Wheaton Precious Metals Corp (WPM)

[OTCRIDER]

Silver Wheaton’s unique business model

Every day it seems a major mining company announces a production cut due to unforeseen issues. Silver Wheaton doesn’t have those operational risks. The company isn’t a miner; it simply provides upfront money to mining companies to help them get base metal mines into production. In return for the cash infusion, Silver Wheaton secures the right to purchase gold and silver by-product at very low prices.

How low?

In the company’s Q2 2015 earnings statement Silver Wheaton said it paid an average US$4.26 per ounce for its silver and just US$395 per ounce for its gold supply. Gold and silver spot prices have been under pressure this year, but Silver Wheaton still enjoys strong margins.

Could the stock double?

The shares have come down so far that any pop in the price of silver will light a fire under the stock. If precious metals move higher through next year, Silver Wheaton could easily see a 100% gain from current levels.

There is no guarantee that will happen, but the long-term outlook is still attractive and the downside risks are probably limited at this point.


http://www.fool.ca/2015/09/11/could-silver-wheaton-corp-double-in-the-next-12-months/