WPM

Business Context and Reporting Period

Company: Silver Wheaton Corp. (Note: Filing lists "Silver Wheaton Corp." while metadata references "Wheaton Precious Metals Corp.")
Reporting Period: February 23, 2006
Business Model: The company is the only public mining company with 100% of its revenue derived from silver production. It operates on an unhedged basis and acquires silver streams from mining operations.

Key Financial Metrics and Transaction Details

Transaction Overview: Agreement to purchase a 20-year silver stream from Glencore International AG (Yauliyacu mine, Peru).
Volume: 4.75 million ounces of silver per year.
Consideration:

• Upfront payment: US$285 million total.
• Cash component: US$245 million.
• Promissory note: US$40 million.
• Per-ounce price: US$3.90 per ounce (subject to inflationary adjustment after three years).

Production Impact:

• Expected 2006 annual sales: Over 15 million ounces.
• Expected 2009 annual sales: 20 million ounces.
• Yauliyacu mine average production: 6 million ounces per year.

Liquidity and Debt:

• Cash on hand utilized: US$120 million.
• New bank debt incurred: US$125 million.

Financial Performance: The filing text does not provide specific values for revenue, profit, cash flow, or margins for the reporting period.

Material Changes and Strategic Outlook

Strategic Growth: This acquisition significantly increases the company's annual silver sales volume, projecting a growth from over 15 million ounces in 2006 to 20 million ounces by 2009.
Contractual Rights:

• Right of first refusal on future silver stream sales from Yauliyacu.
• Right of first offer on future silver sales from other Glencore-owned mines.
• Option to extend the 20-year term in five-year increments.
• Shortfall protection: If Yauliyacu production falls below 4.75 million ounces in a year, subsequent years' volumes will increase to make up the difference.

Closing Status: Expected to close by March 15, 2006, subject to regulatory approvals and definitive agreements.

Risks and Contingencies

Forward-Looking Statements: The release contains forward-looking statements regarding future silver prices, mineral reserves, production timing, and costs. Actual results may differ materially due to known and unknown risks.
Operational Risks:

• Lack of control over the mining operations (Yauliyacu) from which silver is purchased.
• Risks associated with international operations in Peru.
• Integration risks related to acquisitions.
• Uncertainty regarding reserve determination and conversion rates.

Regulatory Contingencies: Closing is contingent upon acceptance by the Toronto Stock Exchange and other third-party consents.

Investor Verification Checklist

• Verify the execution of definitive agreements and receipt of all regulatory approvals required for the March 15, 2006 closing.
• Confirm the availability of the independent National Instrument 43-101 technical report on the Yauliyacu mine (expected within 45 days on www.sedar.com).
• Monitor the company's ability to secure the US$125 million in bank debt as planned.
• Review the "Risk Factors" section in the company's Form 40-F for detailed disclosures on international operations and lack of operational control.
• Track the actual production volumes from Yauliyacu to ensure they meet the 4.75 million ounce annual threshold to avoid volume shortfalls.