Streams of Gold
The past several months have been challenging for those investing in precious metals.
Currently, silver trades near $68/oz, while gold is at $4,415.
Had these figures been shared with me a year ago, I would have celebrated. Yet today, they feel underwhelming.
I don’t believe a grand scheme is influencing the markets. Rather, prices surged too rapidly, and now that volatility is here, a correction is underway.
A friend shared a meme that perfectly captures this scenario.
On the left: gold at its record $4,400 peak in December 2025.
On the right: gold priced at $4,400 today.
Identical cost, yet a shift in outlook.
Nonetheless, my belief in the long-term bullish outlook remains unshaken. A looming global debt crisis is intensifying.
Inflation is rising, and the longer the Strait of Hormuz remains closed, the worse conditions will become.
As conflict expands and power dynamics shift towards a multipolar world, the geopolitical landscape is stirring in ways unseen for decades.
Currency and trade battles rage on, exactly as our colleague Jim Rickards has long warned.
This is still a gold and silver world. We just got a bit ahead of ourselves.
This moment calls for patience or preparing to purchase. I’m holding more cash than usual and finalizing my buying list.
Given the elevated oil prices, I’m not currently adding to miners (I already have significant holdings there).
There is an alternative to gain leveraged exposure to gold and silver prices with less sensitivity to fuel costs.
That alternative is investing in precious metal streaming companies.
The Streaming Model
Mining offers profitable opportunities, though the initial costs are steep—acquiring land rights, permits, drilling, and infrastructure development.
Mining firms can raise capital in various ways, one being the sale of “streams.” Essentially, they trade a portion of future metal production for immediate cash.
Consider a concrete example.
Vale (VALE), the Brazilian mining powerhouse we’ve mentioned before, primarily extracts iron, copper, and nickel.
Mining these base metals inevitably yields some gold and silver.
For Vale, precious metals represent secondary outputs. Thus, they sometimes sell their gold and silver rights to streaming companies, offsetting initial mine construction expenses.
In 2013, Wheaton Precious Metals (WPM) acquired rights to 75% of the gold output from Vale’s vast Salobo copper mine for $3.4 billion.
Part of Vale’s giant Salobo copper and gold mine
In return for the $3.4 billion investment, Wheaton purchases 75% of the gold produced at $429 per ounce.
In Q4 2025, the Salobo mine yielded 88,900 ounces of gold, which Wheaton bought at $429 per ounce and sold near $4,000.
By a rough estimate, this single streaming deal generated $266 million in profit for WPM in the final quarter of 2025 alone!
This business model is highly effective when managed properly. The Salobo mine’s operation could extend 30 more years, meaning Wheaton will continue to reap considerable rewards from its gold stream.
Wheaton holds precious metal streams across numerous projects—some where gold and silver are the main resources, and others where they serve as byproducts. Here’s a visual representation:
Source: WPM
Oil and Overhead Costs
When oil prices soar, the profit margins of gold and silver miners tend to shrink.
Before the conflict in Iran, owning miners was a prime opportunity—cheap oil and high metal prices made for excellent conditions.
With oil expenses climbing, I’m considering shifting some of my investments toward streaming and royalty firms.
Wheaton Precious Metals (WPM) is the premier streaming company. Its exposure to oil prices is minimal (though extremely high oil prices might affect mining operations linked to their assets).
In Q4 2025, Wheaton reported $865 million in revenue and $765 million in operating cash flow, reflecting strong margins.
The company’s shares have dropped roughly 27% from their recent peak.
I haven’t purchased WPM stock yet but plan to start soon, gradually reallocating some of my mining holdings towards it to take advantage of possible further declines.
Should a broad market downturn occur, Wheaton will be a top candidate on my buying list. I want increased stakes in sound streaming assets, especially if oil remains high for an extended period.
Investing in a quality streaming company like WPM offers significant leverage to gold and silver prices, with reduced sensitivity to rising fuel costs.
How long oil stays expensive is uncertain, but the elevated levels might persist longer than many predict.
I still believe in miners and their growth potential. However, I’m also seeking to diversify by adding some streaming company exposure.
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