November 3, 2008 / 3:45 PM / 9 years ago

UPDATE 1-Silver Wheaton profit up on prices, stock climbs

 (In U.S. dollars unless noted)
 TORONTO, Nov 3 (Reuters) - Silver Wheaton SLW.TO said on Monday its third-quarter profit rose 5 percent as higher realized silver prices more than made up for lower sales volume.
 The Canadian company, which buys silver produced by other mining companies and resells it, earned $20.2 million, or 8 cents a share, up from $19.2 million, or 8 cents a share, in the year-before period.
 However, Silver Wheaton lowered its expectations for 2008 sales, due mainly to lower than projected silver output from Goldcorp’s (G.TO) San Dimas mine.
 Silver Wheaton said it expects to sell 3 million ounces in the fourth quarter. Added to sales for the first nine months of 2008, that would give it full-year volume of 11.4 million ounces.
 The company had previously said it would produce between 13 million and 15 million ounces in 2008.
 “Although operating results or the last several quarters have been disappointing, primarily as a result of weaker than expected silver deliveries from the San Dimas mine in Mexico, I am confident that the worst is behind us,” Chief Executive Peter Barnes said in a statement.
 The company said it expects sales in a range of 15 million to 17 million ounces in 2009, rising to about 30 million ounces in 2013.
 At midmorning, Silver Wheaton’s shares were up 10.2 percent, or 43 Canadian cents, at C$4.63, among the strongest mining stocks on the Toronto Stock Exchange.
 Silver sales during the quarter were 2.7 million ounces, down from 3.1 million in the year-before period. Realized prices rose to $14.50 an ounce from $12.66 an ounce, while cash costs per ounce edged up to $3.93 from $3.90.
 Sales volumes were helped by the acquisition of silver from Goldcorp’s Penasquito mine and Aurcana’s (AUN.V) La Negra mine, both of which are in Mexico.
 However, volumes were about 200,000 ounces lower than the company had expected, due to the timing of shipments from two mines, the mining of lower grades of ore, and the slower-than-expected ramp-up of operations at Penasquito.
 Altogether, revenue eased slightly to $39.4 million from $39.6 million.
 Silver XAG=, which was trading above $20 an ounce briefly early in the year, was at $9.80 at ounce on Monday, following an 18 percent decline in October.
  ($1=$1.20 Canadian)  (Reporting by Cameron French; Editing by Peter Galloway)   

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