SYS-CON MEDIA Authors: Adrian Bridgwater, Yeshim Deniz, Elizabeth White, Sean Houghton, Glenn Rossman

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Silver Wheaton Reports Second Quarter Results for 2014

VANCOUVER, British Columbia, August 13, 2014 /PRNewswire/ --


TSX: SLW
NYSE: SLW

Silver Wheaton Corp. ("Silver Wheaton" or the "Company") (TSX:SLW) (NYSE:SLW) is pleased to announce its unaudited results for the second quarter ended June 30, 2014. All figures are presented in United States dollars unless otherwise noted.

SECOND QUARTER HIGHLIGHTS

  • Attributable silver equivalent production in Q2 2014 of 8.4 million ounces (6.3 million ounces of silver and 31,400 ounces of gold), compared to 8.7 million ounces in Q2 2013, representing a decrease of 4%.
  • Attributable silver equivalent sales volume in Q2 2014 of 7.5 million ounces (5.2 million ounces of silver and 34,800 ounces of gold), compared to 7.2 million ounces in Q2 2013, representing an increase of 4%.
  • Revenues of $148.6 million in Q2 2014 compared with $166.9 million in Q2 2013, representing a decrease of 11%.
  • Average realized sale price per silver equivalent ounce sold in Q2 2014 of $19.83 ($19.81 per ounce of silver and $1,295 per ounce of gold), representing a decrease of 14% as compared to Q2 2013.
  • Net earnings of $63.5 million ($0.18 per share) in Q2 2014 compared with $71.1 million ($0.20 per share) in Q2 2013, representing a decrease of 11%.
  • Operating cash flows of $102.5 million ($0.29 per share[1]) in Q2 2014 compared with $125.3 million ($0.35 per share[1]) in Q2 2013, representing a decrease of 18%.
  • Cash operating margin[1] in Q2 2014 of $15.11 per silver equivalent ounce compared with $18.28 in Q2 2013.
  • Average cash costs[1] in Q2 2014 were $4.15 and $393 per ounce of silver and gold, respectively. On a silver equivalent basis, average cash costs[1] decreased to $4.72 compared with $4.77 in Q2 2013.
  • Declared quarterly dividend of $0.06 per common share.
  • Asset Highlights:
    • Subsequent to the quarter end, Primero Mining Corp. ("Primero") announced its decision to expand the San Dimas mine to 3,000 from 2,500 tonnes per day.
    • Vale S.A.'s ("Vale") Salobo II expansion, which will double the mill throughput capacity to 24 million tonnes per annum, was completed and first ore processed in Q2.
    • Hudbay Minerals Inc. ("Hudbay") announced that the Constancia project is approximately 85% complete as of the end of Q2.

_____________________
[1] Please refer to non-IFRS measures at the end of this press release.

"In the second quarter, we saw substantial steps forward at Salobo and Constancia, two of our key growth platforms," said Randy Smallwood, President and Chief Executive Officer of Silver Wheaton. "Most significantly, Vale received first production from Salobo II, the expansion which doubles the mill's capacity. At Constancia, Hudbay continues to advance the project, which is now approximately 85% complete, and we look forward to seeing production from Constancia in the fourth quarter of this year. In addition, one of Silver Wheaton's cornerstone assets, Peñasquito, also advanced during the quarter. Not only did Peñasquito achieve record production despite continued water issues, Goldcorp also continues to highlight the significant potential upside of the mine. Finally, another of our cornerstone assets, San Dimas, completed an expansion to 2,500 tonnes per day earlier this year and Primero has recently announced a further expansion to 3,000 tonnes per day. Given the progress being made at our diversified portfolio of mines and projects, we believe that Silver Wheaton is on the cusp of seeing its next stage of growth realized, leaving it well-positioned to benefit from rebounding precious metal prices."

Financial Review  

Revenues  

Revenue was $148.6 million in the second quarter of 2014, on silver equivalent sales of 7.5 million ounces (5.2 million ounces of silver and 34,800 ounces of gold). This represents an 11% decrease from the $166.9 million of revenue generated in the second quarter of 2013, due primarily to a 14% decrease in the average realized silver equivalent price ($19.83 in Q2 2014 compared to $23.05 in Q2 2013), partially offset by a 4% increase in the number of silver equivalent ounces sold.

Costs and Expenses  

Average cash costs[1] in the second quarter of 2014 were $4.72 per silver equivalent ounce as compared to $4.77 during the comparable period of 2013. This resulted in a cash operating margin[1]of $15.11 per silver equivalent ounce, a reduction of 17% as compared to Q2 2013. The decrease in the cash operating margin was primarily due to a 14% decrease in the average silver equivalent price realized in Q2 2014 compared to Q2 2013.

Earnings and Operating Cash Flows  

Net earnings and cash flow from operations in the second quarter of 2014 were $63.5 million ($0.18 per share) and $102.5 million ($0.29 per share[1]), compared with $71.1 million ($0.20 per share) and $125.3 million ($0.35 per share[1]) for the same period in 2013, a decrease of 11% and 18%, respectively. Earnings and cash flow continued to be impacted by lower gold and silver prices.

Balance Sheet  

At June 30, 2014, the Company had approximately $139.2 million of cash on hand. The combination of cash and ongoing operating cash flows, combined with the credit available under the Company's $1 billion Revolving Facility, positions the Company well to fund all outstanding commitments as well as provide flexibility to acquire additional accretive precious metal stream interests.

_____________________
[1] Please refer to non-IFRS measures at the end of this press release.

Operational and Development Highlights  

During the second quarter of 2014, attributable silver equivalent production was 8.4 million ounces (6.3 million ounces of silver and 31,400 ounces of gold), representing a decrease of 4% compared to the second quarter of 2013.

Operational highlights for the quarter ended June 30, 2014, are as follows:

San Dimas -  

As per Primero's second quarter 2014 Management's Discussion and Analysis ("MD&A"), mill throughput in the second quarter averaged 2,405 tonnes per day ("tpd"), below the current capacity of 2,500 tpd due to a planned nine day shutdown at the Company's hydro-power facility in order to expand its capacity. In addition, Primero recently announced its decision to expand the San Dimas mine to 3,000 tpd.

Peñasquito -  

As per Goldcorp Inc.'s ("Goldcorp") second quarter 2014 MD&A, Peñasquito had record production in the second quarter driven by higher mill throughput and higher ore grades as mining continued at the bottom of Phase 4. Initial permits for the Northern Well Field ("NWF") were received, allowing construction to commence, with completion expected mid-year 2015. Goldcorp indicated that contingency plans remain in place for fresh water supply to Peñasquito until the NWF is operational. The studies for the long-term tailings facility continued during the second quarter of 2014, and Goldcorp indicated that three viable options are being evaluated. Additionally, the existing tailings facility life has been extended to 2018.

Goldcorp has indicated that in the second quarter of 2014, Peñasquito's exploration drilling program continued to focus on defining the copper-gold sulphide rich skarn deposit located below and adjacent to the diatreme ore body. Current exploration activities include drilling to establish the vertical and horizontal size and extent of the skarn deposit.

In addition to exploration, Goldcorp is investigating the potential for producing a saleable copper concentrate at Peñasquito (the Concentrate Enrichment Project or "CEP") as well as assessing the viability of leaching a pyrite concentrate from the zinc flotation tailings ("Pyrite Leach"). Pre-feasibility studies for CEP and Pyrite Leach are advancing and expected to be completed in late 2014 and early 2015, respectively. Successful implementation of one or both of these projects has the potential to significantly improve the overall economics and add to the reserves and resources of Peñasquito through the addition of another saleable product, and to increase gold and silver recoveries, respectively.

Salobo -  

As per Vale's second quarter 2014 MD&A, Salobo II - the expansion of the mill throughput capacity at the Salobo mine to 24 million tonnes per annum ("Mtpa") - was completed in the second quarter with first production of copper concentrate achieved on June 5, 2014. Salobo I, the original 12 Mtpa line, experienced minor delays in its ramp-up in the second quarter as the components of the Salobo II project were connected into the operation.

Sudbury -  

As per Vale's second quarter 2014 MD&A, second quarter production was impacted by planned annual maintenance at some surface facilities. However, Vale indicated that during this year's scheduled maintenance, the Sudbury mines - which are the bottleneck in the Sudbury system - did not stop producing. They continued to build up inventory of ore and concentrates, which Vale anticipates should be smelted and refined in the second half of this year. As a result, Vale expects stronger output for the second half of 2014, compensating for the planned lower production in the second quarter.

Other -  

Constancia - As per Hudbay's second quarter 2014 MD&A, the Constancia project in Peru is approximately 85% complete and remains on track for initial production in the fourth quarter of 2014 and commercial production in the second quarter of 2015. Key milestones have been achieved, including the construction of the power transmission line from Tintaya to Constancia, the placement of first ore on the run of mine pad in July, and the commencement of commissioning activities on the primary crusher and coarse ore stockpile conveying systems. As per the agreement with Hudbay, a final payment of $135 million[1] relative to the gold stream on Constancia will be paid to Hudbay once $1.35 billion in capital expenditures has been incurred by Hudbay on Constancia. Silver Wheaton's payment to Hudbay is expected to be made in the third quarter of 2014.

MineralPark - As per Mercator Minerals Ltd.'s ("Mercator") news release dated August 1, 2014, the proposed business combination between Mercator and Intergeo MMC Ltd. ("Intergeo") has been terminated. As a result of the termination of the arrangement, Mercator has indicated that certain events of default have occurred and are continuing under the credit agreement entered into between Mercator's indirect wholly owned subsidiary, Mineral Park Inc. ("MPI"), and its senior lenders, and under the bridge loan agreement entered into between Mineral Park and Intergeo's controlling shareholder, Daselina Investments Ltd. The MPI lenders have agreed to forebear from exercising their various rights and remedies under the credit agreement, until August 15, 2014. Under the current streaming agreement, Silver Wheaton is entitled to 100% of the payable silver from the Mineral Park mine.

Produced But Not Yet Delivered [2]-

Payable silver equivalent ounces produced but not yet delivered to Silver Wheaton by its partners decreased by 0.1 million ounces to approximately 6.3 million silver equivalent payable ounces at June 30, 2014. A large increase in produced but not yet delivered ounces at the Yauliyacu mine was more than offset by significant decreases at the Salobo, 777, Peñasquito, and Sudbury mines.

Detailed mine by mine production and sales figures can be found in the Appendix to this press release and in Silver Wheaton's MD&A in the 'Results of Operations and Operational Review' section.

_____________________
[1] Silver Wheaton has the option to make the $135 million payment in either cash or Silver Wheaton shares. If the latter, the number of shares is calculated at the time the payment is made.
[2] Payable silver equivalent ounces produced but not yet delivered are based on management estimates, and may be updated in future periods as additional information is received.

Webcast and Conference Call Details  

A conference call will be held Thursday, August 14, starting at 11:00 am (Eastern Time) to discuss these results. To participate in the live call, please use one of the following methods:


    Dial toll free from Canada or the US:           888-231-8191
     Dial from outside Canada or the US:            647-427-7450
                 Pass code:                           71008064
             Live audio webcast:            http://www.silverwheaton.com

Participants should dial in five to ten minutes before the call.

The conference call will be recorded. You can listen to an archive of the call by one of the following methods:


    Dial toll free from Canada or the US:           855-859-2056
     Dial from outside Canada or the US:            416-849-0833
                 Pass code:                           71008064
           Archived audio webcast:          http://www.silverwheaton.com

About Silver Wheaton  

Silver Wheaton is the largest precious metals streaming company in the world. Based upon its current agreements, forecast 2014 annual attributable production is approximately 36 million silver equivalent ounces[1], including 155,000 ounces of gold. By 2018, annual attributable production is anticipated to increase significantly to approximately 48 million silver equivalent ounces[1], including 250,000 ounces of gold. This growth is driven by the Company's portfolio of low-cost and long-life assets, including precious metal and gold streams on Hudbay's Constancia project and Vale's Salobo and Sudbury mines.

This earnings release should be read in conjunction with Silver Wheaton's MD&A and unaudited Financial Statements, which are available on the Company's website at http://www.silverwheaton.com and have been posted on SEDAR at http://www.sedar.com.

_____________________
[1] Silver equivalent production forecast assumes a gold/silver ratio of 60:1.

CAUTIONARY NOTE REGARDING FORWARD LOOKING-STATEMENTS  

The information contained herein contains "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and "forward-looking information" within the meaning of applicable Canadian securities legislation. Forward-looking statements, which are all statements other than statements of historical fact, include, but are not limited to, statements with respect to the future price of silver or gold, the estimation of mineral reserves and resources, the realization of mineral reserve estimates, the timing and amount of estimated future production (including 2014 and 2018 attributable annual production), costs of production, reserve determination, reserve conversion rates, statements as to any future dividends, the ability to fund outstanding commitments and continue to acquire accretive precious metal stream interests and assessments of the impact and resolution of various legal and tax matters. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, operations, level of activity, performance or achievements of Silver Wheaton to be materially different from those expressed or implied by such forward-looking statements, including but not limited to: fluctuations in the price of silver or gold; the absence of control over mining operations from which Silver Wheaton purchases silver or gold and risks related to these mining operations including risks related to fluctuations in the price of the primary commodities mined at such operations, actual results of mining and exploration activities, environmental, economic and political risks of the jurisdictions in which the mining operations are located and changes in project parameters as plans continue to be refined; differences in the interpretation or application of tax laws and regulations; and the Company's interpretation of, or compliance with, tax laws, is found to be incorrect; as well as those factors discussed in the section entitled "Description of the Business - Risk Factors" in Silver Wheaton's Annual Information Form available on SEDAR at http://www.sedar.com and in Silver Wheaton's Form 40-F on file with the U.S. Securities and Exchange Commission in Washington, D.C. Forward-looking statements are based on assumptions management believes to be reasonable, including but not limited to: the continued operation of the mining operations from which Silver Wheaton purchases silver and gold, no material adverse change in the market price of commodities, that the mining operations will operate and the mining projects will be completed in accordance with their public statements and achieve their stated production outcomes, the continuing ability to fund or obtain funding for outstanding commitments, the ability to source and obtain accretive precious metal stream interests, expectations regarding the resolution of legal and tax matters, that Silver Wheaton will be successful in challenging any reassessment by the Canada Revenue Agency and such other assumptions and factors as set out herein. Although Silver Wheaton has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate. Accordingly, readers should not place undue reliance on forward-looking statements and are cautioned that actual outcomes may vary. Silver Wheaton does not undertake to update any forward-looking statements that are included or incorporated by reference herein, except in accordance with applicable securities laws.

CAUTIONARY LANGUAGE REGARDING RESERVES AND RESOURCES

For further information on Mineral Reserves and Mineral Resources and on Silver Wheaton more generally, readers should refer to Silver Wheaton's Annual Information Form for the year ended December 31, 2013, and other continuous disclosure documents filed by Silver Wheaton since January 1, 2014, available on SEDAR at http://www.sedar.com. Silver Wheaton's Mineral Reserves and Mineral Resources are subject to the qualifications and notes set forth therein. Mineral Resources which are not Mineral Reserves do not have demonstrated economic viability.

Cautionary Note to United States Investors Concerning Estimates of Measured, Indicated and Inferred Mineral Resources: The information contained herein uses the terms "Measured", "Indicated" and "Inferred" Mineral Resources. United States investors are advised that while such terms are recognized and required by Canadian regulations, the United States Securities and Exchange Commission does not recognize them and expressly prohibits U.S. registered companies from including such terms in their filings with the SEC. "Inferred Mineral Resources" have a great amount of uncertainty as to their existence, and as to their economic and legal feasibility. It cannot be assumed that all or any part of an Inferred Mineral Resource will ever be upgraded to a higher category. Under Canadian rules, estimates of Inferred Mineral Resources may not form the basis of feasibility or other economic studies. United States investors are cautioned not to assume that all or any part of Measured or Indicated Mineral Resources will ever be converted into Mineral Reserves or that any exploration potential will ever be converted to any category of Mineral Reserves or Mineral Resources. United States investors are also cautioned not to assume that all or any part of an Inferred Mineral Resource exists, or is economically or legally mineable. United States investors are urged to consider closely the disclosure in Silver Wheaton's Form 40-F, a copy of which may be obtained from Silver Wheaton or from http://www.sec.gov/edgar.shtml.



    Consolidated Statement of Earnings

                                                                    Three Months Ended
    (US dollars and shares in thousands, except per share                 June 30
    amounts - unaudited)                                            2014           2013
    Sales                                                         $ 148,570      $ 166,890
    Cost of sales
                                Cost of sales, excluding
                                depletion                         $  35,368      $  34,497
                                Depletion                            38,514         41,362
    Total cost of sales                                           $  73,882      $  75,859
    Earnings from operations                                      $  74,688      $  91,031

    Expenses and other income
                                General and administrative
                                [1]                               $  10,375      $   8,876
                                Foreign exchange loss
                                (gain)                                  147           (75)
                                Interest expense                        591          2,525
                                Other expense                           933          6,926
                                                                  $  12,046      $  18,252
    Earnings before income taxes                                  $  62,642      $  72,779
    Income tax recovery (expense)                                       850        (1,662)
    Net earnings                                                  $  63,492      $  71,117

    Basic earnings per share                                      $    0.18      $    0.20
    Diluted earnings per share                                    $    0.18      $    0.20

    Weighted average number of shares outstanding
                                Basic                               357,655        354,800
                                Diluted                             358,097        355,804
                                                                  $   2,034      $   2,375

Table continues



    Consolidated Statement of Earnings

                                                               Six Months Ended
                                                                    June 30
    (US dollars and shares in thousands, except per share
    amounts - unaudited)                                          2014           2013

    Sales                                                    $ 313,949      $ 372,651

    Cost of sales
                                Cost of sales, excluding
                                depletion                    $  72,456      $  64,907
                                Depletion                       75,136         65,703
    Total cost of sales                                      $ 147,592      $ 130,610
    Earnings from operations                                 $ 166,357      $ 242,041

    Expenses and other income
                                General and administrative
                                [1]                          $  20,485      $  18,768
                                Foreign exchange loss
                                (gain)                            (134)          (185)
                                Interest expense                 1,699          3,205
                                Other expense                    1,842          9,771
                                                             $  23,892      $  31,559
    Earnings before income taxes                             $ 142,465      $ 210,482
    Income tax recovery (expense)                                  836        (5,944)
    Net earnings                                             $ 143,301      $ 204,538

    Basic earnings per share                                 $    0.40      $    0.58
    Diluted earnings per share                               $    0.40      $    0.57

    Weighted average number of shares outstanding
                                Basic                          357,453        354,612
                                Diluted                        357,945        356,112
                                                             $   4,216      $   3,845

       Equity settled stock based compensation (a non-cash item)
    1)     included in general and administrative expenses.


    Consolidated Balance Sheets

                                                                June 30         December 31
    (US dollars in thousands - unaudited)                        2014               2013

    Assets
    Current assets
            Cash and cash equivalents                 $      139,199       $    95,823
            Accounts receivable                                7,911             4,619
            Other                                              1,811               845
    Total current assets                              $      148,921       $   101,287

    Non-current assets
            Silver and gold interests                 $    4,285,347       $ 4,228,484
            Early deposit - gold interest                     13,599            13,602
            Long-term investments                             68,038            40,801
            Other                                              5,690             5,670
    Total non-current assets                          $    4,372,674       $ 4,288,557
    Total assets                                      $    4,521,595       $ 4,389,844

    Liabilities
    Current liabilities
            Accounts payable and accrued liabilities  $       18,109       $    20,416
            Current portion of performance share units         1,792               718
    Total current liabilities                         $       19,901       $    21,134

    Non-current liabilities
            Long-term portion of bank debt            $      997,990       $   998,136
            Deferred income taxes                              1,243             2,191
            Performance share units                            2,257             1,837
    Total non-current liabilities                     $    1,001,490       $ 1,002,164
    Total liabilities                                 $    1,021,391       $ 1,023,298

    Shareholders' equity
    Issued capital                                    $    1,890,102       $ 1,879,475
    Reserves                                                   3,626          (25,618)
    Retained earnings                                      1,606,476         1,512,689
    Total shareholders' equity                        $    3,500,204       $ 3,366,546
    Total liabilities and shareholders' equity        $    4,521,595       $ 4,389,844



    Consolidated Statement of Cash Flows

                                                                       Three Months Ended
                                                                              June 30
    (US dollars in thousands - unaudited)                            2014               2013
    Operating activities
    Net earnings                                                $  63,492      $      71,117
    Adjustments for
                         Depreciation and depletion                38,580             41,417
                         Amortization of credit facility
                         origination fees:
                                              Interest expense         35                278
                                              Amortization of
                                              credit facility
                                              origination fees -
                                              undrawn facilities      257                423
                                              Write off of credit
                                              facility origination
                                              fees upon the
                                              cancellation of the
                                              Bridge Facility           -              4,490
                         Interest expense                             556              2,247
                         Equity settled stock based compensation    2,034              2,375
                         Performance share units                    1,349               (95)
                         Deferred income tax (recovery) expense      (907)             1,631
                         Loss on fair value adjustment of share
                         purchase warrants held                         -              1,364
                         Investment income recognized in net
                         earnings                                     (74)               (63)
                         Other                                         32                 67
    Change in non-cash working capital                             (2,253)              2,727
    Cash generated from operations                         $      103,101      $     127,978
    Interest paid - expensed                                         (575)            (2,727)
    Interest received                                                  17                  7
    Cash generated from operating activities               $      102,543      $     125,258

    Financing activities
    Bank debt repaid                                       $            -      $  (1,530,000)
    Bank debt drawn                                                     -          1,585,000
    Credit facility origination fees                                  (19)            (2,433)
    Share purchase warrants exercised                                   -                  7
    Share purchase options exercised                                3,683              4,909
    Dividends paid                                                (44,792)           (92,219)
    Cash generated from (applied to) financing activities  $      (41,128)      $    (34,736)

    Investing activities
    Silver and gold interests                              $          (52)      $   (124,855)
    Interest paid - capitalized to silver interests                (3,607)            (4,707)
    Silver and gold interests - early deposit                           -                  -
    Dividend income received                                           57                 56
    Other                                                            (642)              (156)
    Cash applied to investing activities                   $       (4,244)      $   (129,662)
    Effect of exchange rate changes on cash and cash equivalents       58       $       (138)

    Increase (decrease) in cash and cash equivalents       $       57,229      $    (39,278)
    Cash and cash equivalents, beginning of period                 81,970             75,535
    Cash and cash equivalents, end of period               $      139,199      $      36,257

Table continues



    Consolidated Statement of Cash Flows

                                                                           Six Months Ended
                                                                             June 30
    (US dollars in thousands - unaudited)                          2014                2013

    Operating activities
    Net earnings                                               $  143,301      $     204,538
    Adjustments for
                         Depreciation and depletion                75,268             65,808
                         Amortization of credit facility
                         origination fees:
                                              Interest expense         90                424
                                              Amortization of
                                              credit facility
                                              origination fees -
                                              undrawn facilities      508              1,428
                                              Write off of credit
                                              facility origination
                                              fees upon the
                                              cancellation of the
                                              Bridge Facility           -              4,490
                         Interest expense                           1,609              2,781
                         Equity settled stock based compensation    4,216              3,845
                         Performance share units                    1,496                119
                         Deferred income tax (recovery) expense      (947)             5,870
                         Loss on fair value adjustment of share
                         purchase warrants held                         -              2,694
                         Investment income recognized in net
                         earnings                                    (159)              (294)
                         Other                                        (46)                65
    Change in non-cash working capital                             (6,385)             1,617
    Cash generated from operations                         $      218,951      $     293,385
    Interest paid - expensed                                       (1,621)            (2,727)
    Interest received                                                  45                212
    Cash generated from operating activities               $      217,375      $     290,870

    Financing activities
    Bank debt repaid                                       $            -      $  (1,580,060)
    Bank debt drawn                                                     -          2,675,000
    Credit facility origination fees                                 (619)           (13,951)
    Share purchase warrants exercised                                   -              2,982
    Share purchase options exercised                                3,696              5,951
    Dividends paid                                                (44,792)           (92,219)
    Cash generated from (applied to) financing activities   $     (41,715)      $    997,703

    Investing activities
    Silver and gold interests                               $    (125,134)      $ (2,025,475)
    Interest paid - capitalized to silver interests                (6,498)            (4,845)
    Silver and gold interests - early deposit                        (149)                 -
    Dividend income received                                          114                113
    Other                                                            (668)              (175)
    Cash applied to investing activities                    $    (132,335)      $ (2,030,382)
    Effect of exchange rate changes on cash and cash equivalents       51       $       (150)

    Increase (decrease) in cash and cash equivalents        $      43,376       $   (741,959)
    Cash and cash equivalents, beginning of period                 95,823            778,216
    Cash and cash equivalents, end of period                $     139,199       $     36,257



    Summary of
      Ounces
     Produced
     and Sold

                          2014                           2013                 2012
                     Q2           Q1        Q4      Q3       Q2      Q1        Q4       Q3

    Silver
    ounces
    produced
    [2]
    San Dimas
    [3]             1,118        1,608     1,979   1,660    1,160  1,743     1,694    1,288
    Yauliyacu         658          718       687     639      668    624       616      640
    Peñasquito      2,054        2,052     2,047   1,636    1,440  1,093     1,445    1,940
    Barrick [4]       299          301       423     465      556    741       769      617
    Other [5]       2,182        2,185     2,119   2,450    2,586  2,038     2,345    2,251
    Total
    silver
    ounces
    produced        6,311        6,864     7,255   6,850    6,410  6,239     6,869    6,736

    Gold ounces
    produced
    [2]
    777            11,611       12,785    14,134  18,259   16,986 16,951    19,615   11,824
    Sudbury         6,086        6,426     7,060   7,341    8,840  9,846         -        -
    Salobo          8,486        8,903    10,067   8,061    6,342  4,677         -        -
    Other [6]       5,185        5,749     9,530   2,894    4,226  5,967     6,785    5,200
    Total gold
    ounces
    produced       31,368       33,863    40,791  36,555   36,394 37,441    26,400   17,024
    Silver
    equivalent
    ounces of
    gold
    produced
    [7]             2,054        2,121     2,476   2,237    2,269  2,095     1,432      881
    Silver
    equivalent
    ounces
    produced
    [7]             8,365        8,985     9,731   9,087    8,679  8,334     8,301    7,617

    Silver
    ounces sold
    San Dimas
    [3]             1,194        1,529     2,071   1,560    1,194  1,850     1,629    1,178
    Yauliyacu         111        1,097       674      13      559    149     1,097      184
    Peñasquito      1,958        1,840     1,412   1,388    1,058  1,459     1,642    1,304
    Barrick [4]       291          361       397     447      560    753       826      528
    Other [5]       1,673        1,398     1,510   2,257    1,771  1,741     2,153    1,592
    Total
    silver
    ounces sold     5,227        6,225     6,064   5,665    5,142  5,952     7,347    4,786

    Gold ounces
    sold
    777            13,599        6,294    15,889  16,972   23,483  9,414    28,084        -
    Sudbury         6,718        6,878     6,551   6,534    4,184    111         -        -
    Salobo         11,902       10,560     6,944   6,490    2,793    720         -        -
    Other [6]       2,559        6,390     1,840   5,287    3,409  6,698     4,876    6,905
    Total gold
    ounces sold    34,778       30,122    31,224  35,283   33,869 16,943    32,960    6,905
    Silver
    equivalent
    ounces of
    gold sold
    [7]             2,267        1,891     1,909   2,163    2,097    971     1,784      357
    Silver
    equivalent
    ounces
    sold[7]         7,494        8,116     7,973   7,828    7,239  6,923     9,131    5,143
    Gold /
    silver
    ratio [7]        65.2         62.8      61.1    61.3     61.9   57.3      54.1     51.7
    Cumulative
    payable
    silver
    equivalent
    ounces
    produced
    but not yet
    delivered
    [9]             6,250        6,353     6,277   5,492    4,994  4,264     3,478    5,038

    1)           All figures in thousands except gold ounces produced and sold.
       Ounces produced represent the quantity of silver and gold contained in concentrate
                       or doré prior to smelting or refining deductions.
          Production figures are based on information provided by the operators of the
                    mining operations to which the silver or gold interests
       relate or management estimates in those situations where other information is not
                          available. Certain production figures may be
    2)          updated in future periods as additional information is received.
        The ounces produced and sold include ounces received from Goldcorp in connection
                        with Goldcorp's four year commitment commencing
        on August 6, 2010 to deliver to Silver Wheaton 1.5 million ounces of silver per
    3)              annum resulting from their sale of San Dimas to Primero.
    4)       Comprised of the Lagunas Norte, Pierina and Veladero silver interests.
          Comprised of the Los Filos, Zinkgruvan, Mineral Park, Cozamin, Neves-Corvo,
                  Stratoni, Keno Hill, Minto, 777, Aljustrel and Campo Morado
    5)                                 silver interests.
    6)                       Comprised of the Minto gold interest.
       Gold ounces produced and sold are converted to a silver equivalent basis based on
                   either (i) the ratio of the average silver price received
       to the average gold price received during the period from the assets that produce
                 both gold and silver; or (ii) the ratio of the price of silver
       to the price of gold on the date of sale as per the London Bullion Metal Exchange
    7)                      for the assets which produce only gold.
    8)     Represents production for the period August 8, 2012 to September 30, 2012.
          Payable silver equivalent ounces produced but not yet delivered are based on
                       management estimates. These figures may be updated
    9)              in future periods as additional information is received

Results of Operations (unaudited)  

The Company currently has nine reportable operating segments: the silver produced by the San Dimas, Yauliyacu, Peñasquito and Barrick mines, the gold produced by the 777, Sudbury and Salobo mines, the silver and gold produced by the Other mines and corporate operations.

 

Three Months Ended June 30, 2014


                               Ounces              Ounces                Sales
          Producedsquared       Sold

    Silver
          San Dimas 4            1,118               1,194             $    23,775
          Yauliyacu                658                 111                   2,184
          Peñasquito             2,054               1,958                  38,366
          Barrick 5                299                 291                   5,853
          Other 6                2,182               1,673                  33,362
                                 6,311               5,227             $   103,540

    Gold
                      777       11,611              13,599             $    17,621
          Sudbury                6,086               6,718                   8,692
          Salobo                 8,486              11,902                  15,379
          Other 7                5,185               2,559                   3,338
                                31,368              34,778             $    45,030
    Silver equivalent 8          8,365               7,494             $   148,570

    Corporate
          General and
          administrative
          Other
    Total corporate
                                 8,365               7,494             $   148,570

                                       Average              Average                Average
             Realized                   Cash               Depletion
               Price                    Cost               ($'s Per
                                        ($'s
             ($'s Per                    Per                Ounce)
              Ounce)                   Ounce)3

    Silver
          San Dimas 4                $   19.92           $      4.17             $    0.81
          Yauliyacu                      19.67                  4.16                  5.92
          Peñasquito                      19.6                  4.05                  2.98
          Barrick 5                      20.11                   3.9                  3.26
          Other 6                        19.94                  4.29                  4.45
                                     $   19.81           $      4.15             $    3.03

    Gold
                      777            $   1,296           $       400             $     823
          Sudbury                        1,294                   400                   841
          Salobo                         1,292                   400                   462
          Other 7                        1,304                   309                   124
                                     $   1,295           $       393             $     651
    Silver equivalent 8              $   19.83           $      4.72             $    5.14

    Corporate
          General and
          administrative
          Other
    Total corporate
                                     $   19.83           $      4.72             $    5.14

                              Net               Cash Flow            Total Assets
                Earnings            From
                                 Operations

    Silver
          San Dimas 4        $  17,822           $  18,794             $   155,274
          Yauliyacu              1,065               1,722                 200,120
          Peñasquito            24,607              30,437                 460,980
          Barrick 5              3,768               3,580                 603,799
          Other 6               18,730              25,189                 663,924
                             $  65,992           $  79,722             $ 2,084,097

    Gold
                      777    $     994           $  12,181             $   263,661
          Sudbury                  352               6,005                 598,013
          Salobo                 5,121              10,618               1,312,108
          Other 7                2,229               2,340                  27,468
                             $   8,696           $  31,144             $ 2,201,250
    Silver equivalent 8      $  74,688           $ 110,866             $ 4,285,347

    Corporate
          General and
          administrative     $ -10,375
          Other                   -821
    Total corporate          $ -11,196           $  -8,323             $   236,248
                             $  63,492           $ 102,543             $ 4,521,595

 


          All figures in thousands except gold ounces produced and sold and per ounce
    1)                                      amounts.
       Ounces produced represent the quantity of silver and gold contained in concentrate
                 or doré prior to smelting or refining deductions. Production
            figures are based on information provided by the operators of the mining
             operations to which the silver or gold interests relate or management
        estimates in those situations where other information is not available. Certain
                     production figures may be updated in future periods as
    2)                        additional information is received.
    3)     Refer to discussion on non-IFRS measures at the end of this press release.
       Results for San Dimas include 375,000 ounces received from Goldcorp in connection
                       with Goldcorp's four year commitment commencing on
       August 6, 2010 to deliver to Silver Wheaton 1.5 million ounces of silver per annum
    4)                 resulting from their sale of San Dimas to Primero.
       Comprised of the operating Lagunas Norte, Pierina and Veladero silver interests in
    5)             addition to the non-operating Pascua-Lama silver interest.
           Comprised of the operating Los Filos, Zinkgruvan, Keno Hill, Mineral Park,
                  Cozamin, Neves-Corvo, Stratoni, Campo Morado, Minto, 777 and
        Aljustrel silver interests in addition to the non-operating Rosemont, Loma de La
    6)                       Plata and Constancia silver interests.
        Comprised of the operating Minto gold interest in addition to the non-operating
    7)                      Constancia and Rosemont gold interests.
       Gold ounces produced and sold are converted to a silver equivalent basis based on
                  either (i) the ratio of the average silver price received to
         the average gold price received during the period from the assets that produce
               both gold and silver; or (ii) the ratio of the price of silver to
       the price of gold on the date of sale as per the London Bullion Metal Exchange for
    8)                        the assets which produce only gold.

 

Three Months Ended June 30, 2014


                                Ounces             Ounces               Sales       Average
          Producedsquared        Sold             Realized
                                                   Price
                                                  ($'s Per
                                                   Ounce)

    Silver
          San Dimas 4            1,160               1,194              $  27,319 $   22.88
          Yauliyacu                668                 559                 13,353     23.89
          Peñasquito             1,440               1,058                 24,690     23.34
          Barrick 5                556                 560                 14,331     25.59
          Other 6                2,586               1,771                 39,192     22.13
                                 6,410               5,142              $ 118,885 $   23.12

    Gold
                      777       16,986              23,483              $  33,872 $   1,442
          Sudbury                8,840               4,184                  5,824     1,392
          Salobo                 6,342               2,793                  3,844     1,377
          Other 7                4,226               3,409                  4,465     1,310
                                36,394              33,869              $  48,005 $   1,417
    Silver equivalent 8          8,679               7,239              $ 166,890 $   23.05

    Corporate
          General and
          administrative
          Other
    Total corporate
                                 8,679               7,239              $ 166,890 $   23.05

                                        Average             Average             Net
               Cash                    Depletion              Earnings
               Cost                    ($'s Per
             ($'s Per                   Ounce)
              Ounce)3

    Silver
          San Dimas 4                $      4.14         $      0.82            $  21,407
          Yauliyacu                         4.12                5.75                7,837
          Peñasquito                        4.02                2.66               17,629
          Barrick 5                          3.9                3.31               10,293
          Other 6                           4.29                4.82               23,066
                                     $      4.14         $      3.38            $  80,232

    Gold
                      777            $       400         $       802            $   5,655
          Sudbury                            400                 829                  681
          Salobo                             400                 462                1,437
          Other 7                            307                 115                3,026
                                     $       391         $       708            $  10,799
    Silver equivalent 8              $      4.77         $      5.71            $  91,031

    Corporate
          General and
          administrative                                                        $  -8,876
          Other                                                                   -11,038
    Total corporate                                                             $ -19,914
                                     $      4.77         $      5.71            $  71,117

                                   Cash Flow         Total Assets
                  From
               Operations

    Silver
          San Dimas 4                $    22,381         $   160,454
          Yauliyacu                       11,049             211,225
          Peñasquito                      20,438             480,588
          Barrick 5                       12,573             599,031
          Other 6                         34,369             564,642
                                     $   100,810         $ 2,015,940

    Gold
                      777            $    24,479         $   306,367
          Sudbury                          4,150             620,306
          Salobo                           2,727           1,328,717
          Other 7                          3,743              29,050
                                     $    35,099         $ 2,284,440
    Silver equivalent 8              $   135,909         $ 4,300,380

    Corporate
          General and
          administrative
          Other
    Total corporate                  $   -10,651         $    95,632
                                     $   125,258         $ 4,396,012

          All figures in thousands except gold ounces produced and sold and per ounce
    1)                                      amounts.
       Ounces produced represent the quantity of silver and gold contained in concentrate
                 or doré prior to smelting or refining deductions. Production
            figures are based on information provided by the operators of the mining
             operations to which the silver or gold interests relate or management
        estimates in those situations where other information is not available. Certain
                     production figures may be updated in future periods as
    2)                        additional information is received.
    3)     Refer to discussion on non-IFRS measures at the end of this press release.
       Results for San Dimas include 375,000 ounces received from Goldcorp in connection
                       with Goldcorp's four year commitment commencing on
       August 6, 2010 to deliver to Silver Wheaton 1.5 million ounces of silver per annum
    4)                 resulting from their sale of San Dimas to Primero.
       Comprised of the operating Lagunas Norte, Pierina and Veladero silver interests in
    5)             addition to the non-operating Pascua-Lama silver interest.
           Comprised of the operating Los Filos, Zinkgruvan, Keno Hill, Mineral Park,
                  Cozamin, Neves-Corvo, Stratoni, Campo Morado, Minto, 777 and
        Aljustrel silver interests in addition to the non-operating Rosemont, Loma de La
    6)                       Plata and Constancia silver interests.
        Comprised of the operating Minto gold interest in addition to the non-operating
    7)                              Rosemont gold interest.
       Gold ounces produced and sold are converted to a silver equivalent basis based on
                  either (i) the ratio of the average silver price received to
         the average gold price received during the period from the assets that produce
               both gold and silver; or (ii) the ratio of the price of silver to
       the price of gold on the date of sale as per the London Bullion Metal Exchange for
    8)                        the assets which produce only gold.

Non-IFRS Measures  

Silver Wheaton has included, throughout this document, certain non-IFRS performance measures, including (i) operating cash flow per share (basic and diluted); (ii) average cash costs of silver and gold on a per ounce basis; and (iii) cash operating margin.


    i.     Operating cash flow per share (basic and diluted) is calculated by dividing cash
            generated by operating activities by the weighted average number of shares
           outstanding (basic and diluted). The Company presents operating cash flow per
          share as management and certain investors use this information to evaluate the
           Company's performance in comparison to other companies in the precious metals
                    mining industry who present results on a similar basis.

    ii.      Average cash cost of silver and gold on a per ounce basis is calculated by
           dividing the total cost of sales, less depletion, by the ounces sold. In the
          precious metals mining industry, this is a common performance measure but does
         not have any standardized meaning. In addition to conventional measures prepared
         in accordance with IFRS, management and certain investors use this information to
            evaluate the Company's performance and ability to generate cash flow.

    iii.        Cash operating margin is calculated by subtracting the average cash cost of
          silver and gold on a per ounce basis from the average realized selling price of
         silver and gold on a per ounce basis. The Company presents cash operating margin
             as management and certain investors use this information to evaluate the
           Company's performance in comparison to other companies in the precious metals
                    mining industry who present results on a similar basis.

These non-IFRS measures do not have any standardized meaning prescribed by IFRS, and other companies may calculate these measures differently. The presentation of these non-IFRS measures 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 IFRS. For more detailed information, please refer to Silver Wheaton's Management Discussion and Analysis available on the Company's website at http://www.silverwheaton.com and posted on SEDAR at http://www.sedar.com.

For further information:
Patrick Drouin
Senior Vice President, Investor Relations
Silver Wheaton Corp.
Tel: 1-800-380-8687
Email: [email protected]
Website: http://www.silverwheaton.com

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