Silver Wheaton Corp. (SLW) Trade Alert – SLW Reports Higher Q3 Net Earnings, Enters New Purchase Agreements

Silver Wheaton Corp. (SLW) shares closed yesterday at $4.48, up 21.08% from the previous close of $3.70. Silver Wheaton, a mining company, engages in silver production. It is the largest public mining company with 100% of its revenue generated from the sale of silver.

The company recently announced net earnings for the third quarter of 2008 at $20.2 million, or 9 cents per share, from the sale of 2.7 million ounces of silver, compared to $19.2 million, or 9 cents per share, from the sale of 3.1 million ounces of silver in 2007. It also reported operating cash flows of $26.7 million, or 12 cents per share for the third quarter this year.

An early exercise of the company's share purchase and Series "A" publicly traded warrants was successfully completed September 15, 2008. The company received gross cash proceeds in excess of $120 million ($113 million), which were used to pay down its bank debt.

Recently, the company entered into an agreement with Alexco Resource Corp. to acquire 25% of the silver produced from Alexco's Keno Hill project located in the Yukon Territory, Canada, for the life of the mine. Silver Wheaton will make upfront cash payments totaling $50 million and, in addition, a per ounce cash payment of the lesser of $3.90 and the prevailing market price is due, for silver delivered under the contract.

The company also announced it has signed a letter of intent with Augusta Resource Corp. dated October 31, 2008, regarding a new silver purchase agreement. Both companies consider it is in their best interests to negotiate and complete the new transaction based on a percentage of silver to be determined once the updated study has been completed.

Silver Wheaton purchases silver from Goldcorp mines in Mexico, Zinkgruvan Mine in Sweden, Yauliyacu Mine in Peru and Stratoni Mine in Greece.

The company has entered into nine long-term silver agreements with Goldcorp (Luismin mines and Penasquito project in Mexico), Lundin Mining (Zinkgruvan mine in Sweden), Glencore (Yauliyacu mine in Peru), Hellas Gold (Stratoni mine in Greece), Mercator (Mineral Park mine in Arizona), Farallon (Campo Morado property in Mexico), Aurcana (La Negra mine in Mexico) and Alexco (Keno Hill property in Canada) whereby Silver Wheaton acquires silver production from the counterparties at a price of $3.90 per ounce, subject to inflationary adjustments. As a result, the primary drivers of the company's financial results are the volume of silver production at the various mines and the price of silver.

The company estimates, based upon its current agreements, to have silver sales of 3 million ounces for the fourth quarter of 2008, 15 million to 17 million ounces in 2009 and increasing to approximately 30 million ounces by 2013.

In today's daily chart, SLW's Bollinger Bands indicate greater than normal volatility as reflected by an increase in distance between the upper and lower bands. Trading within its Bollinger Bands, the stock reflects neither an overbought nor oversold condition relative to its recent price trend. MACD reflects a weak bullish signal, with the indicator trending above the 9-day moving average signal line but still below the 0 level, indicating bearish moving averages. With share prices currently above the stock's 13-day moving average, a bullish trend is generally indicated.