Silver Wheaton Reports Record Quarterly Financial Results Including Operating Cash Flows of Over US$172 Million
VANCOUVER, British Columbia, August 9, 2012 /PRNewswire/ --
TSX: SLW
NYSE: SLW
Silver Wheaton Corp. ("Silver Wheaton" or the "Company") (TSX:SLW)(NYSE:SLW) is pleased to announce its unaudited results for the second quarter ended June 30, 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 share[1]).
- Cash operating margin[1] was US$25.01[1] per silver equivalent ounce, compared to US$34.21 in Q2 2011.
- Average cash costs[1] fell slightly compared with Q2 2011, to US$4.06[1] 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 ounces[2].
"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 ounces[1] 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 costs[1] in the second quarter of 2012 were US$4.06[1] per silver equivalent ounce, compared with US$4.14[1] during the comparable period of 2011. This resulted in cash operating margins[1]of US$25.01[1] 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 share[1]), compared with US$168.3 million (US$0.48 per share[1]) 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 http://www.silverwheaton.com and have been posted on SEDAR at http://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: 1-888-231-8191
Dial from outside Canada or the US: 1-647-427-7450
Pass code: 98200489
Live audio webcast: http://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: 1-855-859-2056
Dial from outside Canada or the US: 1-416-849-0833
Pass code: 98200489
Archived audio webcast: http://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 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 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 Six Months Ended
June 30 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 Six Months Ended
June 30 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
Average
Average Cash
Realized Cost Average
Price (US$'s Depletion
(US$'s Per (US$'s
Ounces Ounces Sales Per Ounce) Per
Produced [2] Sold (US$'s) Ounce) [3] Ounce)
Silver
San Dimas
[4] 1,227 1,295 $ 36,695 $ 28.34 $ 4.09 $ 0.79
Zinkgruvan 673 580 16,505 28.45 4.14 1.68
Yauliyacu 606 1,155 34,468 29.84 4.08 5.02
Peñasquito 1,822 1,845 53,197 28.83 3.99 2.96
Cozamin 429 395 11,981 30.33 4.12 4.05
Barrick
[5] 468 470 14,183 30.18 3.90 4.34
Other [6] 1,276 1,049 30,665 29.22 3.97 4.09
6,501 6,789 $ 197,694 $ 29.12 $ 4.04 $ 3.12
Gold
Minto 3,214 2,369 3,714 1,568 303 171
Silver
equivalent
[7] 6,690 6,928 $ 201,408 $ 29.07 $ 4.06 $ 3.12
Corporate
General and administrative
Other
Total
corporate
6,690 6,928 $ 201,408 $ 29.07 $ 4.06 $ 3.12
Table continues
Three Months
Ended June 30,
2012
Cash Flow
Net From
Earnings Operations Total Assets
(US$'s) (US$'s) (US$'s)
Silver
San Dimas [4] $ 30,367 $ 31,394 $ 165,161
Zinkgruvan 13,131 14,043 55,798
Yauliyacu 23,959 32,202 221,723
Peñasquito 40,373 45,835 495,993
Cozamin 8,756 10,400 21,997
Barrick [5] 10,310 13,571 601,035
Other [6] 22,212 27,670 243,642
$ 149,108 $ 175,115 $ 1,805,349
Gold
Minto 2,593 2,928 32,596
Silver
equivalent [7] $ 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
$ 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
Average
Average Cash
Realized Cost
Price (US$'s Average
Ounces (US$'s Per Depletion
Produced Ounces Sales Per Ounce) (US$'s Per
[2] Sold (US$'s) Ounce) [3] Ounce)
Silver
San Dimas
[4] 1,150 1,149 $ 42,798 $ 37.25 $ 4.05 $ 0.71
Zinkgruvan 414 401 16,220 40.46 4.08 1.69
Yauliyacu 674 471 17,663 37.50 4.02 5.02
Peñasquito 1,282 961 39,274 40.89 3.90 2.41
Cozamin 414 281 10,284 36.58 4.08 4.62
Barrick
[5] 741 726 27,437 37.78 3.90 3.57
Other [6] 1,153 862 32,515 37.71 3.94 4.30
5,828 4,851 $ 186,191 $ 38.38 $ 3.98 $ 2.84
Gold
Minto 6,510 5,674 8,561 1,509 300 169
Silver
equivalent
[7] 6,089 5,078 $ 194,752 $ 38.35 $ 4.14 $ 2.90
Corporate
General and
administrative
Other
Total
corporate
6,089 5,078 $ 194,752 $ 38.35 $ 4.14 $ 2.90
Table continues
Three Months
Ended June 30,
2011
Cash Flow
Net From
Earnings Operations Total Assets
(US$'s) (US$'s) (US$'s)
Silver
San Dimas [4] $ 37,333 $ 38,149 $ 169,458
Zinkgruvan 13,905 13,303 58,899
Yauliyacu 13,406 15,770 233,355
Peñasquito 33,215 35,528 510,351
Cozamin 7,838 10,798 28,394
Barrick [5] 22,009 24,605 599,449
Other [6] 25,415 29,105 260,447
$ 153,121 $ 167,258 $ 1,860,353
Gold
Minto 5,897 5,941 35,362
Silver
equivalent [7] $ 159,018 $ 173,199 $ 1,895,715
Corporate
General and
administrative $ (6,252)
Other (4,701)
Total
corporate $ (10,953) $ (4,918) $ 911,631
$ 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
Average
Average Cash
Realized Cost Average
Price (US$'s Depletion
Ounces (US$'s Per (US$'s
Produced Ounces Sales Per Ounce) Per
[2] Sold (US$'s) Ounce) [3] Ounce)
Silver
San Dimas
[4] 2,919 2,996 $ 92,261 $ 30.79 $ 4.09 $ 0.79
Zinkgruvan 1,315 1,097 33,443 30.47 4.14 1.68
Yauliyacu 1,156 1,652 50,054 30.30 4.06 5.02
Peñasquito 3,187 3,034 91,957 30.31 3.99 2.96
Cozamin 834 771 24,590 31.91 4.10 4.05
Barrick
[5] 1,135 1,126 35,686 31.70 3.90 4.34
Other [6] 2,564 2,041 62,865 30.79 3.96 4.04
13,110 12,717 $ 390,856 $ 30.73 $ 4.03 $ 2.97
Gold
Minto 5,302 6,229 10,190 1,636 303 171
Silver
equivalent
[7] 13,406 13,054 $ 401,046 $ 30.72 $ 4.07 $ 2.97
Corporate
General and
administrative
Other
Total
corporate
13,406 13,054 $ 401,046 $ 30.72 $ 4.07 $ 2.97
Table continues
Six Months Ended June
30, 2012
Cash Flow
Net From
Earnings Operations Total Assets
(US$'s) (US$'s) (US$'s)
Silver
San Dimas [4] $ 77,634 $ 79,999 $ 165,161
Zinkgruvan 27,058 27,538 55,798
Yauliyacu 35,055 45,790 221,723
Peñasquito 70,873 79,853 495,993
Cozamin 18,313 20,540 21,997
Barrick [5] 26,410 32,517 601,035
Other [6] 46,531 54,722 243,642
$ 301,874 $ 340,959 $ 1,805,349
Gold
Minto 7,240 8,077 32,596
Silver
equivalent [7] $ 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
$ 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
Average
Average Cash
Realized Cost Average
Price (US$'s Depletion
Ounces (US$'s Per (US$'s
Produced Ounces Sales Per Ounce) Per
[2] Sold (US$'s) Ounce) [3] Ounce)
Silver
San Dimas
[4] 2,756 2,897 $ 101,169 $ 34.92 $ 4.05 $ 0.71
Zinkgruvan 922 722 27,269 37.76 4.08 1.69
Yauliyacu 1,357 591 21,186 35.85 4.01 5.02
Peñasquito 2,489 1,902 66,294 34.87 3.90 2.41
Cozamin 739 552 18,935 34.26 4.06 4.62
Barrick
[5] 1,463 1,406 49,100 34.91 3.90 3.56
Other [6] 2,241 1,603 56,542 35.27 3.93 4.14
11,967 9,673 $ 340,495 $ 35.20 $ 3.98 $ 2.59
Gold
Minto 9,435 8,198 12,440 1,517 300 169
Silver
equivalent
[7] 12,325 9,983 $ 352,935 $ 35.35 $ 4.10 $ 2.65
Corporate
General and
administrative
Other
Total
corporate
12,325 9,983 $ 352,935 $ 35.35 $ 4.10 $ 2.65
Table continues
Six Months Ended June
30, 2011
Cash Flow
Net From
Earnings Operations Total Assets
(US$'s) (US$'s) (US$'s)
Silver
San Dimas [4] $ 87,384 $ 88,351 $ 169,458
Zinkgruvan 23,100 22,909 58,899
Yauliyacu 15,850 18,815 233,355
Peñasquito 54,301 58,880 510,351
Cozamin 14,136 18,573 28,394
Barrick [5] 38,604 42,056 599,449
Other [6] 43,601 49,290 260,447
$ 276,976 $ 298,874 $ 1,860,353
Gold
Minto 8,595 8,811 35,362
Silver
equivalent [7] $ 285,571 $ 307,685 $ 1,895,715
Corporate
General and
administrative $ (12,754)
Other (2,576)
Total corporate $ (15,330) $ (12,208) $ 911,631
$ 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 http://www.silverwheaton.com and posted on SEDAR at http://www.sedar.com.
For further information:
Brad Kopp
Senior Vice President, Investor Relations
Silver Wheaton Corp.
Tel: 1-800-380-8687
Email: info@silverwheaton.com
Website: http://www.silverwheaton.com
(SLW. SLW)
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