SILVER WHEATON REPORTS RECORD ATTRIBUTABLE PRODUCTION IN THE SECOND QUARTER
July 30, 2009
Vancouver, British Columbia - Silver Wheaton Corp. (TSX, NYSE:SLW) today announced its unaudited results for the second quarter ended June 30, 2009.
SECOND QUARTER HIGHLIGHTS
- Record attributable production of 4.0 million silver equivalent ounces (3.8 million ounces of silver and 3,400 ounces of gold) at a total cash cost of US$3.99 (1) per silver ounce.
- During the quarter, approximately 1 million silver equivalent ounces produced at the various mines and deliverable to Silver Wheaton under the agreements, was not sold due primarily to the timing of shipments. It is anticipated that these sales will be made by the mines during the remainder of 2009, at which time Silver Wheaton will take delivery and record a sale of the ounces.
- Net earnings of US$18.4 million (US$0.06 per share) from the sale of 2.9 million ounces of silver, compared to US$23.3 million (US$0.10 per share) from the sale of 2.9 million ounces of silver in 2008.
- Operating cash flows of US$26.5 million (US$0.09 per share) compared to US$35.9 million (US$0.16 per share) in 2008.
- Closed the acquisition of Silverstone Resources Corp. ("Silverstone") through the issuance of 23,434,332 common shares and 1,367,364 share purchase options of Silver Wheaton on conversion of previously issued fully vested share purchase options of Silverstone. The transaction was valued at approximately US$152 million and increased annual sales by over 4 million silver equivalent ounces.
- On July 13, 2009, Goldcorp Inc. announced that construction of the first sulphide process line at their Pe�asquito mine in Mexico is now complete and commissioning work is advancing on schedule. Production and shipment of first concentrates, including silver, are still targeted for the second half of 2009.
"I am very pleased with our performance during the second quarter," said Peter Barnes, President and Chief Executive Officer of Silver Wheaton. "Despite continued challenges in the global economy, Silver Wheaton is proud to have achieved record attributable production during the quarter and we remain on target to meet our 2009 sales guidance of 17 to 19 million silver equivalent ounces for the year. Although our partners produced approximately 1 million silver equivalent ounces more during the quarter than we sold, this is only a timing issue and we anticipate these sales will be recorded during the second half of the year."
"In May, we closed the Silverstone acquisition which was accretive on all key metrics, significantly increasing attributable silver reserves and resources and boosting annual production levels by approximately 4 million silver equivalent ounces. Already we are seeing further growth opportunities from these mines, particularly the Minto mine, where they continue to have spectacular exploration success."
"Last, but certainly not least, construction at the Pe�asquito mine is going very well, with completion of the first sulphide process line on schedule, and commissioning underway. Silver deliveries from Pe�asquito to Silver Wheaton are targeted by year-end, crystallizing significant sales growth over the next several years."
"With almost US$50 million of cash on hand at the end of the quarter, and access to an undrawn US$400 million low-cost credit facility, we remain very well positioned to continue delivering on our strategy of accretive growth."
Operating Results
Second quarter attributable silver production at the various mines set a new record of approximately 4.0 million silver equivalent ounces. Sales in the quarter were over 2.9 million silver equivalent ounces, and were impacted by a number of shipping related issues, primarily at the Yauliyacu mine in Peru, the Stratoni mine in Greece and the Minto mine in Canada.
Concentrate shipments from the Yauliyacu mine during the second quarter were affected by the shut-down of the Doe Run Peru smelter, the largest buyer of the concentrate produced at the mine. During the quarter, alternative smelting arrangements were made for a portion of the stockpiled concentrates at Yauliyacu. Silver Wheaton expects the shortfall in silver deliveries to be made up over the remainder of 2009.
All concentrate shipments from the Stratoni mine occurred near the end of the second quarter. As title to the concentrate had not yet passed to Silver Wheaton, the related revenue was not recognized until July 2009.
Following the acquisition of Silverstone, no silver and gold shipments were delivered under the Minto agreement during the quarter. Truck transportation of concentrate is unavailable at the Minto mine for two periods of eight to ten weeks beginning in April and October of each year as the Yukon River breaks up and freezes, preventing access to the mine. As a result, silver sales from the Minto mine will vary significantly from quarter to quarter.
This earnings release should be read in conjunction with Silver Wheaton's MD&A and Financial Statements which have been posted on SEDAR at www.sedar.com and are available on the Company's website at www.silverwheaton.com.
Conference Call Details
A conference call will be held Friday, July 31, 2009, starting at 11:00 am (Eastern Time) to discuss these results. To participate in the live call use one of the following methods:
Dial toll free from Canada or the US: 1-800-732-9307 Dial from outside Canada or the US: 1-416-644-3415 Live audio webcast: www.silverwheaton.com
Participants should dial in five to ten minutes before the call.
The conference call will be recorded and you can listen to an archive of the call by one of the following methods:
Dial toll free from Canada or the US: 1-877-289-8525 Dial from outside Canada or the US: 1-416-640-1917 Pass code: 21308834# Archived audio webcast: www.silverwheaton.com
Share Purchase Warrants Expiring August 5, 2009
The Company advises holders of the common share purchase warrants (TSX: SLW.WT)(the "Warrants") that the deadline for exercising the Warrants is August 5, 2009. As of the date of this press release, the Warrants are trading in-the-money. Warrant holders are entitled to receive one share of Silver Wheaton upon exercise of 5 Warrants and payment of the exercise price of C$4.00 prior to their expiry.
Warrant holders who hold their Warrants in the account of a brokerage firm can instruct their broker to exercise the Warrants on their behalf.
If you are a registered warrant holder and have questions or require assistance for the exercise of your Warrants, please contact CIBC Mellon at 1-800-387-0825.
About Silver Wheaton
Silver Wheaton is the largest silver streaming company in the world. Forecast 2009 sales are 16 to 18 million ounces of silver and 17,000 ounces of gold, for total sales of 17 to 19 million silver equivalent ounces, growing to approximately 30 million ounces of silver and 20,000 ounces of gold, for total sales of approximately 31 million silver equivalent ounces, by 2013.
1) Non-GAAP Measures - Total Cash Costs Per Ounce Of Silver & Gold Calculation
Silver Wheaton has included certain non-GAAP performance measures, including total cash costs of silver and gold on a sales basis. These non-GAAP measures do not have any standardized meaning prescribed by GAAP, nor are they necessarily comparable with similar measures presented by other companies. Cash costs are presented as they represent an industry standard method of comparing certain costs on a per unit basis. The Company believes that certain investors use this information to evaluate the Company's performance. The data is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. During the three months ended June 30, 2009, the Company's total cash costs, which were equivalent to the Company's Cost of Sales in accordance with GAAP, were $3.99 per ounce of silver and $300 per ounce of gold (2008 - $3.93 per ounce of silver).
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 applicable Canadian securities legislation. Forward-looking statements include, but are not limited to, statements with respect to the future price of silver, the estimation of mineral reserves and resources, the realization of mineral reserve estimates, the timing and amount of estimated future production, costs of production, reserve determination and reserve conversion rates. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Silver Wheaton to be materially different from those expressed or implied by such forward-looking statements, including but not limited to: fluctuations in the price of silver, the absence of control over mining operations from which Silver Wheaton purchases silver and risks related to these mining operations, including risks related to fluctuations in the price of the primary commodities mined at such operations, changes in laws and regulations including taxation policies, actual results of mining and exploration activities, changes in project parameters as plans continue to be refined, 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, no material adverse change in the market price of commodities, that the mining operations will operate 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 such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Silver Wheaton does not undertake to update any forward-looking statements that are incorporated by reference herein, except in accordance with applicable securities laws.
For further information, please contact:
Brad Kopp Director, Investor Relations Silver Wheaton Corp. Tel: 1-800-380-8687 Email: info@silverwheaton.com Website: www.silverwheaton.com
Silver Wheaton is a trademark of Silver Wheaton Corp. |