ESG Due Diligence Process

Wheaton is focused on high-quality mine projects that can support streaming transactions in the long-term. Due diligence is critical in determining whether mine projects can withstand market pressure and manage ESG risks and issues, with a view to the long-term success of the mine.

Due diligence for new streaming agreements

When evaluating new streaming opportunities, Wheaton employs extensive and diverse methods to identify and assess risks prior to entering into new agreements. The due diligence process is undertaken by Wheaton’s internal staff with experience evaluating financial, technical, ESG and political risks. When appropriate, third-party experts are used to assist in the evaluations. Information provided to Wheaton by Third-Party Operators is subject to obligations of confidentiality.

Wheaton’s internal experts use their discretion in determining the level of due diligence that is deemed appropriate for each investment, and the due diligence process can differ depending on the mine project, jurisdiction(s) and context. The due diligence conducted by Wheaton may include, but is not limited to:

  • Technical Analysis: Wheaton will review the technical aspects of the mine, geology and processing methods; which may include:
    • Exploration data, concession boundaries, permits, reserve and resource estimates, reconciliations, annual reserve replacement, mine plans, mining methods, ground conditions, metallurgy and processing, geography of the site (and any associated challenges with developing or expanding sites), manpower, production statistics and forecasts, costs, profit margins and closure plans.
  • Financial and Economic Analysis: Wheaton will review a mine project with the intent to confirm if the mine project can support the streaming transaction longer-term. Wheaton favours accretive transactions where the mine project has costs of production that place it in the lowest half of the cost curve for the primary metal being produced so that the mine project is more likely to remain economic throughout the term of the stream transaction and withstand fluctuations in metal prices.
  • Environmental, Social and Governance Analysis: Wheaton will undertake an ESG risk assessment of the mine project, Third-Party Operator, and surrounding context; including, but not limited to: energy and GHG emissions, climate risk and opportunity; air quality; tailings and waste; water; biodiversity; community engagement; security; human rights; the rights of indigenous peoples; labour; health and safety; business ethics and ESG governance. 
  • Legal Analysis: Wheaton will undertake legal due diligence on the Mining Partner and the mine project, which may include a review of title to mining properties, Mining Partner corporate and ownership structure, outstanding and threatened litigation, material contract review, compliance with laws and regulations, and permits and approvals.

Throughout the due diligence process, Wheaton will extensively engage with the Mining Partner. A site visit is performed for every investment, during which technical, financial and ESG issues are discussed and all facilities are visited including open pit and/or underground operations, mineral processing plants, and other infrastructure. The surrounding communities are also visited with a focus on reviewing ESG-related programs at the community level.

After the potential investment is analyzed and evaluated by Wheaton’s internal experts, the management teams discuss the opportunity, including reviewing the financial, technical, legal and ESG risks uncovered during the due diligence process. The potential investment is then considered on various quantitative and qualitative factors, including ESG risk factors. Wheaton endeavors to add streaming transactions on mine project(s) with reputable partners that effectively manage their ESG risks through the appropriate policies and programs. Once the due diligence process is completed and management teams are supportive of a potential investment, approval is sought from the applicable Board of Directors.

Once a streaming agreement is in place, Wheaton monitors its Mining Partners' operations on an ongoing basis. Wheaton maintains regular communication with Mining Partners' site and corporate teams. Its technical teams also typically conduct a yearly site visit to every operating mine.