PURE PRECIOUS METALS
SEPTEMBER 2014
PURE PRECIOUS METALS SEPTEMBER 2014 CAUTIONARY STATEMENTS - - PowerPoint PPT Presentation
PURE PRECIOUS METALS SEPTEMBER 2014 CAUTIONARY STATEMENTS CAUTIONARY NOTE REGARDING FORWARD LOOKING-STATEMENTS The information contained herein contains forward-looking statements within the meaning of the United States Private Securities
SEPTEMBER 2014
CAUTIONARY NOTE REGARDING FORWARD LOOKING-STATEMENTS The information contained herein contains “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 and “forward-looking information” within the meaning of applicable Canadian securities legislation. Forward-looking statements, which are all statements other than statements of historical fact, include, but are not limited to, statements with respect to the future price of silver or gold, the estimation of mineral reserves and resources, the realization of mineral reserve estimates, the timing and amount of estimated future production (including 2014 and 2018 attributable annual production), costs of production, reserve determination, reserve conversion rates, statements as to any future dividends, the ability to fund outstanding commitments and continue to acquire accretive precious metal stream interests and assessments of the impact and resolution of various legal and tax matters. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved”. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, operations, level of activity, performance or achievements of Silver Wheaton to be materially different from those expressed or implied by such forward-looking statements, including but not limited to: fluctuations in the price of silver or gold; the absence of control over mining operations from which Silver Wheaton purchases silver and gold and risks related to these mining operations including risks related to fluctuations in the price of the primary commodities mined at such
project parameters as plans continue to be refined; differences in the interpretation or application of tax laws and regulations; and the Company’s interpretation of, or compliance with, tax laws, is found to be incorrect; as well as those factors discussed in the section entitled “Description of the Business - Risk Factors” in Silver Wheaton's Annual Information Form available on SEDAR at www.sedar.com and in Silver Wheaton's Form 40-F on file with the U.S. Securities and Exchange Commission in Washington, D.C. Forward-looking statements are based on assumptions management believes to be reasonable, including but not limited to: the continued operation of the mining operations from which Silver Wheaton purchases silver and gold, no material adverse change in the market price of commodities, that the mining operations will operate and the mining projects will be completed in accordance with their public statements and achieve their stated production outcomes, the continuing ability to fund or obtain funding for outstanding commitments, the ability to source and obtain accretive precious metal stream interests, expectations regarding the resolution of legal and tax matters, and such other assumptions and factors as set out herein. Although Silver Wheaton has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate. Accordingly, readers should not place undue reliance on forward-looking statements and are cautioned that actual outcomes may vary. Silver Wheaton does not undertake to update any forward-looking statements that are included or incorporated by reference herein, except in accordance with applicable securities laws. CAUTIONARY LANGUAGE REGARDING RESERVES AND RESOURCES For further information on Mineral Reserves and Mineral Resources and on Silver Wheaton more generally, readers should refer to Silver Wheaton’s Annual Information Form for the year ended December 31, 2013, and other continuous disclosure documents filed by Silver Wheaton since January 1, 2014, available on SEDAR at www.sedar.com. Silver Wheaton’s Mineral Reserves and Mineral Resources are subject to the qualifications and notes set forth therein. Mineral Resources which are not Mineral Reserves do not have demonstrated economic viability. Cautionary Note to United States Investors Concerning Estimates of Measured, Indicated and Inferred Mineral Resources: The information contained herein uses the terms “Measured”, “Indicated” and “Inferred” Mineral Resources. United States investors are advised that while such terms are recognized and required by Canadian regulations, the United States Securities and Exchange Commission does not recognize them and expressly prohibits U.S. registered companies from including such terms in their filings with the SEC. “Inferred Mineral Resources” have a great amount of uncertainty as to their existence, and as to their economic and legal feasibility. It cannot be assumed that all or any part of an Inferred Mineral Resource will ever be upgraded to a higher category. Under Canadian rules, estimates of Inferred Mineral Resources may not form the basis of feasibility or other economic
exploration potential will ever be converted to any category of Mineral Reserves or Mineral Resources. United States investors are also cautioned not to assume that all or any part of an Inferred Mineral Resource exists, or is economically or legally mineable. United States investors are urged to consider closely the disclosure in Silver Wheaton’s Form 40-F, a copy of which may be obtained from Silver Wheaton or from http://www.sec.gov/edgar.shtml.
1
2
a fixed percentage of the future silver and/or gold production from a mine
delivery payment* is made to them
3
Partner Mining Company Upfront payment
(Cash and/or SLW shares)
SLW receives a % of life-of-mine silver and/or gold production
*Delivery payments are typically subject to an inflationary adjustment of approximately 1% per annum after the third year of production
Delivery payment
($ per ounce)
4
purchaser (streamer) and the seller (traditional miner)
by the market than if it had been produced by a streaming company
Traditional Miner Streaming Company Arbitrage opportunity exists to create value for both the Streamer and the Partner’s shareholders Value of Future Precious Metal Production Value of Future Precious Metal Stream
5
28% 12% 7% 4% 4%3% 2% 2%
Fresnillo Fresnillo Float Cap Silver Wheaton Tahoe Pan American First Majestic Hecla Hochschild Coeur d'Alene Silver Standard
55% 11% 9% 7% 7% 6% 4% 0.5% 0.5%
Silver Wheaton Pan American Coeur Mining First Majestic Hecla Fresnillo Silver Standard Hocschild Tahoe
6
WORLDWIDE SENIOR SILVER PRODUCERS
*As of August 15, 2014; **Fresnillo’s float cap is only $3.1B of the total market cap of $12.4B as it is 75% owned by Peñoles according to ThomsonReuters, October 4, 2013; ***Liquidity calculated as total value in US dollars of shares traded FY 2013 on NYSE, TSX & LSE; Source:ThomsonReuters as of December 31, 2013
By Market Cap* By Liquidity***
$9.2B $3.1B** Float 38% $160M / day
44% 35% 21%
Silver Wheaton Franco-Nevada Royal Gold
63% 18% 19%
Silver Wheaton Franco Nevada Royal Gold
PRECIOUS METAL STREAMING / ROYALTY COMPANIES
7
By Enterprise Value* By Liquidity**
*Source: ThomsonReuters as of August 15, 2014, Royal Gold FY 2014 Financials, Silver Wheaton & Franco Nevada Q2 2014 Financials; **Liquidity calculated as total value in US dollars of shares traded FY 2013 on NYSE, TSX & LSE; Source:ThomsonReuters as of December 31, 2013
Silver Wheaton is the largest and most liquid precious metal streaming company
$10.0B $160M / day $7.9B $4.8B
56% 28% 16%
Silver Wheaton Franco Nevada Royal Gold
55% 28% 17%
Silver Wheaton Franco Nevada Royal Gold
PRECIOUS METAL STREAMING / ROYALTY COMPANIES
8
By Operating Cash flow H1 2014 By Earnings H1 2014
*Source: Company reports, 2014 Q2 Report for Franco Nevada and Silver Wheaton, 2014 FY Report for Royal Gold
Silver Wheaton generates significantly higher Cash Flow and Earnings than its peers
$217.3M $67.5M $113.2M $143.8M $72.3M $41.6M
REVENUE BREAKDOWN BY COMMODITY
9
Revenue based on Metal
*Source: Company Reports as at March 25, 2014
Royalty / Streaming Gold / Silver Producers
Silver Wheaton generates 100% of revenue from precious metals
100% 80% 76% 96% 93% 92% 89% 84% 78% 71% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Oil & Gas Other Nickel Lead / Zinc Copper Precious Metals
HIGHEST QUALITY OUNCES
10
*Source: Company Reports updated as at Dec 31, 2013; Fresnillo & Tahoe as at Dec 31, 2012; **For a breakdown of Silver Wheaton silver and gold reserves and resources by category, and additional information relating to reserves and resources, calculated in accordance with National Instrument 43-101, see Silverwheaton.com
Silver Reserves and Resources (Moz)*
Silver Wheaton has more silver reserves than any other silver company in the world
**
200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 2,200
Silver Wheaton Fresnillo Silver Standard Resources Pan American Silver Coeur Mining Hecla Mining Polymetal Hochschild Mining First Majestic Tahoe Resources
Inferred Measured & Indicated Reserves
DIVERSIFIED PORTFOLIO
11
Well-diversified with low political risk and strong partnerships Operating Mines (19) Development Projects (5) Partners:
Vale Glencore Goldcorp Barrick Eldorado Lundin Pan American Hudbay Primero Capstone Nyrstar Augusta Alexco Sandspring Mercator
10 20 30 40 50 60 2010A 2011A 2012A 2013A 2014E 2018E Pascua Lama Toroparu Salobo Sudbury 777 Constancia Rosemont Peñasquito San Dimas*** Yauliyacu Zinkgruvan Barrick (other)** Other
STRONG GROWTH PROFILE WITH SIGNIFICANT OPTIONALITY
12
Silver Equivalent Production* (Moz)
Production is forecast to grow ~35% to 48 Moz Ag Eq. in 2018 Pascua Lama is not in 2018 forecast but would add an additional 9Moz in its first 5 years
*Assumes a Au/Ag ratio of 60:1; **Comprised of the Veladero, Lagunas Norte and Pierina mines; ***Production includes Goldcorp’s four year commitment from August 2010 – 2014, to deliver to Silver Wheaton 1.5Moz of Ag per annum resulting from their sale of San Dimas to Primero
5 Year Forecast Production Growth of ~35%
29.4Moz 35.8Moz ~36Moz ~48Moz ~9Moz ~1.4Moz Optionality
2014 Forecast Production by Cost Quartile* 2018 Forecast Production by Cost Quartile*
13
LOW-COST PRODUCTION
*From company reports and Wood Mackenzie estimates of July 2014 byproduct cost curves for gold, zinc, copper, nickel and silver mines
Over 85% of SLW’s production comes from assets in the lowest half of the cost curve ~35% Production Growth
85% 1% 13% 1%
74% 12% 13% 1%
14
CURRENT CORNERSTONE ASSETS
*Source: Company Reports
San Dimas: Acquired in 2004
Peñasquito: Acquired in 2007
new production wells) expected to be operational mid-year 2015
Salobo and Sudbury: Acquired in 2013
Stronger output expected in H2.
Sudbury: 30koz Au (2013-2015), 50koz (20yr avg.)
15
DEVELOPMENT ASSETS
*Source: Company Reports
Pascua Lama: Acquired in 2009
Constancia: Acquired in 2012 – Expanded to include gold November 2013
Rosemont: Acquired in 2010
16
In the Sandspring Agreement, only $13.5M paid initially by Silver Wheaton
*Standard condition for a stream agreement include permits, financing, security, etc. **If stream is cancelled, Silver Wheaton is entitled to a return of the deposit less $2M that is
Early Deposit Structure: Silver Wheaton / Sandspring example
Toroparu, an early-stage development project, for minimal upfront capital
SANDSPRING EARLY DEPOSIT AGREEMENT
Paid $13.5M Early Deposit Positive feasibility study received Negative feasibility study received Construction commences Advance remaining $135M upfront payment Cancel stream and receive $11.5M** Permitting & financing* in place? Yes No Forecast attributable production of up to 23koz gold/year***
Silver Wheaton (Caymans) is helping to finance important community initiatives around our partners’ mines:
Primero is building three community facilities in Tayoltita, Mexico, near the San Dimas mine. Barrick is executing an irrigation project in Argentina, near the Veladero mine and Pascua-Lama project.
Silver Wheaton supports a number of local Canadian causes, including:
SUPPORTING OUR MINING & LOCAL COMMUNITIES
17
18
19
INVESTMENT IN THE SILVER INDUSTRY
*Measured by average daily trading volume in US dollars, source is Bloomberg market data as of Dec 31, 2013, Data from US and Cdn exchanges except for Fresnillo and Hochschild which trade on LSE, **Includes iShares Silver Trust, ETF Securities’ Silver ETFs, ZKB Silver ETF and Sprott Silver Trust; ***Includes Coeur d’Alene, Hecla, Pan American Silver, Silver Standard, Tahoe, First Majestic, Fresnillo and Hochschild
Percentage Allocation of Investment Dollars*
26% 62% 12%
= Silver Wheaton = Silver ETFs** = Senior Silver Producers***
Silver Wheaton investment represents >25% of total investment in the silver space
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
20
Silver Wheaton Traditional Miners 100% Precious Metals Exposure
Fixed operating* and capital costs
No exploration costs but exploration upside
Highly diverse asset base
Sustainable dividend at all commodity prices
*Ongoing delivery payments are fixed at approximately US$4/oz with an inflationary adjustment of approximately 1% per annum after the third year of production
Strong upside with downside protection
FIXED OPERATING AND CAPITAL COSTS
21
*Refer to non-IRFS measures at the end of this presentation; **Operating costs are fixed at approximately US$4/oz with an inflationary adjustment of approximately 1% per annum after the third year of production; ***2014 & 2018 expected cash costs are calculations based on existing agreements contributing to 2014 & 2018 production forecasts
Cash Operating Margins* Total Cash Cost/oz*
Fixed cash costs** provide for industry leading margin and free cash flow
$7.30 $7.31 $11.72 $13.42 $14.97 $15.02 $20.75 $34.60 $31.03 $23.86 $3.90 $3.90 $3.90 $3.91 $3.94 $3.97 $3.97 $3.99 $4.06 $4.12 $4.15 $4.39
$0 $5 $10 $15 $20 $25 $30 $35 $40 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014E*** 2018E***
Silver Price (US$/oz)
22
Silver Wheaton ETF/Bullion 100% Precious Metals Exposure
Leverage to Commodity Price
Exploration and Expansion
Acquisition Growth Potential
Dividend Yield
Silver Wheaton provides much more than precious metals exposure
LEVERAGE TO PRECIOUS METALS PRICES
23
*Source: ThomsonOne August 15, 2014 – August 14, 2009; **2014 Q2 – 2009 Q2, Refer to non-IRFS measures at the end of this presentation
Five year growth
$33.20/share $2.03/share $24.56/share
43% 60% 156% 222% 0% 50% 100% 150% 200% 250% Silver Price* Gold Price* Silver Wheaton Share Price* Cash Flow/Share**
EXPLORATION AND EXPANSION - GROWING RESERVES & RESOURCES
24
Silver Equivalent Reserves and Resources (in Moz)*
Silver Wheaton’s production has been more than replaced through successful exploration by our partners
4(M&I)
1,830 275 387
*As at Dec 31, 2013: Reserves and resources are as of Dec. 31 for each year (see Silverwheaton.com). Silver equivalent basis assuming a 60:1 Ag:Au ratio
556
173 (Inf) 69 (P&P)
EXPANSION AND GROWTH THROUGH ACCRETIVE ACQUISITIONS
25
Total attributable silver equivalent reserves and resources per share since inception*
Reserves Measured & Indicated Inferred
*From Dec. 31, 2004 to Dec. 31, 2013, Reserves and Resources are as of Dec. 31 for each year (see Silverwheaton.com); **Current reserves and resources include reserves and resources updated to Dec 31 2013
Significant growth in reserves and resources per share since inception
0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Silver Eq oz/share
100 200 300 400 500 600 700 800 900 1000
2013A 2014E 2015E 2016E 2017E 2018E SLW 2014 SLW 2018 26
ACQUISITION GROWTH POTENTIAL - LARGE TARGET MARKET
Silver Wheaton vs. Global Silver Production*
Forecast Global Silver Production (Moz) (Silver Output by Mine’s Source Metal)* Silver Wheaton’s Potential Target Market 4% 6% Traditional Silver Companies Silver Wheaton’s Forecast Production (% of potential target market)
>70% of mined silver is produced as a by-product from base metal or gold mines = significant growth potential in the silver stream space
Primary Silver Mines Gold Mines Base Metal Mines
*Source: Thomson Reuters GFMS Estimates
5 10 15 20 25 30 35 40 45 50 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Silver Price (US$ / oz.)
Spot Silver Price Analyst Consensus LT Silver Price
27
ACQUISITION GROWTH POTENTIAL - FAVORABLE ENVIRONMENT
Spot Silver Prices vs. Long-term Analyst Consensus
Luismin Zinkgruvan Yauliyacu Peñasquito Stratoni Barrick Keno Hill Mineral Park Campo Morado Rosemont Silverstone Hudbay
Transactions have typically occurred when long-term analyst consensus silver prices are approximately 75% of spot silver prices
Vale*
*Gold only stream; **Early Deposit structure, Gold only stream
Constancia* Toroparu**
STRONG BALANCE SHEET FOR FUTURE GROWTH
28
*Silver Wheaton has extended the term of the NRT loan by one year to May 28, 2017; **Operating cash flow based on projected production of 36Moz AgEq and silver price of $20 and gold price of $1200; ***Includes one final payment to Hudbay of US$135M (which can be made in cash of SLW shares) once $1.35B has been spent on Constancia for the Gold stream and US$230M for the Rosemont transaction contingent upon receipt of key operating permits and commitments of financing (does note include US$32.4M for the Navidad transaction)
Forecasted operating cash flow more than offsets capital commitments, leaving over $950 million in available capacity for growth
Augusta’s Rosemont
$1B Non-Revolving Term Loan Fully Drawn* $1B Revolving Credit Facility 5-year term Projected 12-month
Capital Commitments
>$950M Capacity Balance Sheet as of June 30, 2014
Hudbay Au
** ***
~$140M in Cash
$0.00 $0.10 $0.20 $0.30 $0.40 $0.50 2011 2012 2013 2014 YTD
29
*The declaration and payment of dividends remains at the discretion of the Board and will depend on the Company’s cash requirements, future prospects and other factors deemed relevant by the Board; **In respect of Treasury Acquisitions under the DRIP, the Company can issue the common shares at a discount of up to 5% of the Average Market Price, as defined in the DRIP, but has no obligation to issue with any discount
DIVIDEND REINVESTMENT PROGRAM ADOPTED
previous four quarters’ operating cash flows are distributed to shareholders*
$0.18 $0.35 $0.45 $0.20
30
ALL THE ADVANTAGES AND A LOW COST Administrative Costs
SLW administrative costs are competitive compared to Silver ETF and Bullion storage fees
1) Presented as a % of Enterprise Value for SLW; as a % of NAV for SLV, SIVR and PSLV; as a % of Bullion held in custody for PHAG; 2) 2013 G&A of $35.8M / Enterprise Value of $10.0B per Thomson and Company reports as of August 15, 2014; 3) As reported in May 10-13 10Q; 4) As reported in Oct-31-12 fact sheet; 5) As reported in Dec-31- 11 Report to Unit Holders. Management fee of 0.45% + operating expense of 0.15% of NAV. 2011 operating expense of $1.67 million / NAV of $1.5B as of Sep-28-12; 6)
2 3 3 4 5 6 1
0.36% 0.50% 0.30% 0.49% 0.56% 0.45% 0.00% 0.10% 0.20% 0.30% 0.40% 0.50% 0.60%
Silver Wheaton iShares Silver Trust (SLV) ETFS Physical Silver - New York (SIVR) ETFS Physical Silver - London (PHAG) Sprott Physical Silver Trust (PSLV) Bullion Storage Fee (Industrial quantity)
0% 200% 400% 600% 800% 1000% 1200% 1400% Oct-04 Feb-05 Jun-05 Oct-05 Feb-06 Jun-06 Oct-06 Feb-07 Jun-07 Oct-07 Feb-08 Jun-08 Oct-08 Feb-09 Jun-09 Oct-09 Feb-10 Jun-10 Oct-10 Feb-11 Jun-11 Oct-11 Feb-12 Jun-12 Oct-12 Feb-13 Jun-13 Oct-13 Feb-14 Jun-14
31
IS IN THE PRICE PERFORMANCE SLW
*Source: ThomsonOne, as of August 15, 2014; **Na Ag, North American senior silver producer average, includes: CDE, HL, FR-T, PAAS & SSRI
Silver NA Ag** PHLX
SLW’s share price has significantly outperformed the price of silver, its silver producing peer group, and the Philadelphia Gold & Silver Index since the Company’s inception
32
SILVER WHEATON PROVIDES:
AND REMAINS STRATEGICALLY POSITIONED FOR FURTHER GROWTH.
INVESTOR RELATIONS
Tel: 604-684-9648 Toll Free: 1-800-380-8687 Email: info@silverwheaton.com
TRANSFER AGENT
CST Trust Company Toll Free: 1-800-387-0825 Email: inquiries@canstockta.com
NYSE: SLW TSX: SLW www.silverwheaton.com 33
34
35
CAPITAL STRUCTURE AS OF JUNE 30, 2014 Shares Outstanding 358.0 million Warrants Outstanding (in-the-money) 0.0 million Options Outstanding (in-the-money) 1.7 million Shares Fully Diluted 359.7 million 3 Month Average Daily Trading Volume: TSX: 1.1 million shares NYSE: 3.8 million shares
36
TIMELINE
2004 2005 2006 2007 2008 2009 2010 2011 2012
Date of Contract: 10/15/2004 Current Owner: Primero Mining Upfront Payment: $190 million Term of Agreement: LOM
100% Silver San Dimas (Mexico) Date of Contract: 12/8/2004 Current Owner: Lundin Mining Upfront Payment: $78 million Term of Agreement: LOM
100% Silver Zinkgruvan (Sweden) Date of Contract: 3/23/2006 Current Owner: Glencore Upfront Payment: $285 million Term of Agreement: 20 years
100% Silver Yauliyacu (Peru) Date of Contract: 4/23/2007 Current Owner: Eldorado Gold Upfront Payment: $58 million Term of Agreement: LOM
100% Silver Stratoni (Greece) Date of Contract: 7/24/2007 Current Owner: Goldcorp Upfront Payment: $485 million Term of Agreement: LOM
25% Silver Peñasquito (Mexico) Date of Contract: 3/17/2008 Current Owner: Mercator Minerals Upfront Payment: $42 million Term of Agreement: LOM
100% Silver Mineral Park (United States) Date of Contract: 5/13/2008 Current Owner: Nyrstar NV Upfront Payment: $79 million Term of Agreement: LOM
75% Silver Campo Morado (Mexico) Date of Contract: 10/2/2008 Current Owner: Alexco Upfront Payment: $50 million Term of Agreement: LOM
25% Silver Keno Hill (Canada) Date of Contract: 10/15/2004 Current Owner: Goldcorp Upfront Payment: $4 million Term of Agreement: 25 years
100% Silver Los Filos (Mexico) Date of Contract: 2/11/2010 Current Owner: Augusta Resources Upfront Payment: $230 million Term of Agreement: LOM
100% Silver 100% Gold Rosemont (United States) Date of Contract: 8/8/2012 & 11/4/2013 Current Owner: Hudbay Upfront Payment: $430 million Term of Agreement: LOM
100% Silver 50% Gold Constancia (Peru) Date of Contract: 8/8/2012 Current Owner: Hudbay Upfront Payment: $455 million Term of Agreement: LOM
100% Silver 100% / 50% Gold* 777 (Canada) Date of Transaction: 5/21/2009 Interests Acquired: (mine / owner / location) Minto Capstone Mining Canada Cozamin Capstone Mining Mexico Neves-Corvo Lundin Mining Portugal Aljustrel I’M SGPA Portugal Silverstone Resources Date of Contract: 9/8/2009 Current Owner: Barrick Upfront Payment: $625 million Term of Agreement: LOM
25% Silver Additional Consideration: (mine / location) Lagunas Norte Peru Pierina Peru Veladero Argentina Pascua-Lama (Chile / Argentina) 10/22/2004: Silver Wheaton began trading on the TSX under the symbol
name was changed from Chap Mercantile Inc. to Silver Wheaton Corp. and the outstanding shares were consolidated on a 5 for 1 basis.
Note: Upfront payment denoted in US$ millions; excludes closing costs and capitalized interest, where applicable *Silver Wheaton is entitled to acquire 100% of the life of mine gold production from Hudbay’s 777 mine until Hudbay’s Constancia project satisfies its completion test, or the end
Date of Contract: 2/28/2013 Current Owner: Vale Upfront Payment: $1.33 billion Term of Agreement: LOM
25% Gold Salobo (Brazil) Date of Contract: 2/28/2013 Current Owner: Vale Upfront Payment: $570 million Term of Agreement: 20 years
70% Gold Additional Consideration: 10 million SLW warrants w/$65 strike & 10yr term Sudbury (Canada)
2013 2014
Date of Contract: 11/11/2013 Current Owner: Sandspring Resources Upfront Payment: $148.5 million Term of Agreement: LOM
10% Gold Early Deposit: $13.5 million Toroparu (Guyana)**
37
19 PRODUCING MINES IN 2014
2014 Forecast Production by Mine 2018 Forecast Production by Mine
*Silver Eq. production assuming Ag:Au ratio of 60:1; **Production includes Goldcorp’s four year commitment commencing in August 2010 to deliver to Silver Wheaton 1.5Moz
Diversified asset base with no single asset accounting for more than 20% of production
19% 16% 12% 8% 7% 7% 5% 4% 22% Peñasquito San Dimas** 777* Salobo* Yauliyacu Zinkgruvan Sudbury* Barrick (Other)*** Other* 20% 13% 12% 9% 8% 7% 6% 6% 6% 13% Peñasquito San Dimas** Constancia Salobo* Rosemont* Yauliyacu Sudbury* Zinkgruvan 777* Other*
38
Silver Wheaton has included, throughout this document, certain non-IFRS performance measures, including (i) operating cash flow per share (basic and diluted); (ii) average cash costs of silver and gold on a per ounce basis; and (iii) cash operating margin. i. Operating cash flow per share (basic and diluted) is calculated by dividing cash generated by operating activities by the weighted average number of shares outstanding (basic and diluted). The Company presents operating cash flow per share as management and certain investors use this information to evaluate the Company’s performance in comparison to other companies in the precious metals mining industry who present results on a similar basis. ii. Average cash cost of silver and gold on a per ounce basis is calculated by dividing the total cost of sales, less depletion, by the
information to evaluate the Company’s performance and ability to generate cash flow. iii. Cash operating margin is calculated by subtracting the average cash cost of silver and gold on a per ounce basis from the average realized selling price of silver and gold on a per ounce basis. The Company presents cash operating margin as management and certain investors use this information to evaluate the Company’s performance in comparison to other companies in the precious metals mining industry who present results on a similar basis. These non-IFRS measures do not have any standardized meaning prescribed by IFRS, and other companies may calculate these measures differently. The presentation of these non-IFRS measures is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. For more detailed information, please refer to Silver Wheaton’s Management Discussion and Analysis available on the Company’s website at www.silverwheaton.com and posted on SEDAR at www.sedar.com.