Silver Wheaton lifts FY gold outlook 15% following record Q2 output

VANCOUVER (miningweekly.com) – The world’s largest precious metals streaming firm Silver Wheaton said Wednesday it expected to produce 15% more gold this year than previously expected, as production is being boosted by strong performance from its key asset, Vale’s Salobo mine, on which it had just picked up a further gold stream.

For 2016, Silver Wheaton’s estimated attributable gold production will be 305 000 oz, up from the 265 000 oz previously forecast. The estimated average yearly attributable gold output over the next five years (including 2016), is likely to be about 330 000 oz/y of gold, up from 260 000 oz, the Vancouver-based company advised.

The company also expects slightly lower silver output this year at 32-million ounces, down from 32.8-million ounces previously, weighed down by lower-than-expected output from Primero Mining’s San Dimas mine and Goldcorp’s Peñasquito mine. This will be partially offset by Glencore’s Antamina mine, which is expected to be above previous guidance. Over the next five years (including 2016), the silver outlook remains unchanged at 31-million ounces a year.

Silver Wheaton reported record attributable silver sales volumes for the six months ended June 30 of 14.7-million ounces, an increase of 31% when compared with the first half of 2015. Gold sales also hit record volumes at 136 000 oz for the first half, up 52% year-on-year.

On a silver equivalent basis, the attributable sales volume for the six months ended June 30 was 25-million ounces, representing an increase of 40% year-on-year, representing yet another company record.

Revenue for the three and six months came in at $212-million and $400-million, respectively, up 29% and 36% each.

Net earnings rose 12% during the second quarter to $60-million, or $0.14 a share, while falling 2% during the first half to $101-million, or $0.24 a share.

Operating cash flows for the three and six months were $134-million, or $0.31 a share, and $248-million, or $0.59 a share, respectively, representing an increase of 23% and 25% over the respective periods of 2015.

The board declared a dividend in the amount of $0.05 a common share according to the company’s stated dividend policy being equal to 20% of the average of the previous four quarters' operating cash flow.