Executive Summary / Key Takeaways

• Wheaton Precious Metals ($WPM) stands as a premier precious metals streaming company, leveraging its asset-light model to deliver high-margin, low-risk exposure to gold and silver, underpinned by a robust organic growth pipeline and a fortress balance sheet.
• The company achieved record financial performance in Q1 and Q2 2025, with revenue reaching $503 million in Q2, driven by strong commodity prices and increased sales volumes, demonstrating the inherent leverage of its fixed per-ounce payment model.
• WPM projects an industry-leading 40% production growth by 2029, targeting 870,000 gold equivalent ounces (GEOs), fueled by the ramp-up of nine development projects, including the significant Koné and Blackwater mines.
• Strategic capital deployment, including innovative financing structures that blend streams with debt or equity, enhances returns and provides crucial support to mining partners, differentiating WPM in a competitive deal environment.
• Key risks include commodity price volatility and operational disruptions at partner mines, but WPM mitigates these through a diversified portfolio, contractual protections, and a strong focus on first and second quartile assets.

The Enduring Strength of the Streaming Model

Wheaton Precious Metals Corp. ($WPM), founded in 2004 as Silver Wheaton Corp., has meticulously built its reputation as a leading player in the precious metals streaming sector. Its core business model, an asset-light approach, involves providing upfront capital to mining companies in exchange for a fixed percentage of their future metal production at a predetermined, low cost. This strategy has proven to be a foundational strength, allowing WPM to offer investors direct exposure to precious metal prices while largely insulating it from the operational complexities and inflationary cost pressures inherent in traditional mining. The company's evolution, marked by its name change in 2017 to reflect a broader precious metals focus, underscores a strategic adaptability that has been central to its success.

WPM's competitive positioning is robust, characterized by its established presence and ability to secure significant deals. While direct quantitative market share figures for all niche competitors are not publicly detailed, WPM's scale and reputation suggest a substantial standing. The company's operational execution, driven by its focused expertise, allows it to compete effectively in deal-making and portfolio management. However, it faces challenges in achieving the same level of comprehensive diversification as larger rivals like Franco-Nevada Corporation (FNV), which boasts a wider array of commodities and geographies. Similarly, while WPM's financial resilience is strong, it may not always match the stability of Royal Gold, Inc. (RGLD), known for its conservative capital structure and focus on high-value royalty acquisitions.

The streaming model itself acts as WPM's primary technological differentiator, offering tangible and quantifiable benefits. By securing metal production at fixed, low costs, WPM effectively locks in margins, providing superior leverage to rising commodity prices. For instance, in Q2 2025, 85% of WPM's revenue was derived from fixed per-ounce production payments, allowing gains to outpace the increase in gold and silver prices during the same period. This model also significantly reduces capital intensity compared to traditional mining, freeing WPM from the direct costs and risks associated with mine development and operation. This strategic advantage translates into more robust growth by enabling WPM to fund projects with lower risk, potentially enhancing capital efficiency compared to traditional miners.

WPM actively fosters innovation within the broader mining industry through initiatives like its "Future of Mining Challenge." The second annual challenge, launched in 2025, focuses on advancing sustainable water management technologies, following the 2024 challenge which awarded Rethink Milling for its energy-saving grinding technology. These initiatives, while not directly tied to WPM's internal operational technology, strategically position the company as a leader in sustainable practices. This commitment enhances its competitive moat by attracting partners who prioritize ESG (Environmental, Social, and Governance) performance, potentially leading to more favorable deal terms and strengthening its market positioning as a responsible capital provider.

A Trajectory of Record Performance and Strategic Growth

Wheaton Precious Metals has demonstrated a compelling trajectory of financial and operational success, particularly in recent periods. The company delivered an "outstanding quarter" in Q2 2025, achieving "record revenue, adjusted net earnings and operating cash flow for both the second quarter and the first half of 2025". This performance underscores the effectiveness of its streaming business model in leveraging rising commodity prices while maintaining strong margins. In Q2 2025, revenue surged by 68% year-over-year to a record $503 million, driven by a 32% increase in commodity prices and a 28% increase in sales volumes. Adjusted net earnings reached a record $286 million, up 91% from the prior year, and operating cash flow increased 77% to $450 million. These gains significantly outpaced the rise in gold and silver prices, highlighting the inherent leverage from WPM's fixed per-ounce production payments, which constituted 85% of its revenue.

The first quarter of 2025 also set records, with revenue of $470 million, an increase of 59% year-over-year, and adjusted net earnings of $251 million. The gross margin in Q1 2025 expanded by 86% to $319 million, further demonstrating the model's ability to maintain strong cash operating margins. For the full year 2024, WPM achieved "record revenue, adjusted net earnings, and operating cash flows," with total revenue reaching $1.3 billion, a 26% increase from 2023. This consistent financial outperformance, even amidst persistent inflationary environments, reinforces WPM's "low and predictable costs" and its ability to generate "some of the highest margins in the entire precious metals space".

WPM's revenue composition in Q2 2025 was 65% from gold, 33% from silver, and the remainder from palladium and cobalt. This substantial silver exposure is a key differentiator, positioning the company to benefit from silver's recent outperformance, reaching its highest level in over a decade.

Operational Excellence and a Catalyst-Rich Future

WPM's operational performance in 2025 has been robust, with several key assets exceeding expectations. Salobo, a cornerstone asset, delivered "record quarterly production" in Q4 2024 and continued strong performance in Q1 and Q2 2025. The Salobo III expansion was fully ramped up by late July 2025, with the entire complex operating at full capacity. Attributable gold production from Salobo in Q2 2025 was 69,400 ounces, a 10% year-over-year increase, driven by higher throughput. Production is forecast to remain steady for the rest of 2025, supported by increased throughput across all three Salobo lines.

Antamina, a significant silver producer for WPM, saw attributable silver production increase by 31% year-over-year to 1.3 million ounces in Q2 2025, primarily due to higher silver grades from copper-zinc ore. Production is expected to increase in the second half of 2025 and continue through 2026 and 2027, benefiting from anticipated higher silver grades and throughput.

The year 2025 is proving to be "catalyst-rich" for WPM, with several development projects transitioning to production. Blackwater, owned by Artemis Gold (AGF), achieved its first gold and silver pour in January 2025 and announced commercial production in Q2 2025, with the mill operating above design capacity by June. Production from Blackwater is expected to be weighted towards the second half of the year as mill performance and feed grades improve. Artemis Gold is also fast-tracking the Phase 2 expansion, which could double production, with a Board investment decision expected later in 2025. The Goose project successfully delivered its first gold pour during Q2 2025. Mineral Park, Goose, Platreef, and Aljustrel are all forecast to commence production in the second half of 2025. Combined, these four new mines are estimated to contribute 20,000 to 25,000 GEOs in 2025, with full production not expected until mid-2026.

Looking ahead, WPM projects an "industry-leading rate of approximately 40% production growth" by 2029, reaching 870,000 GEOs. Attributable production is forecast to average over 950,000 GEOs from 2030 to 2034, incorporating additional incremental production from pre-development assets. This impressive growth profile is a direct result of WPM's strategic investments, including the $625 million gold stream on Montage Gold (MAG)'s Koné project, which is forecast to become WPM's second-largest gold-producing asset for its first five years of production. Koné is expected to begin delivering ounces in early 2027.

Financial Strength and Strategic Capital Deployment

Wheaton Precious Metals maintains a robust financial position, providing significant flexibility for its growth initiatives. The company ended Q2 2025 with over $1 billion in cash on hand and a fully undrawn $2 billion revolving credit facility, complemented by a $500 million accordion. This substantial liquidity is "the highest amount of liquidity compared to our peers" and positions WPM "exceptionally well to satisfy our funding commitments while retaining flexibility to acquire additional accretive streams".

WPM's capital deployment strategy is disciplined, focusing on "well-structured, accretive and high-quality streaming opportunities". In Q2 2025, upfront cash payments for streams totaled $347 million, including significant investments in Koné ($156 million), Salobo ($144 million), and Kurmuk ($44 million). An additional $156 million was paid to Koné subsequent to the quarter. The company's "solid war chest" and active deal pipeline, comprising 12 to 15 opportunities (two-thirds development stage, one-third operating, plus M&A), underscore its commitment to sustained growth. Most opportunities range from $100 million to $350 million, with a few larger deals between $750 million and $1 billion-plus.

WPM's approach to financing has evolved to include more diversified funding packages. The Koné transaction, for example, saw WPM supply the bulk of the financing, allowing Montage Gold to advance the project "without any project debt". This innovative structure, where WPM acts as a significant creditor, provides greater control in downside scenarios and positions WPM as a patient capital provider. While WPM will consider debt or equity components in financing, its core focus remains stream-dominant, ensuring that at least 80% of the value in such packages is derived from the stream itself. This strategy allows WPM to expand its high-quality streams, especially in environments with "lack of equity markets and the expensive debt that's out there".

The company's commitment to shareholder returns is evident in its progressive dividend policy. In 2024, WPM increased its quarterly dividend by 6.5%, and declared a $0.165 per share dividend for Q2 2025, also a 6.5% increase from Q2 2024. Since inception, WPM has returned over $2.3 billion in dividends, representing more than 60% of the equity ever raised. The growth rate of the dividend is directly tied to the effectiveness of capital deployment into accretive opportunities; if fewer such deals are found, a larger portion of cash flow may be returned to shareholders.

Risks and Competitive Dynamics

Despite its strengths, WPM faces several risks inherent to the mining and streaming sectors. Commodity price volatility remains a primary concern, though WPM's fixed-cost streaming model provides a degree of insulation. Operational disruptions at partner mines, such as the 31-day halt at Salobo in Q3 2024 due to a conveyor belt fire or the safety-related shutdown at Antamina in April 2025, can temporarily impact production. The placement of Stillwater West operations into care and maintenance due to low PGM prices is expected to reduce WPM's attributable production by 40-45% in 2025 compared to historical levels. Additionally, WPM recognized a $109 million impairment charge on its Voisey's Bay cobalt stream in Q4 2024 due to a "sustained decline in market cobalt prices".

The competitive landscape for streaming and royalty companies is "more competitive on terms". WPM distinguishes itself by focusing on "first and second quartile assets" and ensuring that its stream agreements do not overburden its partners, typically aiming to keep its economic take under 20-25% of an asset's value. This approach fosters healthy, long-term partnerships, which WPM views as crucial, stating, "if our operating partners aren't healthy, we're not". WPM's ability to act as a "supportive partner" through project start-ups and adjustments, as seen with Artemis Gold's Blackwater, has garnered attention from other developers seeking comprehensive financing solutions.

WPM generally avoids corporate consolidation, preferring to deploy capital into streaming agreements rather than acquiring companies that may come with "structural flaws and some weaknesses" in their existing streams. The company notes that other streaming companies often trade at premiums to net asset value (NAV), making direct acquisitions less accretive than securing new streams at or below NAV. Geographically, WPM is increasingly focusing on opportunities in "first world jurisdictions," primarily North and South America, rather than Africa, reflecting a careful assessment of political and community risk.

A new development is the Global Minimum Tax (GMT), with a $28 million expense recognized in Q3 2024. The GMT for 2024, estimated at $112 million, will be payable in Q2 or Q3 2026, and will be an annual, staggered payment thereafter.

Conclusion

Wheaton Precious Metals stands as a compelling investment in the precious metals space, distinguished by its robust streaming model, record-setting financial performance, and an impressive organic growth pipeline. The company's strategic focus on high-quality assets, disciplined capital deployment, and innovative financing structures positions it for continued expansion, with a projected 40% production growth by 2029. WPM's commitment to sustainability and its ability to act as a supportive partner further enhance its competitive moat. While commodity price volatility and operational risks at partner mines remain factors, WPM's diversified portfolio, contractual protections, and strong liquidity provide a resilient foundation. For discerning investors seeking leveraged exposure to precious metals with mitigated operational risk, WPM's blend of financial strength, strategic acumen, and a catalyst-rich future presents a highly attractive proposition.