This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Silver Wheaton Reports Record Quarterly Financial Results Including Operating Cash Flows Of Over US$172 Million

Stocks in this article: SLW

The conference call will be recorded and you can listen to an archive of the call by one of the following methods:

    Dial toll free from Canada or the US: 1-855-859-2056
    Dial from outside Canada or the US:   1-416-849-0833
    Pass code:                            98200489
    Archived audio webcast:               http://www.silverwheaton.com

About Silver Wheaton

Silver Wheaton is the largest silver streaming company in the world. Based upon its current agreements, forecast 2012 attributable production is approximately 28 million silver equivalent ounces, including 42,000 ounces of gold. By 2016, annual attributable production is anticipated to increase significantly to approximately 48 million silver equivalent ounces, including 100,000 ounces of gold. This growth is driven by the Company's portfolio of low-cost and long-life assets, including silver and precious metal streams on Barrick's Pascua-Lama project and Hudbay's flagship 777 mine and Constancia project.

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 future price of silver and gold, the estimation of mineral reserves and resources, the realization of mineral reserve estimates, the timing and amount of estimated future production, costs of production, reserve determination, reserve conversion rates and statements as to any future dividends. 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", "intends", "anticipates" or "does not anticipate", or "believes", 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 Silver 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 silver and gold; the absence of control over mining operations from which Silver Wheaton purchases silver or gold and risks related to these 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, 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; and differences in the interpretation or application of tax laws and regulations; as well as those factors discussed in the section entitled "Description of the Business - Risk Factors" in Silver Wheaton's Annual Information Form available on SEDAR at http://www.sedar.com and in Silver Wheaton's Form 40-F on file with the U.S. Securities and Exchange Commission in Washington, D.C. Forward-looking statements are based on assumptions management believes to be reasonable, including but not limited to: the continued operation of the mining operations from which Silver Wheaton purchases silver or gold, no material adverse change in the market price of commodities, that the mining operations will operate and the mining projects will be completed in accordance with their public statements and achieve their stated production outcomes, and such other assumptions and factors as set out herein. Although Silver Wheaton has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate. Accordingly, readers should not place undue reliance on forward-looking statements. Silver 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.

________________________________ [ 1] Please refer to non-IFRS measures at the end of this press release. [ 2] Silver equivalent production forecast assumes a gold/silver ratio of 50:1

Consolidated Statement of Earnings

                                    Three Months Ended     Six Months Ended
                                          June 30               June 30
    (US dollars and shares in
    thousands, except per share
    amounts - unaudited)              2012       2011       2012       2011
    Sales                           $ 201,408  $ 194,752  $ 401,046  $ 352,935
    Cost of sales
    Cost of sales, excluding
    depletion                       $  28,116  $  21,000  $  53,135  $  40,947
    Depletion                          21,591     14,734     38,797     26,417
    Total cost of sales             $  49,707  $  35,734  $  91,932  $  67,364
    Earnings from operations        $ 151,701  $ 159,018  $ 309,114  $ 285,571
    Expenses and other income
    General and administrative
    [1]                             $   7,354  $   6,252  $  14,918  $  12,754
    Foreign exchange loss (gain)           39      (502)          9      (506)
    Other expense (income)                144      2,765      (506)      2,905
                                    $   7,537  $   8,515  $  14,421  $  15,153
    Earnings before income taxes    $ 144,164  $ 150,503  $ 294,693  $ 270,418
    Income tax expense                (2,750)    (2,438)    (6,098)      (177)
    Net earnings                    $ 141,414  $ 148,065  $ 288,595  $ 270,241
 
    Basic earnings per share        $    0.40  $    0.42  $    0.82  $    0.77
    Diluted earnings per share      $    0.40  $    0.42  $    0.81  $    0.76
    Weighted average number of
    shares outstanding
    Basic                             353,733    353,267    353,631    353,083
    Diluted                           355,519    355,921    355,751    355,895
    1) Equity settled stock based
    compensation (a non-cash
    item) included in general and
    administrative expenses.        $   1,669  $   1,814  $   3,328  $   3,069
 

Consolidated Balance Sheets

                                                   June 30     December 31
    (US dollars in thousands - unaudited)            2012          2011
    Assets
    Current assets
    Cash and cash equivalents                     $ 1,102,116  $     840,201
    Accounts receivable                                 5,927          3,890
    Other                                               2,235          1,221
    Total current assets                          $ 1,110,278  $     845,312
    Non-current assets
    Silver and gold interests                     $ 1,837,945  $   1,871,726
    Long-term investments                             107,307        151,621
    Deferred income taxes                                   -          2,301
    Other                                               1,295          1,375
    Total non-current assets                      $ 1,946,547  $   2,027,023
    Total assets                                  $ 3,056,825  $   2,872,335
    Liabilities
    Current liabilities
    Accounts payable and accrued liabilities      $    12,521  $       8,709
    Current portion of bank debt                       28,560         28,560
    Current portion of silver interest
    payments                                          135,225        130,789
    Total current liabilities                     $   176,306  $     168,058
    Non-current liabilities
    Long-term portion of bank debt                     35,780         50,060
    Deferred income taxes                                  61              -
    Total non-current liabilities                 $    35,841  $      50,060
    Total liabilities                             $   212,147  $     218,118
    Shareholders' equity
    Issued capital                                $ 1,800,338  $   1,793,772
    Reserves                                         (15,620)         25,422
    Retained earnings                               1,059,960        835,023
    Total shareholders' equity                    $ 2,844,678  $   2,654,217
    Total liabilities and shareholders' equity    $ 3,056,825  $   2,872,335
 

Consolidated Statement of Cash Flows

                                Three Months Ended        Six Months Ended
                                     June 30                  June 30
    (US dollars in
    thousands -
    unaudited)                   2012        2011         2012        2011
    Operating
    activities
    Net earnings              $   141,414  $  148,065  $   288,595  $  270,241
    Adjustments for
    Depreciation
    and depletion                  21,651      14,803       38,917      26,557
    Equity settled
    stock based
    compensation                    1,669       1,814        3,328       3,069
    Deferred income
    tax expense
    (recovery)                      2,498       2,249        5,566       (269)
    Loss (gain) on
      fair value
     adjustment of
    share purchase
     warrants held                    277       2,701        (398)       2,767
      Investment
        income
     recognized in
     net earnings                   (350)       (205)        (669)       (414)
    Other                              80       (162)         (17)       (296)
    Change in
    non-cash
    operating
    working capital                 5,344     (1,178)          770     (6,570)
    Operating cash
    flows before
    interest income           $   172,583  $  168,087  $   336,092  $  295,085
    Interest income
    received                          333         194          635         392
    Cash generated by
    operating activities      $   172,916  $  168,281  $   336,727  $  295,477
    Financing
    activities
    Bank debt
    repaid                    $   (7,140)  $  (7,140)  $  (14,280)  $ (14,280)
    Share purchase
    warrants
    exercised                           -           -           10          61
    Share purchase
    options
    exercised                       3,164         667        4,088       5,062
    Dividends paid               (63,658)    (10,599)     (63,658)    (21,194)
    Cash applied to
    financing activities      $  (67,634)  $ (17,072)  $  (73,840)  $ (30,351)
    Investing
    activities
    Silver and gold
    interests                 $         -  $     (16)  $     (180)  $  (2,557)
    Silver and gold
    interests -
    interest paid                   (194)       (385)        (409)       (701)
    Acquisition of
    long-term
    investments                     (395)    (13,674)        (395)    (13,674)
    Proceeds on
    disposal of
    long-term
    investments                         -           -            -      24,270
    Dividend income
    received                           17          11           34          22
    Other                            (42)        (25)         (62)        (33)
    Cash (applied to)
    generated by investing
    activities                $     (614)  $ (14,089)  $   (1,012)  $    7,327
    Effect of exchange rate
    changes on cash and
    cash equivalents          $      (41)  $      155  $        40  $      261
    Increase in cash and
    cash equivalents          $   104,627  $  137,275  $   261,915  $  272,714
    Cash and cash
    equivalents, beginning
    of period                     997,489     564,075      840,201     428,636
    Cash and cash
    equivalents, end of
    period                    $ 1,102,116  $  701,350  $ 1,102,116  $  701,350

Summary of Ounces Produced and Sold

                                  2012              2011              2010
    (in thousands)              Q2    Q1    Q4    Q3    Q2    Q1    Q4    Q3
    Silver ounces produced [1]
    San Dimas [2]              1,227 1,692 1,578 1,251 1,150 1,606 1,586 1,255
    Zinkgruvan                   673   642   390   379   414   508   428   508
    Yauliyacu                    606   550   583   608   674   683   651   633
    Peñasquito                 1,822 1,365 1,633 1,162 1,282 1,207 1,260 1,109
    Cozamin                      429   405   433   395   414   325   335   381
    Barrick [3]                  468   667   723   794   741   722   458   682
    Other [4]                  1,276 1,288 1,389 1,272 1,153 1,088 1,245 1,069
                               6,501 6,609 6,729 5,861 5,828 6,139 5,963 5,637
    Silver equivalent ounces
    of gold produced [5]
    Minto                        189   107   202   257   261    97   205   402
    Silver equivalent ounces
    produced                   6,690 6,716 6,931 6,118 6,089 6,236 6,168 6,039
    Silver ounces sold
    San Dimas [2]              1,295 1,701 1,488 1,232 1,149 1,748 1,438 1,274
    Zinkgruvan                   580   517   425   319   401   321   421   635
    Yauliyacu                  1,155   497   655    11   471   120   470    87
    Peñasquito                 1,845 1,189   851 1,382   961   941 1,169   692
    Cozamin                      395   376   374   335   281   271   411   306
    Barrick [3]                  470   656   755   747   726   680   482   533
    Other [4]                  1,049   992 1,230   770   862   741 1,139   750
                               6,789 5,928 5,778 4,796 4,851 4,822 5,530 4,277
    Silver equivalent ounces
    of
    gold sold [5]
    Minto                        139   198   196   316   227    83   127   411
    Silver equivalent ounces
    sold                       6,928 6,126 5,974 5,112 5,078 4,905 5,657 4,688
    Gold / silver ratio [5]     58.7  51.2  51.9  50.4  40.1  33.0  49.7  57.7
    Cumulative payable
    silver equivalent ounces
    produced but not yet
    delivered [6]              3,212 4,166 4,127 3,805 3,537 3,018 2,275 2,174

1)     Ounces produced represent the quantity of silver and gold contained in concentrate or doré prior to smelting or refining deductions. Production figures are based on information provided by the operators of the mining operations to which the silver or gold interests relate or management estimates in those situations where other information is not available. Certain production figures may be updated in future periods as additional information is received. 2)     The ounces produced and sold include ounces received from Goldcorp in connection with Goldcorp's four year commitment to deliver to Silver Wheaton 1.5 million ounces of silver per annum resulting from their sale of San Dimas to Primero. 3)     Comprised of the Lagunas Norte, Pierina and Veladero silver interests. 4)     Comprised of the Los Filos, Mineral Park, Neves-Corvo, Stratoni, Keno Hill, Minto, Aljustrel and Campo Morado silver interests in addition to the previously owned La Negra and San Martin silver interests. 5)     Gold ounces produced and sold are converted to a silver equivalent basis on the ratio of the average silver price received to the average gold price received during the period from the assets that produce both gold and silver. 6)     Based on management estimates.

Results of Operations (unaudited)

                                Three Months Ended June 30, 2012
                                                            Average
                                                 Average     Cash
                                                 Realized    Cost      Average
                                                  Price     (US$'s    Depletion
                                                  (US$'s      Per      (US$'s
                  Ounces    Ounces    Sales        Per      Ounce)       Per
               Produced [2]  Sold    (US$'s)      Ounce)      [3]      Ounce)
    Silver
    San Dimas
    [4]               1,227  1,295    $  36,695    $ 28.34    $ 4.09     $  0.79
    Zinkgruvan          673    580       16,505      28.45      4.14        1.68
    Yauliyacu           606  1,155       34,468      29.84      4.08        5.02
    Peñasquito        1,822  1,845       53,197      28.83      3.99        2.96
    Cozamin             429    395       11,981      30.33      4.12        4.05
    Barrick
    [5]                 468    470       14,183      30.18      3.90        4.34
    Other [6]         1,276  1,049       30,665      29.22      3.97        4.09
                      6,501  6,789    $ 197,694    $ 29.12    $ 4.04     $  3.12
    Gold
    Minto             3,214  2,369        3,714      1,568       303         171
    Silver
    equivalent
    [7]               6,690  6,928    $ 201,408    $ 29.07    $ 4.06     $  3.12
    Corporate
    General and administrative
    Other
    Total
    corporate
                      6,690  6,928    $ 201,408    $ 29.07    $ 4.06     $  3.12
                                                            

Table continues

    Three Months
    Ended June 30,
    2012
                                                           Cash Flow
                                          Net                 From
                                       Earnings           Operations      Total Assets
                                        (US$'s)             (US$'s)          (US$'s)
    Silver
    San Dimas [4]               $        30,367          $    31,394   $     165,161
    Zinkgruvan                           13,131               14,043          55,798
    Yauliyacu                            23,959               32,202         221,723
    Peñasquito                           40,373               45,835         495,993
    Cozamin                               8,756               10,400          21,997
    Barrick [5]                          10,310               13,571         601,035
    Other [6]                            22,212               27,670         243,642
                                $       149,108          $   175,115   $   1,805,349
    Gold
    Minto                                 2,593                2,928          32,596
    Silver
    equivalent [7]              $       151,701          $   178,043   $   1,837,945
    Corporate
    General and
    administrative              $       (7,354)
    Other                               (2,933)
    Total
    corporate                   $      (10,287)          $   (5,127)   $   1,218,880
                                $       141,414          $   172,916   $   3,056,825
 

 

7 of 10

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,356.87 +288.00 1.69%
S&P 500 2,012.89 +40.15 2.04%
NASDAQ 4,644.3120 +96.4780 2.12%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs