TORONTO (miningweekly.com) – The TSX-listed shares of silver streaming firm Silver Wheaton on Monday dropped 3.62%, as higher costs and the low silver price impacted on the company’s first-quarter earnings.
Silver Wheaton’s net earnings for the three months ended March 31 declined by 9% to $133.4-million, or $0.38 a share, compared with $147.2-million, or $0.42 a share, for the same period in 2012.
Average cash costs in the first quarter of 2013 were $4.39 for each silver-equivalent ounce (SOE), up 7.5% when compared with $4.08 during the comparable period of 2012. Cash costs rose year-over-year mainly owing to increased gold sales from miner Hudbay Minerals’ 777 mine in Manitoba.
Silver Wheaton late on Friday said this resulted in narrower cash operating margins of $25.33 a SOE, which was 11% when compared with the first quarter of 2012. The lower cash-operating margin was mainly the result of a 9% year-on-year decrease in the realised silver price to $29.89/oz, as well as the increased cash costs.
Revenue totalled $205.8-million in the first quarter, on silver-equivalent sales of 6.9-million ounces comprising six-million ounces of silver and 16 900 oz of gold. This represented a 3% increase from the $199.6-million of revenue generated in the same quarter of 2012, and was the result of a 13% increase in SOEs sold, partially offset by the lower realised sales price.
Silver Wheaton produced 20% more SEOs in the period, at eight-million ounces, comprised of 6.3-million ounces of silver and 32 200 oz of gold, compared with 6.7-million SOEs a year earlier.
The company expected to boost its attributable growth profile by 80% over five years to 53-million SOEs in 2017.
This year, Silver Wheaton expected to produce 33.5-million SOEs.
The firm, which provided miners with cash up front to finance mine construction in exchange for the right to buy future precious-metals production at a set price, had pushed up its attributable proven and probable reserves by more than 38% in 2012, to a record of 1.12-billion.
Its attributable reserves comprised 851.4-million ounces of silver and 4.96-million ounces of gold.
The company’s TSX-listed shares traded at C$23.70 apiece on Monday morning.