Silver Wheaton Reports Record Production for the Third Quarter and First Nine Months of 2013
VANCOUVER, November 11, 2013 /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 third quarter ended September 30, 2013. All figures are presented in United States dollars unless otherwise noted.
THIRD QUARTER HIGHLIGHTS
- Record attributable silver equivalent production for the three months ended September 30, 2013 of 8.9 million ounces (6.8 million ounces of silver and 34,800 ounces of gold), compared to 7.6 million ounces in Q3 2012, representing an increase of 17%.
- Attributable silver equivalent sales for the three months ended September 30, 2013 of 7.8 million ounces (5.7 million ounces of silver and 35,300 ounces of gold), compared to 5.1 million ounces in Q3 2012, representing an increase of 52%.
- Revenues of $166.4 million compared with $161.3 million in Q3 2012, representing an increase of 3%.
- Average realized sale price per silver equivalent ounce sold for the three months ended September 30, 2013 of $21.26 ($21.22 per ounce of silver and $1,308 per ounce of gold), representing a decrease of 32% as compared to the comparable period of 2012.
- Net earnings of $77.1 million ($0.22 per share) compared with $119.7 million ($0.34 per share) in Q3 2012, representing a decrease of 36%.
- Operating cash flows of $118.7 million ($0.33 per share¹) compared with $128.7 million ($0.36 per share[1]) in Q3 2012, representing a decrease of 8%.
- Cash operating margin[1] of $16.53 per silver equivalent ounce compared with $27.20 in Q3 2012.
- Average cash costs[1] were $4.13 and $386 per ounce of silver and gold, respectively. On a silver equivalent basis, average cash costs1 rose to $4.73 compared with $4.16 in Q3 2012, due primarily to an increase in the percentage of revenue from gold sales.
- Declared quarterly dividend of $0.09 per common share as the result of the Company's dividend policy whereby the quarterly dividend is equal to 20% of the average of the previous four quarters' operating cash flow.
- Subsequent to quarter end, the Company announced an amendment to the precious metal purchase agreement with Hudbay Minerals Inc. ("Hudbay") to include the acquisition of an amount equal to 50% of the gold production from the Constancia project ("Constancia") in Peru for the life of mine.
- Subsequent to quarter end, Barrick Gold Corp. ("Barrick") announced it will temporarily suspend construction activities at its Pascua-Lama project ("Pascua-Lama"), except those required for environmental protection and regulatory compliance. As a result, Silver Wheaton agreed to amend its silver purchase agreement to extend the Company's entitlement to 100% of the production from three of Barrick's currently producing mines by one year until the end of 2016, and to extend the completion test deadline an additional year to the end of 2017.
- Silver Wheaton recently revised 2017 guidance to reflect recent developments as stated in the Company's November 4, 2013 news release. 2017 guidance is now forecast to be 42.5 million silver equivalent ounces[2] including 210,000 ounces of gold. Silver Wheaton's 2013 silver equivalent production is still expected to exceed 33.5 million ounces[2] including 145,000 ounces of gold.
- Silver Wheaton announces the appointment of Chantal Gosselin to the Board of Directors.
Please refer to non-IFRS measures at the end of this press
[1] release.
Silver equivalent production forecast assumes a
[2] gold/silver ratio of 53.3:1.
"Production in the third quarter once again hit record levels, putting us well on track to achieving our best year ever and exceeding our 2013 production guidance of 33.5 million silver equivalent ounces," said Randy Smallwood, President and Chief Executive Officer of Silver Wheaton. "We finished this quarter with our second strongest quarterly sales ever, as the impact of our strong production started flowing through the sales pipeline. Overall, our producing assets performed very well during the quarter, and Sudbury and Salobo added to our strength as these mines began contributing consistent gold deliveries."
"While we are somewhat disappointed about the delay at Pascua-Lama, we believe that securing an additional year of production from three of Barrick's other mines adequately compensates Silver Wheaton for extending Pascua-Lama's completion test deadline. We see Barrick's decision as fiscally prudent and important in order to improve the economics and allow Pascua-Lama to ultimately be developed into a world-class gold and silver mine."
"Subsequent to quarter end, we added a gold stream with Hudbay on the Constancia project, which is on schedule to start production in late 2014. We remain exceptionally busy on the corporate development front but will always maintain our focus on high-quality, tangible opportunities that will allow us to further grow our portfolio of world-class assets."
Revenues
Revenue was $166.4 million in the third quarter of 2013, on silver
equivalent sales of 7.8 million ounces (5.7 million ounces of silver and
35,300 ounces of gold). This represents a 3% increase from the $161.3
million of revenue generated in the third quarter of 2012, due primarily
to a 52% increase in the number of silver equivalent ounces sold,
partially offset by a 32% decrease in the average realized silver
equivalent price ($21.26 in Q3 2013 compared to $31.36 in Q3 2012).
Costs and Expenses
Average cash costs[1] in the third quarter of 2013 were $4.73 per silver
equivalent ounce, compared with $4.16 during the comparable period of
2012. Cash costs rose year over year primarily due to an increase in
gold sales (35,300 ounces in Q3 2013 compared to 6,900 ounces in Q3
2012) associated with Hudbay's 777 mine and Vale S.A.'s ("Vale") Sudbury
and Salobo mines. The average cash cost per gold ounce[1] was $386, or
$6.30 per silver equivalent ounce[2]. This resulted in a cash operating
margin[1] of $16.53 per silver equivalent ounce, a reduction of 39% as
compared to the third quarter of 2012. The decrease in the cash
operating margin was largely due to a 32% decrease in the silver
equivalent price realized in the third quarter of 2013 compared to the
third quarter of 2012, as well as increased cash costs, as noted above.
Earnings and Operating Cash Flows
Net earnings and cash flow from operations in the third quarter of 2013
were $77.1 million ($0.22 per share) and $118.7 million ($0.33 per
share[1]), compared with $119.7 million ($0.34 per share) and $128.7
million ($0.36 per share[1]) for the same period in 2012, a decrease of
36% and 8%, respectively. Earnings and cash flow were impacted by lower
gold and silver prices, as well as increased costs due to an increase in
gold sales, as noted above.
Balance Sheet
At September 30, 2013, the Company had approximately $62.0 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.
Financial Review
[1] Please refer to non-IFRS measures at the end of this press release.
[2] Cash cost per silver equivalent ounce calculated using a gold to
silver ratio of 61.3 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 the assets
which produce only gold.
Operational and Development Highlights
Attributable silver equivalent production was 8.9 million ounces (6.8 million ounces of silver and 34,800 ounces of gold), representing an increase of 17% compared to the third quarter of 2012.
Operational highlights for the quarter ended September 30, 2013, are as follows:
Pascua-Lama -
As per Barrick's Q3 2013 MD&A dated October 31, 2013, Barrick has
temporarily suspended construction activities at Pascua-Lama, except
those required for environmental protection and regulatory compliance,
and to place the project on care and maintenance. Barrick also stated
that the decision to re-start construction activities will depend on
improved project economics such as go-forward costs, the outlook for
metal prices, and reduced uncertainty associated with legal and other
regulatory requirements. As a result of the suspension, Barrick no
longer expects first production by mid-2016.
On October 31, 2013, the Company announced that, as a result of
Barrick's decision to temporarily suspend construction activities at
Pascua-Lama, the Company has amended its silver purchase agreement with
Barrick. The amendment entails Silver Wheaton being entitled to 100% of
the silver production from Barrick's Lagunas Norte, Pierina and Veladero
mines until the end of 2016 - an extension of one year, and extending
the completion test deadline an additional year to December 31, 2017. If
the requirements of the completion test have not been satisfied by the
amended completion date, the agreement may be terminated by Silver
Wheaton. In such an event, Silver Wheaton will be entitled to the return
of the upfront cash consideration of $625 million less a credit for any
silver delivered up to that date.
San Dimas -
As stated in Primero Mining Corp.'s ("Primero") November 6, 2013
disclosure, expansion of the San Dimas mine from 2,150 tonnes per day
("tpd") to 2,500 tpd is on track for commissioning during the first
quarter of 2014. At September 30, 2013 the expansion of the mill to
2,500 tpd was 70% complete. Mine development to feed the mill also
remains on track to be completed during the first quarter of 2014. In
addition, Primero continues to review the option to further expand the
San Dimas mine to 3,000 tpd and will provide an update no later than
mid-2014.
Peñasquito -
As stated in Goldcorp Inc.'s ("Goldcorp") October 24, 2013 disclosure,
water production at Peñasquito continued in line with Goldcorp's
expectations during the third quarter. In addition, the year to date
rainfall has already exceeded the annual average for Peñasquito, which
should improve recharge in the basin over time. Goldcorp also stated
that the Northern Well Field ("NWF") project continued on schedule and
the final routing has been selected. Land access agreements continued as
planned throughout the quarter and final engineering designs are
essentially complete. Construction activities are planned to commence in
the fourth quarter of 2013.
Other -
On November 4, 2013, Silver Wheaton, through its wholly owned subsidiary
Silver Wheaton (Caymans) Ltd., agreed to acquire from Hudbay 50% of the
life of mine gold production from Constancia, located in southern Peru,
for US$135 million. Silver Wheaton's August 2012 silver stream purchase
agreement for 100% of the life of mine silver production from Constancia
has now been amended to include 50% of the life of mine gold production.
Silver Wheaton has the option to make the initial upfront payment in
either cash or Silver Wheaton shares, calculated at the time the payment
is made. Forecast average annual attributable gold production[1] from
Constancia is anticipated to be approximately 35,000 gold ounces over
the first five years, and 18,000 ounces life of mine.
Produced But Not Yet Delivered -
Payable silver equivalent ounces produced but not yet delivered to
Silver Wheaton by its partners increased by 0.3 million ounces to
approximately 5.3 million silver equivalent payable ounces at September
30, 2013. An increase in produced but not yet delivered ounces at
Yauliyacu was partially offset by a decrease at Other mines.
Detailed mine by mine production and sales figures can be found in the Appendix to this press release and in Silver Wheaton's Management's Discussion and Analysis ("MD&A") in the 'Results of Operations and Operational Review' section.
[1] Forecast gold production attributable to Silver Wheaton is
based on fixed recoveries as defined in the amended
precious metals agreement and the most recent mine plan.
New Addition to Silver Wheaton's Board of Directors
Silver Wheaton is pleased to announce the addition of Chantal Gosselin to the Company's Board of Directors. Ms. Gosselin brings over 20 years of experience in the financial services and mining industry. Most recently, Ms. Gosselin served as Vice President and Portfolio Manager at Goodman Investment Counsel. Prior to this, she was a senior mining analyst at investment firm Sun Valley Gold LLP. Her career has also included brokerage firm positions at Genuity Capital, Haywood Securities Inc., and Dundee Securities Corporation. Prior to entering the financial industry, Ms. Gosselin held a variety of positions in the mining industry including mine site manager for Blackhawk Mining Inc., Aur Resources and Pan American Silver Corp. Ms. Gosselin holds a Bachelor of Science Mine Engineering degree from Laval University, an MBA from Concordia University, and a Chartered Investment Manager designation.
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.
Webcast and Conference Call Details
A conference call will be held Tuesday, November 12, 2013, 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: 86400095
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: 1-855-859-2056
Dial from outside Canada or the US: (416) 849-0833
Pass code: 86400095
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 2013 attributable production is approximately 33.5 million silver equivalent ounces[1], including 145,000 ounces of gold. By 2017, annual attributable production is anticipated to increase significantly to approximately 42.5 million silver equivalent ounces[1], including 210,000 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.
[1] Silver equivalent production forecast assumes a gold/silver
ratio of 53.3:1. Production guidance was updated in Silver
Wheaton's November 5, 2013 news release.
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, 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 and 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, 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.
Consolidated Statement of Earnings
Three Months Ended Nine Months Ended
September 30 September 30
(US dollars and
shares in thousands,
except per share
amounts - unaudited) 2013 2012 2013 2012
Sales $ 166,405 $ 161,273 $ 539,056 $ 562,319
Cost of sales
Cost of sales,
excluding
depletion $ 37,007 $ 21,406 $ 101,914 $ 74,541
Depletion 38,756 14,464 104,460 53,261
Total cost of sales $ 75,763 $ 35,870 $ 206,374 $ 127,802
Earnings from
operations $ 90,642 $ 125,403 $ 332,682 $ 434,517
Expenses and other
income
General and
administrative
[1] $ 9,390 $ 6,762 $ 28,159 $ 21,680
Foreign
exchange loss
(gain) 71 77 (115) 86
Interest
expense 1,653 - 4,858 -
Other expense
(income) 858 (1,646) 10,629 (2,152)
$ 11,972 $ 5,193 $ 43,531 $ 19,614
Earnings before
income taxes $ 78,670 $ 120,210 $ 289,151 $ 414,903
Income tax expense (1,613) (513) (7,556) (6,611)
Net earnings $ 77,057 $ 119,697 $ 281,595 $ 408,292
Basic earnings per
share $ 0.22 $ 0.34 $ 0.79 $ 1.15
Diluted earnings per
share $ 0.22 $ 0.34 $ 0.79 $ 1.15
Weighted average
number of shares
outstanding
Basic 355,707 353,927 354,981 353,730
Diluted 356,557 355,928 356,239 355,811
1) Equity settled
stock based
compensation (a
non-cash
item) included in
general and
administrative
expenses. $ 2,268 $ 1,521 $ 6,113 $ 4,849
Consolidated Balance Sheets
September 30 December 31
(US dollars in thousands - unaudited) 2013 2012
Assets
Current assets
Cash and cash
equivalents $ 61,956 $ 778,216
Accounts receivable 5,804 6,197
Other 1,304 966
Total current assets $ 69,064 $ 785,379
Non-current assets
Silver and gold
interests $ 4,264,839 $ 2,281,234
Long-term investments 58,643 121,377
Other 5,899 1,347
Total non-current assets $ 4,329,381 $ 2,403,958
Total assets $ 4,398,445 $ 3,189,337
Liabilities
Current liabilities
Accounts payable and
accrued liabilities $ 19,814 $ 20,898
Current portion of
bank debt - 28,560
Current portion of
performance share
units 1,056 -
Total current liabilities $ 20,870 $ 49,458
Non-current liabilities
Long-term portion of
bank debt $ 1,039,951 $ 21,500
Deferred income taxes 14,908 9,250
Performance share
units 2,408 2,055
Total non-current liabilities $ 1,057,267 $ 32,805
Total liabilities $ 1,078,137 $ 82,263
Shareholders' equity
Issued capital $ 1,879,386 $ 1,811,577
Reserves (10,032) (1,710)
Retained earnings 1,450,954 1,297,207
Total shareholders' equity $ 3,320,308 $ 3,107,074
Total liabilities and shareholders'
equity $ 4,398,445 $ 3,189,337
Consolidated Statement of Cash Flows
Three Months Ended Nine Months Ended
September 30 September 30
(US dollars in
thousands -
unaudited) 2013 2012 2013 2012
Operating activities
Net earnings $ 77,057 $ 119,697 $ 281,595 $ 408,292
Adjustments for
Depreciation and
depletion 38,820 14,523 104,628 53,440
Amortization of
credit facility
origination fees:
Interest
expense 79 - 503 -
Stand-by
fees 229 - 1,657 -
Credit
facility
origination
fees re
Bridge
Facility - - 4,490 -
Interest expense 1,574 - 4,355 -
Equity settled
stock based
compensation 2,268 1,521 6,113 4,849
Performance share
units 1,330 831 1,449 1,213
Deferred income
tax expense 1,573 361 7,442 5,927
Loss (gain) on
fair value
adjustment of
share purchase
warrants held - (1,539) 2,694 (1,937)
Investment income
recognized in net
earnings (64) (421) (358) (1,090)
Other (50) 4 15 (20)
Change in non-cash
working capital (2,522) (6,724) (904) (6,329)
Cash generated from
operations $ 120,294 $ 128,253 $ 413,679 $ 464,345
Interest paid -
expensed (1,628) - (4,355) -
Interest received 6 398 218 1,033
Cash generated from
operating activities $ 118,672 $ 128,651 $ 409,542 $ 465,378
Financing activities
Bank debt repaid $ (103,000) $ (7,140) $ (1,683,060) $ (21,420)
Bank debt drawn - - 2,675,000 -
Credit facility
origination fees (44) - (13,995) -
Share purchase
warrants exercised 48,754 - 51,736 10
Share purchase
options exercised 371 5,425 6,322 9,513
Dividends paid (35,629) (35,388) (127,848) (99,046)
Cash generated from
(applied to)
financing activities $ (89,548) $ (37,103) $ 908,155 $ (110,943)
Investing activities
Silver and gold
interests $ (388) $ (638,430) $ (2,025,863) $ (638,610)
Interest paid -
capitalized to silver
interests (3,114) (168) (7,959) (577)
Acquisition of
long-term investments - - - (395)
Dividend income
received 57 23 170 57
Other (43) (43) (218) (105)
Cash applied to
investing activities $ (3,488) $ (638,618) $ (2,033,870) $ (639,630)
Effect of exchange
rate changes on cash
and cash equivalents $ 63 $ 10 $ (87) $ 50
Increase (decrease)
in cash and cash
equivalents $ 25,699 $ (547,060) $ (716,260) $ (285,145)
Cash and cash
equivalents,
beginning of period 36,257 1,102,116 778,216 840,201
Cash and cash
equivalents, end of
period $ 61,956 $ 555,056 $ 61,956 $ 555,056
Summary of Ounces Produced and Sold
2013 2012 2011
Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4
Silver
ounces
produced[2]
San Dimas[3] 1,660 1,160 1,743 1,694 1,288 1,231 1,692 1,578
Yauliyacu 639 668 624 616 640 606 550 583
Peñasquito 1,636 1,440 1,093 1,445 1,940 1,822 1,365 1,633
Barrick[4] 465 556 741 769 617 455 630 728
Other[5] 2,418 2,570 2,038 2,345 2,251 2,378 2,335 2,212
Total silver
ounces
produced 6,818 6,394 6,239 6,869 6,736 6,492 6,572 6,734
Gold ounces
produced[2]
Minto 2,894 4,226 5,967 6,785 5,200 3,710 3,348 3,891
777 18,259 16,986 16,951 19,615 11,824 - - -
Sudbury 5,575 8,896 9,741 - - - - -
Salobo 8,061 6,342 4,677 - - - - -
Total gold
ounces
produced 34,789 36,450 37,336 26,400 17,024 3,710 3,348 3,891
Silver
equivalent
ounces of
gold
produced[6] 2,130 2,273 2,089 1,432 881 218 172 202
Silver
equivalent
ounces
produced[6] 8,948 8,667 8,328 8,301 7,617 6,710 6,744 6,936
Silver
ounces sold
San Dimas[3] 1,560 1,194 1,850 1,629 1,178 1,295 1,701 1,488
Yauliyacu 13 559 149 1,097 184 1,155 497 655
Peñasquito 1,388 1,058 1,459 1,642 1,304 1,845 1,189 851
Barrick[4] 447 560 753 826 528 470 656 755
Other[5] 2,257 1,771 1,741 2,153 1,592 2,024 1,885 2,029
Total silver
ounces sold 5,665 5,142 5,952 7,347 4,786 6,789 5,928 5,778
Gold ounces
sold
Minto 5,287 3,409 6,698 4,876 6,905 2,369 3,860 3,777
777 16,972 23,483 9,414 28,084 - - - -
Sudbury 6,534 4,184 111 - - - - -
Salobo 6,490 2,793 720 - - - - -
Total gold
ounces sold 35,283 33,869 16,943 32,960 6,905 2,369 3,860 3,777
Silver
equivalent
ounces of
gold sold[6] 2,163 2,097 971 1,784 357 139 198 196
Silver
equivalent
ounces
sold[6] 7,828 7,239 6,923 9,131 5,143 6,928 6,126 5,974
Gold /
silver
ratio[6] 61.3 61.9 57.3 54.1 51.7 58.7 51.2 51.9
Cumulative
payable
silver
equivalent
ounces
produced
but not yet
delivered[8] 5,289 5,022 4,051 3,824 5,195 3,212 4,166 4,127
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 updated in future
periods as additional information is received. The Company has been
informed by Glencore that reported production related to the Yauliyacu
mine may have been overstated by a total of approximately 200,000
ounces for all or some portion of the period between April 1, 2011 and
June 30, 2012. The required adjustments to production, if any, related
to the Yauliyacu mine for these periods will be made once management
2) completes a review of the timing and amount of any production variance.
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
3) 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
5) Morado silver 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
6) London Bullion Metal Exchange for the assets which produce only gold.
Represents production for the period August 8, 2012 to September 30,
7) 2012.
8) Based on management estimates.
Results of Operations (unaudited)
The Company currently has ten reportable operating segments: the silver produced by the San Dimas, Yauliyacu, Peñasquito, Barrick and Other mines, the gold produced by the Minto, 777, Sudbury and Salobo mines, and corporate operations.
Three Months Ended September 30, 2013
Average Average
Realized Cash
Price Cost
Ounces Ounces ($'s Per ($'s Per
Produced[2] Sold Sales Ounce) Ounce)[3]
Silver
San Dimas
[4] 1,660 1,560 $ 33,856 $ 21.70 $ 4.16
Yauliyacu 639 13 260 20.02 4.12
Peñasquito 1,636 1,388 27,815 20.03 4.02
Barrick
[5] 465 447 10,250 22.93 3.90
Other [6] 2,418 2,257 48,074 21.30 4.22
6,818 5,665 $ 120,255 $ 21.22 $ 4.13
Gold
Minto 2,894 5,287 $ 6,944 $ 1,313 $ 306
777 18,259 16,972 22,040 1,299 400
Sudbury 5,575 6,534 8,636 1,322 400
Salobo 8,061 6,490 8,530 1,314 400
34,789 35,283 $ 46,150 $ 1,308 $ 386
Silver equivalent
[7] 8,948 7,828 $ 166,405 $ 21.26 $ 4.73
Corporate
General and
administrative
Other
Total corporate
8,948 7,828 $ 166,405 $ 21.26 $ 4.73
(table continued)
Three Months Ended September 30, 2013
Average
Depletion Cash Flow
($'s Per Net From
Ounce) Earnings Operations Total Assets
Silver
San Dimas
[4] $ 0.82 $ 26,089 $ 27,361 $ 159,180
Yauliyacu 5.75 132 207 211,151
Peñasquito 2.96 18,119 22,233 476,473
Barrick
[5] 3.31 7,026 5,541 599,993
Other [6] 4.07 29,371 35,157 556,224
$ 2.85 $ 80,737 $ 90,499 $ 2,003,021
Gold
Minto $ 115 $ 4,716 $ 5,254 $ 28,440
777 802 1,647 15,252 292,763
Sudbury 829 605 6,023 1,325,726
Salobo 462 2,937 5,934 614,889
$ 641 $ 9,905 $ 32,463 $ 2,261,818
Silver equivalent
[7] $ 4.95 $ 90,642 $ 122,962 $ 4,264,839
Corporate
General and
administrative $ (9,390)
Other (4,195)
Total corporate $ (13,585) $ (4,290) $ 133,606
$ 4.95 $ 77,057 $ 118,672 $ 4,398,445
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, Zinkgruvan, Keno Hill, Mineral
Park, Cozamin, Neves-Corvo, Stratoni, Campo Morado, Minto, 777 and
Aljustrel silver interests in addition to the non-operating Rosemont
silver and gold interest and Loma de La Plata and Constancia silver
interests.
7) 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 the assets which produce only gold.
Three Months Ended September 30, 2012
Average Average
Realized Cash
Price Cost
Ounces Ounces ($'s Per ($'s Per
Produced[2] Sold Sales Ounce) Ounce)[3]
Silver
San Dimas [4] 1,288 1,178 $ 37,565 $ 31.90 $ 4.12
Yauliyacu 640 184 5,378 29.23 4.08
Peñasquito 1,940 1,304 40,431 30.99 3.99
Barrick [5] 617 528 15,752 29.85 3.90
Other [6] 2,251 1,592 49,960 31.39 4.05
6,736 4,786 $ 149,086 $ 31.16 $ 4.04
Gold
Minto 5,200 6,905 $ 12,187 $ 1,765 $ 303
777 11,824 - - - -
17,024 6,905 $ 12,187 $ 1,765 $ 303
Silver equivalent
[7] 7,617 5,143 $ 161,273 $ 31.36 $ 4.16
Corporate
General and
administrative
Other
Total corporate
7,617 5,143 $ 161,273 $ 31.36 $ 4.16
(table continued)
Three Months Ended September 30, 2012
Average
Depletion Cash Flow
($'s Per Net From Total
Ounce) Earnings Operations Assets
Silver
San Dimas [4] $ 0.79 $ 31,776 $ 32,710 $ 164,227
Yauliyacu 5.02 3,704 2,181 220,799
Peñasquito 2.96 31,364 35,226 492,132
Barrick [5] 4.34 11,404 13,425 601,187
Other [6] 3.32 38,238 39,570 464,681
$ 2.78 $ 116,486 $ 123,112 $ 1,943,026
Gold
Minto $ 171 $ 8,917 $ 8,930 $ 31,418
777 - - - 354,364
$ 171 $ 8,917 $ 8,930 $ 385,782
Silver equivalent
[7] $ 2.81 $ 125,403 $ 132,042 $ 2,328,808
Corporate
General and
administrative $ (6,762)
Other 1,056
Total corporate $ (5,706) $ (3,391) $ 717,756
$ 2.81 $ 119,697 $ 128,651 $ 3,046,564
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, Zinkgruvan, Keno Hill, Mineral
Park, Cozamin, Neves-Corvo, Stratoni, Campo Morado, Minto, 777 and
Aljustrel silver interests in addition to the non-operating Rosemont
silver and gold interest and Loma de La Plata and Constancia silver
interests.
7) 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 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 pages 22 to 24 of 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
Vice President, Investor Relations
Silver Wheaton Corp.
Tel: +1-800-380-8687
Email: info@silverwheaton.com
Website: http://www.silverwheaton.com
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