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TSX: SLW
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VANCOUVER, May 8, 2014 /PRNewswire/ - Silver Wheaton Corp. ("Silver Wheaton" or
the "Company") (TSX:SLW) (NYSE: SLW) is pleased to announce its
unaudited results for the first quarter ended March 31, 2014. All
figures are presented in United States dollars unless otherwise noted.
FIRST QUARTER HIGHLIGHTS
Attributable silver equivalent production in Q1 2014 of 9.0 million
ounces (6.9 million ounces of silver and 33,800 ounces of gold),
compared to 8.3 million ounces in Q1 2013, representing an increase of
8%.
Attributable silver equivalent sales volume in Q1 2014 of 8.1 million
ounces (6.2 million ounces of silver and 30,100 ounces of gold),
compared to 6.9 million ounces in Q1 2013, representing an increase of
17%.
Revenues of $165.4 million in Q1 2014 compared with $205.8 million in Q1
2013, representing a decrease of 20%.
Average realized sale price per silver equivalent ounce sold in Q1 2014
of $20.38 ($20.36 per ounce of silver and $1,283 per ounce of gold),
representing a decrease of 31% as compared to Q1 2013.
Net earnings of $79.8 million ($0.22 per share) in Q1 2014 compared with
$133.4 million ($0.38 per share) in Q1 2013, representing a decrease of
40%.
Operating cash flows of $114.8 million ($0.32 per share¹) in Q1 2014
compared with $165.6 million ($0.47 per share¹) in Q1 2013,
representing a decrease of 31%.
Cash operating margin¹ Q1 2014 of $15.81 per silver equivalent ounce
compared with $25.33 in Q1 2013.
Average cash costs¹ in Q1 2014 were $4.12 and $381 per ounce of silver
and gold, respectively. On a silver equivalent basis, average cash
costs¹ rose to $4.57 compared with $4.39 in Q1 2013.
Declared quarterly dividend of $0.07 per common share. On March 20,
2014, the Company announced that it will be implementing a dividend
reinvestment plan whereby shareholders can elect to have dividends
reinvested directly into additional Silver Wheaton common shares. The
plan will be effective commencing with this quarter's dividend, which
will be distributed on or about May 30, 2014.
On March 26, 2014, the Company paid $125 million to Hudbay Minerals Inc.
("Hudbay") in satisfaction of the final upfront payment relative to the
silver stream on the Constancia project.
_____________________________ 1 Please refer to non-IFRS measures at the end of this press release.
"Silver Wheaton started the year on a strong note, achieving production
of 9.0 million silver equivalent ounces in the first quarter of 2014.
Production and sales increased, 8% and 17% respectively, compared with
the first quarter of 2013," said Randy Smallwood, President and Chief
Executive Officer of Silver Wheaton. "Furthermore, we maintained a very
healthy cash operating margin of around 70% and operating cash flows of
nearly $115 million, despite precious metal prices being down over 30%
compared to a year ago. These numbers once again highlight one of the
key strengths of our low-cost business model - that even in lower
commodity price environments Silver Wheaton can generate some of the
highest margins in the industry."
"This is an exciting year for Silver Wheaton as some of our key mining
assets are expected to expand and come on line in 2014. During the
first quarter, Primero's San Dimas mine completed an expansion from
2,150 to 2,500 tonnes per day, and we expect the true impact of this
expansion to be fully realized by Silver Wheaton in 2015 and beyond.
Furthermore, towards the end of the first quarter, we made the final
payment for the silver stream on Hudbay's Constancia project, where
production is expected to begin by the end of 2014. In addition, Vale's
Totten mine in Sudbury, which commenced production in the first
quarter, is now adding to the gold production we have already been
receiving from five of Vale's other mines in Sudbury. Moreover, the
expansion of Vale's Salobo mine continues to progress and remains on
track to be commissioned in the middle of this year. All things
considered, we see 2014 as a step forward for Silver Wheaton as these
core assets continue to grow, adding significantly to our growth
profile in 2015 and beyond."
Financial Review
Revenues
Revenue was $165.4 million in the first quarter of 2014, on silver
equivalent sales of 8.1 million ounces (6.2 million ounces of silver
and 30,100 ounces of gold). This represents a 20% decrease from the
$205.8 million of revenue generated in the first quarter of 2013, due
primarily to a 31% decrease in the average realized silver equivalent
price ($20.38 in Q1 2014 compared to $29.72 in Q1 2013), partially
offset by a 17% increase in the number of silver equivalent ounces
sold.
Costs and Expenses
Average cash costs1 in the first quarter of 2014 were $4.57 per silver equivalent ounce as
compared to $4.39 during the comparable period of 2013. This resulted
in a cash operating margin1 of $15.81 per silver equivalent ounce, a reduction of 38% as compared to
Q1 2013. The decrease in the cash operating margin was due to a 31%
decrease in the silver equivalent price realized in Q1 2014 compared to
Q1 2013.
Cash costs rose year over year primarily due to an increase in gold
sales (30,100 ounces in Q1 2014 compared to 16,900 ounces in Q1 2013)
associated with Vale S.A.'s ("Vale") Sudbury and Salobo mines. The
average cash cost per gold ounce1 was $381, or $6.06 per silver equivalent ounce2.
Earnings and Operating Cash Flows
Net earnings and cash flow from operations in the first quarter of 2014
were $79.8 million ($0.22 per share) and $114.8 million ($0.32 per
share¹), compared with $133.4 million ($0.38 per share) and $165.6
million ($0.47 per share¹) for the same period in 2013, a decrease of
40% and 31%, respectively. Earnings and cash flow continued to be
impacted by lower gold and silver prices.
Balance Sheet
At March 31, 2014, the Company had approximately $82.0 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.
In accordance with the provisions of the Company's US$1 billion
non-revolving term loan ("NRT Loan"), Silver Wheaton has extended the
term of the NRT Loan by one year to May 28, 2017. As of March 31, 2014,
Silver Wheaton had $1 billion outstanding under the NRT Loan.
____________________________ 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 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
During the first quarter of 2014, attributable silver equivalent
production was 9.0 million ounces (6.9 million ounces of silver and
33,800 ounces of gold), representing an increase of 8% compared to the
first quarter of 2013.
Operational highlights for the quarter ended March 31, 2014, are as
follows:
San Dimas -
As per Primero Mining Corp.'s ("Primero") first quarter 2014
Management's Discussion and Analysis ("MD&A"), the expansion of the San
Dimas mine from 2,150 tonnes per day ("tpd") to 2,500 tpd was completed
during the first quarter of 2014. Throughput in the first quarter
averaged 2,422 tpd. In addition, Primero also indicated that recoveries
are expected to improve in the second quarter 2014 with the completion
of an additional leaching tank and additional thickener. Primero
continues to review the option to further expand the San Dimas mine to
3,000 tpd.
Peñasquito-
As stated in Goldcorp Inc.'s ("Goldcorp") first quarter 2014 MD&A,
permitting for the Northern Well Field project, which will add 25 new
production wells, has been delayed due to unanticipated additional
regulatory requirements related to the interconnection with the
existing well fields, securing surface land access rights, and
additional permitting requirements by the environmental authority.
Goldcorp now expects construction to begin during mid-2014 with
completion expected around mid-2015. Contingency plans have been
developed for fresh water production at the mine to ensure plant
production continues as planned. The long term tailings study continued
on schedule this quarter with results still expected in the second
quarter of 2014.
Goldcorp has indicated that Peñasquito's exploration drilling program
continued in the first quarter of 2014, resulting in a total of 6,334
metres drilled. The exploration program continues to define the
intersection of the copper-gold sulphide rich skarn ore body and
porphyry deposit located below and adjacent to the diatreme ore body.
In addition to exploration, Goldcorp is investigating the potential for
producing a saleable copper concentrate at Peñasquito as well as
assessing the viability of leaching a pyrite concentrate from the zinc
flotation tailings. Successful implementation of one or both of these
new process improvements has the potential to significantly improve the
overall economics and add to the mineral reserves of Peñasquito. As
highlighted in Goldcorp's Investor Day presentation on April 10, 2014,
these initiatives, if successfully implemented, could also result in an
additional 4 to 5 million ounces of silver dore production per year (or
1 to 1.25 million ounces net to Silver Wheaton).
Salobo -
As per Vale's first quarter 2014 MD&A, the expansion of the mill
throughput capacity at the Salobo mine to 24 million tonnes per annum
("Mtpa") from its current 12 Mtpa reached 97% physical completion in
the first quarter of 2014. The expansion is expected to come on stream
in the second quarter of this year.
Sudbury -
As per Vale's February 21, 2014 news release, Vale officially opened the
Totten mine during the first quarter of 2014. Vale stated that the mine
is expected to ramp up to full production in 2016 and process 2,200
tons per day of ore containing copper, nickel and precious metals for
approximately 20 years.
Constancia -
As per Hudbay's first quarter 2014 MD&A, the Constancia project in Peru
remains on track for initial production in the fourth quarter of 2014
and commercial production in the second quarter of 2015. Hudbay has
incurred $1.2 billion in costs as of March 31, 2014, and the project is
now over 71% complete. As per the agreement with Hudbay, in the first
quarter Silver Wheaton paid Hudbay the final payment of $125 million in
connection with the silver stream on the Constancia Project as Hudbay's
total expenditures related to Constancia reached $1 billion. An
additional $135 million1 relative to the gold stream on Constancia will be paid to Hudbay once
$1.35 billion in capital expenditures has been incurred on Constancia.
Produced But Not Yet Delivered2-
Payable silver equivalent ounces produced but not yet delivered to
Silver Wheaton by its partners increased by 0.1 million ounces to
approximately 6.3 million silver equivalent payable ounces at March 31,
2014, primarily as a result of an increase related to the 777 mine
largely offset by a decrease related to the Yauliyacu mine.
Detailed mine by mine production and sales figures can be found in the
Appendix to this press release and in Silver Wheaton's MD&A in the
'Results of Operations and Operational Review' section.
________________________________ 1 Silver Wheaton has the option to make the $135 million payment in either
cash or Silver Wheaton shares, calculated with the number of shares
determined at the time the payment is made.
2 Payable silver equivalent ounces produced but not yet delivered are
based on management estimates, and may be updated in future periods as
additional information is received.
Webcast and Conference Call Details
A conference call will be held Friday, May 9, 2014, starting at 11:00 am
(Eastern Time) to discuss these results. To participate in the live
call, please use one of the following methods:
Silver Wheaton is the largest precious metals streaming company in the
world. Based upon its current agreements, forecast 2014 annual
attributable production is approximately 36 million silver equivalent
ounces1 including 155,000 ounces of gold. By 2018, annual attributable
production is anticipated to increase significantly to approximately 48
million silver equivalent ounces1, including 250,000 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.
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.
____________________________ 1 Silver equivalent production forecast assumes a gold/silver ratio of
60:1.
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 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, 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 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, that Silver Wheaton will be successful in
challenging any reassessment by the Canada Revenue Agency 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.
CAUTIONARY LANGUAGE REGARDING RESERVES AND RESOURCES
For further information on Mineral Reserves and Mineral Resources and on
Silver Wheaton more generally, readers should refer to Silver Wheaton's
Annual Information Form for the year ended December 31, 2013, and other
continuous disclosure documents filed by Silver Wheaton since January
1, 2014, available on SEDAR at www.sedar.com. Silver Wheaton's Mineral Reserves and Mineral Resources are subject to
the qualifications and notes set forth therein. Mineral Resources which
are not Mineral Reserves do not have demonstrated economic viability.
Cautionary Note to United States Investors Concerning Estimates of
Measured, Indicated and Inferred Mineral Resources: The information contained herein uses the terms "Measured", "Indicated"
and "Inferred" Mineral Resources. United States investors are advised
that while such terms are recognized and required by Canadian
regulations, the United States Securities and Exchange Commission does
not recognize them and expressly prohibits U.S. registered companies
from including such terms in their filings with the SEC. "Inferred
Mineral Resources" have a great amount of uncertainty as to their
existence, and as to their economic and legal feasibility. It cannot be
assumed that all or any part of an Inferred Mineral Resource will ever
be upgraded to a higher category. Under Canadian rules, estimates of
Inferred Mineral Resources may not form the basis of feasibility or
other economic studies. United States investors are cautioned not to
assume that all or any part of Measured or Indicated Mineral Resources
will ever be converted into Mineral Reserves or that any exploration
potential will ever be converted to any category of Mineral Reserves or
Mineral Resources. United States investors are also cautioned not to
assume that all or any part of an Inferred Mineral Resource exists, or
is economically or legally mineable. United States investors are urged
to consider closely the disclosure in Silver Wheaton's Form 40-F, a
copy of which may be obtained from Silver Wheaton or from http://www.sec.gov/edgar.shtml.
Consolidated Statement of Earnings
Three Months Ended
March 31
(US dollars and shares in thousands, except per share amounts -
unaudited)
2014
2013
Sales
$
165,379
$
205,761
Cost of sales
Cost of sales, excluding depletion
$
37,088
$
30,410
Depletion
36,621
24,341
Total cost of sales
$
73,709
$
54,751
Earnings from operations
$
91,670
$
151,010
Expenses and other income
General and administrative 1
$
10,110
$
9,893
Foreign exchange gain
(281)
(111)
Interest expense
1,108
680
Other expense
910
2,845
$
11,847
$
13,307
Earnings before income taxes
$
79,823
$
137,703
Income tax expense
(14)
(4,282)
Net earnings
$
79,809
$
133,421
Basic earnings per share
$
0.22
$
0.38
Diluted earnings per share
$
0.22
$
0.37
Weighted average number of shares outstanding
Basic
357,398
354,423
Diluted
357,940
356,382
$
2,182
$
1,470
1) Equity settled stock based compensation (a non-cash item) included in
general and administrative expenses.
Consolidated Balance Sheets
March 31
December 31
(US dollars in thousands - unaudited)
2014
2013
Assets
Current assets
Cash and cash equivalents
$
81,970
$
95,823
Accounts receivable
5,064
4,619
Other
1,212
845
Total current assets
$
88,246
$
101,287
Non-current assets
Silver and gold interests
$
4,320,048
$
4,228,484
Early deposit - gold interest
13,599
13,602
Long-term investments
48,945
40,801
Other
6,027
5,670
Total non-current assets
$
4,388,619
$
4,288,557
Total assets
$
4,476,865
$
4,389,844
Liabilities
Current liabilities
Accounts payable and accrued liabilities
$
17,655
$
20,416
Dividends payable
25,019
-
Current portion of performance share units
1,380
718
Total current liabilities
$
44,054
$
21,134
Non-current liabilities
Long-term portion of bank debt
$
997,750
$
998,136
Deferred income taxes
2,151
2,191
Performance share units
1,235
1,837
Total non-current liabilities
$
1,001,136
$
1,002,164
Total liabilities
$
1,045,190
$
1,023,298
Shareholders' equity
Issued capital
$
1,880,013
$
1,879,475
Reserves
(15,817)
(25,618)
Retained earnings
1,567,479
1,512,689
Total shareholders' equity
$
3,431,675
$
3,366,546
Total liabilities and shareholders' equity
$
4,476,865
$
4,389,844
Consolidated Statement of Cash Flows
Three Months Ended
March 31
(US dollars in thousands - unaudited)
2014
2013
Operating activities
Net earnings
$
79,809
$
133,421
Adjustments for
Depreciation and depletion
36,688
24,393
Amortization of credit facility origination fees:
Interest expense
55
146
Amortization of credit facility origination fees - undrawn facilities
251
1,005
Interest expense
1,053
534
Equity settled stock based compensation
2,182
1,470
Performance share units
147
214
Deferred income tax (recovery) expense
(40)
4,239
Loss (gain) on fair value adjustment of share purchase warrants held
-
1,330
Investment income recognized in net earnings
(85)
(231)
Other
(78)
(4)
Change in non-cash working capital
(4,132)
(1,110)
Cash generated from operations
$
115,850
$
165,407
Interest paid - expensed
(1,046)
-
Interest received
28
205
Cash generated from operating activities
$
114,832
$
165,612
Financing activities
Bank debt repaid
$
-
$
(50,060)
Bank debt drawn
-
1,090,000
Credit facility origination fees
(600)
(11,518)
Share purchase warrants exercised
-
2,975
Share purchase options exercised
13
1,042
Cash generated from (applied to) financing activities
$
(587)
$
1,032,439
Investing activities
Silver and gold interests
$
(125,082)
$
(1,900,620)
Interest paid - capitalized to silver interests
(2,891)
(138)
Silver and gold interests - early deposit
(149)
-
Dividend income received
57
57
Other
(26)
(19)
Cash applied to investing activities
$
(128,091)
$
(1,900,720)
Effect of exchange rate changes on cash and cash equivalents
$
(7)
$
(12)
Decrease in cash and cash equivalents
$
(13,853)
$
(702,681)
Cash and cash equivalents, beginning of period
95,823
778,216
Cash and cash equivalents, end of period
$
81,970
$
75,535
Summary of Ounces Produced and Sold
2014
2013
2012
Q1
Q4
Q3
Q2
Q1
Q4
Q3
Q2
Silver ounces produced ²
San Dimas ³
1,608
1,979
1,660
1,160
1,743
1,694
1,288
1,231
Yauliyacu ²
718
687
639
668
624
616
640
606
Peñasquito
2,052
2,047
1,636
1,440
1,093
1,445
1,940
1,822
Barrick ⁴
301
423
465
556
741
769
617
455
Other ⁵
2,181
2,119
2,450
2,586
2,038
2,345
2,251
2,378
Total silver ounces produced
6,860
7,255
6,850
6,410
6,239
6,869
6,736
6,492
Gold ounces produced ²
777
12,785
14,134
18,259
16,986
16,951
19,615
11,824 ⁸
-
Sudbury
6,082
6,920
7,341
8,840
9,846
-
-
-
Salobo
8,903
10,067
8,061
6,342
4,677
-
-
-
Other ⁶
6,016
9,530
2,894
4,226
5,967
6,785
5,200
3,710
Total gold ounces produced
33,786
40,651
36,555
36,394
37,441
26,400
17,024
3,710
Silver equivalent ounces of gold produced ⁷
2,117
2,468
2,237
2,269
2,095
1,432
881
218
Silver equivalent ounces produced ⁷
8,977
9,723
9,087
8,679
8,334
8,301
7,617
6,710
Silver ounces sold
San Dimas ³
1,529
2,071
1,560
1,194
1,850
1,629
1,178
1,295
Yauliyacu
1,097
674
13
559
149
1,097
184
1,155
Peñasquito
1,840
1,412
1,388
1,058
1,459
1,642
1,304
1,845
Barrick ⁴
361
397
447
560
753
826
528
470
Other ⁵
1,398
1,510
2,257
1,771
1,741
2,153
1,592
2,024
Total silver ounces sold
6,225
6,064
5,665
5,142
5,952
7,347
4,786
6,789
Gold ounces sold
777
6,294
15,889
16,972
23,483
9,414
28,084
-
-
Sudbury
6,878
6,551
6,534
4,184
111
-
-
-
Salobo
10,560
6,944
6,490
2,793
720
-
-
-
Other ⁶
6,390
1,840
5,287
3,409
6,698
4,876
6,905
2,369
Total gold ounces sold
30,122
31,224
35,283
33,869
16,943
32,960
6,905
2,369
Silver equivalent ounces of gold sold ⁷
1,891
1,909
2,163
2,097
971
1,784
357
139
Silver equivalent ounces sold⁷
8,116
7,973
7,828
7,239
6,923
9,131
5,143
6,928
Gold / silver ratio ⁷
62.8
61.1
61.3
61.9
57.3
54.1
51.7
58.7
Cumulative payable silver equivalent ounces produced but not yet delivered ⁹
6,332
6,273
5,492
4,994
4,264
3,478
5,038
3,114
1)
All figures in thousands except gold ounces produced and sold.
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. 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
completes a review of the timing and amount of any production variance.
3)
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.
4)
Comprised of the Lagunas Norte, Pierina and Veladero silver interests.
5)
Comprised of the Los Filos, Zinkgruvan, Mineral Park, Cozamin,
Neves-Corvo, Stratoni, Keno Hill, Minto, 777, Aljustrel and Campo
Morado silver interests.
6)
Comprised of the Minto gold interest.
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.
8)
Represents production for the period August 8, 2012 to September 30,
2012.
9)
Payable silver equivalent ounces produced but not yet delivered are
based on management estimates. These figures may be updated in future
periods as additional information is received
Results of Operations (unaudited)
The Company currently has nine reportable operating segments: the silver
produced by the San Dimas, Yauliyacu, Peñasquito and Barrick mines, the
gold produced by the 777, Sudbury and Salobo mines, the silver and gold
produced by the Other mines and corporate operations.
Three Months Ended March 31, 2014
Ounces
Produced²
Ounces
Sold
Sales
Average
Realized
Price
($'s Per
Ounce)
Average
Cash
Cost
($'s Per
Ounce)3
Average
Depletion
($'s Per
Ounce)
Net
Earnings
Cash Flow
From
Operations
Total
Assets
Silver
San Dimas 4
1,608
1,529
$
31,608
$
20.67
$
4.17
$
0.81
$
23,986
$
25,232
$
156,246
Yauliyacu
718
1,097
22,166
20.21
4.12
5.92
11,147
17,646
200,778
Peñasquito
2,052
1,840
37,562
20.42
4.05
2.98
24,632
30,111
466,810
Barrick 5
301
361
7,407
20.53
3.90
3.26
4,823
6,765
602,315
Other 6
2,181
1,398
28,001
20.02
4.19
3.99
16,551
23,288
670,088
6,860
6,225
$
126,744
$
20.36
$
4.12
$
3.21
$
81,139
$
103,042
$
2,096,237
Gold
777
12,785
6,294
$
8,039
$
1,277
$
400
$
823
$
344
$
5,522
$
274,848
Sudbury
6,082
6,878
8,812
1,281
400
841
273
6,060
1,317,606
Salobo
8,903
10,560
13,479
1,276
400
462
4,378
9,255
603,666
Other 7
6,016
6,390
8,305
1,300
309
124
5,536
5,886
27,691
33,786
30,122
$
38,635
$
1,283
$
381
$
552
$
10,531
$
26,723
$
2,223,811
Silver equivalent 8
8,977
8,116
$
165,379
$
20.38
$
4.57
$
4.51
$
91,670
$
129,765
$
4,320,048
Corporate
General and administrative
$
(10,110)
Other
(1,751)
Total corporate
$
(11,861)
$
(14,933)
$
156,817
8,977
8,116
$
165,379
$
20.38
$
4.57
$
4.51
$
79,809
$
114,832
$
4,476,865
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,
Loma de La Plata and Constancia silver interests.
7)
Comprised of the operating Minto gold interest in addition to the
non-operating Constancia and Rosemont gold interests.
8)
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 March 31, 2013
Ounces
Produced²
Ounces
Sold
Sales
Average
Realized
Price
($'s Per
Ounce)
Average
Cash
Cost
($'s Per
Ounce)3
Average
Depletion
($'s Per
Ounce)
Net
Earnings
Cash Flow
From
Operations
Total
Assets
Silver
San Dimas 4
1,743
1,850
$
53,903
$
29.13
$
4.13
$
0.82
$
44,753
$
46,262
$
161,427
Yauliyacu
624
149
4,759
31.94
4.08
5.75
3,295
4,151
214,439
Peñasquito
1,093
1,459
43,574
29.87
4.02
2.66
33,834
37,709
483,397
Barrick 5
741
753
23,625
31.37
3.90
2.54
18,776
24,592
596,621
Other 6
2,038
1,741
52,037
29.90
4.15
4.07
37,738
45,692
447,675
6,239
5,952
$
177,898
$
29.89
$
4.08
$
2.56
$
138,396
$
158,406
$
1,903,559
Gold
777
16,951
9,414
$
15,372
$
1,633
$
400
$
802
$
4,060
$
7,634
$
325,191
Sudbury
9,846
111
179
1,609
400
823
44
134
1,330,022
Salobo
4,677
720
1,153
1,602
400
463
531
865
623,776
Other 7
5,967
6,698
11,159
1,666
304
171
7,979
8,734
29,443
37,441
16,943
$
27,863
$
1,645
$
362
$
538
$
12,614
$
17,367
$
2,308,432
Silver equivalent 8
8,334
6,923
$
205,761
$
29.72
$
4.39
$
3.52
$
151,010
$
175,773
$
4,211,991
Corporate
General and administrative
$
(9,893)
Other
(7,696)
Total corporate
$
(17,589)
$
(10,161)
$
188,262
8,334
6,923
$
205,761
$
29.72
$
4.39
$
3.52
$
133,421
$
165,612
$
4,400,253
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,
Loma de La Plata and Constancia silver interests.
7)
Comprised of the operating Minto gold interest in addition to the
non-operating Rosemont gold interest.
8)
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 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.
