Cautionary Statements

Transcription

1 April 2008

2 Cautionary Statements CAUTIONARY NOTE REGARDING FORWARD LOOKING-STATEMENTS Safe Harbor Statement under the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities legislation: Except for the statements of historical fact contained herein, the information presented constitutes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and applicable Canadian securities legislation. Such forward-looking statements, including but not limited to those with respect to the price of silver, the estimation of mineral reserves and resources, the realization of mineral reserve estimates, the timing and amount of estimated future production, costs of production, reserve determination and reserve conversion rates involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Silver Wheaton to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, risks related to the integration of acquisitions, the absence of control over mining operations from which Silver Wheaton purchases silver and risks related to these mining operations, including risks related to international operations, actualal results of current exploration activities, ities actualal results of current reclamation activities, conclusions of economic evaluations, changes in project parameters as plans continue to be refined, as well as those factors discussed in the section entitled Description of the Business-Risk Factors in Silver Wheaton s Annual Information Form for the year ended December 31, 2006 incorporated by reference into Silver Wheaton s Form 40-F on file with the U.S. Securities and Exchange Commission in Washington, D.C. Although Silver Wheaton has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate as actual results and future events could differ materially from those anticipated i t in such statements. t t Accordingly, readers should not place undue reliance on forward-looking statements. t t CAUTIONARY NOTE TO U.S. INVESTORS CONCERNING ESTIMATES OF MEASURED, INDICATED AND INFERRED RESOURCES This presentation uses the terms Measured, Indicated and Inferred Resources. U.S. investors are advised that while such terms are recognized and required by Canadian regulations, the Securities and Exchange Commission does not recognize them. Inferred Resources have a great amount of uncertainty as to their existence and as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred resource will ever be upgraded to a higher category. Under Canadian rules, estimates of Inferred Resources may not form the basis of feasibility or other economic studies. U.S. investors are cautioned not to assume that all or any part of Measured or Indicated Resources will ever be converted into reserves. U.S. investors are also cautioned not to assume that all or any part of an Inferred Mineral Resource exists, or is economically or legally mineable. 2

3 A Unique Mining Company 100% Pure Silver Simple investment model Strong upside potential 98% organic sales growth by 2010 Well positioned for further growth No hedging Best leverage to silver price 10% increase in silver price results in a 15% increase in 2008 cash flow Very low political risk profile Significant stake in 6 of the top 30 silver deposits in the world 3

4 Key Advantages Costs are essentially fixed Structured to minimize income taxes No ongoing g CAPEX requirements Yet SLW benefits from production/exploration growth No environmental/closure responsibilities Downside protection Very limited currency risk All contracts in $US 4

5 Mine Locations Zinkgruvan Rosemont Luismin Mineral Park Peñasquito Stratoni Yauliyacu Development Projects Operating Mines 5

6

7 Peñasquito Goldcorp s world-class zinc-gold- Positive deep drilling shows silver-lead deposit in Mexico underground potential Largest silver deposit in the world Reserves and Resources (June 2007) P&P Reserves: 864 M oz M&I Resources: 413 M oz Continued excellent potential for exploration growth Construction on schedule; initial production expected by Q4, % boost in daily tonnage over 2006 feasibility Average payable silver of 31 M/oz per year 7

8 Peñasquito Transaction Terms 25% of silver production for the life of mine Upfront cash payment of US$ 485 million 100% debt financed; no shareholder h dilution Goldcorp completion guarantee No significant tax is to be paid by Silver Wheaton 25% interest in Peñasquito would rank as one of the top 10 silver deposits in the world Purchase price is the lower of US$3.90/oz or spot silver 8

9 Peñasquito Project Growth Since Our Acquisition, April 2007 April 2007 Current Growth Silver Reserves/Resources P&P Reserves 575 M oz 864 M oz +50% M&I Resources 247 M oz 413 M oz +67% LOM Silver Production Attributable t bl to SLW (25%) 92 M oz 140 M oz +52% Average Annual Silver Sales Attributable to SLW (25%) 5.4 M oz 7.8 M oz +44% Anticipated Mine Life 17 yrs 19 yrs +12% Underground Potential Not contemplated Yes +%?? 9

10 Peñasquito Production 10

11 Mineral Park Mercator Minerals Cu-Mo-Ag open pit mine in northwest Arizona in continuous operations for more than 30 yrs Currently ygoing gthrough an expansion to produce a silver bearing copper concentrate Current Silver Reserves & Resources: P&P Reserves: 35 M oz M&I Resources: 2 M oz Inferred Resources: 15 M oz Expected to produce 600,000 ounces of silver per year for at least 21 years. 11

12 Mineral Park Transaction Terms Payment of US$42 M at closing of the transaction Purchase price is the lower of US$3.90/oz or spot silver Completion guarantee from Mercator 12

13 Rosemont Finalizing in Q2/08 Cu-Mo-Ag porphyry deposit in Arizona owned by Augusta Resources August 2007 Feasibility Study: 75,000 tpd mill Avg. 2.7 M oz/year silver production Minimum mine life of 18 years Silver Reserves and Resources: Reserves 62 M oz M&I Resources 5 M oz Inferred Resources 9 M oz Permitting in process and commercial production expected to commence in

14 Rosemont Transaction Terms Augusta to select a deal ranging from minimum of 45% to maximum of 90% of LOM silver production SLW does not pay any ongoing payment for the silver delivered Cash costs for silver are $0 for LOM Completion guarantees No payments until Permits are in place Adequate financing in place Construction has begun 14

15 15 WHERE ARE WE NOW?

16 Silver Sales Growth 1 No Further CAPEX To Be Paid 98% 116% 16 1 Does not include Rosemont

17 Attributable Reserves & Resources 1 250% 259% Peñasquito Stratoni Zinkgruvan 54% Yauliyacu Luismin Mineral Park 17 1 Does not include Rosemont

18 Current Attributable Reserves & Resources 1800 (M oz) Contain ned Silver P & P Reserves M & I Resource Inferred 0 Coeur Pan American Apex Silver Wheaton (1) Silver Standard 18 Source: Company Reports 1 Does not include Rosemont

19 2007 Value Accretion Assuming $20/oz Ag 19 Does not include Rosemont

20 Projected EBITDA Existing Contracts 20 Does not include Rosemont

21 Debt Sensitivity Debt Repayment By $20/oz r Price (US S$) Silve $15/oz $10/oz Dec-08 Dec-09 Dec-10 Dec-11 Assuming in-the-money warrants are exercised in 2009 and proceeds are applied to debt 21

22 Reserves & Resources per Share 185% Reserve & Resource e Ozs 12/31/ /31/ /31/ /31/2007 Today 22

23 Capital Structure As of Mar., 2008 Shares Outstanding million SLW.WT Warrants 23.5 million (1) C$ 4.00 SLW.WT.A Warrants 7.7 million (1) C$ 5.50 SLW.WT.B Warrants 7.8 million C$10.00 Options 3.1 million C$6.15 Shares Fully Diluted million 3 Month Avg. Daily Volume TSX: NYSE: 2,500,000 shares 3,560,000 shares 1 Consolidated based on 0.2 SLW.wt and SLW.WT.A for every common share of SLW 23

24 Top 30 Silver Deposits in the World Producing Mines and Development Projects 2,000 1,600 1, % of Peñasquito Silver Wheaton Relationship (6) Apex Silver Silver Standard Coeur d Alene Res serves & Reso ources (Moz) Rock Cree ek Region Operation ns 0 Penasquit to Bolshoi Kalimansur KG GHM Polska Mied dz Pascua Lam ma Mt Isa Navida ad Grasber rg Toromoch ho San Cristob bal Las Minita as 25% of Penasquito Duk kat Ocamp po Pittaril lla Toquepa ala Que Rive er Cora ani Canningto on Kholodninsko oe Olympic Dam Cerro Colorado Metate es Rocheste er Hackett Riv ver MacArthur Rive er Canane ea Xiacu un San Dima as Montanor re East Source: Metals Economics Group 24

25 Leverage to Silver Price Performance Since Inception (Oct. 04) 600% 500% SLW 400% 300% 200% Silver PAAS SSRI HL 100% CDE 0% -100% Oct-04 Jan-08 Jan-05 Apr-05 Jul-05 Oct-05 Jan-06 Apr-06 Jul-06 Oct-06 Jan-07 Apr-07 Jul-07 Oct Source: Thomson

26 Performance Year To Date 40% 50% HL 30% 40% Silver HL PAAS 10% 20% SLW SSRI -10% 0% SS CDE -30% -20% Jan-0 Jan-0 Jan-0 Jan-1 Jan-1 Jan-2 Jan-2 Jan-2 Feb-0 Feb-0 Feb-1 Feb-1 Feb-1 Feb-2 Feb-2 Mar-0 Mar-0 Mar-0 Mar-1 Mar-1 Mar-2 Mar-2

27 Financial Performance $0.60 $0.50 CFPS S/EPS (US SD) $0.40 $0.30 $0.20 $0.10 $ EPS CFPS 27

28 Net Profit Margin 9 months/2007 Precious Metal Companies Golden Star Teck Gold IAMGOLD Newmont Centerra Norhtgate Goldcorp Kinross Average Hecla Pan American Meridian Barrick Eldorado Agnico Sil Yamana ver Wheaton Source: Michael Jalonen, Merrill Lynch Research 28

29 Change in Total Cash Costs Precious Metals Companies 9 Months 07 vs. 9 Months 06 Agnico Eldorado Centerra Kinross Barrick Average Teck Gold Meridian Northgate Newmont Golden Star IAMGOLD Hecla Source: Michael Jalonen, Merrill Lynch Research 29

30 Silver companies From Q3/2007 (3 months) 30

31 Silver Wheaton A Low Cost Producer Cash Cos st $6.00 $5.96 $5.60 $ E Co o-product $4.00 $2.00 $3.93 $0.00 Hecla Pan American Coeur Silver Wheaton Source: Cormark Securities 31

32 Silver Production Contracts Luismin Zinkgruvan Yauliyacu Stratoni Peñasquito 25% Mineral Park Company Contract Length 25 yrs LOM 20 yrs LOM LOM LOM Ag Prod. 100% 100% up to 4.75 M oz/yr 100% 25% 100% Mine Life Cash Costs 25+ yrs 25+ yrs 25+ yrs 7+ yrs 19+ yrs 21+ yrs $3.90/oz 1 $3.90/oz 1 $3.90/oz $3.90/oz 1 $3.90/oz 1 $3.90/oz 1 Annual Ag Production 7-12 M oz 2 M oz up to 4.75 Moz 1-2 M oz Up to10 M oz.6 M oz 1 SLW pays the lesser of $3.90 and spot price on these contracts; 32

33 SLW Equity Investments Property of Interest Corani Rock Creek Hackett River Montanore Ownership 18% 17% 12% 11% Stage Pre-Feasibility Pre-Feasibility Pre-Feasibility Advanced Exploration Resource (Ag M oz) M&I 327 Inf. 35 Inf. 229 Ind. 205 Inf. 52 M&I 164 Inf. 65 Est. Annual Ag Production 15 M oz/yr 6 M oz/yr 12 M oz/yr N/A Source: Company Reports 33

34 34 WHY SILVER?

35 Silver Supply & Demand Moz E 2008E 2009E Demand Supply (mining & scrap) Source: GFMS & RBC Capital Markets 35

36 Silver Inventories Are At A Historical Low oz) Inve entory (M Source: CPM Group,

37 Demand For Industrial Applications Roughly 4% in average annual growth (11% in 2005) Demand is relatively inelastic to the price of silver (low proportion of cost) Primary Uses Electrical & Electronics Chemicals Brazing Alloys New Areas of Growth Solar LCD/Plasma Screens Medical Instruments Biocides Source: CPM Group, RBC Capital Markets Positive Trends Growth in Middle Class in China & India Growing use of Mobile Phones Computerization in Third World More Stringent Environmental Laws 37

38 Ounces in ishares Silver Trust (M oz) Investment - A Major Catalyst of Silver Price Silver Price and ishares Silver Trust Holdings Demand for silver $ ETF s expected to $ increase $ $ ishares growing $ applied for +360 M oz $10 80 $8 New ETF s emerging 60 $6 40 $4 Silver Price (LME PM Fix in USD) 20 $2 0 $0 1/16/2008 3/12/ /19/20 7/9/2007 7/23/ /6/2007 4/26/2007 3/14/2007 1/30/ /13/20 10/31/20 9/19/2006 7/8/2006 6/23/ /5/2006 3/28/2006 2/14/2006 1/3/2006 Increased mine production expected to be offset by increased industrial demand Silver demand for ETF s expected to result in a tightening of the silver market Source: GFMS & ishares and Bloomberg 38

39 Silver Wheaton vs Silver ETF SILVER WHEATON Silver ETF Pure Silver Best Leverage to Silver Price Organic Growth Further Growth Potential 39

40 Top Ten Silver Producing Companies M oz Penoles KGHM BHP Kazakhyms Polymetal Buenaventura Grupo Mexico Rio Tinto Coeur Goldcorp Source: The 2007 World Silver Survey 40

41 Silver Wheaton Going Forward Take advantage of huge growth opportunities Valuation arbitrage Financing tool Hedging tool How will we do this? Leverage existing partnerships New partnerships Strategic investments 41

42 Near-term Catalysts Sale of Goldcorp s entire 48% interest in Silver Wheaton Growth opportunities Strengthening silver prices H2/2008: Peñasquito heap leach operation commences 42

43 Summary 100% Pure Silver Established, long life, low cost mines Strong cash flow & earnings Strongly leveraged to increases in silver price Downside protection Very low political risk profile Well positioned for further growth 43