Wheaton Precious Metals: World's 5th Largest Silver Producer | Randy Smallwood and Jimmy Connor

Jimmy Connor Feb 16, 2026 36:33

Summary

Streaming separates mine investors from cost risk: the upfront payment and per-ounce production payment are fixed, capped at spot price.

Pascua Llama taught the streamer to demand parent guarantees, asset security, and open-ended compensation — and to refuse streaming political risk.

Most silver is a byproduct of lead-zinc mining, and with no new lead-zinc mines being built, supply stays structurally constrained.

The guest argues silver can reclaim its historical 30-to-40 gold ratio (how many silver ounces one gold ounce buys).

Gold streams now dominate new deals because miners see streaming as their cheapest capital, lifting Wheaton toward a million gold-equivalent ounces.

The guest calls Agnico Eagle the company that is still dominant in the Canadian gold space as foreign buyers absorb other Canadian producers.

The guest remains a believer in Barrick's Pascua Lama: Wheaton's 2009 stream paid $625 million for 25% of the silver at $3.90 an ounce plus a 1% inflation kicker, and the parent guarantee still lets Wheaton demand full repayment from Barrick at any time, yet Wheaton keeps the stream because of the ore body's potential.
Under its original production plan Pascua Lama was to produce about 40 million ounces of silver and 700,000 ounces of gold a year, implying close to 10 million silver ounces annually to Wheaton's 25% share; Barrick is refreshing that plan with the first mill line 90% built and the second 40%.
After permits were pulled in 2013, Wheaton collected about $375 million of compensation silver (nearly 2 million ounces a year) from Barrick's Veladero, Pierina and Lagunas Norte mines before the clause expired at the end of 2018, a finite-date mistake the guest says will not be repeated.
The guest notes Barrick continues trying to progress Pascua Lama even though the project sits outside Wheaton's current production schedule.
In the Canadian-industry discussion, the guest says Barrick still keeps a Toronto office but no longer holds Canadian assets.

The guest notes that Gold Corp, whose Mexican silver mine seeded Silver Wheaton and had contributed over $5 billion by 2009, is now part of Newmont.

The guest says Wheaton was the highest bidder on the Cobre Panama stream but walked away when no parent guarantee was offered, leaving Franco-Nevada to take that risk.
He adds that one of the largest streaming peers remains mired in the Panama situation as a result, the same deal Wheaton declined without a parent guarantee.

The guest says Wheaton is on a clear path to one million gold-equivalent ounces a year, now expected by 2029 instead of the 2031 target, helped by partner expansions and recent additions such as Hemlo and Spring Valley, with 50-60% growth projected over the next four years.
Wheaton is the world's fifth-largest silver producer (20-22 million ounces guided for 2025, a year the guest calls good), and its biggest off-schedule optionality is silver: Pascua Lama plus Navidad could add roughly 11-12 million ounces a year and make it one of the largest again.
The Zinkgruvan stream, $75 million paid in 2004 for 100% of the silver at about $3.90 an ounce plus 1% inflation (now roughly $4.50), has returned over $1 billion, still delivers about 2 million ounces a year, and keeps a decade-plus of reserves under new owner Boliden.
The guest argues silver's supply side is drying up because most silver is byproduct from lead-zinc mines that are not being built, and with the gold-silver ratio compressed to about 57 from near 100:1 he would not be surprised to see silver above $100 by the end of 2026.
The guest stresses Wheaton's multi-layer protection, security on the asset, limits on the operating subsidiary and parent guarantees, and says the company refuses to stream political risk, walking away as highest bidder on Cobre Panama when none was offered.

Top takeaway The guest is emphatically bullish on silver as of February 2026: he argues the supply side is drying up because most silver is lead-zinc byproduct and no new lead-zinc mines are being built, and he would not be surprised to see silver above $100 by the end of 2026 with the gold-silver ratio near 57.
He argues streaming is the most competitive source of mine financing because it values the metal independently of the seller's equity price, with fixed, capped per-ounce payments that take cost and inflation risk away from shareholders.
He is focused on growth, saying Wheaton will likely reach one million gold-equivalent ounces a year by 2029, years ahead of the 2031 target, on partner expansions and acquisitions such as Hemlo and Spring Valley.
He champions strict risk discipline learned from Pascua Lama: construction streams now key to mechanical completion, compensation clauses kept open-ended, and every deal backed by asset security, subsidiary limits and a parent guarantee, while refusing to stream political risk.
On Canada, he argues the country should build on its resource strength rather than chase manufacturing, faults Canadian pension funds for under-investing at home compared with Australia and Brazil, and opposes regulatory barriers in favor of letting strength grow organically.

Top takeaway The guest recalls Lukas Lundin, since deceased, reaching out within a week of Silver Wheaton's October 2004 listing to stream the silver from the Zinkgruvan mine he had just bought from Rio Tinto for $125 million.
Lundin took $50 million in cash plus $25 million in Silver Wheaton stock that roughly quadrupled during its six-month lockup, which the guest says effectively made the Zinkgruvan purchase free for him.

Top takeaway As host, Jimmy Connor steers the interview into jurisdictional risk, pressing for the Pascua Lama permit-loss story and for lessons from bad deals before the successes.
He frames Canada's shrinking roster of resource champions, noting INCO, Alcan and most recently Teck were taken over by foreign buyers, and closes by asking about Wheaton's Future of Mining Challenge.