Silver Wheaton (SLW) is the world’s pre-eminent precious metals’ streaming company, with 24 streaming agreements. Since its creation and listing in 2004, it has recorded a 39.4% compound increase in silver sales pa, an 81.4% pa increase in earnings, a 55.4% pa increase in basic EPS and a 58.7% pa increase in operating cash flows. In particular, it offers exposure to exploration success and production expansion without exposure to cost inflation. It also pays a dividend, has geared exposure to precious metals prices and optionality provided by major projects such as Barrick’s Pascua-Lama. Despite this, Silver Wheaton trades on a rating that is uniformly cheaper than its royalty company contemporaries and is often little different to those of major mining companies, despite its having a materially lower risk profile.
In this programme, Edison’s head of mining, Charles Gibson discusses what Silver Wheaton actually does, the returns it makes and how if differs from other precious metals and mining investments, both in terms of the returns it offers to investors and its (generally significantly lower) risk profile.
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