Silver Wheaton: Acquisition is a Step in the Right Direction

Silver Wheaton (SLW) has purchased the silver production from another mine. It looks like this mine could provide 600,000 oz. of silver per year for 25 years.

Over the last couple of years SLW has significantly increased the amount of silver mine production they control. The goal is the purchase and resale of 25 million oz. per year. However, sales have been stagnant in the 15 million oz. per year range for the last 4-5 quarters. I really like the structure of this company, but earnings need to start keeping up with the valuation soon. First quarter earnings should come out around the end of April.

Silver Wheaton’s stock price has a tendency to run up in the month before earnings, then drop afterward. This chart shows the earnings and comparison to the silver ETF (SLV) for the last year. Click on the chart for a larger view.

See here for more information on SLW's purchase.