Two days ago, just two days ago, I discussed the $20 level representing the round, whole, psychologically level that silver price continues to battle with. Now I thought in the next few days / weeks price would consolidate around the $20 level and if and when price breached and closed above the $20, it could be off to the races with price potentially getting to the $50 level.
Well, price closed above the $20 level yesterday. Silver prices haven’t been this higher since 2016. Silver, just came off its best quarter since 2010 and continues to get bid up due to supply and currently riding the coattails of gold. The other day, I talked about a pure way to play silver in First Majestic.
Today, I want to talk about Wheaton Precious Metals Corp. which is a mining company, primarily selling precious metals in Canada and internationally. The company sells silver and gold ores. What’s unique about Wheaton is it’s a silver streaming company. Silver streaming is the term often used when a company makes an agreement with a mining company to purchase all or part of their silver production at a low, fixed, predetermined price to which both parties agree. Thus, Wheaton doesn't have the associated overhead cost like a mining company.
Wheaton is one of the biggest silver streaming businesses in the world, but in recent years, Wheaton's gold sales are surged because it struck more deals with gold miners than with silver producers. However, that’s about to change over the next 12 months.
Mining companies may raise as much as $3 billion by selling a share of future output in so-called streaming deals, according to the head of Wheaton Precious Metals Corp.
The Vancouver-based company itself is “very active” on a couple of potential deals, including one valued at $1 billion that it expects will be awarded in the next few months, Smallwood said.
“I had a really crazy February and March where I was basically around the world twice in a four-week period,” he said. “Any time there’s a bit of financial stress in the industry it always opens up financial opportunities for us.”
Wheaton is eyeing another potential deal that could approach $1 billion, which Smallwood expects will be struck late this year or early next year. On top of those two larger prospects, he said there are at least three other potential streams in the $300-$500 million range, in addition to some smaller gold, silver or platinum-group metals streams that may be sold.
So as silver goes…up,
Wheaton goes…up as well as the chart suggests Wheaton will mesh the previous all-time high from 2011.
This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.
