VALUATION HIGHLIGHTS

1. Gold Streams (Sudbury Mines, Salobo Mine, Other Gold Streams, San Dimas Mine - Gold) constitute 62% of the Trefis price estimate for Wheaton Precious Metals's stock.
2. Silver Streams (Antamine Mine, San Dimas Mine, Penasquito Mine, Constancia Mine, Other Silver Streams) constitute 36% of the Trefis price estimate for Wheaton Precious Metals's stock.

WHAT HAS CHANGED?

1. Q3 2024 Earnings
   • Wheaton Precious Metals posted a healthy set of Q3 2024 results. While adjusted earnings came in at $0.56 per share, revenue rose 38% year-over-year to $308 million. The company benefited from higher price realizations as well as higher volumes.

2. Rising gold prices
   • Gold prices have risen from levels of under $1,850 in October 2023 to levels of over $2,500 as of early October 2024. The yellow metal is benefiting from easing global inflation, geopolitical headwinds as well as expectations that the U.S. Fed could cut interest rates multiple times this year.

POTENTIAL UPSIDE & DOWNSIDE TO TREFIS PRICE

Below are key drivers of Wheaton Precious Metals Corp.'s value that present opportunities for upside or downside to the current Trefis price estimate for Wheaton Precious Metals Corp.:

Silver and gold prices

• Average Realized Price Per Ounce: Precious metals are viewed as safe-haven assets from an investment point of view. Investments in these metals are primarily made from the point of view of hedging against macroeconomic and geopolitical uncertainty. Thus, any unforeseen disruption such as a sudden outburst of the uncertainty prevailing in the Korean peninsula or the continued uncertainty about U.S.-China trade relations leads to a surge in the investment demand for precious metals and, consequently, the prices of these commodities. If such a macroeconomic/geopolitical disruption materializes and prices rise by 5% relative to our current estimates by the end of the forecast period (accompanied by a 100 basis point increase in margins), it would result in an upside of around 6% to our price estimate.

BUSINESS SUMMARY

Wheaton Precious Metals Corporation is the world's largest silver streaming company. The company currently has fourteen silver purchase agreements and two precious metals agreements. In exchange for an upfront payment, it has the right to purchase all or a portion of the silver production at a low fixed cost from high-quality mines located in politically stable regions.

Based on the 2020 report, attributable production totaled 22,892 ounces of silver, 22,187 ounces of palladium, and 367,419 ounces of gold.

We have divided the company into ten divisions based on its current streaming contracts.

SOURCES OF VALUE

Salobo mine is the most valuable division

The Salobo mine consists of Wheaton Precious Metals Corp.'s 75% interest in the gold by-product produced from Vale's Salobo copper mine, located in Brazil. The signing of a streaming agreement for an additional 25% of the life of mine gold production from the Salobo mine in August 2016, over and above the pre-existing agreement for 50% life of mine gold production, has significantly boosted the division's shipments. The sharp rise in shipments will drive the value of this division.

KEY TRENDS

Fixed rate contracts provide some visibility

Wheaton Precious Metals Corp.'s business model is to provide some of the necessary capital to other mining companies via an upfront payment to assist in the construction of mines. In return, the company gets a portion of the silver or gold produced as a by-product for a specified period (generally the life of the mine) at a fixed cost. Most companies assisted by Wheaton Precious Metals Corp. produce silver as a by-product of their mining operations. Accordingly, it is a mutually beneficial arrangement for the participating companies.

On average, Wheaton Precious Metals Corp. pays about $4-6 per ounce of silver procured from the mining companies. This fixed price is subject to change based on inflationary factors. The company does not have to pay for any additional development costs for any projects after the initial payment. Wheaton Precious Metals Corp. sells silver at spot market prices and does not hedge.

Rising demand from emerging markets

China is the world's largest consumer of precious metals. There is robust growth in demand for precious metals. The growing demand from increasingly affluent middle classes in emerging economies, such as China and India, will support prices of precious metals in the medium to long term.