Silver Wheaton wants name change
Cites gold assets as motivation
Silver Wheaton Corp. is proposing a name change to Wheaton Precious Metals Corp. as the Vancouver-based streaming company seeks a brand that better reflects the increasingly large contribution gold is making to its bottom line.
“A lot of investors judged our book by its cover and so we’ve decided to change the cover,” chief executive officer Randy Smallwood said in an interview Wednesday. “The name change really reflects the fact that we are truly a precious metals company and not just a silver company.”
In 2004, Silver Wheaton pioneered the concept of financing miners upfront in return for a portion of future production at a fixed discounted price. The company started off in the silver space but has seen a marked increase in gold production since 2013.
By the second half of last year, its revenue stream was equally split. By the fourth quarter, increased gold sales volumes and prices pushed gold’s share to 51 per cent of the company’s revenue.
Smallwood said he anticipates gold will make up an even larger portion of revenues this year given that workers at one of its key silver mines, San Dimas owned by Primero Mining Corp., are on strike.
“We actually like silver better but there are so few silver opportunities out there in terms of investing,” he said. The majority of silver production is a byproduct of lead-zinc operations, of which there have been very few in development.
“When we look at the opportunities in front of us, most of them are gold-focused. I would say that three-quarter of the assets that are potential acquisitions for us are gold-focused.”
Smallwood believes more equity investment is coming into the mining space than in the past five years but there are still opportunities for streaming agreements, which tend to be less attractive when options are abundant because miners have to give up future revenue in exchange for financing.
“I still think we’ve got some growth in front of us where companies are starting to invest back into the ground,” he said. “It’s not the harvest phase, when we don’t have opportunities, when the market is frothy — we’re not in a frothy market right now.”
The company, which reports in U.S. dollars, said Tuesday after markets closed that it booked its highest-ever revenue of US$892 million, backed by record gold and silver sales in 2016. Annual net income was US$195 million, or 45 cents per share, compared to a net loss of US$162 million, or 41 cents per share in 2015. The company fetched an eight per cent increase in the price of both gold and silver last year as commodities prices recovered. Gold production was a record 353,700 ounces and growing sales volumes, particularly in gold, pushed the company to raise its dividend to seven cents per share.