Gold streaming took center stage at the Vancouver Resource Investment Conference last week as Randy Smallwood, president and CEO of Wheaton Precious Metals (TSX:WPM,NYSE:WPM), laid out why the model is drawing renewed investor attention amid today’s high gold and silver prices.
Speaking during a fireside chat, Smallwood positioned streaming as a lower-risk way for investors to gain exposure to precious metals at a time when rising commodities prices are amplifying cost pressures across the mining sector.
“From the investor’s perspective, streaming is a much lower-risk way of investing into the precious metal space,” he said.
Under a streaming agreement, companies like Wheaton provide upfront capital to mining operators in exchange for a percentage of future metal production, typically at a fixed cost per ounce. That structure, he said, shields streamers from many of the operational risks that weigh on traditional miners.
“One of the biggest failures in the mining industry is cost delivery — capital cost and operating cost,” Smallwood said. “When you’re investing into a streaming company, you take that risk out. Our costs are all defined in the contract.”
At current prices, that distinction has become more pronounced. Gold has been trading above US$5,000 per ounce, while silver recently pushed past US$100, levels that have reignited investor interest but also raised concerns about inflation in mining costs.
Smallwood said Wheaton’s model allows it to maintain high margins even in a higher-price environment, noting that the company’s average production payment last year was “probably $500 per gold equivalent ounce.”
“It’s a very good time to be in a streaming business,” he said.
Wheaton in particular is coming off a strong 2025. Smallwood said the company expects 2025 production to come in near the top of its previously guided range of 600,000 to 670,000 gold equivalent ounces, with cash costs slightly below US$500 per ounce. Updated guidance is expected mid-February.
The company has also been active on the deal front. In 2025, Wheaton committed roughly US$1 billion across several transactions, including investments in the Spring Valley project in Nevada and the Hemlo gold mine in Ontario.
The Hemlo transaction, finalized in November, illustrates how streaming fits into broader mine recapitalizations. As Barrick Mining (TSX:ABX,NYSE:B) exited the asset, Wheaton closed a previously announced gold stream with the mine’s new owner, providing US$300 million in upfront funding as part of a larger financing package.
How does streaming works?
Gold streaming and royalty agreements offer investors exposure to precious metals while limiting many of the operational risks faced by traditional mining companies.
Under a typical royalty agreement, a royalty company provides funding for the exploration or development of a project in exchange for a percentage of future revenue if the mine enters production.
Streaming arrangements are similar but differ in structure: instead of receiving revenue, streaming companies take delivery of a fixed portion of the metal produced, or retain the right to purchase that metal at a predetermined price well below market value.
These structures benefit both sides of the transaction. Mining companies gain access to substantial upfront capital during the costly construction or expansion phases of a project, without taking on debt or issuing equity at a discount.
Streaming and royalty companies, meanwhile, secure long-term exposure to gold and silver production at fixed costs, insulating them from cost overruns, operating inflation and many of the risks associated with mine ownership.
One of the most prominent examples is Franco-Nevada’s (TSX:FNV,NYSE:FNV) stream on Lundin Mining’s (TSX:LUN,OTCPL:LUNMF) Candelaria copper mine in Chile. As part of Lundin’s 2014 acquisition of Freeport-McMoRan’s (NYSE:FCX) stake in the asset, Franco-Nevada provided US$648 million in exchange for a majority stream of Candelaria’s gold and silver production, delivered at prices far below prevailing market levels.
Smallwood said the higher-price environment has also broadened the pipeline of potential streaming opportunities.
“The era of multi-billion-dollar streams is coming,” he said, pointing to major producers looking to crystallize value from precious-metal by-products to fund large capital programs in copper and other base metals.
Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.
