A mixed performance at Silver Wheaton's (NYSE:SLW) silver division was trumped by an exceptional performance at its gold division in Q416, such that the company’s financial results materially outperformed our prior estimates for Q416 as well as SLW’s own guidance at the time of its Q316 results. As a consequence, sales and cash flows derived by SLW from gold operations exceeded those from silver for the first time ever.
Inventories and prices see-saw in Q4 vs Q3
In addition to its quarterly results, SLW’s FY16 results were characterised by record silver and gold sales volumes and record revenues. Moreover, in contrast to its Q316 results, inventories were drawn down, rather than increasing (although the full benefit of this was masked by falling precious metals prices in Q4 in the aftermath of the US presidential election). As at 31 December, payable ounces attributable to Silver Wheaton produced but not yet delivered amounted to 3.2Moz silver and 61,700oz gold (cf 3.8Moz silver and 63,300oz gold as at end-September), equating to 1.25 months and 2.1 months of annual silver and gold production, respectively, or 1.6 months in aggregate (cf 1.9 months as at end-September) – slightly below SLW’s target level of two months.
To read the entire report Please click on the pdf File Below