Silver Wheaton triples quarterly dividend

Silver Wheaton (SLW-T, SLW-N) has tripled its quarterly dividend after doubling revenue and operating cash flow for the third quarter.

The company announced a fourth quarterly cash dividend of US9¢ per share, based on a new policy, which links quarterly dividend payments to the previous quarter’s operating cash flows.

Based on the policy, the dividend for the quarter will equal 20% of the operating cash flow in the previous quarter divided by the company’s outstanding shares at the time the dividend is approved. 

“Our new policy allows us to return a meaningful portion of our cash flows to our shareholders, with the current quarterly dividend tripling previous levels,” the company’s president and CEO, Randy Smallwood, said in a statement.

The dividend for the third quarter was US3¢ per share. The company will pay next quarter’s dividend on Dec.5 to shareholders on record as of Nov. 23.

Before revealing its new dividend policy, the company released its third quarter results earlier in the day on Nov. 9. 

For the period, the world’s largest silver streaming company saw profits climbing 96% to US$135 million, compared to the year ago period. Revenue and operating cash flows came in at US$185.2 million and US$167.2 million, respectively, both doubling from last year’s third period. 

Cash operating margins also doubled during the quarter to US$32.11 per silver equivalent oz.

The company says it delivers one of the highest cash operating margins in the precious metals industry because it keeps cash costs generally fixed at US$4 for every ounce of silver sold. 

The average cash costs for the third quarter came at US$4.12 per silver equivalent oz., compared to US$4.09 in the year ago period.

The company produced 6.1 million silver equivalent oz. for the quarter, slightly higher than the 5.9 million oz. generated in the comparable period of last year.

It sold 4.8 million oz. silver and 6,300 oz. gold during the period.

Smallwood noted the company is on track to achieve its 2011 production target of between 25 and 26 million silver equivalent oz., and 15,000 oz. gold.

Despite the new dividend policy and quarterly results, the company shares closed down 2.6% to $35.85 on 1.7 million shares traded. In New York, Silver Wheaton was off 3% to US$35.05 after 7.8 million shares changed hands.