exploration and expansion potential. These are the assets that our partners want to invest into first because they deliver high margins to our operating partners. Of course, predictable costs. The costs themselves are fixed, the capital cost upfront, the operating cost as that metal is delivered to us. And all of that, of course, because we do have that operating cost on a per ounce basis, does give us commodity price leverage.
We will perform better than, say, a comparable royalty, which doesn't have that operating cost base itself going forward. So does give us better leverage on commodity prices. A very strong innovative dividend and of course, great optionality with a number of assets aren't even part of our production portfolio yet. So we have had a pretty successful pandemic, transitioning into a hybrid world. We've had a number of projects move forward into next stages and a number of acquisitions: Santo Domingo, the Cozamin Stream, the Phoenix with Rio 2.
Voyases Bay has now started delivering Cobalt 2S early in January. We've made some significant advances in sustainability. Patrick will talk about that in a bit. Listed on the London Aker Exchange. Hoping to get over to London to do some marketing there sometime soon.
Good strong dividend growth that we've seen with that dividend being tied directly to commodity prices and our growing production and of course, leadership in precious metals themselves. So year to date production. You can see we're well advanced in terms of making our objectives for the year. I'm getting red lights flashing at me here, so I'm going to speed up through this. But you can see our production.
We've got good strong growth over the next 5 years and in fact, 10 years. We came up with 10 year guidance for 1 of the first times that anyone in this space has, just to highlight the longevity of our asset base. Good, strong Production growth should see us all the way up to about 830,000 gold equivalent ounces per year averaging over the next 10 years, which implies 850,000 for the last five years of that to push it up to those levels. And we've added a few assets since we came up with this guidance. And so it's good, strong production growth over the course so the next 10 years.
Cumulative value of upfront payments to date, we've delivered over 40% of all streaming contributions into the mining space and a good strong list of partners, all the way from Glencore, Vale, Newmont, all the way down to some of the small little single asset producers, smaller copper producers like Capstone and such and then single asset companies. So This streaming model was very effective as a source of capital in the mining industry itself. You can see precious We have been active over the last 5 years. We've got 3 of the top 5 precious metal streaming deals completed over the last 5 years, and we continue to be very active on that front, and I know Haitham will have a bit to say about that. So with my last slide, our capital allocation, it is our most pressing issue.
This year, we should see relatively close to $1,000,000,000 in free cash flow. And so our focus is to try and in fact, all of us. What we're paid to do is put that into accretive, responsible transactions that continue to grow our company. But if we can't put that back into our company, back into the ground by making good acquisitions, then we continue to grow our dividend. It's really our biggest pressing issue in this company.
So it's pretty times for Wheaton. So with that, I'll hand the slide over to Patrick.
Thank you, Randy. As mentioned, my name is Patrick Jerone. I'm the Senior Vice President Investor Relations. Part of my responsibility at Wheaton is to oversee our sustainability program.
All
right. So now that you've seen my presentation So at Wheaton, sustainability is a core value. It's something that I may oversee, but everyone on this stage and throughout the company is focused on sustainability. And when we talk about sustainability as an organization, we tend to look at it in 4 different areas. The first off is due diligence.
We do very thorough due diligence, inclusive of ESG. Secondly, we believe in giving back to the communities from which we operate, as Randy already alluded to. Thirdly, we need a strong foundation based on formalized ESG policies and practices, and our foundation is overseen at the board level through our governance and sustainability committee. And lastly, we need to hold ourselves accountable, and we've committed to a number of external frameworks to make sure that we are accountable to best practices within the industry. On the due diligence, Heath will go into much more detail on our due diligence program.
It is very thorough looking at technical, financial, legal, environmental, and ESG. And on the ESG, that's where I'm focus. The ESG due diligence, we have 10 principles, 10 investment ESG principles tools that we look at when we're evaluating risk related to an opportunity and doing due diligence. I'm not going to go through all of 10 of these, but I will highlight a few of Number 4, I think, is important, and this is maintaining regular and ongoing dialogue with our mining partners. The key thing for us is partnerships.
That's what you see throughout my presentation, what Randy's already talked about and what the rest of the team will be discussing. We really do believe forging certain partnerships is crucial. And that plays into numbers 67 here, which our community reinvestment program. Giving back to the communities from which our we get metal is is paramount to us, and it goes back to, again, forging strong
partnerships, both with the mining operator as
well as the local tips, both with the mining operator as well as the local communities around the mine sites. And lastly, number 10, I quite And that's being agents of change. If we see ways to make something better, be it from a technical perspective, a community perspective, we're not afraid to Speak up and make that happen. So with those ten principles. We've come up with an ESG checklist.
This ESG checklist is used to helps us to screen for potential risks and shoes. We evaluate the partners' potential policies and practices around these material topics That can potentially impact the future of the mines. As Haytham will show you in his presentation, through this exercise, we're able to assign quantitative rankings for the various ESG factors, which are then consolidated into a weighted contribution that goes into our determination of the discount rate that we apply to a new opportunity. So we do quantify this, and this does have financial impacts for a potential opportunity down the road. As I've mentioned a few times, giving back to the community is something very much a part of Wheaton.
We've got a formalized policy where we dedicate 1.5% of our net income to charities and to the communities. 2 thirds of that goes to those communities around the mines from which we get metal. The remaining third goes to the local communities around corporate offices. As you can see from our partner program, this is something we're very proud of. This lists some of the very proud of.
And last year, we saw that there was more that we could do. With the pandemic raging, The rural communities, especially those rural communities around our mine sites that don't have the resources, needed more help. We put in a 5 $1,000,000 additional fund focused on combating COVID-nineteen. As of the end of the second quarter, we deployed $4,000,000 of that, and we fully anticipate the remaining $1,000,000 going out hopefully by the year end. And as you can see, a number of initiatives.
It's neat to see an ambulance down in Tayo Tito with our name on it, and that's just one example of the many things that we've done. And we also recognize that we need to, again, hold ourselves accountable. To that end, we are We've signed on with a number of external frameworks. We've been carbon neutral for the past 6 years, since 2015. We were founding signatories to the World Gold Council's And we were the 1st streaming company to sign on to the UN Global Compact, the largest sustainability initiative in the world.
And as part of that commitment to the UNGC, we have published sustainability reports. We put our second one out gist in May. It is aligned with SASB, with TCFD and select GRI disclosures. I would urge you to take a look at this. There are copies of that sustainability report on everybody's desk here in the room as well as on our website.
It really is a comprehensive look at our sustainability program. And it's nice to know that our hard work hasn't gone unnoticed. We are consistently top ranked amongst the ESG rating agencies. We're a AA with MSCI. Sustainalytics has us number 1 for precious medals.
And perhaps more importantly, Sustainalytics also has us ranked in the global top fifty. That's out of over 12,000 companies cross sector that they've screened us as being in the global top fifty, the only mining company in that indices. And I can assure you we won't rest on our laurels. We're very proud of what we've accomplished and what we've done to date, but we still see lots of opportunities for us to do more. Even to that end, I recently hired a full time sustainability manager to both complement the existing team but really to give press.
And with that, I'll turn the floor over to Haitham Hohle to talk about corporate development.
Thank you, Patrick, and good morning, everyone. For those of you who don't know me, my name is Haitham Holy. I'm the Senior Vice President of Corporate Development. And I'll be here to talk to you a little bit today just about the process we undertake when we're looking at new streaming opportunities as well as what we look for in those streaming opportunities. So the first thing we do is we actually identify a potential opportunity and ensure it meets our sustainability criteria.
That's one of the most important things. Then we generate, as you see from this flowchart here, production profile. We arrive at a discount rate, and I'm going to go through all these in a little bit more presentation to map out some future cash flows. And then we analyze the impact on Wheaton's portfolio, but not just on Wheaton's portfolio but also on our partners' portfolio and see how it impacts them. Now there's the reason streaming works is there's a number of benefits to our partners.
Otherwise, our partners would never look and consider streaming. It provides attractive, flexible funding. I'm not going to go through the list. I will go through some of these points in my presentation. It's viewed as portfolio optimization.
In other words, unlocking value from the partner company. It creates sustainable value, and we look at ourselves as a proponent for change going forward, not just looking for things that are already established, but something ways we can continue to move things forward. And then it also mitigates risk. It reduces their risk by diversifying their development risk. How is streaming better than traditional funding?
No, there's several ways that streaming is advantageous. One of the most important ways is A stream always improves the internal rate of return for a project. It creates value for both parties, and we'll talk about how that takes place here shortly. And it's an expedited due diligence process. Whereas it may take debt or other forms of capital 6 months to a year, can do it in a matter of weeks.
It's non dilutive. It crystallizes future production of the mining partner and endorses the technical merits of the mine. The reasons that we've been successful is we have an internal technical team that consists of mining engineers, processing engineers, geological engineers, etcetera. And all that is done internally, which gives us the ability to do things or expedite the overall process. When we're evaluating opportunities, we start with the due diligence, and due diligence is pretty important.
We've got financial due diligence. We've got technical due diligence. We've got ESG due diligence. We've got legal due diligence, which is not here. There's a number of things we go through to make sure that the project is suitable for Wheaton and for our investors.
The next step would be financial modeling, and we take into account all kinds of discounting and all kinds of factors that determine what that discount rate will be. After that, we look at we analyze that value. We look and say, okay, how does this contribute to Wheaton and how does it contribute to our partners. And one of the most important things, we will not do a transaction if it's not accretive and We can't see a path to accretiveness going forward. So something to keep in mind as we're going through the presentation.
In terms of due diligence, the way we start, we start with the stop study. It's almost as simple as someone gives us a production profile, we kind of map out to see where it falls in the cost on the cost curve. We arrive at basically a preliminary, what we call, indication of value. We socialize that with the counterparty. The counterparty says yes or no, we're If they're interested, we'll sign a CA.
We'll move into a data room. And the data room was where we will actually take the entire drill hole database, rebuild the block model, rebuild and vet the existing economics to make sure everything makes sense. And then if we get to that final stage, where we actually like we see after we've gone through the desktop due diligence, we'll actually schedule a site visit and head to site. And just about every single site visit we've done, except during pandemic, where about half of them we were not able to to where we actually hired external consultants that we can rely on. We've actually gone to most of these sites ourselves.
And that's one of the reasons why we've been able to differentiate ourselves. When you send consultants to sites quite You get a consultant that's typically looking for problems. What we're looking for is opportunities in these mines. That's something to point out. Patrick has gone through the ESG evaluation.
As you can see, every time we look at an opportunity, there checklist of at least, I'll call it, 8 to 10 items here that we will look at. And I won't go through all these items, but I will say our objective is not necessarily find a project that has all these items. It would be great if it had all these items. What our objective is to ensure that these projects transition. Edition.
We want to be a proponent of change. So we make sure that the companies that we're dealing with, if they don't meet some of these criteria, that we write it into our contract. We contribute additional capital towards the mine annual basis to try to get them to that stage. And that, I think, is the important difference, I guess, between us and some of the others. In terms of looking at the appropriate discount rate, one of the first things we'll do is we'll look at the asset quality.
As you can see from this pie chart on the left, 90% of our production profile comes from assets that fall in the lowest half of the cost curve. Optimally, we'd love to have every single asset fall in that lowest half of cost curve. Sometimes it will fall in the upper half of the cost curve. But what we look for is a way or a reason why there's going to be improvements in efficiencies, improvements in bridge. We want to see a transition to that lower half if possible.
And if we can't see it but it's still a high quality asset and the margins are great, then we will still discount it higher to reflect the fact that it's higher risk than the rest of our portfolio. We look at the life cycle of the mine. As you can see, we've got 24 operating mines and 8 development projects. Of those 24 operating mines, those 24 operating mines alone will generate more than the 150 to 2 the operating months that each of our largest competitors have in terms of cash flow. So we're we do focus on asset quality.
That is one of our key focuses. Now we look at political risk and adjust for political risk. It's all relative to which country and etcetera. And then counterparty risk, 65 percent of the current production comes from investment grade counterparties. If it's not investment grade, that warrants a higher discount rate, which we also factor in.
And lastly, we look at geological confidence. Over 50% of our R and R falls into the reserve category. Now how do we establish a price that benefits both our partners? The reason that streaming actually works is that initially, we started to take byproduct precious metals production from base metal mines. And Since then, we've warranted a premium valuation.
That also allows us to take precious metals from underperforming precious metals counterparties. So what we do is we actually take The valuation that they're getting for their ounces, and we look at the valuation we're getting for our ounces, and we're able to actually share that value spread to ensure that there's a win win opportunity out there. And doing that makes both partners happy and allows us to not just succeed on one transaction, but to build a relationship so that we can continue to help partner grow. We really don't look at this as this is one of the reasons we don't do royalties. We don't look at this as a one shot deal.
We look at this as this is Wheaton forming a joint venture partnership with this company to help it grow to the next stage. And that's every one of our assets is we approach that way. And that's why 3 out of the last 5 streams we've done have been with existing or previous counterparties. So we do take that very, very seriously. And this slide also shows What streaming does is it provides a significant amount of the capital.
It's Slovo, for an example. We provided 78% of the upfront capital is almost $3,900,000,000 We provided 78% of that capital and only ended up taking 20% of the revenues. That only that required Vale to only put up less than $900,000,000 of the capital, which they can as you can see from their 2020 EBITDA, they recouped easily in 1 year's time. So streaming definitely does work to improve the overall internal return of the project and reduce the I guess the risk of other financing methods. In addition to Looking at accretiveness, the typical accretiveness, earnings per share, cash flow per share, net asset value per share, we also look at various other things from a technical side, such as accretiveness to reserve and resource accretiveness.
We look at Macaulay's duration, which measures the average life of the stream and how quickly we get those ounces back. And then we also look at the production profile and how the stream that we're considering actually contributes on a per ounce basis to the existing profile we have. And we try to ensure that just about in all these cases that the stream we're looking at is accretive on those basis. The illustrative time line of a typical transaction, we like to say that it takes 8 to 12 weeks to do a transaction, whereby we start with the S. T.
A. Study, we go over to the indication of value that I actually outlined earlier. We do the data review, the site visit, we submit the final IOV. And in theory, we close the deal in 8 to 12 weeks. I can tell you, The largest deal we've ever done, which was a $1,900,000,000 Vale deal, took less than 5 weeks to do.
And we've done transactions that are even been quicker. We let the counterparty drive the timing of the transaction, but that does not they don't drive the timing of the technical due diligence. Usually, it's 2 to 3 to 4 weeks maximum to detect the due diligence. And then the other 4 to 8 weeks end up being legal, etcetera, and We've seen balance sheet strengthening has been pretty critical. We've seen project financing.
A lot of the opportunities we're seeing now have been M and A opportunities whereby people are looking at streaming as a source of funding for acquisitions. In terms of the type of the assets to stream, historically and optimally, what we like to see is We'd like to have a stream on a producing asset that generates cash flow right away. But unfortunately, that also tends to reflect a higher valuation we have to put upfront because we're getting those cash flows right away. So we've also got a few different structures where we enter into early deposit structures, etcetera. I'll go through going forward.
Development stage opportunities are probably the largest number of opportunities we're looking at these days in this environment. As I said, the traditional one is the operating mine and where we actually put up our capital. We pay up every production ounce that's out there, and We get our cash flow right away. The second opportunity is a development stage opportunity whereby we put up, once permitting and financing is in place, We do have completion tests that protect us in case the project doesn't operate at the expectations that it's supposed to. And the last one, which It seems to suit a lot of the junior companies and development stage opportunities because dilution is such an important factor for them and they're They try not to dilute, obviously, as they're trying to grow their company.
We come up with an early deposit structure where we'll put up 5% to 10% of the value of the stream upfront at no dilution, which allows them to advance the project from, let's say, PFS to FS, and then we'll put up the remainder pro rata with the rest of the capital required going forward. What that does is it allows us it reduces our risk because we're staging our payments. And every time they derisk by getting a permit or a financing place. That actually makes our life a lot easier and improves our returns. And what it does is if you look at our existing production profile, we have a production profile that's trending upwards.
And this allows us, with these development stage projects, to continue to add to these 3 to 5 year profiles so that we don't have that big drop offs as some others may. Why is Wheaton the premier streaming company? As I've said, we focus on sustainable relationships. We're not just there for 1 transaction. We're there to continue to help the company grow and build its portfolio.
Quality is the utmost important importance. That's why we only have 24 assets, but those 24 assets I mentioned are some of the highest quality and largest cash flow generating assets in the streaming industry. We've got a strong reputation for excellence. We've got a strong internal technical team that I'm very proud to say has done a phenomenal job. And There's we probably look at 60 different opportunities a year, and maybe we'll do 1 to 3 opportunities a year, and we're very ecstatic about those.
It's the ones that we don't do that we're actually more proud of because we've seen some big disasters out there in the industry, and thankfully, we haven't been involved in those. We've got a proven track record, and that helps the counterparty because when we enter in a string transaction, that tells the market that this has been vetted by Wheaton's thorough technical team and a healthy balance sheet, which Gary will talk to you a lot more about here going forward, but we're very comfortable doing Any Size Transaction. We're not not every transaction has to move the needle, but it has to be a high quality transaction, and that's really what we focus hon. And we're flexible. We recognize that as mines mature, there has to be changes to these things.
And we've made several changes streams to benefit our partners, but also we found ways to help it benefit us and our shareholders. Anyway, thank you very much. I'd be happy to take questions right after Gary has gone through. So at this point, I'll introduce Gary Brown, our CFO. Thank you.
Thanks, For those of you who do not know me, I'm Gary Brown. I'm the CFO of Wheaton Precious Metals. I'm going to start by is the presentation on the main screen, supposed to there we go. Taking you through a little bit of a history lesson. And you have to remember that we've been around for over 17 years.
So this will be just a refresh of where we've been. First, I would point to the growth rate that we've achieved. If you look at from 2,004 2020. That translates into a compound annual growth rate of about 24%, which is It's quite stunning. And it may look like we've flatlined since about 2016, but it's really important to understand that we were countering the impacts of the maturity of the Cozamin stream, which matured in 2017, stream that we paid about $40,000,000 for, but which contributed about $200,000,000 of cash flow to us over about an year period.
As well, the maturity of the flows from 3 of Barrick's assets that were put in place in order to protect us against delays, against related to Pascua getting up and running. And I would remind you that we recovered about 60% of our investment relative to Pascua. And we still feel that that's a very promising project, which will contribute significantly to us. And as well, we restructured the San Namaste stream in 2018 and took the amount of metal that we're receiving from San Namaste down by about 50%. And for that, we received First Majestic shares that we ultimately sold for about 275,000,000 dollars of value.
On top of that, during that period since 2016, we've really planted the seeds for future growth in the consummation of raft of transactions, including the Marmato transaction. We did the Voisey's Bay deal, which doesn't it didn't start contributing until this year. We Did Cozamin, Santadomingo, Cucco, and all of those add to the already very strong organic growth profile that comes from Our streams relative to Rosemont, Pasqua, Toroparu, Cotabambas And all of those together, once they're up and running, we'll take our gold equivalent ounce production profile up over 1,000,000 gold equivalent ounces. So there's a lot of kinetic energy in our portfolio, not to mention the inorganic growth that Haitham alluded to with the opportunity set that we're currently looking guide. Then I wanted to take you through a little bit of how that production and sales profile translated into cash flow.
If I've divided our history into certain segments. So the first takes us from 2,004 to 20 12. And you can see from this graph that we had sales volumes increased by almost 1800%, coupled with over a 300% increase in commodity prices, that resulted in over a 9,000 percent increase in our operating cash flows. And that really highlights the power of this business model and the leverage price increases that you get. Then I would look at the period 2012 to 2014.
We weathered a 35% drop in commodity prices and still generated well over $400,000,000 of operating cash flows, highlighting the resiliency of this business model. The increase in sales volumes between 2014 2016 was really due to the consummation of Salobo, the second and third legs of Salobo, where we took the attributable gold production that we're entitled to from 25% to 75% and also Antamina. And Then we've talked about the drop in sales volumes between 2016 2018 due to the cozamin and the cessation of flows from the 3 assets relative to Barrick. And then our sales volumes Between 2018 2020 are pretty much flat. But the our operating cash flows increased by about 50 percent, which is significantly more than the increase in the commodity price, again, about a 1.3x multiple there, again highlighting the leverage that this business model provides to increase commodity prices.
Then this slide really just highlights the power of fixing your cost base for every ounce of silver and gold that gets delivered to us. This really just highlights that our business model provides very good exposure for investors to increases in commodity prices. And we know with virtual certainty what we'll be paying for every ounce of silver and gold that gets delivered tied to the price of the underlying commodity that we're receiving. And right now, that comprises of less than 20% of our portfolio. Which equates to what we thought our cash flows would be when we entered into the transactions that comprise our current portfolio.
And the green line reflects the cash flows that we've actually generated. And this is really important to understand as an investor in Wheaton. What we do is is provide long term exposure to precious metals where we provide exposure to the cycles that the mining industry inevitably goes through. And you can see that virtually every point along that curve, the green line, so our actual cash flows, have been above where we had expected our cash flows to be. In fact, between 2010 2014, we generated over $2,000,000,000 more cash flow than we had And you can also see that right now, it looks like we're at the start of another rally in precious metal prices, and the portfolio is extremely well positioned to reap the benefits of that.
Then we turn to the dividend policy, and our dividend policy is relatively unique. In fact, I don't really know of any other company in the world that ties their dividend directly to their operating cash flow. And I really like that as a CFO because that's very sustainable dividend policy. And I I think our investors like it because it really provides them with direct participation in our production growth as well as the growth in commodity prices. And as you can see from this chart, Our dividend has increased 50% over the last year, and we've had 4 consecutive increases, quarterly increases in that dividend, and we expect that just to go up from here.
This slide, we put this together after the last Investor Day because I think there There's a little bit of confusion as to how I was calculating the returns that we've generated on the dollars we've invested into the streaming space. It shows you that we've invested about $9,000,000,000 into the streaming base. We've recovered this is as at December 31, 2020. We've recovered most of that already. So over $7,000,000,000 has been recovered through the cash flows that have been generated from the metal that's been delivered U.
S. Under those contracts. And that portfolio of contracts as at December 31 was worth almost $19,000,000,000 So So if you run a simple IRR on that profile, it will result in about a 20% average return that we've generated on every dollar that we've invested into the streaming space. Again, that's over a 17 year period. So I would challenge you to find a portfolio manager that can Put those types of stats in front of you.
This slide really just shows you that we rely very little on equity to fund our growth. Since inception, We have used operating cash flow and debt primarily to fund our growth, about 80% of our growth. We haven't issued equity since 2016 and our current portfolio is generating about $1,000,000,000 of operating cash flow a year. We're debt free, so we don't anticipate requiring equity to fuel our growth in the future. And this really just gives you a snapshot of what our balance sheet looks like.
As at June 30, we're debt free. We had over $200,000,000 of cash on our We've got a $2,000,000,000 revolving credit facility that's in place, which is completely undrawn. So we've got over $2,000,000,000 or had over $2,000,000,000 of firepower at the end of June. And then I would turn your attention to the cash flows that we're generating. On average, over the next 5 years, we're expecting to generate rate, about $1,000,000,000 of operating cash flow annually.
And then you can see the leverage that we provide to increases in commodity prices. Basically, as I had previously explained based upon our historical results, but this holds true for the future as well. For every dollar or percent increase in commodity prices. You get a 1.3x multiple in our operating cash flow, which should translate into cash flow, which should translate into increases in the share price as well. With the use of our debt.
And this slide shows you that between 2,009 and 2012, we really built up a war chest. We didn't have any debt and then we deployed that war chest and borrowed. We reached a maximum borrowing of about $1,400,000,000 in 2015, again, that related to actions. And then we repaid that debt. And we're currently in a position where we're building that war chest again, getting ready to consummate all the deals that Hatham's talked about.
I would also highlight the leverage ratio that we've had. We've always had a leverage ratio of below 3x. And leverage ratio, for those who may not know, is your net debt to EBITDA. And it's very important to understand that our EBITDA is effectively our free cash flow. We don't have any sustaining CapEx.
So you can't really compare our leverage ratio to that of a mining company that has a significant amount of sustaining CapEx. And so I think The other point would be that you have to remember that we've got over 30 years of reserve life in our portfolio currently. And then if you account for resources and the conversion of those resources, that more than doubles our mine life. So you've got 60 years of potential mine life here. For me to only have debt outstanding that's Less than 3 years' worth of cash flow is a very conservative use of the balance sheet.
This is an interesting slide, I think. This is a new one. What we're showing here is that of our resources just up to M and I, assets. And for those development stage assets, we only have to make less than $1,000,000,000 of payments, which equates to about 5% of our the value of our existing portfolio. And I I think we're getting much value for development stage assets in our portfolio right now.
So you can see the catalyst for shareholder value that the seeds of growth that we've planted will provide. And this really just kind of drives home what we've been saying, which is if you're looking In a streaming company like Wheaton Precious Metals. We have beaten the price of the movement in for Mining Companies for every time horizon that you want to look at. So in conclusion, we put $9,000,000,000 of money to work in the streaming space. We're the guys who invented this business model, I'll remind you.
We've recovered to June 30, about $8,000,000,000 of that $9,000,000,000 already. We've paid about $1,300,000,000 in dividends, which equates to about 50% of the equity capital that we've raised to date. So we've returned about 50% of that. And we are currently generating $1,000,000,000 of operating cash flow per year. We have over 40 years of mine life, if you just look at reserves and M and I.
We are focused and have been leaders in the sustainability side of things. And we've been very disciplined in the way that we approach growth, achieving about a 20% IRR on our investments in the dreaming space. And I would finish up by just reminding you that the team that's responsible for the growth to date is still the team that's in place today. I've been with the company for over 13 years. Randy is Founder and most of the executive team have been here for over 10 years.
So you've still got that team that is refining the way that we approach growth and can execute on that very efficiently. And with that, I will conclude.
Thank you, Gary, and thanks, team. As you can see, we're a bit behind on schedule, and so we'll open up for Q and A. But I'm just going to encourage, if anyone wants to refresh with water or coffee, We are going to work our way right through the coffee break. Feel free to go back and recharge. So any questions for the management team here?
Please.
Hey, Thim. Thanks for the discussion on setting the discount rate. I'm just wondering, in this market environment, how you factor in Wheaton's cost of capital and when some of your peers talk about what a tough deal environment it is, if that makes you Have to push it a bit on the discount rate.
Thank you for the question. So we're really somewhat
indifferent as to what some of our competitors are doing.
We're not looking to compete with as to what some of our competitors are doing. We're not looking to compete with 1% to 3% IRRs. That's not our strategy. The way we differentiate ourselves is when we're actually putting an indication of value in front of somebody, we don't actually factor in the existing reserves, the existing mine plan. We take a look at the resources.
We basically take the entire geological model and figure out where trending into and factoring those reserves and resources. The caps on the Cosmo was a perfect example. It looked like we were probably low single digit IRR on that transaction, but as soon as but we'd already had access to a lot of the information, which came out a couple of weeks after we actually announced the transaction. And you saw that there was a significant increase in reserves and resources at that point. So we do take our technical due diligence and try to improve on that.
We can't control what some of our competitors do. We think the market is quite efficient, and the market will end up We think the market is quite efficient and the market will end up translating into either increases in share prices or decrease in share price for these low cost of capital transactions that are happening. You're never going to see us do a negative IRR or very, very low single digits unless we see significant upside, whether that upside comes through expansion or increases in efficiency CEO improvements, etcetera.
We really strive to be a partner of choice. I think that's and there's so many other things that we add as part of the package. First, reputation in terms of strong technical due diligence, but also we I have an overlying belief that the stronger our partners are, the stronger we are. So we continually work well past the upfront payment to help our partners be stronger.
Good morning. Hey, Tim, you said something intriguing about looking at opportunities where the ESG score wasn't quite there and that you're willing to contribute capital to your counterparty. I'm just wondering, can you talk a little bit about when and if that's ever happened in a certain transaction? And could that take the form of, say, an equity investment? Or is that taken into account in the upfront consideration and the transaction valuation itself.
Sure. No, it's a good question. So I can tell you that there's a lot of opportunities that we see out there that currently aren't up to the ESG standards, we would love to have them at. But what we do as part of the existing precious metals purchase agreement we enter into is We actually write into certain contracts. I don't want to name names because everyone is actually a various project because the companies, the counterparties have been improving.
But I can tell you, just in the last year alone, on some of the opportunities we've looked at, there has been instances where we've said, listen, we need to see improvements in tailings. This needs to happen for us to get there. And they would commit to doing that within the actual precious metals purchase agreement that we signed. So it has happened. The majority because they don't always meet those standards, but this whole ESG push has The last, call it, 2 to 4 years where everybody's been pushing to get there, we've been there for a long time.
We've been trying to add to our counterparties to try and help them improve the communities, the environmental, the social, everything for the last decade since I've in there. And only recently has that been a big push in the industry. But yes, definitely, we're going to continue to do that, and we contribute a certain amount even after the original upfront payment on an annual basis to help them get there. Cosmos? Thanks, Randy, Gary, Hathum and Patrick, first off, good to see everyone in person.
You're looking good. Maybe my question is on M and A. As you talked about, Haitham, a lot of these new opportunities are in funding M and A. And you also talked about the importance of due diligence in your process. M and A transactions, does that complicate how you do your due diligence?
Maybe you can quickly talk about that. So it depends on what stage we get involved in the M and A transaction. If we're brought in right from the beginning, then we basically do our entire desktop due diligence at the same time that the actual potential acquirer is actually doing their due diligence. We actually participate in the site visit along with them. Typically, we've got a team of 3 to 5 people that goes in and addresses mining, geology, processing, ESG.
So generally Speaking, if we're involved right from the beginning, it makes it seamless. There's no change to our existing profile. Often, what will happen is Some companies will come in and say, listen, we'd like to acquire this. We've already gone through our due diligence process. And that complicates things.
What we'll do at that point is we'll Into a conditional indication of value that's subject to due diligence as they're going through their final due diligence. Usually, while they're finalizing their legal, we'll be going through our final technical and legal at the same time.
Yes. Just it does not compromise our own We own our decisions and in order to own them, we need to complete a full suite of analysis.
I think we're just about out of time for questions. There is one coming in from the web. I think it's pretty much to the group. How do you see the type of streams evolving and will you that you will do over the next 5 years given the strength of your balance sheet and that of the sector,
one. As Haitham highlighted in his presentation, what we're seeing is a lot of development type projects right now, which is very similar to what we saw from 2,004 through to 2010, where we're actually funding growth, whether it's through expansions or greenfields development or even sometimes acquisitions. We're seeing more of that versus balance sheet repair or the 3rd season that we call harvest. And so I fully expect CDAT. Balance sheets are strong in the industry.
And so where most of the need for outside capital comes from is the smaller companies, the companies that have 1 or 2 assets or even single asset companies trying to move these things forward. As Haitham highlighted, a stream is an incredibly attractive way to help build year company when you're a single asset developer going forward because the amount of dilution when you sit and look at what these companies are trading at to issue shares to fund that growth in these assets is very expensive to the existing shareholders, which is who we all work for as our existing shareholders. And so we see lots of activity, not big in scale. They're not we haven't seen a lot $1,000,000,000 sized opportunities out there, but there's a lot of smaller opportunities out there that cumulatively will make a difference.
Yes. And I just addressed the last part of that question with respect to increasing dividends. We Are currently paying out 30% of our operating cash flow in the form of dividends, and we've got a really significant number of opportunities We're looking at. So we think we'll find a home for the 70% that we're retaining. If we're not as successful on the growth front as we think we can be, then we're definitely going to have to look at that payout ratio because We'd rather ratchet up the quarterly dividend than return excess cash to shareholders
So with that, I think we're going to as I said, anyone needs refreshments or additional coffee. Feel free to get up during this, but we are going to sort of skip through this coffee break because we're a bit behind schedule. So much to share. I believe we're going to try a virtual presentation here right now. Capstone is our first partner presenter.
Brad Mercer, who's the Senior Vice President and Chief Operating Officer at Capstone. Of course, we've just recently completed streams on Cozamin and Santo Domingo. This is a relationship that goes back to in fact, my relationship with Capstone goes way back to actually optioning them their first ever mining property way back in the early 1000s while I was at Wheaton River. And so helping Darren pilot and that team morph into Capstone, I've known this company for a long time and so very, very happy to be working with them again. We had a term stream on the Cozamin mine that and on Minto that went very well for us.
Cozamin is a mine that we know well, and so I'm going to let Brad take over. So Brad, good to see you. We can see them on this side, but hopefully you can see it. Okay.
Production of 285,000 ounces have been delivered thereafter dropping to 67% of the production. The payments are missed There, Deane. Next slide. This I love this slide. I'm a big believer in exploration.
I started out my career in exploration. This basically shows the progression of the mine plan and reserves over the last 3 years. In March, we filed the strongest mine plan ever in Cozeman's history. As Randy said, Wheaton's been involved way back since 2005. So it's remarkable that we have the best plan ever 16 years later.
We talk about a project called Impact 23 that aims to optimize the mine plan and extend the mine life, both through drilling and through using technology and better extraction ratios using pay stub. This year, we started on some cross cuts to allow us to more efficiently drill off the Malinoche West area and the Malinoche Footwall Zone West you'll see some diagrams in a minute. And we've got another crosscut plan for 'twenty three to go to the east and look at that extension. We are just embarked 2 weeks ago on Phase 3 of our ore sorting technology. For those of you out there that have been to Cosum and have seen the mineralization, it's a poster child for sorting because very course kalcopyrite.
So that's coming along good. I'll speak about that in a minute. Next slide. So this impact 'twenty three, basically, there's 5 pillars here. There's the exploration, which we've been very good at and we will continue exploring.
In addition to these east and west targets, we've also started developing some near to mine other veins. This is world class historic district. There's a lot of old mines here. Enhanced pillar recovery, that's really code for paste fill. I I can tell you that the Paceville project is on time, on track, on schedule, on budget.
We are dead on the money here advancing very quickly. Stope dilution, this mostly is long hole drill control. This mine is as it advances here, will become more and more dependent on long hole drilling and less on the development because We've kind of overdeveloped the mine a little ahead of schedule, so improved engineering planning and drill control. And more recently, we've started looking at explosive design to put less energy into the rocket and get the right fracture. Trapless headings, I'm really excited about this one.
This is an unusual discovery that the Malinorche Footwall Zone upper area. It was Instead of discovering it, mining down and discovering it downward, we basically discovered it laterally from the workings and then up, So we can use gravity. So basically, everything above Level 10 will be the ore will be passed through ore passes, which has a big efficiency improvement, big ESG improvement on air quality, greenhouse gas, lower greenhouse gas emissions. But more importantly, too, I think safety because it debottlenecks to traffic. I want to turn your attention to the table on the bottom.
There's 9,500,000 tonnes of 1.56 percent copper, 35 grams per tonne silver, another 4,000,000 tonnes of low copper, but good lead zinc and decent silver. These are resources that are not in reserves and this is what we are targeting primarily with ore sorting and we'll talk about that I think on the next slide. So there's a huge opportunity here. Sorry, I'll talk about it in a few slides. I want to explain the mine a little bit.
Unfortunately, we don't have a pointer on the screen here, so you'll have to bear with me. You're looking into the page north. So west is on the left, east is on the right. The blue ramp you see, This was the one way loop that we've connected on time and we're actually a little ahead of schedule and on budget. This was a $4,700,000 project that unlocks about 50% more metal per year for $4,700,000 So this is a transformative project for us.
It's in operation. In the past, we We were bottleneck getting the ore up the shaft and a little bit out of the ramp because of the two way traffic. Now we've debottlenecked that and the ramp has a 1,000 tonne per day capacity and the shaft is 1800 to 2000. So right now, our haulage capacity exceeds our ability to break the rock, which is one of the things we're looking at is upping the output. So we are above plan at the 37, 80 tonne per day mark, and that's going very well.
Next slide. Sorry, just go back one second. You can see a faint black line in the upper part of the ore body. That is Level 10. So everything above that will be dropped through ore passes.
So the ramps that you see going up are just to get the equipment into the mining equipment up to those levels, but there will be no haulage on those levels. We'll just drop it down. The next slide is kind of gives you a schematic overview of the 2 biggest targets. As I mentioned, we are developing other veins outside of this system. But for now, the principal target is on the left, what we call the West across cut.
That's being developed right now and on schedule to be finished in the winter of 'twenty two, so January, February, hopefully. The idea is if you go out to the end of those cross cuts and you drill back towards you in out of the page where you see the oval that's called Melanoche West Target Zone. So In these drill holes, which we're now drilling from surface in 'twenty one, we're going to go underground in 'twenty two to make it more efficient. We're actually drilling 2 veins. We're drilling the extension of that purple to the left, and we're drilling that kind of beige mauve color.
That's the main vein. So we're actually testing 2 veins with one drill hole every time. There's a design you see on the right, another blue crosscut where it says East Exploration Drift. This is more in the area where we have referred to in the table as well some of the more copper pour, but zinc, lead, silver rich veins. And we will be mining that in 'twenty three and then drilling from there on to increase exploration in that direction.
So Remarkably, after 16 years, we still got exploration targets in the mine as well as adjacent to the mine. Next, please. I think I'm not sure what your color resolution is like in the room, but the slide on the left Sorry, the picture on the left is very high grade material that's been sorted. And the slide on the sorry, the picture on the right is the waste. I think that kind of speaks for itself.
We did a bench scale test, which was very, very optimistic. So we went to an 8 tonne sample, and This is the residual of that 8 tonne sample. We tested 2 different technologies, which at this point I won't name because Jack did 31% of the mass, so that's your waste on the far right, and we only lost 1% to 2% of the contained metal. That's pretty remarkable. Obviously, there's a lot of upside here, less energy, which is a big ESG benefit.
The other thing is if you can sort and put higher grade material to the mill, You don't need to increase the mill capacity to increase your metal output. So that sample, it went from 1.7 percent copper and 42 grams per tonne gold sorry, silver, and that bumped it up to 2.25 cent copper and 57 grams per kiloton silver. So that was on run of mine ore that's not overly diluted. There's a lot of internal dilution in this ore body with the Rhyolite dikes, but there's not a lot of dilution on the sides where we got So the next obvious step is to do a real life test on these narrow veins. Those samples, I'm glad to announce, have been collected and shipped.
So we've started Phase 3. So we've opened up a couple of narrow veins that for all intents and purposes would be 1.5 meters to 2 meters wide, and we developed that out to 4.5 meters so that you're taking in like 66% dilution. So it'd be interesting to see what the results are on dose test. And we have every reason to believe that they're going to be optimistic. So Again, I'll draw your attention to the table.
This opens up a big resource to reserve potential conversion should we be successful. Next slide. I want to segue a little bit to Santo Domingo. And we something we haven't talked about a lot is we've started exploration there as well, familiar with this. But I just want to remind you, it's in the case of Wheaton here, it's 18 year mine life, 285 1,000 ounces of gold.
But the project has a $1,000,000,000 NPV at 8% post tax at an IRR of 33.3%. Payback is very short at 1.9 years. 1st 5 years C1 costs are $0.76 per pound of copper and life of mine is $0.62 You see the line there, that's cumulative free cash flow. And under our assumptions, which was at lower metal prices than today, It's still $2,800,000,000 worth of free cash flow. Of course, if we had to redo it at spot prices, it would be even better.
Next slide. And I think this is one of the most exciting slides in this presentation. We and I think you'll see why when I do go to the next slide. So the gray here is the ore body that's in the feasibility study. We did a VTM survey a long time ago.
I think it was in 2012, 'eleven or 'twelve. And we knew we had a target that kind of speaks to the extension of that ore body. And you'll see it a little better in cross You're looking at 2 stacked saucers basically shaped units that dip off to the northwest. So if you keep that in your mind when we flip to the cross action. So we had to bring a drill in here to drill on the right side.
The drill holes are not shown, but it's basically red line is to do condemnation drilling before we put the mill foundations in. Visually, we got a few hits On the right there, visually, it was there was a few small hits, but it did confirm that the mill is in the right location. We're not going to sterilize anything. Then we moved the drill over to drill this target here in the middle, and we're pretty excited about the results. So we've got almost 8,500 meters of drilling in 19 holes.
The assays have been slow to come in due to COVID, but we expect to be probably fully in hand by September. We are updating a model using the new geology information. We've refined the resource. There will be a new model and estimate coming out in Q4. And one of the other big pluses here as we took the opportunity to get a lot more information on the iron, on the magnetite, and we have a more robust, I think, magnetite estimation.
But let's go to the next slide, please, and you'll see why we're excited about this. So you can see the ore body on the left, right above where it says resource, there's 2 gray bodies and they're basically they're split by a wedge of waste. So the VTM anomaly goes right down dip from that where you see VTM. So you're coming from the west basically sorry, from the north to the south, down dip and then it goes back up again to the right. So We could put 8 wide spaced holes in here.
I think you can see the scale. These holes are 400 meters apart, and they all hit the mineralized horizon with various visual grades, which obviously I can't comment on visual grades, but we're very close to getting the assays. So it has the potential to expand resource down dip and then basically as you go to the north, back up dip again. So we're excited about this. We've left it let this target live for quite a while while we were concentrating on the feasibility work.
And next slide, please. And I'll take questions. I won't present the appendix slides, but if anybody wants to see the resource tabulation. That's what's there. But I think right now, we'll just Randy, I think we could skip to questions.
Yes. If there's any questions, no, I can speak for the fact that Santo Domingo was a project that we went in a little bit skeptical and came back very impressed with its potential. And so it's we're really excited to have it in our portfolio. So is there any Questions for Brad on either Cozamin or Santodomingo? You did a great job, Brad.
And we definitely look forward to seeing that growth. This This is going to be a project that I think will add a lot to Capstone. Obviously, it will also add a lot to Wheaton in terms of moving forward, both Santimento Cozamin, again, a mine that I've known for a very long time and really happy to have it back in our portfolio and working with the Capstone home team. So thank you for coming out and joining us today, Brad. Really appreciate that.
Wish you could have been here in person, but perhaps next time.
I'm actually in Arizona right now, just at the Pinto Valley mine.
Yes. Okay. Good. Well, it's definitely warmer and drier than it is here.
Thank you, everyone.
Great. Thanks, Brad. So next up, we've got a presentation from Hudbay. Cassel Meagher is here, the Senior Vice President and Chief Operating Officer, Hudbay. We've got a long history with Hudbay.
Funny enough, I was pretty heavily recruited to become the CEO of Hudbay at one point and fortunately they chose Mr. Garofalo instead of me. It wasn't something that but anyway, so I've got a long history with Hudbay And the initial stream was 7 77, then we went on to expand that onto the Constancia project, which is a project we'd followed for quite a while and so helping Hudbay build that. And then, of course, they acquired the Rosemont project, which we already had a stream on. So really excited just based on the performance that they had at Cozamin, which I still go back to meeting Peruvian Mine Minister back shortly after the completion of Constancia and describing it as the best mine build ever in that country from the Peruvian mines minister at that time.
And so really happy to have Cashel here, sporting his pandemic beard. Come on up, Cashel. Thanks. And I'm cleaning off everything.
Well, thanks for having me. Thanks for the invite. It's an annual thing. We might have skipped it last year. Yes, but yes, it's always nice to come.
It's always nice to to talk about your assets with your partners. And as Randy said, we go back with the team a long way. And Certainly. The financing of Constancia and the delivery was very successful with the help of Wheaton. The normal slides here.
So we'll start with Constancia. Many of you are familiar, obviously, with the assets. Some of you aren't. I'll just point out Few things that are maybe interesting about it. You know, we are bookended in what's called the Andoailus Yari Copper Belt.
And one end is Las Bombas. It's the super deposit that the MMG Chinese own now. And to the southeast, we have Glencore that own The Tintaya Antipakai Complex. These are massive mines, massive copper systems. And If you actually put a ruler down on these, Constancia lies on a break and Perfectly in between.
And even at a micro scale, if you lie on that exact same ruler, Papakancha lies right on that line, and so does some of our targets I'll talk about later, Maria Reyna and Caballito to the northwest. Certainly, a lot of copper is coming out of there now. All those mines got built at the same time. BHP started with Tintaya, but Antakay, Las Bombas and Constancia all came on producing within a year of each other. So it was a tremendous amount of activity within that copper belt And now a tremendous amount of copper and very critical to the GDP of Peru.
It gets a lot of attention, gets a lot of attention from the locals, gets a lot of attention from NGOs, and it gets a lot of attention in the political realm also. So Peru, 2nd largest producer of copper in the world, as we all know. So very important for their economy. And certainly on this, you can see that our route of travel is very important. It's like a 10 hour drive with a concentrate truck down to the port, and obviously, there are lots of Is we've yet to be interrupted for production in the years we've operated there.
And I would say, A neighbor like Las Bombas would be stopped for several days every single month. So It's a credit to the team there on the way they manage social problems and their interaction and those We purchased it in 2011. It was to be a $1,500,000,000 project, turned out to be $1,700,000,000 In hindsight, that capital cost increase in that type of inflationary environment was good, Actually, just a 10% overrun. I think, actually, we're kind of in that same sort of scenario now with a lot of the construction that's going on in the world, this sort of elevated inflationary environment with the rising metal prices. It seems to parallel quite often.
One of the things we did is we helped move the project from originally being permitted at 56,000 tonnes a day. Now we're permitted and we run at 31,000,000 tonnes a year, which is 90,000 tonnes a day. So that was one of the things we did to improve the project over time. And we've also Had the ability to improve the recoveries. We were optimistic of the recoveries to begin with.
Our run rate recoveries were a little low, but now we're Achieving those other recoveries. And so there's this sort of sense of continuous optimization. And I think one of the other things is, The safety results we've had at Constancia really are second to none. We've We've had a few lost time injuries, you know, year over year, but we've, you know, during the construction period. We had a period there where we had 8,000 people on-site and we ran 19,000,000 hours lost time injury free.
And recently, we also Had a run or a stretch over 20,000,000 man hours lost time injury free. So they take a lot of pride in the way they do things and to ensure no one gets hurt. You can see here on these couple of slides, you know, our copper production profile going forward And the throughput profile looking backwards, and obviously, the benefit of the copper increase profile going forward is mining of our satellite pit, Papagansha. So just to introduce the site itself, in The pit is sort of in the north, in the middle. Well, it's actually the east in the middle, but we'll say the top of the page in the middle.
We've got the mill location, waste rock facility, and then across the way is the big tailings facility. It's a very tight footprint. The mill itself, It's varies. It doesn't take up a lot of room. It was the 1st open or large facility with open.
It's wide open to the elements. It helped reduce, obviously, the capital cost, the amount of steel employed, the amount of cement. It was a very efficient capital build. Our Papagansha deposit to the right of that slide, that's where we're mining now. That'll deliver some of the higher grade copper, some of higher grade gold.
And then we hope to be able to expand in the future. And then just up to the very top left hand corner of this slide, you see what we call our deposit, Caballito, used to be the Mitsui mine. It's actually a small open pit there, quite an active crew of informal minors in that area, but that's one of the communities that we made the original negotiation for about a third of the Constancia surface rights originally. This slide shows that production profile going forward. So substantial EBITDA is substantially contributing to the EBITDA over the next 3 years.
We hope to be able to expand that. Recently, I was told by the geologists on-site that they seem to find an extension, something else to drill, northeast of Papagancha, we thought it was pretty sterile before, so that's encouraging. So that's something new, and that's something they'll get, hopefully, to drill in 2022. So that's within the footprint of the mine itself. And you know, it was a long time coming.
We got we you know, I used to feel questions all the time. When are we going to negotiate? How are we going to get this deposit into the mine plan? When is the community going to sell us the surface rights. I always joke that, you know, we bought Constancia at $4.27 copper, and We commissioned it at $2.40 At least with Papagansha, I think we're getting right with the metal cycle right now.
So I'm glad, serendipitously, we delayed it a little. You know, I mentioned this It's sort of social interaction. And the way I see ourselves, measuring ourselves with ESG and Easiest way to do it in Peru is if if they stop your operation, they don't like you and there's something wrong and they wanna Do something. We rarely get stopped, and it's this route of travel so important. There's some 14 major communities we need to work with.
You know, we have 70, 80 trucks on the road a day. Las Bombas would have 300 trucks on the road, and, Antebakay I would have about a 100 trucks on the road. So there's a lot of traffic along this road, and there's been times we've been stopped. And there's And and they've been stopped, and then they've let our trucks go through, and they've stopped there. So they they distinguish which is which.
And one of the thing and the important things we were able to do As we were able to introduce our communities, make partnerships, and they're actually part owners of some of these concentrate trucks. So and they sit in them themselves. So So when they pull up and their cousin's telling them to stop and they shut it down, they say, no, you're hurting me, my family. We're going through, and they let them through. So it's a pretty impressive process.
And we think we can with with the success we've had at that, we think we can increase that ownership of that sort of service relationship with our local communities, and this is one of the examples. There's also been a lot of innovation here. You know, our team put together, you know, a ways for all the truckers and all the mines so that they report incidents, bad weather, all these things online right away. And then the whole trucking systems all done by GPS with a dispatcher monitoring and watching everything that's going on. So it's quite a sophisticated process that has been developed over time and it has really worked well for us.
You know, I mentioned some of the, you know, This culture of continuous improvement since 2016 when I came on as a COO here at Hudbay, you know, and this is just one example to show that we continue to do it. We actually believe, much like Brad talked about, the ore sorting. This is just at a larger scale within the pit, but it seems our ores are amenable to this. We were hoping to have this installed already this year for the ore sorting, which obviously gives the benefit of higher grades in the throughput and then also lower strip ratio. We're seeing the benefits in all our testing and our bulk testing and evaluation phase, but we're actually slowed up a bit with some of the installation on the large shovels because Just getting through right now, getting through customs through Peru right now is difficult with the the government, but it's just everybody sort of knowing what I's to dot, what T's to cross.
So we hope to be talking a bit more about this next year, the results of it, and we're very encouraged by it. The same thing, we have self. We have a very, we have a corporate metallurgical team that has done, great things both in Waller, New Britannia and also in Constancia. And we see that we're able to probably increase the copper and the associated We're passing the roughers through. The residency time is a little too high.
So for a very cheap amount, I think it's between $8,000,000 $10,000,000 we can Sort of, like, increase the size of the pumps, diameters of pipes, and various things. And so we're working towards that to be able to utilize Those float cells in a sort of more efficient manner, and that mass pull get a lot more of the copper right away so we don't get rejects tales. Yes. So Reconciliation wise, look, we've been working back and forth. When we first started Constancia, the grades were a lot higher.
We're dealing with lower recoveries because of mixed transition zones, mixed with oxide, different things. We really have a hold of what the grade Now, we've been able to optimize the mine. We've been able to resequence the mine. And then learning about it, we've been able to reinterpret the mine. These guys re block model and re interpret the mine every single year.
So Our reserve gradually changes, and with that, we've been able to incorporate what we call Constancia Norte. So we did that last year. It adds a year of higher grade than reserve. But what's exciting about it is it'll offer some other opportunities in the future. Like I said to you, there might be something coming off of Papagansha.
The geologists are now looking for these sorts of offshoots that might be able to fit within the pit shells. And so we added this in. It's gonna Contribute to the back end of overlap a bit with Pampacancha and also contribute thereafter and extend, give us a little more breathing room with some of high grade before we have to hit the residual reserve of 0.3 or below. Again, when we were drilling We believe there might be some underground sweeteners. This is something we've always looked awards.
The actual or mineralized shell itself disseminates some grades It's out to almost nothing. But there's these offshoots, these sort of feeder zones, these sort of high grade areas that we feel might be able to give us opportunity as sweeteners, and one of them is off to Constancia Norte, a little deeper. There might be an opportunity there for thing. We'll be able to talk more about, probably with our reserve statement back in 2022 coming ahead, and we'll be able to talk about what we think This is and how that might contribute to the mine plan in the future and understand what that might be. But we think that there might This opportunity, this opportunity might actually be bigger than what we currently got drilled.
And so we think that's another way to perpetuate some of the higher grade and bring it earlier into the mine plan. You know, it sort of behooves me to talk about Constancia without talking a bit about the immediate region. You know, when I first went there for due diligence in 2009, one of the things I actually stayed in the community of Uchicarco, that's where Norseman had their exploration camp and, you know, you wake up in the morning, you look out and there's this big pit and there's 400 or 500 informal miners, and that's marked on this map here as Caballito. But so in 2014, I managed to convince You know, some people to giving me some money to fly some geophysics, some V10, Z10, I think it was time. But anyway, this is a potassium thorium output.
And what it shows you is it shows you the radioactivity of what you might have with batholith or with a sort of a porphyry system. And I think what's unique about it is it's it's not unique that we can find granite Batholiths in the Andes. What's unique about it is is is we could fly it over to Titaya and to Pacai, and it clearly outlines, we did that as baseline, where those deposits were, and then some other sort of systems and dikes. And you can see how they're very isolated. And obviously, those 2 are They're copper bearing.
And so the idea was, oh, look, well, we can pick out Constancia and Papagansha perfectly, too. And so, well, those are copper bearing also, like we're mining them, so we know that for sure. I also know Caballito's copper bearing because there are people mining there. And, you know, Mitsui's grade was 4.5 percent oxide when they were mining there in the early nineties. So we know there's We're working with the communities to get access to this, and so we know there's ore there, and those systems look bigger.
And then if we go further, where we own a 100% of the mineral rights also, To Maria Reina, valet back in 2011, it will have drilled 11 holes there, and one of which was about and 60 meters, 1 percent copper equivalents. We know that's cupric for us. That's got copper in it too. So we know these things have Right. There's no question.
And this potassium thorium sort of outlines the sort of the range of the resources we can validate with Antipakai, Tintaya, Constancia, and Papacancha. So really excited, of course, about this. So one of the things is is we've always been patient negotiators with our communities. They change their leadership frequently. It's one of the things that you have to do to operate uninterrupted in Peru.
It's some things our peers don't have the patience We've reaped the rewards for it. While frustratingly, maybe Papa Cancha took longer, maybe this negotiation took longer, but we hope sort of next year to be in the position where we've negotiated those agreements to put these drill holes on and validate the copper And I would say these would be scale and size of Antipakae, Tyntaya and orulus bondis. So that's sort of the upside we see coming. I'm running short on time here. I talked a lot Constancia, I talked about the social.
The other project Randy mentioned, of course, was Arizona. I think the story there is well known. I mean, it's a robust project, would be the 3rd largest mine. It's something we put a lot of work into. We re optimized the mine, and then we got our permit.
And you know, in July of 2019, we got interrupted by what I would call sort of a very unusual interpretation of an 18/72 minuteing law that has, you know, obviously been upheld for for a very long time. So we sat there. I mean, we could have cried in our milk. We could we can be waiting for the 9th Circuit, which will be coming, We hope early soon, maybe before the end of this year, a decision by the 9th Circuit to overturn that crazy ruling, and then we'll be back with Rosemont. In the meantime, instead of doing that, what we said was is, well, what else is there?
You know, if they don't want us to mine that, what is on our own What is there? So if you walk up along the ridge there, this place called Gonsai Pass, and you walk a 100 meters off of it, well, you can see on this slide. There's a big green patch. That's copper oxide. And in some of the drill holes we drilled and we have released, and I think this week we'll release some more of them, There's up to 400 feet of continuous oxide along that ridge in-depth.
We're on to a world class copper system here that already has the underpinnings of a 600,000,000 ton deposit in Rosemont. Now, 2 thirds of Rosemont, of that 600,000,000 tonnes is already on private land and is available for us to permit differently than how we permitted the original Rosemont project. And It's only going to be enhanced by this very low strip, near surface mineralization that runs over a 7 kilometre stretch from the top left hand corner down to the Rose projected pit on this slide called Peach Elgin. And so there's been some terrific intersections there. We're not getting value for Rosemont.
It's not appearing in our share price, and we believe, you know, with us and our partners, that this ticket to be able to develop a mine on private land is the way Forward, and we're going to pursue that while still pursuing our rights to Rosemont to mine it on the federal lands. And we've we believe we've got enough private land purchase now that we can develop sort of the similar size or an operation about 2 thirds the size of what was originally there. And probably we'll come out with a resource on the copper world By the end of this year and then the middle of next year, we'll probably come out with a PEA of what copper world will look like, so we're pretty excited about that. So I think that's where I'll end it because I'm run out of time. I Don't know.
I guess we've run over the Q and A session, too, have we?
We've come so far. We're not going to let jigging enough that easy.
Four blocks for me.
Jackie, if
you could take the mic, please.
Thanks, Cashel. I just wanted to ask about Yes, the exploration properties that you have in Peru, the Caballito, Murray, Reno, those ones. I guess my first question would be, are those subject to the stream agreement that you currently have under Wheaton. And does it matter if you process it through the Constancia Mill or if you build a separate mill?
What I would say is, no, it's not under that agreement. But what I would say is, we had to work because the Papagansha agreement is Slightly different than the Constancia Agreement. The partnership with Wheaton was that we came to a mutual arrangement to change agreement to facilitate the ore going through the current infrastructure. So if that ore or those starter pits are there, the most elegant way to not get into processes. And if there is capital required, as they elegantly put it, that their capital is Much cheaper than others.
I think there would be an elegant way to be able to negotiate how we can bring in those deposits and still participate with our partner
partners. I truly do believe that that's one of the things that differentiates Wheaton from its peers in this space is that we're always in strong engagement with our partners. We have an overlying mantra: The stronger our partners are, the stronger we are. And so everything from our ESG to technical ambassadors to sitting down and reviewing projects on a regular basis. We never want to stand in the way of common sense in terms of how these projects move forward, right?
That's the last thing that we want. And so we're always working strongly with our partners to try and find to move forward. And so that wouldn't be any different.
The first one, I think you've already somewhat alluded to it, but how is the Pampacancha ramp up going and are grades reconciling to plan?
So I would say the papa gancha is going great. But we're up in the top of the system, again, that sort of area of mixed transition. We're not down where the drill holes in Peru. I'm trying to be short of this answer. In Peru, you permit drill stations and you That's a GPS location and coordinate, and you have to starburst from them.
So your idealized drill spacing is down further in the deposit and not near top, so the constraints are there. So what I would say is we're not reconciling well, but we're getting more ore than we thought, but that initial ore is a little lower grade than The ore we will be getting. And that was exactly what we experienced at Constancia also.
Perfect. The other question was could you clarify whether Wheaton would benefit from any other mines exploded on private land at Rosemont, I. E. Copper World?
Quote. Their, my understanding is their agreement is for all those mineral claims that we currently have, and so they will benefit from Copper World. And obviously, the agreement would have to be written differently if it's a different mine plan. But as Randy pointed out, we've done this a number of times with Wheaton, work through variations of what was thought to be the truth, and we've come to easy agreements.
Next up, we have Avisia. A very, very important partner of ours is Vale. So we have Juan Merlini here, who's the Head of Sales for the base metals division here in Toronto. A little valet story that I'll share. We started off investing into our communities around the mine sites and stuff like that.
And within Vale, they have an organization called the Vale Foundation that oversees their sustainability initiatives with respect to communities and such around the mine sites that Vale operates around the world. Vale Foundation, it's actually a real model, and we've looked at it. And we were, I think, the first partner of theirs at any other sites in terms of contractors or anything. 1st partner to actually contribute into that Vale Foundation. And it's kick started something where now just about every company that works with Vale has contributed to that.
And trust It's the right thing to do. We as an industry have to continue to strengthen the benefits that we deliver to these communities. And I've always been sort of thought about the fact that we kind of kick started even more capacity within the Vale Foundation to provide benefits to the communities that are impacted or most benefited from these mines, but particularly most impacted from these mines and deliver that back and forth. So Vale, of course, the Salobo stream, a very important stream for us, Sudbury and Voisey's Bay here in Canada. So Juan, if you want to come on up to the stage, I appreciate Thank you.
Well, good morning. It's a pleasure. Thanks for the invite. It's a pleasure to be here. My name is Juan Merlini.
I'm the Head of Sales and Marketing. And I'm going to talk a little about Vale, about our operations, about our partnership and about our future. So basically, I mean, Vale is one of the largest mining companies in the world. Vale currently is one of The main producers are iron ore nickel. We are present in more than 20 countries.
We have our market cap around $80,000,000,000 to $90,000,000,000 and very strong financial positions. This is framework here that I want to highlight. Since the Brumadinho accident in 2019 and our CEO, Eduardo, stepped in, Vale went through very deep changes and these changes are ongoing. This is just the framework of how the company is positioning, but there are very deep changes in terms of people, committees, governance at all levels. I mean, It's not only the software, but the hardware as well.
So this is part of a big cultural transformation going on at Vale. And We believe the company is really focused on 3, on the safety, on people and on the reparation of the accident. But also this led to a broader road map and where we are progressing in order to derisk, reshape and re rate the company. So we are really focusing on all the reparation and the compensation on Brumadinho. We set of a very large agreement this year.
We reviewed completely in improving Our tailings management model, this is something that is critical for Vale. We put in place and I'm going to talk a very strong ESG practices in terms what we call our new pact with the society and also to resume our production, particularly in iron ore And that was deeply impacted by the accident, but also in base metals as well as we have been focusing in terms of stability and growth for our assets. That will lead to reshape the company. So we have been focusing on core business, Renoir base metals. We have been selling a lot of non core assets.
We recently saw our operation in New Caledonia and Nikko. We announced the divestment of our coal asset. So it's something that it's really focused in order to control the cash drains and also to 50, where we are going to really become a talent driven organization, a best in class in terms of viable operations, low carbon mining, I'm going to talk about it and reference in terms of creating shareholder value. All of these based on a foundation of strong cash flow generation and also a discipline in capital allocation. So very quickly touching on our ESG front.
I mean, Vale is really leading the transition towards carbon mining base into a net zero strategy. So we have 4 big commitments The company did and these are not only statements, there are a lot of investments, a lot of efforts being done in order to achieve that. So we plan to reduce Scope 1 and Scope 2 emissions by 33% in 2030. We have several initiatives in terms of electrification of our fleet in terms of bringing new projects to reduce that. We are working in terms to become 100 percent self sufficient with renewable energy.
So we have a target in Brazil for 2025 and 2030 for the We want to reduce the Scope 3 emissions by 15%, 25% and also to reach Scope 1 and Scope 2 net 0 by 2,050. So it's a very ambitious goal that the company has announced to the market and is committed on that. And Base metals play a key role on that, right? I mean, we are I mean, we probably have one of the largest base metals portfolio in to the large mining companies. We produce copper.
We want to grow in copper. We produce nickel, cobalt. And we see a lot of opportunities coming, not only terms of demand but application for these metals. So this is something we are part of our core strategy into The base metals business. And we have done a lot into the base metals.
Here's some examples of what we have done and how we plan to evolve. So just as an example, in Sudbury, we invested more than 1,500,000,000 In reducing our emissions, GOG and particulates and so forth, We are evolving into the electrification of our underground fleet. So we have a target of more than 40 equipments by the end of this year with Not only to reduce the emissions, but also the quality of the environment and the underground operations. And also we plan to invest more and to work in our low carbon agenda through the decarbonization of our rotary kilns, through the use of clean energy, biofuels and helping us to achieve the targets I mentioned. So as you know, we have I would say probably it's one of the strongest partnership Vale has with Wheaton.
And for Veismetos, it has been a very unique position. We did 4 deals since 2013, very important for the company and very important for the future as well. So talking a little bit about the assets, first starting with Salobo. So it has been a tough year For Salobo, by the end of last year and beginning of this year, we had 2 fatalities. And this led to completely review of our safety and operational model there in Salobo.
So as you can see, our production until the end of the year has been lowered and compared to the last year. But the good news is that all these big intervention, all these review, it's already bringing results. So we are seeing the volume increasing. So the volume for the second half will be higher than what we have seen. And also this is bringing more we have been focusing also on the mine movement.
We've been using a third party to help us to increase the production levels there on top of all these changes on the mine maintenance. So we will An upward trend in terms of our production for the second half. And I think it's just to reinforce, Salobo is our main asset into the base metals portfolio. It's a very low cost, very competitive, a long lifespan and still offers significant opportunities for expansion. So one of these expansions is Salobo III.
As you know, these are some pictures Recently taken from our concentration plant there. It is a significant investment. We plan to increase our current processing capacity from 24,000,000 tons to 36,000,000 tons. So it's an incremental 12,000,000 tons. There are a lot of synergies that have been explored with our current base there in terms of infrastructure equipment process.
The project is around $1,000,000,000 and the current stage is 77% physical progress. We are to initiate this project by the second half of next year. And this will bring us about 30,000 to 40,000 tons of copper on average throughout the life of mine, even though in the beginning there is a much higher production increase and that goes down as the grades of the mine evolves. And We are studying it's still a very early stage, but we are studying even a potential 4th expansion of Salobo. So it's we call SOLO4, so that could add another 30,000 to 40,000 tons, very early stage, still under analysis, but this shows how this asset can still add value into the portfolio.
Shifting to North Atlantic, and I'm going to focus on Sudbury, but just to give a highlight. North Atlantic is I'd say our main focus is the stability, is the as part of our turnaround into the base metals to turn the North Atlantic, a more stable, reliable and efficient business and also to prepare Business for the Growth. So we have important initiatives going on there on top of the projects. I'm going to talk about Voice Bay and that's part of our cobalt stream with Wheaton. But we also have an important project coming to production this year in Copper Cliff in Sudbury, which is a Copper Cliff Mine 1, which is a project that we plan to ramp up now by the end of this year with additional 10,000 tons of nickel into our portfolio.
And also Manitoba, which is outside the Sudbury complex, as you know, but it's important For the whole flow sheet, where we recently approved the an investment for the extension of the Manitoba is the Manitoba Phase 1. We still have another phase to expand, where we're investing around $100,000,000 and this will give more than 10 years of production for Manitoba. So the challenges on Sudbury, as you know, this year, we had a strike. So it was a 2 month strike where we had to stop our operations there. I think after a strong effort from the team and from the union, we managed to reach an agreement.
So this agreements in place and now it's a 5 year agreement. So this gives us also a good visibility for the future. Looking backwards since 2017, we had The change in our production flow sheet and a movement to a single furnace, so that reduced a little bit the production levels. And more recently in 2020 with COVID and 2021 with the strike, our production was impacted. But we are already ramping up.
Since the end of the strike. We managed to complete some of our regular maintenance and now we are ramping up in September and be in full production by October. So again, the number for the first half, this in nickel terms cannot be necessarily, let's say, extrapolated, but we are seeing a production increase on the following months. CCM is coming on line by the end of the year. And important to highlight that, I mean, Sudbury, as all our North Atlantic assets.
They have a very, very unique position in terms of carbon emissions. It's one of the world's lowest carbon emission in the nickel industry, which is something that it will be very important in order to promote our ESG agenda. Moving to Voyage's Bay. Voyage's Bay has been more stable and growing. Last year, due to the COVID, we had to stop the mine and the project for some months.
It's It's a remote region. We had a quite large number of employees on a fly in, fly out. So there were a lot of About the COVID spread that's in the region. So we took the right decision. We stopped.
And after 2, 3 months we went back. So the operation is very stable. We actually produced more cobalt in the half of this year than last year. We had about 940,000 tonnes of cobalt produced in the first in this year and very solid. And as you know, we are transitioning from our current Opa pit mine to the underground.
And I'm going to give some highlights about the project. But again, voice based is also a very important asset into our ESG gs strategy, very low, probably one of the lowest carbon intensity in the corporate industry. Just I highlight into the underground project. This year, we had we achieved the first ore. This was a very important milestone into our development of this project.
So we basically have 2 underground mines there, Reed Brook and Eastern Deep. We achieved the 1st ore for rebook by June. So it's 60% to 70% of the physical progress, but we are already mining 1 of the mines and we will achieve the full start up of the Eastern Deep by the second half of next year. And this will allow us to operate voices Bay and the refinery where we process the feed from voices Bay in Long Harbour until 'thirty three, 'twenty four. So it's a very important asset into our North Atlantic flow sheet and very critical for to port us into the growth for our business.
So as a summary, I think base metals, it is core business for Vale. It is a strategic. There is actually where the growth is coming for Vale. If you look iron ore, it's a much more stable profile. It's core for the broader strategy of the company.
We are going through deep transformations and these transformations are also impacting our business in terms of how We need to manage safety, how we manage people, how we manage our process. And we started this journey on the turnaround of the base metals in 2018. Team. And I think we are starting to see the results and to prepare this business for the big opportunity that is coming with electrification, with the need of a decarbonization in the economies. So we see a big opportunity for nickel, copper cobalt.
And we will continue investing and increasing the value of this business as we go through. And Wheaton has been strategic for us since the beginning, helping us to fund this growth. And we have, I mean, I think, unique opportunity in the future that we'll be exploring. So I'll be pleased to take questions. Thanks.
Thank you very much, Juan. And is there any questions for Juan on
Maybe if I could Can you hear
me? Yes.
Just maybe a couple of questions. First of all, I have to ask this since you put it out there, Salobo 4, When do you think that could be in production? And secondly, on that, does Wheaton still get a piece of that? And then switching to Voisey's Bay, As you go through Eastern Deeps in Reed Brook, is the cobalt grade fairly consistent or does it move around a fair bit over those years through 2,030 or 33 or 35. Thank you.
No, thank you for the questions. Well, regarding Salobo 4, it's still very early stage, right. So for sure, that's It's part of the mining rights and for the stream as well in the future. So we still I don't want to commit with any date, but we are studying and looking carefully as copper continue to improve and Vale is very committed to grow into the into copper. So that's definitely an opportunity.
So I won't put a date here, so then you but it is something the company is studying and still on a very early stage. Regarding the Greater Cobalt, yes, we don't foresee any major change on our production profile going forward. For sure, there is a transition now from the open pit to the underground that this is, let's say, not exactly a linear extrapolation of our production profile, but it's pretty constant over time.
Just to expand on the Global 4. The way the expansion payment is structured there is that it's a onetime option for Vale to exercise. And All of our discussions have been to date that they would exercise that upon completing Salobo 3, but they don't have to. They could easily hold And do that at the end of Salobo 4. Because of the time value in terms of it all depends when Salobo 4 comes into play.
But Riz. You could capture that expansion payment. You could capture the extra capacity of Slovo 4 into that, but it would definitely, depending on timing in terms of when so before it was completed. So it's just it's a onetime option is the key aspect to sort of recognize is that and all of our discussions to date have been that they'll exercise that option at the end of Slobo 3 once they've satisfied a completion test.
Just wondering if you can give any color on the start of Salobo III. If you have an idea, I think there was some debate about grade, whether you'd be able to stockpile some of the lower grade So high grade to the mill right away when you started up? Or any guidance around that?
Yes. I think I mean, The start up is still, let's say, we had a little bit of a delay due to COVID. So we have shifted from first half to the second half of twenty twenty two. And as far as I know, I mean, the whole strategy in terms of the ramp Still, I mean, we have been trying to optimize as much as possible and to increase our, let's say, our production in order to us to maximize the credit that we have. So I mean, I can check if there is any specific changes into that, let's say, feed between the stockpile and the mine plan.
But on overall, We don't see any big change in that.
I think it's become clear through our discussions that their intent is to find a way to satisfy the higher grade option of the expansion payment. With all the exploration work and the updated minutee plans and stuff like this. That's what we're working our way towards is just ensuring that they will be able to satisfy that commitment to basically, it comes down to balancing between stockpiling lower grade material versus what goes through the mill. We know that the operating cutoff grades are going to drop just by virtue of scale. It just makes sense that you're going to do that as ramp up capacity.
But yes, it's a matter of finalizing those discussions, which are still in questions from the All good. One, thank you very much. You were the only person that did it in the allocated time. That represents our experience as a partner with Vale. They deliver.
Thank you. Thank you very much, Michael.
So next up, we're going to have some of the members, some of the leaders of our technical team come up and present on some of the other areas that we're excited about within the Wheaton portfolio. So Neil Burns and Wes Carson. Wes is the Vice President of Operations. Neil is Vice President of Technical Services. They're going to talk about I've got a list here, but actually, I'll just let them work their way through the list.
So the floor is there.
Perfect. Thanks, Wendy. So I'll start off by Same thank you to Brad and Cashel and Juan for their presentations there. Very, very much appreciated. You guys do a much cleaner and better job than we can
of presenting your operations.
So that being said, operations. So that being said, kind of our next bit here, we're going to go through really kind of a short introduction on our operating portfolio, and Then we'll talk a little bit about some of our core assets being Antamina, Penasquito, San Dimas and Stillwater. So on the map here, you can see the 24 operating mines that we've got marked with the blue markers, and then we've also got development projects that are marked in green on there. So really showing that diversity both in jurisdiction and across kind of the lower political risk areas of the world. We really pride ourselves in having a diversity of partner companies as well.
And really, that shows that streaming model really can work for anyone. So everyone from really the large diversified companies such as Vale, Newmont and Glencore down to small single asset companies. Also, I'd like to highlight here really the fact that over the past year here, 18 months, I guess, has been a bit of a strange time. Our technical team has Had to transition to this sort of virtual model for a lot of our site visits. Generally, Neil and I are the ones who are going out and visiting all these sites every year.
We certainly miss having to do It's a great part of the job and moving to that virtual side has been difficult but at the same time really has highlighted the value ships that we've got. We've got really that same value out of those virtual visits, but look very forward to getting back out on the road and getting back to these operations in the time moving forward here. Next, we've got these two graphs, which really show kind of 2 of the key attributes that we use to define the quality of our So first, really on the left hand side there is the low costs. Really on that pie chart, you can see that 90% of our production comes from the lower half of cost curve. And these are really mines that can not only withstand the price in any commodity cycle, but they're also the ones that our partners are really looking to continually best back into.
And secondly, the bar chart on the right, and you heard the other guys kind of highlight this, particularly Gary earlier, really just the value of these long lived assets. So just in the reserve side, we've got 33 years in those assets. And then if you Consider the resources, that's an additional really 28 years on top of that. So over 60 years that we've got in that life of mine across the different assets. And we really feel that these two attributes are really the key difference between us and our competitors and I challenge Really to find any other precious metal company that has assets of this quality.
Overall. So what does this really, this portfolio really deliver to us? And the diversity of that current asset base combined with the continued addition of high quality assets over the last year. We've added Miramato, Cozamin, Satterdomingo and Phoenix. They really give the company a strong growth portfolio over the next 10 years and beyond.
You can see that in 2021 we're forecasting production of 7 780,000 ounces of gold and then the next 5 years moves that up to 810,000 average and then the 10 year up to 830 So you've seen that growth of those high quality assets as we move forward. With that, I'll hand it over to Neil for the next couple.
Sure. Thanks, Wes. When you look at our average revenue from 2021 to 2025, you can see the metal split It's 51% gold, 41 percent silver, 5% palladium from the Stillwater Mine in Montana, and 3 percent cobalt from Boise's Bay in Labrador. On the pie chart on the right, you can see that split in revenue by country, with the largest contributors being Mexico, Brazil, and Peru. This waterfall equivalent ounces, which they've amazingly almost completely replaced with exploration success.
During our due diligence review of new opportunities, we put a lot of time and effort into understanding exploration and resource conversion potential with the goal of investing into mines that will operate much, much longer than originally projected. When you look at the company growth on a per share basis, you can see we've done an exceptional job of growing. Originally, we had about a half an ounce of gold equivalent per 100 shares, and you can see we've grown that amount to over 7, which does not include the 3 5 ounces that have been mined over that same period. This slide and the previous one really speak to our track record of accretive transactions.
So now we'll move on to the assets themselves. So starting with Antamina. So Antamina is one of the largest base metal mines in the world, as I'm sure you're all aware, located high in the Peruvian Andes, currently operated by a joint venture of BHP, Glencore Tech and Mitsubishi. The mine's large open pit feeds an average of 145,000 tonnes a day of ore 2 conventional crushing, milling and flotation plant, which produces copper, zinc, lead and molybdenum concentrates. Despite the impacts of COVID, Antamina produced 5,400,000 ounces of attributable silver in 2020 is on track for a strong performance in 2021.
On the top right there, you could see that there is a map of the infrastructure and that shows All of the concentrate, actually the copper and zinc concentrator actually sent from the mine out to the port facility via pipeline. The smaller amounts of lead and So that's a real major advantage for Antamina. They don't have to worry about having all those trucks on the road down from that upper section. So mining is currently focused on kind of copper ore in the pit. However, as that pit expands over the next couple of years, we will see a transition to the copper zinc ore, which does have higher silver grades in it.
Additionally, the silver production is anticipated to increase further in 2025 as a result of commissioning of new infrastructure, which includes a new primary crusher and several Print belt systems that they're putting in to handle waste and that will allow access to higher grade material as well. One of the aspects of Antamina that we're really most proud of is the community investment program and we support a program that's called Encenia Peru, which is a non profit organization dedicated to the improvement of academic performance in the region. And similar to, as Randy mentioned, with Vale earlier, with Glencore in this program. We were the original investor in this program. Antamina has then been able to leverage that to get multiple other of their flyers and other partners in on this Encinia Peru program as well and really grown and we've had the opportunity to go and see some of the schools they've impacted on several trips there and it is really Quite incredible to see the difference that bringing these teachers into these communities makes.
In 2021, Wheaton has committed to a further 2 year term, which is really 6 years of continuous support to this fantastic program.
This is a plan view or sorry, the Giant Antamina Mine is the world's largest copper zinc scarred deposit. On this plan view is slice through the deposit and it shows the central intrusive body in red and the surrounding endoskarn in orange and exoskarn in green. The endoskarn hosts the majority copper ore, which also contains moly and lesser amounts of silver and zinc. The Exoskarn hosts the copper zinc ore, which is very rich in silver. The mine is Currently 100 percent from open pit, but they are looking at evaluating the potential for an underground mine, which is still at the conceptual stage.
There's currently about 400,000,000 tons of underground resources in the inferred category. The land package, Which are our area of influence for our stream coverage is very large at over 700 square kilometers and hosts multiple geological targets. However, the exploration focus remains on the resource definition and conversion at Antamina. The mine is using directional drilling with their deep exploration programs. The rigs can be situated outside of the pit away from the mining equipment and holes can be guided to intersect ore body at the desired location and angle.
Drilling in 2020 continued to extend the ore body definition below the resource pit. And this map on the left is a plan view which shows the drill hole traces and the location of the section line, which is shown on the right. The section map highlights a number of spectacular 2020 drill intersections. I'll just highlight a couple. A243 hit 3 27 Meters Grading 1.32 percent Copper and 10 grams per tonne silver.
And A3158 in an amazing 10 25 meters grading 1.76 percent copper and 13 grams per tonne silver. As You can see, these intersections are all located below the current resource pit, where they could eventually be mined, potentially in a larger open pit or
Perfect. Now we'll move on to the Penasquito mine. So Newmont's Penasquito operation is located in Mexico, hosts a gold, silver, lead, zinc, por Kriscairn deposit and is Mexico's largest open pit mine. The Penasquito mill consists of 2 sulfide processing lines and a high pressure grinding roll circuit with combined capacity of up to 130,000 tonnes a day. The ore is processed through conventional crushing, milling and flotation circuit that produces zinc and lead concentrates and the addition of the, in 2019, of the large pyrite circuit, sorry, has now allowed for the production of gold and silver dory on-site as well.
Over the past 12 months, Newmont has successfully implemented their full potential program at Penasquito delivering over $200,000,000 in value. Included in this program was a focus on back to basics mining practices, which helped drive cost efficiencies and capital discipline across the operation. As the mine transitioned into harder material over the last several years, the process plant has not only succeeded in maintaining throughput but is working to increase it by up to an additional 20% by 24. Additionally, the process plant has identified and is implementing a number of incremental improvements, which are expected
On the plan map here on the bottom right. You can see the outline of the Penasco in the Chile, Colorado pits and the section line which is shown above. And the section line above or the section above shows the resources and reserves currently and the exploration targets which Corp sorry, Newmont are currently exploring. It also shows the 2, Brexit pipes, which focus of mineralization, which deposited the 2 deposits seen there. The section also shows targets which Newmont are exploring for extensions to the ore bodies and mineralization at depth.
Perfect. We'll continue our tour here. So on to San Dimas. So San Dimas deposit is located on the border of the Durango and Sinaloa Estates and is considered one of the most significant precious metal deposits in Mexico. It's been a continuous operation for over 100 years.
The mine is owned and operated by First Majestic Silver and consists of 5 ore zones which are mined using long hole open stoping and mechanized cut and fill mining methods. The ore is processed through the 2,500 tonne a day mill in inteletita, which uses a conventional crushing grinding coupled with cyanidation and zinc precipitation to produce gold and silver doria. Since acquiring the mine in 2018, First Majestic has been developing a long term mine and mill automation plan for the future of the operation at San Dimas. This plan includes numerous projects that will be implemented over the next 12 to 18 months to improve production costs at the mine and processing plant, including upgrading the grinding circuit, including the addition of fine grinding technology, improvements to the tailings filtration and overall construction of the tailings storage facility, significant advances in the reduction of mining dilution and overall mining costs, and a focus on recovering the high grade pillars to the Teletita, Santa Rita and Noche Buena mines.
On the bottom map here, you can see the surface geology in relation to the concession areas. The lower volcanics are shown in green and those are the primary host of mineralization at San Dimas. You can see the San Dimas area covers majority of those exposed lower volcanics. The Ventanas area to the south is named after the Spanish word for window, where the area is interpreted to be a localized window into those lower volcanics. The top map shows the various mine location, the various mining blocks, excuse me, and the traces of the drilling.
Historically, the mining has developed from south to the north, and veins have been discovered as they progress to the north. Significant exploration potential still exists within all of these mining blocks.
And last but certainly not least, Stillwater is the only U. S.-based platinum grit metals mine. It is also the largest primary producer of PGMs outside of South Africa and the Russian Federation. It's located in Montana. Stillwater consists of 2 underground mines, Stillwater Mine and the East Boulder Mine and the Columbus Metallurgical Complex.
Stillwater and East Boulder mines have been in operation since 1986 and 2 respectively. Stillwater Mine currently has a mine life as of the end of last year of 25 years and the East Boulder mine is up to 38 years. There's a lot more in that JM Reef, which is really the world's largest high grade world's highest grade PGM deposit. Each mine has its own mill and concentrator on-site. The Columbus Metallurgical Complex is a state of the art facility which is capable of providing smelting and refining processes for the mine concentrates.
The complex then produces a PGM rich filter cake which shipped off to 3rd party precious metal refinery. In 2020, the East Boulder operation completed the Fill the Mole project, which really focused on a modular expansion at the mine, which managed to improve the efficiencies both at the plant and the mine itself by approximately 15 event. The Blitz project is another major expansion project, which is currently under development and is focused on building up to steady state in 2024. The ramp up is expected to nearly double the production at the Stillwater Mine Complex.
The top map here shows the location of the East Boulder and Stillwater mines with the world class JAM Reef shown in green. Mineralization of that reef has been traced over a 32 kilometer strike length. Also shown in the map is the Metallurgical Complex in Columbus. On the mine life, these operations is expected to be extended as drilling expands the reserves and the resources at the Lower East Boulder, Lower Stillwater East and Blitz. On top of that, you can see there is this 12.2 kilometer undeveloped gap between Stillwater and East Boulder, where continuity of or continuation, I should say, of the JGM Reef has been confirmed through drilling.
So lots of potential left at Stillwater. So the last of our slides, and I believe we do have some time or Q and A for the group.
If anyone's got any questions about any of the other assets in our portfolio or even the rest of the senior management team. Haitham and Gary are still in the back there, so happy to answer any questions.
Trevor? Yes. Maybe, Neil, or you guys, you just talked about some of the potential at Antamina, but seems like that's always been tied also to the ability to find extra space for tailings. And I just wondered if there's any update on that.
Sure. Thanks, Trevor. They are continually working on expanding that facility, obviously. I think it's this year they're supposed to be announcing the new permitting on it. So they're well on the way with that permitting for the expansion of the current facility.
They were looking at other facilities potentially in the area. But with the change in the construction of the dam, they've Actually managed to get it to the point now where they can just continue raising in the current facilities. So those concerns really are we'll keep getting pushed out as That permitting kind of moves along, but it is really that's what constrains the mine life for them, but certainly the potential is massive there and they are able to contain that within that current facility, which It's great to
see you. Yes. One of the things that I remember from the due diligence at Antamina was the fact that That tailings capacity is what limits their reserve statement. And the technical information, the confidence that you have for the rest of the resources or a large portion of the resources is the same as the reserves. The only reason they're not classed reserves is because there's no tailings capacity that's permitted.
It's an approach that they take at Antamina. And so it has obviously huge potential. As they get through the permitting process, the reserves will kick up. As they get through the next phase, the reserves will kick up. And so it's an incredible Any other questions?
We did have a couple of questions coming in from the web. The first one was related to Antamina. And if we could give any color as far as can you give a steer on how much do you expect Antamina silver production to increase by? Steer, I'm not sure
the technical term Yes. I mean, it varies definitely as you go through the deposit because I mean the deposit as you move through Scarnes, you're moving through from the Copper Ridge to the Zinc. It's all accounted for in our current profile that you see. So I would struggle to give a number to what that increase is, but you will continue to see that cycle over the mine life, certainly.
It's a very complex ore body that's got very different grades with respect to copper rich versus zinc rich ores and how much silver silver is going to come out of that. So it's going to fluctuate back and forth. There's no expansions in throughput capacity. It's all a matter of variance with back to the mix of ores that actually feed through that mill. It's already an incredible asset, I think, at 160,000 tonnes per day with a 6:one strip ratio.
I know a bunch of you were there for a tour about 3, 4 years ago when we went down. And I mean, it's an asset that still boggles excellent examples of that and being able to deliver that to precious metals investors, which you don't normally get in the precious metals industry. The capital intensity is much lower. They don't need as much reserve and resource definition and such. So Antamina is an excellent example of that.
From the floor?
The global minimum corporate tax made somewhat of a splash, but has it been reflected in sort of stock prices and market reaction? And do you think sort of Perhaps the dismissal of it as a meaningful risk is the right reaction for the market?
Yes. I mean, I think 139 members of the OECD trying to get alignment. I know a large portion of those members keep themselves competitive on the worldwide economic stage by having varying tax rates. That's what sovereign nations do to try and maintain standards living in. So the vision from the G7, which of course has the benefit of and populations and capacity to build high standards of livings for their own populations, to arbitrarily hope for higher tax rates for other areas that have to maintain competitive and attractive predictions.
I have a hard time envisioning that being successful. It would be a challenge. And to take that right away from sovereign nations would have to have some type of compensation. And so why are you really gaining anything there? I think the other side of it is that The application, of course, would be uniform across.
And those costs have to be borne by someone, right? There's nothing and so those costs, they in a domino kind of effect would actually probably lead towards higher inflation rates around the world, which may even be supportive for precious metal pricing and stuff like that. So there's just so many things that would have to fall into place for us to see that as being number 1 of which sovereign nations giving up control in terms how they maintain competitive characteristics to maintain their own standards of living within their countries. And that's probably the biggest hurdle that I see. And I think as people look at that and realize that's a big ask.
It's tough enough Just getting the United Nations to as that group to come together on a number of different initiatives to have something like this come forward. It would be a very unlikely event.
Randy, we do have one other question from the webcast. And I know the answer to this one, but Very interesting. So Beignet is expanding more into green commodities, lithium, etcetera. Is this a consideration for Wheaton? Or will you stick with precious metals.
Yes, we just spent, I don't know, it was about 5, 6 years ago rebranding ourselves as Wheaton Precious Metals from the old silver Wheaton, which we hear quite a bit. We are focused on precious metals. The cobalt at Voisey's Bay, a very strong and important partner of ours, Vale, an incredible asset, Voisey's Bay, along with a dedicated smelting facility. It produces a very unique product within the cobalt world. And so it has a lot of appeal to it that attracted us in terms of making that investment.
We just don't see anything comparable in the space. We're not looking in that space. We are focused on precious Metals. And so our objective is to be the choice as a precious metal investment for anyone that wants precious metals exposure in their portfolio. Wheaton should be their first choice.
Any other questions? Nothing from the web? Well, I've got a few closing slides, I think. So if you could please bring those up. Next slide.
So I hope through the course of today, and by all means, we're going to have a lunch afterwards, and I encourage especially the ability to meet face to face and talk face to face. I encourage everyone to dive deeper into what we have at Wheaton and what we present. I'm hoping that through the course of this, You understand a bit more about why we're so bullish about our company and the growth and the asset base and the opportunities that we have to continue delivering. We our objective is to be the choice for precious metals investing. And when you look at the assets that we've brought into our portfolio, we've talked obviously about Salobo and Santo Domingo, Marmato, Copper World Constancia, Marmatos.
It's another asset that has incredible upside potential. There was a question earlier on about gs in terms of things. We're not scared of being change agents, and I think Marmato was a good example of where we saw an opportunity to help the company through our own experiences improve their own performance and commit to doing some upgrades to some of their own water treatment facilities in the area and such. And so it's an exciting portfolio of assets that has all sorts of upside potential, especially in today's world as we talk about the need for the green metals. Our company is here to help finance that growth into the green metals.
And so Lots of exciting opportunities for us going forward. Next slide? So just I think This is the last slide. It deserves to be the last slide. Wheaton has been the largest single contributor to precious metal streaming over the last 5 years.
We have been active, and we are still very active. The scale of the deals isn't as big as it has been in times past, but I think that's a reflection of the fact that Now most of what we're doing is not so much balance sheet repair, it's more focused on development and helping companies grow their own portfolios and pay for help fund expansions and stuff like that. And so the difference between now and back in 2000 and forward to 2010, which is the last time we saw such a heavy focus on development, is that there's not a single CFO in the entire manning industry that doesn't understand what a stream can deliver in terms of improving the internal rate of return for their shareholders. The amount of capital that we invest into any project, that percentage of the overall capital required is always going to be higher than the percentage of revenue we take away, and that automatically means an increase in the internal rate of return or the return on invested capital, whichever phrase you want to use for the operator shareholders. That's why there's not a single CFO in the entire mining industry doesn't understand what streaming can deliver to projects, and that's why we're so busy on this front, and we expect to be successful in terms of delivering some more opportunities.
The sustainability initiative. It's just common sense. Any good business, sustainability has been around forever. We're getting a lot better talking about it and presenting it, but you needed to have strong social license to be successful, especially in a resource industry where you can't pick it up and move it. You have to have these strong community relations.
I inherited that from my own time in the operations space, that need, that recognizing the fact that that has to be recognized. And so I'm incredibly proud of what our team has done in terms of kick starting the entire streaming and royalty space into taking this seriously. It never happened before. Royalty traditional royalty companies never contributed towards that. They just Collected the Check and Ran Away.
It's something that we as a society have to do, and I'm proud of what we at Wheaton have accomplished on that front, and we're continuing to it. It is a journey as we move forward. It's incredibly important. It's just the right thing to do. If we're getting benefits from this, we deserve to share some of those benefits, some of that good fortune back with the communities around there to make sure that we leave good, strong, sustainable benefits in the community.
The dividend policy, Gary talked a lot about that. It's we've now had increases in the last four quarters. It reflects a direct connection to the commodity prices and to our organic growth profile. And we still have good strong growth coming over the next going out. And so that's going to continue to grow that dividend on a per share basis.
And so and I can tell you that It's going to even get stronger as our cash flows get higher because our biggest challenge in this company right now is how to effectively put the cash flow back to work. And if we can't put it back into the ground on accretive acquisitions, high quality acquisitions, then ultimately it will be returned to the shareholders, one form or another. All of that to date has delivered about a 20% average annualized after tax return from our portfolio. So we have delivered, and we will continued delivering. And the last one, I think, after some of the discussion today, we've got a number of near term catalysts that continue to support growth and strengthen our company.
I don't think we've ever been stronger than we are right now, but That doesn't mean we're relaxing. I would hazard a guess that we are probably as busy and go and talk to Haytham. Well, it's the entire team, it's not just Aethon, but we the number of opportunities we're reviewing now is The quantity is higher than we've ever seen, so we continue to expect to deliver on the precious metal streaming front. So Wheaton Precious Metals is a sustainable option. Yes, it is.
Thank you. With that, I think we're going to slide over to lunch in the backside. We're in the end about 3 minutes behind schedule. Sorry about losing the coffee break.
Lunch will be back towards the main hallway. We are outside under a tent, but We hope everybody can join us. You hopefully won't get wet. We should be well covered, but it's not the best weather out there.
I think everyone understands the mask protocols within the building. Someone should have reminded me when I went back to get a coffee. But anyways, yes, masks on the inside when you're moving around, but when you're sitting table. Obviously, you're good to go. So thank you very much.
For everyone online that's been joining us, thank you for joining us for this. And By all means, let's dig a little bit deeper into any questions that anyone might have, and happy to talk about what we've done. Thank you, everyone.