TORONTO (miningweekly.com) – The world’s largest precious metals streaming firm Silver Wheaton this week said that declining precious metals prices had eroded its first-quarter profit, despite lifting output.

For the three months ended March 31, Vancouver-based Silver Wheaton reported net earnings of $79.8-million, or $0.22 a share, 40% down on the $133.4-million, or $0.38 a share, the firm recorded a year earlier.

Net cash flow from operations declined 31% to $114.8-million, or $0.32 a share, also hit by declining metals prices.

The company, which assists with financing mining projects in return for the right to buy precious metals at set discounted prices, reported an 8% year-on-year rise in silver-equivalent output to nine-million ounces, comprising 6.9-million ounces of silver and 33 800 oz of gold.

Despite Silver Wheaton’s attributable silver equivalent sales volume in the period rising by 17% to 8.1-million ounces, comprising 6.2-million ounces of silver and 30 100 oz of gold, revenue contracted by 20% to $165.4-million, as a 31% decrease in the average realised silver-equivalent price, from $29.72/oz in the first quarter of 2013, down to $20.38/oz, hit hard.

As at the end of the quarter, Silver Wheaton had about $82-million in cash on hand, which combined with the relatively strong operating cash flows, and with the credit available under the company’s $1-billion revolving facility, positioned the company well to fund all outstanding commitments as well as provide flexibility to acquire additional precious metal stream interests.

“These numbers once again highlight one of the key strengths of our low-cost business model – that even in lower commodity price environments Silver Wheaton can generate some of the highest margins in the industry,” president and CEO Randy Smallwood said, adding that this was an exciting year for Silver Wheaton as some of its key mining assets were expected to expand and come on line.

During the first quarter, Primero Resources' San Dimas mine, in Mexico, completed an expansion from 2 150 t/d to 2 500 t/d, and the company expected the true impact of this expansion to be fully realised in 2015 and beyond.

Further, towards the end of the first quarter, Silver Wheaton made the final payment for the silver stream on Hudbay’s Constancia project, in Peru, where production is expected to start by the end of the year. Further, Vale’s Totten mine, in Sudbury, which started production in the first quarter, was now adding to the gold output the company was already receiving from five of Vale’s other mines in Sudbury.

Vale’s Salobo mine, in Brazil, continued to progress and remained on track to be commissioned in the middle of this year.

“All things considered, we see 2014 as a step forward for Silver Wheaton as these core assets continue to grow, adding significantly to our growth profile in 2015 and beyond.”

Based upon its current agreements, expected 2014 attributable production is about 36-million silver-equivalent ounces, including 155 000 oz of gold. By 2018, its yearly attributable output is expected to increase significantly to about 48-million silver-equivalent ounces, including 250 000 oz of gold.

At Friday noon, Silver Wheaton’s TSX-listed stock traded almost half-a-per-cent lower at C$23.46 apiece.