Silver Wheaton’s Results Suggest a Sparkling Future!
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| Topic: Silver Mining Companies — February 19th, 2009
We will start with a comment from Peter Barnes, President and Chief
Executive Officer of Silver Wheaton,
“With the onset of the global economic crisis, the strength of Silver Wheaton’s business model has been clearly demonstrated. Despite a year of significant challenges, including less than anticipated silver deliveries from the Luismin mines in Mexico, we have continued to diversify our silver stream portfolio and have laid the groundwork for a significant increase in silver sales in 2009. With annual silver sales from our existing assets expected to approach 30 million ounces by 2013, our organic growth profile is unrivaled. In the last 6 months we have raised gross proceeds of more than US$340 million, to pay down our revolving credit facility in full and to give us the financial flexibility to pursue further accretive growth opportunities with low-cost mines in current production.”
The highlights for 2008 are as follows:
Net earnings of US$17.3 million (US$0.07 per share) from the sale of 11.1 million ounces of silver, after recording a US$65.1 million (US$0.28 per share) non-cash write-down of long term investments, compared to US$91.9 million (US$0.41 per share) from the sale of 13.1 million ounces of silver in 2007.
Operating cash flows of US$111.1 million (US$0.48 per share), compared to US$119.3 million (US$0.54 per share) in 2007.
With four new silver stream agreements completed in 2008, and the world class Peñasquito project commencing production, annual silver sales are expected to increase to 15 to 17 million ounces in 2009 and to approximately 30 million ounces by 2013.
In February 2008, Goldcorp sold its entire 48% interest in Silver Wheaton, on a bought deal basis, for aggregate gross cash proceeds of C$1.6 billion. In June 2008, an amending agreement was entered into with existing lenders to increase the revolving bank debt available by US$100 million to US$400 million.
In September 2008, an early exercise of the Company’s share purchase and series “A” publicly traded warrants was successfully completed. The Company received gross cash proceeds in excess of C$120 million which were used to pay down outstanding bank debt.
Subsequent to year-end, gross proceeds of C$287.5 million were raised by way of a bought deal equity financing through the issuance of 35,937,500 common shares. The proceeds were primarily used to repay outstanding debt under the revolving bank loan facility, and are available to fund future acquisitions of silver interests.
Silver Wheaton is one of our holdings and we are pleased to see that it is recovering from its lows of sub $3.00 made in December 2008.
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 $6.59 The Company has a market capitalization of $1.9 billion million, a P/E ratio of 17.7, with 287.44 million shares outstanding.
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