Silver Wheaton Corp.

Largest Pure Silver Streaming Company

Free
Message: Silver Wheaton Poised to Complete 'Astute' Acquisition / Seeking Alpha

Silver Wheaton Poised to Complete 'Astute' Acquisition / Seeking Alpha

posted on May 23, 2009 01:22PM

http://seekingalpha.com/article/1387...

Silver Wheaton Poised to Complete 'Astute' Acquisition

by: FP Trading Desk May 20, 2009 | about stocks: SLW

After a successful shareholders vote on Tuesday, Silver Wheaton Corp. (SLW) is poised to complete the C$243-million acquisition of smaller rival Silverstone Resources Corp. Analysts are pleased to see it.

Richard Gray of Blackmont Capital called the deal a "very astute move" as it eliminates Silver Wheaton's primary competitor in the silver streaming business. It also gives the company three silver streams from low-cost copper mines and is accretive on a number of key metrics. Silverstone's 4.5 million ounces of silver sales in 2009 should increase Silver Wheaton's sales to 20 million for the year, growing to 27 million in 2010 and 32 million by 2012, Mr. Gray added.

UBS Securities analyst Dan Rollins pointed out that with C$400-million available under Silver Wheaton's revolving debt facility, the company has the financial capability to make more silver stream acquisitions within the next 12 months. He also suggested that Silver Wheaton will sell Silverstone's exploration assets, because the company is not seen as an operator.

David Haughton of BMO Capital Markets wrote that Silver Wheaton's main catalyst for growth is still Goldcorp Inc.'s (GG) Penasquito mine, but the Silverstone acquisition appears accretive to "all" valuation metrics, and has the potential to provide additional royalty revenue in the future through expansions and development of new products.

All three analysts call Silver Wheaton a "buy" (or "outperform") and have price targets between $11.00 and $12.00 a share.

Share
New Message
Please login to post a reply