Silver WheatonSilver Wheaton produced more than 130,000 oz of gold in the first half of 2016, substantially more than the first half of 2015 (103,700 oz) and almost twice the first half of 2014 production (66,600 oz). Furthermore, gold sales were at a second-consecutive record level in the quarter at more than 70,000 oz, driven by record gold sales at Salobo.
“Silver Wheaton continues to focus 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 CEO 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 more than $130 million in operating cash flow.”
Salobo was once again the strongest asset in the quarter, generating record gold sales, Smallwood explained. “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. 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 how powerful our cash flow generation can be in an environment of increasing precious metals prices.”
On August 2, Silver Wheaton signed a deal with a subsidiary of Vale to acquire an additional 25% of the life-of-mine gold production from the Salobo mine for $800 million in cash and a stock deal that amends the exercise price of 10 million Silver Wheaton warrants it had previously issued to Vale from $65/share to $43.75/share. The company had already acquired 50% of Salobo’s gold production. Vale expects Salobo to reach its full production capacity in the second half of 2016.
During the second quarter of 2016, Silver Wheaton’s attributable production was 7.6 million oz of silver and 70,200 oz of gold, representing an increase of 5% and 40%, respectively, with the second quarter of 2015.
