Very good, this is the solution to debt worries. It is a dilution for sure, but now all upside in Silver price will be shareholders' and company can sit out on cash flow volatility in the market. Bought deal means no short selling plays in the market. We would even prefer to see the new deal of acquiring Silver Stream to be announced in the near term. It will be a rocket again with silver close to 15USD.
Silver Wheaton to raise up to C$287,5m in bought deal financing
Published on 26th January 2009
Updated 1 hour 12 minutes ago
TORONTO (miningweekly.com) – Vancouver-based Silver Wheaton has entered an agreement with a syndicate of underwriters who will buy 31,25-million shares in the company, at C$8,00 apiece, on a bought deal basis.The financing will raise C$250-million, but this could increase to around $287,5-million in the underwriters exercise an option to buy another 4,68-million shares on the same terms.
Silver Wheaton buys silver from producers on a long-term basis, at predetermined prices, and then sells the metal at the current spot price.The company plans to use the money to repay a revolving debt facility and for “general corporate purposes”, it said, although president and CEO Peter Barnes hinted that the firm could be building an acquisition arsenal.The share sale “significantly de-leverages our balance sheet, and positions our company to take advantage of some of the high-quality acquisition opportunities that we expect to become available during 2009,” Barnes said in a statement.“Our focus going forward is to continue to grow the asset base in an accretive manner, by adding high quality silver streams from low-cost mines that are already in production."
The offering is scheduled to close on or about February 12.
2009 OUTLOOK REAFFIRMED
The company said on Monday that it still expects silver sales to be between 15-million and 17-million ounces in 2009, increasing to approximately 30-million ounces by 2013.
In the fourth quarter of 2008, silver production attributable to the company was in line with previous guidance, at around 3-million ounces.
However, silver sales during the quarter were only 2,7-million ounces, because the timing of shipments meant that some sales will only be accounted for in the first-quarter statements.
The firm expects to report total silver sales for 2008 of about 11,1-million ounces, at an estimated total cash cost of $3,94/oz of silver.
However, the company warned that expects to record a noncash writedown of its long-term investments of as much as $65-million in its fourth-quarter financial statements.
Silver Wheaton shares rose 0,71% on Monday, to C$8,53 a share by 16:19 in Toronto.
Editor: Liezel Hill