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Silver Wheaton Corp. Message Board

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  • reticiiz reticiiz Oct 25, 2006 7:31 PM Flag

    silver wheaton becoming the darling

    49% or Penasquito is roughly 280million oz over 17years roughly 16 million ounces a year for SLW. Which is 100% to today's SLW sales. The have about 6 months to close the deal and 2 years before the mine goes into production. I don't know how much GG BOD owns of SLW stock in their portfolios but I would image a substantial amount.

    Dilution is the only way for SLW to grow to this size IMO in which SLW would benefit but also GG and GG BOD. That is if the issued shares go directly to GG not an external institution(s). In that case GG could sell silver to SLW at low price of even 3.90/oz as the increase to SLW stock would offset the low cost of selling silver.

    Any major upfront cash would be substantialy dilute SLW and would affect our price in a negative way which would also mean negative impact on GG and it's BOD. Which I don't see it right now. A cash on first delivery of silver which would also be cause us to dilute would be alright but what would occur is that doing financing of this size would mean that GG's ownership might drop from 60% not to something like 40% which might not impact us in negative way but GG would loose the controling interest in SLW - which is also something I think GG BOD doesn't want to see.

    Higher cash for silver at let's say 9.90/oz might be fine if silver is $15 but not right now. They're going to be making a contract 1.5 years ahead of getting silver and many things can happen. Silver could be $30 but it could also be $5. If they make a contract right now for 9.90/oz silver now SLW might drop as this would not look as such a great deal.

    Will be interesing which route they go but the dilution is all but certain and if it's only dilution and it's done directly by GG gaining all the new shares that would benefit all parties involved because not only could silver be sold to SLW for low low price but everyone would benefit.
    That's enough of speculation. I'm off :)

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