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BioBIO interview Barbara Salinas
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=89637550
Barrick will be brought to financial disaster over the very many class action law suits started (six so far)to come and yes again they have no rights to extract minerals from Mina Pasua Chile See BioBio Chile interview with Barbara Salinas over the anullment of the Pasua Lama Protocol.
I can't believe the volatility in this stock. I didn't expect the big downturn yesterday and now it is up so far today.
Toofuzzy
Well it seems Chile is allowing them to go forward except for the environmental concerns. The ownership debate was not an issue. That is NOT what stopped them from digging.
Toofuzzy
What will SLW have to say when Barrick are found to be fraudulent in all that concerns Pascua Lama.
They have no claims to mine any minerals on the Chilean side and are in contempt of the law as the deposite has been injunctioned since 2001. So exactly what silver do you all expect from this endeavor......... nil always was always will be nil
movie at 11:00
$SLW - Silver Wheaton provides update on Pascua-Lama
http://www.silverwheaton.com/News1/PressReleases/PressReleaseDetails/2013/Silver-Wheaton-provides-update-on-Pascua-Lama/default.aspx
VANCOUVER, July 1, 2013 /CNW/ - Silver Wheaton Corp. ("Silver Wheaton" or the "Company") (TSX:SLW) (NYSE:SLW) today provides an update on the Pascua-Lama project, on which Silver Wheaton has a silver streaming agreement with Barrick Gold Corporation ("Barrick").
As per Barrick's news release dated June 28, 2013, Barrick "has submitted a plan, subject to review by Chilean regulatory authorities, to construct the project's water management system in compliance with permit conditions for completion by the end of 2014, after which Barrick expects to complete remaining construction works in Chile, including pre-stripping. Under this scenario, ore from Chile is expected to be available for processing by mid-2016."
As part of Silver Wheaton's original contract with Barrick, Barrick has provided Silver Wheaton with a completion guarantee, requiring Barrick to complete Pascua-Lama to at least 75% of design capacity by December 31, 2015. During 2014 and 2015, Silver Wheaton will be entitled to silver production from three of Barrick's currently producing mines, the Lagunas Norte, Pierina, and Veladero mines, to the extent of any production shortfall at Pascua-Lama, until Barrick satisfies the completion guarantee.
According to the original silver purchase agreement, if the requirements of the completion guarantee have not been satisfied by an outside completion date of December 31, 2015, the agreement may be terminated by Silver Wheaton. Given the recent developments, Silver Wheaton has agreed to extend the outside completion date for Pascua-Lama to December 31, 2016. In such an event, Silver Wheaton will be entitled to the return of the upfront cash consideration of $625 million less a credit for silver delivered up to December 31, 2016. Silver deliveries from the other three mines will still end at the end of 2015, to the extent of any Pascua-Lama production shortfalls.
"As long as Barrick is still advancing construction of Pascua-Lama at the end of 2015, Silver Wheaton does not intend to cancel the silver stream", said Randy Smallwood, Silver Wheaton's President and Chief Executive Officer. "We are in regular contact with Barrick, and are confident that all the right measures are being taken to achieve production at this mine. Pascua-Lama is a world class gold and silver deposit and will be a world class mine once it begins production."
Silver Wheaton has revised its 2017 production forecast to 49 million silver equivalent ounces from 53 million to reflect the delay at Pascua-Lama. Production for 2013 is still expected to be 33.5 million silver equivalent ounces.
Patrick Drouin
Vice President, Investor Relations
Silver Wheaton Corp.
Tel: 1-800-380-8687
Email: info@silverwheaton.com
Website: www.silverwheaton.com
I purchased some additional shares in my ROTH IRA. I didn't have enough funds (till contribution in January) so I purchased $13 January 2013 CALLS .(the deeper in the money the less time premium) I also SOLD $13 January PUTS in my taxable account. If I sold these in the IRA I would need more cash sitting there and that would have defeated the purpose of using options.
I may also consider selling $30 January 2013 CALLS in the IRA to pick up a few extra bucks now. If I can pick up a move from $20 to $30 in that time frame I would be more than happy.
Toofuzzy
There are some very powerfull funds invested in both ABX as well as SLW watching the course of development of the Pascua Lama fiasco!
They are more and more convinced that the current state has been self committed with little regard to shareholders in general.
My friends there will be class action proceedings over this matter and others of major proportions still to be anounced that will likely cause Barrick to have to sell most of its assets to cover liabilties!
Likely Barrick will be dissolved and whatever is left will go in a fire sale.
Mark the date.......................
movie at 11:00
$SLW - Silver Wheaton Corp: A Big Long-Term Investment Opportunity
http://seekingalpha.com/article/1526182-silver-wheaton-corp-a-big-long-term-investment-opportunity?source=email_rt_article_readmore
Silver is one of the most widely acknowledged stores of value since historic times. Although fiat money has taken its place in recent times, silver continues to hold much significance in our modern world. World demand for silver and its products has never been higher.
(click to enlarge)
Source: World Silver Survey 2013 and Thomson Reuters GFMS
Silver, because of its many applications, is an essential input for many companies belonging to the jewelry, solar paneling, and fabrication industries. Silver is also used for investment purposes as its price constantly fluctuates with changes in the economic variables that affect it.
Exploiting Silver's Potential - Silver Wheaton Corp (SLW)
SLW is the largest silver streaming company in the world. It has a unique business model which allows it to generate attractive returns for its shareholders. SLW engages in long-term contracts with different mining companies to purchase the silver they produce. The contract is enacted at a low price on which both the parties have mutual agreement. The mining companies in question are those that extract base metals and for them silver are a by-product of their operations. SLW pays an upfront payment to the mining companies when the contract is signed. Later on SLW also pays delivery payments to the mining company per ounce of silver delivered. The contract is beneficial for both of the parties as SLW is able to procure silver at lower rates and the mining company gets much needed capital by selling off the silver by-product of their operation. Two major mining companies that have contracts with silver streaming companies are Barrick Gold and Goldcorp.
One of the prime characteristics of silver streaming companies is that their earnings are directly proportional to the changes in the price of silver in the open market.
(click to enlarge)(click to enlarge)
Source: Y Charts
The above graph shows the 3- year percentage change in the price of SLW with the S&P Gsci Silver Index. It is very evident from the graph that SLW's performance is highly correlated with the movement in silver's price. The reason for this great correlation is explained below.
(click to enlarge)
Source: Company Presentations
The above graph shows that SLW's total cash costs per ounce of silver are fairly stable over the years. The slight increase over the years is an adjustment for inflation. This is due to the long term contracts of SLW with the mining companies as discussed before. We see that as the per ounce price of silver increased, in the 2010-2011 period, the margins for the company increased. The opposite is true when the per ounce price of silver decreased in the 2011-2012 period. Overall, the company has seen an increase in its cash operating margins.
(click to enlarge)
Source: Company Presentations
The above bar charts show the most positive financial indicators for the company in the 2010-2012 period. Revenues, operating cash flows and earnings have more than doubled in the representative period.
(click to enlarge)
Source: Company Presentations
The 1Q13 results for the company have been largely positive. The YoY increase in the production of silver equivalent products was 20%. Revenues increased by 3% on the YoY basis. This figure is the best indicator of the current performance of the company because as the operating cash margins have fallen, the company has been able offset it by increasing its sales volumes. The sales volume increased due to the increasing demand for silver from different industries which use it as an input for production. The falling market price of silver had the inevitable effect on the earnings on the company which fell by 9% on the YoY basis.
Future Outlook - SLW
SLW's future in part depends on the future of mining companies.
(click to enlarge)
Source: CPM Group silver production forecasts by source metal, company presentation
The above bar chart shows the estimated increase in base metal mining operations around the world. We can also see an increase in the number of gold mines and traditional silver mines. It is interesting to note that 70% of the silver is produced as a by-product of base metal and gold mining operations. The forecasted increase in base metal and gold mining operations is a positive sign for SLW as it will be able to increase its supply by contracting with these mining companies in the future. Therefore, we see tremendous growth potential for the companies involved in the silver streaming operations.
A possible downside to the silver streaming companies is that no credible forecast exists for the possible changes in silver prices. Historically, money supply and velocity of money have shown correlation with changing prices of silver. A detailed regression model can at best only vaguely estimate the price changes in the future. Therefore, it is highly recommended that investors should not base their expectations on changes in these two variables only.
SLW's Risk Profile
Companies that pack growth potential have exposure to mounting risks. Below we analyze how SLW manages its risks.
(click to enlarge)
Source: Company Presentations
The above graph shows that SLW ranks very favorably on the political risk spectrum. This is because most of the mining companies that provide silver to SLW operate in politically stable locations with lesser chances of downtime. This will ensure steady supply of silver to SLW in the years to come.
(click to enlarge)
Source: Company Reports, Company Presentations
Another way SLW has reduced its exposure to risks is through contracting only those mining companies that have access to long-life mines. The pie charts show that by the year 2017, up to 80% of silver supply to SLW would come from long-life mines (long life mines are those which are expected to last 10 or more years).
SLW is also protected from currency translation losses as it deals in silver. SLW has no exploration expenditures and it is able to maintain strong cash flows. All these factors reduce the risks SLW faces.
Valuation
SLW is not the only silver streaming company in world. The performance of other companies in this industry has immense effect on the share price of SLW.
Source: Company Financial Statements and Morningstar
The above table shows the valuation of SLW using the price multiples. The fair value that we get for SLW is a little higher that the last close value of its share price.
Conclusion
SLW has a winner business model which packs enormous growth potential once the silver prices start to rise again. The comparative valuation shows a small upside potential for the company signifying no immediate gains to be made on the stocks of this company. As silver prices are subject to changes, there will surely come a time in future when they start to rise again. Until then, SLW will focus on increasing its sales volume and providing solid dividends to its shareholders. Due to the above mentioned reasons, I will give a buy recommendation to the investors for a long horizon.
$SLW - The King Of The Royalty And Streaming Companies
http://seekingalpha.com/article/1515392-the-king-of-the-royalty-and-streaming-companies?source=email_rt_article_readmore
... "Although Silver Wheaton (SLW) isn't the market darling it used to be, it is still king of the royalties/streamers. It has a robust growth profile even if Chile stops mining on that side of the border at Pascua-Lama. Should this happen, Barrick (ABX) would construct a much smaller open pit on the Argentinean side; however, I am confident the currently designed operation will take place. I say this with one caveat; that Barrick has no chance of reaching initial commercial production in neither 2014 nor early-mid 2015 or mid 2016. Silver Wheaton's other advantage over the other royalty/streaming companies is that it only pays taxes on its Canadian assets, which is the norm for Canadian companies who operate both in Canada and other countries. Of course its biggest advantage over any other mining stocks is its fixed cost structure. Also, its largest "cornerstone" streaming deals have been negotiated will big proven companies including Goldcorp (GG), Vale (VALE), Barrick, Hudbay (HBM), Glencore (GLCNF.PK), as well a mid-size operators which have executed brilliantly including Primero (PPP), Capstone (CPST), El-Dorado (EGO) and others.
Silver Wheaton has an impressive all in costs structure for the majority of the streams they've acquired;
(Click to enlarge)
This king of the royalty/streaming companies is due to its asset base. The next closest competitor to Silver Wheaton is Franco-Nevada (FNV), which has Cobre-Panama, Palmarejo, the Sudbury mines, Goldstrike and Tasiast as cornerstone assets. Silver Wheaton has Rosemont, Constancia, San Dimas, Pascua-Lama, Penasquito, 777, Sudbury, Yauliyacu and Salobo. To boot, all these streaming interests will augment production growth. Rosemont, Constancia and Pascua-Lama are assets which aren't online yet. San Dimas, Sudbury and Salobo are undergoing or will undergo expansions. Penasquito Is addressing its water issue and Yauliyacu is still working on fixing its concentrate problem. 777 will be partly responsible for growth in 2013 as well as some other streams.
Cornerstone Assets and Growth Drivers
San Dimas (Mexico) ~ Is one of two cornerstone assets in the silver rich country of Mexico. This agreement was amended so that Goldcorp could sell the asset to Primero. This came with some caveats, however, the first being that until the 4th anniversary following the amendment, Goldcorp will supply 1.5m oz.'s per annum and Primero will supply 3.5m oz.'s + 50% of the excess production beyond that. Starting in 2015, Goldcorp will no long supply any silver but Primero will be required to supply the first 6m oz.'s produced plus 50% of the excess beyond that. Additionally, Silver Wheaton now holds a stream which lasts for the LOM instead of 2029. Goldcorp will guarantee delivery on Primero's portion until 2029. Primero will have completed its Phase I expansion in early 2014, increasing attributable production to Silver Wheaton to 6.4-6.6m oz.'s, followed by phase II expansion, increasing attributable production above 7m oz.'s in 2016.
Penasquito (Mexico) - Despite water shortages at the mine, which have caused less than ideal production, Goldcorp has implemented a plan to resolve this issue in Q2 +/- in 2014. This will cause production to jump up greatly, increasing each year until 2021-2022 when peak silver production is projected at 36m oz.'s or 9m oz.'s attributable. This was initially forecast to be in 2019 but due to disruptions has been pushed back a couple of years. Additionally, a scoping study will take place as those who manage the mine think there is an opportunity to develop and underground mine and run both open pit and underground operations concurrently
Constancia (Peru) -Constancia is part of the Hudbay deal, expected to commence production sometime in 2015, reaching capacity in 2016. This will increase Silver Wheaton's production by 2.4m oz.s Ag for the first several years, dropping off to 2.2m oz.'s. Constancia will be in operation a minimum of 16 years, based on current reserves. Silver Wheaton and Hudbay both believe the upside potential is substantial, both optimizing total production and adding significant mine life going forward. Like 777, the ongoing per ounce purchase price of silver will be $5.90/oz. In aggregate, these two new streams will add approximately 4.8m silver equivalent ounces, bolstering the company's immediate and longer term growth profile.
Sudbury (Canada) ~ Silver Wheaton's most recent deal with Vale involved streaming deals on two of its assets, Sudbury mines and Salobo. This was the first deal ever completed by Silver Wheaton which was strictly confined to gold streams, which increased the long term exposure to gold to 20% of total revenue and 80% from silver. Located in Canada, the Sudbury mines have been in production for some time, operated by a proven operator, Vale. In exchange for $1.9B paid to Vale, Silver Wheaton will have the right but not the obligation to purchase 70% of the gold production from Sudbury and 25% of the gold production from Salobo, located in Para, Brazil. Each ounce will be sold to Silver Wheaton at $400/oz. The Sudbury stream agreement has a 20-year term sheet which began paying out on January 1, 2013. Average annual production will be 35,000 oz.'s for the first 3 years, increasing to 50,000 oz.'s thereafter.
Salobo (Brazil) ~ the real meat of this deal was for the Salobo stream, Silver Wheaton's first asset in Brazil. Not only does this increase the geographical diversity of its assets but it also gives Silver Wheaton is longest lived streaming asset. Based on current reserves, Salobo has a 63.33 year mine life, during which time it will sell Silver Wheaton 45,000 oz.'s through 2015, at which time production will increase and Vale will sell 70,000 oz.'s from Salobo. Futhermore, there is plenty of room to further increase mill throughput thereby increasing attributable production to Silver Wheaton. As with the Sudbury stream, each oz. of gold will be sold at $400/oz. In aggregate these two streams increase the average mine life per stream, immediately increase production as well as providing growth starting in 2016, further increases Silver Wheaton's geographical diversity, increases reserves by a more than 4m oz.'s and increases Silver Wheaton's exposure to gold.
777 (Canada) - 777 is one of two streams recently acquired from Hudbay Minerals in Silver Wheaton's first deal in over 2 years. 777 is unique in the sense that it more than triples the company's exposure to gold, at least until the Rosemont stream comes online. Silver Wheaton is entitled to purchase all the mines gold and silver production until Constancia meets certain development requirements or 2016, whatever is longer. Once either development requirements are met or 2016, Silver Wheaton's Gold but not silver stream will off to 50% from 100%. As part of this 750 million dollar deal, Silver Wheaton will be entitled to purchase each ounce of gold at $400/Oz. and each ounce of silver at $5.90/Oz. For at least the first full 4 years after the deal closes, Silver Wheaton's production will increase by 65,000 - 70,000 Oz.'s Au and 800,000 Ag. Once the stream falls to 50%, Silver Wheaton's long term attributable production in the longer term will increase by 32,500 - 35,000 Oz.'s Au and 800,000 Oz.'s Ag or 2.4m-2.5m silver equivalent Oz's. This will, however, be augmented by the second stream in the deal, Constancia. The 777 mine has a very long history of replacing reserves, making the current 9 year life a conservative estimate.
Pascua-Lama (Chile) - Silver Wheaton acquired 25% of the life of mine production from yet another one of the world's largest silver deposits, further diversifying its asset base via exposure to Chile and to a smaller degree, Argentina. Pascua-Lama, was set to reach commercial production in Q2 2014, however, due to delays, we are forecasting late 2015 - mid 2016. It is projected to reach feasibility levels in late 2016, producing an average of 800,000-850,000 Au and 34-36m Ag annually. Pascua-Lama hosts 671 million ounces of contained silver within Barrick's reported proven and probable gold reserves, with an additional 166 million ounces of contained silver within Barrick's reported measured and indicated gold resources, currently supporting a minimum mine life of 25 years. This, however, like many of Silver Wheaton's other assets is unlikely to be depleted when the 25 years comes due unless further mining and mill optimization measures are implemented, drastically increasing the projects internal rate of return, NPV and attributable annual production.
Rosemont (USA) - The Arizona mine along with Pascua-Lama, Keno Hill, Navidad, Constancia and potential acquisitions going forward will be the company's primary long term growth drivers. Once in production, Rosemont will increase Silver Wheaton's attributable production by 2.9m oz. of silver and up to 15,000 oz. of gold for over 20 years based on current reserves. While the timeline for commercial production is still unknown, it should begin initial production by 2015, reaching capacity or near capacity in 2016 or earlier. Once online, Rosemont will be the key to propelling Silver Wheaton's attributable gold production to or past 200,000 oz.
While this robust growth may be satisfactory for more mediocre companies, the same can't be said for Silver Wheaton. The company recently re-arranged its credit facilities, replacing its 1.5B bridge loan with a 3-Year non revolving credit facility of $1B. This leaves Silver Wheaton will roughly $600-650m in available capacity to pursue additional deals. We arrived at this number by adding up cash on hand (75m 1 quarter OCF (100m) + available debt ($950m) less financing obligations (2 $125m payments to Hudbay & a $230m payment to Augusta). Silver Wheaton can of course complete a larger deal than this by making milestone payments instead of one upfront payment or it can issue equity simultaneously for financing purposes (although in our discussions with Silver Wheaton, it would only do so if it found a large, very accretive deal)." ...
You can probably add a few more percentage points of potential today - compliments of the BOJ, et al.
http://www.reuters.com/article/2013/06/11/markets-japan-stocks-idUSL3N0EN13D20130611
$SLW - Precious Metal Streamers Analyst Watch: June Edition
http://seekingalpha.com/article/1490992-precious-metal-streamers-analyst-watch-june-edition?source=email_portfolio&ifp=0
... "Observations
Silver Wheaton still seems to be considered the stock in our watch list with the greatest potential judging from the price targets provided by analysts. The median price target has come down to $40 from $48.50 three months ago, with shares currently trading with a $23 handle. Even the lowest price target of $33 would represent a healthy 30% margin from current levels.
Price targets for Silver Wheaton also display the greatest spread between the high and the low target. We presume that this disagreement between analysts is related to increased debt levels and uncertainty surrounding the completion of the Pascua Lama mine by Barrick Gold for which Silver Wheaton has a cornerstone streaming agreement (as has Royal Gold).
Silver Wheaton has been getting a constant 1.7 recommendation from analysts consistently beating peers and also precious metal miners in this category. The chart below illustrates the share price development and the price target development over the past three months.
(click to enlarge)
A price target cut of 10.6% on average over high, low and median targets for Royal Gold is the main issue to report for the other streaming companies.
Franco Nevada's price targets have changed only insignificantly during the past month and the one analyst covering Sandstorm Gold has also seen no reason to update findings." ...
Looks like another buying "opportunity" today - compliments of the BOJ.
http://www.reuters.com/article/2013/06/11/us-japan-economy-boj-idUSBRE95913120130611
$SLW - Silver Wheaton: Slowdown In China May Be A Positive Sign
http://seekingalpha.com/article/1484161-silver-wheaton-slowdown-in-china-may-be-a-positive-sign?source=email_rt_article_readmore
Disclosure: I am long SLW, GG. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
For those of you who have been following the precious metals sector you know that things continue to look dismal. Silver slumped 27 percent this year, the biggest loss among the 24 commodities in the S&P GSCI Spot Index, while gold dropped 17 percent on speculation the Federal Reserve may reduce U.S. monetary stimulus. The general trend of the precious metals sector, one of downward momentum and negative investor sentiment, looks to continue, with no telling when the rebound will occur. My article today will focus primarily on the current situation of silver, and whether the recent movements in silver prices warrants a buying opportunity for investors or whether it is best for investors to stay away from a potential "value trap".
Recent Performance
Last Tuesday, Silver gained 6 cents to trade at 22.47. But stocks in the precious metals sector were extremely volatile as concerns eased about an early cut in U.S. monetary stimulus and as investors took account of a prolonged shutdown at the world's second-largest copper mine (Grasberg's copper mine).
Short Term Outlook
Based on Tuesday's volume in the precious metals sector, we are already seeing investors holding off on trades until Friday. On Friday, the U.S. non-farm payrolls report will show the employment situation--the key factor for the Fed's decision on monetary policy. Expectations remain that the Federal Reserve will continue its stimulus program to bolster the U.S. economic recovery. As these expectations hold up, a solid report should lead to another day of rebounding silver prices.
Long Term Outlook
The longer term outlook in silver prices, in my opinion, is much more certain. Over the past year, the underperformance of both the Chinese and Indian economy has led to a massive drop in silver prices. Under the new Chinese administration, with Xi Jinping as president, China is willing to sacrifice short-term economic growth in order to deliver structural reforms to the government for sustainable growth in the future. Despite some good numbers coming out of China last week, with China's manufacturing PMI index inching up to 50.8 in May, I believe China's GDP growth for 2013 will fall to below 6% given that China missed nearly every single forecast number in Q1, and given the industrial and power generation slowdown during the first three months of 2013.
India continues to struggle with a rapidly declining middle class consumption and a worsening econotrade deficit. The country's structural hurdles are leading to a deterioration of the countries investment situation, and a soft-landing in 2013 may be warranted. This is not good for silver prices as India is one of the world's leading consumers of silver (and gold).
In addition, Barclays Bank recently noted that silver imports in China were down 28% in the month of April year on year (confirming a decline in silver consumption in China).
Investment Thesis
What I would tell investors is to look at mining companies with the following characteristics:
Diversified asset portfolio with low political risk
Access to capital funding
Low all-in costs of production
Conservative balance sheet-i.e. low debt levels
Healthy pipeline of high quality projects.
I continue to like Silver Wheaton (SLW), one of the world's largest silver streaming companies, as it meets all of the above characteristics. SLW currently has 17 long-term silver purchase agreements (14 to 25 years of a mine's production) with cash costs of approximately $4 per ounce of silver. That is, for the next 14 to 25 years, Silver Wheaton will be able to purchase silver at $4 per ounce and sell silver at $20-35 per ounce (whatever the prevailing market price of silver is). This provides the company with a +60% net income margin and a +80% EBITDA margin.
The streaming business is relatively new to market, extremely profitable, and offers a real hedge against falling metal spot prices. On the contrary, a rise in silver prices should play heavily in SLW's favor as margins will rise significantly. SLW also has a healthy balance sheet, an experienced management team, and a strong pipeline of projects. Its common stock is currently trading at $24.75 per share and has fallen over 30% year to date.
Why silver fans should buy SLW?
Cost certainty - silver cost fixed at $4/oz
Leverage to increasing silver prices - as silver prices increase, margins increase
High quality asset base - including one of the largest mines in South America (Penasquito owned by Goldcorp (GG))
Exceptional growth profile - 4 additional silver agreements currently in the developmental phase
Dividend yield - pays a generous 2% dividend
Stock Forecast
Wall Street analysts are looking for a $40 price target on SLW's common stock or a 62% upside to the stock by the end of the year. I'm looking for the stock to rebound to the $34 level (the level in which the stock opened the year at). This warrants an investment opportunity with a 37% upside.
It is good to see that many analysts are relatively more optimistic about Silver Wheaton compared with other stocks in the sector. As per reports, hedge funds are positive on the stock. A SA article mentioned that the lowest target given by analysts for the stock is $33 which indicates expectations of good growth in stock price in the medium term. The median target for the stock is around $40. The decline in prices of precious metals has adversely impacted the company, but the effect has been much less as compared to the miners who have much higher exposure. The production for 2013 is anticipated at around 33.5 million silver equivalent ounces which is likely to grow to 53 million silver equivalent ounces by 2017. The optimism about the stock stems from the low risk business model of the streaming company, good growth prospects and also the high profit margins. The latest transaction with a Vale subsidiary, for 25% of the gold production in perpetuity from its Salobo Mine in Brazil and 70% of the gold production for 20 years from some of its Sudbury Mines in Canada, is also expected to help the company in the long run. The increased exposure to Gold may help the company in balancing its business model in the long run. The acquisition was completed in February which was a pretty gloomy period for the sector in recent months. Companies are able to get better deals due to the gloom surrounding the sector. Coeur D'Alene (CDE) has hinted that it may acquire more stake in the properties surrounding it in Nevada. CDE had recently got 5% stake in Pershing Gold corporation (PGLC) which is likely to start production in 2014. For Silver Wheaton, analysts are definitely expecting a better outlook compared with the mining companies. A turnaround in the sector will definitely lead to a stronger bounce in stocks like Silver Wheaton.
$SLW - Dundee Starts Silver Wheaton (SLW) at Buy
http://www.streetinsider.com/New+Coverage/Dundee+Starts+Silver+Wheaton+%28SLW%29+at+Buy/8388949.html
Dundee initiates coverage on Silver Wheaton (NYSE: SLW) with a Buy. PT C$35
$SLW - Presentation at Scotiabank Latin American Mining Conference today
http://www.silverwheaton.com/files/13-05-30%20SLW%20Scotiabank%20GBM%20Presentation%20FINAL%20V.2.%28for%20web%20&%20Print%29_v001_m431j8.pdf
$SLW - Silver Wheaton: A Buy Even With Lower Realized Prices And A Billion Dollar Debt
http://seekingalpha.com/article/1469801-silver-wheaton-a-buy-even-with-lower-realized-prices-and-a-billion-dollar-debt?source=email_rt_article_focus_0
... "The above analysis reveals that Silver Wheaton Corporation is a solid company on the debt side. It has significantly increased its debt levels over the past year but all of the ratios imply that the company is not "over-leveraged" or currently in any financial distress. Currently, they have a couple of forces working against them. They must payoff a billion dollar debt that they accumulated in the recent Vale S.A. deal and they must do this with lower realized silver and gold prices.
On the positive side, they have an excellent growth profile. As Silver Wheaton is looking to increase production by over 80% in the next four years, this should create shareholder value in the long-term.
Based on the chart above, the stock is currently on a strong downtrend. I believe patience is needed at this point. When the commodity prices finally find a bottom and when the stock price matches that movement and ultimately begins break to the upside, it should prove be an excellent opportunity to invest in a company with an excellent growth profile." ...
Post Unavailable
I don't know why SLW went up as much as it did today but I am just glad it has stopped going down.
Toofuzzy
when I look at how SLW and Barrick are trading today, it would seem a loss of P.Lama is already factored in.
There will not ever be any silver for SLW from Pascua Lama!
How will this affect stock valuation"? I suspect rather negatively!
actually Pascua Lama will cost SLW a pretty penny for the fraud they will be charged with along with Barrick????????????????????
Class action lawsuits anyone......anyone......Bueller?
movie at 11:00
The recent lows have been providing support to gold and silver companies. If the overall market starts to correct, then things may become a little uncertain. If the recent lows of gold and silver continue to hold, then streaming companies like Silver Wheaton will benefit pretty quickly. On the upside, levels beyond $25 will not be achievable unless silver does a decisive turnaround. The analysts continue to remain bearish on these companies. The recent Q1'13 results were below analyst estimates as the net income declined by more than 9%. Even the revenues did not grow much on a YoY basis. In Q4'12, the company had done much better with nearly 50% growth in revenues and 23% growth in net income. Sequentially, the revenues declined by ~29% and net income fell by nearly 25%. While nothing great was expected from the results, such numbers do reflect the fundamental position of the sector. This puts additional pressure to keep the stocks subdued. The company has used its cash to fund the acquisition of gold streams of Vale's Salobo mine in Brazil and Sadbury mines in Canada. These acquisitions are increasing in the sector as these depressing times have provided opportunities to buy good gold and silver assets at cheap valuations. Development stage companies like Pershing Gold Corporation (PGLC), which is about to start production in a few quarters, are available at a significant discount. Silver Wheaton is operating in a low risk model and the margins of the business are high. In case silver stabilizes, the stock has the potential to rebound strongly. Most gold and silver company stocks have started to show that the recent lows may be a good entry point, at least for trading the range at the extremes. But the stop losses have to be strict.
Thanks for your reply. You are right.. Prices of the precious metals are the key..
Where this stock goes depends on whether silver goes to $10 or has bottomed here at about $20
Toofuzzy
You are correct. Good luck.
Unfortunately, it moves on sentiment. Otherwise, it is a great stock. Profit margins are Wow. Thanks.
3:47 PM Silver Wheaton (SLW) declares $0.12/share quarterly dividend (20% of average cash generated by operating activities for trailing two quarters). For shareholders of record May 23. Payable May 31. Ex-div date May 21
A great business model should help keep this stable until the rebound in metals comes.
IMO this has a very good risk to reward ratio.
Good luck to all.
The recent article on seekingalpha.com has given a thumbs up to Silver Wheaton. The analysis ultimately concludes that the stock has relatively lower risk due to its business model and the diversity of its assets. The analyst has recommended an overweight stance if the stock corrects to $22. This level is the 52 week low made by the stock. It has since bounced by 13% from those levels, and is looking relatively stable. Other companies in the sector have shown stronger rebounds. Many have bounced from levels which were close to the lows of 2008, and a much deeper cut has been avoided. Of course, the fortunes may change pretty quickly if the silver goes into another leg of decline. The most likely scenario is that the stocks my consolidate at current levels and remain in a range. Lower levels can be bought, but one has to remain careful with a stop loss in mind. The good part is that too many analysts are now bearish on the sector. This is usually the best time to start becoming positive. For Silver Wheaton, the price targets of these analysts are significantly higher than the current levels (e.g. Credit Suisse PT of $38). This is because the high margins, and low risk business model of Silver Wheaton makes it a preferred bet in the current scenario. It is a near zero debt company with $778 million in cash. With depressed prices of stocks, especially of development stage companies, it may be good time to invest in some silver / gold assets. Companies like Pershing Gold Corporation (PGLC) (likely to start production in 2014) are looking for investors to fund their endeavors. Contracts may be available at good terms. Silver Wheaton can look for such assets in the Silver sector. The company has maintained its growth and it remains to be seen what happens in the next earnings.
Doh! lol - it's the ol k-i-s-s
http://stockcharts.com/h-sc/ui?s=SLW&p=D&b=5&g=0&id=p00709761746
http://stockcharts.com/h-sc/ui?s=$SILVER&p=D&b=5&g=0&id=p72577072711
earnings reports are good for a few day ride but they too fall back into the rollercoaster.
Toofuzzy is right. When silver goes up, so will SLW.
When silver goes up this will also.
Toofuzzy
Anybody here?? This thing should be bouncing hard pretty soon.
Added 27% to my holdings of SLW today at $24.9 Not as low as you other guys but I was afraid it was still going lower then. Hopefully it doesn't turn around and crash and burn from here.
Did you guys hear about the copper pit mine collapse out west that will affect a good chunk of the gold and silver supply. More gold production lost than Cyprus is supposed to be selling. Hope no one was hurt.
Toofuzzy
You guys are driving the price up with your buying >grin<
Toofuzzy
Thanks John. Good luck to you too.
Yes $22.07 was my entry.
21.79 - 22.09 looks like a safe entry point ...
SLW article today "buy (SLW) a good silver stock."
"The no-brainer of the silver market is Silver Wheaton (SLW), of course. They get to be a producer without actually having to run mines and deal with all the difficulties and problems of being a miner -- and they basically get guaranteed profits. Their contracts are written in such a way that they get to buy well below spot. It’s just a money-making machine."
http://seekingalpha.com/article/1359891-casey-research-s-james-favors-silver-over-gold-in-near-term-recommends-silver-wheaton?source=yahoo
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