QUOTE AND NEWS
SeekingAlpha  Sep 16  Comment 
By SA Transcripts: Start Time: 15:47 End Time: 16:05 Silver Wheaton Corp. (NYSE:SLW) Denver Gold Forum 2014 Conference Call September 16, 2014 03:45 PM ET Executives Randy Smallwood - President & CEO Analysts ...
Forbes  Sep 16  Comment 
Denver (Kitco News) - The strength of the U.S. dollar has been giving gold prices fits of late, and Silver Wheaton Corp.’s (TSX:SLW) (NYSE:SLW) Randy Smallwood, president and chief executive officer, sees this as gold and silver mining’s...
SeekingAlpha  Sep 15  Comment 
By Joseph Harry: Silver Wheaton (NYSE: SLW) is the largest precious metals streaming company in the world. As a streaming company, it pays upfront for by-product silver or gold production from mining operations it doesn't actually own or even...
SeekingAlpha  Sep 10  Comment 
By Options Calling: The Rosemont Copper project was approved by the Augusta Resource Corporation for the development of an open pit mine, and is expected to begin its commercial production by 2016. Its capacity is to produce 221 million pounds of...
Forbes  Sep 4  Comment 
Silver Wheaton is a precious metals streaming company which signs long term purchase agreements with mining companies producing silver or gold as a by-product. It provides funds for capital expenditure upfront when a project is being developed and...
SeekingAlpha  Sep 4  Comment 
By Stephen Simpson, CFA: Investors have plenty of options for investing in silver, including silver miners like Fortuna Silver Mines (NYSE:FSM), Pan American Silver (NASDAQ:PAAS), and Coeur Mining (NYSE:CDE), bullion ETFs (as well as mining ETFs),...
SeekingAlpha  Sep 3  Comment 
By Anyoption: Silver Wheaton (NYSE: SLW) has had a pretty rough time over the past couple of weeks since its Q2 earnings release, sliding 8.7% from a close of $27.18 on Aug. 13 to yesterday's close of $24.85. But despite disappointing earnings...
SeekingAlpha  Sep 2  Comment 
By Ben Kramer-Miller: About Input Capital Input Capital (OTC:INPCF) is a relatively new company based on the streaming model that has become a popular investment vehicle in the precious metals space, led by Silver Wheaton (NYSE:SLW)....
Motley Fool  Aug 27  Comment 
Even as precious metals remain at depressed levels, the silver-streaming specialist has bounced back from a terrible 2013.
SeekingAlpha  Aug 27  Comment 
By Lior Cohen: Silver Wheaton (NYSE:SLW), the leading silver streaming company, hasn't performed well in the stock market in the past month partly due to the weakness of silver prices. But what are the other factors that could have impacted this...




 

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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