|
|
|
|||
|
SILVER WHEATON CORP.
|
|
|||
March 21, 2013
|
By:
|
/s/ Curt Bernardi
|
|
||
|
|
Name:
|
Curt Bernardi
|
|
|
|
|
Title:
|
Senior Vice President,
|
|
|
|
Legal and Corporate Secretary
|
|
·
|
Record attributable silver equivalent production for the three months and year ended December 31, 2012 of 8.5 million ounces (7.0 million ounces of silver and 26,400 ounces of gold) and 29.6 million ounces (26.9 million ounces of silver and 50,000 ounces of gold), respectively, representing an increase of 22% and 17% over the comparable periods in 2011.
|
·
|
Record silver equivalent sales for the three months and year ended December 31, 2012 of 9.1 million ounces (7.3 million ounces of silver and 33,000 ounces of gold) and 27.3 million ounces (24.8 million ounces of silver and 46,100 ounces of gold), respectively, representing an increase of 53% and 30% over the comparable periods in 2011.
|
·
|
Record revenue for the three months and year ended December 31, 2012 of $287.2 million and $849.6 million, respectively, compared with $191.9 million and $730.0 million for the comparable periods in 2011, representing an increase of 50% and 16%.
|
·
|
Record net earnings for the three months and year ended December 31, 2012 of $177.7 million ($0.50 per share) and $586.0 million ($1.66 per share), respectively, compared with $144.7 million ($0.41 per share) and $550.0 million ($1.56 per share) for the comparable periods in 2011, representing an increase of 23% and 7%.
|
·
|
Record operating cash flows for the three months and year ended December 31, 2012 of $254.0 million ($0.72 per share1) and $719.4 million ($2.03 per share1), respectively, compared with $163.7 million ($0.46 per share1) and $626.4 million ($1.77 per share1) for the comparable periods in 2011, representing an increase of 55% and 15%.
|
·
|
Based on operating cash flows generated by the Company during the three months ended December 31, 2012, a dividend of $0.14 per common share has been approved for shareholders of record on April 2, 2013.
|
·
|
Average cash costs2 for the three months and year ended December 31, 2012 of $4.70 and $4.30 per silver equivalent ounce, respectively, representing an increase of 16% and 5% over the comparable periods in 2011.
|
·
|
Cash operating margin3 for the three months and year ended December 31, 2012 of $26.76 and $26.79 per silver equivalent ounce, respectively, representing a decrease of 5% and 12% relative to the comparable periods in 2011.
|
·
|
As at December 31, 2012, approximately 3.8 million payable silver equivalent ounces attributable to the Company have been produced at the various mines and will be recognized in future sales as they are delivered to the Company under the terms of their contracts. This represents a decrease of 1.4 million payable silver equivalent ounces during the three month period ended December 31, 2012.
|
|
1 Refer to discussion on non-IFRS measure (i) on page 25 of this MD&A.
|
|
2 Refer to discussion on non-IFRS measure (ii) on page 26 of this MD&A.
|
|
3 Refer to discussion on non-IFRS measure (iii) on page 27 of this MD&A.
|
·
|
As per Barrick Gold Corporation’s (“Barrick”) year end 2012 MD&A, Barrick finalized the cost estimate and schedule for its world-class gold-silver Pascua-Lama project during the fourth quarter. Expected total mine construction capital remains unchanged in the range of $8.0 to $8.5 billion, and includes a contingency of 15% to 20% of remaining capital. First gold production continues to be targeted for the second half of 2014.
|
·
|
On September 28, 2012, the Company announced that it had closed the previously announced purchase from HudBay Minerals Inc. ("Hudbay") of 100% of the life of mine silver production from its currently producing 777 mine ("777"), 100% of the life of mine silver production from its Constancia project ("Constancia"), as well as 100% of gold production from the 777 mine until Constancia satisfies a completion test, or the end of 2016, whichever is later. At that point, Silver Wheaton's share of gold production from 777 will be reduced to 50% for the remainder of the mine life.
|
·
|
On February 28, 2013, the Company announced that it had entered into a definitive agreement to acquire from Vale S.A. ("Vale") an amount of gold equal to 25% of the life of mine gold production from its Brazilian Salobo mine, as well as 70% of the gold production, for a 20 year term, from certain of its Canadian Sudbury mines.
|
·
|
On March 19, 2013, the Company announced that its attributable silver and gold reserves had increased to 851.4 million ounces and 4.96 million ounces, respectively, as a result of organic and acquisition growth, inclusive of the acquisition of gold streams from Vale’s Salobo and Sudbury mines. Based on reserve estimates as at December 31, 20121, following the Vale transaction, silver equivalent2 reserves attributable to Silver Wheaton have grown to 1.12 billion ounces.
|
·
|
On February 28, 2013, the Company entered into two new credit facilities, comprised of (i) a $1 billion revolving credit facility having a 5 year term; and (ii) a $1.5 billion bridge financing facility having a 1 year term, as more fully described in the Subsequent Events section of this MD&A. These facilities replaced the pre-existing $400 million revolving credit facility.
|
Silver and Gold
Interests
|
Mine
Owner
|
Location of
Mine
|
Upfront Consideration 1
|
Attributable
Production to be
Purchased
|
Term of
Agreement
|
Date of
Contract
|
|||
Silver
|
Gold
|
||||||||
San Dimas
|
Primero 2
|
Mexico
|
$
|
189,799
|
3
|
100% 2
|
-
|
Life of Mine
|
15-Oct-04
|
Zinkgruvan
|
Lundin
|
Sweden
|
$
|
77,866
|
100%
|
-
|
Life of Mine
|
8-Dec-04
|
|
Yauliyacu
|
Glencore
|
Peru
|
$
|
285,000
|
100% 4
|
-
|
20 years
|
23-Mar-06
|
|
Peñasquito
|
Goldcorp
|
Mexico
|
$
|
485,000
|
25%
|
-
|
Life of Mine
|
24-Jul-07
|
|
Minto
|
Capstone
|
Canada
|
$
|
54,805
|
5
|
100%
|
100% 6
|
Life of Mine
|
1-Dec-08
|
Cozamin
|
Capstone
|
Mexico
|
$
|
41,959
|
5
|
100%
|
-
|
10 years
|
4-Apr-07
|
777
|
Hudbay
|
Canada
|
$
|
455,100
|
100%
|
100%/50% 7
|
Life of Mine
|
8-Aug-12
|
|
Salobo
|
Vale
|
Brazil
|
$
|
1,330,000
|
⁸
|
-
|
25%
|
Life of Mine
|
28-Feb-13
|
Sudbury
|
Vale
|
Canada
|
$
|
623,572
|
⁹
|
-
|
70%
|
20 years
|
28-Feb-13
|
Barrick
|
$
|
625,000
|
|||||||
Pascua-Lama
|
Barrick
|
Chile/Argentina
|
25%
|
-
|
Life of Mine
|
8-Sep-09
|
|||
Lagunas Norte
|
Barrick
|
Peru
|
100%
|
-
|
4 years 10
|
8-Sep-09
|
|||
Pierina
|
Barrick
|
Peru
|
100%
|
-
|
4 years 10
|
8-Sep-09
|
|||
Veladero
|
Barrick
|
Argentina
|
100% 11
|
-
|
4 years 10
|
8-Sep-09
|
|||
Other
|
$
|
839,203
|
|||||||
Los Filos
|
Goldcorp
|
Mexico
|
$
|
4,463
|
3
|
100%
|
-
|
25 years
|
15-Oct-04
|
Stratoni
|
Eldorado Gold 12
|
Greece
|
$
|
57,500
|
100%
|
-
|
Life of Mine
|
23-Apr-07
|
|
Neves-Corvo
|
Lundin
|
Portugal
|
$
|
35,350
|
5
|
100%
|
-
|
50 years
|
5-Jun-07
|
Aljustrel
|
I'M SGPS
|
Portugal
|
$
|
2,451
|
5
|
100%
|
-
|
50 years
|
5-Jun-07
|
Mineral Park
|
Mercator
|
United States
|
$
|
42,000
|
100%
|
-
|
Life of Mine
|
17-Mar-08
|
|
Campo Morado
|
Nyrstar NV
|
Mexico
|
$
|
79,250
|
75%
|
-
|
Life of Mine
|
13-May-08
|
|
Keno Hill
|
Alexco
|
Canada
|
$
|
50,000
|
25%
|
-
|
Life of Mine
|
2-Oct-08
|
|
Rosemont
|
Augusta
|
United States
|
$
|
230,000
|
13
|
100%
|
100%
|
Life of Mine
|
11-Feb-10
|
Loma de La Plata
|
Pan American
|
Argentina
|
$
|
43,289
|
14
|
12.5%
|
-
|
Life of Mine
|
n/a 15
|
Constancia
|
Hudbay
|
Peru
|
$
|
294,900
|
16
|
100%
|
-
|
Life of Mine
|
8-Aug-12
|
1)
|
Expressed in United States dollars, rounded to the nearest thousand; excludes closing costs and capitalized interest, where applicable.
|
2)
|
Until August 6, 2014, Primero will deliver to Silver Wheaton a per annum amount equal to the first 3.5 million ounces of payable silver produced at San Dimas and 50% of any excess, plus Silver Wheaton will receive an additional 1.5 million ounces of silver per annum to be delivered by Goldcorp. After August 6, 2014, Primero will deliver a per annum amount to Silver Wheaton equal to the first 6 million ounces of payable silver produced at San Dimas and 50% of any excess.
|
3)
|
As more fully described in the San Dimas section on page 5 of this MD&A, on August 6, 2010, Goldcorp completed the sale of the San Dimas mine, which was part of the Luismin mining operations (“Luismin”), to Primero. The original cost of Luismin was allocated to San Dimas and Los Filos based on the estimated fair values of these silver interests as at August 6, 2010.
|
4)
|
To a maximum of 4.75 million ounces per annum. In the event that silver sold and delivered to Silver Wheaton in any year totals less than 4.75 million ounces, the amount sold and delivered to Silver Wheaton in subsequent years will be increased to make up for any cumulative shortfall, to the extent production permits.
|
5)
|
Comprised of the value allocated to the silver and gold interests upon the Company’s acquisition of Silverstone Resources Corp., which was closed on May 21, 2009 (the “Silverstone Acquisition”).
|
6)
|
The Company is entitled to acquire 100% of the first 30,000 ounces of gold produced per annum and 50% thereafter.
|
7)
|
Silver Wheaton is entitled to acquire 100% of the life of mine gold production from Hudbay’s 777 mine until Hudbay’s Constancia project satisfies a completion test, or the end of 2016, whichever is later. At that point, Silver Wheaton’s share of gold production from 777 will be reduced to 50% for the life of the mine.
|
8)
|
Does not include the contingent liability related to the Salobo mine expansion (see the Other Contractual Obligations and Contingencies section of this MD&A).
|
9)
|
Comprised of a $570 million upfront cash payment plus warrants to purchase 10 million shares of Silver Wheaton common stock at a strike price of $65, with a term of 10 years.
|
10)
|
Barrick will deliver to Silver Wheaton silver production from the currently producing mines until December 31, 2013. In addition, during 2014 and 2015, Silver Wheaton will be entitled to all or a portion of the silver production from these mines to the extent of any production shortfall at Pascua-Lama relative to the completion guarantee provided by Barrick, until such time as the completion guarantee is satisfied.
|
11)
|
Silver Wheaton's attributable silver production is subject to a maximum of 8% of the silver contained in the ore mined at Veladero during the period.
|
12)
|
95% owned by Eldorado Gold Corporation.
|
13)
|
Currently reflected as a contingent obligation, payable on an installment basis to partially fund construction of the Rosemont mine once certain milestones are achieved, including the receipt of key permits and securing the necessary financing to complete construction of the mine.
|
14)
|
Comprised of $10.9 million allocated to the silver interest upon the Silverstone Acquisition in addition to a contingent liability of $32.4 million, payable upon the satisfaction of certain conditions, including Pan American receiving all necessary permits to proceed with the mine construction.
|
15)
|
Definitive terms of the agreement are in the process of being finalized.
|
16)
|
Comprised of $44.9 million which was paid on the closing date, with a further payment of $125 million to be made once $500 million in capital expenditures have been incurred at Constancia, and a final payment of $125 million to be made once $1 billion in capital expenditures have been incurred.
|
i.
|
Argentine Glacier Legislation and Constitutional Litigation
|
ii.
|
Pascua-Lama Constitutional Protection Actions
|
|
1 Silver Wheaton's attributable silver production is subject to a maximum of 8% of the silver contained in the ore mined at Veladero during the period.
|
iii.
|
Dust Related Health and Safety Concerns
|
i.
|
As part of the agreement with Goldcorp to acquire silver from the Luismin mining operations, on October 15, 2004, the Company entered into an agreement with Goldcorp to acquire 100% of the silver production from its Los Filos mine in Mexico for a period of 25 years, commencing October 15, 2004. In addition, pursuant to Goldcorp’s sale of the San Dimas mine, Goldcorp is obligated to deliver to Silver Wheaton 1.5 million ounces of silver per year until August 6, 2014, which is reflected in this MD&A and financial statements as part of the silver production and sales relating to San Dimas;
|
ii.
|
On April 23, 2007, the Company entered into an agreement with European Goldfields Limited, which was acquired by Eldorado Gold Corporation (“Eldorado Gold”) on February 24, 2012, to acquire 100% of the life of mine silver production from its 95% owned Stratoni mine in Greece;
|
iii.
|
As part of the Silverstone Acquisition, the Company acquired an agreement with Lundin to acquire 100% of the silver production from its Neves-Corvo mine in Portugal for a period of 50 years, commencing June 5, 2007;
|
iv.
|
As part of the Silverstone Acquisition, the Company acquired an agreement with I’M SGPS to acquire 100% of the silver production from its Aljustrel mine in Portugal for a period of 50 years, commencing June 5, 2007;
|
v.
|
On March 17, 2008, the Company entered into an agreement with Mercator Minerals Ltd.1 (“Mercator”) to acquire an amount equal to 100% of the life of mine silver production from its Mineral Park mine in the United States;
|
vi.
|
On May 13, 2008, the Company entered into an agreement with Farallon Mining Ltd., which was acquired by Nyrstar NV on January 5, 2011, to acquire an amount equal to 75% of the life of mine silver production from its Campo Morado mine in Mexico;
|
vii.
|
On October 2, 2008, the Company entered into an agreement with Alexco Resource Corp. (“Alexco”) to acquire an amount equal to 25% of the life of mine silver production from its Keno Hill silver district in Canada, including the currently producing Bellekeno mine;
|
viii.
|
On February 11, 2010, the Company entered into an agreement with Augusta Resource Corporation (“Augusta”) to acquire an amount equal to 100% of the life of mine silver and gold production from the Rosemont Copper project in the United States. The Company is committed to pay Augusta total upfront cash payments of $230 million, payable on an installment basis to partially fund construction of the Rosemont mine once certain milestones are achieved, including the receipt of key permits and securing the necessary financing to complete construction of the mine;
|
|
1 The Company has entered into a non-binding letter of intent with Mercator to amend the Mineral Park silver purchase agreement. Once signed, Mercator will have the right to exercise an option at any time until August 31, 2014 to defer delivery of up to 50% of the required silver deliveries for one year. All deferred silver will be delivered in equal installments over 18 months after the one year deferral period. Mercator will compensate Silver Wheaton for any shortfall arising from a decrease in the silver spot price at the time of the original delivery date until the date of actual delivery, including a 12% annualized interest rate. The amendment will also grant Silver Wheaton a right of first refusal on any future precious metals streams relating to the El Creston project.
|
ix.
|
As part of the Silverstone Acquisition, the Company acquired an agreement with Aquiline Resources Inc., which was acquired by Pan American Silver Corp. (“Pan American”) on December 22, 2009, to acquire an amount equal to 12.5% of the life of mine silver production from the Loma de La Plata zone of the Navidad project in Argentina, the definitive terms of which are in the process of being finalized. The Company is committed to pay Pan American total upfront cash payments of $32.4 million following the satisfaction of certain conditions, including Pan American receiving all necessary permits to proceed with the mine construction; and
|
x.
|
On August 8, 2012, the Company entered into an agreement with Hudbay to acquire an amount equal to 100% of the life of mine silver production from the Constancia project in Peru. Silver Wheaton will pay Hudbay total cash consideration of $294.9 million, of which $44.9 million was paid on the closing date of September 28, 2012, with two further payments of $125 million to be made once capital expenditures of $500 million and $1 billion have been incurred at Constancia. In addition, Silver Wheaton will make ongoing payments of the lesser of $5.90 per ounce of silver (subject to an inflationary adjustment of 1% beginning in the fourth year) or the prevailing market price per ounce of silver delivered. If the Constancia processing plant fails to achieve at least 90% of expected throughput and recovery by December 31, 2020, Silver Wheaton would be entitled to a proportionate return of the $250 million upfront cash consideration relating to Constancia. Hudbay has granted Silver Wheaton a right of first refusal on any future streaming agreement, royalty agreement, or similar transaction related to the production of silver from Constancia.
|
December 31
|
December 31
|
|||
(in thousands)
|
2012
|
2011
|
||
Common shares held
|
$
|
118,683
|
$
|
149,039
|
Warrants held
|
2,694
|
2,582
|
||
$
|
121,377
|
$
|
151,621
|
Dec 31 2012
|
Three Months
Ended
Dec 31 2012
|
Year Ended
Dec 31 2012
|
Year Ended
Dec 31 2012
|
|
(in thousands)
|
Fair Value
|
Fair Value Adjustment Losses
Included in OCI
|
Realized Gain on Disposal
|
|
Bear Creek
|
$ 44,130
|
$ (5,896)
|
$ (2,041)
|
$ -
|
Revett
|
14,824
|
(4,092)
|
(9,747)
|
-
|
Sabina
|
31,164
|
(7,848)
|
(13,013)
|
-
|
Other
|
28,565
|
(10,239)
|
(6,333)
|
-
|
$ 118,683
|
$ (28,075)
|
$ (31,134)
|
$ -
|
Dec 31 2011
|
Three Months
Ended
Dec 31 2011
|
Year Ended
Dec 31 2011
|
Year Ended
Dec 31 2011
|
|||||
(in thousands)
|
Fair Value
|
Fair Value Adjustment Gains
(Losses) Included in OCI
|
Realized Gain on Disposal
|
|||||
Bear Creek
|
$
|
46,171
|
$
|
(4,389)
|
$
|
(80,524)
|
$
|
-
|
Revett
|
23,793
|
4,092
|
(1,043)
|
-
|
||||
Sabina
|
44,177
|
11,067
|
(21,817)
|
-
|
||||
Other
|
34,898
|
(78)
|
(15,730)
|
4,532
|
||||
$
|
149,039
|
$
|
10,692
|
$
|
(119,114)
|
$
|
4,532
|
Dec 31 2012
|
Three Months
Ended
Dec 31 2012
|
Year Ended
Dec 31 2012
|
Year Ended
Dec 31 2012
|
|||||
(in thousands)
|
Fair Value
|
Fair Value Adjustment (Losses)
Gains Included in Net Earnings
|
Realized Loss on Disposal
|
|||||
Revett
|
$
|
-
|
$
|
-
|
$
|
(357)
|
$
|
-
|
Other
|
2,694
|
(1,441)
|
853
|
-
|
||||
$
|
2,694
|
$
|
(1,441)
|
$
|
496
|
$
|
-
|
Dec 31 2011
|
Three Months
Ended
Dec 31 2011
|
Year Ended
Dec 31 2011
|
Year Ended
Dec 31 2011
|
|||||
(in thousands)
|
Fair Value
|
Fair Value Adjustment Gains
(Losses) Included in
Net Earnings
|
Realized Loss on Disposal
|
|||||
Revett
|
$
|
741
|
$
|
188
|
$
|
(55)
|
$
|
-
|
Other
|
1,841
|
74
|
(3,063)
|
(16)
|
||||
$
|
2,582
|
$
|
262
|
$
|
(3,118)
|
$
|
(16)
|
Years Ended December 31
|
|||||||||
2012
|
2011
|
2010
|
|||||||
Silver equivalent production 1
|
|||||||||
Attributable silver ounces produced (000’s)
|
26,894
|
24,557
|
21,984
|
||||||
Attributable gold ounces produced
|
50,039
|
18,436
|
28,795
|
||||||
Attributable silver equivalent ounces produced (000’s) 1
|
29,571
|
25,374
|
23,758
|
||||||
Silver equivalent sales 1
|
|||||||||
Silver ounces sold (000’s)
|
24,850
|
20,247
|
18,878
|
||||||
Gold ounces sold
|
46,094
|
18,256
|
25,884
|
||||||
Silver equivalent ounces sold (000’s) 1
|
27,328
|
21,069
|
20,483
|
||||||
Average realized price ($'s per ounce)
|
|||||||||
Average realized silver price
|
$
|
31.03
|
$
|
34.60
|
$
|
20.75
|
|||
Average realized gold price
|
$
|
1,701
|
$
|
1,609
|
$
|
1,224
|
|||
Average realized silver equivalent price 1
|
$
|
31.09
|
$
|
34.65
|
$
|
20.67
|
|||
Average cash cost ($'s per ounce) 2
|
|||||||||
Average silver cash cost
|
$
|
4.06
|
$
|
3.99
|
$
|
3.97
|
|||
Average gold cash cost
|
$
|
362
|
$
|
300
|
$
|
300
|
|||
Average silver equivalent cash cost 1
|
$
|
4.30
|
$
|
4.09
|
$
|
4.04
|
|||
Total revenue ($000's)
|
$
|
849,560
|
$
|
729,997
|
$
|
423,353
|
|||
Net earnings ($000's)
|
$
|
586,036
|
$
|
550,028
|
$
|
153,381
|
|||
Add back - loss on fair value adjustment of Canadian dollar share purchase warrants issued
|
-
|
-
|
133,210
|
||||||
Adjusted net earnings 3 ($000's)
|
$
|
586,036
|
$
|
550,028
|
$
|
286,591
|
|||
Earnings per share
|
|||||||||
Basic
|
$
|
1.66
|
$
|
1.56
|
$
|
0.45
|
|||
Diluted
|
$
|
1.65
|
$
|
1.55
|
$
|
0.44
|
|||
Adjusted earnings per share 3
|
|||||||||
Basic
|
$
|
1.66
|
$
|
1.56
|
$
|
0.83
|
|||
Diluted
|
$
|
1.65
|
$
|
1.55
|
$
|
0.83
|
|||
Cash flow from operations ($000's)
|
$
|
719,404
|
$
|
626,427
|
$
|
319,726
|
|||
Dividends
|
|||||||||
Dividends paid ($000's)
|
$
|
123,852
|
$
|
63,612
|
$
|
-
|
|||
Dividends paid per share
|
$
|
0.35
|
$
|
0.18
|
$
|
-
|
|||
Total assets ($000's)
|
$
|
3,189,337
|
$
|
2,872,335
|
$
|
2,635,383
|
|||
Total non-current financial liabilities ($000’s)
|
$
|
23,555
|
$
|
50,424
|
$
|
200,966
|
|||
Shareholders' equity ($000's)
|
$
|
3,107,074
|
$
|
2,654,217
|
$
|
2,261,949
|
1)
|
Gold ounces produced and sold are converted to a silver equivalent basis on the ratio of the average silver price received to the average gold price received during the period from the assets that produce both gold and silver.
|
2)
|
Refer to discussion on non-IFRS measure (ii) on page 26 of this MD&A.
|
3)
|
Refer to discussion on non-IFRS measure (iv) on page 27 of this MD&A.
|
2012
|
2011
|
||||||||
(in thousands)
|
Q4
|
Q3
|
Q2
|
Q1
|
Q4
|
Q3
|
Q2
|
Q1
|
|
Silver ounces produced ¹
|
|||||||||
San Dimas ²
|
1,694
|
1,288
|
1,231
|
1,692
|
1,578
|
1,251
|
1,150
|
1,606
|
|
Zinkgruvan
|
566
|
621
|
673
|
642
|
390
|
379
|
414
|
508
|
|
Yauliyacu
|
616
|
640
|
606
|
550
|
583
|
608
|
674
|
683
|
|
Peñasquito
|
1,445
|
1,940
|
1,822
|
1,365
|
1,633
|
1,162
|
1,282
|
1,207
|
|
Cozamin
|
372
|
370
|
429
|
405
|
433
|
395
|
414
|
325
|
|
Barrick ³
|
934
|
627
|
468
|
667
|
723
|
794
|
741
|
722
|
|
Other ⁴
|
1,407
|
1,260
|
1,276
|
1,288
|
1,389
|
1,272
|
1,153
|
1,088
|
|
7,034
|
6,746
|
6,505
|
6,609
|
6,729
|
5,861
|
5,828
|
6,139
|
||
Silver equivalent ounces of gold produced ⁵
|
|||||||||
Minto
|
373
|
337
|
189
|
107
|
202
|
257
|
261
|
97
|
|
777
|
1,059
|
612⁶
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Silver equivalent ounces produced ⁵
|
8,466
|
7,695
|
6,694
|
6,716
|
6,931
|
6,118
|
6,089
|
6,236
|
|
Silver ounces sold
|
|||||||||
San Dimas ²
|
1,629
|
1,178
|
1,295
|
1,701
|
1,488
|
1,232
|
1,149
|
1,748
|
|
Zinkgruvan
|
532
|
495
|
580
|
517
|
425
|
319
|
401
|
321
|
|
Yauliyacu
|
1,097
|
184
|
1,155
|
497
|
655
|
11
|
471
|
120
|
|
Peñasquito
|
1,642
|
1,304
|
1,845
|
1,189
|
851
|
1,382
|
961
|
941
|
|
Cozamin
|
406
|
301
|
395
|
376
|
374
|
335
|
281
|
271
|
|
Barrick ³
|
826
|
528
|
470
|
656
|
755
|
747
|
726
|
680
|
|
Other ⁴
|
1,215
|
796
|
1,049
|
992
|
1,230
|
770
|
862
|
741
|
|
7,347
|
4,786
|
6,789
|
5,928
|
5,778
|
4,796
|
4,851
|
4,822
|
||
Silver equivalent ounces of gold sold ⁵
|
|||||||||
Minto
|
268
|
357
|
139
|
198
|
196
|
316
|
227
|
83
|
|
777
|
1,516
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Silver equivalent ounces sold ⁵
|
9,131
|
5,143
|
6,928
|
6,126
|
5,974
|
5,112
|
5,078
|
4,905
|
|
Gold / silver ratio ⁵
|
54.1
|
51.7
|
58.7
|
51.2
|
51.9
|
50.4
|
40.1
|
33.0
|
|
Cumulative payable silver equivalent ounces produced but not yet delivered ⁷
|
3,824
|
5,195
|
3,212
|
4,166
|
4,127
|
3,805
|
3,537
|
3,018
|
1)
|
Ounces produced represent the quantity of silver and gold contained in concentrate or doré prior to smelting or refining deductions. Production figures are based on information provided by the operators of the mining operations to which the silver or gold interests relate or management estimates in those situations where other information is not available. Certain production figures may be updated in future periods as additional information is received. The Company has been informed that reported production related to the Yauliyacu mine may have been overstated by a total of approximately 200,000 ounces for all or some portion of the period between April 1, 2011 and June 30, 2012. The required adjustments to production, if any, related to the Yauliyacu mine for these periods will be made once management completes a review of the timing and amount of any production variance.
|
2)
|
The ounces produced and sold include ounces received from Goldcorp in connection with Goldcorp’s four year commitment to deliver to Silver Wheaton 1.5 million ounces of silver per annum resulting from their sale of San Dimas to Primero.
|
3)
|
Comprised of the Lagunas Norte, Pierina and Veladero silver interests.
|
4)
|
Comprised of the Los Filos, Mineral Park, Neves-Corvo, Stratoni, Keno Hill, Minto, 777, Aljustrel and Campo Morado silver interests.
|
5)
|
Gold ounces produced and sold are converted to a silver equivalent basis on the ratio of the average silver price received to the average gold price received during the period from the assets that produce both gold and silver.
|
6)
|
Represents production for the period August 8, 2012 to September 30, 2012.
|
7)
|
Based on management estimates.
|
2012
|
2011
|
||||||||||||||||||||||||
Q4
|
Q3
|
Q2
|
Q1
|
Q4
|
Q3
|
Q2
|
Q1
|
||||||||||||||||||
Total silver ounces sold (000's)
|
7,347
|
4,786
|
6,789
|
5,928
|
5,778
|
4,796
|
4,851
|
4,822
|
|||||||||||||||||
Average realized silver price 1
|
$
|
31.47
|
$
|
31.16
|
$
|
29.12
|
$
|
32.58
|
$
|
32.09
|
$
|
36.44
|
$
|
38.38
|
$
|
32.00
|
|||||||||
Silver sales (000's)
|
$
|
231,226
|
$
|
149,086
|
$
|
197,694
|
$
|
193,162
|
$
|
185,401
|
$
|
174,733
|
$
|
186,191
|
$
|
154,304
|
|||||||||
Total gold ounces sold
|
32,960
|
6,905
|
2,369
|
3,860
|
3,777
|
6,280
|
5,674
|
2,524
|
|||||||||||||||||
Average realized gold price 1
|
$
|
1,699
|
$
|
1,765
|
$
|
1,568
|
$
|
1,678
|
$
|
1,712
|
$
|
1,666
|
$
|
1,509
|
$
|
1,537
|
|||||||||
Gold sales (000's)
|
$
|
56,015
|
$
|
12,187
|
$
|
3,714
|
$
|
6,476
|
$
|
6,466
|
$
|
10,462
|
$
|
8,561
|
$
|
3,879
|
|||||||||
Total silver equivalent ounces sold (000's) 2
|
9,131
|
5,143
|
6,928
|
6,126
|
5,974
|
5,112
|
5,078
|
4,905
|
|||||||||||||||||
Average realized silver equivalent price 1, 2
|
$
|
31.46
|
$
|
31.36
|
$
|
29.07
|
$
|
32.59
|
$
|
32.12
|
$
|
36.23
|
$
|
38.35
|
$
|
32.24
|
|||||||||
Total sales (000's)
|
$
|
287,241
|
$
|
161,273
|
$
|
201,408
|
$
|
199,638
|
$
|
191,867
|
$
|
185,195
|
$
|
194,752
|
$
|
158,183
|
|||||||||
Average cash cost, silver 1, 3
|
$
|
4.12
|
$
|
4.04
|
$
|
4.04
|
$
|
4.02
|
$
|
4.01
|
$
|
3.99
|
$
|
3.98
|
$
|
3.98
|
|||||||||
Average cash cost, gold 1, 3
|
$
|
386
|
$
|
303
|
$
|
303
|
$
|
303
|
$
|
301
|
$
|
300
|
$
|
300
|
$
|
300
|
|||||||||
Average cash cost, silver equivalent 1, 2, 3
|
$
|
4.70
|
$
|
4.16
|
$
|
4.06
|
$
|
4.08
|
$
|
4.06
|
$
|
4.12
|
$
|
4.14
|
$
|
4.07
|
|||||||||
Net earnings (000's)
|
$
|
177,744
|
$
|
119,697
|
$
|
141,414
|
$
|
147,181
|
$
|
144,747
|
$
|
135,040
|
$
|
148,065
|
$
|
122,176
|
|||||||||
Earnings per share
|
|||||||||||||||||||||||||
Basic
|
$
|
0.50
|
$
|
0.34
|
$
|
0.40
|
$
|
0.42
|
$
|
0.41
|
$
|
0.38
|
$
|
0.42
|
$
|
0.35
|
|||||||||
Diluted
|
$
|
0.50
|
$
|
0.34
|
$
|
0.40
|
$
|
0.41
|
$
|
0.41
|
$
|
0.38
|
$
|
0.42
|
$
|
0.34
|
|||||||||
Cash flow from operations (000's)
|
$
|
254,026
|
$
|
128,651
|
$
|
172,916
|
$
|
163,811
|
$
|
163,714
|
$
|
167,236
|
$
|
168,281
|
$
|
127,196
|
|||||||||
Cash flow from operations per share 4
|
|||||||||||||||||||||||||
Basic
|
$
|
0.72
|
$
|
0.36
|
$
|
0.49
|
$
|
0.46
|
$
|
0.46
|
$
|
0.47
|
$
|
0.48
|
$
|
0.36
|
|||||||||
Diluted
|
$
|
0.71
|
$
|
0.36
|
$
|
0.49
|
$
|
0.46
|
$
|
0.46
|
$
|
0.47
|
$
|
0.47
|
$
|
0.36
|
|||||||||
Dividends
|
|||||||||||||||||||||||||
Dividends declared (000's)
|
$
|
24,806
|
$
|
35,388
|
$
|
31,829
|
$
|
31,829 5
|
$
|
31,814
|
$
|
10,603
|
$
|
10,599
|
$
|
10,595
|
|||||||||
Dividends declared per share
|
$
|
0.07
|
$
|
0.10
|
$
|
0.09
|
$
|
0.09
|
$
|
0.09
|
$
|
0.03
|
$
|
0.03
|
$
|
0.03
|
|||||||||
Total assets (000's)
|
$
|
3,189,337
|
$
|
3,046,564
|
$
|
3,056,825
|
$
|
3,005,839
|
$
|
2,872,335
|
$
|
2,760,675
|
$
|
2,807,346
|
$
|
2,757,065
|
|||||||||
Total liabilities (000's)
|
$
|
82,263
|
$
|
71,076
|
$
|
212,147
|
$
|
242,873
|
$
|
218,118
|
$
|
229,676
|
$
|
359,544
|
$
|
363,131
|
|||||||||
Total shareholders' equity (000's)
|
$
|
3,107,074
|
$
|
2,975,488
|
$
|
2,844,678
|
$
|
2,762,966
|
$
|
2,654,217
|
$
|
2,530,999
|
$
|
2,447,802
|
$
|
2,393,934
|
1)
|
Expressed as United States dollars per ounce.
|
2)
|
Gold ounces sold are converted to a silver equivalent basis on the ratio of the average silver price received to the average gold price received during the period from the assets that produce both gold and silver.
|
3)
|
Refer to discussion on non-IFRS measure (ii) on page 26 of this MD&A.
|
4)
|
Refer to discussion on non-IFRS measure (i) on page 25 of this MD&A.
|
5)
|
On March 22, 2012, the Company declared dividends of $0.09 per common share for total dividends of $31.8 million, which was paid on April 17, 2012.
|
Three Months Ended December 31, 2012
|
||||||||||||||||
Ounces Produced²
|
Ounces Sold
|
Sales
|
Average
Realized
Price
($'s Per Ounce)
|
Average
Cash Cost
($'s Per
Ounce) 3
|
Average
Depletion
($'s Per
Ounce)
|
Net
Earnings
|
Cash Flow
From
Operations
|
Total Assets
|
||||||||
Silver
|
||||||||||||||||
San Dimas 4
|
1,694
|
1,629
|
$
|
52,080
|
$
|
31.97
|
$
|
4.13
|
$
|
0.79
|
$
|
44,059
|
$
|
45,351
|
$
|
162,936
|
Zinkgruvan
|
566
|
532
|
16,485
|
30.99
|
4.15
|
1.68
|
13,387
|
16,668
|
54,075
|
|||||||
Yauliyacu
|
616
|
1,097
|
30,753
|
28.03
|
4.08
|
5.02
|
20,773
|
32,106
|
215,295
|
|||||||
Peñasquito
|
1,445
|
1,642
|
53,697
|
32.71
|
3.99
|
2.96
|
42,287
|
47,147
|
487,272
|
|||||||
Cozamin
|
372
|
406
|
13,109
|
32.25
|
4.12
|
4.05
|
9,790
|
11,873
|
19,135
|
|||||||
Barrick 5
|
934
|
826
|
26,920
|
32.59
|
3.90
|
4.34
|
20,112
|
23,561
|
597,736
|
|||||||
Other 6
|
1,407
|
1,215
|
38,182
|
31.43
|
4.43
|
6.29
|
25,167
|
33,296
|
381,467
|
|||||||
7,034
|
7,347
|
$
|
231,226
|
$
|
31.47
|
$
|
4.12
|
$
|
3.46
|
$
|
175,575
|
$
|
210,002
|
$
|
1,917,916
|
|
Gold
|
||||||||||||||||
Minto
|
6,785
|
4,876
|
$
|
8,247
|
$
|
1,691
|
$
|
303
|
$
|
171
|
$
|
5,937
|
$
|
8,052
|
$
|
30,586
|
777
|
19,615
|
28,084
|
47,768
|
1,701
|
400
|
773
|
14,813
|
40,507
|
332,732
|
|||||||
26,400
|
32,960
|
$
|
56,015
|
$
|
1,699
|
$
|
386
|
$
|
684
|
$
|
20,750
|
$
|
48,559
|
$
|
363,318
|
|
Silver equivalent 7
|
8,466
|
9,131
|
$
|
287,241
|
$
|
31.46
|
$
|
4.70
|
$
|
5.25
|
$
|
196,325
|
$
|
258,561
|
$
|
2,281,234
|
Corporate
|
||||||||||||||||
General and administrative
|
$
|
(9,159)
|
||||||||||||||
Other
|
(9,422)
|
|||||||||||||||
Total corporate
|
$
|
(18,581)
|
$
|
(4,535)
|
$
|
908,103
|
||||||||||
8,466
|
9,131
|
$
|
287,241
|
$
|
31.46
|
$
|
4.70
|
$
|
5.25
|
$
|
177,744
|
$
|
254,026
|
$
|
3,189,337
|
1)
|
All figures in thousands except gold ounces produced and sold and per ounce amounts.
|
2)
|
Ounces produced represent the quantity of silver and gold contained in concentrate or doré prior to smelting or refining deductions. Production figures are based on information provided by the operators of the mining operations to which the silver or gold interests relate or management estimates in those situations where other information is not available. Certain production figures may be updated in future periods as additional information is received.
|
3)
|
Refer to discussion on non-IFRS measure (ii) on page 26 of this MD&A.
|
4)
|
Results for San Dimas include 375,000 ounces received from Goldcorp in connection with Goldcorp’s four year commitment to deliver to Silver Wheaton 1.5 million ounces of silver per annum resulting from their sale of San Dimas to Primero.
|
5)
|
Comprised of the operating Lagunas Norte, Pierina and Veladero silver interests in addition to the non-operating Pascua-Lama silver interest.
|
6)
|
Comprised of the operating Los Filos, Keno Hill, Mineral Park, Neves-Corvo, Stratoni, Campo Morado, Minto, 777 and Aljustrel silver interests in addition to the non-operating Rosemont silver and gold interest and Loma de La Plata and Constancia silver interests.
|
7)
|
Gold ounces produced and sold are converted to a silver equivalent basis on the ratio of the average silver price received to the average gold price received during the period from the assets that produce both gold and silver.
|
Three Months Ended December 31, 2011
|
||||||||||||||||
Ounces Produced 2
|
Ounces Sold
|
Sales
|
Average
Realized
Price
($'s Per Ounce)
|
Average
Cash Cost
($'s Per
Ounce) 3
|
Average
Depletion
($'s Per
Ounce)
|
Net
Earnings
|
Cash Flow
From
Operations
|
Total Assets
|
||||||||
Silver
|
||||||||||||||||
San Dimas 4
|
1,578
|
1,488
|
$
|
44,641
|
$
|
30.00
|
$
|
4.09
|
$
|
0.71
|
$
|
37,494
|
$
|
38,551
|
$
|
167,527
|
Zinkgruvan
|
390
|
425
|
13,537
|
31.87
|
4.10
|
1.69
|
11,077
|
14,061
|
57,639
|
|||||||
Yauliyacu
|
583
|
655
|
22,270
|
34.00
|
4.02
|
5.02
|
16,350
|
19,637
|
230,012
|
|||||||
Peñasquito
|
1,633
|
851
|
27,374
|
32.17
|
3.96
|
2.41
|
21,954
|
24,004
|
504,973
|
|||||||
Cozamin
|
433
|
374
|
12,786
|
34.18
|
4.08
|
4.62
|
9,531
|
10,260
|
25,115
|
|||||||
Barrick 5
|
723
|
755
|
24,673
|
32.67
|
3.90
|
3.60
|
19,008
|
21,728
|
601,085
|
|||||||
Other 6
|
1,389
|
1,230
|
40,120
|
32.63
|
3.94
|
4.22
|
30,089
|
36,301
|
251,716
|
|||||||
6,729
|
5,778
|
$
|
185,401
|
$
|
32.09
|
$
|
4.01
|
$
|
2.90
|
$
|
145,503
|
$
|
164,542
|
$
|
1,838,067
|
|
Gold
|
||||||||||||||||
Minto
|
3,891
|
3,777
|
6,466
|
1,712
|
301
|
169
|
4,689
|
6,314
|
33,659
|
|||||||
Silver equivalent 7
|
6,931
|
5,974
|
$
|
191,867
|
$
|
32.12
|
$
|
4.06
|
$
|
2.91
|
$
|
150,192
|
$
|
170,856
|
$
|
1,871,726
|
Corporate
|
||||||||||||||||
General and administrative
|
$
|
(6,115)
|
||||||||||||||
Other
|
670
|
|||||||||||||||
Total corporate
|
$
|
(5,445)
|
$
|
(7,142)
|
$
|
1,000,609
|
||||||||||
6,931
|
5,974
|
$
|
191,867
|
$
|
32.12
|
$
|
4.06
|
$
|
2.91
|
$
|
144,747
|
$
|
163,714
|
$
|
2,872,335
|
1)
|
All figures in thousands except gold ounces produced and sold and per ounce amounts.
|
2)
|
Ounces produced represent the quantity of silver and gold contained in concentrate or doré prior to smelting or refining deductions. Production figures are based on information provided by the operators of the mining operations to which the silver or gold interests relate or management estimates in those situations where other information is not available. Certain production figures may be updated in future periods as additional information is received.
|
3)
|
Refer to discussion on non-IFRS measure (ii) on page 26 of this MD&A.
|
4)
|
Results for San Dimas include 375,000 ounces received from Goldcorp in connection with Goldcorp’s four year commitment to deliver to Silver Wheaton 1.5 million ounces of silver per annum resulting from their sale of San Dimas to Primero.
|
5)
|
Comprised of the operating Lagunas Norte, Pierina and Veladero silver interests in addition to the non-operating Pascua-Lama silver interest.
|
6)
|
Comprised of the operating Los Filos, Keno Hill, Mineral Park, Neves-Corvo, Stratoni, Campo Morado, Minto and Aljustrel silver interests in addition to the non-operating Rosemont silver and gold interest and Loma de La Plata silver interest.
|
7)
|
Gold ounces produced and sold are converted to a silver equivalent basis on the ratio of the average silver price received to the average gold price received during the period from the assets that produce both gold and silver.
|
·
|
1.1 million silver equivalent ounces of gold production from the 777 mine;
|
·
|
176,000 ounce (45%) increase related to the Zinkgruvan mine, achieved primarily through higher recoveries;
|
·
|
211,000 ounce (29%) increase related to the Barrick mines, primarily related to higher grades and recoveries at the Veladero mine; partially offset by
|
·
|
188,000 ounce (12%) reduction related to the Peñasquito mine, primarily due to lower grades.
|
·
|
$17.7 million increase due to a 22% increase in payable silver equivalent ounces produced during the three months ended December 31, 2012, primarily attributable to:
|
i.
|
$10.0 million increase related to gold production at the 777 mine; and
|
ii.
|
$5.6 million increase related to a 29% increase in payable silver production at the Barrick mines; and
|
·
|
$32.7 million increase as a result of the timing of shipments of stockpiled concentrate and doré, primarily attributable to the following factors:
|
i.
|
$4.8 million increase relating to gold at the 777 mine;
|
ii.
|
$25.1 million increase relating to the Peñasquito mine;
|
iii.
|
$10.0 million increase relating to the Yauliyacu mine; partially offset by
|
iv.
|
$4.8 million decrease relating to Other mines; partially offset by
|
·
|
$6.2 million decrease due to a reduction in the operating margin per ounce due primarily to a higher cost per silver equivalent ounce sold; and
|
·
|
$13.1 million decrease as a result of an increase in corporate costs, as explained in the Corporate Costs section of this MD&A ($2.6 million decrease from a cash flow perspective).
|
Year Ended December 31, 2012
|
||||||||||||||||
Ounces Produced 2
|
Ounces Sold
|
Sales
|
Average
Realized
Price
($'s Per Ounce)
|
Average
Cash Cost
($'s Per
Ounce) 3
|
Average
Depletion
($'s Per
Ounce)
|
Net
Earnings
|
Cash Flow
From
Operations
|
Total Assets
|
||||||||
Silver
|
||||||||||||||||
San Dimas 4
|
5,905
|
5,803
|
$
|
181,906
|
$
|
31.35
|
$
|
4.11
|
$
|
0.79
|
$
|
153,469
|
$
|
158,060
|
$
|
162,936
|
Zinkgruvan
|
2,502
|
2,124
|
65,914
|
31.03
|
4.14
|
1.68
|
53,553
|
55,855
|
54,075
|
|||||||
Yauliyacu
|
2,412
|
2,933
|
86,185
|
29.38
|
4.07
|
5.02
|
59,531
|
80,077
|
215,295
|
|||||||
Peñasquito
|
6,572
|
5,980
|
186,085
|
31.12
|
3.99
|
2.96
|
144,524
|
162,225
|
487,272
|
|||||||
Cozamin
|
1,576
|
1,478
|
46,601
|
31.54
|
4.11
|
4.05
|
34,552
|
40,143
|
19,135
|
|||||||
Barrick 5
|
2,696
|
2,480
|
78,359
|
31.60
|
3.90
|
4.34
|
57,926
|
69,504
|
597,736
|
|||||||
Other 6
|
5,231
|
4,052
|
126,118
|
31.12
|
4.10
|
4.72
|
90,381
|
108,208
|
381,467
|
|||||||
26,894
|
24,850
|
$
|
771,168
|
$
|
31.03
|
$
|
4.06
|
$
|
3.08
|
$
|
593,936
|
$
|
674,072
|
$
|
1,917,916
|
|
Gold
|
||||||||||||||||
Minto
|
18,600
|
18,010
|
$
|
30,624
|
$
|
1,700
|
$
|
303
|
$
|
171
|
$
|
22,094
|
$
|
25,059
|
$
|
30,586
|
777
|
31,439
|
28,084
|
47,768
|
1,701
|
400
|
773
|
14,812
|
40,507
|
332,732
|
|||||||
50,039
|
46,094
|
$
|
78,392
|
$
|
1,701
|
$
|
362
|
$
|
538
|
$
|
36,906
|
$
|
65,566
|
$
|
363,318
|
|
Silver equivalent 7
|
29,571
|
27,328
|
$
|
849,560
|
$
|
31.09
|
$
|
4.30
|
$
|
3.70
|
$
|
630,842
|
$
|
739,638
|
$
|
2,281,234
|
Corporate
|
||||||||||||||||
General and administrative
|
$
|
(30,839)
|
||||||||||||||
Other
|
(13,967)
|
|||||||||||||||
Total corporate
|
$
|
(44,806)
|
$
|
(20,234)
|
$
|
908,103
|
||||||||||
29,571
|
27,328
|
$
|
849,560
|
$
|
31.09
|
$
|
4.30
|
$
|
3.70
|
$
|
586,036
|
$
|
719,404
|
$
|
3,189,337
|
1)
|
All figures in thousands except gold ounces produced and sold and per ounce amounts.
|
2)
|
Ounces produced represent the quantity of silver and gold contained in concentrate or doré prior to smelting or refining deductions. Production figures are based on information provided by the operators of the mining operations to which the silver or gold interests relate or management estimates in those situations where other information is not available. Certain production figures may be updated in future periods as additional information is received.
|
3)
|
Refer to discussion on non-IFRS measure (ii) on page 26 of this MD&A.
|
4)
|
Results for San Dimas include 1.5 million ounces received from Goldcorp in connection with Goldcorp’s four year commitment to deliver to Silver Wheaton 1.5 million ounces of silver per annum resulting from their sale of San Dimas to Primero.
|
5)
|
Comprised of the operating Lagunas Norte, Pierina and Veladero silver interests in addition to the non-operating Pascua-Lama silver interest.
|
6)
|
Comprised of the operating Los Filos, Keno Hill, Mineral Park, Neves-Corvo, Stratoni, Campo Morado, Minto, 777 and Aljustrel silver interests in addition to the non-operating Rosemont silver and gold interest and Loma de La Plata and Constancia silver interests.
|
7)
|
Gold ounces produced and sold are converted to a silver equivalent basis on the ratio of the average silver price received to the average gold price received during the period from the assets that produce both gold and silver.
|
Year Ended December 31, 2011
|
||||||||||||||||
Ounces Produced 2
|
Ounces Sold
|
Sales
|
Average
Realized
Price
($'s Per Ounce)
|
Average
Cash Cost
($'s Per
Ounce) 3
|
Average
Depletion
($'s Per
Ounce)
|
Net
Earnings
|
Cash Flow
From
Operations
|
Total Assets
|
||||||||
Silver
|
||||||||||||||||
San Dimas 4
|
5,585
|
5,617
|
$
|
188,377
|
$
|
33.54
|
$
|
4.06
|
$
|
0.71
|
$
|
161,554
|
$
|
164,453
|
$
|
167,527
|
Zinkgruvan
|
1,691
|
1,466
|
52,974
|
36.14
|
4.08
|
1.69
|
44,503
|
49,377
|
57,639
|
|||||||
Yauliyacu
|
2,548
|
1,257
|
43,911
|
34.93
|
4.02
|
5.02
|
32,555
|
38,863
|
230,012
|
|||||||
Peñasquito
|
5,284
|
4,135
|
143,069
|
34.61
|
3.93
|
2.41
|
116,855
|
126,812
|
504,973
|
|||||||
Cozamin
|
1,567
|
1,261
|
43,990
|
34.85
|
4.07
|
4.62
|
33,018
|
40,586
|
25,115
|
|||||||
Barrick 5
|
2,980
|
2,908
|
102,454
|
35.23
|
3.90
|
3.58
|
80,692
|
89,554
|
601,085
|
|||||||
Other 6
|
4,902
|
3,603
|
125,854
|
34.93
|
3.94
|
4.27
|
96,298
|
112,414
|
251,716
|
|||||||
24,557
|
20,247
|
$
|
700,629
|
$
|
34.60
|
$
|
3.99
|
$
|
2.69
|
$
|
565,475
|
$
|
622,059
|
$
|
1,838,067
|
|
Gold
|
||||||||||||||||
Minto
|
18,436
|
18,256
|
29,368
|
1,609
|
300
|
169
|
20,799
|
24,240
|
33,659
|
|||||||
Silver equivalent 7
|
25,374
|
21,069
|
$
|
729,997
|
$
|
34.65
|
$
|
4.09
|
$
|
2.73
|
$
|
586,274
|
$
|
646,299
|
$
|
1,871,726
|
Corporate
|
||||||||||||||||
General and administrative
|
$
|
(25,180)
|
||||||||||||||
Other
|
(11,066)
|
|||||||||||||||
Total corporate
|
$
|
(36,246)
|
$
|
(19,872)
|
$
|
1,000,609
|
||||||||||
25,374
|
21,069
|
$
|
729,997
|
$
|
34.65
|
$
|
4.09
|
$
|
2.73
|
$
|
550,028
|
$
|
626,427
|
$
|
2,872,335
|
1)
|
All figures in thousands except gold ounces produced and sold and per ounce amounts.
|
2)
|
Ounces produced represent the quantity of silver and gold contained in concentrate or doré prior to smelting or refining deductions. Production figures are based on information provided by the operators of the mining operations to which the silver or gold interests relate or management estimates in those situations where other information is not available. Certain production figures may be updated in future periods as additional information is received.
|
3)
|
Refer to discussion on non-IFRS measure (ii) on page 26 of this MD&A.
|
4)
|
Results for San Dimas include 1.5 million ounces received from Goldcorp in connection with Goldcorp’s four year commitment to deliver to Silver Wheaton 1.5 million ounces of silver per annum resulting from their sale of San Dimas to Primero.
|
5)
|
Comprised of the operating Lagunas Norte, Pierina and Veladero silver interests in addition to the non-operating Pascua-Lama silver interest.
|
6)
|
Comprised of the operating Los Filos, Keno Hill, Mineral Park, Neves-Corvo, Stratoni, Campo Morado, Minto and Aljustrel silver interests in addition to the non-operating Rosemont silver and gold interest and Loma de La Plata silver interest.
|
7)
|
Gold ounces produced and sold are converted to a silver equivalent basis on the ratio of the average silver price received to the average gold price received during the period from the assets that produce both gold and silver.
|
·
|
1.7 million silver equivalent ounces of gold production from the 777 mine;
|
·
|
810,000 ounce (48%) increase related to the Zinkgruvan mine, achieved through higher grades and recoveries; and
|
·
|
1.3 million ounce (25%) increase related to the Peñasquito mine reflecting the ramping up of milling operations, including the successful commissioning of the high pressure grinding circuit during the three month period ended June 30, 2012.
|
·
|
$70.8 million increase due to a 17% increase in payable silver equivalent ounces produced during the year ended December 31, 2012, primarily attributable to:
|
i.
|
$16.1 million increase related to gold production at the 777 mine;
|
ii.
|
$20.3 million increase relating to a 48% increase in payable silver production at the Zinkgruvan mine;
|
iii.
|
$32.3 million increase related to a 24% increase in payable silver production at the Peñasquito mine; and
|
·
|
$58.9 million increase as a result of the timing of shipments of stockpiled concentrate and doré, primarily attributable to a $46.3 million increase due to Yauliyacu having made alternate arrangements to sell its bulk concentrates, resulting in a more consistent delivery schedule during the year; partially offset by
|
·
|
$91.9 million decrease as a result of a 12% decrease in the average earnings from operations on a per ounce basis, driven primarily by a 10% decrease in the average realized selling price in addition to the Company paying a higher per ounce cost on its recently acquired 777 silver and gold interest in comparison to the per ounce cost paid related to silver and gold interests acquired in the past; and
|
·
|
$8.6 million decrease as a result of an increase in corporate costs, as explained in the Corporate Costs section of this MD&A ($0.4 million increase from a cash flow perspective).
|
Three Months Ended
December 31
|
Years Ended
December 31
|
|||
(in thousands)
|
2012
|
2011
|
2012
|
2011
|
General and administrative
|
$ 9,159
|
$ 6,115
|
$ 30,839
|
$ 25,180
|
Foreign exchange loss (gain)
|
(57)
|
65
|
29
|
(453)
|
Other (income) expense
|
1,335
|
(345)
|
(817)
|
3,182
|
Income tax expense (recovery)
|
8,144
|
(390)
|
14,755
|
8,337
|
Total corporate costs
|
$ 18,581
|
$ 5,445
|
$ 44,806
|
$ 36,246
|
Three Months Ended
December 31
|
Years Ended
December 31
|
|||
(in thousands)
|
2012
|
2011
|
2012
|
2011
|
Salaries and benefits
|
||||
Salaries and benefits, excluding PSUs
|
$ 3,663
|
$ 1,819
|
$ 10,173
|
$ 8,036
|
PSUs
|
472
|
36
|
1,685
|
377
|
Total salaries and benefits
|
$ 4,135
|
$ 1,855
|
$ 11,858
|
$ 8,413
|
Depreciation
|
49
|
61
|
228
|
261
|
Charitable donations
|
649
|
422
|
1,857
|
1,208
|
Professional fees
|
840
|
611
|
2,981
|
2,313
|
Other
|
1,914
|
1,607
|
7,495
|
6,656
|
Cash settled general and administrative
|
$ 7,587
|
$ 4,556
|
$ 24,419
|
$ 18,851
|
Equity settled stock based compensation (a non-cash expense)
|
1,572
|
1,559
|
6,420
|
6,329
|
Total general and administrative
|
$ 9,159
|
$ 6,115
|
$ 30,839
|
$ 25,180
|
Three Months Ended
December 31
|
Years Ended
December 31
|
|||
(in thousands)
|
2012
|
2011
|
2012
|
2011
|
Dividend income
|
$ (23)
|
$ (11)
|
$ (80)
|
$ (57)
|
Interest income
|
(238)
|
(348)
|
(1,222)
|
(983)
|
Stand-by fees
|
214
|
214
|
897
|
850
|
Loss (gain) on long-term investments - share purchase warrants held
|
1,441
|
(262)
|
(496)
|
3,118
|
Other
|
(59)
|
62
|
84
|
254
|
Total other (income) expense
|
$ 1,335
|
$ (345)
|
$ (817)
|
$ 3,182
|
Three Months Ended
December 31
|
Years Ended
December 31
|
|||
(in thousands)
|
2012
|
2011
|
2012
|
2011
|
Current income tax expense related to foreign jurisdictions
|
$ 40
|
$ 150
|
$ 724
|
$ 762
|
Deferred income tax expense (recovery) related to:
|
||||
Origination and reversal of temporary differences ¹
|
$ 6,159
|
$ 1,518
|
$ 11,615
|
$ 3,578
|
Write down (reversal of write down) of previously recognized temporary differences
|
1,945
|
(2,058)
|
2,416
|
3,997
|
$ 8,104
|
$ (540)
|
$ 14,031
|
$ 7,575
|
|
Total income tax expense (recovery)
|
$ 8,144
|
$ (390)
|
$ 14,755
|
$ 8,337
|
1)
|
Primarily related to income from Canadian operations.
|
i.
|
Operating cash flow per share (basic and diluted) is calculated by dividing cash generated by operating activities by the weighted average number of shares outstanding (basic and diluted). The Company presents operating cash flow per share as it believes that certain investors use this information to evaluate the Company’s performance in comparison to other companies in the precious metals mining industry who present results on a similar basis.
|
Three Months Ended
December 31
|
Years Ended
December 31
|
||||||||||||
(in thousands, except for per share amounts)
|
2012
|
2011
|
2012
|
2011
|
|||||||||
Cash generated by operating activities
|
$
|
254,026
|
$
|
163,714
|
$
|
719,404
|
$
|
626,427
|
|||||
Divided by:
|
|||||||||||||
Basic weighted average number of shares outstanding
|
354,301
|
353,497
|
353,874
|
353,249
|
|||||||||
Diluted weighted average number of shares outstanding
|
356,566
|
355,797
|
356,008
|
355,904
|
|||||||||
Equals:
|
|||||||||||||
Operating cash flow per share - basic
|
$
|
0.72
|
$
|
0.46
|
$
|
2.03
|
$
|
1.77
|
|||||
Operating cash flow per share - diluted
|
$
|
0.71
|
$
|
0.46
|
$
|
2.02
|
$
|
1.76
|
ii.
|
Average cash cost of silver and gold on a per ounce basis is calculated by dividing the total cost of sales, less depletion, by the ounces sold. In the precious metals mining industry, this is a common performance measure but does not have any standardized meaning. The Company believes that, in addition to conventional measures prepared in accordance with IFRS, certain investors use this information to evaluate the Company’s performance and ability to generate cash flow.
|
Three Months Ended
December 31
|
Years Ended
December 31
|
||||||||||||
(in thousands, except for gold ounces sold and per ounce amounts)
|
2012
|
2011
|
2012
|
2011
|
|||||||||
Cost of sales
|
$
|
90,916
|
$
|
41,675
|
$
|
218,718
|
$
|
143,723
|
|||||
Less: depletion
|
(47,968)
|
(17,393)
|
(101,229)
|
(57,457)
|
|||||||||
Cash cost of sales
|
$
|
42,948
|
$
|
24,282
|
$
|
117,489
|
$
|
86,266
|
|||||
Cash cost of sales is comprised of:
|
|||||||||||||
Total cash cost of silver sold
|
$
|
30,237
|
$
|
23,144
|
$
|
100,798
|
$
|
80,785
|
|||||
Total cash cost of gold sold
|
12,711
|
1,138
|
16,691
|
5,481
|
|||||||||
Total cash cost of sales
|
$
|
42,948
|
$
|
24,282
|
$
|
117,489
|
$
|
86,266
|
|||||
Divided by:
|
|||||||||||||
Total silver ounces sold
|
7,347
|
5,778
|
24,850
|
20,247
|
|||||||||
Total gold ounces sold
|
32,960
|
3,777
|
46,094
|
18,256
|
|||||||||
Total silver equivalent ounces sold 1
|
9,131
|
5,974
|
27,328
|
21,069
|
|||||||||
Equals:
|
|||||||||||||
Average cash cost of silver (per ounce)
|
$
|
4.12
|
$
|
4.01
|
$
|
4.06
|
$
|
3.99
|
|||||
Average cash cost of gold (per ounce)
|
$
|
386
|
$
|
301
|
$
|
362
|
$
|
300
|
|||||
Average cash cost (per silver equivalent ounce 1)
|
$
|
4.70
|
$
|
4.06
|
$
|
4.30
|
$
|
4.09
|
1)
|
Gold ounces sold are converted to a silver equivalent basis on the ratio of the average silver price received to the average gold price received during the period from the assets that produce both silver and gold.
|
iii.
|
Cash operating margin is calculated by subtracting the average cash cost of silver and gold on a per ounce basis from the average realized selling price of silver and gold on a per ounce basis. The Company presents cash operating margin as it believes that certain investors use this information to evaluate the Company’s performance in comparison to other companies in the precious metals mining industry who present results on a similar basis.
|
Three Months Ended
December 31
|
Years Ended
December 31
|
||||||||||||
(in thousands, except for per ounce amounts)
|
2012
|
2011
|
2012
|
2011
|
|||||||||
Average realized selling price of silver and gold
|
|||||||||||||
Sales
|
$
|
287,241
|
$
|
191,867
|
$
|
849,560
|
$
|
729,997
|
|||||
Divided by - total silver equivalent ounces sold 1
|
9,131
|
5,974
|
27,328
|
21,069
|
|||||||||
Equals - average realized price ($'s per silver equivalent ounce 1)
|
$
|
31.46
|
$
|
32.12
|
$
|
31.09
|
$
|
34.65
|
|||||
Less - average cash cost ($'s per silver equivalent ounce 1)
|
(4.70)
|
(4.06)
|
(4.30)
|
(4.09)
|
|||||||||
Cash operating margin per silver equivalent ounce 1
|
$
|
26.76
|
$
|
28.06
|
$
|
26.79
|
$
|
30.56
|
1)
|
Gold ounces sold are converted to a silver equivalent basis on the ratio of the average silver price received to the average gold price received during the period from the assets that produce both silver and gold.
|
iv.
|
Adjusted net earnings and adjusted net earnings per share is calculated by removing the effects of the non-cash, fair value adjustment on the Company’s previously issued and outstanding share purchase warrants, which had an exercise price denominated in Canadian dollars, from net earnings of the Company. These share purchase warrants are classified as a financial liability with any fair value adjustments being reflected as a component of net earnings. This accounting treatment was applicable to the share purchase warrants which expired or were exercised prior to December 22, 2010. The Company believes that, in addition to conventional measures prepared in accordance with IFRS, the Company and certain investors use this information to evaluate the Company’s performance.
|
Silver and Gold Interests
|
Attributable Payable
Production to be
Purchased
|
Per Ounce Cash
Payment 1,2
|
Term of
Agreement
|
Date of
Contract
|
||||
Silver
|
Gold
|
Silver
|
Gold
|
|||||
San Dimas
|
100% 3
|
-
|
$
|
4.12
|
n/a
|
Life of Mine
|
15-Oct-04
|
|
Zinkgruvan
|
100%
|
-
|
$
|
4.18
|
n/a
|
Life of Mine
|
8-Dec-04
|
|
Yauliyacu
|
100% 4
|
-
|
$
|
4.08
|
n/a
|
20 years
|
23-Mar-06
|
|
Peñasquito
|
25%
|
-
|
$
|
3.99
|
n/a
|
Life of Mine
|
24-Jul-07
|
|
Minto
|
100%
|
100% 5
|
$
|
3.94
|
$
|
303
|
Life of Mine
|
1-Dec-08
|
Cozamin
|
100%
|
-
|
$
|
4.12
|
n/a
|
10 years
|
4-Apr-07
|
|
777
|
100%
|
100%/50% 6
|
$
|
5.90
|
$
|
400
|
Life of Mine
|
8-Aug-12
|
Salobo
|
-
|
25%
|
n/a
|
$
|
400
|
Life of Mine
|
28-Feb-13
|
|
Sudbury
|
-
|
70%
|
n/a
|
$
|
400
|
20 years
|
28-Feb-13
|
|
Barrick
|
||||||||
Pascua-Lama
|
25%
|
-
|
$
|
3.90
|
n/a
|
Life of Mine
|
8-Sep-09
|
|
Lagunas Norte
|
100%
|
-
|
$
|
3.90
|
n/a
|
4 years 7
|
8-Sep-09
|
|
Pierina
|
100%
|
-
|
$
|
3.90
|
n/a
|
4 years 7
|
8-Sep-09
|
|
Veladero
|
100% 8
|
-
|
$
|
3.90
|
n/a
|
4 years 7
|
8-Sep-09
|
|
Other
|
||||||||
Los Filos 3
|
100%
|
-
|
$
|
4.17
|
n/a
|
25 years
|
15-Oct-04
|
|
Keno Hill
|
25%
|
-
|
$
|
3.90
|
n/a
|
Life of Mine
|
2-Oct-08
|
|
Mineral Park
|
100%
|
-
|
$
|
3.90
|
n/a
|
Life of Mine
|
17-Mar-08
|
|
Neves-Corvo
|
100%
|
-
|
$
|
4.02
|
n/a
|
50 years
|
5-Jun-07
|
|
Stratoni
|
100%
|
-
|
$
|
4.02
|
n/a
|
Life of Mine
|
23-Apr-07
|
|
Campo Morado
|
75%
|
-
|
$
|
3.94
|
n/a
|
Life of Mine
|
13-May-08
|
|
Aljustrel
|
100%
|
-
|
$
|
3.98
|
n/a
|
50 years
|
5-Jun-07
|
|
Loma de La Plata
|
12.5%
|
-
|
$
|
4.00
|
n/a
|
Life of Mine
|
n/a 9
|
|
Rosemont
|
100%
|
100%
|
$
|
3.90
|
$
|
450
|
Life of Mine
|
11-Feb-10
|
Constancia
|
100%
|
-
|
$
|
5.90
|
n/a
|
Life of Mine
|
8-Aug-12
|
1)
|
Subject to an annual inflationary adjustment with the exception of Loma de La Plata and Sudbury.
|
2)
|
Should the prevailing market price for silver or gold be lower than this amount, the per ounce cash payment will be reduced to the prevailing market price, with the exception of Yauliyacu.
|
3)
|
Until August 6, 2014, Silver Wheaton is committed to purchase from Primero a per annum amount equal to the first 3.5 million ounces of payable silver produced at San Dimas and 50% of any excess, plus Silver Wheaton is committed to purchase an additional 1.5 million ounces of silver per annum to be delivered by Goldcorp for a per ounce cash payment equal to that applicable under the Los Filos silver purchase agreement. After August 6, 2014, Silver Wheaton is committed to purchase from Primero a per annum amount equal to the first 6 million ounces of payable silver produced at San Dimas and 50% of any excess.
|
4)
|
To a maximum of 4.75 million ounces per annum. In the event that silver sold and delivered to Silver Wheaton in any year totals less than 4.75 million ounces, the amount sold and delivered to Silver Wheaton in subsequent years will be increased to make up for any cumulative shortfall, to the extent production permits. The cumulative shortfall as at March 23, 2012, representing the six year anniversary, was 13.0 million ounces.
|
5)
|
The Company is committed to acquire 100% of the first 30,000 ounces of gold produced per annum and 50% thereafter.
|
6)
|
The Company’s share of gold production at 777 will remain at 100% until the later of the end of 2016 or the satisfaction of a completion test relating to Hudbay’s Constancia project, after which it will be reduced to 50% for the remainder of the mine life.
|
7)
|
The Company is committed to purchase silver production from the currently producing mines until December 31, 2013. In addition, during 2014 and 2015, the Company is committed to purchase all or a portion of the silver production from these mines to the extent of any production shortfall at Pascua-Lama relative to the completion guarantee provided by Barrick, until such time as the completion guarantee is satisfied.
|
8)
|
Silver Wheaton's attributable silver production is subject to a maximum of 8% of the silver contained in the ore mined at Veladero during the period.
|
9)
|
Terms of the agreement not yet finalized.
|
Obligations With Scheduled Payment Dates
|
Other Commitments
|
|||||||||||||
(in thousands)
|
2013
|
2014 - 2016
|
2017 - 2018
|
After 2018
|
Sub-Total
|
Total
|
||||||||
Bank debt ¹
|
$
|
28,560
|
$
|
21,500
|
$
|
-
|
$
|
-
|
$
|
50,060
|
$
|
-
|
$
|
50,060
|
Interest on bank debt 2
|
472
|
145
|
-
|
-
|
617
|
-
|
617
|
|||||||
Silver and gold interest payments 3
|
||||||||||||||
Rosemont
|
-
|
-
|
-
|
-
|
-
|
230,000
|
230,000
|
|||||||
Loma de La Plata
|
-
|
-
|
-
|
-
|
-
|
32,400
|
32,400
|
|||||||
Constancia
|
-
|
-
|
-
|
-
|
-
|
250,000
|
250,000
|
|||||||
Operating leases
|
507
|
1,520
|
132
|
-
|
2,159
|
-
|
2,159
|
|||||||
Total contractual obligations
|
$
|
29,539
|
$
|
23,165
|
$
|
132
|
$
|
-
|
$
|
52,836
|
$
|
512,400
|
$
|
565,236
|
1)
|
As more fully disclosed in the Subsequent Events section of this MD&A, the bank debt was repaid in full on February 22, 2013.
|
2)
|
As the applicable interest rates are floating in nature, the interest charges are estimated based on market-based forward interest rate curves at the end of the reporting period.
|
3)
|
Does not reflect the contingent payment due related to the Salobo gold purchase agreement.
|
·
|
IAS 1 - Presentation of Financial Statements (amended 2011)
|
·
|
IFRS 7 – Financial Instruments (amended 2011)
|
·
|
IFRS 10 - Consolidated Financial Statements (“IFRS 10”)
|
·
|
IFRS 11 - Joint Arrangements (“IFRS 11”)
|
·
|
IFRS 12 - Disclosure of Interests in Other Entities (“IFRS 12”)
|
·
|
IFRS 13 - Fair Value Measurement
|
·
|
IAS 19 – Employee Benefits (amended 2011)
|
·
|
IAS 27 - Separate Financial Statements (amended 2011) (“IAS 27”)
|
·
|
IAS 28 - Investments in Associates (amended 2011) (“IAS 28”)
|
·
|
IFRIC 20 - Stripping Costs in the Production Phase of a Surface Mine
|
·
|
IAS 32 – Financial Instruments: Presentation (amended 2011)
|
·
|
IFRS 9 (2010) – Financial Instruments (amended 2010)
|
·
|
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;
|
·
|
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with IFRS, and that receipts and expenditures of the Company are being made only in accordance with authorizations of the Company’s management and directors; and,
|
·
|
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the annual financial statements or interim financial statements.
|
Proven
|
Probable
|
Proven & Probable
|
||||||||
Tonnage
|
Grade
|
Contained
|
Tonnage
|
Grade
|
Contained
|
Tonnage
|
Grade
|
Contained
|
Process Recovery % (7)
|
|
SILVER
|
Mt
|
g/t
|
Moz
|
Mt
|
g/t
|
Moz
|
Mt
|
g/t
|
Moz
|
|
Peñasquito (25%)(14)
|
||||||||||
Mill
|
144.5
|
29.4
|
136.4
|
121.2
|
20.8
|
80.9
|
265.7
|
25.5
|
217.4
|
53-65%
|
Heap Leach
|
8.1
|
14.6
|
3.8
|
21.9
|
9.7
|
6.8
|
29.9
|
11.0
|
10.6
|
24%
|
San Dimas(10, 14)
|
-
|
-
|
-
|
3.8
|
289.5
|
35.2
|
3.8
|
289.5
|
35.2
|
94%
|
Pascua-Lama (25%)(14)
|
9.9
|
59.5
|
18.9
|
86.3
|
54.1
|
150.2
|
96.2
|
54.7
|
169.1
|
82%
|
Lagunas Norte(11)
|
3.4
|
3.2
|
0.4
|
38.6
|
3.2
|
4.0
|
42.1
|
3.2
|
4.3
|
22%
|
Pierina(11)
|
2.8
|
9.0
|
0.8
|
20.6
|
9.0
|
6.0
|
23.3
|
9.0
|
6.8
|
37%
|
Veladero(11)
|
4.7
|
10.6
|
1.6
|
62.4
|
10.6
|
21.2
|
67.1
|
10.6
|
22.8
|
6%
|
Yauliyacu(11, 12)
|
1.1
|
96.0
|
3.3
|
2.9
|
100.0
|
9.4
|
4.0
|
98.9
|
12.7
|
85%
|
777 (13, 14)
|
4.9
|
26.8
|
4.2
|
7.5
|
27.9
|
6.7
|
12.4
|
27.4
|
10.9
|
64%
|
Neves-Corvo
|
||||||||||
Copper
|
6.1
|
40.0
|
7.8
|
18.0
|
40.0
|
23.2
|
24.1
|
40.0
|
31.0
|
35%
|
Zinc
|
11.5
|
72.0
|
26.7
|
11.2
|
67.0
|
24.0
|
22.7
|
69.5
|
50.7
|
20%
|
Rosemont(15)
|
279.5
|
4.1
|
37.0
|
325.8
|
4.1
|
43.1
|
605.3
|
4.1
|
80.1
|
80%
|
Constancia
|
359.0
|
3.3
|
38.3
|
91.0
|
3.6
|
10.6
|
450.0
|
3.4
|
48.8
|
72%
|
Mineral Park(15)
|
293.9
|
2.7
|
25.7
|
74.5
|
2.9
|
7.0
|
368.4
|
2.8
|
32.6
|
49%
|
Zinkgruvan
|
||||||||||
Zinc
|
8.4
|
95.0
|
25.8
|
2.4
|
54.0
|
4.2
|
10.9
|
85.9
|
30.0
|
70%
|
Copper
|
3.9
|
32.0
|
4.0
|
0.1
|
34.0
|
0.1
|
4.0
|
32.0
|
4.1
|
78%
|
Aljustrel
|
||||||||||
Copper
|
2.2
|
19.2
|
1.3
|
8.4
|
15.3
|
4.1
|
10.6
|
16.1
|
5.5
|
30%
|
Campo Morado (75%)
|
0.8
|
158.2
|
4.0
|
0.2
|
133.3
|
0.6
|
0.9
|
154.3
|
4.7
|
55%
|
Stratoni
|
1.7
|
174.0
|
9.3
|
0.1
|
225.0
|
0.7
|
1.8
|
177.0
|
10.0
|
84%
|
Minto
|
5.5
|
5.4
|
1.0
|
5.9
|
4.6
|
0.9
|
11.4
|
5.0
|
1.8
|
78%
|
Cozamin(11)
|
||||||||||
Copper
|
0.9
|
63.0
|
1.7
|
4.9
|
50.7
|
8.0
|
5.8
|
52.5
|
9.8
|
74%
|
Los Filos
|
72.6
|
5.3
|
12.3
|
224.1
|
5.6
|
40.2
|
296.7
|
5.5
|
52.5
|
5%
|
Total Silver
|
364.2
|
487.1
|
851.4
|
|||||||
GOLD
|
||||||||||
Salobo (25%)(16)
|
159.2
|
0.42
|
2.15
|
121.5
|
0.32
|
1.25
|
280.6
|
0.38
|
3.40
|
66%
|
Sudbury (70%)(11)
|
34.8
|
0.29
|
0.33
|
26.5
|
0.49
|
0.42
|
61.3
|
0.38
|
0.75
|
81%
|
777 (13, 14)
|
3.9
|
1.90
|
0.24
|
5.9
|
1.90
|
0.36
|
9.8
|
1.90
|
0.60
|
73%
|
Minto
|
5.5
|
0.69
|
0.12
|
5.9
|
0.51
|
0.10
|
11.4
|
0.60
|
0.22
|
74%
|
TOTAL GOLD
|
2.84
|
2.13
|
4.96
|
Measured
|
Indicated
|
Measured & Indicated
|
|||||||
Tonnage
|
Grade
|
Contained
|
Tonnage
|
Grade
|
Contained
|
Tonnage
|
Grade
|
Contained
|
|
SILVER
|
Mt
|
g/t
|
Moz
|
Mt
|
g/t
|
Moz
|
Mt
|
g/t
|
Moz
|
Peñasquito (25%)(14)
|
|||||||||
Mill
|
31.4
|
14.4
|
14.6
|
112.9
|
13.1
|
47.6
|
144.2
|
13.4
|
62.2
|
Heap Leach
|
0.9
|
5.0
|
0.1
|
5.4
|
4.2
|
0.7
|
6.4
|
4.3
|
0.9
|
Pascua-Lama (25%)(14)
|
5.3
|
24.5
|
4.2
|
55.9
|
23.4
|
42.1
|
61.2
|
23.5
|
46.3
|
Yauliyacu(11, 12)
|
0.7
|
115.6
|
2.5
|
5.1
|
227.1
|
37.2
|
5.8
|
214.2
|
39.7
|
Neves-Corvo
|
|||||||||
Copper
|
4.1
|
49.3
|
6.4
|
23.1
|
50.7
|
37.6
|
27.1
|
50.5
|
44.1
|
Zinc
|
13.0
|
59.7
|
25.0
|
51.6
|
55.4
|
92.0
|
64.6
|
56.3
|
117.0
|
Rosemont(15)
|
38.5
|
3.0
|
3.7
|
197.7
|
2.7
|
17.1
|
236.2
|
2.7
|
20.8
|
Constancia
|
119.0
|
2.3
|
8.6
|
344.0
|
2.0
|
21.9
|
463.0
|
2.1
|
30.5
|
Mineral Park(15)
|
101.0
|
2.6
|
8.4
|
175.6
|
2.7
|
15.2
|
276.6
|
2.7
|
23.6
|
Zinkgruvan
|
|||||||||
Zinc
|
1.0
|
88.8
|
2.7
|
3.7
|
124.6
|
14.7
|
4.6
|
117.2
|
17.4
|
Copper
|
1.5
|
21.2
|
1.0
|
0.5
|
33.8
|
0.6
|
2.0
|
24.3
|
1.6
|
Aljustrel
|
|||||||||
Zinc
|
1.3
|
65.6
|
2.7
|
20.5
|
60.3
|
39.7
|
21.8
|
60.7
|
42.4
|
Copper
|
-
|
-
|
-
|
0.1
|
11.7
|
0.04
|
0.1
|
11.7
|
0.04
|
Campo Morado (75%)
|
5.0
|
128.9
|
20.6
|
2.4
|
123.5
|
9.7
|
7.4
|
127.1
|
30.2
|
Loma de La Plata (12.5%)
|
-
|
-
|
-
|
3.6
|
169.0
|
19.8
|
3.6
|
169.0
|
19.8
|
Minto
|
9.4
|
3.9
|
1.2
|
27.2
|
3.2
|
2.8
|
36.5
|
3.3
|
3.9
|
Keno Hill (25%)
|
|||||||||
Underground
|
-
|
-
|
-
|
0.6
|
506.0
|
10.4
|
0.6
|
506.0
|
10.4
|
Elsa Tailings
|
-
|
-
|
-
|
0.6
|
119.0
|
2.4
|
0.6
|
119.0
|
2.4
|
Los Filos
|
9.6
|
8.5
|
2.6
|
61.4
|
6.8
|
13.4
|
71.0
|
7.0
|
16.0
|
Total Silver
|
104.3
|
424.8
|
529.1
|
||||||
GOLD
|
|||||||||
Salobo (25%)(16)
|
12.3
|
0.47
|
0.19
|
48.8
|
0.37
|
0.58
|
61.1
|
0.39
|
0.77
|
Sudbury (70%)(11)
|
-
|
-
|
-
|
23.3
|
0.33
|
0.25
|
23.3
|
0.33
|
0.25
|
Minto
|
9.4
|
0.44
|
0.13
|
27.2
|
0.28
|
0.24
|
36.5
|
0.32
|
0.38
|
TOTAL GOLD
|
0.32
|
1.07
|
1.39
|
Inferred
|
|||
Tonnage
|
Grade
|
Contained
|
|
SILVER
|
Mt
|
g/t
|
Moz
|
Peñasquito (25%)(14)
|
|||
Mill
|
31.7
|
9.1
|
9.3
|
Heap Leach
|
12.7
|
1.6
|
0.7
|
San Dimas(10, 14)
|
6.9
|
300.4
|
66.3
|
Pascua-Lama (25%)(14)
|
8.1
|
15.5
|
4.0
|
777 (13, 14)
|
1.2
|
39.2
|
1.5
|
Neves-Corvo
|
|||
Copper
|
25.4
|
47.2
|
38.6
|
Zinc
|
22.1
|
51.0
|
36.2
|
Rosemont(15)
|
104.5
|
3.3
|
11.1
|
Constancia
|
223.0
|
1.9
|
13.4
|
Mineral Park(15)
|
320.1
|
2.3
|
23.9
|
Zinkgruvan
|
|||
Zinc
|
4.6
|
78.0
|
11.4
|
Copper
|
0.6
|
31.0
|
0.6
|
Aljustrel
|
|||
Zinc
|
8.7
|
50.4
|
14.0
|
Copper
|
4.7
|
16.0
|
2.4
|
Campo Morado (75%)
|
1.7
|
128.9
|
7.1
|
Stratoni
|
0.7
|
217.0
|
4.7
|
Loma de La Plata (12.5%)
|
0.2
|
76.0
|
0.4
|
Minto
|
8.5
|
2.9
|
0.8
|
Keno Hill (25%)
|
|||
Underground
|
0.2
|
340.8
|
1.9
|
Los Filos
|
239.2
|
6.0
|
46.5
|
TOTAL SILVER
|
294.7
|
||
GOLD
|
|||
Salobo (25%)(16)
|
37.0
|
0.31
|
0.37
|
Sudbury (70%)(11)
|
18.9
|
0.67
|
0.40
|
777 (13, 14)
|
0.6
|
1.96
|
0.04
|
Minto
|
8.5
|
0.24
|
0.07
|
TOTAL GOLD
|
0.88
|
||
1.
|
All Mineral Reserves and Mineral Resources have been calculated in accordance with the CIM Standards and NI 43-101, or the AusIMM JORC equivalent.
|
2.
|
Mineral Reserves and Mineral Resources are reported above in millions of metric tonnes (“Mt”), grams per metric tonne (“g/t”) and millions of ounces (“Moz”).
|
3.
|
Individual qualified persons (“QPs”), as defined by the NI 43-101, for the technical information contained in this document (including the Mineral Reserve and Mineral Resource estimates) for the following operations are as follows:
|
a.
|
Salobo – Christopher Jacobs, CEng MIMMM (Vice President and Mining Economist), James Turner, CEng MIMMM (Senior Mineral Process Engineer), Barnard Foo, P.Eng., MBA (Senior Mining Engineer) and Jason Ché Osmond, FGS, C.Geol, EurGeol (Senior Geologist) all of whom are employees of Micon International Ltd.
|
b.
|
All other operations and development projects: the Company’s QPs Neil Burns, M.Sc., P.Geo. (Vice President, Technical Services); Samuel Mah, M.A.Sc., P.Eng. (Senior Director, Project Evaluations), both employees of the Company (the “Company’s QPs”).
|
4.
|
The Mineral Resources reported in the above tables are exclusive of Mineral Reserves. The Minto, Campo Morado, Neves-Corvo, Zinkgruvan and Aljustrel mines report Mineral Resources inclusive of Mineral Reserves. The Company’s QPs have made the exclusive Mineral Resource estimates for these mines based on average mine recoveries and dilution.
|
5.
|
Mineral Resources which are not Mineral Reserves do not have demonstrated economic viability.
|
6.
|
Other than as detailed below, Mineral Reserves and Mineral Resources are reported as of December 31, 2012 based on information available to the Company as of the date of this document, and therefore will not reflect updates, if any, after such date.
|
a.
|
Resources and Reserves for 777, Sudbury, Cozamin and Minto are reported as of December 31, 2011.
|
b.
|
Resources and Reserves for San Dimas, Neves-Corvo and Zinkgruvan are reported as of June 30, 2012.
|
c.
|
Resources and Reserves for Rosemont are reported as of August 28, 2012.
|
d.
|
Resources for the Constancia and Pampacancha deposits are reported as of August 23, 2011 and April 2, 2012, respectively. Reserves for both Constancia and Pampacancha deposits are reported as of August 8, 2012.
|
e.
|
Resources for Mineral Park are reported as of December 29, 2006 and Reserves as of December 31, 2011.
|
f.
|
Resources and Reserves for Aljustrel’s Feitais and Moinho deposits are reported as of November 30, 2010, Resources for the Estaçao deposit are reported as of December 31, 2007.
|
g.
|
Resources for Campo Morado’s El Rey, Naranjo and Reforma deposits are reported as of October 13, 2005.
|
h.
|
Resources and Reserves for Stratoni are reported as of August 10, 2010.
|
i.
|
Resources for Keno Hill’s Elsa Tailings are reported as of April 22, 2010, Lucky Queen and Onek deposits as of July 27, 2011, Bermingham as of June 27, 2012 and Flame and Moth as of January 30, 2013.
|
j.
|
Resources for Loma de La Plata are reported as of May 20, 2009.
|
7.
|
Process recoveries are the average percentage of silver or gold in a saleable product (doré or concentrate) recovered from mined ore at the applicable site process plants as reported by the operators.
|
8.
|
Mineral Reserves are estimated using appropriate process recovery rates and the following commodity prices:
|
a.
|
Peñasquito and Los Filos -$24.00 per ounce silver.
|
b.
|
San Dimas, Rosemont and Cozamin - $20.00 per ounce silver.
|
c.
|
Pascua-Lama - $22.00 per ounce silver.
|
d.
|
Lagunas Norte, Veladero, Pierina – $28.00 per ounce silver.
|
e.
|
Yauliyacu - $30.00 per ounce silver.
|
f.
|
777 – $22.00 per ounce silver and $1,100 per ounce gold.
|
g.
|
Neves-Corvo – 1.4% Cu cut-off for the copper Reserve and 5.0% Zn cut-off for all the zinc Reserves except for Lombador which was reported above a cut-off of 6.0% Zn.
|
h.
|
Constancia - $23.00 per ounce silver.
|
i.
|
Mineral Park – $7.50 per ounce silver.
|
j.
|
Zinkgruvan – 3.7% Zn equivalent cut-off for the zinc Reserve and 1.8% Cu cut-off for the copper Reserve.
|
k.
|
Aljustrel – 1.5% Cu cut-off for all copper Reserves, 4.5% Zn cut-off for all zinc Reserves.
|
l.
|
Campo Morado - $18.92 per ounce silver.
|
m.
|
Stratoni - $15.00 per ounce silver.
|
n.
|
Minto – $3.90 per ounce silver and $300 per ounce gold.
|
o.
|
Salobo - $1,150 per ounce gold.
|
p.
|
Sudbury - $975 per ounce gold.
|
9.
|
Mineral Resources are estimated using appropriate recovery rates and the following commodity prices:
|
a.
|
Peñasquito and Los Filos - $27.00 per ounce silver.
|
b.
|
San Dimas - $25.00 per ounce silver.
|
c.
|
Pascua-Lama, Lagunas Norte, Veladero and Pierina – $28.00 per ounce silver.
|
d.
|
Yauliyacu – $30.00 per ounce silver.
|
e.
|
777 – $22.00 per ounce silver and $1,100 per ounce gold.
|
f.
|
Neves-Corvo – 1.0% Cu cut-off for the copper Resource and 3.0% Zn cut-off for the zinc Resource.
|
g.
|
Rosemont and Cozamin – $20.00 per ounce silver.
|
h.
|
Constancia - $22.00 per ounce silver.
|
i.
|
Mineral Park – $7.50 per ounce silver.
|
j.
|
Zinkgruvan – 3.1% Zn equivalent cut-off for the zinc Resource and 1.5% Cu cut-off for the copper Resource.
|
k.
|
Aljustrel – 1.5% Cu cut-off for all copper Resources, 4.5% Zn cut-off for Feitais and Moinho zinc Resources and 4.0% for Estação zinc Resources.
|
l.
|
Campo Morado – $18.92 per ounce silver for the G-9 zones and 5% Zn cut-off for the El Rey, Naranjo and Reforma deposits.
|
m.
|
Stratoni - $15.00 per ounce silver.
|
n.
|
Minto – 0.5% Cu cut-off.
|
o.
|
Loma de La Plata – $12.50 per ounce silver.
|
p.
|
Keno Hill – $15.25 per ounce silver for the Southwest and 99 Zones, $14.50 per ounce silver for the East Zone, $17.00 per ounce silver for the Elsa Tailings, $18.50 per ounce silver for the Lucky Queen and Onek deposits, $23.00 per ounce silver for Bermingham and $24.00 per ounce silver for Flame and Moth.
|
q.
|
Salobo - $1,150 per ounce gold.
|
r.
|
Sudbury - $975 per ounce gold.
|
10.
|
The San Dimas silver purchase agreement provides that from August 6, 2010 until August 5, 2014, Primero Mining Corp. (“Primero”) will deliver to the Company a per annum amount equal to the first 3.5 million ounces of payable silver produced at San Dimas and 50% of any excess, plus the Company will receive an additional 1.5 million ounces of silver per annum to be delivered by Goldcorp Inc. (“Goldcorp”). Beginning August 6, 2014, Primero will deliver to the Company a per annum amount equal to the first 6.0 million ounces of payable silver produced at San Dimas and 50% of any excess, for the life of the mine.
|
11.
|
The Company’s attributable Resources and Reserves for Pierina, Lagunas Norte, Veladero, Cozamin and Yauliyacu silver interests in addition to the Sudbury and 777 gold interests have been constrained to the production expected for the various contracts.
|
12.
|
The Company’s Yauliyacu silver purchase agreement (March 2006) with Glencore International AG provides for the delivery of up to 4.75 million ounces of silver per year for 20 years. In the event that silver sold and delivered to Silver Wheaton in any year totals less than 4.75 million ounces, the amount sold and delivered to Silver Wheaton in subsequent years will be increased to make up for any cumulative shortfall, to the extent production permits. Depending upon production levels it is possible that the Company’s current attributable tonnage may not be mined before the agreement expires.
|
13.
|
The 777 purchase agreement provides that Hudbay Minerals Inc. (“Hudbay”) will deliver 100% of the payable silver for the life of the mine and 100% of the payable gold until completion of the Constancia project, after which the gold stream will reduce to 50%. The gold figures in this table represent the attributable 777 Resources and Reserves constrained to the production expected for the 777 contract.
|
14.
|
In reliance upon Section 9.2 of NI 43-101, all technical information in this document regarding Peñasquito, San Dimas, Pascua-Lama and 777 was sourced by the Company from the following SEDAR (www.sedar.com) filed documents:
|
a.
|
Peñasquito - Goldcorp Annual Information Form filed on March 1, 2013;
|
b.
|
San Dimas - Primero MD&A filed on February 21, 2013;
|
c.
|
Pascua-Lama – Barrick Gold Corp. Fourth Quarter and Year-End Report - 2012 filed on February 14, 2013; and
|
d.
|
777 – Hudbay Annual Information Form filed on March 30, 2012.
|
|
The Company QP's have approved the disclosure in this document in reliance on such documents.
|
15.
|
The Mineral Park and Rosemont Resources and Reserves do not include the SX/EW leach material since this process does not recover silver.
|
16.
|
The Company has filed a technical report for Salobo, which is available on SEDAR.
|
17.
|
Silver and gold are produced as by-product metal at all operations with the exception of silver at the Keno Hill mine and Loma de La Plata project; therefore, the economic cut-off applied to the reporting of silver and gold Resources and Reserves will be influenced by changes in the commodity prices of other metals at the time.
|
/s/ Randy Smallwood | /s/ Gary Brown | ||
Randy Smallwood | Gary Brown | ||
President & Chief Executive Officer | Senior Vice President & Chief Financial Officer |
i.
|
pertain to the maintenance of records that accurately and fairly reflect, in reasonable detail, the transactions related to Silver Wheaton’s assets
|
ii.
|
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with IFRS, and Silver Wheaton receipts and expenditures are made only in accordance with authorizations of management and Silver Wheaton’s directors
|
iii.
|
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of Silver Wheaton’s assets that could have a material effect on Silver Wheaton’s financial statements.
|
/s/ Randy Smallwood | /s/ Gary Brown | ||
Randy Smallwood | Gary Brown | ||
President & Chief Executive Officer | Senior Vice President & Chief Financial Officer |
Years Ended December 31
|
|||||
(US dollars and shares in thousands, except per share amounts)
|
Note
|
2012
|
2011
|
||
Sales
|
5
|
$
|
849,560
|
$
|
729,997
|
Cost of sales
|
|||||
Cost of sales, excluding depletion
|
$
|
117,489
|
$
|
86,266
|
|
Depletion
|
101,229
|
57,457
|
|||
Total cost of sales
|
$
|
218,718
|
$
|
143,723
|
|
Earnings from operations
|
$
|
630,842
|
$
|
586,274
|
|
Expenses and other income
|
|||||
General and administrative 1
|
6
|
$
|
30,839
|
$
|
25,180
|
Foreign exchange loss (gain)
|
29
|
(453)
|
|||
Other (income) expense
|
(817)
|
3,182
|
|||
$
|
30,051
|
$
|
27,909
|
||
Earnings before income taxes
|
$
|
600,791
|
$
|
558,365
|
|
Income tax expense
|
19
|
(14,755)
|
(8,337)
|
||
Net earnings
|
$
|
586,036
|
$
|
550,028
|
|
Basic earnings per share
|
$
|
1.66
|
$
|
1.56
|
|
Diluted earnings per share
|
$
|
1.65
|
$
|
1.55
|
|
Weighted average number of shares outstanding
|
|||||
Basic
|
15
|
353,874
|
353,249
|
||
Diluted
|
15
|
356,008
|
355,904
|
||
1) Equity settled stock based compensation (a non-cash item) included in general and administrative expenses.
|
$
|
6,420
|
$
|
6,329
|
Years Ended December 31
|
|||||
(US dollars in thousands)
|
Note
|
2012
|
2011
|
||
Net earnings
|
$
|
586,036
|
$
|
550,028
|
|
Other comprehensive income (loss)
|
|||||
Loss on long-term investments - common shares held
|
8
|
$
|
(31,134)
|
$
|
(119,114)
|
Deferred income tax recovery
|
19
|
2,479
|
10,699
|
||
Total other comprehensive loss
|
$
|
(28,655)
|
$
|
(108,415)
|
|
Total comprehensive income
|
$
|
557,381
|
$
|
441,613
|
Note
|
December 31
|
December 31
|
|||
(US dollars in thousands)
|
2012
|
2011
|
|||
Assets
|
|||||
Current assets
|
|||||
Cash and cash equivalents
|
$
|
778,216
|
$
|
840,201
|
|
Accounts receivable
|
7
|
6,197
|
3,890
|
||
Other
|
966
|
1,221
|
|||
Total current assets
|
$
|
785,379
|
$
|
845,312
|
|
Non-current assets
|
|||||
Silver and gold interests
|
9
|
$
|
2,281,234
|
$
|
1,871,726
|
Long-term investments
|
8
|
121,377
|
151,621
|
||
Deferred income taxes
|
19
|
-
|
2,301
|
||
Other
|
1,347
|
1,375
|
|||
Total non-current assets
|
$
|
2,403,958
|
$
|
2,027,023
|
|
Total assets
|
$
|
3,189,337
|
$
|
2,872,335
|
|
Liabilities
|
|||||
Current liabilities
|
|||||
Accounts payable and accrued liabilities
|
$
|
20,898
|
$
|
8,345
|
|
Current portion of bank debt
|
10
|
28,560
|
28,560
|
||
Current portion of silver interest payments
|
11
|
-
|
130,789
|
||
Total current liabilities
|
$
|
49,458
|
$
|
167,694
|
|
Non-current liabilities
|
|||||
Long-term portion of bank debt
|
10
|
$
|
21,500
|
$
|
50,060
|
Deferred income taxes
|
19
|
9,250
|
-
|
||
Performance share units
|
14.1
|
2,055
|
364
|
||
Total non-current liabilities
|
$
|
32,805
|
$
|
50,424
|
|
Total liabilities
|
$
|
82,263
|
$
|
218,118
|
|
Shareholders' equity
|
|||||
Issued capital
|
12
|
$
|
1,811,577
|
$
|
1,793,772
|
Reserves
|
13
|
(1,710)
|
25,422
|
||
Retained earnings
|
1,297,207
|
835,023
|
|||
Total shareholders' equity
|
$
|
3,107,074
|
$
|
2,654,217
|
|
Total liabilities and shareholders' equity
|
$
|
3,189,337
|
$
|
2,872,335
|
|
Commitments and contingencies
|
10, 20
|
/s/ Randy Smallwood
|
/s/ John Brough
|
||||||||||
Randy Smallwood
|
John Brough
|
||||||||||
Director
|
Director
|
Years Ended December 31
|
|||||
(US dollars in thousands)
|
Note
|
2012
|
2011
|
||
Operating activities
|
|||||
Net earnings
|
$
|
586,036
|
$
|
550,028
|
|
Adjustments for
|
|||||
Depreciation and depletion
|
101,457
|
57,720
|
|||
Equity settled stock based compensation
|
6,420
|
6,329
|
|||
Cash settled stock based compensation
|
14.1
|
1,685
|
377
|
||
Deferred income tax expense
|
19
|
14,031
|
7,575
|
||
(Gain) loss on fair value adjustment of share purchase warrants held
|
8
|
(496)
|
3,118
|
||
Investment income recognized in net earnings
|
(1,367)
|
(929)
|
|||
Other
|
(15)
|
(97)
|
|||
Change in non-cash operating working capital
|
16
|
10,366
|
1,422
|
||
Operating cash flows before interest received
|
$
|
718,117
|
$
|
625,543
|
|
Interest received
|
1,287
|
884
|
|||
Cash generated by operating activities
|
$
|
719,404
|
$
|
626,427
|
|
Financing activities
|
|||||
Bank debt repaid
|
10
|
$
|
(28,560)
|
$
|
(28,560)
|
Share purchase warrants exercised
|
1,878
|
99
|
|||
Share purchase options exercised
|
11,030
|
7,839
|
|||
Dividends paid
|
12.2
|
(123,852)
|
(63,612)
|
||
Cash applied to financing activities
|
$
|
(139,504)
|
$
|
(84,234)
|
|
Investing activities
|
|||||
Silver and gold interests
|
$
|
(640,718)
|
$
|
(140,063)
|
|
Silver and gold interests - interest paid
|
(671)
|
(1,260)
|
|||
Acquisition of long-term investments
|
8
|
(395)
|
(13,674)
|
||
Proceeds on disposal of long-term investments
|
8
|
-
|
24,270
|
||
Dividend income received
|
80
|
45
|
|||
Other
|
(192)
|
(54)
|
|||
Cash applied to investing activities
|
$
|
(641,896)
|
$
|
(130,736)
|
|
Effect of exchange rate changes on cash and cash equivalents
|
$
|
11
|
$
|
108
|
|
(Decrease) increase in cash and cash equivalents
|
$
|
(61,985)
|
$
|
411,565
|
|
Cash and cash equivalents, beginning of year
|
840,201
|
428,636
|
|||
Cash and cash equivalents, end of year
|
$
|
778,216
|
$
|
840,201
|
Reserves
|
||||||||||||||||
(US dollars in thousands)
|
Issued Capital
|
Share Purchase Warrants Reserve
|
Share Purchase Options Reserve
|
Restricted Share Units Reserve
|
Long-Term Investment Revaluation Reserve
(Net of Tax)
|
Total
Reserves
|
Retained Earnings
|
Total
|
||||||||
At January 1, 2011
|
$
|
1,782,510
|
$
|
7,471
|
$
|
9,853
|
$
|
1,952
|
$
|
116,088
|
$
|
135,364
|
$
|
344,075
|
$
|
2,261,949
|
Total comprehensive income
|
||||||||||||||||
Net earnings
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
550,028
|
$
|
550,028
|
OCI 1
|
-
|
-
|
-
|
-
|
(108,415)
|
(108,415)
|
-
|
(108,415)
|
||||||||
Total comprehensive income
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
(108,415)
|
$
|
(108,415)
|
$
|
550,028
|
$
|
441,613
|
Fair value of SBC 1
|
$
|
-
|
$
|
-
|
$
|
4,674
|
$
|
1,655
|
$
|
-
|
$
|
6,329
|
$
|
-
|
$
|
6,329
|
Options 1 exercised
|
10,052
|
-
|
(2,213)
|
-
|
-
|
(2,213)
|
-
|
7,839
|
||||||||
RSUs 1 released
|
1,097
|
-
|
-
|
(1,097)
|
-
|
(1,097)
|
-
|
-
|
||||||||
Warrants 1 exercised
|
113
|
(14)
|
-
|
-
|
-
|
(14)
|
-
|
99
|
||||||||
Realized gain on disposal of LTI's 1
|
-
|
-
|
-
|
-
|
(4,532)
|
(4,532)
|
4,532
|
-
|
||||||||
Dividends (Note 12.2)
|
-
|
-
|
-
|
-
|
-
|
-
|
(63,612)
|
(63,612)
|
||||||||
At December 31, 2011
|
$
|
1,793,772
|
$
|
7,457
|
$
|
12,314
|
$
|
2,510
|
$
|
3,141
|
$
|
25,422
|
$
|
835,023
|
$
|
2,654,217
|
Total comprehensive income
|
||||||||||||||||
Net earnings
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
586,036
|
$
|
586,036
|
OCI 1
|
-
|
-
|
-
|
-
|
(28,655)
|
(28,655)
|
-
|
(28,655)
|
||||||||
Total comprehensive income
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
(28,655)
|
$
|
(28,655)
|
$
|
586,036
|
$
|
557,381
|
Fair value of SBC 1
|
$
|
-
|
$
|
-
|
$
|
5,191
|
$
|
1,229
|
$
|
-
|
$
|
6,420
|
$
|
-
|
$
|
6,420
|
Options 1 exercised
|
14,485
|
-
|
(3,455)
|
-
|
-
|
(3,455)
|
-
|
11,030
|
||||||||
RSUs 1 released
|
1,186
|
-
|
-
|
(1,186)
|
-
|
(1,186)
|
-
|
-
|
||||||||
Warrants 1 exercised
|
2,134
|
(256)
|
-
|
-
|
-
|
(256)
|
-
|
1,878
|
||||||||
Dividends (Note 12.2)
|
-
|
-
|
-
|
-
|
-
|
-
|
(123,852)
|
(123,852)
|
||||||||
At December 31, 2012
|
$
|
1,811,577
|
$
|
7,201
|
$
|
14,050
|
$
|
2,553
|
$
|
(25,514)
|
$
|
(1,710)
|
$
|
1,297,207
|
$
|
3,107,074
|
1)
|
Definitions as follows: “OCI” = Other Comprehensive Income (Loss); “SBC” = Equity Settled Stock Based Compensation; “Options” = Share Purchase Options; “RSUs” = Restricted Share Units; “Warrants” = Share Purchase Warrants; “LTI’s” = Long-Term Investments in Common Shares Held.
|
1.
|
Description of Business and Nature of Operations
|
2.
|
Significant Accounting Policies
|
2.1.
|
Basis of Presentation
|
2.2.
|
Statement of Compliance
|
2.3.
|
Principles of Consolidation
|
2.4.
|
Cash and Cash Equivalents
|
2.5.
|
Revenue Recognition
|
2.6.
|
Financial Instruments
|
2.7.
|
Financial Assets
|
·
|
For financial assets that are classified as FVTNE, the foreign exchange component is recognized as a component of net earnings, and
|
·
|
For financial assets that are classified as FVTOCI, the foreign exchange component is recognized as a component of OCI.
|
2.8.
|
Financial Liabilities and Equity Instruments
|
·
|
For financial liabilities that are denominated in a foreign currency and are measured at amortized cost at the end of each reporting period, the foreign exchange gains and losses are determined based on the amortized cost of the instruments and are recognized as a component of net earnings, and
|
·
|
For financial liabilities that are classified as FVTNE, the foreign exchange component forms part of the fair value gains or losses and is recognized as a component of net earnings.
|
2.9.
|
Silver and Gold Interests
|
2.10.
|
Borrowing and Debt Issue Costs
|
2.11.
|
Stock Based Payment Transactions
|
2.12.
|
Income Taxes
|
2.13.
|
Earnings Per Share
|
2.14.
|
Foreign Currency Translation
|
2.15.
|
Leasing
|
2.16.
|
Provisions
|
2.17.
|
Changes in Accounting Policies
|
2.18.
|
Future Changes in Accounting Policies
|
·
|
IAS 1 - Presentation of Financial Statements (amended 2011)
|
·
|
IFRS 7 – Financial Instruments (amended 2011)
|
·
|
IFRS 10 - Consolidated Financial Statements (“IFRS 10”)
|
·
|
IFRS 11 - Joint Arrangements (“IFRS 11”)
|
·
|
IFRS 12 - Disclosure of Interests in Other Entities (“IFRS 12”)
|
·
|
IFRS 13 - Fair Value Measurement
|
·
|
IAS 19 – Employee Benefits (amended 2011)
|
·
|
IAS 27 - Separate Financial Statements (amended 2011) (“IAS 27”)
|
·
|
IAS 28 - Investments in Associates (amended 2011) (“IAS 28”)
|
·
|
IFRIC 20 - Stripping Costs in the Production Phase of a Surface Mine
|
·
|
IAS 32 – Financial Instruments: Presentation (amended 2011)
|
·
|
IFRS 9 (2010) – Financial Instruments (amended 2010)
|
3.
|
Key Sources of Estimation Uncertainty and Critical Accounting Judgments
|
3.1.
|
Attributable Reserve and Resource Estimates
|
3.2.
|
Depletion
|
3.3.
|
Impairment of Assets
|
3.4.
|
Valuation of Stock Based Compensation
|
3.5.
|
Provisionally Priced Concentrate Sales
|
3.6.
|
Contingencies
|
3.7.
|
Functional Currency
|
·
|
The Company’s revenue is denominated in US dollars;
|
·
|
The majority of the Company’s cash is held in US dollars;
|
·
|
The Company’s cash cost of sales is denominated in US dollars; and
|
·
|
The Company generally seeks to raise capital in US dollars.
|
3.8.
|
Income Taxes
|
4.
|
Financial Instruments
|
4.1.
|
Capital Risk Management
|
4.2.
|
Categories of Financial Assets and Liabilities
|
Note
|
December 31
|
December 31
|
|||
(in thousands)
|
2012
|
2011
|
|||
Financial assets
|
|||||
Fair value through net earnings
|
|||||
Long-term investments - warrants held
|
8
|
$
|
2,694
|
$
|
2,582
|
Trade receivables from provisional concentrate sales, net of fair value adjustment
|
7
|
5,909
|
3,494
|
||
Fair value through other comprehensive income
|
|||||
Long-term investments - common shares held
|
8
|
118,683
|
149,039
|
||
Amortized cost
|
|||||
Cash and cash equivalents
|
778,216
|
840,201
|
|||
Other receivables
|
7
|
288
|
396
|
||
$
|
905,790
|
$
|
995,712
|
||
Financial liabilities
|
|||||
Fair value through net earnings
|
|||||
Accrued liabilities from provisional concentrate sales related to fair value adjustment, net of trade receivable
|
7
|
$
|
634
|
$
|
1,567
|
Amortized cost
|
|||||
Accounts payable and accrued liabilities
|
19,094
|
6,688
|
|||
Bank debt
|
10
|
50,060
|
78,620
|
||
Silver interest payments
|
11
|
-
|
130,789
|
||
$
|
69,788
|
$
|
217,664
|
4.3.
|
Credit Risk
|
December 31
|
December 31
|
||||
(in thousands)
|
Note
|
2012
|
2011
|
||
Cash and cash equivalents
|
$
|
778,216
|
$
|
840,201
|
|
Trade receivables from provisional concentrate sales, net of fair value adjustment
|
7
|
5,909
|
3,494
|
||
Other receivables
|
7
|
288
|
396
|
||
$
|
784,413
|
$
|
844,091
|
4.4.
|
Liquidity Risk
|
As at December 31, 2012
|
||||||||||||||||
(in thousands)
|
2013
|
2014
|
2015
|
2016
|
2017
|
Thereafter
|
Commitments
|
Total
|
||||||||
Non-derivative financial liabilities and commitments
|
||||||||||||||||
Bank debt ¹
|
$
|
28,560
|
$
|
21,500
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
50,060
|
Interest on bank debt ²
|
472
|
145
|
-
|
-
|
-
|
-
|
-
|
617
|
||||||||
Silver and gold interest payments ³
|
||||||||||||||||
Constancia ⁴
|
-
|
-
|
-
|
-
|
-
|
-
|
250,000
|
250,000
|
||||||||
Rosemont ⁵
|
-
|
-
|
-
|
-
|
-
|
-
|
230,000
|
230,000
|
||||||||
Loma de La Plata ⁶
|
-
|
-
|
-
|
-
|
-
|
-
|
32,400
|
32,400
|
||||||||
Accounts payable and accrued liabilities
|
19,094
|
-
|
-
|
-
|
-
|
-
|
-
|
19,094
|
||||||||
Performance share units
|
-
|
1,064
|
991
|
-
|
-
|
-
|
-
|
2,055
|
||||||||
Derivative financial liabilities
|
||||||||||||||||
Accrued liabilities from provisional concentrate sales related to fair value adjustment, net of trade receivable
|
634
|
-
|
-
|
-
|
-
|
-
|
-
|
634
|
||||||||
Total
|
$
|
48,760
|
$
|
22,709
|
$
|
991
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
512,400
|
$
|
584,860
|
1)
|
As more fully disclosed in Note 22, the bank debt was repaid in full on February 22, 2013.
|
2)
|
As the applicable interest rates are floating in nature, the interest charges are estimated based on market-based forward interest rate curves at the end of the reporting period.
|
3)
|
Does not reflect the contingent payment due related to the Salobo gold purchase agreement (Note 20).
|
4)
|
In connection with the Constancia silver purchase agreement, the Company is committed to pay Hudbay two further payments of $125 million to be made once capital expenditures of $500 million and $1 billion have been incurred at Constancia.
|
5)
|
In connection with the Rosemont precious metals purchase agreement, the Company is committed to pay Augusta total upfront cash payments of $230 million, payable on an installment basis, to partially fund construction of the Rosemont mine once certain milestones are achieved, including the receipt of key permits and securing the necessary financing to complete construction of the mine.
|
6)
|
In connection with the Company’s election to convert the debenture with Pan American into a silver purchase agreement, the Company is committed to pay Pan American total upfront cash payments of $32.4 million following the satisfaction of certain conditions, including Pan American receiving all necessary permits to proceed with the mine construction.
|
As at December 31, 2011
|
||||||||||||||||
(in thousands)
|
2012
|
2013
|
2014
|
2015
|
2016
|
Thereafter
|
Commitments
|
Total
|
||||||||
Non-derivative financial liabilities and commitments
|
||||||||||||||||
Bank debt
|
$
|
28,560
|
$
|
28,560
|
$
|
21,500
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
78,620
|
Interest on bank debt 1
|
1,006
|
618
|
174
|
-
|
-
|
-
|
-
|
1,798
|
||||||||
Silver and gold interest payments
|
||||||||||||||||
Barrick
|
137,500
|
-
|
-
|
-
|
-
|
-
|
-
|
137,500
|
||||||||
Rosemont 2
|
-
|
-
|
-
|
-
|
-
|
-
|
230,000
|
230,000
|
||||||||
Loma de La Plata 3
|
-
|
-
|
-
|
-
|
-
|
-
|
32,400
|
32,400
|
||||||||
Accounts payable and accrued liabilities
|
6,324
|
-
|
-
|
-
|
-
|
-
|
-
|
6,324
|
||||||||
Performance share units
|
-
|
-
|
364
|
-
|
-
|
-
|
-
|
364
|
||||||||
Derivative financial liabilities
|
||||||||||||||||
Accrued liabilities from provisional concentrate sales related to fair value adjustment, net of trade receivable
|
1,567
|
-
|
-
|
-
|
-
|
-
|
-
|
1,567
|
||||||||
Total
|
$
|
174,957
|
$
|
29,178
|
$
|
21,674
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
262,400
|
$
|
488,573
|
1)
|
As the applicable interest rates are floating in nature, the interest charges are estimated based on market-based forward interest rate curves at the end of the reporting period.
|
2)
|
In connection with the Rosemont precious metals purchase agreement, the Company is committed to pay Augusta total upfront cash payments of $230 million, payable on an installment basis, to partially fund construction of the Rosemont mine once certain milestones are achieved, including the receipt of key permits and securing the necessary financing to complete construction of the mine.
|
3)
|
In connection with the Company’s election to convert the debenture with Pan American into a silver purchase agreement, the Company is committed to pay Pan American total upfront cash payments of $32.4 million following the satisfaction of certain conditions, including Pan American receiving all necessary permits to proceed with the mine construction.
|
4.5.
|
Currency Risk
|
December 31
|
December 31
|
|||||
(in thousands)
|
2012
|
2011
|
||||
Monetary assets
|
||||||
Cash and cash equivalents
|
$
|
1,007
|
$
|
690
|
||
Accounts receivable
|
127
|
115
|
||||
Long-term investments - common shares held
|
116,108
|
144,039
|
||||
Long-term investments - warrants held
|
2,694
|
2,582
|
||||
$
|
119,936
|
$
|
147,426
|
|||
Monetary liabilities
|
||||||
Accounts payable and accrued liabilities
|
$
|
5,785
|
$
|
3,107
|
||
Performance share units
|
1,923
|
348
|
||||
$
|
7,708
|
$
|
3,455
|
As at December 31, 2012
|
||||
(in thousands)
|
10% Increase in the Canadian Dollar
|
10% Decrease in the Canadian Dollar
|
||
Increase (decrease) in net earnings
|
$
|
(388)
|
$
|
388
|
Increase (decrease) in other comprehensive income
|
11,611
|
(11,611)
|
||
Increase (decrease) in total comprehensive income
|
$
|
11,223
|
$
|
(11,223)
|
As at December 31, 2011
|
||||
(in thousands)
|
10% Increase in the Canadian Dollar
|
10% Decrease in the Canadian Dollar
|
||
Increase (decrease) in net earnings
|
$
|
(7)
|
$
|
7
|
Increase (decrease) in other comprehensive income
|
14,404
|
(14,404)
|
||
Increase (decrease) in total comprehensive income
|
$
|
14,397
|
$
|
(14,397)
|
4.6.
|
Interest Rate Risk
|
4.7.
|
Commodity Price Risk
|
4.8.
|
Other Price Risk
|
·
|
Net earnings for the year ended December 31, 2012 would have increased/decreased by approximately $0.3 million (2011 - $0.3 million) as a result of changes in the fair value of share purchase warrants held; and
|
·
|
Other comprehensive income for the year ended December 31, 2012 would have increased/decreased by approximately $11.9 million (2011 - $14.9 million) as a result of changes in the fair value of common shares held.
|
4.9.
|
Fair Value Estimation
|
December 31, 2012
|
||||||||
(in thousands)
|
Total
|
Quoted prices in active markets for identical assets (Level 1)
|
Significant other observable inputs
(Level 2)
|
Unobservable inputs
(Level 3)
|
||||
Trade receivables from provisional concentrate sales, net of fair value adjustment
|
$
|
5,909
|
$
|
-
|
$
|
5,909
|
$
|
-
|
Accrued liabilities from provisional concentrate sales related to fair value adjustment, net of trade receivable
|
(634)
|
-
|
(634)
|
-
|
||||
Long-term investments - common shares held
|
118,683
|
118,683
|
-
|
-
|
||||
Long-term investments - warrants held
|
2,694
|
-
|
2,694
|
-
|
||||
$
|
126,652
|
$
|
118,683
|
$
|
7,969
|
$
|
-
|
December 31, 2011
|
||||||||
(in thousands)
|
Total
|
Quoted prices in active markets for identical assets (Level 1)
|
Significant other observable inputs
(Level 2)
|
Unobservable inputs
(Level 3)
|
||||
Trade receivables from provisional concentrate sales, net of fair value adjustment
|
$
|
3,494
|
$
|
-
|
$
|
3,494
|
$
|
-
|
Accrued liabilities from provisional concentrate sales related to fair value adjustment, net of trade receivable
|
(1,567)
|
-
|
(1,567)
|
-
|
||||
Long-term investments - common shares held
|
149,039
|
149,039
|
-
|
-
|
||||
Long-term investments - warrants held
|
2,582
|
-
|
2,582
|
-
|
||||
$
|
153,548
|
$
|
149,039
|
$
|
4,509
|
$
|
-
|
5.
|
Revenue
|
Years Ended December 31
|
||||
(in thousands)
|
2012
|
2011
|
||
Sales
|
||||
Silver bullion sales
|
||||
Silver credit sales
|
$
|
611,468
|
$
|
552,122
|
Concentrate sales
|
159,700
|
148,507
|
||
$
|
771,168
|
$
|
700,629
|
|
Gold bullion sales
|
||||
Gold credit sales
|
$
|
47,768
|
$
|
-
|
Concentrate sales
|
30,624
|
29,368
|
||
$
|
78,392
|
$
|
29,368
|
|
Total sales revenue
|
$
|
849,560
|
$
|
729,997
|
6.
|
General and Administrative
|
Years Ended December 31
|
|||||
(in thousands)
|
Note
|
2012
|
2011
|
||
Salaries and benefits
|
|||||
Salaries and benefits, excluding PSUs
|
$
|
10,173
|
$
|
8,036
|
|
PSUs
|
14.1
|
1,685
|
377
|
||
Total salaries and benefits
|
$
|
11,858
|
$
|
8,413
|
|
Depreciation
|
228
|
261
|
|||
Charitable donations
|
1,857
|
1,208
|
|||
Professional fees
|
2,981
|
2,313
|
|||
Other
|
7,495
|
6,656
|
|||
Cash settled general and administrative
|
$
|
24,419
|
$
|
18,851
|
|
Equity settled stock based compensation (a non-cash expense)
|
6,420
|
6,329
|
|||
Total general and administrative
|
$
|
30,839
|
$
|
25,180
|
7.
|
Accounts Receivable
|
December 31
|
December 31
|
|||
(in thousands)
|
2012
|
2011
|
||
Trade receivables from provisional concentrate sales, net of fair value adjustment
|
$
|
5,909
|
$
|
3,494
|
Other receivables
|
288
|
396
|
||
Total accounts receivable
|
$
|
6,197
|
$
|
3,890
|
8.
|
Long-Term Investments
|
December 31
|
December 31
|
|||
(in thousands)
|
2012
|
2011
|
||
Common shares held
|
$
|
118,683
|
$
|
149,039
|
Warrants held
|
2,694
|
2,582
|
||
$
|
121,377
|
$
|
151,621
|
December 31, 2012
|
||||||
(in thousands)
|
Fair Value
|
Fair Value Adjustment Losses Included in OCI
|
Realized Gain on Disposal
|
|||
Bear Creek
|
$
|
44,130
|
$
|
(2,041)
|
$
|
-
|
Revett
|
14,824
|
(9,747)
|
-
|
|||
Sabina
|
31,164
|
(13,013)
|
-
|
|||
Other
|
28,565
|
(6,333)
|
-
|
|||
$
|
118,683
|
$
|
(31,134)
|
$
|
-
|
December 31, 2011
|
||||||
(in thousands)
|
Fair Value
|
Fair Value Adjustment Losses Included in OCI
|
Realized Gain on Disposal
|
|||
Bear Creek
|
$
|
46,171
|
$
|
(80,524)
|
$
|
-
|
Revett
|
23,793
|
(1,043)
|
-
|
|||
Sabina
|
44,177
|
(21,817)
|
-
|
|||
Other
|
34,898
|
(15,730)
|
4,532
|
|||
$
|
149,039
|
$
|
(119,114)
|
$
|
4,532
|
December 31, 2012
|
||||||
(in thousands)
|
Fair Value
|
Fair Value Adjustment (Losses) Gains Included in Net Earnings
|
Realized Loss on Disposal
|
|||
Revett
|
$
|
-
|
$
|
(357)
|
$
|
-
|
Other
|
2,694
|
853
|
-
|
|||
$
|
2,694
|
$
|
496
|
$
|
-
|
December 31, 2011
|
||||||
(in thousands)
|
Fair Value
|
Fair Value Adjustment Losses Included in Net Earnings
|
Realized Loss on Disposal
|
|||
Revett
|
$
|
741
|
$
|
(55)
|
$
|
-
|
Other
|
1,841
|
(3,063)
|
(16)
|
|||
$
|
2,582
|
$
|
(3,118)
|
$
|
(16)
|
9.
|
Silver and Gold Interests
|
December 31, 2012
|
||||||||||||||
Cost
|
Accumulated Depletion
|
Carrying Amount -
Dec 31, 2012
|
||||||||||||
(in thousands)
|
Balance -
Jan 1, 2012
|
Additions
|
Balance -
Dec 31, 2012
|
Balance -
Jan 1, 2012
|
Depletion
|
Balance -
Dec 31, 2012
|
||||||||
Silver interests
|
||||||||||||||
San Dimas
|
$
|
190,331
|
$
|
-
|
$
|
190,331
|
$
|
(22,804)
|
$
|
(4,591)
|
$
|
(27,395)
|
$
|
162,936
|
Zinkgruvan
|
77,919
|
-
|
77,919
|
(20,280)
|
(3,564)
|
(23,844)
|
54,075
|
|||||||
Yauliyacu
|
285,292
|
-
|
285,292
|
(55,280)
|
(14,717)
|
(69,997)
|
215,295
|
|||||||
Peñasquito
|
524,626
|
-
|
524,626
|
(19,653)
|
(17,701)
|
(37,354)
|
487,272
|
|||||||
Cozamin
|
41,959
|
-
|
41,959
|
(16,844)
|
(5,980)
|
(22,824)
|
19,135
|
|||||||
Barrick 1
|
623,809
|
7,414
|
631,223
|
(22,724)
|
(10,763)
|
(33,487)
|
597,736
|
|||||||
Other 2
|
294,367
|
148,869
|
443,236
|
(42,651)
|
(19,118)
|
(61,769)
|
381,467
|
|||||||
$
|
2,038,303
|
$
|
156,283
|
$
|
2,194,586
|
$
|
(200,236)
|
$
|
(76,434)
|
$
|
(276,670)
|
$
|
1,917,916
|
|
Gold interests
|
||||||||||||||
Minto
|
$
|
47,774
|
$
|
-
|
$
|
47,774
|
$
|
(14,115)
|
$
|
(3,073)
|
$
|
(17,188)
|
$
|
30,586
|
777
|
-
|
354,454
|
354,454
|
-
|
(21,722)
|
(21,722)
|
332,732
|
|||||||
$
|
47,774
|
$
|
354,454
|
$
|
402,228
|
$
|
(14,115)
|
$
|
(24,795)
|
$
|
(38,910)
|
$
|
363,318
|
|
$
|
2,086,077
|
$
|
510,737
|
$
|
2,596,814
|
$
|
(214,351)
|
$
|
(101,229)
|
$
|
(315,580)
|
$
|
2,281,234
|
1)
|
Comprised of the Pascua-Lama, Lagunas Norte, Pierina and Veladero silver interests.
|
2)
|
Comprised of the Los Filos, Keno Hill, Mineral Park, Neves-Corvo, Stratoni, Campo Morado, Minto, 777, Aljustrel, Loma de La Plata and Constancia silver interests and the Rosemont silver and gold interest.
|
December 31, 2011
|
||||||||||||||
Cost
|
Accumulated Depletion
|
Carrying Amount -
Dec 31, 2011
|
||||||||||||
(in thousands)
|
Balance -
Jan 1, 2011
|
Additions
|
Balance -
Dec 31, 2011
|
Balance -
Jan 1, 2011
|
Depletion
|
Balance -
Dec 31, 2011
|
||||||||
Silver interests
|
||||||||||||||
San Dimas
|
$
|
190,331
|
$
|
-
|
$
|
190,331
|
$
|
(18,807)
|
$
|
(3,997)
|
$
|
(22,804)
|
$
|
167,527
|
Zinkgruvan
|
77,919
|
-
|
77,919
|
(17,797)
|
(2,483)
|
(20,280)
|
57,639
|
|||||||
Yauliyacu
|
285,292
|
-
|
285,292
|
(48,972)
|
(6,308)
|
(55,280)
|
230,012
|
|||||||
Peñasquito
|
524,626
|
-
|
524,626
|
(9,696)
|
(9,957)
|
(19,653)
|
504,973
|
|||||||
Cozamin
|
41,959
|
-
|
41,959
|
(11,010)
|
(5,834)
|
(16,844)
|
25,115
|
|||||||
Barrick 1
|
607,612
|
16,197
|
623,809
|
(12,305)
|
(10,419)
|
(22,724)
|
601,085
|
|||||||
Other 2
|
294,258
|
109
|
294,367
|
(27,280)
|
(15,371)
|
(42,651)
|
251,716
|
|||||||
$
|
2,021,997
|
$
|
16,306
|
$
|
2,038,303
|
$
|
(145,867)
|
$
|
(54,369)
|
$
|
(200,236)
|
$
|
1,838,067
|
|
Gold interests
|
||||||||||||||
Minto
|
$
|
47,774
|
$
|
-
|
$
|
47,774
|
$
|
(11,027)
|
$
|
(3,088)
|
$
|
(14,115)
|
$
|
33,659
|
$
|
2,069,771
|
$
|
16,306
|
$
|
2,086,077
|
$
|
(156,894)
|
$
|
(57,457)
|
$
|
(214,351)
|
$
|
1,871,726
|
1)
|
Comprised of the Pascua-Lama, Lagunas Norte, Pierina and Veladero silver interests.
|
2)
|
Comprised of the Los Filos, Keno Hill, Mineral Park, Neves-Corvo, Stratoni, Campo Morado, Minto, Aljustrel and Loma de La Plata silver interests and the Rosemont silver and gold interest.
|
December 31, 2012
|
December 31, 2011
|
|||||||||||
(in thousands)
|
Depletable
|
Non-Depletable
|
Total
|
Depletable
|
Non-Depletable
|
Total
|
||||||
Silver interests
|
||||||||||||
San Dimas
|
$
|
22,127
|
$
|
140,809
|
$
|
162,936
|
$
|
41,719
|
$
|
125,808
|
$
|
167,527
|
Zinkgruvan
|
34,429
|
19,646
|
54,075
|
37,118
|
20,521
|
57,639
|
||||||
Yauliyacu
|
24,722
|
190,573
|
215,295
|
38,368
|
191,644
|
230,012
|
||||||
Peñasquito
|
380,145
|
107,127
|
487,272
|
411,124
|
93,849
|
504,973
|
||||||
Cozamin
|
19,135
|
-
|
19,135
|
25,115
|
-
|
25,115
|
||||||
Barrick 1, 2
|
13,422
|
584,314
|
597,736
|
24,185
|
576,900
|
601,085
|
||||||
Other 3
|
169,364
|
212,103
|
381,467
|
104,705
|
147,011
|
251,716
|
||||||
$
|
663,344
|
$
|
1,254,572
|
$
|
1,917,916
|
$
|
682,334
|
$
|
1,155,733
|
$
|
1,838,067
|
|
Gold interests
|
||||||||||||
Minto
|
$
|
22,281
|
$
|
8,305
|
$
|
30,586
|
$
|
25,354
|
$
|
8,305
|
$
|
33,659
|
777
|
281,344
|
51,388
|
332,732
|
-
|
-
|
-
|
||||||
$
|
303,625
|
$
|
59,693
|
$
|
363,318
|
$
|
25,354
|
$
|
8,305
|
$
|
33,659
|
|
$
|
966,969
|
$
|
1,314,265
|
$
|
2,281,234
|
$
|
707,688
|
$
|
1,164,038
|
$
|
1,871,726
|
1)
|
Comprised of the Pascua-Lama, Lagunas Norte, Pierina and Veladero silver interests.
|
2)
|
The amount reflected as depletable is based on the value of the reserves relating to the Lagunas Norte, Pierina and Veladero silver interests.
|
3)
|
Comprised of the Los Filos, Keno Hill, Mineral Park, Neves-Corvo, Stratoni, Campo Morado, Minto, 777, Aljustrel, Loma de La Plata and Constancia silver interests and the Rosemont silver and gold interest.
|
(in thousands)
|
||
Cost:
|
||
Cash
|
$
|
455,100
|
Acquisition costs
|
1,798
|
|
$
|
456,898
|
|
Allocated as follows:
|
||
Silver interest ¹
|
$
|
102,444
|
Gold interest
|
354,454
|
|
$
|
456,898
|
1)
|
The cost of the 777 silver interest is included under Other silver interests.
|
10.
|
Bank Debt
|
December 31, 2012
|
||||||
(in thousands)
|
Term Loan
|
Revolving Loan
|
Total
|
|||
Current portion
|
$
|
28,560
|
$
|
-
|
$
|
28,560
|
Long-term portion
|
21,500
|
-
|
21,500
|
|||
$
|
50,060
|
$
|
-
|
$
|
50,060
|
|
Interest capitalized during the year
|
$
|
714
|
$
|
-
|
$
|
714
|
Effective interest rate
|
1.12%
|
0.00%
|
1.12%
|
December 31, 2011
|
||||||
(in thousands)
|
Term Loan
|
Revolving Loan
|
Total
|
|||
Current portion
|
$
|
28,560
|
$
|
-
|
$
|
28,560
|
Long-term portion
|
50,060
|
-
|
50,060
|
|||
$
|
78,620
|
$
|
-
|
$
|
78,620
|
|
Interest capitalized during the year
|
$
|
1,044
|
$
|
-
|
$
|
1,044
|
Effective interest rate
|
1.13%
|
0.00%
|
1.13%
|
Fiscal Year
|
Term Loan
(000's)
|
Revolving Loan
(000's)
|
Total
(000's)
|
|||
2013
|
$
|
28,560
|
$
|
-
|
$
|
28,560
|
2014
|
21,500
|
-
|
21,500
|
|||
$
|
50,060
|
$
|
-
|
$
|
50,060
|
11.
|
Silver Interest Payments
|
12.
|
Issued Capital
|
Note
|
December 31
|
December 31
|
|||
(US dollars in thousands)
|
2012
|
2011
|
|||
Issued capital
|
|||||
Share capital issued and outstanding: 354,375,852 common shares (December 31, 2011: 353,499,816 common shares)
|
12.1
|
$
|
1,811,577
|
$
|
1,793,772
|
12.1.
|
Shares Issued
|
Number of
Shares
|
Weighted Average Price
|
|
At January 1, 2011
|
352,785,382
|
|
Share purchase options exercised
|
642,173
|
Cdn$11.96
|
Share purchase warrants exercised
|
4,968
|
US$20.00
|
Restricted share units released
|
67,293
|
$0.00
|
At December 31, 2011
|
353,499,816
|
|
Share purchase options exercised
|
721,632
|
Cdn$15.17
|
Share purchase warrants exercised
|
93,897
|
US$20.00
|
Restricted share units released
|
60,507
|
$0.00
|
At December 31, 2012
|
354,375,852
|
12.2.
|
Dividends Declared
|
13.
|
Reserves
|
Note
|
December 31
|
December 31
|
|||
(in thousands)
|
2012
|
2011
|
|||
Reserves
|
|||||
Share purchase warrants
|
13.1
|
$
|
7,201
|
$
|
7,457
|
Share purchase options
|
13.2
|
14,050
|
12,314
|
||
Restricted share units
|
13.3
|
2,553
|
2,510
|
||
Long-term investment revaluation reserve, net of tax
|
13.4
|
(25,514)
|
3,141
|
||
Total reserves
|
$
|
(1,710)
|
$
|
25,422
|
Warrants Outstanding
|
Weighted Average Exercise Price
|
Exchange Ratio
|
Share Purchase Warrants Reserve
|
||
At January 1, 2011
|
2,718,205
|
$20.00
|
1.00
|
$
|
7,471
|
Exercised
|
(4,968)
|
20.00
|
1.00
|
(14)
|
|
At December 31, 2011
|
2,713,237
|
$20.00
|
1.00
|
$
|
7,457
|
Exercised
|
(93,897)
|
20.00
|
1.00
|
(256)
|
|
At December 31, 2012
|
2,619,340
|
$20.00
|
1.00
|
$
|
7,201
|
Years Ended December 31
|
||
2012
|
2011
|
|
Black-Scholes weighted average assumptions
|
||
Grant date share price and exercise price
|
Cdn$32.29
|
Cdn$37.37
|
Expected dividend yield
|
1.21%
|
0.49%
|
Expected volatility
|
45%
|
48%
|
Risk-free interest rate
|
1.20%
|
1.67%
|
Expected option life, in years
|
2.5
|
2.5
|
Weighted average fair value per option granted
|
Cdn$8.66
|
Cdn$11.28
|
(in thousands)
|
Share Purchase Options Reserve
|
|
At January 1, 2011
|
$
|
9,853
|
Amortization of fair value of share purchase options issued
|
4,674
|
|
Share purchase options exercised
|
(2,213)
|
|
At December 31, 2011
|
$
|
12,314
|
Amortization of fair value of share purchase options issued
|
5,191
|
|
Share purchase options exercised
|
(3,455)
|
|
At December 31, 2012
|
$
|
14,050
|
Exercise Price
(Cdn$)
|
Exercisable
Options
|
Non-Exercisable
Options
|
Total Options
Outstanding
|
Weighted Average
Remaining
Contractual Life
|
$9.08
|
280,965
|
-
|
280,965
|
1.1 years
|
$12.97
|
18,500
|
-
|
18,500
|
0.3 years
|
$15.89
|
755,497
|
-
|
755,497
|
2.2 years
|
$15.95
|
33,333
|
-
|
33,333
|
2.2 years
|
$16.63
|
156,000
|
-
|
156,000
|
0.2 years
|
$28.14
|
-
|
80,000
|
80,000
|
4.5 years
|
$28.59
|
-
|
80,000
|
80,000
|
4.4 years
|
$29.50
|
50,000
|
50,000
|
100,000
|
4.0 years
|
$30.51
|
-
|
15,000
|
15,000
|
4.6 years
|
$33.03
|
5,000
|
5,000
|
10,000
|
3.4 years
|
$33.71
|
-
|
360,700
|
360,700
|
4.2 years
|
$34.17
|
59,550
|
60,550
|
120,100
|
3.4 years
|
$34.55
|
-
|
10,000
|
10,000
|
5.0 years
|
$39.25
|
-
|
10,000
|
10,000
|
4.9 years
|
$41.58
|
150,800
|
150,800
|
301,600
|
3.2 years
|
1,509,645
|
822,050
|
2,331,695
|
2.4 years
|
Number of Options
Outstanding
|
Weighted Average Exercise Price (Cdn$)
|
|
At January 1, 2011
|
2,603,822
|
$13.91
|
Granted (fair value - $7.2 million or Cdn$11.28 per option)
|
626,000
|
37.37
|
Exercised
|
(642,173)
|
11.96
|
Forfeited
|
(26,522)
|
25.23
|
At December 31, 2011
|
2,561,127
|
$19.60
|
Granted (fair value - $5.1 million or Cdn$8.66 per option)
|
591,000
|
32.29
|
Exercised
|
(721,632)
|
15.17
|
Forfeited
|
(98,800)
|
35.76
|
At December 31, 2012
|
2,331,695
|
$23.91
|
(in thousands)
|
Restricted Share Units Reserve
|
At January 1, 2011
|
$ 1,952
|
Amortization of fair value of RSUs issued
|
1,655
|
Restricted share units released
|
(1,097)
|
At December 31, 2011
|
$ 2,510
|
Amortization of fair value of RSUs issued
|
1,229
|
Restricted share units released
|
(1,186)
|
At December 31, 2012
|
$ 2,553
|
Change in Fair
Value due to:
|
||||
(in thousands)
|
Share Price
|
Foreign Exchange
|
Tax Effect
|
Total
|
At January 1, 2011
|
$ 106,795
|
$ 23,715
|
$ (14,422)
|
$ 116,088
|
Unrealized loss on LTI's 1
|
(118,962)
|
(152)
|
-
|
(119,114)
|
Deferred income tax recovery
|
-
|
-
|
10,699
|
10,699
|
Realized gain on disposal of LTI's 1
|
(2,695)
|
(1,837)
|
-
|
(4,532)
|
At December 31, 2011
|
$ (14,862)
|
$ 21,726
|
$ (3,723)
|
$ 3,141
|
Unrealized (loss) gain on LTI's 1
|
(34,806)
|
3,672
|
-
|
(31,134)
|
Deferred income tax recovery
|
-
|
-
|
2,479
|
2,479
|
At December 31, 2012
|
$ (49,668)
|
$ 25,398
|
$ (1,244)
|
$ (25,514)
|
1)
|
LTI’s refers to long-term investments in common shares held.
|
14.
|
Stock Based Compensation
|
14.1.
|
Performance Share Units (“PSUs”)
|
Number of PSUs
outstanding
|
|
At January 1, 2011
|
-
|
Granted
|
62,800
|
Forfeited
|
(21,115)
|
Dividend equivalent participation
|
228
|
At December 31, 2011
|
41,913
|
Granted
|
76,700
|
Forfeited
|
(10,774)
|
Dividend equivalent participation
|
1,172
|
At December 31, 2012
|
109,011
|
15.
|
Earnings Per Share (“EPS”) and Diluted Earnings Per Share (“Diluted EPS”)
|
Years Ended December 31
|
||
(in thousands)
|
2012
|
2011
|
Basic weighted average number of shares outstanding
|
353,874
|
353,249
|
Effect of dilutive securities
|
||
Share purchase options
|
934
|
1,307
|
Share purchase warrants
|
1,061
|
1,186
|
Restricted share units
|
139
|
162
|
Diluted weighted average number of shares outstanding
|
356,008
|
355,904
|
Years Ended December 31
|
||
(in thousands)
|
2012
|
2011
|
Share purchase options
|
812
|
314
|
Share purchase warrants
|
-
|
-
|
Total
|
812
|
314
|
16.
|
Supplemental Cash Flow Information
|
Years Ended December 31
|
||||
(in thousands)
|
2012
|
2011
|
||
Change in non-cash working capital
|
||||
Accounts receivable
|
$
|
(2,307)
|
$
|
3,198
|
Accounts payable and accrued liabilities
|
12,418
|
(1,282)
|
||
Other
|
255
|
(494)
|
||
Total change in non-cash working capital
|
$
|
10,366
|
$
|
1,422
|
17.
|
Related Party Transactions
|
Years Ended December 31
|
||||
(in thousands)
|
2012
|
2011
|
||
Short-term benefits 1
|
$
|
6,678
|
$
|
5,504
|
Post-employment benefits
|
57
|
57
|
||
Cash settled stock based compensation
|
1,311
|
286
|
||
Equity settled stock based compensation (a non-cash expense)
|
4,232
|
5,159
|
||
Total executive compensation
|
$
|
12,278
|
$
|
11,006
|
1)
|
Short-term employee benefits include salaries, bonuses payable within twelve months of the balance sheet date and other annual employee benefits.
|
18.
|
Post Employment Benefit Costs
|
19.
|
Income Taxes
|
Years Ended December 31
|
||
(in thousands)
|
2012
|
2011
|
Current income tax expense related to foreign jurisdictions
|
$ 725
|
$ 762
|
Deferred income tax expense
|
||
Origination and reversal of temporary differences
|
$ 11,614
|
$ 3,578
|
Write down of previously recognized temporary differences
|
2,416
|
3,997
|
$ 14,030
|
$ 7,575
|
|
Income tax expense recognized in net earnings
|
$ 14,755
|
$ 8,337
|
Years Ended December 31
|
||
(in thousands)
|
2012
|
2011
|
Deferred income tax recovery related to the losses on long-term investments - common shares held
|
$ (2,479)
|
$ (10,699)
|
Years Ended December 31
|
||||||
(in thousands)
|
2012
|
2011
|
||||
Earnings before income taxes
|
$
|
600,791
|
$
|
558,365
|
||
Canadian federal and provincial income tax rates
|
25.00%
|
26.50%
|
||||
Income tax expense based on above rates
|
$
|
150,198
|
$
|
147,967
|
||
Canadian functional currency election¹
|
-
|
(3,556)
|
||||
(Non taxable) non-deductible portion of capital gains, net of capital losses
|
(62)
|
429
|
||||
Non-deductible stock based compensation and other
|
1,639
|
2,141
|
||||
Differences in tax rates in foreign jurisdictions
|
(139,436)
|
(142,433)
|
||||
Impact of future income tax rate applied versus current statutory rate
|
-
|
(290)
|
||||
Change in unrecognized temporary differences
|
2,416
|
4,079
|
||||
Income tax expense
|
$
|
14,755
|
$
|
8,337
|
1)
|
The Company elected to prepare its Canadian tax returns using US dollar functional currency, effective January 1, 2011. The election resulted in a one-time benefit of $3.6 million.
|
Year Ended December 31, 2012
|
||||||||||
Opening
Balance
|
Recovery (Expense) Recognized In Net Earnings
|
Recovery Recognized In OCI
|
Recognized In Shareholders' Equity
|
Closing
Balance
|
||||||
Recognized deferred tax assets and liabilities
|
||||||||||
Deferred tax assets
|
||||||||||
Non-capital losses
|
$
|
12,738
|
$
|
(3,319)
|
$
|
-
|
$
|
-
|
$
|
9,419
|
Financing fees
|
2,695
|
(1,416)
|
-
|
-
|
1,279
|
|||||
Capital losses
|
4,846
|
(2,542)
|
-
|
-
|
2,304
|
|||||
Other
|
290
|
379
|
-
|
-
|
669
|
|||||
Deferred tax liabilities
|
||||||||||
Interest capitalized for accounting but
deducted for tax
|
(10,129)
|
180
|
-
|
-
|
(9,949)
|
|||||
Foreign exchange on debt
|
(421)
|
153
|
-
|
-
|
(268)
|
|||||
Long-term investments
|
(4,425)
|
(90)
|
2,479
|
-
|
(2,036)
|
|||||
Silver and gold interests
|
(3,293)
|
(7,375)
|
-
|
-
|
(10,668)
|
|||||
Total
|
$
|
2,301
|
$
|
(14,030)
|
$
|
2,479
|
$
|
-
|
$
|
(9,250)
|
Year Ended December 31, 2011
|
||||||||||||
Opening
Balance
|
Recovery (Expense) Recognized In
Net Earnings
|
Recovery (Expense) Recognized In OCI
|
Recognized In Shareholders' Equity
|
Closing
Balance
|
||||||||
Recognized deferred tax assets and liabilities
|
Functional Currency Election
|
Other
|
||||||||||
Deferred tax assets
|
||||||||||||
Non-capital losses
|
$
|
16,153
|
$
|
-
|
$
|
(3,415)
|
$
|
-
|
$
|
-
|
$
|
12,738
|
Long-term investments
|
366
|
-
|
-
|
(366)
|
-
|
-
|
||||||
Financing fees
|
4,467
|
-
|
(1,772)
|
-
|
-
|
2,695
|
||||||
Capital losses
|
8,775
|
-
|
(3,495)
|
(434)
|
-
|
4,846
|
||||||
Foreign exchange on investments
|
792
|
-
|
(792)
|
-
|
-
|
-
|
||||||
Other
|
184
|
6
|
100
|
-
|
-
|
290
|
||||||
Deferred tax liabilities
|
||||||||||||
Interest capitalized for accounting but
deducted for tax
|
(10,758)
|
669
|
(40)
|
-
|
-
|
(10,129)
|
||||||
Foreign exchange on debt
|
(575)
|
-
|
154
|
-
|
-
|
(421)
|
||||||
Long-term investments
|
(16,230)
|
-
|
306
|
11,499
|
-
|
(4,425)
|
||||||
Silver and gold interests
|
(3,996)
|
2,881
|
(2,178)
|
-
|
-
|
(3,293)
|
||||||
Total
|
$
|
(822)
|
$
|
3,556
|
$
|
(11,132)
|
$
|
10,699
|
$
|
-
|
$
|
2,301
|
December 31
|
December 31
|
|||
2012
|
2011
|
|||
Capital losses
|
$
|
6,386
|
$
|
3,971
|
Unrealized foreign exchange
|
-
|
27
|
||
Unrealized losses on long-term investments
|
5,712
|
4,272
|
||
Total
|
$
|
12,098
|
$
|
8,270
|
20.
|
Commitments and Contingencies
|
Silver and Gold Interests
|
Attributable Payable
Production to be
Purchased
|
Per Ounce Cash
Payment 1,2
|
Term of
Agreement
|
Date of
Contract
|
||||
Silver
|
Gold
|
Silver
|
Gold
|
|||||
San Dimas
|
100% 3
|
-
|
$
|
4.12
|
n/a
|
Life of Mine
|
15-Oct-04
|
|
Zinkgruvan
|
100%
|
-
|
$
|
4.18
|
n/a
|
Life of Mine
|
8-Dec-04
|
|
Yauliyacu
|
100% 4
|
-
|
$
|
4.08
|
n/a
|
20 years
|
23-Mar-06
|
|
Peñasquito
|
25%
|
-
|
$
|
3.99
|
n/a
|
Life of Mine
|
24-Jul-07
|
|
Minto
|
100%
|
100% 5
|
$
|
3.94
|
$
|
303
|
Life of Mine
|
1-Dec-08
|
Cozamin
|
100%
|
-
|
$
|
4.12
|
n/a
|
10 years
|
4-Apr-07
|
|
777
|
100%
|
100%/50% 6
|
$
|
5.90
|
$
|
400
|
Life of Mine
|
8-Aug-12
|
Salobo (Note 22)
|
-
|
25%
|
n/a
|
$
|
400
|
Life of Mine
|
28-Feb-13
|
|
Sudbury (Note 22)
|
-
|
70%
|
n/a
|
$
|
400
|
20 years
|
28-Feb-13
|
|
Barrick
|
||||||||
Pascua-Lama
|
25%
|
-
|
$
|
3.90
|
n/a
|
Life of Mine
|
8-Sep-09
|
|
Lagunas Norte
|
100%
|
-
|
$
|
3.90
|
n/a
|
4 years 7
|
8-Sep-09
|
|
Pierina
|
100%
|
-
|
$
|
3.90
|
n/a
|
4 years 7
|
8-Sep-09
|
|
Veladero
|
100% 8
|
-
|
$
|
3.90
|
n/a
|
4 years 7
|
8-Sep-09
|
|
Other
|
||||||||
Los Filos 3
|
100%
|
-
|
$
|
4.17
|
n/a
|
25 years
|
15-Oct-04
|
|
Keno Hill
|
25%
|
-
|
$
|
3.90
|
n/a
|
Life of Mine
|
2-Oct-08
|
|
Mineral Park
|
100%
|
-
|
$
|
3.90
|
n/a
|
Life of Mine
|
17-Mar-08
|
|
Neves-Corvo
|
100%
|
-
|
$
|
4.02
|
n/a
|
50 years
|
5-Jun-07
|
|
Stratoni
|
100%
|
-
|
$
|
4.02
|
n/a
|
Life of Mine
|
23-Apr-07
|
|
Campo Morado
|
75%
|
-
|
$
|
3.94
|
n/a
|
Life of Mine
|
13-May-08
|
|
Aljustrel
|
100%
|
-
|
$
|
3.98
|
n/a
|
50 years
|
5-Jun-07
|
|
Loma de La Plata
|
12.5%
|
-
|
$
|
4.00
|
n/a
|
Life of Mine
|
n/a 9
|
|
Rosemont
|
100%
|
100%
|
$
|
3.90
|
$
|
450
|
Life of Mine
|
11-Feb-10
|
Constancia
|
100%
|
-
|
$
|
5.90
|
n/a
|
Life of Mine
|
8-Aug-12
|
1)
|
Subject to an annual inflationary adjustment with the exception of Loma de La Plata and Sudbury.
|
2)
|
Should the prevailing market price for silver or gold be lower than this amount, the per ounce cash payment will be reduced to the prevailing market price, with the exception of Yauliyacu.
|
3)
|
Until August 6, 2014, Silver Wheaton is committed to purchase from Primero a per annum amount equal to the first 3.5 million ounces of payable silver produced at San Dimas and 50% of any excess, plus Silver Wheaton is committed to purchase an additional 1.5 million ounces of silver per annum to be delivered by Goldcorp for a per ounce cash payment equal to that applicable under the Los Filos silver purchase agreement. After August 6, 2014, Silver Wheaton is committed to purchase from Primero a per annum amount equal to the first 6 million ounces of payable silver produced at San Dimas and 50% of any excess.
|
4)
|
To a maximum of 4.75 million ounces per annum. In the event that silver sold and delivered to Silver Wheaton in any year totals less than 4.75 million ounces, the amount sold and delivered to Silver Wheaton in subsequent years will be increased to make up for any cumulative shortfall, to the extent production permits. The cumulative shortfall as at March 23, 2012, representing the six year anniversary, was 13.0 million ounces.
|
5)
|
The Company is committed to acquire 100% of the first 30,000 ounces of gold produced per annum and 50% thereafter.
|
6)
|
The Company’s share of gold production at 777 will remain at 100% until the later of the end of 2016 or the satisfaction of a completion test relating to Hudbay’s Constancia project, after which it will be reduced to 50% for the remainder of the mine life.
|
7)
|
The Company is committed to purchase silver production from the currently producing mines until December 31, 2013. In addition, during 2014 and 2015, the Company is committed to purchase all or a portion of the silver production from these mines to the extent of any production shortfall at Pascua-Lama relative to the completion guarantee provided by Barrick, until such time as the completion guarantee is satisfied.
|
8)
|
Silver Wheaton's attributable silver production is subject to a maximum of 8% of the silver contained in the ore mined at Veladero during the period.
|
9)
|
Terms of the agreement not yet finalized.
|
Obligations With Scheduled Payment Dates
|
Other Commitments
|
|||||||||||||
(in thousands)
|
2013
|
2014 - 2016
|
2017 - 2018
|
After 2018
|
Sub-Total
|
Total
|
||||||||
Bank debt ¹
|
$
|
28,560
|
$
|
21,500
|
$
|
-
|
$
|
-
|
$
|
50,060
|
$
|
-
|
$
|
50,060
|
Interest on bank debt 2
|
472
|
145
|
-
|
-
|
617
|
-
|
617
|
|||||||
Silver and gold interest payments 3
|
||||||||||||||
Rosemont
|
-
|
-
|
-
|
-
|
-
|
230,000
|
230,000
|
|||||||
Loma de La Plata
|
-
|
-
|
-
|
-
|
-
|
32,400
|
32,400
|
|||||||
Constancia
|
-
|
-
|
-
|
-
|
-
|
250,000
|
250,000
|
|||||||
Operating leases
|
507
|
1,520
|
132
|
-
|
2,159
|
-
|
2,159
|
|||||||
Total contractual obligations
|
$
|
29,539
|
$
|
23,165
|
$
|
132
|
$
|
-
|
$
|
52,836
|
$
|
512,400
|
$
|
565,236
|
1)
|
As more fully disclosed in Note 22, the bank debt was repaid in full on February 22, 2013.
|
2)
|
As the applicable interest rates are floating in nature, the interest charges are estimated based on market-based forward interest rate curves at the end of the reporting period.
|
3)
|
Does not reflect the contingent payment due related to the Salobo gold purchase agreement.
|
21.
|
Segmented Information
|
Year Ended December 31, 2012
|
||||||||||||
Sales
|
Cost of Sales
|
Depletion
|
Net Earnings
|
Cash Flow From Operations
|
Total Assets
|
|||||||
(in thousands)
|
||||||||||||
Silver
|
||||||||||||
San Dimas 1
|
$
|
181,906
|
$
|
23,846
|
$
|
4,591
|
$
|
153,469
|
$
|
158,060
|
$
|
162,936
|
Zinkgruvan
|
65,914
|
8,797
|
3,564
|
53,553
|
55,855
|
54,075
|
||||||
Yauliyacu
|
86,185
|
11,937
|
14,717
|
59,531
|
80,077
|
215,295
|
||||||
Peñasquito
|
186,085
|
23,860
|
17,701
|
144,524
|
162,225
|
487,272
|
||||||
Cozamin
|
46,601
|
6,069
|
5,980
|
34,552
|
40,143
|
19,135
|
||||||
Barrick 2
|
78,359
|
9,670
|
10,763
|
57,926
|
69,504
|
597,736
|
||||||
Other 3
|
126,118
|
16,619
|
19,118
|
90,381
|
108,208
|
381,467
|
||||||
$
|
771,168
|
$
|
100,798
|
$
|
76,434
|
$
|
593,936
|
$
|
674,072
|
$
|
1,917,916
|
|
Gold
|
||||||||||||
Minto
|
30,624
|
$
|
5,457
|
$
|
3,073
|
$
|
22,094
|
$ |
25,059
|
$ |
30,586
|
|
777
|
47,768
|
11,234
|
21,722
|
14,812
|
40,507
|
332,732
|
||||||
$
|
78,392
|
$
|
16,691
|
$
|
24,795
|
$
|
36,906
|
$
|
65,566
|
$
|
363,318
|
|
Total silver and gold interests
|
$
|
849,560
|
$
|
117,489
|
$
|
101,229
|
$
|
630,842
|
$
|
739,638
|
$
|
2,281,234
|
Corporate
|
||||||||||||
General and administrative
|
$
|
(30,839)
|
||||||||||
Other
|
(13,967)
|
|||||||||||
Total corporate
|
$
|
(44,806)
|
$
|
(20,234)
|
$
|
908,103
|
||||||
Consolidated
|
$
|
849,560
|
$
|
117,489
|
$
|
101,229
|
$
|
586,036
|
$
|
719,404
|
$
|
3,189,337
|
1)
|
Results for San Dimas include 1.5 million ounces received from Goldcorp in connection with Goldcorp’s four year commitment to deliver to Silver Wheaton 1.5 million ounces of silver per annum resulting from their sale of San Dimas to Primero.
|
2)
|
Comprised of the operating Lagunas Norte, Pierina and Veladero silver interests in addition to the non-operating Pascua-Lama silver interest.
|
3)
|
Comprised of the operating Los Filos, Keno Hill, Mineral Park, Neves-Corvo, Stratoni, Campo Morado, Minto, 777 and Aljustrel silver interests in addition to the non-operating Rosemont silver and gold interest and Loma de La Plata and Constancia silver interests.
|
Year Ended December 31, 2011
|
||||||||||||
Sales
|
Cost of Sales
|
Depletion
|
Net Earnings
|
Cash Flow From Operations
|
Total Assets
|
|||||||
(in thousands)
|
||||||||||||
Silver
|
||||||||||||
San Dimas 1
|
$
|
188,377
|
$
|
22,826
|
$
|
3,997
|
$
|
161,554
|
$
|
164,453
|
$
|
167,527
|
Zinkgruvan
|
52,974
|
5,988
|
2,483
|
44,503
|
49,377
|
57,639
|
||||||
Yauliyacu
|
43,911
|
5,048
|
6,308
|
32,555
|
38,863
|
230,012
|
||||||
Peñasquito
|
143,069
|
16,257
|
9,957
|
116,855
|
126,812
|
504,973
|
||||||
Cozamin
|
43,990
|
5,138
|
5,834
|
33,018
|
40,586
|
25,115
|
||||||
Barrick 2
|
102,454
|
11,343
|
10,419
|
80,692
|
89,554
|
601,085
|
||||||
Other 3
|
125,854
|
14,185
|
15,371
|
96,298
|
112,414
|
251,716
|
||||||
$
|
700,629
|
$
|
80,785
|
$
|
54,369
|
$
|
565,475
|
$
|
622,059
|
$
|
1,838,067
|
|
Gold
|
||||||||||||
Minto
|
29,368
|
5,481
|
3,088
|
20,799
|
24,240
|
33,659
|
||||||
Total silver and gold interests
|
$
|
729,997
|
$
|
86,266
|
$
|
57,457
|
$
|
586,274
|
$
|
646,299
|
$
|
1,871,726
|
Corporate
|
||||||||||||
General and administrative
|
$
|
(25,180)
|
||||||||||
Other
|
(11,066)
|
|||||||||||
Total corporate
|
$
|
(36,246)
|
$
|
(19,872)
|
$
|
1,000,609
|
||||||
Consolidated
|
$
|
729,997
|
$
|
86,266
|
$
|
57,457
|
$
|
550,028
|
$
|
626,427
|
$
|
2,872,335
|
1)
|
Results for San Dimas include 1.5 million ounces received from Goldcorp in connection with Goldcorp’s four year commitment to deliver to Silver Wheaton 1.5 million ounces of silver per annum resulting from their sale of San Dimas to Primero.
|
2)
|
Comprised of the operating Lagunas Norte, Pierina and Veladero silver interests in addition to the non-operating Pascua-Lama silver interest.
|
3)
|
Comprised of the operating Los Filos, Keno Hill, Mineral Park, Neves-Corvo, Stratoni, Campo Morado, Minto and Aljustrel silver interests in addition to the non-operating Rosemont silver and gold interest and Loma de La Plata silver interest.
|
Year Ended December 31, 2012
|
||||||
Sales
|
Carrying Amount
|
|||||
(in thousands)
|
Silver
Interests
|
Gold
Interests
|
||||
North America
|
||||||
Canada
|
$
|
108,390
|
$
|
149,078
|
$
|
363,318
|
United States
|
17,650
|
39,018
|
-
|
|||
Mexico
|
450,394
|
735,736
|
-
|
|||
Europe
|
||||||
Greece
|
25,962
|
37,788
|
-
|
|||
Portugal
|
16,707
|
32,056
|
-
|
|||
Sweden
|
65,914
|
54,075
|
-
|
|||
South America
|
||||||
Argentina / Chile 1
|
39,106
|
597,390
|
-
|
|||
Peru
|
125,437
|
272,775
|
-
|
|||
Consolidated
|
$
|
849,560
|
$
|
1,917,916
|
$
|
363,318
|
1)
|
Includes the Pascua-Lama project, which straddles the border of Chile and Argentina.
|
Year Ended December 31, 2011
|
||||||
Sales
|
Carrying Amount
|
|||||
(in thousands)
|
Silver
Interests
|
Gold
Interests
|
||||
North America
|
||||||
Canada
|
$
|
48,278
|
$
|
53,660
|
$
|
33,659
|
United States
|
21,100
|
40,417
|
-
|
|||
Mexico
|
414,902
|
769,537
|
-
|
|||
Europe
|
||||||
Greece
|
24,773
|
41,401
|
-
|
|||
Portugal
|
21,605
|
33,430
|
-
|
|||
Sweden
|
52,974
|
57,639
|
-
|
|||
South America
|
||||||
Argentina / Chile 1
|
53,853
|
592,153
|
-
|
|||
Peru
|
92,512
|
249,830
|
-
|
|||
Consolidated
|
$
|
729,997
|
$
|
1,838,067
|
$
|
33,659
|
1)
|
Includes the Pascua-Lama project, which straddles the border of Chile and Argentina.
|
22.
|
Subsequent Events
|
CANADA – HEAD OFFICE
Silver Wheaton Corp.
Park Place, Suite 3150
666 Burrard Street
Vancouver, BC V6C 2X8
Canada
T: 1 604 684 9648
F: 1 604 684 3123
CAYMAN ISLANDS OFFICE
Silver Wheaton (Caymans) Ltd.
Unit #5 - 201 Governors Square
23 Lime Tree Bay Avenue
P.O. Box 1791 George Town, Grand Cayman
Cayman Islands KY1-1109
STOCK EXCHANGE LISTING
Toronto Stock Exchange: SLW
New York Stock Exchange: SLW
DIRECTORS
Lawrence Bell
George Brack
John Brough
Peter Gillin
Douglas Holtby, Chairman
Eduardo Luna
Wade Nesmith
Randy Smallwood
OFFICERS
Randy Smallwood
President & Chief Executive Officer
Curt Bernardi
Senior Vice President,
Legal & Corporate Secretary
Gary Brown
Senior Vice President &
Chief Financial Officer
Haytham Hodaly
Senior Vice President,
Corporate Development
|
TRANSFER AGENT
CIBC Mellon Trust Company
1600 - 1066 West Hastings Street
Vancouver, BC V6E 3X1
Toll-free in Canada and the United States:
1 800 387 0825
Outside of Canada and the United States:
1 416 682 3860
E: inquiries@canstockta.com
AUDITORS
Deloitte LLP
Vancouver, BC
INVESTOR RELATIONS
Patrick Drouin
Vice President,
Investor Relations
T:1 604 684 9648
TF: 1 800 380 8687
E: info@silverwheaton.com
|
|||
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