TSX: SLW
NYSE: SLW
VANCOUVER, Aug. 9, 2012 /PRNewswire/ - 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, 2012.
SECOND QUARTER HIGHLIGHTS
- Attributable silver equivalent production of 6.7 million ounces (6.5
million ounces of silver and 3,200 ounces of gold), an increase of 10%
compared with Q2 2011
- Revenues increased 3% compared with Q2 2011, to a record US$201.4
million, on record silver equivalent sales of 6.9 million ounces (6.8
million ounces of silver and 2,400 ounces of gold).
- Net earnings were US$141.4 million (US$0.40 per share) compared to
US$148.1 million (US$0.42 per share) in Q2 2011.
- Operating cash flows increased 3% compared with Q2 2011, to a record
US$172.9 million (US$0.49 per share1).
- Cash operating margin1 was US$25.011 per silver equivalent ounce, compared to US$34.21 in Q2 2011.
- Average cash costs1 fell slightly compared with Q2 2011, to US$4.061 per silver equivalent ounce (US$4.04 per ounce of silver and US$303 per
ounce of gold).
- Cash balance of US$1.1 billion, with a net cash position of US$1.04
billion at the end of Q2 2012.
- Declared quarterly dividend of US$0.10 per common share, representing
20% of the cash generated by operating activities during the three
months ended June 30, 2012.
- Announced attributable proven and probable silver reserves of 798
million ounces, nearly twice the reserves of any other silver company
in the world.
- Subsequent to the second quarter, Silver Wheaton announced that it has agreed to acquire a precious metals stream from Hudbay Minerals Inc.'s ("Hudbay") currently producing flagship 777 Mine ("777"), as well as a silver stream from their cornerstone development project, Constancia. Combined, 777 and Constancia will increase Silver Wheaton's long-term average annual silver equivalent production by approximately 4.9 million ounces2.
"For the second quarter in a row, we achieved record silver sales and revenues, putting us on track for our best year ever," said Randy Smallwood, President and Chief Executive Officer of Silver Wheaton. "Production from most of our assets was very solid, with Zinkgruvan once again delivering a strong quarter and with sales of concentrate produced but not yet delivered from Yauliyacu contributing considerably to our revenues and cash flow. While we did see some temporary shortfalls in production at the Peñasquito mine and a delay at Pascua-Lama, we remain confident in our partners and view both of these assets as core streams which solidify our industry-leading growth profile."
"We recently announced a transaction with Hudbay that once again highlights the effectiveness of our business model, combining the certainty of fixed capital and operating costs with immediate cash flow and long term growth potential. We are extremely excited about adding two new streams, one for silver and gold from Hudbay's current flagship mine, 777, and the other for silver from their cornerstone development asset, Constancia. These new streams deliver an immediate increase to our silver and gold production, with 777 contributing average annual production of approximately 4.2 million silver equivalent ounces1 until the end of 2016. Once Constancia is in full production, which is forecast by 2015, both mines provide substantial opportunity for future growth. With the addition of these assets to our portfolio, our 2016 production guidance has increased to approximately 48 million silver equivalent ounces."
"Furthermore, we remain very excited about the current opportunity-rich environment. With approximately US$600 million in cash - net of the initial US$500 million upfront payment to Hudbay - a fully undrawn US$400 million revolving credit facility, and strong forecast annual operating cash flow, we believe there is substantial opportunity for further growth both in the near and long-term."
Financial Review
Revenues
Revenue was US$201.4 million in the second quarter of 2012, on silver equivalent sales of 6.9 million ounces (6.8 million ounces of silver and 2,400 ounces of gold), a record for the Company. This represents a 3% increase from the US$194.8 million of revenue generated in the second quarter of 2011. This was due to a 36% increase in the number of silver equivalent ounces sold, which was partially offset by a 24% decrease in the realized price per silver equivalent ounce. The increase in silver equivalent ounces sold was primarily related to the timing of shipments of stockpiled concentrate in addition to increased production at some of the mines underlying the Company's silver purchase agreements.
Costs and Expenses
Average cash costs1 in the second quarter of 2012 were US$4.061 per silver equivalent ounce, compared with US$4.141 during the comparable period of 2011. This resulted in cash operating margins1 of US$25.011 per silver equivalent ounce, a 27% decrease compared to the second quarter of 2011, primarily a result of a 24% decrease in the realized price per silver equivalent ounce.
During the second quarter of 2012, the Company recorded an income tax expense of US$2.8 million, which includes a non-cash deferred income tax expense of US$2.5 million, attributable primarily to the reversal of previously recognized deferred income tax assets relating to the decline in fair value of long-term investments in common shares and to income from Canadian operations. This compares to an income tax expense of $2.4 million in the comparable period of the previous year, which included a non-cash deferred income tax expense of $2.2 million.
Earnings and Operating Cash Flows
Net earnings in the second quarter of 2012 were US$141.4 million(US$0.40 per share), compared with US$148.1 (US$0.42 per share) for the same period in 2011, a decrease of 5%. Cash flow from operations in the second quarter of 2012 was US$172.9 million (US$0.49 per share1), compared with US$168.3 million (US$0.48 per share1) for the same period in 2011, an increase of 3%. The change in net earnings and operating cash flows is primarily due to a 36% increase in the number of silver equivalent ounces sold, which was partially offset by a 24% decrease in the realized price per silver equivalent ounce.
Balance Sheet
At June 30, 2012, the Company had approximately US$1.1 billion of cash on hand. In addition, the Company had US$400 million of available credit under its revolving bank debt facility. Following the initial US$500 million upfront payment due to Hudbay under the recently announced transaction, the combination of cash, available credit, and strong operating cash flows, positions the Company well to execute on its growth strategy of acquiring additional accretive silver stream interests.
Operational Highlights
Attributable silver equivalent production was 6.7 million ounces (6.5 million ounces of silver and 3,200 ounces of gold) in the second quarter of 2012, representing an increase of 10% compared to the second quarter of 2011.
Operational highlights for the quarter ended June 30, 2012 are as follows:
Peñasquito -
While attributable silver production increased 42% compared to 2011, to over 1.8 million ounces, as per Goldcorp Inc.'s ("Goldcorp") July 10, 2012 disclosure, second quarter mill throughput at its Peñasquito mine was impacted by lower than anticipated water supplies, the result of prolonged drought conditions in the region. The water deficit is expected to limit plant throughput to between approximately 98,000 and 107,000 tonnes per day over the balance of 2012, resulting in a reduction of forecast silver production attributable to Silver Wheaton during this period.
Goldcorp holds permits for sufficient quantities of water and is currently working to drill additional wells to increase water production. Concurrently, work is also underway to increase the quantity of water reclaimed from the tailings facility. Goldcorp highlighted that both the processing plant and the ore body continue to perform well, and the focus now is on bringing water wells into production. Peñasquito will become Silver Wheaton's largest contributor of silver production in 2012, with forecast attributable silver production of approximately 7 million ounces once at full design capacity.
Pascua-Lama -
As per Barrick Gold Corporation's ("Barrick") second quarter 2012 MD&A, initial production at their world-class gold-silver Pascua-Lama project has been delayed due to lower than expected productivity. Initial production, previously expected in mid-2013, is now expected in mid-2014, with an approximate 50 to 60 percent increase in capital costs from the top end of its previously announced estimate of $4.7 to $5.0 billion. During the second quarter, the project achieved critical milestones with completion of Phase 1 of the pioneering road and also the water management system in Chile, both of which enabled the commencement of pre-stripping activities.
Until December 31, 2015, Silver Wheaton will be entitled to all or a portion of the silver production from Barrick's Veladero, Pierina and Lagunas Norte mines, to the extent Pascua-Lama is operating below 75% of design capacity. Once in production, Pascua-Lama is forecast to be one of the largest and lowest cost gold mines in the world with an expected mine life in excess of 25 years. In its first full five years of operation, Silver Wheaton's attributable silver production is expected to average nine million ounces annually.
Zinkgruvan -
Silver Wheaton's second quarter 2012 attributable silver production from the Zingruvan mine was a record 673,000 ounces, an increase of 63% compared to the second quarter of 2011. As per Lundin Mining Corporation's July 25, 2012 disclosure, metal production year-to-date is at all time highs due to high ore grades, good recoveries and record throughput levels.
Produced But Not Yet Delivered -
Payable silver equivalent ounces produced but not yet delivered to Silver Wheaton by its partners fell by almost one million ounces to approximately 3.2 million silver equivalent payable ounces at June 30, 2012. The reduction was primarily due to the sale of a substantial portion of the stockpiled concentrates at Glencore International AG's Yauliyacu mine.
Detailed mine by mine production and sales figures can be found in the Appendix of this press release and in Silver Wheaton's Management's Discussion and Analysis ("MD&A") in the 'Results of Operations and Operational Review' section.
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 www.silverwheaton.com and have been posted on SEDAR at www.sedar.com.
On April 24, 2012, the British Columbia Securities Commission ("BCSC") issued a notice of hearing naming as respondents Canaco Resources Inc. ("Canaco") and certain of its directors. Mr. Randy Smallwood, President and CEO of Silver Wheaton, was previously a non-executive director of Canaco, and is named in the notice of hearing. The BCSC alleges that, in December 2010, Canaco failed to file a material change report when it received certain drill results, and, further, that its Board voted to price directors' options prior to disclosure of the drill results. The BCSC alleges that by delaying the disclosure, the Canaco directors were able to set the exercise price of the options lower than would have been the case if Canaco had promptly disclosed the drill results.
The Board of Silver Wheaton has, together with legal counsel to the Board, examined the allegations against Mr. Smallwood and considered the implications to the Company. The Board does not believe that this matter will adversely affect Mr. Smallwood's ability to perform his role as the Company's President and CEO. Furthermore, the Board has been advised that Mr. Smallwood has a legitimate defence to these unproven allegations, which he intends to vigorously defend. In light of the foregoing, and given the Board's confidence in Mr. Smallwood, they continue to be fully and completely supportive of him in his role as President and CEO of Silver Wheaton.
Webcast and Conference Call Details
A conference call will be held Friday, August 10, 2012, 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: Dial from outside Canada or the US: Pass code: Live audio webcast: | 1-888-231-8191 1-647-427-7450 98200489 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: Dial from outside Canada or the US: Pass code: Archived audio webcast: | 1-855-859-2056 1-416-849-0833 98200489 www.silverwheaton.com |
About Silver Wheaton
Silver Wheaton is the largest silver streaming company in the world. Based upon its current agreements, forecast 2012 attributable production is approximately 28 million silver equivalent ounces, including 42,000 ounces of gold. By 2016, annual attributable production is anticipated to increase significantly to approximately 48 million silver equivalent ounces, including 100,000 ounces of gold. This growth is driven by the Company's portfolio of low-cost and long-life assets, including silver and precious metal streams on Barrick's Pascua-Lama project and Hudbay's flagship 777 mine and Constancia 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, reserve conversion rates and
statements as to any future dividends. 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.
________________________________
1 Please refer to non-IFRS measures at the end of this press release.
2 Silver equivalent production forecast assumes a gold/silver ratio of
50:1
Consolidated Statement of Earnings
| Three Months Ended June 30 | Six Months Ended June 30 | ||||||||
| (US dollars and shares in thousands, except per share amounts - unaudited) | 2012 | 2011 | 2012 | 2011 | |||||
| Sales | $ | 201,408 | $ | 194,752 | $ | 401,046 | $ | 352,935 | |
| Cost of sales | |||||||||
| Cost of sales, excluding depletion | $ | 28,116 | $ | 21,000 | $ | 53,135 | $ | 40,947 | |
| Depletion | 21,591 | 14,734 | 38,797 | 26,417 | |||||
| Total cost of sales | $ | 49,707 | $ | 35,734 | $ | 91,932 | $ | 67,364 | |
| Earnings from operations | $ | 151,701 | $ | 159,018 | $ | 309,114 | $ | 285,571 | |
| Expenses and other income | |||||||||
| General and administrative 1 | $ | 7,354 | $ | 6,252 | $ | 14,918 | $ | 12,754 | |
| Foreign exchange loss (gain) | 39 | (502) | 9 | (506) | |||||
| Other expense (income) | 144 | 2,765 | (506) | 2,905 | |||||
| $ | 7,537 | $ | 8,515 | $ | 14,421 | $ | 15,153 | ||
| Earnings before income taxes | $ | 144,164 | $ | 150,503 | $ | 294,693 | $ | 270,418 | |
| Income tax expense | (2,750) | (2,438) | (6,098) | (177) | |||||
| Net earnings | $ | 141,414 | $ | 148,065 | $ | 288,595 | $ | 270,241 | |
| Basic earnings per share | $ | 0.40 | $ | 0.42 | $ | 0.82 | $ | 0.77 | |
| Diluted earnings per share | $ | 0.40 | $ | 0.42 | $ | 0.81 | $ | 0.76 | |
| Weighted average number of shares outstanding | |||||||||
| Basic | 353,733 | 353,267 | 353,631 | 353,083 | |||||
| Diluted | 355,519 | 355,921 | 355,751 | 355,895 | |||||
| 1) Equity settled stock based compensation (a non-cash item) included in general and administrative expenses. | $ | 1,669 | $ | 1,814 | $ | 3,328 | $ | 3,069 | |
Consolidated Balance Sheets
| June 30 | December 31 | |||||||
| (US dollars in thousands - unaudited) | 2012 | 2011 | ||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 1,102,116 | $ | 840,201 | ||||
| Accounts receivable | 5,927 | 3,890 | ||||||
| Other | 2,235 | 1,221 | ||||||
| Total current assets | $ | 1,110,278 | $ | 845,312 | ||||
| Non-current assets | ||||||||
| Silver and gold interests | $ | 1,837,945 | $ | 1,871,726 | ||||
| Long-term investments | 107,307 | 151,621 | ||||||
| Deferred income taxes | - | 2,301 | ||||||
| Other | 1,295 | 1,375 | ||||||
| Total non-current assets | $ | 1,946,547 | $ | 2,027,023 | ||||
| Total assets | $ | 3,056,825 | $ | 2,872,335 | ||||
| Liabilities | ||||||||
| Current liabilities | ||||||||
| Accounts payable and accrued liabilities | $ | 12,521 | $ | 8,709 | ||||
| Current portion of bank debt | 28,560 | 28,560 | ||||||
| Current portion of silver interest payments | 135,225 | 130,789 | ||||||
| Total current liabilities | $ | 176,306 | $ | 168,058 | ||||
| Non-current liabilities | ||||||||
| Long-term portion of bank debt | 35,780 | 50,060 | ||||||
| Deferred income taxes | 61 | - | ||||||
| Total non-current liabilities | $ | 35,841 | $ | 50,060 | ||||
| Total liabilities | $ | 212,147 | $ | 218,118 | ||||
| Shareholders' equity | ||||||||
| Issued capital | $ | 1,800,338 | $ | 1,793,772 | ||||
| Reserves | (15,620) | 25,422 | ||||||
| Retained earnings | 1,059,960 | 835,023 | ||||||
| Total shareholders' equity | $ | 2,844,678 | $ | 2,654,217 | ||||
| Total liabilities and shareholders' equity | $ | 3,056,825 | $ | 2,872,335 | ||||
Consolidated Statement of Cash Flows
| Three Months Ended June 30 | Six Months Ended June 30 | ||||||||
| (US dollars in thousands - unaudited) | 2012 | 2011 | 2012 | 2011 | |||||
| Operating activities | |||||||||
| Net earnings | $ | 141,414 | $ | 148,065 | $ | 288,595 | $ | 270,241 | |
| Adjustments for | |||||||||
| Depreciation and depletion | 21,651 | 14,803 | 38,917 | 26,557 | |||||
| Equity settled stock based compensation | 1,669 | 1,814 | 3,328 | 3,069 | |||||
| Deferred income tax expense (recovery) | 2,498 | 2,249 | 5,566 | (269) | |||||
| Loss (gain) on fair value adjustment of share purchase warrants held | 277 | 2,701 | (398) | 2,767 | |||||
| Investment income recognized in net earnings | (350) | (205) | (669) | (414) | |||||
| Other | 80 | (162) | (17) | (296) | |||||
| Change in non-cash operating working capital | 5,344 | (1,178) | 770 | (6,570) | |||||
| Operating cash flows before interest income | $ | 172,583 | $ | 168,087 | $ | 336,092 | $ | 295,085 | |
| Interest income received | 333 | 194 | 635 | 392 | |||||
| Cash generated by operating activities | $ | 172,916 | $ | 168,281 | $ | 336,727 | $ | 295,477 | |
| Financing activities | |||||||||
| Bank debt repaid | $ | (7,140) | $ | (7,140) | $ | (14,280) | $ | (14,280) | |
| Share purchase warrants exercised | - | - | 10 | 61 | |||||
| Share purchase options exercised | 3,164 | 667 | 4,088 | 5,062 | |||||
| Dividends paid | (63,658) | (10,599) | (63,658) | (21,194) | |||||
| Cash applied to financing activities | $ | (67,634) | $ | (17,072) | $ | (73,840) | $ | (30,351) | |
| Investing activities | |||||||||
| Silver and gold interests | $ | - | $ | (16) | $ | (180) | $ | (2,557) | |
| Silver and gold interests - interest paid | (194) | (385) | (409) | (701) | |||||
| Acquisition of long-term investments | (395) | (13,674) | (395) | (13,674) | |||||
| Proceeds on disposal of long-term investments | - | - | - | 24,270 | |||||
| Dividend income received | 17 | 11 | 34 | 22 | |||||
| Other | (42) | (25) | (62) | (33) | |||||
| Cash (applied to) generated by investing activities | $ | (614) | $ | (14,089) | $ | (1,012) | $ | 7,327 | |
| Effect of exchange rate changes on cash and cash equivalents | $ | (41) | $ | 155 | $ | 40 | $ | 261 | |
| Increase in cash and cash equivalents | $ | 104,627 | $ | 137,275 | $ | 261,915 | $ | 272,714 | |
| Cash and cash equivalents, beginning of period | 997,489 | 564,075 | 840,201 | 428,636 | |||||
| Cash and cash equivalents, end of period | $ | 1,102,116 | $ | 701,350 | $ | 1,102,116 | $ | 701,350 | |
Summary of Ounces Produced and Sold
| 2012 | 2011 | 2010 | |||||||
| (in thousands) | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | |
| Silver ounces produced 1 | |||||||||
| San Dimas 2 | 1,227 | 1,692 | 1,578 | 1,251 | 1,150 | 1,606 | 1,586 | 1,255 | |
| Zinkgruvan | 673 | 642 | 390 | 379 | 414 | 508 | 428 | 508 | |
| Yauliyacu | 606 | 550 | 583 | 608 | 674 | 683 | 651 | 633 | |
| Peñasquito | 1,822 | 1,365 | 1,633 | 1,162 | 1,282 | 1,207 | 1,260 | 1,109 | |
| Cozamin | 429 | 405 | 433 | 395 | 414 | 325 | 335 | 381 | |
| Barrick 3 | 468 | 667 | 723 | 794 | 741 | 722 | 458 | 682 | |
| Other 4 | 1,276 | 1,288 | 1,389 | 1,272 | 1,153 | 1,088 | 1,245 | 1,069 | |
| 6,501 | 6,609 | 6,729 | 5,861 | 5,828 | 6,139 | 5,963 | 5,637 | ||
| Silver equivalent ounces of gold produced 5 | |||||||||
| Minto | 189 | 107 | 202 | 257 | 261 | 97 | 205 | 402 | |
| Silver equivalent ounces produced | 6,690 | 6,716 | 6,931 | 6,118 | 6,089 | 6,236 | 6,168 | 6,039 | |
| Silver ounces sold | |||||||||
| San Dimas 2 | 1,295 | 1,701 | 1,488 | 1,232 | 1,149 | 1,748 | 1,438 | 1,274 | |
| Zinkgruvan | 580 | 517 | 425 | 319 | 401 | 321 | 421 | 635 | |
| Yauliyacu | 1,155 | 497 | 655 | 11 | 471 | 120 | 470 | 87 | |
| Peñasquito | 1,845 | 1,189 | 851 | 1,382 | 961 | 941 | 1,169 | 692 | |
| Cozamin | 395 | 376 | 374 | 335 | 281 | 271 | 411 | 306 | |
| Barrick 3 | 470 | 656 | 755 | 747 | 726 | 680 | 482 | 533 | |
| Other 4 | 1,049 | 992 | 1,230 | 770 | 862 | 741 | 1,139 | 750 | |
| 6,789 | 5,928 | 5,778 | 4,796 | 4,851 | 4,822 | 5,530 | 4,277 | ||
| Silver equivalent ounces of gold sold 5 | |||||||||
| Minto | 139 | 198 | 196 | 316 | 227 | 83 | 127 | 411 | |
| Silver equivalent ounces sold | 6,928 | 6,126 | 5,974 | 5,112 | 5,078 | 4,905 | 5,657 | 4,688 | |
| Gold / silver ratio 5 | 58.7 | 51.2 | 51.9 | 50.4 | 40.1 | 33.0 | 49.7 | 57.7 | |
| Cumulative payable silver equivalent ounces produced but not yet delivered 6 | 3,212 | 4,166 | 4,127 | 3,805 | 3,537 | 3,018 | 2,275 | 2,174 | |
1) 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 additional information is received.
2) The ounces produced and sold include ounces received from
Goldcorp in connection with Goldcorp's four year commitment to deliver
to Silver Wheaton 1.5 million ounces of silver per annum resulting from
their sale of San Dimas to Primero.
3) Comprised of the Lagunas Norte, Pierina and Veladero silver
interests.
4) Comprised of the Los Filos, Mineral Park, Neves-Corvo, Stratoni,
Keno Hill, Minto, Aljustrel and Campo Morado silver interests in
addition to the previously owned La Negra and San Martin silver
interests.
5) 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 from the assets that
produce both gold and silver.
6) Based on management estimates.
Results of Operations (unaudited)
| Three Months Ended June 30, 2012 | ||||||||||||||||
| Ounces Produced 2 | Ounces Sold | Sales (US$'s) | Average Realized Price (US$'s Per Ounce) | Average Cash Cost (US$'s Per Ounce) 3 | Average Depletion (US$'s Per Ounce) | Net Earnings (US$'s) | Cash Flow From Operations (US$'s) | Total Assets (US$'s) | ||||||||
| Silver | ||||||||||||||||
| San Dimas 4 | 1,227 | 1,295 | $ | 36,695 | $ | 28.34 | $ | 4.09 | $ | 0.79 | $ | 30,367 | $ | 31,394 | $ | 165,161 |
| Zinkgruvan | 673 | 580 | 16,505 | 28.45 | 4.14 | 1.68 | 13,131 | 14,043 | 55,798 | |||||||
| Yauliyacu | 606 | 1,155 | 34,468 | 29.84 | 4.08 | 5.02 | 23,959 | 32,202 | 221,723 | |||||||
| Peñasquito | 1,822 | 1,845 | 53,197 | 28.83 | 3.99 | 2.96 | 40,373 | 45,835 | 495,993 | |||||||
| Cozamin | 429 | 395 | 11,981 | 30.33 | 4.12 | 4.05 | 8,756 | 10,400 | 21,997 | |||||||
| Barrick 5 | 468 | 470 | 14,183 | 30.18 | 3.90 | 4.34 | 10,310 | 13,571 | 601,035 | |||||||
| Other 6 | 1,276 | 1,049 | 30,665 | 29.22 | 3.97 | 4.09 | 22,212 | 27,670 | 243,642 | |||||||
| 6,501 | 6,789 | $ | 197,694 | $ | 29.12 | $ | 4.04 | $ | 3.12 | $ | 149,108 | $ | 175,115 | $ | 1,805,349 | |
| Gold | ||||||||||||||||
| Minto | 3,214 | 2,369 | 3,714 | 1,568 | 303 | 171 | 2,593 | 2,928 | 32,596 | |||||||
| Silver equivalent 7 | 6,690 | 6,928 | $ | 201,408 | $ | 29.07 | $ | 4.06 | $ | 3.12 | $ | 151,701 | $ | 178,043 | $ | 1,837,945 |
| Corporate | ||||||||||||||||
| General and administrative | $ | (7,354) | ||||||||||||||
| Other | (2,933) | |||||||||||||||
| Total corporate | $ | (10,287) | $ | (5,127) | $ | 1,218,880 | ||||||||||
| 6,690 | 6,928 | $ | 201,408 | $ | 29.07 | $ | 4.06 | $ | 3.12 | $ | 141,414 | $ | 172,916 | $ | 3,056,825 | |
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. 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 additional information is received.
3) Refer to discussion on non-IFRS measures at the end of this press
release.
4) Results for San Dimas include 375,000 ounces received from
Goldcorp in connection with Goldcorp's four year commitment to deliver
to Silver Wheaton 1.5 million ounces of silver per annum resulting from
their sale of San Dimas to Primero.
5) Comprised of the operating Lagunas Norte, Pierina and Veladero
silver interests in addition to the non-operating Pascua-Lama silver
interest.
6) Comprised of the operating Los Filos, Keno Hill, Mineral Park,
Neves-Corvo, Stratoni, Campo Morado, Minto and Aljustrel silver
interests in addition to the non-operating Rosemont silver and gold
interest and Loma de La Plata silver interest.
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 from the assets that
produce both gold and silver.
| Three Months Ended June 30, 2011 | ||||||||||||||||
| Ounces Produced 2 | Ounces Sold | Sales (US$'s) | Average Realized Price (US$'s Per Ounce) | Average Cash Cost (US$'s Per Ounce) 3 | Average Depletion (US$'s Per Ounce) | Net Earnings (US$'s) | Cash Flow From Operations (US$'s) | Total Assets (US$'s) | ||||||||
| Silver | ||||||||||||||||
| San Dimas 4 | 1,150 | 1,149 | $ | 42,798 | $ | 37.25 | $ | 4.05 | $ | 0.71 | $ | 37,333 | $ | 38,149 | $ | 169,458 |
| Zinkgruvan | 414 | 401 | 16,220 | 40.46 | 4.08 | 1.69 | 13,905 | 13,303 | 58,899 | |||||||
| Yauliyacu | 674 | 471 | 17,663 | 37.50 | 4.02 | 5.02 | 13,406 | 15,770 | 233,355 | |||||||
| Peñasquito | 1,282 | 961 | 39,274 | 40.89 | 3.90 | 2.41 | 33,215 | 35,528 | 510,351 | |||||||
| Cozamin | 414 | 281 | 10,284 | 36.58 | 4.08 | 4.62 | 7,838 | 10,798 | 28,394 | |||||||
| Barrick 5 | 741 | 726 | 27,437 | 37.78 | 3.90 | 3.57 | 22,009 | 24,605 | 599,449 | |||||||
| Other 6 | 1,153 | 862 | 32,515 | 37.71 | 3.94 | 4.30 | 25,415 | 29,105 | 260,447 | |||||||
| 5,828 | 4,851 | $ | 186,191 | $ | 38.38 | $ | 3.98 | $ | 2.84 | $ | 153,121 | $ | 167,258 | $ | 1,860,353 | |
| Gold | ||||||||||||||||
| Minto | 6,510 | 5,674 | 8,561 | 1,509 | 300 | 169 | 5,897 | 5,941 | 35,362 | |||||||
| Silver equivalent 7 | 6,089 | 5,078 | $ | 194,752 | $ | 38.35 | $ | 4.14 | $ | 2.90 | $ | 159,018 | $ | 173,199 | $ | 1,895,715 |
| Corporate | ||||||||||||||||
| General and administrative | $ | (6,252) | ||||||||||||||
| Other | (4,701) | |||||||||||||||
| Total corporate | $ | (10,953) | $ | (4,918) | $ | 911,631 | ||||||||||
| 6,089 | 5,078 | $ | 194,752 | $ | 38.35 | $ | 4.14 | $ | 2.90 | $ | 148,065 | $ | 168,281 | $ | 2,807,346 | |
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. 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 additional information is received.
3) Refer to discussion on non-IFRS measure at the end of this press
release.
4) Results for San Dimas include 375,000 ounces received from
Goldcorp in connection with Goldcorp's four year commitment to deliver
to Silver Wheaton 1.5 million ounces of silver per annum resulting from
their sale of San Dimas to Primero.
5) Comprised of the operating Lagunas Norte, Pierina and Veladero
silver interests in addition to the non-operating Pascua-Lama silver
interest.
6) Comprised of the operating Los Filos, Keno Hill, Mineral Park,
Neves-Corvo, Stratoni, Campo Morado, Minto and Aljustrel silver
interests in addition to the non-operating Rosemont silver and gold
interest and Loma de La Plata silver interest.
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 from the assets that
produce both gold and silver.
| Six Months Ended June 30, 2012 | ||||||||||||||||
| Ounces Produced 2 | Ounces Sold | Sales (US$'s) | Average Realized Price (US$'s Per Ounce) | Average Cash Cost (US$'s Per Ounce) 3 | Average Depletion (US$'s Per Ounce) | Net Earnings (US$'s) | Cash Flow From Operations (US$'s) | Total Assets (US$'s) | ||||||||
| Silver | ||||||||||||||||
| San Dimas 4 | 2,919 | 2,996 | $ | 92,261 | $ | 30.79 | $ | 4.09 | $ | 0.79 | $ | 77,634 | $ | 79,999 | $ | 165,161 |
| Zinkgruvan | 1,315 | 1,097 | 33,443 | 30.47 | 4.14 | 1.68 | 27,058 | 27,538 | 55,798 | |||||||
| Yauliyacu | 1,156 | 1,652 | 50,054 | 30.30 | 4.06 | 5.02 | 35,055 | 45,790 | 221,723 | |||||||
| Peñasquito | 3,187 | 3,034 | 91,957 | 30.31 | 3.99 | 2.96 | 70,873 | 79,853 | 495,993 | |||||||
| Cozamin | 834 | 771 | 24,590 | 31.91 | 4.10 | 4.05 | 18,313 | 20,540 | 21,997 | |||||||
| Barrick 5 | 1,135 | 1,126 | 35,686 | 31.70 | 3.90 | 4.34 | 26,410 | 32,517 | 601,035 | |||||||
| Other 6 | 2,564 | 2,041 | 62,865 | 30.79 | 3.96 | 4.04 | 46,531 | 54,722 | 243,642 | |||||||
| 13,110 | 12,717 | $ | 390,856 | $ | 30.73 | $ | 4.03 | $ | 2.97 | $ | 301,874 | $ | 340,959 | $ | 1,805,349 | |
| Gold | ||||||||||||||||
| Minto | 5,302 | 6,229 | 10,190 | 1,636 | 303 | 171 | 7,240 | 8,077 | 32,596 | |||||||
| Silver equivalent 7 | 13,406 | 13,054 | $ | 401,046 | $ | 30.72 | $ | 4.07 | $ | 2.97 | $ | 309,114 | $ | 349,036 | $ | 1,837,945 |
| Corporate | ||||||||||||||||
| General and administrative | $ | (14,918) | ||||||||||||||
| Other | (5,601) | |||||||||||||||
| Total corporate | $ | (20,519) | $ | (12,309) | $ | 1,218,880 | ||||||||||
| 13,406 | 13,054 | $ | 401,046 | $ | 30.72 | $ | 4.07 | $ | 2.97 | $ | 288,595 | $ | 336,727 | $ | 3,056,825 | |
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. 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 additional information is received.
3) Refer to discussion on non-IFRS measure at the end of this press
release.
4) Results for San Dimas include 750,000 ounces received from
Goldcorp in connection with Goldcorp's four year commitment to deliver
to Silver Wheaton 1.5 million ounces of silver per annum resulting from
their sale of San Dimas to Primero.
5) Comprised of the operating Lagunas Norte, Pierina and Veladero
silver interests in addition to the non-operating Pascua-Lama silver
interest.
6) Comprised of the operating Los Filos, Keno Hill, Mineral Park,
Neves-Corvo, Stratoni, Campo Morado, Minto and Aljustrel silver
interests in addition to the non-operating Rosemont silver and gold
interest and Loma de La Plata silver interest.
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 from the assets that
produce both gold and silver.
| Six Months Ended June 30, 2011 | |||||||||||||||||
| Ounces Produced 2 | Ounces Sold | Sales (US$'s) | Average Realized Price (US$'s Per Ounce) | Average Cash Cost (US$'s Per Ounce) 3 | Average Depletion (US$'s Per Ounce) | Net Earnings (US$'s) | Cash Flow From Operations (US$'s) | Total Assets (US$'s) | |||||||||
| Silver | |||||||||||||||||
| San Dimas 4 | 2,756 | 2,897 | $ | 101,169 | $ | 34.92 | $ | 4.05 | $ | 0.71 | $ | 87,384 | $ | 88,351 | $ | 169,458 | |
| Zinkgruvan | 922 | 722 | 27,269 | 37.76 | 4.08 | 1.69 | 23,100 | 22,909 | 58,899 | ||||||||
| Yauliyacu | 1,357 | 591 | 21,186 | 35.85 | 4.01 | 5.02 | 15,850 | 18,815 | 233,355 | ||||||||
| Peñasquito | 2,489 | 1,902 | 66,294 | 34.87 | 3.90 | 2.41 | 54,301 | 58,880 | 510,351 | ||||||||
| Cozamin | 739 | 552 | 18,935 | 34.26 | 4.06 | 4.62 | 14,136 | 18,573 | 28,394 | ||||||||
| Barrick 5 | 1,463 | 1,406 | 49,100 | 34.91 | 3.90 | 3.56 | 38,604 | 42,056 | 599,449 | ||||||||
| Other 6 | 2,241 | 1,603 | 56,542 | 35.27 | 3.93 | 4.14 | 43,601 | 49,290 | 260,447 | ||||||||
| 11,967 | 9,673 | $ | 340,495 | $ | 35.20 | $ | 3.98 | $ | 2.59 | $ | 276,976 | $ | 298,874 | $ | 1,860,353 | ||
| Gold | |||||||||||||||||
| Minto | 9,435 | 8,198 | 12,440 | 1,517 | 300 | 169 | 8,595 | 8,811 | 35,362 | ||||||||
| Silver equivalent 7 | 12,325 | 9,983 | $ | 352,935 | $ | 35.35 | $ | 4.10 | $ | 2.65 | $ | 285,571 | $ | 307,685 | $ | 1,895,715 | |
| Corporate | |||||||||||||||||
| General and administrative | $ | (12,754) | |||||||||||||||
| Other | (2,576) | ||||||||||||||||
| Total corporate | $ | (15,330) | $ | (12,208) | $ | 911,631 | |||||||||||
| 12,325 | 9,983 | $ | 352,935 | $ | 35.35 | $ | 4.10 | $ | 2.65 | $ | 270,241 | $ | 295,477 | $ | 2,807,346 | ||
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. 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 additional information is received.
3) Refer to discussion on non-IFRS measures at the end of this press
release.
4) Results for San Dimas include 750,000 ounces received from
Goldcorp in connection with Goldcorp's four year commitment to deliver
to Silver Wheaton 1.5 million ounces of silver per annum resulting from
their sale of San Dimas to Primero.
5) Comprised of the operating Lagunas Norte, Pierina and Veladero
silver interests in addition to the non-operating Pascua-Lama silver
interest.
6) Comprised of the operating Los Filos, Keno Hill, Mineral Park,
Neves-Corvo, Stratoni, Campo Morado, Minto and Aljustrel silver
interests in addition to the non-operating Rosemont silver and gold
interest and Loma de La Plata silver interest.
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 from the assets that
produce both gold and silver.
Non-IFRS Measures
Silver Wheaton has included, throughout this document, certain non-IFRS performance measures, including (i) average cash costs of silver and gold on a per ounce basis; (ii) operating cash flow per share (basic and diluted); and (iii) cash operating margin.
| i. 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. The Company believes that, in addition to conventional measures prepared in accordance with IFRS, certain investors use this information to evaluate the Company's performance and ability to generate cash flow. | ||||||
| ii. 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 it believes that 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. | ||||||
| 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 it believes that 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 pages 19 to 21 of Silver Wheaton's Management Discussion and Analysis available on the Company's website at www.silverwheaton.com and posted on SEDAR at www.sedar.com.
SOURCE Silver Wheaton Corp.
