I found out the answer to slw's slide. SLW sold some 25 million shares into the market. The reason for doing so was to pay down debt and to put some money in the bank. Because of this move, they are now debt free and have cash to do something with like acquire some assets or maybe to start distributing a dividen. I would like a dividen because it would attract an investor who is patient and not eager to sell if they get a slight swing in their favor.
I feel since they are done selling now, that we will do pretty well next week if prices maintain themselves. Maybe GG has been doing the samething in order to get as much cash as possible to finance their recent aquisitions or maybe some new ones. I am not concerned as long as they plow the monies back into productive assets for future prosperity for the company.
The number of shares sold was nowhere near 25 million shares. It was more like 14.6 to 16.6 million shares, depending on whether the over allotment was taken (most likely).
Here is what I have regarding the SLW sales.
Mining-Journal.com March 27 TORONTO-LISTED Silver Wheaton Corp, the 58%-owned silver subsidiary of Goldcorp Inc, is raising up to C$200 million in equity to repay debt associated with the company�s recently executed silver-securitisation transaction with Swiss-based commodities trader Glencore International AG.
A syndicate of underwriters led by GMP Securities has agreed to purchase, on a �bought-deal� basis, 14.6 million new shares in Silver Wheaton at C$12.00/share, for gross proceeds of C$175 million. The underwriters have an option to increase the number of shares purchased by 14%, which, if exercised, would raise the total proceeds to C$200 million.
The placing price represents a 9% discount to Silver Wheaton�s closing price of C$13.14/share last Friday (March 24), the last trading day prior to the announcement of the financing.
Silver Wheaton will use the net proceeds to settle a US$40 million promissory note issued to Glencore and to repay bank debt associated with its recently completed acquisition of future silver production from Glencore�s Yauliyacu silver-lead-zinc operation in Peru (MJ, March 3, p15).
That transaction included an upfront payment to Glencore of US$285 million, comprising the US$40 million promissory note plus US$245 million in cash. Silver Wheaton said at the time that the cash component would be funded using US$120 million of existing cash resources and US$125 million of bank debt.
"I like GG's idea of holding gold and not selling it right away. Money in the bank"
You need to catch up, they don't do that any more. Sold off all the gold once they moved Rob out (that was his program). In hind sight Rob was right AGAIN. If johnny was still around maybe he would tell us how much money Ian left on the table by selling too soon.
Pay down debt?
The latest financials from Q4 2005 indicate that SLW had no material debt:
and $117 million in cash. By now that is probably even higher.
I wonder if some of this is to pay off the promissory note to Goldcorp in the recent new deal?
If so, that would give GG another $20 million in cash to reduce the PDG loan. And maybe GG did sell a few shares of SLW as well? Combine all that with the $450 million to be raised from calling in the warrants and a later closing date for the PDG deal.
By the time this deal closes, I wonder if the final loan amount is going to be less than $500 million. That would cut the interest payments we have been expecting GG to make going forward on this loan in half.
When all this information comes out and it becomes clearer that GG will have much less long term debt than had been expected, I suspect the market may like that news for GG.
Please let me be one of many to Thank You for your previous analysis.
This is the debt that Silver Wheaton is looking to retire.
SILVER WHEATON COMPLETES GLENCORE TRANSACTION
Vancouver, British Columbia � Silver Wheaton Corp. is pleased to announce that it has completed the previously announced transaction with Glencore International AG. The Company has agreed to purchase 4.75 million ounces of silver produced per year, for a period of 20 years, from Glencore, based on production from their Yauliyacu mining operations in Per�. Silver Wheaton will provide an upfront payment of US$285 million, comprised of US$245 million in cash and a US$40 million promissory note, and US$3.90 per ounce of silver delivered under the contract (subject to an inflationary adjustment after three years).
Yauliyacu is a low-cost silver/lead/zinc mine located in central Per� which has been in continuous operation for more than 100 years and is expected to produce an average of 6 million ounces of silver per year during the term of the contract. In the event that silver produced at Yauliyacu in any year totals less than 4.75 million ounces, the amount sold to Silver Wheaton in subsequent years will be increased to make up for the shortfall, so long as production allows.
During the term of the contract, Silver Wheaton will have a right of first refusal on any future sales of silver streams from the Yauliyacu mine and a right of first offer on future sales of silver from any other mine currently owned by Glencore. In addition, Silver Wheaton will also have an option to extend the 20 year term of the silver purchase agreement in five year increments, on substantially the same terms as the existing agreement, subject to an adjustment related to silver price expectations at the time and other factors.
In order to fund the US$245 million cash consideration, Silver Wheaton has utilized cash on hand, together with US$125 million of bank debt.
Silver Wheaton is the only public mining company with 100% of its revenue from silver production. The Company expects to have annual silver sales of 15 million ounces in 2006, increasing to 20 million ounces by 2009 and thereafter. Silver Wheaton is unhedged and well positioned for further growth.
And they'll like the news for SLW too. For those who remember the details, it's like a page out of the WHT playbook. Telfer is better with paper than anyone I've ever seen. Buy up that SLW cause it's going cheap right now.