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« Silver and Gold Update 17 May 2010 | Main | Pan American Silver Corporation: First Quarter Highlights »

Silver Wheaton Corporation: Earnings Triple

SLW Chart 14 May 2010.jpg

We will start with a quick look at the chart for Silver Wheaton Corporation (SLW) where we can see that the technical indicators are in the overbought zone so take care as a breather could be on the cards for SLW, albeit for the short term. We also draw your attention to the progress of this stock where the possibility exists that SLW will return to back fill the gap which was created by the quick rise in the stock price.

However, all appears to be going reasonably well as the latest news release from Silver Wheaton Corporation details the first quarter earnings as follows:

- Net earnings almost tripled to US$44.6 million (US$0.13 per share),

compared to US$15.1 million (US$0.06 per share) in 2009.

- Operating cash flows increased 149% to US$57.6 million (US$0.17 per
share)(1), compared with US$23.1 million (US$0.09 per share)(1) in

- Attributable silver equivalent production of 5.5 million ounces (4.9
million ounces of silver and 7,700 ounces of gold), representing an
increase of 68% over the comparable period in 2009.

- Silver equivalent sales of 5.0 million ounces (4.4 million ounces of
silver and 8,600 ounces of gold), representing an increase of 58%
over the comparable period in 2009.

- Total cash costs(1) of US$4.04 per silver equivalent ounce compared
to US$3.97 per ounce in 2009.

- Cash operating margin(1) increased by 66% to US$13.16 per silver
equivalent ounce, compared to US$7.93 per ounce in 2009.

- Recorded first silver sales attributable to the sulphide process line
at Goldcorp's Penasquito mine in Mexico. Silver production at
Penasquito met expectations during the quarter and is anticipated to
ramp up as the year progresses. Annual production attributable to
Silver Wheaton from the mine is expected to average approximately 7
million ounces of silver over the estimated 22 year mine life.

- Acquired an amount equal to 100% of the life of mine silver and gold
production from Augusta Resource Corporation's ("Augusta") Rosemont
Copper project ("Rosemont") in the United States. Once production
commences, Rosemont is forecast to increase Silver Wheaton's
long-term annual production by approximately 2.4 million ounces of
silver, plus any gold production, estimated by Augusta to average up
to 15,000 ounces of gold per annum.

- Converted the debenture with Pan American Silver Corp. ("Pan
American") into an agreement to acquire an amount equal to 12.5% of
the life of mine silver production from the Loma de La Plata zone of
the Navidad project located in Argentina. Navidad is forecast to
increase Silver Wheaton's long-term annual silver production by
approximately 2 million ounces.

- Announced that attributable proven and probable reserves more than
doubled in 2009, including an increase of 431 million ounces of
silver and 220,000 ounces of gold, to a record 875 million silver
equivalent ounces. In addition, attributable measured and indicated
resources increased by 72%, including an increase of 141 million
ounces of silver and 180,000 ounces of gold, to a record 366 million
silver equivalent ounces. Attributable inferred resources increased
by 4%, including an increase of 12 million ounces of silver and
50,000 ounces of gold, to a record 408 million silver equivalent ounces.

To read the the article in full please click here.

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 $20.49.

The Company has a market capitalization of $6.32 billion, with 342.54 million shares outstanding, a 52 week trading range of $7.12 to $20.22 with an average volume of 5-6 million shares traded, although spikes in trading have seen 14 million shares change hands.

Keep smiling its all falling into place for gold and silver bugs.

Got a comment then please add it to this article, all opinions are welcome and very much appreciated by both our readership and the team here.

The latest trade from our options team was slightly more sophisticated in that we shorted a PUT as follows:

On Friday 7th May our premium options trading service OPTIONTRADER opened a speculative short term trade on GLD Puts, signalling to short sell the $105 May-10 Puts series at $0.09.

On Tuesday the 11th May we bought back the puts for just $0.05, making a 44.44% profit in just 4 days.

We've done a bit of a write up on have been rather fortunate to close both the $15.00 and the $16.00 options trade on Silver Wheaton Corporation, with both returning a little over 100% profit.

If you would like to get a bit more bang out of your buck, then check out our Options Trading Service please click here.

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Reader Comments (2)

As always it seems, I agree with your assessment.

My extra two cents is that there's a whiff of parabolic mega rally in the air. I'd be buying on what looks to be a short term, maybe sharp but fairly shallow pullback...and if we don't get it, I may still be buying...just going with more conservative plays. It feels like the big one is brewing...and overbought conditions and seasonal headwinds notwithstanding, you don't wanna miss the big one. Phase 2 C wave stuff. I could be all wet, but there it is.

Went short the S&P through the SDS double short ETF yesterday morning. (I've taken a third off already.) The gravitational pull down seems to be affecting the GDX. No surprise. If S&P500 reaches the low end of the support range around 1115 and holds, that's when to buy gold and silver related stuff. It's all guesswork, of course, but that's the best I got.

SLW...not bad for an "overstaffed" company that "resells" silver. "Ooooh, you'd better look out!" On my core position, talk to me when SLW reaches 30. And I could see it at 100...for real.

May 14, 2010 | Unregistered Commenterfallingman

Good input. It will be interesting to see where the chart lines take us shortly.

May 15, 2010 | Unregistered CommenterJ

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