TORONTO (miningweekly.com) – Precious metals streaming firm Silver Wheaton has swung to a third-quarter loss after booking a $154-million impairment charge on Hudbay Minerals’ 777 silver-gold mine, in Manitoba, while a 21% year-on-year drop in the average realised price of silver-equivalent more than offset a 17% rise in sales.

Headline earnings of $49.8-million, or $0.12 a share, fell short of Wall Street analysts’ average forecast of $0.13 a share, and were 31% lower year-on-year, mainly owing to lower realised prices.

During the three months ended September 30, Silver Wheaton reported a net loss of $95.9-million, or $0.24 a share, compared with net earnings of $4.5-million, or $0.01 a share, in the third quarter of 2014.

Revenues fell 8% to $153.3-million, compared with $165.9-million in the comparable period a year earlier. The average realised silver-equivalent price in the period was $15.03/oz, compared with $18.98/oz a year earlier.

The company reported record attributable silver-equivalent output of 11-million ounces, compared with 8.9-million ounces a year earlier, an increase of 24%. However, the record silver-equivalent sales volume of 10.2-million ounces were not enough to counter the drop in realised prices.

"Our cornerstone assets delivered solid results with Peñasquito, in Mexico, and Salobo, in Brazil, setting new production records. With over 32-million ounces produced in the year to date, we remain on track to deliver on our original production growth guidance of over 20% in 2015," president and CEO Randy Smallwood stated.

GLENCORE STREAMING DEAL
Silver Wheaton also on Tuesday announced that it had acquired a significant silver stream from Glencore’s Antamina mine, in Peru.

In exchange for providing $900-million in upfront funding, Silver Wheaton would receive 33.75% of the Antamina silver output until 140-million ounces had been delivered, after which it would receive 22.5% of silver output for the life of the mine at a fixed 100% payable rate.

Antamina was regarded as one of the lowest-cost copper mines globally and was the eighth-largest copper mine in the world.

Silver Wheaton noted that, with the addition of Antamina, about 84% of Silver Wheaton's 2019 output was forecast to come from mines operating in the first-quartile cost curve.

After closing the deal, Silver Wheaton's estimated proven and probable silver reserves would increase by 75-million ounces, the measured and indicated resources would rise by 56-million ounces and the inferred resources by 126-million ounces.

The acquisition was expected to immediately increase Silver Wheaton's output and cash flow profile by adding expected average silver output of 5.1-million ounces a year in 2016 and 2017, and 4.7-million ounces a year over the first 20 years.

Antamina was expected to produce between 1-million and 1.5-million ounces of silver in the current quarter.

As a result, Silver Wheaton raised its full-year guidance to 44.5-million ounces of silver-equivalent (including 230 000 oz of gold), which would grow to about 55-million silver-equivalent ounces (including 325 000 oz of gold) in 2019.

Closing of the transaction was expected to take place before the end of November.

Silver Wheaton’s NYSE-listed stock had fallen by more than 34% since the start of the year, but gained 0.88% in after-market trading after releasing its third-quarter results, to change hands at $13.78 apiece.