QUOTE AND NEWS
SeekingAlpha  Mar 26  Comment 
By Stock Gamer: Silver Wheaton (SLW) is the world's largest silver and gold streaming company. Its share price has experienced 25% loss over the past 12 months, compared to a 20% return for the S&P 500 Index. In my view, SLW represents a solid...
SeekingAlpha  Mar 21  Comment 
Silver Wheaton Corp. (SLW) Q4 2013 Results Earnings Conference Call March 21, 2014, 11:00 AM ET Executives Patrick Drouin - Vice President, Investor Relations Randy Smallwood - President and CEO Gary Brown - SVP and CFO ...
Forbes  Mar 21  Comment 
(Kitco News) - While the current mining sector environment is ideal for Silver Wheaton Corp.’s (TSX: SLW)(NYSE: SLW) business model, Chief Executive Officer Randy Smallwood sees an issue with a lack of grassroots exploration and capital...
SeekingAlpha  Mar 21  Comment 
By The Investment Doctor: Introduction In this article I'll have a closer look at Silver Wheaton (SLW) which has just announced its results for 2013. I will provide my view on the company's financial results and its balance sheet, where after...
TheStreet.com  Mar 21  Comment 
Story updated at 9:40 a.m. to reflect market activity. NEW YORK (TheStreet) -- BMO raised its price target for Silver Wheaton to $31 Friday. Shares of Silver Wheaton gained 1% to $25.40 in morning trading. The analyst firm maintained its...
StreetInsider.com  Mar 20  Comment 
Visit StreetInsider.com at http://www.streetinsider.com/Dividends/Silver+Wheaton+%28SLW%29+Declares+%240.07+Quarterly+Dividend%3B+1.1%25+Yield/9303482.html for the full story.
StreetInsider.com  Mar 20  Comment 
Visit StreetInsider.com at http://www.streetinsider.com/Earnings/Silver+Wheaton+%28SLW%29+Tops+Q4+EPS+by+1c/9303474.html for the full story.
SeekingAlpha  Mar 19  Comment 
By Lior Cohen: Silver Wheaton Corp. (SLW) will release its fourth-quarter earnings report and its annual guidance on March 20. In anticipation of this release, let's review the company's performance in the fourth quarter, the potential changes in...
Forbes  Mar 18  Comment 
Silver Wheaton links its dividend payment to cash generated by operating activities in the previous quarter. Low silver prices imply lower cash flows and hence lower dividends, which may put pressure on the company?s share price.




 

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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