After four quarters in which the production of both gold and silver achieved successive new records, output attributable to Silver Wheaton Corp (NYSE:SLW) moderated in Q116 – albeit to only the second-best ever – with good quarterly performances (again) from Antamina and Salobo offset by headwinds at San Dimas and SLW’s ‘other’ assets. However, sales of material closely approximated production, with the result that inventories decreased by 0.9Moz AgE.
Depletion and expensed interest changes
Other features of the results were a continuation of the (non-cash) depletion charge at the elevated levels of Q415 and a decision to change the accounting treatment of interest paid, such that all interest is now expensed and none capitalised (whereas, previously, the majority, relating to the Barrick silver interest, in particular, was capitalised). We estimate that these two effects alone have a combined negative effect of 10c/sh on reported EPS in FY16.
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