TSX: WPM
NYSE: WPM
VANCOUVER, Dec. 13, 2018 /PRNewswire/ - Wheaton
Precious Metals™ Corp. ("Wheaton" or the "Company") is very pleased
to announce that it has reached a settlement with the Canada
Revenue Agency ("CRA") which provides for a final resolution of
Wheaton's tax appeal in connection with the reassessment under
transfer pricing rules of the 2005 to 2010 taxation years (the
"Reassessments") related to income generated by the Company's
wholly-owned foreign subsidiaries ("Wheaton International") outside
of Canada.
SETTLEMENT HIGHLIGHTS
- Foreign income on earnings generated by Wheaton International
will not be subject to tax in Canada.1
- The service fee charged by Wheaton for the services provided to
Wheaton International will be adjusted to:
-
- include capital-raising costs associated with Wheaton for the
purpose of funding streaming transactions entered into by Wheaton
International; and
- increase the mark-up applied to Wheaton's cost of providing
services to Wheaton International, including the above
capital-raising costs, from the current 20% to 30%.
This additional service fee will
result in increased income generated by Wheaton in Canada that is subject to Canadian tax.
- Transfer pricing penalties in the Reassessments will be
reversed. Interest will be adjusted consequentially to the
adjustments described above, subject to some minor
adjustments.
- These transfer pricing principles will also apply to all
taxation years after 2010, including the 2011 to 2015 taxation
years which are currently under audit and on a go forward basis.
1
After the application of non-capital losses, Wheaton does not
anticipate any additional cash taxes will arise in respect of the
2005 to 2010 taxation years as a result of the settlement.
"The terms of the settlement are an excellent outcome for
Wheaton and its shareholders," said Randy
Smallwood, Wheaton's President and Chief Executive Officer.
"This settlement removes uncertainty with the use of our business
model going forward and puts the tax issue behind us so that we can
continue to focus on what we do best: building and managing our
high-quality portfolio both organically and by accretive
acquisitions, as we did earlier this year with the transactions on
Vale's Voisey's Bay Mine and Sibanye's Stillwater Mines. With the
clarity provided by this settlement, I look forward to our company
again being valued solely based on the virtues of its excellent
portfolio of high-quality assets and strong growth profile over the
coming years."
CONFERENCE CALL
A conference call will be held on December 14, 2018, starting at 9:00 am (Eastern Time) to discuss the settlement.
To participate in the live call please use one of the following
methods:
Dial toll free from
Canada or the US:
|
888-231-8191
|
Dial from outside
Canada or the US:
|
647-427-7450
|
Pass code:
|
8993966
|
Live audio
webcast:
|
www.wheatonpm.com
|
Participants should dial in ten to fifteen minutes before the
call.
The conference call will be recorded and available until
December 21, 2018 at 11:59 pm ET. The webcast will be available for
one year. You can listen to an archive of the call by one of the
following methods:
Dial toll free from
Canada or the US:
|
855-859-2056
|
Dial from outside
Canada or the US:
|
416-849-0833
|
Pass
code:
|
8993966
|
Archived audio
webcast:
|
www.wheatonpm.com
|
ADVISORS AND COUNSEL
Osler, Hoskin & Harcourt
LLP acted as legal counsel to Wheaton.
End Notes
____________________________
1 The application of the settlement to years after 2010
(including the 2011 to 2015 taxation years which are currently
under audit) is limited to transfer pricing and will be subject to
there being no material change in facts or change in law or
jurisprudence.
CAUTIONARY NOTE REGARDING FORWARD LOOKING-STATEMENTS
The information contained herein contains "forward-looking
statements" within the meaning of the United States Private
Securities Litigation Reform Act of 1995 and "forward-looking
information" within the meaning of applicable Canadian securities
legislation. Forward-looking statements, which are all statements
other than statements of historical fact, include, but are not
limited to, statements with respect to:
- the estimated future production;
- the future price of commodities;
- the timing and amount of estimated future production (including
2018 and average attributable annual production over the next five
years);
- the costs of future production;
- any statements as to future dividends, the ability to fund
outstanding commitments and the ability to continue to acquire
accretive precious metal stream interests;
- confidence in the Company's business structure;
- the Company's estimation of the cash taxes payable in respect
of the 2005 to 2010 taxation years as a result of the settlement of
the CRA dispute; the Company's assessment of the impact of the
settlement of the CRA dispute for years subsequent to 2010;
possible audits for taxation years subsequent to 2015; and
assessments of the impact and resolution of various tax matters,
including outstanding audits; and
- assessments of the impact and resolution of various legal and
tax matters, including but not limited to outstanding class
actions.
Generally, these forward-looking statements can be identified by
the use of forward-looking terminology such as "plans", "expects"
or "does not expect", "is expected", "budget", "scheduled",
"estimates", "forecasts", "projects", "intends", "anticipates" or
"does not anticipate", or "believes", "potential", or variations of
such words and phrases or statements that certain actions, events
or results "may", "could", "would", "might" or "will be taken",
"occur" or "be achieved". Forward-looking statements are subject to
known and unknown risks, uncertainties and other factors that may
cause the actual results, level of activity, performance or
achievements of Wheaton to be materially different from those
expressed or implied by such forward-looking statements, including
but not limited to:
- fluctuations in the price of commodities;
- risks related to the mining operations from which Wheaton
purchases precious metals or cobalt (the "Mining Operations")
including risks related to fluctuations in the price of the primary
commodities mined at such operations, actual results of mining and
exploration activities, environmental, economic and political risks
of the jurisdictions in which the Mining Operations are located,
and changes in project parameters as plans continue to be
refined;
- absence of control over the Mining Operations and having to
rely on the accuracy of the public disclosure and other information
Wheaton receives from the owners and operators of the Mining
Operations as the basis for its analyses, forecasts and assessments
relating to its own business;
- credit and liquidity risks;
- indebtedness and guarantees risks;
- mine operator concentration risks;
- hedging risk;
- competition in the mining industry;
- risks related to Wheaton's acquisition strategy;
- risks in estimating cash taxes payable in respect of the 2005
to 2010 taxation years and assessing the impact of the settlement
with the CRA for years subsequent to 2010, including whether there
will be any material change in the Company's facts or change in law
or jurisprudence;
- differences in the interpretation or application of tax laws
and regulations or accounting policies and rules;
- Wheaton's interpretation of, or compliance with, tax laws and
regulations or accounting policies and rules, being found to be
incorrect or the tax impact to the Company's business operations
being materially different than currently contemplated;
- litigation risk associated with a challenge to the Company's
tax filings;
- litigation risk associated with outstanding legal matters;
- risks related to claims and legal proceedings against Wheaton
or Mining Operations;
- risks relating to unknown defects and impairments;
- risks relating to security over underlying assets;
- risks related to ensuring the security and safety of
information systems, including cyber security risks;
- risks related to the adequacy of internal control over
financial reporting;
- risks related to governmental regulations;
- risks related to international operations of Wheaton and the
Mining Operations;
- risks relating to exploration, development and operations at
the Mining Operations;
- risks related to the ability of the companies with which
Wheaton has precious metal purchase agreements to perform their
obligations under those precious metal purchase agreements in the
event of a material adverse effect on the results of operations,
financial condition, cash flows or business of such companies;
- risks related to environmental regulations and climate
change;
- the ability of Wheaton and the Mining Operations to obtain and
maintain necessary licenses, permits, approvals and rulings;
- the ability of Wheaton and the Mining Operations to comply with
applicable laws, regulations and permitting requirements;
- lack of suitable infrastructure and employees to support the
Mining Operations;
- uncertainty in the accuracy of mineral reserve and mineral
resource estimates;
- inability to replace and expand mineral reserves;
- risks relating to production estimates from Mining Operations,
including anticipated timing of the commencement of production by
certain Mining Operations; and
- other risks discussed in the section entitled "Description of
the Business – Risk Factors" in Wheaton's Annual Information Form
available on SEDAR at www.sedar.com, and in Wheaton's Form 40-F for
the year ended December 31, 2017 and
Form 6-K filed March 21, 2018 both on
file with the U.S. Securities and Exchange Commission in
Washington, D.C., together with
Wheaton's subsequent financial statements and related management's
discussion and analysis available on SEDAR and filed on Form 6-K
(the "Disclosure").
Forward-looking statements are based on assumptions management
currently believes to be reasonable, including but not limited
to:
- that each party will satisfy their obligations in accordance
with the precious metal purchase agreements;
- that there will be no material adverse change in the market
price of commodities;
- that the Mining Operations will continue to operate and the
mining projects will be completed in accordance with public
statements and achieve their stated production estimates;
- that Wheaton will continue to be able to fund or obtain funding
for outstanding commitments;
- that Wheaton will be able to source and obtain accretive
precious metal stream interests;
- that Wheaton's estimation of cash taxes payable in respect of
the 2005 to 2010 taxation years as a result of the settlement of
the CRA dispute and the Company's assessment of the impact of the
settlement of the CRA dispute for years subsequent to 2010 are
accurate, including the Company's assessment that there will be no
material change in the Company's facts or change in law or
jurisprudence for years subsequent to 2010;
- expectations regarding the resolution of legal and tax matters,
including the ongoing class action litigation; and
- such other assumptions and factors as set out in the
Disclosure.
Although Wheaton has attempted to identify important factors
that could cause actual results, level of activity, performance or
achievements to differ materially from those contained in
forward-looking statements, there may be other factors that cause
results, level of activity, performance or achievements not to be
as anticipated, estimated or intended. There can be no assurance
that forward-looking statements will prove to be accurate and even
if events or results described in the forward-looking statements
are realized or substantially realized, there can be no assurance
that they will have the expected consequences to, or effects on,
Wheaton. Accordingly, readers should not place undue reliance on
forward-looking statements and are cautioned that actual outcomes
may vary. The forward-looking statements included herein are for
the purpose of providing investors with information to assist them
in understanding Wheaton's expected financial and operational
performance and may not be appropriate for other purposes. Any
forward looking statement speaks only as of the date on which it is
made. Wheaton does not undertake to update any forward-looking
statements that are included or incorporated by reference herein,
except in accordance with applicable securities laws.
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SOURCE Wheaton Precious Metals Corp.