Silver Wheaton Reports Higher 2Q Profit, Record Gold Production

By Kitco News

Thursday August 11, 2016 08:16

(Kitco News) - Silver Wheaton Corp. (TSX, NYSE: SLW), a Vancouver-based precious-metals streaming company, reported a rise in second-quarter profit late Wednesday, helped by higher prices of precious metals and a record volume of gold.

Net earnings were listed at $60 million, or 14 cents per share, compared with $54 million, or 13 cents, in the same period of 2015. Revenue rose 29% to $212 million, while operating cash flow rose 23% to $134 million.

Average realized prices per ounce sold in the second quarter were $17.18 for silver and $1,267 for gold, representing increases of 5% and 6%, respectively, from the same period of 2015.

The company reported production of 7.6 million ounces of silver and 70,200 ounces of gold, compared with 7.2 million ounces of silver and 50,100 ounces of gold in the year-ago period. The gold total was the second consecutive record, driven by sales from Salobo, Silver Wheaton said.

The company listed silver-equivalent production of 12.9 million ounces, up from 10.8 million. As of June 30, payable ounces produced but not yet delivered amounted to 2.6 million silver ounces and 28,500 gold ounces, Silver Wheaton reported.

“Salobo was once again our strongest asset in the quarter, generating record gold sales for us,” said Randy Smallwood, president and chief executive officer of Silver Wheaton. “Given its continued outperformance since we acquired the first stream in 2013, it should come as no surprise that Silver Wheaton seized the opportunity to add an additional 25% of the gold from the Salobo mine just last week.”

As a result of amendments to the Salobo precious-metal purchase agreement, Silver Wheaton said it updated one-year and long-term gold-production guidance. For 2016, Silver Wheaton estimated gold production now will be 305,000 ounces, up from 265,000 previously. Estimated average annual gold output over the next five years, starting with 2016, is forecast at approximately 330,000 ounces per year, up from 260,000 ounces.

Meanwhile, silver production in 2016 is now forecast to be approximately 32 million ounces, down slightly from previous guidance of 32.8 million. Silver Wheaton said this is due to lower-than-expected production from San Dimas, as labor issues during July impacted development and has therefore resulted in deferring mining some high-grade areas to 2017, and Peñasquito, where mining will focus on lower-grade ore over a three-year period. This will be partially offset by Antamina, where output is expected to be above previous guidance, Silver Wheaton said. Annual silver production over the next five years was unchanged at 31 million ounces per year.

Silver Wheaton also announced that its board of directors declared its third quarterly cash dividend payment for 2016 of 5 cents per common share. This will be paid to shareholders as of the close of business on Aug. 24, 2016, and will be distributed around Sept. 7.