Wheaton Precious Metals is the largest streaming company in the world. The Company’s revenue is roughly evenly split between silver and gold sales. Wheaton has entered into 22 agreements with fifteen 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 portfolio of both silver and gold assets.
Precious metal streaming agreements allow the Company to purchase, in exchange for an up-front payment, the by-product silver and/or gold production from a base or precious metal mine that it does not own or operate. Wheaton’s operating costs are contractually set at the time the stream is entered into. This allows the company to stabilize operating costs and reduce downside risk, while providing the upside of significant leverage to the price of silver and gold. 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, at a low predictable cost, all or a portion of the silver and/or gold production, from high-quality mines in Mexico, Chile, Argentina, Brazil, Peru, 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 silver sales. All of this provides significant leverage to increases in the price of silver and gold, while mitigating the downside risks associated with traditional mining companies.