QUOTE AND NEWS
Market Intelligence Center  Oct 24  Comment 
Silver Wheaton (SLW) was selected by MarketIntelligenceCenter.com’s trade-picking algorithms today after trading between $19.19 and $19.93 on Thursday before closing at $19.71. A diagonal spread using a long position in the Jan. '16 $13.00 call...
SeekingAlpha  Oct 22  Comment 
By Lior Cohen: Silver Wheaton (NYSE:SLW) will release its third quarter earnings report on November 12th. The recent recovery of silver provided some back-wind for the precious metals streaming company - the stock is up by 1.2% for the month. This...
Market Intelligence Center  Oct 20  Comment 
Silver Wheaton (SLW) presents a trading opportunity that offers a 5.26% return in just 89 days. A covered call on Silver Wheaton at the $18.00 level expiring on Jan. '15 offers an assigned return rate of 5.26% or 21.58% annualized. This trade...
SeekingAlpha  Oct 15  Comment 
By SA Transcripts: Silver Wheaton Corp. (NYSE:SLW) Canaccord Genuity Global Resources Conference October 16, 2014 01:00 PM ET Executives Randy Smallwood - President and CEO Analysts Tony Lesiak - Canaccord Genuity ...
Benzinga  Oct 15  Comment 
Below are the silver stocks on the NYSE in terms of revenue. The trailing-twelve-month revenue at Coeur Mining (NYSE: CDE) is $693.87 million. Coeur Mining's gross profit for the same period is $49.45 million. The trailing-twelve-month revenue...
Forbes  Oct 14  Comment 
Silver Wheaton is in a favorable position for the acquisition of additional streaming deals. The company’s management has indicated this in its Q2 earnings conference call. It has also indicated that the company is pursuing potential new deals....
SeekingAlpha  Oct 14  Comment 
Market Intelligence Center  Oct 14  Comment 
After Monday’s trading in Silver Wheaton (SLW) the algorithms behind MarketIntelligenceCenter.com's Artifical Intelligence Center picked out a trade that offers a 8.96% or 20.83% (for comparison purposes only), while providing 14.40% downside...
SeekingAlpha  Oct 10  Comment 
By Lior Cohen: Shares of Silver Wheaton (NYSE:SLW) have fallen by nearly 22% since the beginning of September. The weakness in the precious metals market contributed to the company's stock recent descent. Moreover, in the past few months silver...
SeekingAlpha  Oct 10  Comment 
By Individual Trader: Unfortunately the junior mining sector is being hit bad at the moment, and the situation doesn't seem to be abating. The Junior Gold Miners ETF (NYSEARCA:GDXJ) is nearing its all time lows as capital is being sucked from the...
SeekingAlpha  Oct 9  Comment 
By SomaBull: In my previous article on Silver Wheaton (NYSE:SLW), I talked about how I felt that other silver stocks would outperform the company should silver move higher. Many could take that to mean that I was bearish on Silver Wheaton, or...




 

Silver Wheaton Corp (NYSE:SLW) is the world's only pure play silver middle man.[1] SLW does not own or operate its own mines, but instead the company buys silver at below market prices via long-term contracts with eleven mining companies the largest of which are Barrick Gold, Goldcorp, Lundin Mining, Hellas Gold, and Glencore. Although many of the contracts are for a certain percentage of the silver mined (25% of the largest mine it has a deal with Barrick Gold for) and for a specific length of time some last the length of the mine's life (Penasquito) and/or the total amount of silver supplied by the mine. SLW then sells the silver to major industrial customers at a markup (in 2009 the price it agreed to pay producers averaged around $4 an ounce).[2]

Silver prices are the single largest determinant of the company's profitability. SLW's contracts, while indexed for inflation, allow the company to pay a fixed rate for the silver it purchases, regardless of silver price fluctuations. When silver prices rise significantly, the company is able to pocket the difference. When silver prices fall, the company still has to pay the same fixed price. Moreover, the company has no control over how much silver its mining partners produce. SLW is not compensated in any way if the mines miss production expectations.

Trends and Forces

Silver Wheaton has No Control Over the Silver Mines

Silver Wheaton does not own, operate, or control the mines with which it is partnered. If the mines miss production expectations, temporarily halt production, or shut down then SLW is not compensated in any way. Silver Wheaton buys its silver from 6 different mines which combine to record 344.6M oz of proven and probable reserves. [3] Glencore’s Yauliyacu mine is located in Peru and is vulnerable to the political instability in that region. SLW’s largest reserve source is the Penasquito mine owned by Goldcorp.

Silver Wheaton Pays No Income Taxes

Silver Wheaton operates through its wholly owned subsidiary Silver Wheaton Caymans. Silver Wheaton Caymans is based in the Cayman Islands where the company is exempt from income tax laws. A change in this law could significantly decrease earnings if Silver Wheaton has to pay income taxes.

Production

Due to increasing business with Barrick Gold (specifically the Pacua Lama mine that when operational in 2013 will be the largest contributor of silver among the 4 Barrick Gold mines) Silver Wheaton's exposure to gold has risen (in terms of the primary metal mined at the mines from which it receives silver, has gone up from 41% in 2009 to 67% by 2013).[4]

Silver by mine '000 oz 1hfy08[5] 2hfy08[5] 1hfy09[6] 2hfy09[6] 1hfy10[6] 9M10[6]
San Dimas 2764 2497 2587 2507 2316 3571
Zinkgruvan 950 745 941 920 865 1373
Yauliyacu 1685 1499 1609 1533 1429 2062
Peñasquito 28 311 322 606 1320 2337
Minto 0 0 37 135 111 157
Cozamin 0 0 262 754 687 1068
Barrick 0 0 0 979 1477 2159
Other 540 896 1309 1762 2076 3099
Total 5967 5948 7,067 9,196 10,281 15,826

Competition

Silver Wheaton is the largest public mining company with all of its revenue from silver. Silver Wheaton competes most closely with non-producing mining companies like Silver Standard Resources (SSRI). Other close competitors include Pan American Silver (PAAS), Bear Creek Mining Corporation (BCM) and Endeavour Silver (EXK).

References

  1. Silver Wheaton Homepage
  2. Silver Wheaton (SLW) (2009-12-16).
  3. SLW 2007 Annual Report, pg.23
  4. November Corporate Presentation (2009-11-12).
  5. 5.0 5.1 2009 annual report (March 2010).
  6. 6.0 6.1 6.2 6.3 third quarter 2010 (2010).
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