Silver Wheaton Corp. (USA) (SLW)

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A mining company which operates its revenue from the sale of silver. The Corporation is actively pursuing further growth opportunities, primarily by way of entering into long-term silver purchase contract.

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Avatar Vince1172 (81.55) Submitted: 4/14/07 5:40 PM : Start Price: $9.60 SLW Score: 29.65

Here are the two most bullish factors affecting silver.

1. The world has nearly run out of silver.

2. The nations of the world have printed up nearly unlimited amounts of unbacked paper money.

Put together, these two factors have never occurred before in the history of mankind.

True, the world was once using silver as money in many nations at once. But back then, in the late 1800's, the world had 5-10 billion ounces of silver to use as money. Today, we have much, much less, because most of the silver that has ever been mined in the world has been consumed by industry, and we may be down to about only one billion ounces or less.

True, there have been hyper-inflations as paper money has been printed to excess. But at those times, it was usually in one nation at a time, and there was still plenty of silver (and gold) to be used as money.

Today, no nation is using silver as money. And today, the world is almost out of silver. These factors create this once-in-history opportunity.

Silver today may be the best investment opportunity in the history of mankind.

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Avatar Vince1172 (81.55) Submitted: 4/14/07 6:07 PM

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Silver Wheaton (NYSE: SLW) has taken an innovative approach to the mining industry,” explains Adrian Day. Rather than operating mines, its acquires "silver streams" from other companies.

With its "low-risk model," the editor of The Global Analyst says, "SLW is selling well below net asset value and is a great buy."

“Silver is often a by-product in other mining, and Silver Wheaton buys the silver stream, typically for an upfront payment and a fixed cost-per-ounce. Thus, its costs are fixed and it retains all the upside, all the while remaining a pure silver company.

"So long as the price of silver remains above the fixed cost paid—and there is a very wide cushion now — the company guarantees itself positive cash flow.

“With rapid growth in the past couple of years since it was spun off from Goldcorp, and a strong growth outlook — with attributable ounces rising from 15 million this year to 20 million by 2009, just from current mines — Silver Wheaton has seen tremendous growth in cash flow.

"For this year, it is forecasting $135 million in cash flow; this results in a strong balance sheet, with $60 million in cash today, double the figure of a year ago.

"In addition, the company has substantial investments in other silver companies (including $50 million invested last year alone), also increasing its leverage to the silver market.

"This expected growth outlook is simply from its existing contracts, but Silver Wheaton looks poised to announce more deals.

“Most importantly, it has a right of first refusal, and an exclusive negotiating period, on Goldcorp’s huge Penasquito project, which came along with the recent purchase of Glamis.

"Penasquito, which will be Mexico’s largest mine when it comes onstream by 2010, is scheduled to produce as much as 20 million ounces of silver a year. There is no guarantee of a deal, but many analysts are betting there will be one.

“This is a low-risk model, where the company has no capital requirements (beyond purchase of the silver stream), and where cash flow is virtually identical with free cash flow. The biggest risk – although unexpected – is if the companies with which it has contracted do not produce and are not able to pay.

“Meanwhile, the stock has risen from the mid-$2 range two years ago to today’s $9.51. While it has been very volatile over the past year, the chart pattern looks very positive—with higher and higher lows over the past four dips.

"More importantly, it is selling well below its net asset value of around $12 per share, Silver Wheaton is a great buy, provided the price of silver holds together.”

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Silver Wheaton Corp. (USA) (SLW)

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