Silver Wheaton (SLW) Continues its Bull Run

Silver Wheaton (NYSE:SLW) has resumed its bullish performance after a short-term lull where it dropped below $29 a share. It closed Monday at $45.02, moving from about the $29 level starting January 25, 2011.

The company is a silver streaming company launched in 1999 to acquire the silver byproduct from mines in exchange for an upfront payment and then sell the silver in the global market at spot prices.

Because SLW purchases silver byproduct at essentially a fixed price of $3.90 it locks in costs and is open to increases in the price of silver without the capex, environmental, or maintenance costs associated with operating a mine.

SLW has relationships with 3 of the top 5 silver deposits in the world, Penasquito (NYSE:GG), Pascua-Lama (NYSE:ABX) (GG), and Navidad (NASDAQ:PAAS). The Penasquito and Pascua-Lama mines are gold mines with a significant silver byproduct while the Navidad mine is primarily a silver mine.

SLW was able to get such attractive terms because it was able to provide some of the necessary capital via an upfront payment to assist in the build out of the mine. In return they get a portion of the silver for the life of the mine.




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