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Silver Wheaton Corporation A Takeover Target?

Companies / Gold & Silver Stocks Oct 01, 2010 - 03:50 AM GMT

By: Bob_Kirtley

Companies

Exploration activity is moving at a fair old pace, however, the results are no longer startling, in fact discoveries of any significance are few and far between. In order for a producer to add to their pipeline of gold and silver reserves a friendly or even a hostile takeover appears to be the way go.


As an example we have just witnessed, Kinross Gold Corporation’s (KGC) all paper merger of around $7.00 billion dollars for the acquisition Red Back Mining. There are a few other notably large takeovers of late which demonstrates the willingness of companies to come up with the big bucks in order to lock in supplies for the future. So, as these predators scan the horizon for suitable targets Silver Wheaton could well fit the bill. With a current market capitalization of $9.17 billion it will require a company of some substance, however, it would be securing a supply of silver which is ramping up as follows:

Forecast 2010 production, based upon the company’s current agreements, is 22.2 million ounces of silver and 20,000 ounces of gold, for total production of 23.5 million silver equivalent ounces. By 2013, annual production is anticipated to increase significantly to approximately 40 million silver equivalent ounces. No ongoing capital expenditures are required to generate this growth and Silver Wheaton does not hedge its silver production.

Its not too hard to imagine that there is a smoke filled board room somewhere, where a lot of thinking, debate, pacing of the floor is going on right now. It would be a shame to see it go as its one of our favourite stocks. If silver prices are heading to the $30.00/oz level and beyond as we anticipate then SLW would do wonders for the cash flow of one of the majors, but which one? Don’t ask us, we have no idea, other than making a wild guess at one of the usual suspects.

Now, if we consider that there are no takers and SLW goes from strength to strength, there could come a time when the target becomes the predator and decides to branch out by adding a major mining company to its own portfolio.

Just our musings of course, but stranger things have happened.

In the mean time Silver Wheaton Corporation have informed us that Peter Barnes has won the Ernst & Young Entrepreneur Of The Year(R) 2010 Mining and Metals award:

On September 28th, 2010, Ernst & Young (Canada) announced the winners of the Entrepreneur Of The Year Pacific region awards. We are extremely pleased to announce that Peter Barnes, Silver Wheaton’s CEO, was honored as the Mining and Metals category winner.

The Entrepreneur of the Year Award recognizes high-achieving entrepreneurs in Canada and around the world who drive growth, transform industries and build communities. In its 17th year of operation, the award is structured around an independent panel of regional judges determining which nominees deserve recognition as category award finalists, and then selecting the entrepreneur who best demonstrates excellence in that category.

“This award highlights the power of our unique business model and the quality of our people. I am honoured to accept the award on behalf of the entire Silver Wheaton team,” said Peter Barnes.

He has come a long way since his student days in Hull.

Over in our options trading den they have updated the chart to show all the closed trades as of today, so you can see exactly how it is going, please click this link.

Got a comment then please add it to this article, all opinions are welcome and very much appreciated by both our readership and the team here.

We also thought that you might like to know that on Friday, 27th August 2010, we closed another successful trade banking a profit of 79.46% on Call Options on Silver Wheaton.

To stay updated on our market commentary, which gold stocks we are buying and why, please subscribe to The Gold Prices Newsletter, completely FREE of charge. Simply click here and enter your email address. (Winners of the GoldDrivers Stock Picking Competition 2007)

For those readers who are also interested in the silver bull market that is currently unfolding, you may want to subscribe to our Free Silver Prices Newsletter.

DISCLAIMER : Gold Prices makes no guarantee or warranty on the accuracy or completeness of the data provided on this site. Nothing contained herein is intended or shall be deemed to be investment advice, implied or otherwise. This website represents our views and nothing more than that. Always consult your registered advisor to assist you with your investments. We accept no liability for any loss arising from the use of the data contained on this website. We may or may not hold a position in these securities at any given time and reserve the right to buy and sell as we think fit.
Bob Kirtley Archive

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