Wheaton expands into Europe with LSE listing

Wheaton Precious Metals has a life-long gold streaming deal with Vale over its Salobo mine. Credit: Ricardo Teles/Vale S.A.)

Wheaton Precious Metals (TSX: WPM; NYSE; WPM; LSE: WPM), one of the world’s largest gold and silver streaming companies, began trading on the main market of the London Stock Exchange (LSE) on Oct. 28.

The Vancouver-based company will maintain its primary listing on the Toronto Stock and a listing on the New York Stock Exchange, Randy Smallwood, Wheaton’s president and chief executive, said in an interview.

“We’re a Canadian company, so we’re not moving anywhere. We’re just expanding,” he said. “For us, a listing on the LSE is the next step in becoming a truly global company.”

The company, he added, is not seeking to raise money from the listing but is looking to expand its investor base in Europe and, in particular, the United Kingdom.

The move makes Wheaton the largest metals and mining company to join the exchange since Glencore (LSE: GLEN) in 2011.

“One of the appeals of listing on the LSE is there that there aren’t many precious metal mining companies on the exchange, especially on the streaming side,” Smallwood said. “We offer a much lower risk alternative to miners that will attract generalist investors, and our business model offers a unique opportunity to gain exposure to precious metals through a diversified portfolio of high-quality, low-cost assets.”

The company generates its revenue primarily from the sale of precious metals by entering into agreements to purchase all, or a portion, of the precious metals produced from mines for an upfront payment and an additional payment upon the metals’ delivery.

Wheaton has purchase agreements with 17 mining companies, including Barrick Gold (TSX: ABX; NYSE: GOLD), Vale (NYSE: VALE), and Glencore, relating to 20 producing mines, and nine which are at various stages of development, located across 11 countries.

Smallwood said the company has been considering a listing on the LSE for the past couple of years and spent the past year weighing up the benefits of registering on the exchange.

“A large portion of funds based in the UK have restrictions on them in terms of how much they are allowed to invest out of the country,” he said. “We already had a pretty good investor base with about 15% to 20% of our stock typically held by mainly UK-based funds, but after speaking with a number of them it was clear there was an appetite for making it easier to own stock in Wheaton.”

The company is currently reviewing about a dozen different projects as potential acquisitions, Smallwood said, particularly in the base metal sector.

In light of the high prices for precious metals, he noted, precious metal companies have strong balance sheets. However, base metal companies that are now looking to generate value from non-core precious metals present the biggest opportunities for Wheaton.

“Our business is to supply capital to the mining industry, and we’re blessed with the fact that the industry always needs capital,” he said. “Right now, we are looking at companies with copper, lead-zinc, and nickel assets to purchase gold and silver offtakes from them.”

At press time in Toronto, Wheaton was trading at $59.02 per share within a 52-week trading range of $26.99 and $76.69.

The company has 449 million common shares outstanding for a $26.5-billion market capitalization.


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