Silver Wheaton Corp.

Title: Silver Wheaton Corp.
Category: Mining
Clicks: 6
Added on: Nov 26, 2011
Silver Wheaton was founded in 2004 and became one of the leading metals streaming companies globally. Goldcorp sold 108 million shares in 2004, divesting itself of Silver Wheaton. In 2009, Silver Wheaton acquired the silver mining company Silverstone Resources.

Silver Wheaton purchases a portion or all of the silver production of miners, making upfront payments at a low cost. Its main competitors are Coeur d'Alene Mines and Mitsubishi Materials, among others.

The company maintains a portfolio of world-class assets, such as the Pascua-Lama project of Barrick Gold and the Peñasquito mine of Goldcorp in Mexico. Moreover, the company has developed a unique business model aiming to create shareholder value. The goal is to provide significant leverage to increases in the price of silver, simultaneously lowering the risks traditional miners face.

Silver purchase or silver stream agreements allow the company to purchase the byproduct silver production of mining operations, which it does not operate or own. About 70 percent of the total production of silver is a byproduct of the production of other precious and base metals, and there are plenty of opportunities for business expansion following this business model. Given that silver is purchased at a fixed cost, this reduces the downside risks for shareholders. At the same time, the company benefits from the exploration and production growth of miners without contributing to exploration costs and future capital expenditures.

Silver Wheaton is a company that pursues acquisitions, which are low-risk in terms of political jurisdiction and asset quality and are accretive to the company’s shareholders. To this purpose, Silver Wheaton has metal purchase agreements and silver stream agreements with mining companies around the world. The agreements cover development stage projects and operating mines.

The company buys silver production as well as small amounts of gold by signing multi-year agreements. Silver comes from high-quality mining sites found in Peru, Argentina, Sweden, Chile, Greece, and Mexico. Other mining sites are located in the US, Canada, and Portugal. A large portion of Silver Wheaton’s revenue comes from long-life, low-cost mining operations. Then, Silver Wheaten deposits silver bullion in metals trading accounts, and it is sold at the prevailing spot price.
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