Silver Wheaton Reports Second Quarter Results for 2014
VANCOUVER, British Columbia, August 13, 2014 /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, 2014. All figures are presented in United States dollars unless otherwise noted.
SECOND QUARTER HIGHLIGHTS
- Attributable silver equivalent production in Q2 2014 of 8.4 million ounces (6.3 million ounces of silver and 31,400 ounces of gold), compared to 8.7 million ounces in Q2 2013, representing a decrease of 4%.
- Attributable silver equivalent sales volume in Q2 2014 of 7.5 million ounces (5.2 million ounces of silver and 34,800 ounces of gold), compared to 7.2 million ounces in Q2 2013, representing an increase of 4%.
- Revenues of $148.6 million in Q2 2014 compared with $166.9 million in Q2 2013, representing a decrease of 11%.
- Average realized sale price per silver equivalent ounce sold in Q2 2014 of $19.83 ($19.81 per ounce of silver and $1,295 per ounce of gold), representing a decrease of 14% as compared to Q2 2013.
- Net earnings of $63.5 million ($0.18 per share) in Q2 2014 compared with $71.1 million ($0.20 per share) in Q2 2013, representing a decrease of 11%.
- Operating cash flows of $102.5 million ($0.29 per share[1]) in Q2 2014 compared with $125.3 million ($0.35 per share[1]) in Q2 2013, representing a decrease of 18%.
- Cash operating margin[1] in Q2 2014 of $15.11 per silver equivalent ounce compared with $18.28 in Q2 2013.
- Average cash costs[1] in Q2 2014 were $4.15 and $393 per ounce of silver and gold, respectively. On a silver equivalent basis, average cash costs[1] decreased to $4.72 compared with $4.77 in Q2 2013.
- Declared quarterly dividend of $0.06 per common share.
- Asset Highlights:
- Subsequent to the quarter end, Primero Mining Corp. ("Primero") announced its decision to expand the San Dimas mine to 3,000 from 2,500 tonnes per day.
- Vale S.A.'s ("Vale") Salobo II expansion, which will double the mill throughput capacity to 24 million tonnes per annum, was completed and first ore processed in Q2.
- Hudbay Minerals Inc. ("Hudbay") announced that the Constancia project is approximately 85% complete as of the end of Q2.
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[1] Please refer to non-IFRS measures at the end of this press release.
"In the second quarter, we saw substantial steps forward at Salobo and Constancia, two of our key growth platforms," said Randy Smallwood, President and Chief Executive Officer of Silver Wheaton. "Most significantly, Vale received first production from Salobo II, the expansion which doubles the mill's capacity. At Constancia, Hudbay continues to advance the project, which is now approximately 85% complete, and we look forward to seeing production from Constancia in the fourth quarter of this year. In addition, one of Silver Wheaton's cornerstone assets, Peñasquito, also advanced during the quarter. Not only did Peñasquito achieve record production despite continued water issues, Goldcorp also continues to highlight the significant potential upside of the mine. Finally, another of our cornerstone assets, San Dimas, completed an expansion to 2,500 tonnes per day earlier this year and Primero has recently announced a further expansion to 3,000 tonnes per day. Given the progress being made at our diversified portfolio of mines and projects, we believe that Silver Wheaton is on the cusp of seeing its next stage of growth realized, leaving it well-positioned to benefit from rebounding precious metal prices."
Financial Review
Revenues
Revenue was $148.6 million in the second quarter of 2014, on silver equivalent sales of 7.5 million ounces (5.2 million ounces of silver and 34,800 ounces of gold). This represents an 11% decrease from the $166.9 million of revenue generated in the second quarter of 2013, due primarily to a 14% decrease in the average realized silver equivalent price ($19.83 in Q2 2014 compared to $23.05 in Q2 2013), partially offset by a 4% increase in the number of silver equivalent ounces sold.
Costs and Expenses
Average cash costs[1] in the second quarter of 2014 were $4.72 per silver equivalent ounce as compared to $4.77 during the comparable period of 2013. This resulted in a cash operating margin[1]of $15.11 per silver equivalent ounce, a reduction of 17% as compared to Q2 2013. The decrease in the cash operating margin was primarily due to a 14% decrease in the average silver equivalent price realized in Q2 2014 compared to Q2 2013.
Earnings and Operating Cash Flows
Net earnings and cash flow from operations in the second quarter of 2014 were $63.5 million ($0.18 per share) and $102.5 million ($0.29 per share[1]), compared with $71.1 million ($0.20 per share) and $125.3 million ($0.35 per share[1]) for the same period in 2013, a decrease of 11% and 18%, respectively. Earnings and cash flow continued to be impacted by lower gold and silver prices.
Balance Sheet
At June 30, 2014, the Company had approximately $139.2 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.
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[1] Please refer to non-IFRS measures at the end of this press release.
Operational and Development Highlights
During the second quarter of 2014, attributable silver equivalent production was 8.4 million ounces (6.3 million ounces of silver and 31,400 ounces of gold), representing a decrease of 4% compared to the second quarter of 2013.
Operational highlights for the quarter ended June 30, 2014, are as follows:
San Dimas -
As per Primero's second quarter 2014 Management's Discussion and Analysis ("MD&A"), mill throughput in the second quarter averaged 2,405 tonnes per day ("tpd"), below the current capacity of 2,500 tpd due to a planned nine day shutdown at the Company's hydro-power facility in order to expand its capacity. In addition, Primero recently announced its decision to expand the San Dimas mine to 3,000 tpd.
Peñasquito -
As per Goldcorp Inc.'s ("Goldcorp") second quarter 2014 MD&A, Peñasquito had record production in the second quarter driven by higher mill throughput and higher ore grades as mining continued at the bottom of Phase 4. Initial permits for the Northern Well Field ("NWF") were received, allowing construction to commence, with completion expected mid-year 2015. Goldcorp indicated that contingency plans remain in place for fresh water supply to Peñasquito until the NWF is operational. The studies for the long-term tailings facility continued during the second quarter of 2014, and Goldcorp indicated that three viable options are being evaluated. Additionally, the existing tailings facility life has been extended to 2018.
Goldcorp has indicated that in the second quarter of 2014, Peñasquito's exploration drilling program continued to focus on defining the copper-gold sulphide rich skarn deposit located below and adjacent to the diatreme ore body. Current exploration activities include drilling to establish the vertical and horizontal size and extent of the skarn deposit.
In addition to exploration, Goldcorp is investigating the potential for producing a saleable copper concentrate at Peñasquito (the Concentrate Enrichment Project or "CEP") as well as assessing the viability of leaching a pyrite concentrate from the zinc flotation tailings ("Pyrite Leach"). Pre-feasibility studies for CEP and Pyrite Leach are advancing and expected to be completed in late 2014 and early 2015, respectively. Successful implementation of one or both of these projects has the potential to significantly improve the overall economics and add to the reserves and resources of Peñasquito through the addition of another saleable product, and to increase gold and silver recoveries, respectively.
Salobo -
As per Vale's second quarter 2014 MD&A, Salobo II - the expansion of the mill throughput capacity at the Salobo mine to 24 million tonnes per annum ("Mtpa") - was completed in the second quarter with first production of copper concentrate achieved on June 5, 2014. Salobo I, the original 12 Mtpa line, experienced minor delays in its ramp-up in the second quarter as the components of the Salobo II project were connected into the operation.
Sudbury -
As per Vale's second quarter 2014 MD&A, second quarter production was impacted by planned annual maintenance at some surface facilities. However, Vale indicated that during this year's scheduled maintenance, the Sudbury mines - which are the bottleneck in the Sudbury system - did not stop producing. They continued to build up inventory of ore and concentrates, which Vale anticipates should be smelted and refined in the second half of this year. As a result, Vale expects stronger output for the second half of 2014, compensating for the planned lower production in the second quarter.
Other -
Constancia - As per Hudbay's second quarter 2014 MD&A, the Constancia project in Peru is approximately 85% complete and remains on track for initial production in the fourth quarter of 2014 and commercial production in the second quarter of 2015. Key milestones have been achieved, including the construction of the power transmission line from Tintaya to Constancia, the placement of first ore on the run of mine pad in July, and the commencement of commissioning activities on the primary crusher and coarse ore stockpile conveying systems. As per the agreement with Hudbay, a final payment of $135 million[1] relative to the gold stream on Constancia will be paid to Hudbay once $1.35 billion in capital expenditures has been incurred by Hudbay on Constancia. Silver Wheaton's payment to Hudbay is expected to be made in the third quarter of 2014.
MineralPark - As per Mercator Minerals Ltd.'s ("Mercator") news release dated August 1, 2014, the proposed business combination between Mercator and Intergeo MMC Ltd. ("Intergeo") has been terminated. As a result of the termination of the arrangement, Mercator has indicated that certain events of default have occurred and are continuing under the credit agreement entered into between Mercator's indirect wholly owned subsidiary, Mineral Park Inc. ("MPI"), and its senior lenders, and under the bridge loan agreement entered into between Mineral Park and Intergeo's controlling shareholder, Daselina Investments Ltd. The MPI lenders have agreed to forebear from exercising their various rights and remedies under the credit agreement, until August 15, 2014. Under the current streaming agreement, Silver Wheaton is entitled to 100% of the payable silver from the Mineral Park mine.
Produced But Not Yet Delivered [2]-
Payable silver equivalent ounces produced but not yet delivered to Silver Wheaton by its partners decreased by 0.1 million ounces to approximately 6.3 million silver equivalent payable ounces at June 30, 2014. A large increase in produced but not yet delivered ounces at the Yauliyacu mine was more than offset by significant decreases at the Salobo, 777, Peñasquito, and Sudbury mines.
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.
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[1] Silver Wheaton has the option to make the $135 million payment in either cash or Silver Wheaton shares. If the latter, the number of shares is calculated 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 Thursday, August 14, 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: 71008064
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: 855-859-2056
Dial from outside Canada or the US: 416-849-0833
Pass code: 71008064
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 2014 annual attributable production is approximately 36 million silver equivalent ounces[1], including 155,000 ounces of gold. By 2018, annual attributable production is anticipated to increase significantly to approximately 48 million silver equivalent ounces[1], 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 http://www.silverwheaton.com and have been posted on SEDAR at http://www.sedar.com.
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[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 (including 2014 and 2018 attributable annual 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 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, 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 http://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
(US dollars and shares in thousands, except per share June 30
amounts - unaudited) 2014 2013
Sales $ 148,570 $ 166,890
Cost of sales
Cost of sales, excluding
depletion $ 35,368 $ 34,497
Depletion 38,514 41,362
Total cost of sales $ 73,882 $ 75,859
Earnings from operations $ 74,688 $ 91,031
Expenses and other income
General and administrative
[1] $ 10,375 $ 8,876
Foreign exchange loss
(gain) 147 (75)
Interest expense 591 2,525
Other expense 933 6,926
$ 12,046 $ 18,252
Earnings before income taxes $ 62,642 $ 72,779
Income tax recovery (expense) 850 (1,662)
Net earnings $ 63,492 $ 71,117
Basic earnings per share $ 0.18 $ 0.20
Diluted earnings per share $ 0.18 $ 0.20
Weighted average number of shares outstanding
Basic 357,655 354,800
Diluted 358,097 355,804
$ 2,034 $ 2,375
Table continues
Consolidated Statement of Earnings
Six Months Ended
June 30
(US dollars and shares in thousands, except per share
amounts - unaudited) 2014 2013
Sales $ 313,949 $ 372,651
Cost of sales
Cost of sales, excluding
depletion $ 72,456 $ 64,907
Depletion 75,136 65,703
Total cost of sales $ 147,592 $ 130,610
Earnings from operations $ 166,357 $ 242,041
Expenses and other income
General and administrative
[1] $ 20,485 $ 18,768
Foreign exchange loss
(gain) (134) (185)
Interest expense 1,699 3,205
Other expense 1,842 9,771
$ 23,892 $ 31,559
Earnings before income taxes $ 142,465 $ 210,482
Income tax recovery (expense) 836 (5,944)
Net earnings $ 143,301 $ 204,538
Basic earnings per share $ 0.40 $ 0.58
Diluted earnings per share $ 0.40 $ 0.57
Weighted average number of shares outstanding
Basic 357,453 354,612
Diluted 357,945 356,112
$ 4,216 $ 3,845
Equity settled stock based compensation (a non-cash item)
1) included in general and administrative expenses.
Consolidated Balance Sheets
June 30 December 31
(US dollars in thousands - unaudited) 2014 2013
Assets
Current assets
Cash and cash equivalents $ 139,199 $ 95,823
Accounts receivable 7,911 4,619
Other 1,811 845
Total current assets $ 148,921 $ 101,287
Non-current assets
Silver and gold interests $ 4,285,347 $ 4,228,484
Early deposit - gold interest 13,599 13,602
Long-term investments 68,038 40,801
Other 5,690 5,670
Total non-current assets $ 4,372,674 $ 4,288,557
Total assets $ 4,521,595 $ 4,389,844
Liabilities
Current liabilities
Accounts payable and accrued liabilities $ 18,109 $ 20,416
Current portion of performance share units 1,792 718
Total current liabilities $ 19,901 $ 21,134
Non-current liabilities
Long-term portion of bank debt $ 997,990 $ 998,136
Deferred income taxes 1,243 2,191
Performance share units 2,257 1,837
Total non-current liabilities $ 1,001,490 $ 1,002,164
Total liabilities $ 1,021,391 $ 1,023,298
Shareholders' equity
Issued capital $ 1,890,102 $ 1,879,475
Reserves 3,626 (25,618)
Retained earnings 1,606,476 1,512,689
Total shareholders' equity $ 3,500,204 $ 3,366,546
Total liabilities and shareholders' equity $ 4,521,595 $ 4,389,844
Consolidated Statement of Cash Flows
Three Months Ended
June 30
(US dollars in thousands - unaudited) 2014 2013
Operating activities
Net earnings $ 63,492 $ 71,117
Adjustments for
Depreciation and depletion 38,580 41,417
Amortization of credit facility
origination fees:
Interest expense 35 278
Amortization of
credit facility
origination fees -
undrawn facilities 257 423
Write off of credit
facility origination
fees upon the
cancellation of the
Bridge Facility - 4,490
Interest expense 556 2,247
Equity settled stock based compensation 2,034 2,375
Performance share units 1,349 (95)
Deferred income tax (recovery) expense (907) 1,631
Loss on fair value adjustment of share
purchase warrants held - 1,364
Investment income recognized in net
earnings (74) (63)
Other 32 67
Change in non-cash working capital (2,253) 2,727
Cash generated from operations $ 103,101 $ 127,978
Interest paid - expensed (575) (2,727)
Interest received 17 7
Cash generated from operating activities $ 102,543 $ 125,258
Financing activities
Bank debt repaid $ - $ (1,530,000)
Bank debt drawn - 1,585,000
Credit facility origination fees (19) (2,433)
Share purchase warrants exercised - 7
Share purchase options exercised 3,683 4,909
Dividends paid (44,792) (92,219)
Cash generated from (applied to) financing activities $ (41,128) $ (34,736)
Investing activities
Silver and gold interests $ (52) $ (124,855)
Interest paid - capitalized to silver interests (3,607) (4,707)
Silver and gold interests - early deposit - -
Dividend income received 57 56
Other (642) (156)
Cash applied to investing activities $ (4,244) $ (129,662)
Effect of exchange rate changes on cash and cash equivalents 58 $ (138)
Increase (decrease) in cash and cash equivalents $ 57,229 $ (39,278)
Cash and cash equivalents, beginning of period 81,970 75,535
Cash and cash equivalents, end of period $ 139,199 $ 36,257
Table continues
Consolidated Statement of Cash Flows
Six Months Ended
June 30
(US dollars in thousands - unaudited) 2014 2013
Operating activities
Net earnings $ 143,301 $ 204,538
Adjustments for
Depreciation and depletion 75,268 65,808
Amortization of credit facility
origination fees:
Interest expense 90 424
Amortization of
credit facility
origination fees -
undrawn facilities 508 1,428
Write off of credit
facility origination
fees upon the
cancellation of the
Bridge Facility - 4,490
Interest expense 1,609 2,781
Equity settled stock based compensation 4,216 3,845
Performance share units 1,496 119
Deferred income tax (recovery) expense (947) 5,870
Loss on fair value adjustment of share
purchase warrants held - 2,694
Investment income recognized in net
earnings (159) (294)
Other (46) 65
Change in non-cash working capital (6,385) 1,617
Cash generated from operations $ 218,951 $ 293,385
Interest paid - expensed (1,621) (2,727)
Interest received 45 212
Cash generated from operating activities $ 217,375 $ 290,870
Financing activities
Bank debt repaid $ - $ (1,580,060)
Bank debt drawn - 2,675,000
Credit facility origination fees (619) (13,951)
Share purchase warrants exercised - 2,982
Share purchase options exercised 3,696 5,951
Dividends paid (44,792) (92,219)
Cash generated from (applied to) financing activities $ (41,715) $ 997,703
Investing activities
Silver and gold interests $ (125,134) $ (2,025,475)
Interest paid - capitalized to silver interests (6,498) (4,845)
Silver and gold interests - early deposit (149) -
Dividend income received 114 113
Other (668) (175)
Cash applied to investing activities $ (132,335) $ (2,030,382)
Effect of exchange rate changes on cash and cash equivalents 51 $ (150)
Increase (decrease) in cash and cash equivalents $ 43,376 $ (741,959)
Cash and cash equivalents, beginning of period 95,823 778,216
Cash and cash equivalents, end of period $ 139,199 $ 36,257
Summary of
Ounces
Produced
and Sold
2014 2013 2012
Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3
Silver
ounces
produced
[2]
San Dimas
[3] 1,118 1,608 1,979 1,660 1,160 1,743 1,694 1,288
Yauliyacu 658 718 687 639 668 624 616 640
Peñasquito 2,054 2,052 2,047 1,636 1,440 1,093 1,445 1,940
Barrick [4] 299 301 423 465 556 741 769 617
Other [5] 2,182 2,185 2,119 2,450 2,586 2,038 2,345 2,251
Total
silver
ounces
produced 6,311 6,864 7,255 6,850 6,410 6,239 6,869 6,736
Gold ounces
produced
[2]
777 11,611 12,785 14,134 18,259 16,986 16,951 19,615 11,824
Sudbury 6,086 6,426 7,060 7,341 8,840 9,846 - -
Salobo 8,486 8,903 10,067 8,061 6,342 4,677 - -
Other [6] 5,185 5,749 9,530 2,894 4,226 5,967 6,785 5,200
Total gold
ounces
produced 31,368 33,863 40,791 36,555 36,394 37,441 26,400 17,024
Silver
equivalent
ounces of
gold
produced
[7] 2,054 2,121 2,476 2,237 2,269 2,095 1,432 881
Silver
equivalent
ounces
produced
[7] 8,365 8,985 9,731 9,087 8,679 8,334 8,301 7,617
Silver
ounces sold
San Dimas
[3] 1,194 1,529 2,071 1,560 1,194 1,850 1,629 1,178
Yauliyacu 111 1,097 674 13 559 149 1,097 184
Peñasquito 1,958 1,840 1,412 1,388 1,058 1,459 1,642 1,304
Barrick [4] 291 361 397 447 560 753 826 528
Other [5] 1,673 1,398 1,510 2,257 1,771 1,741 2,153 1,592
Total
silver
ounces sold 5,227 6,225 6,064 5,665 5,142 5,952 7,347 4,786
Gold ounces
sold
777 13,599 6,294 15,889 16,972 23,483 9,414 28,084 -
Sudbury 6,718 6,878 6,551 6,534 4,184 111 - -
Salobo 11,902 10,560 6,944 6,490 2,793 720 - -
Other [6] 2,559 6,390 1,840 5,287 3,409 6,698 4,876 6,905
Total gold
ounces sold 34,778 30,122 31,224 35,283 33,869 16,943 32,960 6,905
Silver
equivalent
ounces of
gold sold
[7] 2,267 1,891 1,909 2,163 2,097 971 1,784 357
Silver
equivalent
ounces
sold[7] 7,494 8,116 7,973 7,828 7,239 6,923 9,131 5,143
Gold /
silver
ratio [7] 65.2 62.8 61.1 61.3 61.9 57.3 54.1 51.7
Cumulative
payable
silver
equivalent
ounces
produced
but not yet
delivered
[9] 6,250 6,353 6,277 5,492 4,994 4,264 3,478 5,038
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
2) updated in future periods as additional information is received.
The ounces produced and sold include ounces received from Goldcorp in connection
with Goldcorp's four year commitment commencing
on August 6, 2010 to deliver to Silver Wheaton 1.5 million ounces of silver per
3) annum resulting from their 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 Morado
5) silver interests.
6) Comprised of the Minto gold interest.
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
7) for the assets which produce only gold.
8) Represents production for the period August 8, 2012 to September 30, 2012.
Payable silver equivalent ounces produced but not yet delivered are based on
management estimates. These figures may be updated
9) 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 June 30, 2014
Ounces Ounces Sales
Producedsquared Sold
Silver
San Dimas 4 1,118 1,194 $ 23,775
Yauliyacu 658 111 2,184
Peñasquito 2,054 1,958 38,366
Barrick 5 299 291 5,853
Other 6 2,182 1,673 33,362
6,311 5,227 $ 103,540
Gold
777 11,611 13,599 $ 17,621
Sudbury 6,086 6,718 8,692
Salobo 8,486 11,902 15,379
Other 7 5,185 2,559 3,338
31,368 34,778 $ 45,030
Silver equivalent 8 8,365 7,494 $ 148,570
Corporate
General and
administrative
Other
Total corporate
8,365 7,494 $ 148,570
Average Average Average
Realized Cash Depletion
Price Cost ($'s Per
($'s
($'s Per Per Ounce)
Ounce) Ounce)3
Silver
San Dimas 4 $ 19.92 $ 4.17 $ 0.81
Yauliyacu 19.67 4.16 5.92
Peñasquito 19.6 4.05 2.98
Barrick 5 20.11 3.9 3.26
Other 6 19.94 4.29 4.45
$ 19.81 $ 4.15 $ 3.03
Gold
777 $ 1,296 $ 400 $ 823
Sudbury 1,294 400 841
Salobo 1,292 400 462
Other 7 1,304 309 124
$ 1,295 $ 393 $ 651
Silver equivalent 8 $ 19.83 $ 4.72 $ 5.14
Corporate
General and
administrative
Other
Total corporate
$ 19.83 $ 4.72 $ 5.14
Net Cash Flow Total Assets
Earnings From
Operations
Silver
San Dimas 4 $ 17,822 $ 18,794 $ 155,274
Yauliyacu 1,065 1,722 200,120
Peñasquito 24,607 30,437 460,980
Barrick 5 3,768 3,580 603,799
Other 6 18,730 25,189 663,924
$ 65,992 $ 79,722 $ 2,084,097
Gold
777 $ 994 $ 12,181 $ 263,661
Sudbury 352 6,005 598,013
Salobo 5,121 10,618 1,312,108
Other 7 2,229 2,340 27,468
$ 8,696 $ 31,144 $ 2,201,250
Silver equivalent 8 $ 74,688 $ 110,866 $ 4,285,347
Corporate
General and
administrative $ -10,375
Other -821
Total corporate $ -11,196 $ -8,323 $ 236,248
$ 63,492 $ 102,543 $ 4,521,595
All figures in thousands except gold ounces produced and sold and per ounce
1) amounts.
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
2) additional information is received.
3) Refer to discussion on non-IFRS measures at the end of this press release.
Results for San Dimas include 375,000 ounces received from Goldcorp in connection
with Goldcorp's four year commitment commencing on
August 6, 2010 to deliver to Silver Wheaton 1.5 million ounces of silver per annum
4) resulting from their sale of San Dimas to Primero.
Comprised of the operating Lagunas Norte, Pierina and Veladero silver interests in
5) addition to the non-operating Pascua-Lama silver interest.
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
6) Plata and Constancia silver interests.
Comprised of the operating Minto gold interest in addition to the non-operating
7) Constancia and Rosemont gold 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 London Bullion Metal Exchange for
8) the assets which produce only gold.
Three Months Ended June 30, 2014
Ounces Ounces Sales Average
Producedsquared Sold Realized
Price
($'s Per
Ounce)
Silver
San Dimas 4 1,160 1,194 $ 27,319 $ 22.88
Yauliyacu 668 559 13,353 23.89
Peñasquito 1,440 1,058 24,690 23.34
Barrick 5 556 560 14,331 25.59
Other 6 2,586 1,771 39,192 22.13
6,410 5,142 $ 118,885 $ 23.12
Gold
777 16,986 23,483 $ 33,872 $ 1,442
Sudbury 8,840 4,184 5,824 1,392
Salobo 6,342 2,793 3,844 1,377
Other 7 4,226 3,409 4,465 1,310
36,394 33,869 $ 48,005 $ 1,417
Silver equivalent 8 8,679 7,239 $ 166,890 $ 23.05
Corporate
General and
administrative
Other
Total corporate
8,679 7,239 $ 166,890 $ 23.05
Average Average Net
Cash Depletion Earnings
Cost ($'s Per
($'s Per Ounce)
Ounce)3
Silver
San Dimas 4 $ 4.14 $ 0.82 $ 21,407
Yauliyacu 4.12 5.75 7,837
Peñasquito 4.02 2.66 17,629
Barrick 5 3.9 3.31 10,293
Other 6 4.29 4.82 23,066
$ 4.14 $ 3.38 $ 80,232
Gold
777 $ 400 $ 802 $ 5,655
Sudbury 400 829 681
Salobo 400 462 1,437
Other 7 307 115 3,026
$ 391 $ 708 $ 10,799
Silver equivalent 8 $ 4.77 $ 5.71 $ 91,031
Corporate
General and
administrative $ -8,876
Other -11,038
Total corporate $ -19,914
$ 4.77 $ 5.71 $ 71,117
Cash Flow Total Assets
From
Operations
Silver
San Dimas 4 $ 22,381 $ 160,454
Yauliyacu 11,049 211,225
Peñasquito 20,438 480,588
Barrick 5 12,573 599,031
Other 6 34,369 564,642
$ 100,810 $ 2,015,940
Gold
777 $ 24,479 $ 306,367
Sudbury 4,150 620,306
Salobo 2,727 1,328,717
Other 7 3,743 29,050
$ 35,099 $ 2,284,440
Silver equivalent 8 $ 135,909 $ 4,300,380
Corporate
General and
administrative
Other
Total corporate $ -10,651 $ 95,632
$ 125,258 $ 4,396,012
All figures in thousands except gold ounces produced and sold and per ounce
1) amounts.
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
2) additional information is received.
3) Refer to discussion on non-IFRS measures at the end of this press release.
Results for San Dimas include 375,000 ounces received from Goldcorp in connection
with Goldcorp's four year commitment commencing on
August 6, 2010 to deliver to Silver Wheaton 1.5 million ounces of silver per annum
4) resulting from their sale of San Dimas to Primero.
Comprised of the operating Lagunas Norte, Pierina and Veladero silver interests in
5) addition to the non-operating Pascua-Lama silver interest.
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
6) Plata and Constancia silver interests.
Comprised of the operating Minto gold interest in addition to the non-operating
7) Rosemont gold interest.
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
8) 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 http://www.silverwheaton.com and posted on SEDAR at http://www.sedar.com.
For further information:
Patrick Drouin
Senior Vice President, Investor Relations
Silver Wheaton Corp.
Tel: 1-800-380-8687
Email: [email protected]
Website: http://www.silverwheaton.com
SOURCE Silver Wheaton Corp.
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