Silver Wheaton (SLW) Report

Below is a little piece of research I put together on Silver Wheaton (Amex: SLW)

Silver Wheaton (SLW) is completely unhedged and pays no corporate income taxes. All silver trading is performed by Silver Wheaton Caymans Ltd. and is not subject to income taxes. SLW does not carry any debt. Silver cash costs are $3.90 per ounce. According to SLW, a $0.50 increase in the price of silver will add $6 million in net income for 2006.

Silver Wheaton (SLW) owns 15% of Bear Creek Mining (TSXV: BCM). SLW bought 4,821,905 shares of BCM on the open market for $3.03 CDN. SLW also bought 540,000 shares of BCM during a private placement for $3.25 CDN with the right to purchase 270,000 additional shares for $4.25 CDN within 2 years. BCM shares are currently worth over $6.00 CDN.

Earnings estimates for 2006 are currently $0.25 per share. My own calculations are getting net income for 2006 of $55 million based on no production growth. There are currently 184 million shares outstanding plus a secondary of 14 million shares.I am getting EPS of $0.28 for 2006 if silver prices can average $10.81.

Note: I am long SLW