Why do you think the royalty and streaming model has been so successful in the last decade?

Streaming has developed as a strong and trustworthy source of capital for the mining industry. The mining industry perpetually needs capital, and it needs to reinvest into itself consistently because resources do not last forever. The streaming industry is a source of this capital, and we compare favorably against equity and other traditional forms of finance. Having this in place can often dramatically affect the returns on projects; streaming always improves a project’s economics and the return on invested capital. By taking a non-core value and reinvesting it into a core franchise, a company can continue to grow and that is exactly what streaming delivers.

What were the reasons for rebranding from Silver Wheaton to Wheaton Precious Metals in 2017?

In 2013 we decided to move into the gold space by making two investments and have since expanded by moving into cobalt. We realized that the name Silver Wheaton did not cover all that we offered, and changing our name to Wheaton Precious Metals represented our evolution from a pure silver streaming company to a diversified precious metals streaming company.

Which of Wheaton’s streams and royalties have been standout performers in recent years?

Vale’s Salobo mine is our flagship property; it is the largest copper deposit ever discovered in Brazil with incredible potential. It is a deposit with high operating and profit margins, with Wheaton’s consolidated production figures expected to average 180,000 oz per year over the first 30 years. Glencore’s Antamina polymetallic mine in Peru is also an incredible asset with a very long life and low cost. Goldcorp’s Peñasquito mine has had a few tough years, but has started to turn the corner, and we are seeing some good grades. The Stillwater mine, Wheaton’s acquisition last year, is the only U.S.-based mine for platinum group metals (PGMs) and the largest primary producer of PGMs outside of South Africa and Russia.

What do you look for when analyzing projects?

The key driver that makes us want to invest in an asset is its profitability for our partners as well – it has to be an asset that falls into the lower part of the cost curve. We recognize that we work in an industry that suffers from cyclical commodity pricing, and if a mine falls in the bottom half of the cost curve, it is unlikely to shut down due to low prices and more likely to continue production. This is important because we want to make sure we receive metals continuously. It is also important that partners want to reinvest into the projects.

Considering Wheaton Precious Metals does not operate any mines, why does the company have a strong CSR focus?

I have operated gold mines in Canada and therefore recognize the importance of having the social license; when you work in a community, you need to make sure you deliver a sustainable and positive effect to that community long after the mine has closed. One of the first initiatives I introduced in my role was Wheaton’s CSR program. We approach the site managers at the mines to understand the programs they have in place, and then provide the ability to double the capacity of these programs. I believe that if you are benefiting from the minerals being extracted, you need to make sure you are giving back to those communities.

At what stage of the mining cycle do you believe the industry currently sits?

There seems to be three phases to every mining cycle: the development phase, where prices go up and people invest and buy assets; the harvest phase, where commodity prices are high and there is a lot of equity available; and the balance sheet preparation phase, where those who invested in peak cycle are sourcing capital to bring debt levels down. We could say the balance sheet preparation phase was from 2013-2018, and now in 2019 we are seeing commodity prices increase and more market optimism for growth.

Do you have a final message for the readers of Global Business Reports?

From an investor’s perspective, Wheaton Precious Metals has taken a lot of the risk out of a traditional mining investment, yet still delivers all the rewards. We have growth, yield and leverage, and deliver so much more at an attractive valuation. From an investment perspective, I believe that the streaming model really is the best way to invest into the precious metals industry, offering the lowest risk and highest return.

To operators and potential partners, you must never forget that the ultimate goal is to deliver the maximum return on the invested capital, and I do not know of another financing mechanism that delivers as positive of an impact on the investment front. Streaming allows us to take away the production risk and be an equity partner, yet we contribute more than joint ventures.