Sterling silver sets make for attractive table settings and beloved family heirlooms. When it comes to investing, however, Fools seek a vehicle that's as pure as the finest silver.
After enjoying an incredible 46% surge in silver production from its unrivaled portfolio of producing silver stream assets in 2009, Silver Wheaton (NYSE: SLW ) remains poised to deliver a further 35% growth spurt in 2010 to reach 23.5 million silver equivalent ounces (SEOs). Targeting more than 40 million SEOs by 2013, this is one remarkable growth story. To place the company's production volume into context, popular miner Hecla Mining (NYSE: HL ) is targeting only 11 million ounces for 2010.
Silver Wheaton reported fourth-quarter earnings of $50.8 million, flanked by surging operational cash flow of $71 million. Despite an aggressive spate of strategic acquisitions during 2009, the company ended the year with $220 million more cash in its treasury than after the prior year.
Mixing this cash hoard with a $400 million credit facility at its disposal and a clear outlook for steadily expanding cash flow, Silver Wheaton is cooking up a recipe for unparalleled acquisitive growth in this highly prospective sector.
Goldcorp's (NYSE: GG ) long-awaited Penasquito mine began shipping product during the quarter, and is now forecast to deliver some 3.5 million ounces of silver to Silver Wheaton during 2010 (before reaching long-term average volume of 7 million ounces annually). As I have discussed before, Penasquito is the near-term growth driver that forms the bridge to enormous production growth expected from Barrick Gold's (NYSE: ABX ) Pascua-Lama mine by 2013. With the addition of a silver stream for a portion of production from Pan American Silver's (Nasdaq: PAAS ) Navidad project in Argentina, Silver Wheaton now boasts a stake in three of the top five silver deposits in the world.
Emanating both from the world-class mines noted above, and from exciting development projects like Alexco Resource's (AMEX: AXU ) Keno Hill silver district, an enormous capacity for organic reserve growth forms another of the billions of reasons for Fools to adore Silver Wheaton.
My decidedly bullish outlook for silver is scarcely a secret at this stage, and Fools tracking my coverage of this sector are likewise aware that Silver Wheaton remains my top pick in this exciting sector. Your fellow readers consider your opinions as valuable as a bullion bar, and encourage you to vote in our Motley Poll and share your views in the comments section below.
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