Silver Wheaton Corp.

Silver Wheaton is the largest pure precious metals streaming company in the world. Based upon its current agreements, forecast 2015 estimated annual attributable production is approximately 44.5 Moz Ag eq including 230 Koz gold. By 2019, estimated annual attributable production is anticipated to increase significantly to approximately 55 Moz Ag eq, including 325 Koz gold. This anticipated growth is expected to be driven by the Company’s portfolio of low-cost and long-life assets, including precious metal and gold streams on Vale’s Salobo mine and Hudbay’s Constancia project.

Expert Comments:

Hard Asset Investments, Seeking Alpha (2/3/16)
"Last week Silver Wheaton Corp. announced it had signed a term sheet with Panoro Minerals to enter into an early deposit precious metals purchase agreement for the Cotabambas project in Peru. . .Silver Wheaton doesn't have to commit any capital until Panoro significantly de-risks the project with further drilling, engineering work and late-stage feasibility studies. Basically, I think this deal is simply a no-brainer for Silver Wheaton, and I view it as a leveraged long-term call option on metals prices. . .the company continues to invest in its business and its future."

"Silver Wheaton Corp. has some tax issues hanging out there that make it difficult to go out and tell the story. But the controversy could result in a very good entry point for some people." read more >

Trefis (1/27/16)
"Silver Wheaton Corp. is the world's largest silver streaming company. . .by 2019, its attributable production is anticipated to increase significantly to 51 Moz Ag eq, including 325 Koz gold. . .no ongoing capital expenditures are required to generate this growth and the company does not hedge its silver production."

Phil Russo, Raymond James (1/20/16)
"The announcement that the Canadian Revenue Agency will also review Silver Wheaton Corp.'s taxation years 2011–2013, in addition to the current claim for the 2005–2010 period, does not come as a surprise to us, given the original claim. . .longer-term investors who can tolerate the taxation dispute should consider that current levels given the fundamentals, while overshadowed today, remain strong. . .while the company believes that the court process will provide a quicker resolution to this matter, we don't expect a final resolution until sometime in 2017 at the earliest."

Andrew Kaip, BMO Capital Markets (1/19/16)
"Silver Wheaton Corp. received correspondence advising that the Canadian Revenue Agency (CRA) would be commencing an audit of the company's international transactions covering the 2011 to 2013 taxation years. . .ironically, elevation of the CRA position could be viewed as positive—investors now have a clearer picture of the CRA position for future tax years and can, with increasing certainty, assess the potential impact, thereby accelerating the time frame for shares of Silver Wheaton to move toward 'ex-CRA' and resume trading on fundamentals."

Charles Gibson: Silver Wheaton Corp., a Canadian streaming company, has good defensive characteristics in the current environment for commodities. In this market you want something that's going to give you solid defensive qualities if things get more difficult but could also ride any potential improvement in the market. Those two companies are well placed to perform those functions.

The Gold Report: The Canada Revenue Agency (CRA) says Silver Wheaton owes the government millions in back taxes. Can it overcome those obligations without severely impairing its share price?

CG: First of all, Silver Wheaton is vigorously defending itself against the CRA's position and this will likely go to litigation early next year. The amount the CRA is demanding works out to $0.66/share. By contrast, Silver Wheaton's shares are down a few dollars since the CRA announcement last July. That seems disproportionate. In addition (and the reason that Silver Wheaton is defending itself so vigorously), the CRA is seeking to reassess taxes on revenue streams from non-Canadian assets that go through a wholly owned but non-Canadian subsidiary. It's quite a stretch for the CRA to believe it can tax those assets.

In any event, I would expect the share price to rise whether this issue is resolved either positively or negatively. Even in the unlikely scenario in which it were to lose its case, which I don't think is likely, I can't see Silver Wheaton paying a full Canadian tax charge ad infinitum. So I would expect it to take action, which, again, would reduce that tax charge to something close to historical norms.

TGR: In a recent research report, you called Silver Wheaton "materially cheap" relative to its peers. Why?

CG: Its price-earnings and yield multiples are lower than virtually every other major royalty company listed in North America. It is actually cheaper than quite a few of the major mining companies, which of course have a higher risk profile. That makes Silver Wheaton a very attractive investment. The market is overemphasizing the current and future implications of the CRA's tax reassessment, which has resulted in a share price reaction that is disproportionately to the downside. Silver Wheaton was not expensive, but this move has made it noticeably cheap. Silver Wheaton is trading at a fraction of Franco-Nevada Corp.'s multiples, for example.

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More Expert Comments

Experts Following This Company

Ralph Aldis, Portfolio Manager, Gold and Natural Resources – U.S. Global Investors
Chris Berry, Founder – House Mountain Partners LLC.
Michael Berry, Writer Disruptive Discoveries Journal
John Bridges, Analyst – J.P. Morgan
Doug Casey, CEO / Chair – Casey Research
Cosmos Chiu, Executive Director of Precious Metals Equity Research – CIBC World Markets
Jeff Clark, Senior Editor – Casey Research
Adrian Day, Founder – Adrian Day Asset Management
Charles Gibson, Director, Mining – Edison Investment Research
Michael Gray, Analyst – Macquarie Capital Markets
Doug Groh, Senior Research Analyst – Tocqueville Asset Management L.P.
Ash Guglani, Analyst – Salman Partners
John Hathaway, Senior Managing Director – Tocqueville Asset Management L.P.
Tom Hayes, Analyst – Edison Investment Research
Frank Holmes, Chairman – U.S. Global Investors
Louis James, Analyst – Casey Research
Andrew Kaip, Analyst – BMO Capital Markets
Marin Katusa, Analyst – Katusa Research
Jeff Killeen, Analyst – CIBC World Markets
Pierre Lassonde, President – Franco-Nevada Corp.
Tony Lesiak – Canaccord Genuity
Chris Mancini, Research Analyst – Gabelli Gold Fund
Brad Mills, Fund Manager/CEO – Plinian Capital
David Morgan, Publisher – Silver Investor
Bob Moriarty, Author 321 Gold
Shane Nagle, Analyst – National Bank Financial
Gwen Preston, Founder Resource Maven
Ralph Profiti, Analyst – Credit Suisse
Dan Rollins, Analyst – RBC Capital Markets
Rick Rule, Chairman – Sprott Global Resource Investments Ltd.
Phil Russo, Research Associate – Raymond James
David H. Smith, Analyst –
Porter Stansberry, Pres & CEO – Stansberry Research
Trevor Turnbull, Analyst – Scotia Capital
Josh Wolfson, VP, Senior Analyst Gold & Precious Metals – Dundee Capital Markets

The information provided above is from analysts, newsletters and other contributors. Please contact the company and visit its website before making an investment decision.
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