TORONTO (miningweekly.com) – Vancouver-based Silver Wheaton has entered an agreement with a syndicate of underwriters which will buy 31,25-million shares in the company, at C$8,00 apiece, on a bought deal basis.

The financing will raise C$250-million, but this could increase to around $287,5-million if the underwriters exercise an option to buy another 4,68-million shares on the same terms.

Silver Wheaton buys silver from producers on a long-term basis, at predetermined prices, and then sells the metal at the current spot price.

The company plans to use the money to repay a revolving debt facility and for “general corporate purposes”, it said, although president and CEO Peter Barnes hinted that the firm could be building an acquisition arsenal.

The share sale “significantly deleverages our balance sheet, and positions our company to take advantage of some of the high-quality acquisition opportunities that we expect to become available during 2009,” Barnes said in a statement.

“Our focus going forward is to continue to grow the asset base in an accretive manner, by adding high-quality silver streams from low-cost mines that are already in production."

The offering is scheduled to close on or about February 12.

2009 OUTLOOK REAFFIRMED

The company said on Monday that it still expects silver sales to be between 15-million and 17-million ounces in 2009, increasing to approximately 30-million ounces by 2013.

In the fourth quarter of 2008, silver production attributable to the company was in line with its previous guidance, at around 3-million ounces.

However, silver sales during the quarter were only 2,7-million ounces, because the timing of shipments meant that some sales will only be accounted for in the first-quarter statements.

The firm expects to report total silver sales for 2008 of about 11,1-million ounces, at an estimated total cash cost of $3,94/oz of silver.

However, the company warned that it expects to record a noncash write down of its long-term investments of as much as $65-million in its fourth-quarter financial statements.

Silver Wheaton shares rose 0,71% on Monday, to C$8,53 a share by 16:19 in Toronto.

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