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« Silver Wheaton Corporation: A Short Term Trade | Main | Gold and Silver A Few Thoughts »
Friday
Jul312009

Silver Wheaton Corporation A Good Second Quarter

SWL LOGO 30 July 2009.JPG


Silver Wheaton Corporation (SLW) has just released their second quarter results which read well as they are still on track to hit a sales target of 17 to 19 million silver equivalent ounces for the year.

The highlights are listed below:

Record attributable production of 4.0 million silver equivalent ounces (3.8 million ounces of silver and 3,400 ounces of gold) at a total cash cost of US$3.99 (1) per silver ounce.

During the quarter, approximately 1 million silver equivalent ounces produced at the various mines and deliverable to Silver Wheaton under the agreements, was not sold due primarily to the timing of shipments. 

It is anticipated that these sales will be made by the mines during the remainder of 2009, at which time Silver Wheaton will take delivery and record a sale of the ounces.

Net earnings of US$18.4 million (US$0.06 per share) from the sale of 2.9 million ounces of silver, compared to US$23.3 million (US$0.10 per share) from the sale of 2.9 million ounces of silver in 2008.

Operating cash flows of US$26.5 million (US$0.09 per share) compared to US$35.9 million (US$0.16 per share) in 2008.

Closed the acquisition of Silverstone Resources Corp. ("Silverstone") through the issuance of 23,434,332 common shares and 1,367,364 share purchase options of Silver Wheaton on conversion of previously issued fully vested share purchase options of Silverstone.  The transaction was valued at approximately US$152 million and increased annual sales by over 4 million silver equivalent ounces.

On July 13, 2009, Goldcorp Inc. announced that construction of the first sulphide process line at their Peñasquito mine in Mexico is now complete and commissioning work is advancing on schedule.  Production and shipment of first concentrates, including silver, are still targeted for the second half of 2009.

"I am very pleased with our performance during the second quarter," said Peter Barnes, President and Chief Executive Officer of Silver Wheaton.  "Despite continued challenges in the global economy, Silver Wheaton is proud to have achieved record attributable production during the quarter and we remain on target to meet our 2009 sales guidance of 17 to 19 million silver equivalent ounces for the year.  Although our partners produced approximately 1 million silver equivalent ounces more during the quarter than we sold, this is only a timing issue and we anticipate these sales will be recorded during the second half of the year."

"With almost US$50 million of cash on hand at the end of the quarter, and access to an undrawn US$400 million low-cost credit facility, we remain very well positioned to continue delivering on our strategy of accretive growth."

Please click here to read this news release in full.

All very positive news with the added kicker that more deals will be forthcoming as they make use of their cash and credit lines.

We do own this stock and hope to increase our exposure to it on dips in the future.

Have a sparkling day.

Silver Wheaton Corporation trades on the New York Stock Exchange and the Toronto Stock Exchange under the symbol of SLW and is currently trading at $8.87. The Company has a market capitalization of $2.55 billion, with 287.44 million shares outstanding.

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