Silver Companies | Silver Wheaton in Tough Economic Times

Silver Wheaton

There has been a lot of significance attached to the price of silver and the price ratio of silver to gold, which usually stands historically at about 20 to 1. For some time now it has hovered at around 70 ounces of silver for every ounce of gold, and that has many silver investors thinking there is an inevitable rise that is bound to come.

An number of silver industry and silver stock watchers believe Silver Wheaton may be in a strong position to take advantage of this expected move, as its business practices lend themselves to being strong as a silver investment.

One such practice of the silver miner is to buy a percentage of silver that comes from other silver mines, and has significant reserves that are up 24 percent year over year.

So the Silver Corp has a record amount of silver in reserve, standing at 429.7 million ounces. If Silver Wheaton could have even more ounces on hand, with increases possibly being as high as 33 percent and attributable measured and indicated silver resources increased to 213.5 million ounces.

With the endless, careless government spending, there are increasing inflationary pressures that are expected and sure to push up the prices of silver and gold, and more than likely Silver wheaton will climb with it.

Another postive factor for the company is investors are expected to remain actively in pursuit of the metal, and should be net buyers of silver this year, with projections of about 182 million ounces exchanging hands. Global record sales of silver stands at 222.2 million ounces which were acquired in 1980.

As far as industrial demand, it fell in 2008 to 701.2 million ounces, a decline of 3.1 percent from the 724 ounces in 2007. Higher silver prices and a tougher economic climate were a major part of the fall in fabrication demand in 2008.

In 2009, projections are silver demand will plunge to 641 million ounces because of countries and companies cutting back on buying.

Much of the product demand for items using silver like photography, silverweare, batteries, jewelry and electronics are expected to continue to be slow, putting downward pressure on demand.

Taking all of that into account, it seems its more the investors that will decide silver prices this year, more than industrial demand. If tough economic times and uncertainty remain for some time, investors will continually look for safety in both silver and gold. That should remain for the rest of 2009 and into next year.

For last year, overall silver supply is estimated to have risen to over 800 million ounces.

Last year silver mining production increased by around 14 million ounces over the year before, while secondary supply rose by about 11 million ounces. That could rise even more under the present conditions. As of 2008, silver investors were net buyers for the third straight year, and that should continue. In 2008 net buyers of silver were at the highest levels since the early part of the 1980s.

Again, all of this should play well to the positioning of Silver Wheaton and its usual practices to take advantage of this. They and other silver stocks should do well over the next year or so.

Just recently Silver Wheaton President and CEO John Shanahan, who was accepted in that position after serving an interim stint with the company since September 10, announced they have exercised a participation right to acquire 3,855,558 common shares of Revett Minerals, bringing its total percentage of shares owned in Revett to 16.4 percent.

Shanahan says he looks at it as a solid bakcing of Revett and a commitment over the long haul to increase production at the Troy Mine, while increasing the exploration stage at the Rock Creek project.

Silver Wheaton

Silver Wheaton Announces Adoption of Shareholder Rights Plan

VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 12/08/08 -- Silver Wheaton Corp. (TSX: SLW)(NYSE: SLW) announced today that its board of directors has approved the adoption of a shareholder rights plan (the "Rights Plan"), effective December 8, 2008.

The purpose of the Rights Plan is to provide shareholders and the board of directors with adequate time to consider and evaluate any unsolicited take-over bid made for Silver Wheaton's common shares, provide the board of directors with adequate time to identify, develop and negotiate value-enhancing alternatives, and encourage the fair treatment of shareholders in connection with any take-over bid made for Silver Wheaton's common shares. The Rights Plan is intended to prevent any person from acquiring beneficial ownership of more than 20% of the outstanding common shares of Silver Wheaton while the board of directors' process is ongoing, or from entering into arrangements or relationships that have a similar effect. The Rights Plan remains subject to acceptance by the Toronto Stock Exchange and ratification by Silver Wheaton's shareholders at its next annual meeting of shareholders expected to be held in May 2009. If ratified by the shareholders, the Rights Plan will continue in force until the end of Silver Wheaton's third meeting of shareholders after such ratification. Silver Wheaton is not aware of any specific take-over bid for Silver Wheaton that has been made or is contemplated.

In order to implement the Rights Plan, the board of directors has authorized the issuance of the rights to holders of its common shares at the rate of one right for each common share outstanding. The rights will automatically attach to the common shares and no further action will be required by shareholders.

Pursuant to the terms of the Rights Plan, any bid that meets certain criteria intended to protect the interests of all shareholders will be deemed to be a "permitted bid" and will not trigger the Rights Plan. These criteria require, among other things, that the bid be made by way of a take-over bid circular to all holders of voting shares other than the offeror under the bid, and remain open for acceptance by shareholders for at least 60 days. In the event a take-over bid does not meet the permitted bid requirements of the Rights Plan, the rights issued under the plan will entitle shareholders, other than any shareholder or shareholders involved in the take-over bid, to purchase additional common shares of Silver Wheaton at a significant discount to the market price.

A copy of the Rights Plan will be filed on SEDAR at www.sedar.com and made available on Silver Wheaton's website upon acceptance by the Toronto Stock Exchange.

Silver Wheaton is the largest public mining company with 100% of its operating revenue from silver production.

Silver Wheaton Increases Profit 2 Percent for Quarter

Silver Wheaton CEO Peter Barnes

While Silver Wheaton (SLW.TO) experienced lowers sales volume than anticipated for the quarter, the higher price of metal allowed it to enjoy a 2 percent increase in profit for the second quarter.

The Canadian-based company ended with earnings of $23.3 million, in contrast to $22.9 million a year ago for the quarter ending June 30.

The company average a selling price of $17.35 an ounce for its silver sales, on the 2.9 million ounces it sold. The 2.9 million ounces sold was down by 13 percent from its projections. Last year they sold 3.1 million ounces during the same period.

According to Wheaton, the reason was the quality of the ore mined at Goldcorp's (G.TO) Luismin mine in Mexico, which was lower-grade ore.

CEO Peter Barnes noted in a press release that "This past quarter, we negotiated more silver stream agreements than any other quarter in our history.

"With eight silver agreements completed and another soon to be, we have diversified our portfolio and expanded our relationships within the industry."

Projections are for annual sales to reach somewhere between 13- to 15 million ounces sold in 2008.

Augusta Resource Corp. Sells 45 Percent of Silver in "Rosemont Mine" to Silver Wheaton

In order to fund the development of Rosemount mine, which is close to Tucson, Arizona, Augusta Resource Corp. sold 45 percent of the silver production of the mine to Silver Wheaton. In exchange, Silver Wheaton paid them $165 million in a one-time payment.

The deal is conditioned upon Augusta securing all needed permits and gaining additional development financing.

Over the anticipated 18-year life of the mine, it is expected to generate 220 million pounds of copper, 4.5 million pounds of molybdenum, 2.7 million ounces of silver and 15,000 ounces of gold on a yearly basis.

Augusta Resource Corp. looks to begin production of gold, silver, copper and molybdenum by 2011.

An agreement is expected to be finalized by July 1.

Shares in Silver Mining Companies Fall with Commodity Prices

The decrease in commodity prices Friday had a significant impact on silver mining company shares, as they mirrored the overall decline.

On the Comex division of the Nymex, silver dropped 87 cents to $17.83 an ounce in afternoon trading on Friday. The Dow Jones-AIG Silver Index was also down by 2.7 percent.

Some of the declines included Pan American Silver Corp. (nasdaq:PAAS) which fell $2.11, or 5.2 percent, to $38.42; Hecla Mining Co. (nyse:HL) fell 63 cents, or 4.9 percent, to $12.37; and Silver Wheaton Corp. (nyse:SLW) fell 74 cents, or 4.3 percent, to $16.49; Coeur d'Alene Mines Corp. 14 cents, or 3.7 percent, to $3.63 and Silver Standard Resources Inc. (nasdaq:SSRI) fell $1.31, or 4.3 percent, to $29.22.

Canaccord Adams analyst Steven Butler said that while the silver sell off followed the gold, the demand for silver keeps it different than gold as solely an inflation hedge.

Silver began the year on the spot market at $14.80 an ounce.

Silver News Around the Web

Purchase of silver in Nepal soars despite rising world prices

In Nepal, the purchase of silver has gone up tremendously despite rising world prices.

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Mexivada Intersects up to 1.18 kg/t Silver in Drill Holes at La Republica Silver Mine, Mexico
Mexivada Mining Corp. is pleased to report the assay results from the final five drill holes from its Phase 1 program at its La Republica silver-gold-zinc-lead property, Yecora Mining District, Chihuahua, Mexico.

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Silver Wheaton: 2007 silver reserves more than triple year-over-year

Silver Wheaton (NYSE:SLW) Corp. said Thursday its proven and probable silver reserves increased to 346.4 million ounces as of Dec. 31, 2007, from 102.2 million at the end of 2006

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Fundamental analysis for precious metals silver - 4/4/2008

Silver yesterday rallied in both directions to end the day with some bullish tendency. This move affected the technical indicators to point to the bullish patterns for today as long as silver remains above the critical level at 17.20s.

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Apogee Releases Additional High Grade Results From the Pulacayo Silver Deposit, Bolivia-Including 8.0 Meters Grading 558.75g/t Silver in Hole PUD-063

Apogee Minerals Ltd. (Munich:A9K.MU) reports additional high grade intercepts at the Pulacayo silver-zinc-lead deposit, southern Bolivia.

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Sage Gold Inc.: High Grade Gold and Native Silver Drill Intercept-Onaman

Sage Gold (CDNX:SGX.V) is pleased to report on the latest assays from the 2008 drill program on the Lynx #1 mineralised zone, on the Onaman Project, near Beardmore, Ontario.

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Silvercorp Metals Inc.: Drilling and Tunnelling Discover High Grade Silver-Lead Veins in the LM Silver-Lead Mine in the Ying Silver District, Henan Province, China

Silvercorp Metals Inc. ("Silvercorp") (Toronto:SVM.TO) is pleased to provide an update on its LM Silver (Ag)-Lead (Pb) Mine.

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Silver Producers' Shares Plunge as U.S. Dollar Strengthens

The U.S. dollar continues to wreak havoc in the overall commodities market, as prices plunge in response to the greenback's recent strength.

Silver was no different, as it dropped to $16.63 an ounce on late morning Tuesday, down from Monday's close of $18.11. Shares of silver producers fell along with the silver prices.

Some silver producers falling were Coeur d'Alene Mines Corp. (NYSE: CDE), which fell by 28 cents, or 6.9 percent, to $3.76; Pan American Silver Corp. (Nasdaq:PAAS) dropped $1.97, or 5.1 percent, to $36.41; and Silver Wheaton Corp. (NYSE:SLW) fell 55 cents, or 3.5 percent, to $14.98.

The Dow Jones-AIG Silver Index dropped 4.2 percent.

Along with the stronger U.S. dollar, another factor is the slowing U.S. economy, which some believe will decrease the chances that inflation will rear its ugly head, making precious metals less valuable in the eyes of investors, who typically go there in inflationary times.

The manufacturing index of the Institute of Supply Management said it came in at 48.6 in March, The thinking is if it's below 50 there is a contraction going on in the economy, rather than expansion.

As usual, this is today's activity and response. When the dollar weakens again we could see all this change very quickly.