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TheStreet Open House

Silver Wheaton Reports Record Second Quarter And First Half 2013 Production

Consolidated Balance Sheets

                                                 June 30        December 31
    (US dollars in thousands - unaudited)          2013             2012
    Assets
    Current assets
                     Cash and cash
                     equivalents                 $    36,257       $   778,216
                     Accounts receivable               2,863             6,197
                     Other                             2,054               966
    Total current assets                         $    41,174       $   785,379
    Non-current assets
                     Silver and gold
                     interests                   $ 4,300,380       $ 2,281,234
                     Long-term investments            48,309           121,377
                     Other                             6,149             1,347
    Total non-current assets                     $ 4,354,838       $ 2,403,958
    Total assets                                 $ 4,396,012       $ 3,189,337
    Liabilities
    Current liabilities
                     Accounts payable and
                     accrued liabilities         $    20,648       $    20,898
                     Current portion of
                     bank debt                             -            28,560
                     Current portion of
                     performance share
                     units                               801                 -
    Total current liabilities                    $    21,449       $    49,458
    Non-current liabilities
                     Long-term portion of
                     bank debt                   $ 1,142,802       $    21,500
                     Deferred income taxes            13,336             9,250
                     Performance share
                     units                             1,272             2,055
    Total non-current liabilities                $ 1,157,410       $    32,805
    Total liabilities                            $ 1,178,859       $    82,263
    Shareholders' equity
    Issued capital                               $ 1,823,484       $ 1,811,577
    Reserves                                         (15,857)           (1,710)
    Retained earnings                              1,409,526         1,297,207
    Total shareholders' equity                   $ 3,217,153       $ 3,107,074
    Total liabilities and shareholders'
    equity                                       $ 4,396,012       $ 3,189,337

Consolidated Statement of Cash Flows

                                                                       Three Months Ended
                                                                            June 30
    (US dollars in thousands - unaudited)                             2013             2012
    Operating activities
    Net earnings                                               $     71,117     $   141,414
    Adjustments for
         Depreciation and depletion                                  41,417          21,651
         Amortization of credit facility origination fees:
                Interest expense                                        278               -
                Stand-by fees                                           423               -
                Credit facility origination fees re Bridge Facility   4,490               -
         Interest expense                                             2,247               -
         Equity settled stock based compensation                      2,375           1,669
         Performance share units                                        (95)            205
         Deferred income tax expense                                  1,631           2,498
         Loss (gain) on fair value adjustment of share purchase
         warrants held                                                1,364             277
         Investment income recognized in net earnings                   (63)          (350)
         Other                                                           67              68
    Change in non-cash working capital                                2,727           5,151
    Cash generated from operations                             $    127,978     $   172,583
    Interest paid - expensed                                         (2,727)              -
    Interest received                                                     7             333
    Cash generated from operating activities                   $    125,258     $   172,916
    Financing activities
    Bank debt repaid                                           $ (1,530,000)    $   (7,140)
    Bank debt drawn                                               1,585,000               -
    Credit facility origination fees                                 (2,433)              -
    Share purchase warrants exercised                                     7               -
    Share purchase options exercised                                  4,909           3,164
    Dividends paid                                                  (92,219)       (63,658)
    Cash generated from (applied to) financing activities      $    (34,736)    $  (67,634)
    Investing activities
    Silver and gold interests                                  $   (124,855)    $        -
    Interest paid - capitalized to silver interests                  (4,707)          (194)
    Acquisition of long-term investments                                  -           (395)
    Dividend income received                                             56              17
    Other                                                              (156)           (42)
    Cash applied to investing activities                       $   (129,662)     $    (614)
    Effect of exchange rate changes on cash and cash equivalents $     (138)     $     (41)
    (Decrease) increase in cash and cash equivalents           $    (39,278)     $  104,627
    Cash and cash equivalents, beginning of period                   75,535         997,489
    Cash and cash equivalents, end of period                   $     36,257     $ 1,102,116

Consolidated Statement of Cash Flows continued

                                                                       Six Months Ended
                                                                            June 30
    (US dollars in thousands - unaudited)                             2013          2012
    Operating activities
    Net earnings                                               $     204,538  $  288,595
    Adjustments for
         Depreciation and depletion                                  65,808       38,917
         Amortization of credit facility origination fees:
                Interest expense                                        424            -
                Stand-by fees                                         1,428            -
                Credit facility origination fees re Bridge Facility   4,490            -
         Interest expense                                             2,781            -
         Equity settled stock based compensation                      3,845        3,328
         Performance share units                                        119          382
         Deferred income tax expense                                  5,870        5,566
         Loss (gain) on fair value adjustment of share purchase
         warrants held                                                2,694         (398)
         Investment income recognized in net earnings                  (294)        (669)
         Other                                                           65          (24)
    Change in non-cash working capital                                1,617          395
    Cash generated from operations                             $    293,385  $   336,092
    Interest paid - expensed                                         (2,727)           -
    Interest received                                                   212          635
    Cash generated from operating activities                  $     290,870  $   336,727
    Financing activities
    Bank debt repaid                                          $  (1,580,060) $   (14,280)
    Bank debt drawn                                               2,675,000            -
    Credit facility origination fees                                (13,951)           -
    Share purchase warrants exercised                                 2,982           10
    Share purchase options exercised                                  5,951        4,088
    Dividends paid                                                  (92,219)     (63,658)
    Cash generated from (applied to) financing activities     $     997,703  $   (73,840)
    Investing activities
    Silver and gold interests                                 $  (2,025,475) $      (180)
    Interest paid - capitalized to silver interests                  (4,845)        (409)
    Acquisition of long-term investments                                   -        (395)
    Dividend income received                                            113           34
    Other                                                              (175)         (62)
    Cash applied to investing activities                         (2,030,382) $    (1,012)
    Effect of exchange rate changes on cash and cash equivalents       (150) $        40
    (Decrease) increase in cash and cash equivalents           $   (741,959) $   261,915
    Cash and cash equivalents, beginning of period                  778,216      840,201
    Cash and cash equivalents, end of period                   $     36,257  $ 1,102,116

Summary of Ounces Produced and Sold  

                                 2013               2012              2011
    (in thousands)             Q2    Q1    Q4     Q3    Q2    Q1    Q4    Q3
    Silver ounces produced
    [1]
    San Dimas [2]             1,160 1,743 1,694  1,288 1,231 1,692 1,578 1,251
    Yauliyacu                   668   624   616    640   606   550   583   608
    Peñasquito                1,440 1,093 1,445  1,940 1,822 1,365 1,633 1,162
    Barrick [3]                 556   741   769    617   455   630   728   800
    Other [4]                 2,570 2,038 2,345  2,251 2,378 2,335 2,212 2,046
                              6,394 6,239 6,869  6,736 6,492 6,572 6,734 5,867
    Silver equivalent ounces
    of gold produced [5]
    Minto                       260   369   373    269   218   172   202   257
    777                       1,045   919 1,059 612ⶠ    -     -     -     -
    Sudbury                     514   539     -      -     -     -     -     -
    Salobo                      402   262     -      -     -     -     -     -
    Silver equivalent ounces
    produced [5]              8,615 8,328 8,301  7,617 6,710 6,744 6,936 6,124
    Silver ounces sold
    San Dimas [2]             1,194 1,850 1,629  1,178 1,295 1,701 1,488 1,232
    Yauliyacu                   559   149 1,097    184 1,155   497   655    11
    Peñasquito                1,058 1,459 1,642  1,304 1,845 1,189   851 1,382
    Barrick [3]                 560   753   826    528   470   656   755   747
    Other [4]                 1,771 1,741 2,153  1,592 2,024 1,885 2,029 1,424
                              5,142 5,952 7,347  4,786 6,789 5,928 5,778 4,796
    Silver equivalent ounces
    of gold sold [5]
    Minto                       210   414   268    357   139   198   196   316
    777                       1,444   511 1,516      -     -     -     -     -
    Sudbury                     266     6     -      -     -     -     -     -
    Salobo                      177    40     -      -     -     -     -     -
    Silver equivalent ounces
    sold [5]                  7,239 6,923 9,131  5,143 6,928 6,126 5,974 5,112
    Gold / silver ratio [5]    61.9  57.3  54.1   51.7  58.7  51.2  51.9  50.4
    Cumulative payable silver
    equivalent ounces
    produced but not yet
    delivered [7]             5,022 4,051 3,824  5,195 3,212 4,166 4,127 3,805

       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. The Company has been
       informed by Glencore that reported production related to the Yauliyacu
       mine may have been overstated by a total of approximately 200,000
       ounces for all or some portion of the period between April 1, 2011 and
       June 30, 2012. The required adjustments to production, if any, related
       to the Yauliyacu mine for these periods will be made once management
    1) completes a review of the timing and amount of any production variance.
       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
    2) sale of San Dimas to Primero.
    3) Comprised of the Lagunas Norte, Pierina and Veladero silver interests.
       Comprised of the Los Filos, Zinkgruvan, Mineral Park, Cozamin,
       Neves-Corvo, Stratoni, Keno Hill, Minto, 777, Aljustrel and Campo
    4) Morado silver interests.
       Gold ounces produced and sold are converted to a silver equivalent
       basis based on either (i) 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; or (ii) the ratio of the
       price of silver to the price of gold on the date of sale as per the
    5) London Bullion Metal Exchange for the assets which produce only gold.
       Represents production for the period August 8, 2012 to September 30,
    6) 2012.
    7) Based on management estimates.

Results of Operations (unaudited)

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