Silver Wheaton board recommends name change as it rakes in record precious metals revenues

VANCOUVER (miningweekly.com) – The pioneer of the metals streaming mine financing model Silver Wheaton has proposed a name change to Wheaton Precious Metals, to better reflect the fact that an increasing proportion of its revenue is derived from gold.

The Vancouver-based company on Tuesday said that, since 2013, it had seen a marked increase in gold production and, in the second half of 2016, its revenue was evenly split between silver and gold.

“To better align our corporate identity with underlying operations while maintaining a link to our past and the innovation that the Wheaton name has become synonymous with, we have recommended changing our name to Wheaton Precious Metals. Over the company's history, we have created value through streaming both silver and gold from a diverse portfolio of high-quality assets and the new name will reinforce our position as the leader in precious metals streaming,” president and CEO Randy Smallwood said in a statement.

Shareholders will be asked to approve the name change at the company's annual meeting in May. If the name change to Wheaton Precious Metals is approved by shareholders, the company plans to also change its TSX and NYSE ticker symbol from SLW to WPM.

RECORD REVENUES
Silver Wheaton also on Tuesday reported its full-year operating and financial results, recording record sales volumes for the year ended December 31, of 28.3-million ounces of silver and 330 000 oz of gold, up 7% and 63% year-on-year, respectively, when compared with 26.6-million ounces of silver and 202 300 oz of gold sold in 2015.

This resulted in record revenues of $892-million for 2016, up 37% over 2015.

Headline earnings, removing the impact of a $71-million after-tax impairment charge taken in 2016 and the $372-million after-tax impairment charge taken in 2015, came to $266-million, or $0.62 a share, which, despite representing a year-on-year increase of 27%, missed analysts’ average forecast for earnings of $0.68 a share.

The cash operating margin for the year was $12.54/oz of silver sold and $855/oz of gold sold, up 9% and 13%, respectively.

Average cash costs for the year were $4.42/oz silver and $391/oz gold.

Attributable output totalled 30.4-million ounces of silver and 353 700 oz of gold, down 1% and up 46% year-on-year.

From a liquidity perspective, with the $124-million of cash and cash equivalents as at December 31, combined with the liquidity provided by the available credit under the $2-billion revolving facility and ongoing operating cash flows, Silver Wheaton said it is well funded to meet all outstanding commitments and known contingencies, as well as being provided with flexibility to acquire more accretive precious metals stream interests.

As of December 31, Silver Wheaton’s attributable proven and probable mineral reserves stood at 735.6-million ounces of silver and 11.55-million ounces of gold.

Silver Wheaton's estimated attributable production in 2017 is forecast to be 28-million ounces of silver and 340 000 oz of gold. For 2017 guidance, Silver Wheaton has assumed the ongoing strike at Primero Mining’s San Dimas mine, in Mexico, will continue for a three-month period and that San Dimas will otherwise achieve production in line with that of 2016.

Silver Wheaton's estimated average yearly attributable production over the next five years is anticipated to be in line with 2017 production at about 29-million ounces of silver and 340 000 oz of gold.