Silver Wheaton Announces Record Gold Sales for the Second Quarter of 2016
FOR IMMEDIATE RELEASE TSX: SLW August 10, 2016 NYSE: SLW
SILVER WHEATON ANNOUNCES RECORD GOLD SALES FOR THE SECOND QUARTER OF 2016
Vancouver, British Columbia – Silver Wheaton Corp. (“Silver Wheaton” or the “Company”) (TSX:SLW) (NYSE:SLW) is pleased to announce its results for the second quarter ended June 30, 2016. All figures are presented in United States dollars unless otherwise noted.
Silver Wheaton produced over 130,000 ounces of gold in the first half of 2016 – substantially more than the first half of 2015 at 103,700 ounces and almost twice the first half of 2014 production of 66,600 ounces. Furthermore, gold sales were at a secondconsecutive record level in the quarter at over 70,000 ounces, driven by record gold sales at Salobo.
SECOND QUARTER HIGHLIGHTS
- Attributable production in Q2 2016 of 7.6 million ounces of silver and 70,200 ounces of gold, respectively, compared with 7.2 million ounces of silver and 50,100 ounces of gold in Q2 2015, an increase of 5% and 40%, respectively.
- On a silver equivalent basis¹ and gold equivalent basis¹ attributable production in Q2 2016 was 12.9 million silver equivalent ounces ("SEOs") or 171,300 gold equivalent ounces ("GEOs"), compared with 10.8 million SEOs or 149,100 GEOs in Q2 2015, an increase of 18% and 15%, respectively.1
Attributable sales volume in Q2 2016 of 7.1 million ounces of silver and a record 70,800 ounces of gold, compared with 5.6 million ounces of silver and 61,000 ounces of gold in Q2 2015, an increase of 28% and 16%, respectively.
- On a silver equivalent basis¹ and gold equivalent basis¹, attributable sales volume in Q2 2016 was 12.5 million SEOs or 165,900 GEOs, compared with 10.0 million SEOs or 137,600 GEOs in Q2 2015, an increase of 24% and 21%, respectively.
- As at June 30, 2016, payable ounces attributable to the Company produced but not yet delivered³ amounted to 2.6 million payable silver ounces and 28,500 payable gold ounces, representing a decrease of 0.4 million payable silver ounces and 5,200 payable gold ounces during the three month period ended June 30, 2016.
- Revenues of $212 million in Q2 2016 compared with $164 million in Q2 2015, representing an increase of 29%.
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- Average realized sale price per ounce sold in Q2 2016 of $17.18 per ounce of silver and $1,267 per ounce of gold representing an increase of 5% and 6%, respectively, compared to Q2 2015.
- Net earnings of $60 million ($0.14 per share) in Q2 2016 compared with $54 million ($0.13 per share) in Q2 2015, representing an increase of 12%.
- Operating cash flows of $134 million ($0.31 per share²) in Q2 2016 compared with $109 million ($0.27 per share²) in Q2 2015, representing an increase of 23%.2
- Cash operating margin² in Q2 2016 of $12.72 per silver ounce sold and $866 per gold ounce sold, representing an increase of 5% and 8%, respectively, as compared with Q2 2015.
- Average cash costs² in Q2 2016 were $4.46 and $401 per ounce of silver and gold, respectively.
- Declared quarterly dividend of $0.05 per common share.
- On April 14, 2016, the Company completed a bought-deal common share financing, whereby a total of 38,105,250 common shares (inclusive of the underwriters' overallotment option) of Silver Wheaton were sold at a price of $16.60 per share, for total net proceeds of approximately $607 million.
- Asset Highlights
- Goldcorp Inc. (“Goldcorp”) has approved the Pyrite Leach Project (“PLP”) at Peñasquito with commercial production expected in the first quarter of 2019. The PLP is expected to add annual incremental silver production of approximately 1 to 1.5 million ounces net to Silver Wheaton that is currently not included in the Company’s guidance.
- Peñasquito production was significantly lower relative to Q2 2015 due to a variety of factors including planned lower ore grades and recovery as part of mine sequencing, a planned shutdown of 10 days in Q2 2016 for maintenance, and a longer than anticipated period to ramp the plant up to full production due to a variety of restart issues.
- The Sudbury mines produced a record 14,900 ounces of attributable gold in Q2 2016, an increase of approximately 82% relative to Q2 2015, due to higher grades and associated mill recoveries.
- Events Subsequent to the Quarter
- On August 2, 2016, Silver Wheaton’s wholly-owned subsidiary, Silver Wheaton (Caymans) Ltd. (“SWC”), agreed to acquire from a subsidiary of Vale S.A. ("Vale") an additional amount of gold equal to 25% of the life-of-mine gold production from the Salobo mine, located in Brazil.
“Silver Wheaton continues to be focussed on building a high-quality portfolio of assets that provides a secure foundation during uncertain and volatile times in the precious metals price cycle, but also reap even more robust cash flows when commodity prices turn,” said Randy Smallwood, President and Chief Executive Officer of Silver Wheaton. “With commodity prices rebounding in the second quarter, we were well positioned with the largest precious metals streaming portfolio in the industry, resulting in over $130 million in operating cash flow.”
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“Salobo was once again our strongest asset in the quarter, generating record gold sales for us. Given its continued outperformance since we acquired the first stream in 2013, it should come as no surprise that Silver Wheaton seized the opportunity to add an additional 25% of the gold from the Salobo mine just last week. With the additional gold from Salobo and silver from the recently added Antamina mine, which has surpassed even our expectations for three consecutive quarters, we look forward to demonstrating to investors how powerful our cash flow generation can be in an environment of increasing precious metals prices.”
Financial Review
Revenues
Revenue was $212 million in the second quarter of 2016, on sales volume of 7.1 million ounces of silver and 70,800 ounces of gold. This represents a 29% increase from the $164 million of revenue generated in the second quarter of 2015 due primarily to (i) a 28% increase in the number of silver ounces sold; (ii) a 16% increase in the number of gold ounces sold; (iii) a 5% increase in the average realized silver price ($17.18 in Q2 2016 compared with $16.42 in Q2 2015); and (iv) a 6% increase in the average realized gold price ($1,267 in Q2 2016 compared with $1,195 in Q2 2015).
Costs and Expenses
Average cash costs² in the second quarter of 2016 were $4.46 per silver ounce sold and $401 per gold ounce sold, as compared with $4.26 per silver ounce and $395 per gold ounce sold during the comparable period of 2015. This resulted in a cash operating margin² of $12.72 per silver ounce sold and $866 per gold ounce sold, an increase of 5% and 8%, respectively, as compared with Q2 2015. The increase in the cash operating margin was primarily due to a 5% increase in the average realized silver price and a 6% increase in the average realized gold price in Q2 2016 compared with Q2 2015.
Earnings and Operating Cash Flows
Net earnings and cash flow from operations in the second quarter of 2016 were $60 million ($0.14 per share) and $134 million ($0.31 per share²), compared with $54 million ($0.13 per share) and $109 million ($0.27 per share²) for the same period in 2015, an increase of 12% and an increase of 23%, respectively.
Balance Sheet
At June 30, 2016, the Company had approximately $124 million of cash on hand and $706 million outstanding under the Company's $2 billion revolving term loan. The revolving term loan matures on February 27, 2021.
On April 14, 2016, the Company completed a bought-deal common share financing, whereby a total of 38,105,250 common shares (inclusive of the underwriters' overallotment option) of Silver Wheaton were sold at a price of $16.60 per share, for aggregate gross proceeds to Silver Wheaton of approximately $633 million. After deducting underwriter commissions, the Company raised total net proceeds of approximately $607 million, which was primarily used to repay debt that was outstanding under the Company's $2 billion revolving credit facility.
Subsequent to the quarter, the Company announced the acquisition of an additional 25% of the life-of-mine gold production from the Salobo mine for upfront cash consideration of $800 million and an amendment to the 10 million Silver Wheaton common share purchase warrants previously issued to a subsidiary of Vale to reduce
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the exercise price from US$65 to US$43.75 per common share4. The $800 million upfront cash payment will be financed by cash on hand as well as proceeds from the Company’s $2 billion revolving term loan.
Second Quarter Asset Highlights
During the second quarter of 2016, attributable production was 7.6 million ounces of silver and 70,200 ounces of gold, respectively, representing an increase of 5% and 40% compared with the second quarter of 2015.
Operational highlights for the quarter ended June 30, 2016, are as follows:
Salobo
In the second quarter of 2016, Salobo produced 35,627 ounces of attributable gold, an increase of approximately 28% relative to the second quarter of 2015. This growth was primarily due to increased grade resulting from the continued ramp up of the expansion to 24 million tonnes per annum, which commenced production in mid-2014. Vale expects Salobo to reach its full production capacity in the second half of 2016.
Peñasquito
In the second quarter of 2016, Peñasquito produced 0.9 million ounces of attributable silver, a decrease of approximately 55% relative to the second quarter of 2015. As disclosed in Goldcorp’s second quarter of 2016 MD&A, the significant drop in production was attributable to a variety of factors including: planned lower ore grades and recovery from the upper transitional ore and low grade stockpiles in 2016 compared to 2015 (when ore was being sourced from the heart of the deposit), a shutdown of 10 days in the second quarter for planned mill maintenance, and a longer than anticipated period to ramp the plant up to full production due to a variety of restart issues. The plant had reportedly returned to normal operations by July 2016. Goldcorp forecasts that over the next three years, mining activities in the pit will focus on lower grade ore in the upper parts of the Peñasco pit while stripping is emphasized to ensure an economically optimal pit shell design. By 2019, Goldcorp expects production to once again benefit from mining higher grades at the bottom of the Peñasco pit. Goldcorp further reports that construction of the Northern Well Field project continued to progress during the quarter and is on track to be completed by the end of the third quarter of 2016.
Finally, Goldcorp has approved the PLP and mobilization is expected to commence in August 2016. The PLP is expected to increase overall gold and silver recovery by treating the zinc tailings before discharge to the tailings storage facility. Based on a feasibility study entitled "Feasibility Study Report Peñasquito Metallurgical Enhancement Project" completed in December 2015 by Fluor Canada Inc. (the "Feasibility Study"), the PLP is expected to recover approximately 40% of the gold and 48% of the silver currently reporting to the tailings. The PLP is expected to add annual incremental production of approximately 100 - 140 thousand gold ounces and approximately 4-6 million silver ounces (Silver Wheaton will be entitled to 25% of the incremental silver production). Commercial production is expected in the first quarter of 2019. According to Goldcorp, the project is expected to have a minimal impact on the site water balance and will not require upgrades to the water supply as the Pyrite Leach processing plant recirculates existing plant processing water.
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San Dimas
In the second quarter of 2016, San Dimas produced 1.6 million ounces of attributable silver, a decrease of approximately 11% relative to the second quarter of 2015. As per Primero Mining Corp.’s (“Primero”) second quarter of 2016 MD&A, the decreased production year-over-year was mainly due to lower throughput rates and lower head grades due to the lack of availability of high-grade stopes mainly as a result of lower development in the first quarter of 2016 and ventilation and mine services issues. Primero has also reported that a labor issue during July impacted development and has therefore resulted in deferring mining some high grade areas to 2017.
Antamina
In the second quarter of 2016, Antamina produced 1.7 million ounces of attributable silver benefiting from better than expected recovery and throughput. In the first half of 2016, Antamina has produced 3.7 million ounces of silver relative to full year guidance for 2016 of approximately 5.5 million ounces.
Sudbury
In the second quarter of 2016, Vale’s Sudbury mines produced a record 14,893 ounces of attributable gold, an increase of approximately 82% relative to the second quarter of 2015. This increase was attributable to higher grades and associated mill recoveries at the Coleman, Copper Cliff, and Totten mines.
Other Gold
Total other gold production in the second quarter of 2016 was 19,729 ounces, an increase of approximately 40% relative to the second quarter of 2015. The increase was driven primarily by higher throughput and grades at Minto and higher throughput and recoveries at 777.
Produced But Not Yet Delivered 3
As at June 30, 2016, payable ounces attributable to the Company produced but not yet delivered³ amounted to 2.6 million payable silver ounces and 28,500 payable gold ounces, representing a decrease of 0.4 million payable silver ounces and 5,200 payable gold ounces during the three month period ended June 30, 2016, primarily the result of decreases related to the Antamina, Yauliyacu, and Peñasquito silver interests and the Salobo gold interest. Payable ounces produced but not yet delivered to Silver Wheaton companies are expected to average approximately two months of annualized production but may vary from quarter to quarter due to a number of mining operation factors including mine ramp-up and timing of shipments.
Detailed mine by mine production and sales figures can be found in the Appendix to this press release and in Silver Wheaton’s consolidated MD&A in the ‘Results of Operations and Operational Review’ section.
Events Subsequent to the Quarter
Salobo Acquisition
On August 2, 2016, SWC agreed to acquire from a subsidiary of Vale an additional amount of gold equal to 25% of the life-of-mine gold production from the Salobo mine. This acquisition is in addition to the 50% of the Salobo gold production that SWC is currently entitled to. SWC will pay upfront cash consideration of US$800 million for the increased gold stream and the 10 million Silver Wheaton common share purchase warrants previously issued to a subsidiary of Vale will be amended to reduce the
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exercise price from US$65 to US$43.75 per common share4. In addition, SWC will make ongoing payments of the lesser of US$400 (subject to a 1% annual inflation adjustment now commencing in 2019 on the entire 75% stream) and the prevailing market price for each ounce of gold delivered under the agreement. SWC will be entitled to all attributable gold production for which an off-taker payment is received after July 1, 2016.
Outlook
Silver Wheaton is the largest pure precious metal streaming company in the world. As a result of the recent amendments to the Salobo precious metal purchase agreement, the Company has updated its one-year and long-term production guidance. For 2016, Silver Wheaton’s estimated attributable gold production is now forecast to be 305,000 ounces, up from 265,000 ounces previously forecasted, and estimated average annual attributable gold production over the next five years (including 2016) is anticipated to be approximately 330,000 ounces of gold per year, up from 260,000 ounces. Silver production in 2016 is now forecast to be approximately 32 million ounces, down slightly from previous guidance of 32.8 million ounces due to lower than expected production from San Dimas (Primero has reported that labor issues during July impacted development and has therefore resulted in deferring mining some high grade areas to 2017) and Peñasquito (Goldcorp has reported that over the next three years mining activities in the pit will focus on lower grade ore in the upper parts of the Peñasco pit while stripping is emphasized to ensure an economically optimal pit shell design) partially offset by Antamina, which is expected to be above previous guidance. Annual silver production over the next five years (including 2016) remains unchanged at 31 million ounces per year.
From a liquidity perspective, the $124 million of cash and cash equivalents as at June 30, 2016 combined with the liquidity provided by the available credit under the $2 billion Revolving Facility and ongoing operating cash flows positions the Company well to fund all outstanding commitments and known contingencies as well as providing flexibility to acquire additional accretive precious metal stream interests.
Webcast and Conference Call Details
A conference call and webcast will be held Thursday, August 11, 2016, starting at 11:00 am (Eastern Time) to discuss these results and the acquisition of an additional 25% of the gold from the Salobo mine as announced on August 2, 2016. A presentation on the highlights of the acquisition has been posted on the Company’s home page at www.silverwheaton.com and will be referenced during the call. To participate in the live call, please use one of the following methods:
Dial toll free from Canada or the US: 888-231-8191 Dial from outside Canada or the US: 647-427-7450 Pass code: 45537734 Live audio webcast: www.silverwheaton.com
Participants should dial in five to ten minutes before the call.
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The conference call will be recorded and available until August 18, 2016 at 11:59 pm ET. The webcast will be available for one year. You can listen to an archive of the call by one of the following methods:
Dial toll free from Canada or the US: 855-859-2056 Dial from outside Canada or the US: 416-849-0833 Pass code: 45537734 Archived audio webcast: www.silverwheaton.com
This earnings release should be read in conjunction with Silver Wheaton’s MD&A and Financial Statements, which are available on the Company’s website at www.silverwheaton.com and have been posted on SEDAR at www.sedar.com.
Mr. Neil Burns, Vice President, Technical Services for Silver Wheaton, is a “qualified person” as such term is defined under National Instrument 43-101, and has reviewed and approved the technical information including information on mineral reserves and mineral resources disclosed in this news release.
Silver Wheaton believes that there are no significant differences between its corporate governance practices and those required to be followed by United States domestic issuers under the NYSE listing standards. This confirmation is located on the Silver Wheaton website at http://www.silverwheaton.com/company/corporategovernance/default.aspx.
End Notes
1 Please refer to the table on the bottom of page 12 for the methodology of converting production and sales volumes to silver- and gold-equivalent ounces.
2 Please refer to non-IFRS measures at the end of this press release.
3 Payable silver and gold ounces produced but not yet delivered are based on management estimates, and may be updated in future periods as additional information is received.
4 The amendment to the 10,000,000 Silver Wheaton common share purchase warrants is subject to the approval of the Toronto Stock Exchange. The amended warrants will become effective on August 16, 2016.
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Condensed Interim Consolidated Statement of Earnings
Three Months Ended Six Months Ended June 30 June 30
| (US dollars and shares in thousands, except per share amounts - unaudited) | 2015 | 2015 | ||||||
| 2016 | 2016 | |||||||
| Sales | $ 164,435 | $ 294,939 | ||||||
| $ | 212,351 | $ | 399,862 | |||||
| Cost of sales Cost of sales, excluding depletion Depletion | $ 47,795 53,327 | $ 82,259 85,372 | ||||||
| $ | 60,208 | $ | 116,845 | |||||
| 75,074 | 146,417 | |||||||
| Total cost of sales | $ 101,122 | $ 167,631 | ||||||
| $ | 135,282 | $ | 263,262 | |||||
| Gross margin | $ 63,313 | $ 127,308 | ||||||
| $ | 77,069 | $ | 136,600 | |||||
| Expenses and other income General and administrative 1 Interest expense Other expense | $ 7,886 798 992 | $ 16,056 2,298 2,916 | ||||||
| $ | 9,959 | $ | 20,803 | |||||
| 4,590 | 11,522 | |||||||
| 1,599 | 2,759 | |||||||
| $ 9,676 | $ 21,270 | |||||||
| $ | 16,148 | $ | 35,084 | |||||
| Earnings before income taxes Income tax (expense) recovery | $ 53,637 89 | $ 106,038 (2,893) | ||||||
| $ | 60,921 | $ | 101,516 | |||||
| (615) | (231) | |||||||
| Net earnings | $ 53,726 | $ 103,145 | ||||||
| $ | 60,306 | $ | 101,285 | |||||
| Basic earnings per share Diluted earnings per share Weighted average number of shares outstanding Basic Diluted | $ 0.13 $ 0.13 404,138 404,308 | $ 0.27 $ 0.27 387,464 387,672 | ||||||
| $ | 0.14 | $ | 0.24 | |||||
| $ | 0.14 | $ | 0.24 | |||||
| 436,726 | 419,838 | |||||||
| 436,986 | 420,019 | |||||||
| 1) Equity settled stock based compensation (a non-cash item) included in general and administrative expenses. | 1,205 | 1,420 | 2,602 | 3,341 | ||||
| $ | $ | $ | $ |
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Condensed Interim Consolidated Balance Sheets
| (US dollars in thousands - unaudited) | June 30 | December 31 2015 | |
|---|---|---|---|
| 2016 | |||
| Assets Current assets Cash and cash equivalents Accounts receivable Other | $ 103,297 1,124 1,455 | ||
| $ | 124,490 | ||
| 3,880 | |||
| 2,923 | |||
| Total current assets | $ 105,876 | ||
| $ | 131,293 | ||
| Non-current assets Silver and gold interests Early deposit - silver and gold interest Royalty interest Long-term investments Other | $ 5,469,412 15,725 9,107 19,776 12,315 | ||
| $ | 5,323,048 | ||
| 17,766 | |||
| 9,107 | |||
| 67,229 | |||
| 12,766 | |||
| Total non-current assets | $ 5,526,335 | ||
| $ | 5,429,916 | ||
| Total assets | $ 5,632,211 | ||
| $ | 5,561,209 | ||
| Liabilities Current liabilities Accounts payable and accrued liabilities Current portion of performance share units | $ 10,664 1,904 | ||
| $ | 10,686 | ||
| 3,387 | |||
| Total current liabilities | $ 12,568 | ||
| $ | 14,073 | ||
| Non-current liabilities Bank debt Deferred income taxes Performance share units | $ 1,466,000 176 2,732 | ||
| $ | 706,000 | ||
| 193 | |||
| 1,716 | |||
| Total non-current liabilities | $ 1,468,908 | ||
| $ | 707,909 | ||
| Total liabilities | $ 1,481,476 | ||
| $ | 721,982 | ||
| Shareholders' equity Issued capital Reserves Retained earnings | $ 2,815,569 (23,197) 1,358,363 | ||
| $ | 3,412,454 | ||
| 26,322 | |||
| 1,400,451 | |||
| Total shareholders' equity | $ 4,150,735 | ||
| $ | 4,839,227 | ||
| Total liabilities and shareholders' equity | $ 5,632,211 | ||
| $ | 5,561,209 |
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Condensed Interim Consolidated Statement of Cash Flows
Three Months Ended Six Months Ended June 30 June 30
| (US dollars in thousands - unaudited) | 2015 | 2015 | ||||
| 2016 | 2016 | |||||
| Operating activities Net earnings Adjustments for Depreciation and depletion Amortization of credit facility origination fees: Interest expense Amortization of credit facility origination fees - undrawn facilities Write off of credit facility origination fees upon repayment of NRT Loan Interest expense Equity settled stock based compensation Performance share units Deferred income tax expense (recovery) Investment income recognized in net earnings Other Change in non-cash working capital | $ 53,726 53,448 138 225 - 660 1,420 (684) (130) (39) (162) 1,432 | $ 103,145 85,590 251 474 1,315 2,047 3,341 98 2,806 (171) (200) 1,582 | ||||
| $ | 60,306 | $ | 101,285 | |||
| 75,308 | 146,883 | |||||
| 149 | 406 | |||||
| 214 | 321 | |||||
| - | - | |||||
| 4,441 | 11,116 | |||||
| 1,205 | 2,602 | |||||
| (2,142) | 179 | |||||
| 603 | 232 | |||||
| (55) | (86) | |||||
| 58 | 88 | |||||
| (705) | (3,796) | |||||
| Cash generated from operations Interest paid - expensed Interest received | $ | 139,382 | $ 110,034 (758) 16 | $ | 259,230 | $ 200,278 (1,946) 91 |
| (5,155) | (11,274) | |||||
| 40 | 65 | |||||
| Cash generated from operating activities | $ 109,292 | $ 198,423 | ||||
| $ | 134,267 | $ | 248,021 | |||
| Financing activities Bank debt repaid Bank debt drawn Credit facility origination fees Shares issued Share issue costs Redemption of share capital Share purchase options exercised Dividends paid | $ (85,000) - (129) - (1,045) - - (34,444) | $ (1,085,000) 800,000 (4,241) 800,000 (31,389) - 2,887 (34,444) | ||||
| $ | (665,000) | $ | (760,000) | |||
| - | - | |||||
| - | (1,300) | |||||
| 632,547 | 632,547 | |||||
| (25,834) | (25,834) | |||||
| - | (33,126) | |||||
| 599 | 599 | |||||
| (36,740) | (36,740) | |||||
| Cash generated from (applied to) financing activities | $ (120,618) | $ 447,813 | ||||
| $ | (94,428) | $ | (223,854) | |||
| Investing activities Silver and gold interests Interest paid - capitalized to silver interests Silver and gold interests - early deposit Proceeds on disposal of silver interest Proceeds on disposal of long-term investments Dividend income received Other | $ (55) (2,508) (1,045) - 12 23 (1,447) | $ (900,058) (4,332) (1,058) 25,000 12 80 (2,059) | ||||
| $ | (11) | $ | (284) | |||
| - | (615) | |||||
| (2,041) | (2,042) | |||||
| - | - | |||||
| - | - | |||||
| 14 | 20 | |||||
| (60) | (107) | |||||
| Cash applied to investing activities | $ (5,020) | $ (882,415) | ||||
| $ | (2,098) | $ | (3,028) | |||
| Effect of exchange rate changes on cash and cash equivalents | $ 230 | $ (27) | ||||
| $ | (27) | $ | 54 | |||
| Increase (decrease) in cash and cash equivalents Cash and cash equivalents, beginning of period | $ (16,116) 88,008 | $ (236,206) 308,098 | ||||
| $ | 37,714 | $ | 21,193 | |||
| 86,776 | 103,297 | |||||
| Cash and cash equivalents, end of period | $ 71,892 | $ 71,892 | ||||
| $ | 124,490 | $ | 124,490 |
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Summary of Ounces Produced and Sold
2016 2015 2014
| Q4 Q3 Q2 Q1 Q4 Q3 | |||
|---|---|---|---|
| Q2 | Q1 | ||
| Silver ounces produced 2 San Dimas 3 Yauliyacu Peñasquito Antamina Other 4 | 2,317 1,418 1,786 1,928 1,744 1,290 749 696 696 576 687 875 1,766 2,092 1,932 1,447 1,582 1,630 2,403 - - - - - 3,049 2,684 2,787 2,391 2,391 2,300 | ||
| 1,596 | 923 | ||
| 686 | 657 | ||
| 867 | 1,352 | ||
| 1,707 | 2,021 | ||
| 2,725 | 2,568 | ||
| Total silver ounces produced | 10,284 6,890 7,201 6,342 6,404 6,095 | ||
| 7,581 | 7,521 | ||
| Gold ounces produced ² Sudbury 5 Salobo Other 6 | 13,678 7,300 8,195 8,666 9,924 12,196 37,680 32,954 27,805 27,185 12,253 10,415 19,293 15,592 14,082 17,809 13,925 19,064 | ||
| 14,893 | 7,895 | ||
| 35,627 | 37,871 | ||
| 19,729 | 14,824 | ||
| Total gold ounces produced | 70,651 55,846 50,082 53,660 36,102 41,675 | ||
| 70,249 | 60,590 | ||
| SEOs produced 7 GEOs produced 7 | 15,573 11,092 10,874 10,269 9,078 8,881 208,068 147,178 149,073 140,617 124,056 135,533 | ||
| 12,799 | 12,337 | ||
| 171,290 | 155,110 | ||
| Silver ounces sold San Dimas 3 Yauliyacu Peñasquito Antamina Other 4 | 2,097 2,014 1,265 1,901 1,555 1,295 987 428 809 320 761 1,373 2,086 2,053 1,420 1,573 1,640 1,662 1,340 - - - - - 2,241 2,080 2,081 1,871 1,777 1,969 | ||
| 1,426 | 1,345 | ||
| 578 | 603 | ||
| 886 | 949 | ||
| 2,202 | 1,879 | ||
| 2,050 | 2,776 | ||
| Total silver ounces sold | 8,751 6,575 5,575 5,665 5,733 6,299 | ||
| 7,142 | 7,552 | ||
| Gold ounces sold Sudbury 5 Salobo Other 6 | 6,256 6,674 12,518 8,033 11,251 5,566 44,491 21,957 32,156 9,794 14,270 7,180 14,152 19,446 16,300 10,572 12,383 23,972 | ||
| 11,351 | 9,007 | ||
| 45,396 | 35,366 | ||
| 14,010 | 20,885 | ||
| Total gold ounces sold | 64,899 48,077 60,974 28,399 37,904 36,718 | ||
| 70,757 | 65,258 | ||
| SEOs sold 7 GEOs sold 7 | 13,607 10,201 10,010 7,737 8,493 8,683 181,838 135,243 137,591 106,071 116,654 133,714 | ||
| 12,451 | 12,745 | ||
| 165,945 | 160,180 | ||
| Cumulative payable silver ounces produced but not yet delivered 8 | 3,813 3,290 3,742 2,873 2,876 2,914 | ||
| 2,634 | 3,050 | ||
| Cumulative payable gold ounces produced but not yet delivered 8 | 41,401 40,632 35,604 49,951 27,649 31,485 | ||
| 28,477 | 33,637 |
1) All figures in thousands except gold ounces produced and sold.
2) Ounces produced represent the quantity of silver and gold contained in concentrate or doré prior to smelting or refining deductions. Production figures are based on information provided by the operators of the mining operations to which the silver or gold interests relate or management estimates in those situations where other information is not available. Certain production figures may be updated in future periods as additional information is received.
3) The ounces produced and sold include ounces received from Goldcorp in connection with Goldcorp’s four year commitment commencing on August 6, 2010 to deliver to Silver Wheaton 1.5 million ounces of silver per annum resulting from their sale of San Dimas to Primero.
4) Comprised of the Los Filos, Zinkgruvan, Stratoni, Keno Hill, Cozamin, Neves-Corvo, Minto, Aljustrel, Lagunas Norte, Pierina, Veladero, 777 and Constancia silver interests in addition to the previously owned Mineral Park and Campo Morado silver interests.
5) Comprised of the Coleman, Copper Cliff, Garson, Stobie, Creighton and Totten gold interests.
6) Comprised of the Minto, 777 and Constancia gold interests.
7) Silver equivalent ounces (SEOs) and gold equivalent ounces (GEOs) are calculated by converting gold (in the case of SEOs) or silver (in the case of GEOs) using the ratio of the average price of silver to the average price of gold per the London Bullion Metal Exchange during the period.
8) Payable silver and gold ounces produced but not yet delivered are based on management estimates. These figures may be updated in future periods as additional information is received.
- 12 -
Results of Operations
The Company currently has eight reportable operating segments: the silver produced by the San Dimas, Yauliyacu, Peñasquito and Antamina mines, the gold produced by the Sudbury and Salobo mines, the silver and gold produced by the Other mines and corporate operations.
Three Months Ended June 30, 2016
Average Average Realized Cash Average Price Cost Depletion Cash Flow Ounces Ounces ($'s Per ($'s Per ($'s Per Gross Net From Total Produced² Sold Ounce) Ounce)3 Ounce) Sales Margin Other Earnings Operations Assets
Silver
| San Dimas | 1,596 | 1,426 $ 17.49 $ 4.24 $ 1.11 $ 24,945 $ 17,321 $ | - $ 17,321 $ 18,898 $ | 143,490 | |||||||
| Yauliyacu | 686 | 578 | 16.94 | 8.74 | 5.78 | 9,792 | 1,400 | - | 1,400 | 4,740 | 158,454 |
| Peñasquito | 867 | 886 | 16.11 | 4.09 | 3.05 | 14,272 | 7,945 | - | 7,945 | 10,649 | 425,247 |
| Antamina | 1,707 | 2,202 | 16.96 | 3.42 | 9.94 | 37,344 | 7,934 | - | 7,934 | 29,818 | 846,474 |
| Other4 | 2,725 | 2,050 17.74 4.69 4.73 36,358 17,044 | - 17,044 26,013 | 935,190 | |||||||
| Total silver | 7,581 | 7,142 $ 17.18 $ 4.46 $ 5.49 $ 122,711 $ 51,644 $ | - $ 51,644 $ 90,118 $ 2,508,855 |
Gold
| Sudbury5 | 14,893 11,351 $ 1,258 $ | 400 $ | 787 $ 14,280 $ | 806 $ | - $ | 806 $ | 9,636 $ | 490,227 |
| Salobo | 35,627 45,396 | 1,263 400 | 423 57,357 | 19,985 | - | 19,985 | 39,198 | 2,122,575 |
| Other6 | 19,729 14,010 1,285 | 403 | 551 18,003 | 4,634 | - | 4,634 11,874 | 201,391 | |
| Total gold | 70,249 70,757 $ 1,267 $ | 401 $ | 507 $ 89,640 $ 25,425 $ | - $ 25,425 $ 60,708 $ 2,814,193 | ||||
| Operating results | $ 212,351 $ 77,069 $ | - $ 77,069 $ 150,826 $ 5,323,048 |
Corporate costs
General and administrative $ (9,959) $ (9,959)
Other (6,804) (6,804)
Total corporate costs $ (16,763) $ (16,763) $ (16,559) $ 238,161
$ 212,351 $ 77,069 $ (16,763) $ 60,306 $ 134,267 $ 5,561,209
1) All figures in thousands except gold ounces produced and sold and per ounce amounts.
2) Ounces produced represent the quantity of silver and gold contained in concentrate or doré prior to smelting or refining deductions. Production figures are based on information provided by the operators of the mining operations to which the silver or gold interests relate or management estimates in those situations where other information is not available. Certain production figures may be updated in future periods as additional information is received.
3) Refer to discussion on non-IFRS measures at the end of this press release.
4) Comprised of the operating Los Filos, Zinkgruvan, Stratoni, Cozamin, Neves-Corvo, Minto, Lagunas Norte, Pierina, Veladero, 777 and Constancia silver interests in addition to the non-operating Keno Hill, Aljustrel, Loma de La Plata, Pascua-Lama and Rosemont silver interests.
5) Comprised of the operating Coleman, Copper Cliff, Garson, Stobie, Creighton and Totten gold interests in addition to the non-operating Victor gold interest.
6) Comprised of the operating Minto, 777 and Constancia gold interests in addition to the non-operating Rosemont gold interest.
On a silver equivalent and gold equivalent basis, results for the Company for the three months ended June 30, 2016 were as follows:
Three Months Ended June 30, 2016
Average Cash
| Realized | Average | Operating | Average | Gross | ||||
|---|---|---|---|---|---|---|---|---|
| Silver / | Price | Cash Cost | Margin4 | Depletion | Margin | |||
| Gold | Ounces | Ounces | ($'s Per | ($'s Per | ($'s Per | ($'s Per | ($'s Per | |
| Ratio1 | Produced2, 3 | Sold3 | Ounce) | Ounce)4 | Ounce) | Ounce) | Ounce) | |
| Silver equivalent basis | 75.0 | 12,852 | 12,451 | $ 17.06 | $ 4.84 | $ 12.22 | $ 6.03 | $ 6.19 |
| Gold equivalent basis | 75.0 | 171,290 | 165,945 | $ 1,280 | $ 363 | $ 917 | $ 452 | $ 465 |
1) The silver / gold ratio is the ratio of the average price of silver to the average price of gold per the London Bullion Metal Exchange during the period.
2) Ounces produced represent the quantity of silver and gold contained in concentrate or doré prior to smelting or refining deductions. Production figures are based on information provided by the operators of the mining operations to which the silver or gold interests relate or management estimates in those situations where other information is not available. Certain production figures may be updated in future periods as additional information is received.
3) Silver ounces produced and sold in thousands.
4) Refer to discussion on non-IFRS measures at the end of this press release.