Silver Wheaton reports record attributable production, earnings and cash
flows in the third quarter; Penasquito commences shipments of silver-bearing
concentrates
TSX: SLW NYSE: SLW
THIRD QUARTER HIGHLIGHTS
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- Record attributable production of 4.3 million silver equivalent ounces
(4.0 million ounces of silver and 3,698 ounces of gold) at a total
cash cost of US$3.97(1) per silver ounce, representing an increase of
59% over the comparable period in 2008.
- Record silver equivalent sales of 4.6 million ounces (4.0 million
ounces of silver and 9,953 ounces of gold), representing an increase
of 70% over the comparable period in 2008.
- As of the end of the third quarter, approximately 1.0 million silver
equivalent payable 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.
- Record net earnings of US$33.6 million (US$0.11 per share) compared to
US$20.2 million (US$0.09 per share) for the comparable period in 2008.
- Record operating cash flows of US$45.4 million (US$0.14 per share)
compared to US$26.7 million (US$0.11 per share) for the comparable
period in 2008.
- Entered into an agreement with Barrick Gold Corporation ("Barrick") to
acquire 25% of the life of mine silver production from its Pascua-Lama
project, as well as 100% of the silver production from its Lagunas
Norte, Pierina and Veladero mines until the end of 2013. Silver
Wheaton will make total upfront cash payments of US$625 million
payable in installments, of which US$212.5 million has been paid to
date. The remaining US$412.5 million is payable in annual installments
of US$137.5 million due on the first, second and third anniversaries
of the transaction. The acquisition is forecast to add average
annualized silver production of approximately 2.4 million ounces until
Pascua-Lama commences production in 2013, at which time average annual
silver production is forecast to increase by approximately 9 million
ounces for the first five years of Pascua-Lama's 25 year mine life.
- In conjunction with the Barrick acquisition, closed a bought deal
equity financing, raising gross proceeds of US$287.5 million.
Subsequent to September 30, 2009, US$140 million of the net proceeds
were used to repay a temporary draw under the Company's revolving bank
debt facility, which was utilized to partially finance the initial
upfront payment made to Barrick. The remaining proceeds from the
equity financing, together with the US$400 million of available credit
under the Company's revolving bank debt facility, are available to
fund further silver stream acquisitions.
- On November 4, 2009, Goldcorp Inc. ("Goldcorp") announced that they
have commenced shipments of the first silver-bearing lead and zinc
concentrates produced at their Penasquito mine in Mexico with
preliminary metals grades, recoveries and concentrate quality meeting
or exceeding expectations. Annual production attributable to Silver
Wheaton from Penasquito is expected to average approximately
7.2 million ounces of silver over the estimated 22 year mine life.
(1) Refer to discussion on non-GAAP measures at the end of this press
release
"It is very pleasing to report record attributable silver production, sales, earnings and cash flows, just as Penasquito is poised to start driving further significant growth over the next few years," said
"We are now partnered with the world's two largest gold companies, Barrick and Goldcorp, and have a significant interest in what are forecast to be two of the world's biggest silver producing mines, the Pascua-Lama mine straddling the border of
This earnings release should be read in conjunction with Silver Wheaton's MD&A and Financial Statements, which are available on the Company's website at www.silverwheaton.com and have been posted on SEDAR at www.sedar.com.
Conference Call Details
A conference call will be held
Dial toll free from Canada or the US: 1-888-231-8191
Dial from outside Canada or the US: 1-647-427-7450
Pass code: 34932154
Live audio webcast: www.silverwheaton.com
Participants should dial in five to ten minutes before the call.
The conference call will be recorded and you can listen to an archive of
the call by one of the following methods:
Dial toll free from Canada or the US: 1-800-642-1687
Dial from outside Canada or the US: 1-416-849-0833
Pass code: 34932154
Archived audio webcast: www.silverwheaton.com
About Silver Wheaton
Silver Wheaton is the largest silver streaming company in the world. Forecast 2009 production is 16 million ounces of silver and 17,000 ounces of gold, for total production of 17 million silver equivalent ounces. By 2013, annual production is anticipated to more than double to approximately 39 million ounces of silver and 20,000 ounces of gold, for total production of approximately 40 million silver equivalent ounces. This growth is driven by the Company's portfolio of world-class assets, including silver streams on Goldcorp's Penasquito mine and Barrick's Pascua-Lama project.
CAUTIONARY NOTE REGARDING FORWARD LOOKING-STATEMENTS
The information contained herein contains "forward-looking statements" within the meaning of the
Consolidated Statement of Operations (unaudited)
(US dollars
and shares
in thousands, Three Months Ended Nine Months Ended
except per September 30 September 30
share amounts ---------------------------------------------------------
- unaudited) Note 2009 2008 2009 2008
-------------------------------------------------------------------------
Sales $ 69,767 $ 39,371 $ 148,742 $ 137,994
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Cost of sales 18,765 10,677 43,069 33,033
Depletion 13,164 5,152 26,170 14,443
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31,929 15,829 69,239 47,476
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Earnings from
operations 37,838 23,542 79,503 90,518
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Expenses and other
income
General and
administrative(1) 3,906 3,589 12,917 13,850
Debt issue costs - - - 601
Loss (gain) on
mark-to-market of
warrants held - 100 (33) 1,047
Other 366 (388) (496) (283)
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4,272 3,301 12,388 15,215
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Earnings before tax 33,566 20,241 67,115 75,303
Future income tax
expense - - - 3,858
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Net earnings $ 33,566 $ 20,241 $ 67,115 $ 71,445
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(1) Stock based
compensation
(a non-cash
item) included
in general and
administrative $ 623 $ 1,078 $ 3,312 $ 4,538
Basic earnings per
share $ 0.11 $ 0.09 $ 0.23 $ 0.32
Diluted earnings per
share $ 0.11 $ 0.08 $ 0.23 $ 0.29
Weighted average
number of shares
outstanding
Basic 313,445 232,710 294,208 226,598
Diluted 317,431 249,010 297,936 249,833
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Consolidated Balance Sheets (unaudited)
--------------------------------
September 30 December 31
(US dollars in thousands - unaudited) Note 2009 2008
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Assets
Current
Cash and cash equivalents $ 304,858 $ 7,110
Accounts receivable 5,497 772
Other 667 816
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311,022 8,698
Long-term investments 49,766 21,840
Silver and gold interests 1,937,378 1,238,368
Other 1,604 1,740
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$ 2,299,770 $ 1,270,646
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Liabilities
Current
Accounts payable $ 1,722 $ 1,396
Accrued liabilities 6,285 3,425
Current portion of bank debt 168,760 28,560
Current portion of silver interest
payments due 128,625 -
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305,392 33,381
Bank debt 114,320 349,240
Silver interest payments due 232,879 -
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652,591 382,621
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Shareholders' Equity
Issued capital and contributed surplus 1,326,369 662,115
-------------------------------------------------------------------------
Retained earnings 293,025 225,910
Accumulated other comprehensive income 27,785 -
-------------------------------------------------------------------------
320,810 225,910
-------------------------------------------------------------------------
1,647,179 888,025
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$ 2,299,770 $ 1,270,646
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Consolidated Statement of Cash Flows (unaudited)
Three Months Ended Nine Months Ended
(US dollars September 30 September 30
in thousands - ---------------------------------------------------
unaudited) 2009 2008 2009 2008
-------------------------------------------------------------------------
Operating Activities
Net earnings $ 33,566 $ 20,241 $ 67,115 $ 71,445
Items not affecting
cash
Depreciation and
depletion 13,229 5,152 26,359 14,443
Future income tax
expense - - - 3,858
Stock based
compensation 623 1,078 3,312 4,538
Loss (gain) on
mark-to-market of
warrants held - 100 (33) 1,047
Other (338) (281) (148) (244)
Change in non-cash
operating working
capital (1,700) 435 (1,652) 609
-------------------------------------------------------------------------
Cash generated by
operating activities 45,380 26,725 94,953 95,696
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Financing Activities
Bank debt drawn down 140,200 18,000 140,200 183,500
Bank debt repaid (7,140) (131,040) (234,920) (223,620)
Shares issued 287,531 - 517,955 -
Share issue costs (11,645) (1,159) (21,620) (1,183)
Warrants exercised 10,345 113,463 10,508 115,785
Share purchase
options exercised 4,200 580 5,789 2,640
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Cash generated by
(applied to)
financing activities 423,491 (156) 417,912 77,122
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Investing Activities
Silver interests (213,819) (44,958) (218,466) (164,008)
Acquisition of
Silverstone Resources
Corp., net of cash
acquired (261) - 2,407 -
Other 1,599 (4,044) 1,615 (4,572)
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Cash applied to
investing activities (212,481) (49,002) (214,444) (168,580)
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Effect of exchange
rate changes on cash
and cash equivalents (122) 463 (673) 459
-------------------------------------------------------------------------
Increase (decrease) in
cash and cash
equivalents 256,268 (21,970) 297,748 4,697
Cash and cash
equivalents,
beginning of period 48,590 36,632 7,110 9,965
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Cash and cash
equivalents, end of
period $ 304,858 $ 14,662 $ 304,858 $ 14,662
-------------------------------------------------------------------------
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Results of Operations (unaudited)
Nine Months Ended September 30, 2009
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Average
realized
price
Ounces Ounces ($'s per
produced(2) sold Sales ounce)
-------------------------------------------------------------------------
Silver (000's)
Luismin 4,016 4,034 $ 55,701 $ 13.81
Zinkgruvan 1,356 1,353 19,023 14.06
Yauliyacu 2,359 1,987 26,881 13.53
Stratoni 699 690 8,780 12.71
Penasquito 487 455 6,106 13.42
Campo Morado 610 305 4,180 13.67
Minto 84 67 1,036 15.31
Cozamin 628 597 8,671 14.53
Barrick(4) 223 187 3,008 16.07
Other(5) 638 395 5,648 14.28
Corporate
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11,100 10,070 $ 139,034 $ 13.80
Gold
Minto 10,521 10,098 $ 9,708 $ 961
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Silver Equivalent
(000's)(6) 11,761 10,708 $ 148,742 $ 13.89
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Nine Months Ended September 30, 2009
-------------------------------------------------------------------------
Total Total
cash cost depletion Net Cash flow
($'s per ($'s per earnings from
ounce)(3) ounce) (loss) operations
-------------------------------------------------------------------------
Silver (000's)
Luismin $ 4.02 $ 0.71 $ 36,609 $ 39,483
Zinkgruvan 4.02 1.78 11,175 12,793
Yauliyacu 3.93 3.47 12,184 19,082
Stratoni 3.90 3.59 3,605 6,201
Penasquito 3.90 2.35 3,260 4,331
Campo Morado 3.90 4.85 1,506 2,987
Minto 3.90 4.48 469 808
Cozamin 4.00 4.70 3,479 7,617
Barrick(4) 3.90 3.46 1,631 2,278
Other(5) 3.90 5.80 1,812 3,765
Corporate (12,388) (9,914)
-------------------------------------------------------------------------
$ 3.97 $ 2.31 $ 63,342 $ 89,431
Gold
Minto $ 300 $ 288 $ 3,773 $ 5,522
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Silver Equivalent
(000's)(6) $ 4.02 $ 2.44 $ 67,115 $ 94,953
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(1) Ounces produced represent the quantity of silver and gold contained
in concentrate or doré prior to smelting or refining deductions.
(2) Certain production figures are based on management estimates.
(3) Refer to discussion on non-GAAP measures at the end of this press
release
(4) Comprised of Lagunas Norte, Pierina and Veladero mines.
(5) Comprised of La Negra, Mineral Park and Neves-Corvo mines.
(6) Gold ounces produced and sold are converted to a silver equivalent
basis on the ratio of the average silver price received to the
average gold price received during the period.
Nine Months Ended September 30, 2008
-------------------------------------------------------------------------
Average
realized
price
Ounces Ounces ($'s per
produced sold Sales ounce)
-------------------------------------------------------------------------
Silver (000's)
Luismin 3,938 4,123 $ 68,028 $ 16.50
Zinkgruvan 1,321 1,260 20,523 16.26
Yauliyacu 2,397 2,175 36,346 16.71
Stratoni 803 685 10,868 15.87
Penasquito 141 98 1,451 14.74
Campo Morado 12 - - -
Other(3) 86 58 778 13.33
Corporate
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8,698 8,399 $ 137,994 $ 16.43
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Nine Months Ended September 30, 2008
-------------------------------------------------------------------------
Total Total
cash cost depletion Net Cash flow
($'s per ($'s per earnings from
ounce)(2) ounce) (loss) operations
-------------------------------------------------------------------------
Silver (000's)
Luismin $ 3.95 $ 0.42 $ 50,023 $ 51,746
Zinkgruvan 3.96 1.57 13,563 16,249
Yauliyacu 3.90 3.47 20,310 27,866
Stratoni 3.90 3.69 5,670 8,078
Penasquito 3.90 2.42 830 1,067
Campo Morado - - - -
Other(3) 3.90 7.38 122 828
Corporate (19,073) (10,138)
-------------------------------------------------------------------------
$ 3.93 $ 1.72 $ 71,445 $ 95,696
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(1) Ounces produced represent the quantity of silver contained in
concentrate or doré prior to smelting o r refining deductions.
(2) Refer to discussion on non-GAAP measures at the end of this press
release
(3) Comprised of La Negra mine.
Three Months Ended September 30, 2009
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Average
realized
price
Ounces Ounces ($'s per
produced(2) sold Sales ounce)
-------------------------------------------------------------------------
Silver (000's)
Luismin 1,308 1,310 $ 20,053 $ 15.30
Zinkgruvan 415 433 6,861 15.85
Yauliyacu 750 698 10,600 15.19
Stratoni 229 342 4,826 14.10
Penasquito 165 190 2,691 14.15
Campo Morado 225 170 2,458 14.42
Minto 46 68 1,043 15.29
Cozamin 366 384 5,736 14.94
Barrick(4) 223 187 3,008 16.07
Other(5) 305 192 2,918 15.21
Corporate
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4,032 3,974 $ 60,194 $ 15.14
Gold
Minto 3,698 9,953 $ 9,573 $ 962
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Silver Equivalent
(000's)(6) 4,265 4,600 $ 69,767 $ 15.16
-------------------------------------------------------------------------
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Three Months Ended September 30, 2009
-------------------------------------------------------------------------
Total Total
cash cost depletion Net Cash flow
($'s per ($'s per earnings from
ounce)(3) ounce) (loss) operations
-------------------------------------------------------------------------
Silver (000's)
Luismin $ 4.02 $ 0.65 $ 13,929 $ 14,785
Zinkgruvan 4.02 1.78 4,350 4,415
Yauliyacu 3.94 3.47 5,426 7,849
Stratoni 3.90 3.50 2,292 3,368
Penasquito 3.90 2.36 1,502 1,950
Campo Morado 3.90 4.83 969 1,793
Minto 3.90 4.48 472 794
Cozamin 4.00 4.72 2,389 4,229
Barrick(4) 3.90 3.46 1,631 2,278
Other(5) 3.90 5.29 1,154 1,377
Corporate (4,272) (2,788)
-------------------------------------------------------------------------
$ 3.97 $ 2.59 $ 29,842 $ 40,050
Gold
Minto $ 300 $ 288 $ 3,724 $ 5,330
-------------------------------------------------------------------------
Silver Equivalent
(000's)(6) $ 4.08 $ 2.86 $ 33,566 $ 45,380
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(1) Ounces produced represent the quantity of silver and gold contained
in concentrate or doré prior to smelting or refining deductions.
(2) Certain production figures are based on management estimates.
(3) Refer to discussion on non-GAAP measures at the end of this press
release
(4) Comprised of Lagunas Norte, Pierina and Veladero mines.
(5) Comprised of La Negra, Mineral Park and Neves-Corvo mines.
(6) Gold ounces produced and sold are converted to a silver equivalent
basis on the ratio of the average silver price received to the
average gold price received during the period.
Three Months Ended September 30, 2008
-------------------------------------------------------------------------
Average
realized
price
Ounces Ounces ($'s per
produced sold Sales ounce)
-------------------------------------------------------------------------
Silver (000's)
Luismin 1,174 1,198 $ 17,496 $ 14.61
Zinkgruvan 371 418 5,436 13.01
Yauliyacu 712 691 10,712 15.50
Stratoni 280 253 3,498 13.85
Penasquito 113 98 1,451 14.74
Campo Morado 12 - - -
Other(3) 69 58 778 13.33
Corporate
-------------------------------------------------------------------------
2,731 2,716 $ 39,371 $ 14.50
-------------------------------------------------------------------------
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Three Months Ended September 30, 2008
-------------------------------------------------------------------------
Total Total
cash cost depletion Net Cash flow
($'s per ($'s per earnings from
ounce)(2) ounce) (loss) operations
-------------------------------------------------------------------------
Silver (000's)
Luismin $ 3.95 $ 0.42 $ 12,265 $ 12,766
Zinkgruvan 3.96 1.57 3,127 4,525
Yauliyacu 3.90 3.47 5,616 8,017
Stratoni 3.90 3.68 1,582 2,592
Penasquito 3.90 2.42 830 1,067
Campo Morado - - - -
Other(3) 3.90 7.38 122 828
Corporate (3,301) (3,070)
-------------------------------------------------------------------------
$ 3.93 $ 1.90 $ 20,241 $ 26,725
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(1) Ounces produced represent the quantity of silver contained in
concentrate or doré prior to smelting o r refining deductions.
(2) Refer to discussion on non-GAAP measures at the end of this press
release
(3) Comprised of La Negra mine.
Non-GAAP Measures - Total Cash Costs Per Ounce Of Silver & Gold Calculation
Silver Wheaton has included, throughout this press release, certain non-GAAP performance measures, including total cash costs of silver and gold on a sales basis. These non-GAAP measures do not have any standardized meaning prescribed by GAAP, nor are they necessarily comparable with similar measures presented by other companies. Cash costs are presented as they represent an industry standard method of comparing certain costs on a per unit basis. The Company believes that certain investors use this information to evaluate the Company's performance. The data is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. During the three months ended
For further information: Brad Kopp, Director, Investor Relations, Silver Wheaton Corp., Tel: 1-800-380-8687, Email: [email protected], Website: www.silverwheaton.com
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