Silver Wheaton First Quarter net Earnings Almost Triple, Compared to 2009
By Silver Wheaton Corp., PRNETuesday, May 11, 2010
VANCOUVER, May 12, 2010 -
TSX: SLW NYSE: SLW
Silver Wheaton Corp. ("Silver Wheaton" or the
"Company") (TSX, NYSE:SLW) is pleased to announce its unaudited results for
the first quarter ended March 31, 2010.
FIRST QUARTER HIGHLIGHTS ------------------------------------------------------------------------- - 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 2009. - 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. ------------------------------------ (1) Refer to discussion on non-GAAP measures at the end of this press release.
"The first quarter represented a solid start to the year for us," said
Peter Barnes, Chief Executive Officer of Silver Wheaton. "Production was in
line with our forecasts and, with a 45% increase in our average realized
silver price compared to the first quarter of 2009, our cash margin per ounce
increased by 66%, demonstrating our ability to provide significant silver
price leverage for shareholders. Penasquito continued its smooth production
ramp-up, meeting or exceeding design operating parameters, which should
result in a year of significant production growth for Silver Wheaton. We
continue to forecast 2010 attributable silver equivalent production of 23.5
million ounces, a greater than 35% increase compared to 2009 levels."
"In February, two new precious metal streams were acquired, further
strengthening our industry-leading production growth profile. We completed a
transaction allowing us to purchase an amount equal to 100% of the life of
mine silver and gold production from the Rosemont project in Arizona, and
converted a debenture allowing us to acquire an amount equal to 12.5% of the
life of mine silver production from a portion of the Navidad project in
Argentina. These are both very high-quality advanced-stage development
projects that are forecast to increase our silver equivalent production by
approximately five million ounces per annum, once in production."
This earnings release should be read in conjunction with Silver
Wheaton's unaudited 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.
A conference call will be held Thursday, May 13, 2010, starting at 11:00
am (Eastern Time) to discuss these results. To participate in the live call
use one of the following methods:
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: 68638151 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: 68638151 Archived audio webcast: www.silverwheaton.com
ABOUT SILVER WHEATON
Silver Wheaton is the largest silver streaming company in the world.
Forecast 2010 production, based upon its current agreements, is 22.2 million
ounces of silver and 20,000 ounces of gold, for total production of 23.5
million silver equivalent ounces. By 2013, annual production is anticipated
to increase significantly to approximately 38 million ounces of silver and
59,000 ounces of gold, for total production of over 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 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 and
gold, the estimation of mineral reserves and resources, the realization of
mineral reserve estimates, the timing and amount of estimated future
production, costs of production, reserve determination and reserve conversion
rates. 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, 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 and 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, 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; and differences in the interpretation or
application of tax laws and regulations; 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
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 or 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, 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. 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.
Consolidated Statement of Operations (unaudited) Three Months Ended March 31 (US dollars and shares in thousands, except per share amounts - unaudited) 2010 2009 ------------------------------------------------------------------------- Sales $ 85,938 $ 37,572 ------------------------------------------------------------------------- Cost of sales 20,167 12,540 Depletion 13,551 6,587 ------------------------------------------------------------------------- 33,718 19,127 ------------------------------------------------------------------------- Earnings from operations 52,220 18,445 ------------------------------------------------------------------------- Expenses and other income General and administrative(1) 7,195 4,578 Loss (gain) on mark-to-market of warrants held 164 (3) Other 231 (1,241) ------------------------------------------------------------------------- 7,590 3,334 ------------------------------------------------------------------------- Net earnings $ 44,630 $ 15,111 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Basic earnings per share $ 0.13 $ 0.06 Diluted earnings per share $ 0.13 $ 0.06 Weighted average number of shares outstanding Basic 342,334 270,284 Diluted 346,457 272,767 ------------------------------------------------------------------------- 1) Stock based compensation (a non-cash item) included in general and administrative $ 3,108 $ 1,859 Consolidated Balance Sheets (unaudited) March 31 December 31 (US dollars in thousands - unaudited) 2010 2009 ------------------------------------------------------------------------- Assets Current Cash and cash equivalents $ 279,658 $ 227,566 Accounts receivable 5,364 4,881 Other 751 1,027 ------------------------------------------------------------------------- 285,773 233,474 Long-term investments 77,358 73,747 Silver and gold interests 1,921,542 1,928,476 Other 1,427 1,527 ------------------------------------------------------------------------- $2,286,100 $2,237,224 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Liabilities Current Accounts payable $ 2,126 $ 5,397 Accrued liabilities 3,844 4,578 Current portion of bank debt 28,560 28,560 Current portion of silver interest payments due 132,988 130,788 ------------------------------------------------------------------------- 167,518 169,323 Long-term portion of bank debt 100,040 107,180 Long-term portion of silver interest payments due 240,779 236,796 ------------------------------------------------------------------------- 508,337 513,299 ------------------------------------------------------------------------- Shareholders' Equity Issued capital and contributed surplus 1,339,760 1,333,191 ------------------------------------------------------------------------- Retained earnings 388,464 343,834 Accumulated other comprehensive income 49,539 46,900 ------------------------------------------------------------------------- 438,003 390,734 ------------------------------------------------------------------------- 1,777,763 1,723,925 ------------------------------------------------------------------------- $2,286,100 $2,237,224 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Consolidated Statement of Cash Flows (unaudited) Three Months Ended March 31 (US dollars in thousands - unaudited) 2010 2009 ------------------------------------------------------------------------- Operating Activities Net earnings $ 44,630 $ 15,111 Items not affecting cash Depreciation and depletion 13,616 6,648 Stock based compensation 3,108 1,859 Loss (gain) on mark-to-market of warrants held 164 (3) Other 127 515 Change in non-cash operating working capital (4,045) (1,010) ------------------------------------------------------------------------- Cash generated by operating activities 57,600 23,120 ------------------------------------------------------------------------- Financing Activities Bank debt repaid (7,140) (220,640) Shares issued - 230,424 Share issue costs (85) (9,548) Share purchase warrants exercised 167 86 Share purchase options exercised 3,294 87 ------------------------------------------------------------------------- Cash (applied to) generated by financing activities (3,764) 409 ------------------------------------------------------------------------- Investing Activities Silver and gold interests (517) (3,371) Long-term investments (1,135) 138 Other (212) (50) ------------------------------------------------------------------------- Cash applied to investing activities (1,864) (3,283) ------------------------------------------------------------------------- Effect of exchange rate changes on cash and cash equivalents 120 (612) ------------------------------------------------------------------------- Increase in cash and cash equivalents 52,092 19,634 Cash and cash equivalents, beginning of period 227,566 7,110 ------------------------------------------------------------------------- Cash and cash equivalents, end of period $ 279,658 $ 26,744 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Results of Operations (unaudited) Three Months Ended March 31, 2010 ------------------------------------------------------------------------- Average realized price Ounces Ounces Sales (US$'s per produced(3) sold (US$'s) ounce) ------------------------------------------------------------------------- Silver Luismin 1,270 1,287 $ 22,239 $ 17.28 Zinkgruvan 387 498 8,557 17.19 Yauliyacu 737 581 10,135 17.44 Penasquito 520 424 7,375 17.40 Minto 62 47 789 16.61 Cozamin 401 281 4,813 17.13 Barrick(5) 778 783 13,498 17.24 Other(6) 791 526 9,056 17.23 ------------------------------------------------------------------------- 4,946 4,427 $ 76,462 $ 17.27 Gold Minto 7,651 8,611 $ 9,476 $ 1,100 ------------------------------------------------------------------------- Silver Equivalent(7) 5,453 4,998 $ 85,938 $ 17.20 Corporate ------------------------------------------------------------------------- 5,453 4,998 $ 85,938 $ 17.20 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Three Months Ended March 31, 2010 ------------------------------------------------------------------------- Cash flow Total Total Net from cash cost depletion earnings (used in) (US$'s per (US$'s per (loss) operations ounce)(4) ounce) (US$'s) (US$'s) ------------------------------------------------------------------------- Silver Luismin $ 4.04 $ 0.79 $ 16,028 $ 17,039 Zinkgruvan 4.04 1.72 5,692 5,704 Yauliyacu 3.97 3.47 5,809 7,849 Penasquito 3.90 2.54 4,644 5,722 Minto 3.90 3.69 429 408 Cozamin 4.00 4.62 2,391 4,035 Barrick(5) 3.90 3.50 7,705 8,410 Other(6) 3.90 4.51 4,637 7,515 ------------------------------------------------------------------------- $ 3.97 $ 2.61 $ 47,335 $ 56,682 Gold Minto $ 300 $ 233 $ 4,885 $ 5,752 ------------------------------------------------------------------------- Silver Equivalent(7) $ 4.04 2.71 $ 52,220 $ 62,434 Corporate (7,590) (4,834) ------------------------------------------------------------------------- $ 4.04 $ 2.71 $ 44,630 $ 57,600 ------------------------------------------------------------------------- ------------------------------------------------------------------------- 1) All figures in thousands except gold ounces produced and sold and per ounce amounts. 2) Ounces produced represent the quantity of silver and gold contained in concentrate or doré prior to smelting or refining deductions. 3) Certain production figures are based on management estimates. 4) Refer to discussion on non-GAAP measures at the end of this press release. 5) Comprised of the Lagunas Norte, Pierina and Veladero mines. 6) Comprised of the La Negra, Mineral Park, Stratoni, Campo Morado and Neves-Corvo mines. 7) 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. The conversion ratio for the three months ended March 31, 2010 was 66.26. Three Months Ended March 31, 2009 ------------------------------------------------------------------------- Average realized price Ounces Ounces Sales (US$'s per produced sold (US$'s) ounce) ------------------------------------------------------------------------- Silver Luismin 1,375 1,403 $ 17,174 $ 12.24 Zinkgruvan 461 451 5,416 12.01 Yauliyacu 739 743 8,689 11.69 Penasquito 160 135 1,562 11.55 Other(4) 507 426 4,731 11.11 ------------------------------------------------------------------------- 3,242 3,158 $ 37,572 $ 11.90 Corporate ------------------------------------------------------------------------- 3,242 3,158 $ 37,572 $ 11.90 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Three Months Ended March 31, 2009 ------------------------------------------------------------------------- Cash flow Total Total Net from cash cost depletion earnings (used in) (US$'s per (US$'s per (loss) operations ounce)(3) ounce) (US$'s) (US$'s) ------------------------------------------------------------------------- Silver Luismin $ 4.02 $ 0.82 $ 10,376 $ 11,532 Zinkgruvan 4.02 1.78 2,800 3,220 Yauliyacu 3.90 3.47 3,213 5,791 Penasquito 3.90 2.35 717 1,034 Other(4) 3.90 4.07 1,339 3,503 ------------------------------------------------------------------------- $ 3.97 $ 2.09 $ 18,445 $ 25,080 Corporate (3,334) (1,960) ------------------------------------------------------------------------- $ 3.97 $ 2.09 $ 15,111 $ 23,120 ------------------------------------------------------------------------- ------------------------------------------------------------------------- 1) All figures in thousands except per ounce amounts. 2) Ounces produced represent the quantity of silver contained in concentrate or doré prior to smelting or refining deductions. 3) Refer to discussion on non-GAAP measures at the end of this press release. 4) Comprised of the La Negra, Campo Morado and Stratoni mines.
Non-GAAP Measures
Silver Wheaton has included, throughout this document, certain non-GAAP
performance measures, including total cash costs of silver and gold on a sales
basis, as well as operating cash flows per share and cash operating margin.
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. Cash operating
margin is defined as the realized selling price less total cash cost per
silver equivalent ounce. 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 March 31, 2010, the Company's total cash costs,
which were equivalent to the Company's cost of sales in accordance with GAAP,
were US$3.97 per ounce of silver and US$300 per ounce of gold (three months
ended March 31, 2009 - US$3.97 per ounce of silver).
For further information: Brad Kopp, Vice President, Investor Relations,
Silver Wheaton Corp., Tel: +1-800-380-8687, Email: info@silverwheaton.com,
Website: www.silverwheaton.com
For further information: Brad Kopp, Vice President, Investor Relations, Silver Wheaton Corp., Tel: +1-800-380-8687, Email: info at silverwheaton.com, Website: www.silverwheaton.com
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