EX-99.1 2 exhibit99-1.htm NEWS RELEASE DATED FEBRUARY 19, 2009 Exhibit 99.1

Exhibit 99.1

  

[slwlogo.jpg]


FOR IMMEDIATE RELEASE

TSX: SLW

February 19, 2009

NYSE: SLW


SILVER WHEATON REPORTS 2008 FINANCIAL RESULTS


Vancouver, British Columbia – Silver Wheaton Corp. (TSX, NYSE:SLW) is pleased to announce its unaudited results for the fourth quarter and the year ended December 31, 2008.  Annual net earnings were US$17.3 million (US$0.07 per share), after giving effect to a US$65.1 million (US$0.28 per share) non-cash write-down of long term investments, and operating cash flows were US$111.1 million (US$0.48 per share).   


2008 HIGHLIGHTS (12 Months)

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Net earnings of US$17.3 million (US$0.07 per share) from the sale of 11.1 million ounces of silver, after recording a US$65.1 million (US$0.28 per share) non-cash write-down of long term investments, compared to US$91.9 million (US$0.41 per share) from the sale of 13.1 million ounces of silver in 2007.

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Operating cash flows of US$111.1 million (US$0.48 per share), compared to US$119.3 million (US$0.54 per share) in 2007.

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With four new silver stream agreements completed in 2008, and the world class Peñasquito project commencing production, annual silver sales are expected to increase to 15 to 17 million ounces in 2009 and to approximately 30 million ounces by 2013.

-

In February 2008, Goldcorp sold its entire 48% interest in Silver Wheaton, on a bought deal basis, for aggregate gross cash proceeds of C$1.6 billion.

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In June 2008, an amending agreement was entered into with existing lenders to increase the revolving bank debt available by US$100 million to US$400 million.   

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In September 2008, an early exercise of the Company’s share purchase and series “A” publicly traded warrants was successfully completed.  The Company received gross cash proceeds in excess of C$120 million which were used to pay down outstanding bank debt.

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Subsequent to year-end, gross proceeds of C$287.5 million were raised by way of a bought deal equity financing through the issuance of 35,937,500 common shares.  The proceeds were primarily used to repay outstanding debt under the revolving bank loan facility, and are available to fund future acquisitions of silver interests.  


FOURTH QUARTER HIGHLIGHTS (3 Months)

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Net loss of US$54.2 million (US$0.22 per share) from the sale of 2.7 million ounces of silver, after recording a US$64.0 million (US$0.26 per share) non-cash write-down of long term investments, compared to US$24.9 million (US$0.11 per share) from the sale of 3.5 million ounces of silver in 2007.



Silver Wheaton is a trademark of Silver Wheaton Corp.


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Operating cash flows of US$15.5 million (US$0.06 per share), compared to US$34.4 million (US$0.15 per share) in 2007.

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In October 2008, the Company entered into an agreement with Alexco Resource Corp. (“Alexco”) to acquire 25% of the silver produced from Alexco’s Keno Hill project located in the Yukon Territory, Canada, for the life of mine.  Silver Wheaton will make total upfront cash payments of US$50 million, of which US$15 million had been paid by December 31, 2008, with  a per ounce cash payment of the lesser of US$3.90 (subject to an inflationary adjustment) and the prevailing market price being due for silver delivered under the agreement.


“With the onset of the global economic crisis, the strength of Silver Wheaton’s business model has been clearly demonstrated,” said Peter Barnes, President and Chief Executive Officer of Silver Wheaton. “Despite a year of significant challenges, including less than anticipated silver deliveries from the Luismin mines in Mexico, we have continued to diversify our silver stream portfolio and have laid the groundwork for a significant increase in silver sales in 2009.  With annual silver sales from our existing assets expected to approach 30 million ounces by 2013, our organic growth profile is unrivaled.  In the last 6 months we have raised gross proceeds of more than US$340 million, to pay down our revolving credit facility in full and to give us the financial flexibility to pursue further accretive growth opportunities with low-cost mines in current production.”


2009 and Five Year Silver Sales Forecast


The Company estimates, based upon its current agreements, to have annual silver sales of 15 to 17 million ounces in 2009, increasing to approximately 30 million ounces by 2013.  Mine-by-mine actual 2008 silver sales and forecast 2009 silver sales are as follows:


 

Silver Sales

Mine

2008 Actual

 (‘000 ozs)

2009 Forecast

(‘000 ozs)

Luismin*

5,434

5,700 – 6,200

Yauliyacu

2,777

2,900 – 3,500

Zinkgruvan

1,563

1,800 – 2,100

Stratoni

947

1,600 – 1,700

 Peñasquito - heap leach

288

800 – 1,000

                    - mill

-

600 – 700

Campo Morado, Mineral Park, La Negra

128

1,600 – 1,800

Total

11,137

15,000 – 17,000

* includes the San Dimas, Los Filos and San Martin mines


As several mines continue to ramp up production throughout 2009, silver sales are anticipated to be more heavily weighted towards the second half of the year.  Silver sales are forecast to be approximately 3 million ounces in the first quarter of 2009.  



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A conference call will be held Thursday, February 19, 2009 at 11:30 am (Pacific Time) to discuss these results. To participate in the live call use one of the following methods:


Dial toll free from Canada or the US:

1-888-280-8771

Dial from outside Canada or the US:

1-416-695-9761

Dial toll free from parts of Europe:

800-4222-8835

Live audio webcast:

www.silverwheaton.com


Participants should dial in five to ten minutes before the call.


The conference call will be recorded and you can listen to an archive of the call by one of the following methods:


Dial toll free from Canada or the US:

1-800-408-3053

Dial from outside Canada or the US:

1-416-695-5800

Pass code:

3281209#

Archived audio webcast:

www.silverwheaton.com  



CAUTIONARY NOTE REGARDING FORWARD LOOKING-STATEMENTS

This news release contains “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities legislation.  Forward-looking statements include, but are not limited to, statements with respect to the future price of silver, the estimation of mineral reserves and resources, the realization of mineral reserve estimates, the timing and amount of estimated future production, costs of production, reserve determination and reserve conversion rates.  Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved”.  Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Silver Wheaton to be materially different from those expressed or implied by such forward-looking statements, including but not limited to: risks related to the integration of acquisitions, the absence of control over mining operations from which Silver Wheaton purchases silver and risks related to these mining operations, including risks related to international operations, actual results of current exploration activities, actual results of current reclamation activities, conclusions of economic evaluations, changes in project parameters as plans continue to be refined, as well as those factors discussed in the section entitled “Description of the Business – Risk Factors” in Silver Wheaton’s annual information form for the year ended December 31, 2007 incorporated by reference into Silver Wheaton’s Form 40-F on file with the U.S. Securities and Exchange Commission in Washington, D.C.  Although Silver Wheaton has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended.  There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements.  Accordingly, readers should not place undue reliance on forward-looking statements.  Silver Wheaton does not undertake to update any forward-looking statements that are incorporated by reference herein, except in accordance with applicable securities laws.



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Consolidated Statement of Operations (unaudited)


    Years Ended December 31  
(US dollars and shares in thousands, except per share amounts)   2008     2007     2006  
Silver sales $ 166,719   $ 175,434   $ 158,541  
 
Cost of sales   43,890     51,059     52,772  
Depreciation and amortization   19,491     21,705     16,538  
    63,381     72,764     69,310  
Earnings from operations   103,338     102,670     89,231  
 
Expenses and other income                  
     General and administrative (1)   16,448     9,700     5,700  
     Project evaluation   866     360     211  
     Interest expense   116     -     -  
     Interest income   (320 )   (1,508 )   (3,221 )
     Debt issue costs   601     -     717  
     Loss on mark-to-market of long-term investments held   65,066     1,839     -  
     Other   396     395     604  
    83,173     10,786     4,011  
 
Earnings before tax   20,165     91,884     85,220  
Future income tax expense (2)   2,913     22     -  
Net earnings $ 17,252   $ 91,862   $ 85,220  
                 
1) Stock based compensation (a non-cash item) included in General and administrative $ 5,530   $ 2,735   $ 1,768  
2) A non-cash item                  
 
Basic earnings per share $ 0.07   $ 0.41   $ 0.40  
Diluted earnings per share $ 0.07   $ 0.37   $ 0.37  
Weighted average number of shares outstanding                  
                                                                                               - basic   232,855     221,909     210,538  
                                                                                               - diluted   249,244     246,728     232,566  



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Consolidated Balance Sheets (unaudited)


    December 31   December 31
(US dollars and shares in thousands)   2008   2007
Assets        
Current        
       Cash and cash equivalents $ 7,110 $ 9,965
       Accounts receivable   772   1,428
       Other   816   303
    8,698   11,696
 
Long-term investments   21,840   119,409
Silver interests   1,238,368   1,075,023
Other   1,740   2,346
  $ 1,270,646 $ 1,208,474
Liabilities        
Current        
       Accounts payable $ 1,396 $ 1,021
       Accrued liabilities   3,425   5,362
       Current portion of bank debt   28,560   28,560
    33,381   34,943
 
Bank debt   349,240   391,300
    382,621   426,243
Shareholders' Equity        
Common shares, share purchase options, restricted share units and warrants   662,115   540,061
 
Retained earnings   225,910   208,658
Accumulated other comprehensive income   -   33,512
    225,910   242,170
    888,025   782,231
  $ 1,270,646 $ 1,208,474



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Consolidated Statement of Cash Flows (unaudited)


    Years Ended December 31  
(US dollars in thousands)   2008     2007     2006  
Operating Activities                  
Net earnings $ 17,252   $ 91,862   $ 85,220  
Items not affecting cash                  
     Depreciation and amortization   19,491     21,705     16,538  
     Stock based compensation   5,530     2,735     1,768  
     Loss on mark-to-market of long term investments held   65,066     1,839     -  
     Debt issue costs   -     -     950  
     Future income tax expense   2,913     22     -  
     Other   398     125     (221 )
 
Change in non-cash operating working capital   492     973     467  
  Cash generated by operating activities   111,142     119,261     104,722  
 
Financing Activities                  
Bank debt drawn down   198,500     446,000     125,000  
Bank debt repaid   (240,560 )   (26,140 )   (125,000 )
Promissory note repaid   -     (20,000 )   -  
Debt issue costs   -     -     (1,124 )
Shares issued   -     -     175,150  
Share issue costs   (1,939 )   -     (7,793 )
Warrants exercised   115,796     293     280  
Share purchase options exercised   2,667     7,347     7,018  
  Cash generated by financing activities   74,464     407,500     173,531  
 
Investing Activities                  
Purchase of long-term investments   (3,921 )   (17,003 )   (50,813 )
Silver interests   (184,532 )   (557,940 )   (285,408 )
Deferred project evaluation   (9 )   (1,253 )   -  
Other   (418 )   (828 )   -  
Cash applied to investing activities   (188,880 )   (577,024 )   (336,221 )
  Effect of exchange rate changes on cash and cash equivalents   419     234     221  
  (Decrease) increase in cash and cash equivalents   (2,855 )   (50,029 )   (57,747 )
  Cash and cash equivalents, beginning of year   9,965     59,994     117,741  
Cash and cash equivalents, end of year $ 7,110   $ 9,965   $ 59,994  



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Results of Operations (unaudited)


    Three Months Ended December 31, 2008  
              Average
realized		   Total cash         Cash flow  
              silver price   cost   Net earnings     from  
    Silver sales         (US$'s per   (US$'s per   (loss)     operations  
    (US$000's)    Ounces (000’s)     ounce)   ounce)(1)   (US$000's)     (US$000's)  
 
Luismin $ 13,265   1,312   $ 10.11 $ 4.02 $ 7,442   $ 7,989  
Zinkgruvan   2,953   303     9.75   3.96   1,277     1,524  
Yauliyacu   6,288   602     10.45   3.90   1,848     3,940  
Stratoni   3,550   262     13.55   3.90   1,562     2,267  
Peñasquito   1,960   190     10.32   3.90   760     1,220  
La Negra   709   69     10.28   3.90   (71 )   160  
Corporate   -   -             (67,011 )   (1,654 )
  $ 28,725   2,738   $                    10.49 $ 3.97 ($ 54,193 ) $ 15,446  
 
 
    Three Months Ended December 31, 2007  
              Average
realized
silver price		   Total cash cost   Net earnings     Cash flow from  
    Silver sales         (US$'s per   (US$'s per   (loss)     operations  
    (US$000's)   Ounces (000’s)     ounce)   ounce)(1)   (US$000's)     (US$000's)  
 
Luismin $ 23,787   1,682   $ 14.14 $ 3.95 $ 16,486   $ 17,147  
Zinkgruvan   7,721   540     14.30   3.92   4,725     5,290  
Yauliyacu   13,082   919     14.24   3.90   6,150     9,499  
Stratoni   5,650   402     14.05   3.90   2,478     3,999  
Corporate   -   -             (4,953 )   (1,521 )
  $ 50,240   3,543   $                    14.18 $ 3.93 $ 24,886   $ 34,414  
 
 
    Year Ended December 31, 2008  
              Average
realized		   Total cash         Cash flow  
              silver price   cost   Net earnings     from  
    Silver sales         (US$'s per   (US$'s per   (loss)     operations  
    (US$000's)    Ounces (000’s)     ounce)   ounce)(1)   (US$000's)     (US$000's)  
 
Luismin $ 81,293   5,434   $ 14.96 $ 3.97 $ 57,464   $ 59,735  
Zinkgruvan   23,476   1,563     15.02   3.96   14,840     17,773  
Yauliyacu   42,634   2,777     15.35   3.90   22,159     31,806  
Stratoni   14,418   947     15.22   3.90   7,233     10,345  
Peñasquito   3,411   288     11.84   3.90   1,591     2,287  
La Negra   1,487   128     11.62   3.90   51     988  
Corporate   -   -             (86,086 )   (11,792 )
  $ 166,719   11,137   $                    14.97 $ 3.94 $ 17,252   $ 111,142  



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    Year Ended December 31, 2007  
            Average
realized
silver price		   Total cash cost   Net earnings     Cash flow from  
    Silver sales       (US$'s per   (US$'s per   (loss)     operations  
    (US$000's)   Ounces (000’s)   ounce)   ounce)(1)   (US$000's)     (US$000's)  
 
Luismin $ 92,284   6,913 $                  13.35 $ 3.91 $ 62,532   $ 65,782  
Zinkgruvan   25,315   1,845                    13.72   3.90   15,109     17,991  
Yauliyacu   46,055   3,442                    13.38   3.90   20,088     32,632  
Stratoni   11,780   868                    13.57   3.90   4,941     8,337  
Corporate   -   -           (10,808 )   (5,481 )
  $ 175,434   13,068 $                    13.42 $ 3.91 $ 91,862   $ 119,261  


Note 1. Silver Wheaton has included, throughout this document, a non-GAAP performance measure, total cash costs of silver on a sales basis.  This non-GAAP measure does not have any standardized meaning prescribed by GAAP, nor is it necessarily comparable with similar measures presented by other companies.  Cash costs are presented as they represent an industry standard method of comparing certain costs on a per unit basis.  The Company believes that certain investors use this information to evaluate the Company’s performance.  The data is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP.  During the year ended December 31, 2008, the Company’s total cash costs, which were equivalent to the Company’s Cost of Sales in accordance with GAAP, were $3.94 per ounce of silver (2007 – $3.91 per ounce).


For further information, please contact:


Brad Kopp

Director, Investor Relations

Silver Wheaton Corp.

Tel: 1-800-380-8687

Email: info@silverwheaton.com

Website: www.silverwheaton.com