Silver Wheaton Corp
) fourth-quarter 2012 earnings of 50 cents a share surpassed the
Zacks Consensus Estimate by a penny and the year-ago quarter
earnings by 9 cents. The Canada-based silver mining company's
profit increased 22.8% year over year to a record $177.7 million.
Increased silver equivalent sales boosted the bottom line in the
For full-year 2012, Silver Wheaton posted earnings of $1.66
per share compared with $1.56 per share in 2011, missing the
Zacks Consensus Estimate of $1.69 per share.
Revenues rose 50% year over year to a record $287.2 million in
the reported quarter, beating the Zacks Consensus Estimate of
$246 million. The growth was fueled by a 53% year over year
increase in silver equivalent sale that recorded 9.1 million
(including 7.3 million ounces of silver and 33,000 ounces of gold
with relatively unchanged gold and silver prices).
For full-year 2012, revenues increased 16% to $849.6 million
from $730 million in 2011, and were ahead of the Zacks Consensus
Estimate of $821 million.
Attributable silver equivalent production jumped 22% year over
year to 8.5 million ounces in the quarter including 7 million
ounces of silver and 26,400 ounces of gold. Silver Wheaton
recorded its fourth straight year of record annual attributable
production of 29.6 million silver equivalent ounces, a 17%
Average cash costs per silver equivalent ounce rose to $4.70
in the fourth quarter from $4.06 a year ago. Cash operating
margins declined 5% year over year to $26.76 per silver
equivalent ounce due to higher production payments related with
the precious metals stream on Hudbay's 777 mine, which includes
$5.90 per ounce of silver and $400 per ounce of gold.
Silver Wheaton had cash and cash equivalents of $778 million
as of Dec 31, 2012, down roughly 7.4% year over year, along with
the liquidity provided by the $2.5 billion of new credit
facilities. Operating cash flows increased 55% year over year to
$254 million in the fourth quarter.
Last month, Silver Wheaton entered into an agreement with a
subsidiary of mining giant
) to acquire gold production from mines in Brazil and Sudbury,
Canada.. As per the agreement, Silver Wheaton will receive 25% of
the life of mine gold produced from Vale's Brazilian Salobo mine
as well as 70% of the production from its Sudbury Mines for a
period of 20 years.
Silver Wheaton expects attributable production for 2013 to be
roughly 33.5 million silver equivalent ounces, including 145,000
ounces of gold, a 13% increase compared with 2012
attributable production. The expected increase is based on the
added production from Vale's Salobo and Sudbury mines and a full
year production from the Hudbay's 777 mine acquired in Sep
Silver Wheaton currently carries a Zacks Rank #3 (Hold).
Other mining companies worth considering are
Sandstorm Gold Ltd.
Seabridge Gold, Inc.
) with both having a Zacks Rank #2 (Buy).
SEABRIDGE GOLD (SA): Free Stock Analysis
SANDSTORM GOLD (SAND): Get Free Report
SILVER WHEATON (SLW): Free Stock Analysis
VALE SA (VALE): Free Stock Analysis Report
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