Silver Wheaton says more miners want help funding acquisitions

Silver Wheaton Corp's chief executive said more and more mining companies are asking for his help to finance acquisitions.

Silver Wheaton caters to companies that need capital to build a mine. The Vancouver-based miner buys streams of future gold and silver production from producers in exchange for funding.

But now the landscape is shifting for its "streaming" business.

"There are a number of companies that come to us and ask 'would you like to partner up and jointly bid,' i.e. use a stream as part of the financing to take on the acquisition," Silver Wheaton's chief executive Randy Smallwood said in an interview.

"Over the last six months, we seem to see it more and more."

Osisko Mining had asked Silver Wheaton for help to thwart Goldcorp Inc.'s hostile bid earlier this year. Osisko was eventually bought by two Canadian gold miners.

But although Mr. Smallwood is getting more financing requests for acquisitions and projects, he said the pickings are slim.

"The quality seems to be thinning out," he said. "One of the challenges we have right now is that we have a lot of assets coming through the door looking for financing, but there is not a lot of quality assets."

Mr. Smallwood describes it as a vicious circle. Mines and projects that are in desperate need of funding are usually the ones that are not profitable enough.

"It sort of feeds itself," he said.

Silver Wheaton is looking seriously at about eight different assets.

The company had a $1-billion credit facility and $139-million of cash on hand as of the end of June. Mr. Smallwood said there was no need to do a share offering as its rival Franco-Nevada Corp. did this week.

Unlike Franco-Nevada, which raised $500-million for future acquisitions, Mr. Smallwood said any Silver Wheaton share offering would be tied to a specific acquisition.

"It will not be for general corporate purposes or pending acquisitions. We will lay it out and make sure it's part of the whole package," he said.

Silver Wheaton has streams with 19 mines and five projects in the Americas and Europe.