A Canaccord Genuity report discussed the agreement
implications specifically and broadly.
In a Dec. 14 research note, analyst Carey MacRury reported that Canaccord
Genuity increased its target price on Wheaton
Precious Metals Corp. (WPM:TSX; WPM:NYSE) to CA$41 per share from
CA$38.50 (current share price is about CA$25.54). This change was made to
reflect the company's just-announced tax settlement, which MacRury described
as "a significant win" for the miner-streamer.
The outcome of the agreement, simply put, is that offshore streams are not
taxable in Canada, MacRury noted. For Wheaton specifically, the settlement
"removes a meaningful overhang on its shares that dates back to
2012," the analyst indicated. Also, it "alleviates additional pressure
on the company balance sheet were it to owe back taxes and penalties."
MacRury presented the key points of Wheaton's agreement with the Canada
Revenue Agency (CRA). Wheaton must now include the Canadian income capital
raising costs it incurs to finance offshore transactions. It must increase
the service fee it charges its international subsidiaries, which has been and
remains taxable in Canada, to 30% from 20%, and do so retroactively as well.
The CRA will reverse all transfer pricing penalties and adjust interest per
the settlement terms. The impact of these conditions on Wheaton will be
"minor," the analyst wrote.
Wheaton's tax agreement sets a precedent for, and benefits other,
Canada-based streaming companies, MacRury highlighted. Primarily, they will
not have to make adjustments to pay taxes to Canada on foreign income.
"As a result, we believe the offshore streaming model will retain its
competitiveness as a source of project funding versus traditional equity or
debt funding," MacRury commented.
Canaccord Genuity reiterated its Buy recommendation on Wheaton.
[NLINSERT]
Disclosure:
1) Doresa Banning compiled this article for Streetwise Reports LLC and
provides services to Streetwise reports as an independent contractor. She or
members of her household own securities of the following companies mentioned
in the article: None. She or members of her household are paid by the
following companies mentioned in this article: None.
2) The following companies mentioned in this article are sponsors of Streetwise
Reports: Wheaton Precious Metals. Click here for important
disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not
of Streetwise Reports or its officers. The information provided above is for
informational purposes only and is not a recommendation to buy or sell any
security.
4) The article does not constitute investment advice. Each reader is
encouraged to consult with his or her individual financial professional and
any action a reader takes as a result of information presented here is his or
her own responsibility. By opening this page, each reader accepts and agrees
to Streetwise Reports' terms of use and full legal disclaimer. This article
is not a solicitation for investment. Streetwise Reports does not render
general or specific investment advice and the information on Streetwise
Reports should not be considered a recommendation to buy or sell any
security. Streetwise Reports does not endorse or recommend the business,
products, services or securities of any company mentioned on Streetwise
Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers,
employees or members of their families, as well as persons interviewed for
articles and interviews on the site, may have a long or short position in
securities mentioned. Directors, officers, employees or members of their
immediate families are prohibited from making purchases and/or sales of those
securities in the open market or otherwise from the time of the interview or
the decision to write an article until three business days after the
publication of the interview or article. The foregoing prohibition does not
apply to articles that in substance only restate previously published company
releases. As of the date of this article, officers and/or employees of
Streetwise Reports LLC (including members of their household) own shares of
Wheaton Precious Metals, a company mentioned in this article.
Disclosures from Canaccord Genuity, Wheaton Precious Metals Corp.,
Flash Update, December 14, 2018
Analyst Certification: Each authoring analyst of Canaccord Genuity
whose name appears on the front page of this research hereby certifies that
(i) the recommendations and opinions expressed in this research accurately
reflect the authoring analyst’s personal, independent and objective views
about any and all of the designated investments or relevant issuers discussed
herein that are within such authoring analyst’s coverage universe and (ii) no
part of the authoring analyst’s compensation was, is, or will be, directly or
indirectly, related to the specific recommendations or views expressed by the
authoring analyst in the research.
Analysts employed outside the US are not registered as research
analysts with FINRA. These analysts may not be associated persons of
Canaccord Genuity Inc. and therefore may not be subject to the FINRA Rule
2241 and NYSE Rule 472 restrictions on communications with a subject company,
public appearances and trading securities held by a research analyst account.
Required Company-Specific Disclosures (as of date of this publication):
Canaccord Genuity or one or more of its affiliated companies intend to
seek or expect to receive compensation for Investment Banking services from
Wheaton Precious Metals Corp. in the next three months.
An analyst has visited the material operations of Wheaton Precious
Metals Corp.. Partial payment was received for the related travel costs.
Disclosures are available here.