Wheaton Precious Metals is the largest pure streaming company in the world. The Company’s revenue is roughly evenly split between silver and gold sales. Wheaton has entered into 23 agreements with 16 operating partners, including Vale, Goldcorp and Glencore.
It is estimated that 70 percent of silver production comes as a by-product from base metal and gold mines. This characteristic, along with the Company’s bullish sentiment for long-term silver prices, was the basis for creating Vancouver-based Silver Wheaton in 2004. Starting in 2013, the Company started to see more opportunities in the market for by-product gold. By 2017, revenue was roughly evenly balanced between the two precious metals, forming the basis to change the Company’s name from Silver Wheaton to Wheaton Precious Metals. The new name, Wheaton Precious Metals, better aligns with the Company's diverse asset base of silver, gold, palladium and cobalt streams with a primary focus on precious metals.
Precious metal streaming agreements allow the Company to purchase generally by-product precious metals or cobalt production from a mine that it does not own or operate for an initial upfront payment plus an additional cash payment for each ounce or
pound delivered. Wheaton’s operating costs are contractually set at the time the stream is entered into, generally at or below the prevailing market price. This allows the company to stabilize operating costs and reduce downside risk. Other than the initial up-front payment, no additional capital expenditures or exploration costs are generally required. Yet, Wheaton benefits from the production and exploration growth of its operating partners.
Wheaton's low-risk business model, which was designed specifically to create long-term shareholder value, has a number of unique aspects. At its core are multi-year agreements to purchase all or a portion of the precious metals and cobalt production from high-quality mines in Mexico, Brazil, Peru, Chile, Argentina, Sweden, Greece, Portugal, Guyana, Canada and the United States. The company has predictable operating costs, no ongoing capital expenditures or exploration costs and no exchange rate risk. In addition, a large percentage of the company’s revenue is derived from low-cost and long-life mining operations and it does not sell forward its precious metals sales. All of this provides significant leverage to increases in the price precious metals and cobalt while mitigating the downside risks associated with traditional mining companies.