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Silver Wheaton Reports Record Production For The Third Quarter And First Nine Months Of 2013

Stocks in this article: SLW

"Subsequent to quarter end, we added a gold stream with Hudbay on the Constancia project, which is on schedule to start production in late 2014.  We remain exceptionally busy on the corporate development front but will always maintain our focus on high-quality, tangible opportunities that will allow us to further grow our portfolio of world-class assets."


      Revenue was $166.4 million in the third quarter of 2013, on silver
      equivalent sales of 7.8 million ounces (5.7 million ounces of silver and
      35,300 ounces of gold). This represents a 3% increase from the $161.3
      million of revenue generated in the third quarter of 2012, due primarily
      to a 52% increase in the number of silver equivalent ounces sold,
      partially offset by a 32% decrease in the average realized silver
      equivalent price ($21.26 in Q3 2013 compared to $31.36 in Q3 2012).

      Costs and Expenses

      Average cash costs[1] in the third quarter of 2013 were $4.73 per silver
      equivalent ounce, compared with $4.16 during the comparable period of
      2012. Cash costs rose year over year primarily due to an increase in
      gold sales (35,300 ounces in Q3 2013 compared to 6,900 ounces in Q3
      2012) associated with Hudbay's 777 mine and Vale S.A.'s ("Vale") Sudbury
      and Salobo mines. The average cash cost per gold ounce[1] was $386, or
      $6.30 per silver equivalent ounce[2]. This resulted in a cash operating
      margin[1] of $16.53 per silver equivalent ounce, a reduction of 39% as
      compared to the third quarter of 2012. The decrease in the cash
      operating margin was largely due to a 32% decrease in the silver
      equivalent price realized in the third quarter of 2013 compared to the
      third quarter of 2012, as well as increased cash costs, as noted above.

      Earnings and Operating Cash Flows

      Net earnings and cash flow from operations in the third quarter of 2013
      were $77.1 million ($0.22 per share) and $118.7 million ($0.33 per
      share[1]), compared with $119.7 million ($0.34 per share) and $128.7
      million ($0.36 per share[1]) for the same period in 2012, a decrease of
      36% and 8%, respectively. Earnings and cash flow were impacted by lower
      gold and silver prices, as well as increased costs due to an increase in
      gold sales, as noted above.

      Balance Sheet

      At September 30, 2013, the Company had approximately $62.0 million of
      cash on hand. The combination of cash and ongoing operating cash flows,
      combined with the credit available under the Company's $1 billion
      Revolving Facility, positions the Company well to fund all outstanding
      commitments as well as provide flexibility to acquire additional
      accretive precious metal stream interests.

Financial Review

      [1]            Please refer to non-IFRS measures at the end of this press release.
      [2]            Cash cost per silver equivalent ounce calculated using a gold to
                     silver ratio of 61.3 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 London Bullion Metal Exchange for the assets
                     which produce only gold.

Operational and Development Highlights

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