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« Smile You’re Silver Bug | Main | Gold Trading Vehicles: SK Options Outperform »
Thursday
Mar032011

Silver Wheaton Corporation: Net Earnings US$0.35 per share

slw logo.JPG

Hot off the press we have the latest figures from Silver Wheaton Corporation (SLW) and so we kick off with this comment from Peter Barnes:



"2010 was a tremendously successful year, with the Company setting new records on all financial and operating metrics. In just six years, Silver Wheaton has grown its market capitalization to in excess of US$15 billion, and has more silver reserves than any silver company in the world,"

Peter Barnes is the Chief Executive Officer of Silver Wheaton.

The Company had record quarterly net earnings, operating cash flows, attributable production and sales, as follows:  

FOURTH QUARTER HIGHLIGHTS (3 Months)
 
Net earnings more than doubled to US$123.0 million (US$0.35 per share) compared withUS$50.8 million (US$0.15 per share) in 2009.

Operating cash flows increased 76% to US$124.7 million (US$0.36 per share)1 compared withUS$71.0 million (US$0.21 per share)1 in 2009.

Attributable silver equivalent production of 6.3 million ounces (6.1 million ounces of silver and 4,100 ounces of gold), representing an increase of 10% over the comparable period in 2009.

Silver equivalent sales of 5.7 million ounces (5.5 million ounces of silver and 2,600 ounces of gold), representing an increase of 11% over the comparable period in 2009.

Total cash costs were US$4.021 per silver equivalent ounce, compared with US$4.041 per ounce in 2009.

Cash operating margin1 increased 64% compared to 2009, to a record US$22.42 per silver equivalent ounce, while average silver prices over the same period increased by 50%.

Acquired 3.0 million common shares of Bear Creek Mining Corporation for total consideration of C$19.1 million.  At December 31, 2010, Silver Wheaton owned 13.3 million common shares of Bear Creek representing approximately 14% of the outstanding shares on an undiluted basis.

The Company had record annual net earnings, operating cash flows, attributable production and sales, as follows: 

2010 HIGHLIGHTS (12 Months)
  
Net earnings more than doubled to US$290.1 million (US$0.84 per share) compared toUS$117.9 million (US$0.39 per share) in 2009.

Operating cash flows increased 93% to US$319.8 million (US$0.93 per share)1 compared toUS$165.9 million (US$0.54 per share)1 in 2009.

Attributable silver equivalent production of 23.9 million ounces (22.1 million ounces of silver and 28,800 ounces of gold), representing an increase of 37% compared to 2009.

Silver equivalent sales of 20.5 million ounces (18.9 million ounces of silver and 25,900 ounces of gold), representing an increase of 29% compared to 2009.

Total cash costs were US$4.041 per silver equivalent ounce, compared with US$4.031 per ounce in 2009.

Cash operating margin1 increased 50% compared to 2009, to a record US$16.63 per silver equivalent ounce, while average silver prices over the same period increased by 38%.

As at December 31, 2010, approximately 2.4 million payable silver equivalent ounces attributable to the Company have been produced at the various mines and will be recognized in future sales as they are delivered to the Company under the terms of their contracts.

Acquired an amount equal to 100% of the life of mine silver and gold production fromAugusta Resource Corporation's Rosemont Copper project 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. 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'slong-term annual silver production by up to 2 million ounces.

Acquired 1.8 million units of Ventana Gold Corp. for total consideration of C$20.7 million(US$19.8 million).  As part of this transaction, Silver Wheaton has been granted a right of first refusal over any silver streams relating to Ventana's Colombian properties, including the highly prospective La Bodega project, which has the potential to host a world-class gold deposit with significant silver by product credits.

Goldcorp completed the sale of the San Dimas mine to Primero Mining Corp.  In conjunction with the sale, Silver Wheaton amended its silver purchase agreement relating to the mine.  The term of the agreement, which was set to expire in 2029, was extended to the life of mine.  During the first four years following closing of the transaction, Primero will deliver toSilver Wheaton a per annum amount equal to the first 3.5 million ounces of payable silver produced at San Dimas and 50% of any excess, plus Silver Wheaton will receive an additional 1.5 million ounces of silver per annum to be delivered by Goldcorp.  Beginning in the fifth year after closing, Primero will deliver to the Company a per annum amount equal to the first 6 million ounces of payable silver produced at San Dimas and 50% of any excess. Primero has provided Silver Wheaton with a right of first refusal on any metal stream or similar transaction it enters into.

Goldcorp Inc. announced that its world-class gold-silver-lead-zinc Peñasquito mine achieved commercial production, on schedule, with peak throughput rates as high as 105,000 tonnes per day. The ramp up to full production capacity of 130,000 tonnes per day is anticipated by the end of the first quarter of 2011. 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.

Barrick Gold Corporation's world-class gold-silver Pascua-Lama project is forecast to commence production in the first half of 2013, with detailed engineering and procurement nearing completion and earthworks well underway. Once in production, Pascua-Lama is forecast to be one of the largest and lowest cost gold mines in the world with an expected mine life in excess of 25 years.  In its first five years of operation, Silver Wheaton'sattributable silver production is expected to average 9 million ounces annually. 

"This momentum is expected to continue into 2011, with forecast production growth of another 15%, which will result in operating cash flows of over US$700 million at current metal prices. Production growth over the next five years is forecast at approximately 80%, which represents one of the strongest growth profiles in the precious metals industry and is driven by the continued ramp up at Peñasquito and the forecast 2013 production start at Barrick's world-class Pascua-Lama project."

said Peter Barnes, Chief Executive Officer of Silver Wheaton.

As we see it these are super results, however, we must now wait and see what the analysts make of these figures over the coming days.

PS: Just in case you missed it we have just closed an option play on www.silver-prices.net with an average profit of 96.5% on Silver Wheaton Call Options. Click here to read more.

Many thanks to those of you who have recently signed up for options trading service, its very much appreciated. Please be patient as we have a number of new trades on the drawing board and as you are aware the timing of them is critical to their success.

We now have 65 winners out of 67 options trades, or a 97.00% success rate If you have any questions regarding these trades please address them through their site where they will be handled quickly and I hope efficiently.

sk chart 19 Feb 2011.JPG



The above progress chart is being updated constantly. However, to see exactly how it is going, please click this link.

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Stay on your toes and have a good one.

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Reader Comments (1)

Team,

SLW is up 2.84% today and closed at $44.96, so it looks as though the results have been reasonably well received by the investment community. The last buy signal we gave on SLW was back in September 2010, when we paid around $19.00 for it, so that trade is now more than doubled.

March 4, 2011 | Unregistered CommenterSilver Prices

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