Net earnings in the second quarter of 2012 were US$141.4 million ( US$0.40 per share), compared with US$148.1 ( US$0.42 per share) for the same period in 2011, a decrease of 5%. Cash flow from operations in the second quarter of 2012 was US$172.9 million ( US$0.49 per share [ 1]), compared with US$168.3 million ( US$0.48 per share [ 1]) for the same period in 2011, an increase of 3%. The change in net earnings and operating cash flows is primarily due to a 36% increase in the number of silver equivalent ounces sold, which was partially offset by a 24% decrease in the realized price per silver equivalent ounce.
At June 30, 2012, the Company had approximately US$1.1 billion of cash on hand. In addition, the Company had US$400 million of available credit under its revolving bank debt facility. Following the initial US$500 million upfront payment due to Hudbay under the recently announced transaction, the combination of cash, available credit, and strong operating cash flows, positions the Company well to execute on its growth strategy of acquiring additional accretive silver stream interests.
Operational HighlightsAttributable silver equivalent production was 6.7 million ounces (6.5 million ounces of silver and 3,200 ounces of gold) in the second quarter of 2012, representing an increase of 10% compared to the second quarter of 2011. Operational highlights for the quarter ended June 30, 2012 are as follows: Peñasquito - While attributable silver production increased 42% compared to 2011, to over 1.8 million ounces, as per Goldcorp Inc.'s ("Goldcorp") July 10, 2012 disclosure, second quarter mill throughput at its Peñasquito mine was impacted by lower than anticipated water supplies, the result of prolonged drought conditions in the region. The water deficit is expected to limit plant throughput to between approximately 98,000 and 107,000 tonnes per day over the balance of 2012, resulting in a reduction of forecast silver production attributable to Silver Wheaton during this period. Goldcorp holds permits for sufficient quantities of water and is currently working to drill additional wells to increase water production. Concurrently, work is also underway to increase the quantity of water reclaimed from the tailings facility. Goldcorp highlighted that both the processing plant and the ore body continue to perform well, and the focus now is on bringing water wells into production. Peñasquito will become Silver Wheaton's largest contributor of silver production in 2012, with forecast attributable silver production of approximately 7 million ounces once at full design capacity.