Silver Wheaton’s Q2 2016 Earnings Review: Company Ideally Poised To Profit From Elevated Precious Metal Prices

SLW: Wheaton Precious Metals logo
SLW
Wheaton Precious Metals

Silver Wheaton reported strong Q2 results, as expected, driven by a rally in gold and silver prices. With precious metal prices expected to remain elevated throughout the rest of the year, the company is set to profit from the favorable pricing environment, given the steady acquisition of new precious metal streams over the past year or so.

SLW Q2 2016 Earnings Results

Earlier in the month, the company announced the signing of a streaming agreement with Vale for an additional 25% of the life of mine gold production from the Salobo mine, following on from the signing of a streaming agreement with Glencore and another agreement with Vale last year. [1] With the signing of these agreements, Silver Wheaton’s production in 2016 is expected to total 55 million silver equivalent ounces, around 15% higher year-over-year. [2] The increase in production couldn’t have come at a more opportune time for the company. Precious metal prices have risen sharply this year, as a result of a surge in the investment demand for gold and silver amid uncertainty in the wake of the UK’s EU referendum, and concerns over global economic growth. Due to the subdued global economic outlook, chances of an interest rate hike by the Fed this year have also diminished, creating a conducive environment for elevated precious metal prices for the rest of the year. Check out our forecasts for Silver Wheaton’s realized gold prices.

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With production rising as a result of the signing of new streaming agreements, Silver Wheaton is ideally placed to profit from the favorable pricing environment.

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Notes:
  1. Silver Wheaton Increases Its Gold Stream From The Salobo Mine And Revises Production Guidance, Silver Wheaton News Release []
  2. Silver Wheaton’s Q2 2016 Earnings Release, SEC []