Silver Wheaton announces Record Year of Production and Sales Volumes in 2015

20 Mar

Silver Wheaton of Vancouver, Canada

VANCOUVER, March 16, 2016 – Silver Wheaton Corp. (“Silver Wheaton” or the “Company”) (TSX:SLW) (NYSE:SLW) is pleased to announce its results for the fourth quarter and year ended December 31, 2015. All figures are presented in United States dollars unless otherwise noted.

Silver Wheaton achieved record production for a fifth straight quarter resulting in over 47 million silver equivalent ounces produced in 2015. Total silver and gold ounces sold also came in at a record level for a fourth quarter in a row, with over 41 million silver equivalent ounces sold during 2015. The record production and sales were driven by strong results at all four cornerstone assets, Salobo, Peñasquito, San Dimas, and Antamina, and were also driven by the start-up of Constancia and record production at one of our oldest streams, Zinkgruvan. Silver Wheaton expects to produce 54 million silver equivalent ounces in 2016, a forecast increase of over 13% relative to 2015.

FULL YEAR HIGHLIGHTS

  • Record attributable silver equivalent production for the year ended December 31, 2015 of 47.7 million ounces (30.7 million ounces of silver and 228,800 ounces of gold), compared with 35.4 million ounces in 2014, representing an increase of 35%.
  • Record silver equivalent sales volume for the year ended December 31, 2015 of 41.6 million ounces (26.6 million ounces of silver and 202,300 ounces of gold), compared with 32.9 million ounces in 2014, representing an increase of 26%.
  • Revenues of $648.7 million for the year ended December 31, 2015 compared with $620.2 million in 2014, representing an increase of 5%.
  • Average realized sale price per silver equivalent ounce sold for the year ended December 31, 2015 of $15.60 ($15.64 per ounce of silver and $1,152per ounce of gold), representing a decrease of 17% as compared with 2014.
  • Adjusted net earnings of $210.4 million ($0.53 per share) for the year ended December 31, 2015 compared with $268.0 million ($0.75 per share) in 2014, representing a decrease of 22%.
  • During the year ended December 31, 2015, the Company recognized impairment charges of $384.9 million related to certain of its silver and gold interests.
  • After including the after tax impact of the impairment charges, the net loss was $162.0 million ($0.41 per share) compared with net earnings of $199.8 million ($0.56 per share) in 2014.
  • Operating cash flows of $431.4 million ($1.09 per share) for the year ended December 31, 2015, virtually unchanged from the operating cash flows of$431.9 million ($1.20 per share) in 2014.
  • Cash operating margin of $11.02 per silver equivalent ounce for the year ended December 31, 2015 compared with $14.27 in 2014, representing a decrease of 23%.
  • Average cash costs were $4.17 and $393 per ounce of silver and gold, respectively. On a silver equivalent basis, average cash costs decreased to$4.58 compared with $4.59 in 2014.

FOURTH QUARTER HIGHLIGHTS

  • Record attributable silver equivalent production in Q4 2015 of 15.5 million ounces (10.3 million ounces of silver and 69,200 ounces of gold), compared with 9.1 million ounces in Q4 2014, representing an increase of 70%.
  • Record silver equivalent sales volume in Q4 2015 of 13.6 million ounces (8.8 million ounces of silver and 64,900 ounces of gold), compared with 8.5 million ounces in Q4 2014, representing an increase of 59%.
  • During the three month period ending December 31, 2015, payable silver equivalent ounces attributable to the Company produced but not yet delivered increased by 0.5 million ounces to approximately 6.9 million ounces.
  • Revenues of $200.5 million in Q4 2015 compared with $140.4 million in Q4 2014, representing an increase of 43%.
  • Average realized sale price per silver equivalent ounce sold in Q4 2015 of $14.73 ($14.75 per ounce of silver and $1,100 per ounce of gold), compared with $16.43 in Q4 2014, representing a decrease of 10%.
  • Adjusted net earnings of $57.4 million ($0.14 per share) in Q4 2015 compared with $52.0 million ($0.14 per share) in Q4 2014, representing an increase of 10%.
  • During the three months ended December 31, 2015, the Company recognized impairment charges of $230.9 million related to certain of its silver and gold interests.
  • After including the after tax impact of the impairment charges, net loss of $169.3 million ($0.42 per share) in Q4 2015 compared with net earnings of$52.0 million ($0.14 per share) in Q4 2014.
  • Operating cash flows of $133.4 million ($0.33 per share) in Q4 2015 compared with $94.1 million ($0.26 per share) in Q4 2014, representing an increase of 42%.
  • Cash operating margin in Q4 2015 of $10.23 per silver equivalent ounce compared with $11.92 in Q4 2014, representing a decrease of 14%.
  • Average cash costs in Q4 2015 were $4.06 and $396 per ounce of silver and gold, respectively. On a silver equivalent basis, average cash costs decreased to $4.50 compared with $4.51 in Q4 2014.
  • Declared quarterly dividend of $0.05 per common share.
  • On October 8, 2015, Silver Wheaton filed notices of objection in respect of the Notices of Reassessment (the “Reassessments”) received from theCanada Revenue Agency (“CRA”) for the 2005 to 2010 taxation years.
  • Asset Highlights
    • Silver Wheaton agreed to acquire from a subsidiary of Glencore plc (“Glencore”) an amount of silver equal to 33.75% of the silver production until delivery of 140 million ounces of silver and 22.5% of the silver production thereafter for the life of mine of the Antamina mine for an upfront cash consideration of US$900 million and ongoing payments of 20%.
    • Record attributable production from Salobo, San Dimas, Sudbury, and Zinkgruvan.
    • Record sales volume from Salobo and Peñasquito

EVENTS SUBSEQUENT TO THE QUARTER

  • On January 27, 2016, the Company announced that it had signed a non-binding term sheet with Panoro Minerals Ltd. (“Panoro”) to enter into an Early Deposit Precious Metals Purchase Agreement for the Cotabambas project located in Peru.
  • On January 8, 2016, Silver Wheaton filed a Notice of Appeal with the Tax Court of Canada, electing to pursue resolution of the matters relating to the Reassessments for the 2005 to 2010 taxation years through a judicial court process rather than continue to pursue the CRA internal appeals process.
  • On January 19, 2016, Silver Wheaton received correspondence advising that the CRA would be commencing an audit of the Company’s international transactions covering the 2011-2013 taxation years.

OUTLOOK

  • For 2016, Silver Wheaton’s estimated attributable silver equivalent production is forecast to be 54 million silver equivalent ounces, including 265,000 ounces of gold. This represents an increase of over 13% from 2015.
  • Silver Wheaton’s estimated average annual attributable production over the next five years is anticipated to be approximately 52 million silver equivalent ounces1, including 260,000 ounces of gold.

“2015 was a year of growth for Silver Wheaton as we set new records each quarter for production and sales volumes. These records were driven by our cornerstone assets, San Dimas, Peñasquito, Salobo, and as of last November, Antamina, as well as one of our key growth assets, Constancia,” said Randy Smallwood, President and Chief Executive Officer of Silver Wheaton. “While our assets performed well in 2015, the year was not without challenges. Along with pressure on precious metals prices throughout the year, Silver Wheaton received Notices of Reassessment from the CRA in September. We will continue to vigorously defend our position and work towards the quickest avenue for resolution. Given these headwinds, we believe our share price doesn’t always reflect the quality of our portfolio, which was the reason why we initiated our first ever share buyback in 2015.”

“Our focus at Silver Wheaton has always been to add ounces from high-quality, low-cost mines. This was clearly illustrated in the fourth quarter when we added Antamina, one of the lowest cost, largest copper mines in the world, into a portfolio that was already deriving over 90% of its production from mines in the lowest half of their respective cost curves. Throughout the year it was not only the cornerstone assets that performed well; one of our very first streams, Zinkgruvan, had record attributable production in 2015, and the mine continues to grow and improve. We are proud of our existing portfolio of assets and believe it represents the highest quality portfolio in the entire precious metals space. With sector leading cash flows, no committed capital expenditures, and an environment ripe with opportunities, we believe that we will continue to deliver accretive growth for our shareholders by investing into top quality assets.”

Photo credit: hardwarehank via VisualHunt / CC BY-SA

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