Wheaton Precious Metals Corp (NYSE: WPM) is having an incredibly strong start to the trading session this morning, and for good reason. The company announced that it has reached a settlement with the Canada Revenue Agency, exciting investors and sending the stock running for the top. Today, we’ll talk about:
- The tax settlement;
- what we’re seeing from WPM stock as a result; and
- what we’ll be watching for ahead.
WPM Announces Settlement With CRA
As mentioned above, Wheaton Precious Metals is having an incredibly strong start to the trading session this morning after the company announced that it reached a settlement with the Canada Revenue Agency. In the release, WPM said that the settlement provides a final resolution of its tax appeal in connection with the reassessment under transfer pricing rules of the 2005 to 2010 taxaction years. The cas related specifically to income generated by the company’s wholly-owned foreign subsidiaries. The highlights of the settlement are as follows:
- Foreign Income – The company said that foreign income on earnings generated by Wheaton International will not be subject to tax in Canada.
- Service Fease – Service fees charged by WPM for services provided to Wheaton International will be adjusted, resulting in increased income generated by the company in Canada, which is subject to Canadian tax.
- Transfer Pricing Penalties – The company also said that transfer pricing penalties in the reassessment will be reversed with interest adjusted consequently.
In a statement, Randy Smallwood, President and CEO at WPM, had the following to offer:
The terms of the settlement are an excellent outcome for Wheaton and its shareholders… 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.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to dig into the market is that the news leads to moves. In the case of Wheaton Precious Metals, the news proved to be overwhelmingly positive. After all, the tax settlement takes the fear of higher tax costs away and restructures taxes on the business in a positive way. As is normally the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (9:37), WPM is trading at $19.13 per share after a gain of $2.54 per share or 15.31% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the iWatch Markets team will continue to keep a close eye on WPM. In particular, we’re interested in following the company’s continued growth now that the tax settlement is behind it. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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