Streams of Gold

It’s been a frustrating few months for precious metal investors.

Silver is currently trading around $68/oz. Gold is at $4,415.

If you had told me these prices a year ago, I’d have been thrilled. But today it’s disappointing.

I don’t think there’s any grand conspiracy at play here. We simply went up too far, too fast. Now that volatility has arrived, we’re correcting.

A friend sent a meme which describes the situation well.

On the left: gold when it hit a new high of $4,400 in December, 2025.

On the right: gold at $4,400 today.

Same price, different perception.

However, I remain utterly confident in the long-term bull case. A global debt crisis still lies ahead. In fact, it is accelerating.

Inflation is picking up, and the longer the Strait of Hormuz stays closed, the worse it will get.

War is spreading. The world is becoming multipolar, meaning America is no longer the only superpower. The geopolitical chessboard is in motion like we haven’t seen in decades.

Currency and trade wars are raging, as our colleague Jim Rickards has long predicted.

This is still a gold and silver world. We just got a bit ahead of ourselves.

Now is a time to either sit tight, or make a shopping list. I’m sitting on a larger than normal amount of cash, so am working on my buy list.

With high oil prices, I’m not currently looking to add to miners (already have plenty of exposure there).

There is a way to get similar leverage to the price of gold and silver. But with less exposure to oil and fuel prices.

How? Precious metal streaming companies.

The Streaming Model

Mining can be lucrative, but getting started is expensive. You have to buy the rights to property, get permits, drill extensively, and build out the infrastructure.

A mining company can raise money in a few different ways. One of them is to sell “streams”. In essence, the company gives up some of its future precious metals in exchange for cash up front.

Let’s look at a real example.

Vale (VALE) is the Brazilian mining giant we’ve discussed a few times. They primarily mine iron, copper, and nickel.

But when you mine these base metals, there’s always some gold and silver too.

For Vale, precious metals are byproducts. So sometimes they will sell the rights to gold and silver to a streaming company. This lowers the upfront cost to build the mine.

In this case, Wheaton Precious Metals (WPM) bought the right to 75% of the gold produced at Vale’s massive Salobo copper mine for $3.4 billion in 2013.

Part of Vale’s giant Salobo copper and gold mine

In exchange for that $3.4 billion, Wheaton gets to buy 75% of the gold produced for $429 per ounce.

In the 4th quarter of 2025, the Salobo mine produced 88,900 ounces of gold which Wheaton bought at $429 per ounce, and sold for around $4,000.

By my rough calculation, this single streaming asset produced $266 million of profit for WPM in Q4 of 2025 alone!

It’s a beautiful business model when done right. And the Salobo copper mine could operate for another 30 years. As long as it’s operating, Wheaton will be collecting a big payday from its gold stream.

Wheaton owns precious metal streams on dozens of projects. Ones where gold and silver are primary assets, and ones where they are byproducts. Here’s a map:

Source: WPM

Oil and Overhead Costs

During periods of high oil prices, gold and silver miners’ profit margins decrease.

So before the Iran war, it was a GREAT time to own miners. Oil was cheap and bullion prices were high.

But with oil costs rising, I will be looking to shift some exposure into streaming and royalty companies.

Wheaton Precious Metals (WPM) is the gold standard streaming company. It has almost zero direct exposure to oil prices (though if oil gets high enough to slow mining at sites they have a streaming asset on, it could affect them).

In Q4 2025, Wheaton produced $865 million in revenue and $765 million in operating cash flow. Margins are high.

Wheaton shares are currently down about 27% from its recent high.

I haven’t bought any WPM yet, but plan to soon. I will likely shift some of my mining exposure into WPM, buying over time in case we go lower.

And if we get a broad market crash, Wheaton will be near the top of my shopping list. I need more exposure to quality streaming assets, in case oil stays higher for longer than we expect.

With a good streaming company like WPM, you get nice leverage to the price of gold and silver, but with less exposure to rising oil costs.

I don’t know how long oil prices will stay elevated. But it could be longer than most people expect.

I’m not giving up on miners. I still love the model and the potential upside. I’m simply looking to diversify into some streaming companies as well.