What Could Curb Down Silver Wheaton’s Recovery?

Silver Wheaton Corp. (SLW) will release its fourth-quarter earnings report for the fourth quarter and its annual guidance on March 20. In anticipation of this release, let’s review the current expectations of the company’s performance in the last quarter of 2014, the company’s changes in its operations in 2014 and how will the market may react to the release of this earnings report. 

Fourth-quarter earnings report

The company’s fourth quarter report will reveal whether Silver Wheaton met its 2013 guidance, which included the production of 33.5 million of silver equivalent ounces. This amount also includes 145 thousand ounces of gold. Based on the company’s guidance and its sales in the first nine months of 2013, the company’s silver production is likely to decline, while its gold production is expected to rise. The table below summarizes the changes in production in the company’s leading mines and the expected change in production in the fourth quarter of 2013.

Based on these factors, the company’s silver revenue is likely to tumble down by nearly 42%. This decline is not only because of the drop in production but also due to the sharp fall in the price of silver. The table below shows the changes in the company’s silver revenue, ounces sold and price of silver. 

But the company’s gold production is expected to rise mainly because it had acquired earlier this year gold output from two mines: Sudbury and Salobo. Conversely, the production from Minto mine is expected to decline compared to last year.

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