Wheaton Precious Metals | Randy Smallwood and Jimmy Connor
Summary
Bloor Street Capital Inc. was paid a fee for producing this event. Bloor Street Capital Inc. and its affiliates may or may not hold …
Transcript
Randy, thank you very much for joining us today. How are things in Vancouver? >> Fantastic, Jimmy. Fantastic. Really uh really happy to be back on the show. >> And it really helps to see gold trading at all-time highs and silver also at all-time highs. >> Yeah, it's I mean it's something that uh that we've uh you know been we it's been a strong uptrend in precious metals for quite a while now and now we're really starting to see a you know a new a new setting, a new level. But uh I don't think we're anywhere near finished. >> That's good to hear. So let's get into it. And I want to start with the very basics. Wheat and Precious Metals is a financing company that provides financial solutions to mining companies. And it does this with streaming agreements. And I want to start right here with the basics. What is a streaming agreement and how is it compared to a royalty agreement? So a streaming agreement is a uh contractual partnership between uh an operating company and the streaming company and uh and and that agreement focuses on typically non-core uh byproduct precious metals production. Most of our production comes from copper mines and so uh just about every copper mine in the world produces a little bit of gold, a little bit of silver and so we focus on that gold and silver as a non-core byproduct. And we set up a contractual agreement with the operator where where for a lumpsum upfront uh capital payment, a big upfront payment, we will uh get the rights to a percentage of that precious metals production. Um and when that precious metals production is ultimately delivered to us, we also make a production payment that is typically about 20% of the spot price in the you know of the metal itself at the time that the metal is delivered. And so uh you know it's a it's a relatively simple I mean as we say the simplicity of a streaming agreement is sometimes confusing. Everyone thinks it's uh but really what we're doing is purchasing the right to a uh a portion of the metal production in the future. And for that uh we get a fixed price and and what that does for our shareholders is dramatically reduces uh if not totally gets rid of cost risk which is always one of the biggest challenges in is in in any resource investment. Uh the second part of the question how does it compare to royalties? Well, it's a lot better than royalties and and I would say that that's further reinforced by the fact that the traditional royalty companies are now most of their revenue now does come from streaming agreements. Um, I'll tell you why it's better. There's several several different factors. First off, you know, one of the big advantages is that upfront that upfront capital when we're buying a stream, that upfront capital that you pay is uh is only purchasing about 80% of that value because as I said, there is a downstream production payment of 20% of the spot price. And so when we're calculating the value of upfront payment, it's only about 80% of the value of the metal that you're acquiring. When you buy a royalty, you're actually paying for 100% of that uh of that metal because there is no downstream production payment when a royalty operates. And what that means is that we're much more effective with our capital. We we get over 20% more exposure on a per dollar basis with our invested dollar into a streaming agreement than what a royalty company would get buying into a royalty. And so having 20% more ounces on a on a per dollar basis uh makes makes streaming that much more attractive for the streaming company. Secondly, uh most of our agreements uh are funding growth and when they fund growth in construction, uh we drip feed the payments over that construction period. And what that does just by by by logic is it reduces the permitting risk because construction doesn't happen until permits are issued. And so uh whereas a royalty you have to pay for entirely upfront and then patiently wait on a development project until permits are in place and then construction commences, a stream typically drip feeds the uh the capital over a construction period which means much less produ permitting risk than what you'd have in a traditional royalty in a development scene. And then thirdly and and uh you know also important is is that um we have a production payment at the end you know so while the mine is up and operating we are paying 20% of the spot price typically what what that does is gives our shareholders leverage um we actually outperform we dramatically uh we get much more uh cash flow and leverage uh as commodity prices climb relative to either bullion or royalty where uh where there is no production payment and and you're just getting full exposure to the actual commodity price itself. This uh this is again another advantage of streaming. And so all of that adds up to streaming being you know the the new way to finance uh metals in the industry. And typically focused on precious metals. But also, you know, the other one of the advantages for a stream is that it focuses on a specific metal, a specific commodity, which allows us to be essentially pure precious metals versus a traditional royalty will typically take a slice of all the metal that's being produced at a mine, including the copper, the lead, the zinc, uh, etc. So, a lot of advantages over the streaming model. And, uh, we are 100% streaming, um, and 100% of our revenue. We do own a couple of royalties, but uh but they're nowhere near cash flowing and uh and so our focus is on continuing to grow the streaming database. >> Great overview and thank you for sharing that. Now, let's move on and discuss some of your more recent transactions and the first one was the Hemllo gold mine. This is in the province of Ontario. Hemllo Mining is the owner. Tell us about this deal and how will it benefit Weaten in the future. Well, Hemllo is a, you know, a longstanding history. Uh, you know, back when I first started in this industry, close to 40 years ago, he was was a market darling. It was a new discovery right beside the TransCanada Highway in uh northwestern Ontario. Uh, a lot of people didn't believe that you could find such a great gold mine right beside a national highway. Uh, the national highway that crosses through, the only national highway crosses through that part of Ontario. Uh but it has uh proven to be a long time very successful uh producer owned by Bareric originally and um uh Bob Cartmainer approached us probably about uh be 3 months ago and and said uh you know let's let's uh let's work together to try and move this project forward. Now Bob Bob of course has a long history of success in the industry. Uh numerous successful ventures in the space a good a good old school geologist who actually spent uh the early part of his career working at at Hemllo and uh and has a lot of history at the site itself. In fact during the due diligence he brought some of his old notebooks from from uh you know uh 25 30 years ago when he first started working at the mine and uh was comparing notes to how the place has progressed. So he knows the asset well. Uh it was a a strong due diligence uh trip uh owned by Beric and and I would say largely forgotten about by Bareric. It was a small producer in Bareric's empire. It was the last uh Canadian asset in in Bareric, last Canadian producing asset within Bareric and it uh you know its production levels it has definitely uh you know seen its peak in terms of production. Although I do think that there's a there's a good opportunity for a rebirth. And so uh you know Bareric ran that operation at about you know the in fact when we first started looking at it their reserve base was estimated at $1,400 gold. You know not the $4,200 gold that we see now but $1,400 you know less than a third of what the spot price is. And so we see a great opportunity there in terms of actually just refreshing the resource base. And in fact, our own studies uh had substantive growth just by pushing the price of gold up to 20 2100 20 2400. We we saw the potential for a mine life well in excess of 20 years and and not only that, a potential to ramp up production. There is mill capacity at the site. And so um so anyways, our our stream uh was $300 million and for that we'll get about uh close to 15,000 ounces a year. I actually think there's a good potential to see more than that uh over the next while as they uh start focusing on optimization. I think an asset like this well in fact history has shown that an asset like this put into a small company coming out of a major big diversified uh operator into a small focused company um you know always has uh unlocks some value in terms of efficiencies and uh and optimization truly. and uh and uh we've got a a workforce there that's really excited to take ownership of their asset again and continue to push this forward. So really excited about what this asset's going to deliver. >> So another deal I want to ask about is the Spring Valley project. This is a development project located in the state of Nevada. Water Gold is the owner. What were the details of this stream? >> Yeah, it's again another really exciting opportunity for us. It's our first major investment into the state of Nevada. And I think uh I like to say we uh we made this acquisition without having to pay a Nevada premium that we've seen so many of our peers pay. Uh which which I've never been able to figure out how to calculate what that Nevada premium is actually calculated. We got a really good deal here. Um the Waterton Group has owned this uh this asset for quite a while uh and uh and decided to move it forward. The address is is is a great address. It's immediately north of uh Kors's Rochester mine and and south of the the Florida Canyon mine. And so definitely a mineralized trend that passes right through this property. It's a large property that has been uh you know seen minimal work on it. It's got a it's got a a reasonable resource in in the Spring Valley deposit right now. It's a simple Nevada heat leach. Pick it up, you know, blast it uh pick it up, haul it over. Uh depending on the price of gold at the time, you can decide to whether put it onto the run of mine heap leech pile or put it into the waste dump. And uh my belief is that we're going to see a lot more material. Most of the resource was done at 2,000 I think it was $1,800 or $1,900 gold for reserves and uh just a little bit over 2,000 for for uh resources. uh when we uh push the price up closer to you know reality to what the spot price is today the entire drill hole database disappears into an open pit which means it's dramatically under drilled it has incredible potential we've we've looked at Rochester to the south which is continuing just phased into another expansion that mine has been operating for well over 50 years same with Florida Canyon to the north and I and I just think this is an address that uh with continued reinvestment will be a long-term producer for us nice simple Nevada heap leech and uh and again we're expecting at least 25,000 ounces a year from this to be honest you know given given the fact that it's not production limited uh a run of mine heap leech is really just about you know being able to put the material onto the leech pad itself the only limitation is how fast can you build new heap leech pad which isn't really a limitation uh given that it wouldn't surprise me to see this asset delivering well over 30,000 ounces of gold a year to our credit and so again really excited about the partnership ship. This is the second uh transaction we did with the Waterton Group Mineral Park or Mineral Park of course just uh started up earlier this year and again you know one of the focuses and one of the differentiating factors that I think we have at Wheaten is that being a partner of preference uh Waterton called us up. It wasn't even a competitive process. We just uh ran through the Spring Valley process uh without having to go through an auction because uh they had faith in us being a fair and uh and uh you know equal partner in terms of uh trying to unlock value for all parties. And so uh it's a good example of why Weaten works. >> And Randy, the project is fully financed with 1.3 billion in committed capital. When will construction start? >> Construction's starting uh shortly. We expect to have production coming up by the end of 2027 probably uh or early early 2028. I would say by the end of 27 is is is possible because there's not as much uh there. One of the reasons they wanted to accelerate was they've already got a bunch of the equipment uh purchase contracts in place and so a lot of the mobile equipment is starting to get put together and delivered to site and uh and so we're expecting construction shortly. They uh they've got to work their way through a couple of last little local permits. game. You know, our money is drip fed over the construction period, so we don't have to pay until the construction starts. Uh but yeah, we expect it to start imminently. >> So, I want to get an update on one of your corner store flagship assets, and that's the Lobo. And this is the largest copper deposit in Brazil. Valet is the owner operator. There's been a major expansion going on there. So, maybe you can give us an update on how things are progressing. >> Yeah, it's it's a it's the gift that keeps on giving. Um, you know, uh, Slobo of course is, uh, has, I think, returned to its glory. We signed the original SLOBO contract back in 2013, and really from 2013 to 2020, that asset outperformed even our expectations. So rare in this industry. Um, had had a few challenges through COVID, a couple of years where it missed guidance and uh, and uh, you know, we all suffered as part of that. Uh and it was it was a combination of uh just a a breakdown in the preventative maintenance program that uh that kept the mine running it. So uh but Sean Usmar is the new uh CEO of Valet base metals. Uh he's capitalized on some previous efforts uh and has done a great job in terms of pushing this asset back up to to being the outperformer that it that it has a long history of being. And so uh to have a stream we get 75% of the gold from this uh this mine and to have a stream on this asset as a flagship is great. It's a valet which is a fantastic partner to have. It's Brazil a great country to invest into from a resource perspective and and then of course the Silo mine. Uh perhaps most exciting is that uh during the recent valet day uh uh investor day um they committed to um a a um coarse particle flotation process that should increase throughput capacity over the next four years by about 15%. Um, now it's going to mean some lower grade material going through, but it does mean ultimately, I would say, about 10% more gold production than what we were forecasting. And for an asset like that, that means an additional 25,000 ounces a year to our credit. Uh, the nice thing about the uh Slobo contract is that the uh the price is fixed. It's not a 20% of spot price. It is down in that 400 uh I think it's $430 or $450 an ounce range. And so uh very very high margin ounces and again it's as a flagship asset it just keeps getting better. We keep on trying to grow the company around it but Salobo grows as fast as we can add uh new assets to the portfolio and uh it's a great problem to have. So we talked about a number of your assets and why don't we talk about your growth profile. Now, production is expected to grow 40% by 2029. And this will take your gold equivalent ounces to 870,000 versus the range right now of 600 to 670,000. But what assets will be driving this growth over the next few years? >> Well, in fact, Jimmy, it's uh it's even better than that. Uh that that was the guidance that we came out back in February with. But what we have seen is with these record high gold and uh and silver prices uh dramatic acceleration of expansion plans from just about all of our partners. And so we're seeing just incredible uh drive for growth over the uh over the entire portfolio. Uh, and so I'm pleased to to to to uh to share with you that it looks to me like we will actually break through a million gold equivalent ounces by 2029, which is uh, you know, probably 60% growth instead of the 40% growth that we promised back in February. And and really some of that uh comes from as we already talked about Salobo uh by by 2029 we'll have another 15% of throughput capacity. uh Artemis Blackwater uh that project uh has just gone on to a continuous expansion uh plan. The original process there was three phases to that and it was going to be phase one, run it for a while, phase two, run it for a while, phase three. We weren't expecting phase 3 till 2032, 2033. It now looks like they'll be finished phase three expansion by 2028. And so we're going to see a dramatic uptick in production from uh from Artemis at Blackwater. Um the Plat Reef project uh Robert Freedelland it's finally started production as uh to quote Robert the baby mine which is only a million tons perom coming up the shaft has just started but their expectations are is to have that up to 10.7 million tons perom by 2029. Um that that's significantly faster. We had that again scheduled for 2033 2034 and uh but um Robert I think has realized that there's an excellent opportunity with platinum and palladium prices right now to get Plat Reef up and going at max capacity and so they are pushing hard to get to that production level by 2029. Uh you know a bunch of lesser expansions um uh but but definitely still contributing to it. uh Aerys Mining uh the Marmato deep zone. Uh shortly after we announced our guidance earlier this year, they came out and updated their throughput capacity for the new mill they're building by increasing throughput capacity by 25%. So we'll probably see 20 to 25% more gold production from Marmato than we were expected. um Montage at the Kone project. Uh first off, ahead of schedule. Looks like they'll actually be uh producing gold by the end of 2026, which is uh you know 3 to 6 months earlier than what we were forecasting or at least 3 months earlier than what we were forecasting. But not only that, they've actually found some much higher grade material on an ongoing expiration program where it looks like the grades may be as much as twice as high as what uh was originally forecast. And so if they can phase that in in the early years and bring that into the production profile, instead of the 60,000 ounces a year that we get that we get 20% of whatever gold is produced at that, it looks like that mine will now be producing well over 300,000 ounces, probably closer to 400,000 ounces a year. There's still a lot of work to do in that drilling, but uh but you know, as that gets phased in early, it's within kilometers of the existing mill. uh bringing that higher grade material in could dramatically bump up our production level from 30 to maybe even as high as 40 45,000 ounces a year from that uh from that asset and so or sorry 60 to 70 to 80,000 ounces a year because we do get 20% of whatever the production is at that site and so um you know everywhere we look a bunch of other smaller things Rio2 uh is doing really well at the Phoenix project uh Congreos taken over by Seamok bought from Lumina uh and Seamok has been in our office here just recently telling us how they expect to have that mine up and running by 2028. We didn't have that scheduled until 2032 2033. That's going to add another 15 to 20,000 ounces of production. Uh Elmo Silver Corp again advancing forward and looks like it's going to be pushing uh forward. Uh Santa Domingo with Capstone uh they've they've formed a partnership with Orion. Looks like they're going to be moving that project forward. And again, that was one we didn't have scheduled until the 2030s. And so all the way across the board, we just see dramatic uh um improvement in in in pushing forward production. Combine that with acquiring Spring Valley and Hemllo, and all of that adds up to over a million gold equivalent ounces a year by 2029, a 60% growth profile, by far the strongest uh growth profile. And and the bulk of that is in construction already. Um it's already being done. There's a couple of projects that are just waiting for that commitment. You know, we've got Copper World just waiting for that commitment, finishing off the feasibility. We'll be in construction by the end of this year. I would imagine Santa Domingo will be like that. Congreos is uh probably starting construction next year. All of these are good, solid projects that uh that have us very excited about our near-term. >> I want to talk about your revenue mix now. And many people might not know this, but Weaten was formerly known as Silver Weaten. So, a large percentage of your revenues comes from silver. What's the breakdown between silver and gold? >> Well, it uh I mean it has been about 35% but with silver outperforming gold the way it is, it may be jumping up to about 40% of the revenue. We do have healthy silver production. In fact, I was just looking at a database yesterday and uh I think we rank as about the fifth largest silver producer in the world. And so uh well over 20 million ounces of silver expected this year with silver outperforming gold the way it has and with stronger fundamentals behind silver. Uh you know who knows we may get back up to that uh 50% silver production and have some I've had a few people argue that we should go back to the name silver wheat. And we do have some good silver exposure coming down the pipe, but we but I I'll be honest, we see a lot more gold opportunities. We do silver and so so I don't think that'll ever happen. and I think we'll continue to grow more in the gold space. But we do have Mineral Park coming on stream uh strong silver producer. Rosemont or sorry copper world now it's called copper world with Hud Bay as a dominant silver producer. We have a bit of silver production coming in from uh from Blackwater and uh and uh and of course Elmo and uh and such and so uh so you know we do have some growth in the silver space but we have much more growth in the uh in the gold space. And so uh so even though silver is outperforming, I'm pretty confident that you know we'll we'll probably stay in that 35 to 40% range of uh of of total revenues from silver. So uh probably I would argue and you know I would argue by far the lowest cost base uh in the silver space and so uh being fifth largest in terms of gross production probably one of the most profitable silver companies in the in in the space. Randy, I want to move on now and just touch on your balance sheet. Uh what's your cash position and how will you allocate cash in the coming year? >> Well, at the end of Q3, we had about 1.2 billion cash on hand. Uh we are generating this year, we should clear over $2 billion in free cash flow. Uh and and as I said, with the growth profile that we've got, in four or five years, we'll be up over $3 billion a year in cash flow. So very very strong cash flow. the construction financings that we have over the next 5 years uh total up to somewhere around $2.7 billion. And so we we do have those commitments coming down, but that's the only commitment we have other than new acquisitions that we have in terms of going forward. And so uh that that all combined, in fact, sorry, we just paid the hemllo, so I think we're it's actually about 2.4 billion now because we just paid the $300 million hemllo stream. And so um the you know, we're in excellent excellent position. We also have a $2.5 billion revolver that's readily and immediately available for us uh if we ever need it. Uh I don't think we'll ever issue shares again because our preference is to use debt to uh to finance big growth. I am excited about the near term because I do think that there's some big copper builds coming and those copper builds, building copper mines, uh the potential for the non-core precious metals byproduct, the gold byproduct and even a bit of silver byproduct from those mines could result in multi-billion dollar streams. Uh we have seen streaming proposals go out in the 2.5 to3 billion range here of late on some of these large scale projects. And so so we've got a good strong balance sheet that I think is uh preparing itself for the for the age of multi-billion dollar streams which is uh not far down the road. Uh and so really excited about helping uh you know helping the the mining industry uh build big go big copper mines again by purchasing the the non-core precious metals byproduct from those mines through streaming agreements. our cost of capital is incredibly attractive and uh and when you look at the value that we deliver for that uh precious metal byproduct from those copper mines, it's really tough to ignore us as a financing mechanism to help get those mines built. So uh I'm really excited about that opportunity over the next few years. >> And do you think and so you're expecting more activity on the copper side, but is this because of where copper is and it's trading at or near all-time highs? Yeah, it's at at or near all-time highs, but I still think there's another leg up for copper. Uh when I look at the demand fundamentals, uh and then where supply is coming from, there is going to be a shortfall that's going to have to drive developments. And so I I do think that because most of these large scale copper projects are are 5 to 10 to 15 billion dollars in terms of builds or multi- you know, multi multi-billions of of dollars. um that it's going to take a good strong stable price platform for for companies to make the decision to commit that capital in terms of a build. And I just don't even though we're at near record highs, I I think it needs a little bit more. And so, uh give it a couple of years and I think we'll start to see those commitments coming down the pipe. >> Randy, as we wrap up, what can shareholders and investors expect in terms of news flow from Wheat and Precious Metals in the first half of 2026? >> Well, we're still very active on the corporate development front. still looking at a lot of new opportunities with record uh gold, silver and now copper prices. There's a lot of companies moving forward with either uh you know starting up new mines or expanding existing operations and typically that needs capital and so if there's outside capital needed uh we uh you know we'll be in there having a look at it to see and we are selective about how we invest um you know we are very very defensive we focus on good strong security and parent guarantees uh unlike some of our peers who take uh greater risks on that front our promise to our shareholders is very very low risk, very very profitable precious metals production, good strong growth in that space and uh and high quality asset base because we invest dominantly in the base metal space. They have uh we have extensive expansive reserves and resources and so uh um I always our objective at Weaten has always been to be the foundation investment in anyone's gold portfolio. Everyone should have some gold in their in their investment portfolio. Especially in today's world, today's uh times we're seeing lots of evidence that the sovereign wealth funds and the central banks of the world believe that it doesn't uh that doesn't end there. It should be at everyone's portfolio. 10 to 15% is probably at a a good minimum. Wheaten should be that foundation investment in there. Uh you know, we're we're never going to make you look bad. Our costs are limited. Our risks are limited. very very low risk, very very high margin precious metals production. That's what we're going to continue to deliver. >> Well, I always like to finish on a strong note and I think you just delivered there. So once again, I want to thank you very much for spending time with us today and sharing the Wheaten story and look forward to seeing you in 2026. >> Always enjoy it. Thank you.
Wheaton Precious Metals | Randy Smallwood and Jimmy Connor
Summary
Bloor Street Capital Inc. was paid a fee for producing this event. Bloor Street Capital Inc. and its affiliates may or may not hold …Transcript
Randy, thank you very much for joining us today. How are things in Vancouver? >> Fantastic, Jimmy. Fantastic. Really uh really happy to be back on the show. >> And it really helps to see gold trading at all-time highs and silver also at all-time highs. >> Yeah, it's I mean it's something that uh that we've uh you know been we it's been a strong uptrend in precious metals for quite a while now and now we're really starting to see a you know a new a new setting, a new level. But uh I don't think we're anywhere near finished. >> That's good to hear. So let's get into it. And I want to start with the very basics. Wheat and Precious Metals is a financing company that provides financial solutions to mining companies. And it does this with streaming agreements. And I want to start right here with the basics. What is a streaming agreement and how is it compared to a royalty agreement? So a streaming agreement is a uh contractual partnership between uh an operating company and the streaming company and uh and and that agreement focuses on typically non-core uh byproduct precious metals production. Most of our production comes from copper mines and so uh just about every copper mine in the world produces a little bit of gold, a little bit of silver and so we focus on that gold and silver as a non-core byproduct. And we set up a contractual agreement with the operator where where for a lumpsum upfront uh capital payment, a big upfront payment, we will uh get the rights to a percentage of that precious metals production. Um and when that precious metals production is ultimately delivered to us, we also make a production payment that is typically about 20% of the spot price in the you know of the metal itself at the time that the metal is delivered. And so uh you know it's a it's a relatively simple I mean as we say the simplicity of a streaming agreement is sometimes confusing. Everyone thinks it's uh but really what we're doing is purchasing the right to a uh a portion of the metal production in the future. And for that uh we get a fixed price and and what that does for our shareholders is dramatically reduces uh if not totally gets rid of cost risk which is always one of the biggest challenges in is in in any resource investment. Uh the second part of the question how does it compare to royalties? Well, it's a lot better than royalties and and I would say that that's further reinforced by the fact that the traditional royalty companies are now most of their revenue now does come from streaming agreements. Um, I'll tell you why it's better. There's several several different factors. First off, you know, one of the big advantages is that upfront that upfront capital when we're buying a stream, that upfront capital that you pay is uh is only purchasing about 80% of that value because as I said, there is a downstream production payment of 20% of the spot price. And so when we're calculating the value of upfront payment, it's only about 80% of the value of the metal that you're acquiring. When you buy a royalty, you're actually paying for 100% of that uh of that metal because there is no downstream production payment when a royalty operates. And what that means is that we're much more effective with our capital. We we get over 20% more exposure on a per dollar basis with our invested dollar into a streaming agreement than what a royalty company would get buying into a royalty. And so having 20% more ounces on a on a per dollar basis uh makes makes streaming that much more attractive for the streaming company. Secondly, uh most of our agreements uh are funding growth and when they fund growth in construction, uh we drip feed the payments over that construction period. And what that does just by by by logic is it reduces the permitting risk because construction doesn't happen until permits are issued. And so uh whereas a royalty you have to pay for entirely upfront and then patiently wait on a development project until permits are in place and then construction commences, a stream typically drip feeds the uh the capital over a construction period which means much less produ permitting risk than what you'd have in a traditional royalty in a development scene. And then thirdly and and uh you know also important is is that um we have a production payment at the end you know so while the mine is up and operating we are paying 20% of the spot price typically what what that does is gives our shareholders leverage um we actually outperform we dramatically uh we get much more uh cash flow and leverage uh as commodity prices climb relative to either bullion or royalty where uh where there is no production payment and and you're just getting full exposure to the actual commodity price itself. This uh this is again another advantage of streaming. And so all of that adds up to streaming being you know the the new way to finance uh metals in the industry. And typically focused on precious metals. But also, you know, the other one of the advantages for a stream is that it focuses on a specific metal, a specific commodity, which allows us to be essentially pure precious metals versus a traditional royalty will typically take a slice of all the metal that's being produced at a mine, including the copper, the lead, the zinc, uh, etc. So, a lot of advantages over the streaming model. And, uh, we are 100% streaming, um, and 100% of our revenue. We do own a couple of royalties, but uh but they're nowhere near cash flowing and uh and so our focus is on continuing to grow the streaming database. >> Great overview and thank you for sharing that. Now, let's move on and discuss some of your more recent transactions and the first one was the Hemllo gold mine. This is in the province of Ontario. Hemllo Mining is the owner. Tell us about this deal and how will it benefit Weaten in the future. Well, Hemllo is a, you know, a longstanding history. Uh, you know, back when I first started in this industry, close to 40 years ago, he was was a market darling. It was a new discovery right beside the TransCanada Highway in uh northwestern Ontario. Uh, a lot of people didn't believe that you could find such a great gold mine right beside a national highway. Uh, the national highway that crosses through, the only national highway crosses through that part of Ontario. Uh but it has uh proven to be a long time very successful uh producer owned by Bareric originally and um uh Bob Cartmainer approached us probably about uh be 3 months ago and and said uh you know let's let's uh let's work together to try and move this project forward. Now Bob Bob of course has a long history of success in the industry. Uh numerous successful ventures in the space a good a good old school geologist who actually spent uh the early part of his career working at at Hemllo and uh and has a lot of history at the site itself. In fact during the due diligence he brought some of his old notebooks from from uh you know uh 25 30 years ago when he first started working at the mine and uh was comparing notes to how the place has progressed. So he knows the asset well. Uh it was a a strong due diligence uh trip uh owned by Beric and and I would say largely forgotten about by Bareric. It was a small producer in Bareric's empire. It was the last uh Canadian asset in in Bareric, last Canadian producing asset within Bareric and it uh you know its production levels it has definitely uh you know seen its peak in terms of production. Although I do think that there's a there's a good opportunity for a rebirth. And so uh you know Bareric ran that operation at about you know the in fact when we first started looking at it their reserve base was estimated at $1,400 gold. You know not the $4,200 gold that we see now but $1,400 you know less than a third of what the spot price is. And so we see a great opportunity there in terms of actually just refreshing the resource base. And in fact, our own studies uh had substantive growth just by pushing the price of gold up to 20 2100 20 2400. We we saw the potential for a mine life well in excess of 20 years and and not only that, a potential to ramp up production. There is mill capacity at the site. And so um so anyways, our our stream uh was $300 million and for that we'll get about uh close to 15,000 ounces a year. I actually think there's a good potential to see more than that uh over the next while as they uh start focusing on optimization. I think an asset like this well in fact history has shown that an asset like this put into a small company coming out of a major big diversified uh operator into a small focused company um you know always has uh unlocks some value in terms of efficiencies and uh and optimization truly. and uh and uh we've got a a workforce there that's really excited to take ownership of their asset again and continue to push this forward. So really excited about what this asset's going to deliver. >> So another deal I want to ask about is the Spring Valley project. This is a development project located in the state of Nevada. Water Gold is the owner. What were the details of this stream? >> Yeah, it's again another really exciting opportunity for us. It's our first major investment into the state of Nevada. And I think uh I like to say we uh we made this acquisition without having to pay a Nevada premium that we've seen so many of our peers pay. Uh which which I've never been able to figure out how to calculate what that Nevada premium is actually calculated. We got a really good deal here. Um the Waterton Group has owned this uh this asset for quite a while uh and uh and decided to move it forward. The address is is is a great address. It's immediately north of uh Kors's Rochester mine and and south of the the Florida Canyon mine. And so definitely a mineralized trend that passes right through this property. It's a large property that has been uh you know seen minimal work on it. It's got a it's got a a reasonable resource in in the Spring Valley deposit right now. It's a simple Nevada heat leach. Pick it up, you know, blast it uh pick it up, haul it over. Uh depending on the price of gold at the time, you can decide to whether put it onto the run of mine heap leech pile or put it into the waste dump. And uh my belief is that we're going to see a lot more material. Most of the resource was done at 2,000 I think it was $1,800 or $1,900 gold for reserves and uh just a little bit over 2,000 for for uh resources. uh when we uh push the price up closer to you know reality to what the spot price is today the entire drill hole database disappears into an open pit which means it's dramatically under drilled it has incredible potential we've we've looked at Rochester to the south which is continuing just phased into another expansion that mine has been operating for well over 50 years same with Florida Canyon to the north and I and I just think this is an address that uh with continued reinvestment will be a long-term producer for us nice simple Nevada heap leech and uh and again we're expecting at least 25,000 ounces a year from this to be honest you know given given the fact that it's not production limited uh a run of mine heap leech is really just about you know being able to put the material onto the leech pad itself the only limitation is how fast can you build new heap leech pad which isn't really a limitation uh given that it wouldn't surprise me to see this asset delivering well over 30,000 ounces of gold a year to our credit and so again really excited about the partnership ship. This is the second uh transaction we did with the Waterton Group Mineral Park or Mineral Park of course just uh started up earlier this year and again you know one of the focuses and one of the differentiating factors that I think we have at Wheaten is that being a partner of preference uh Waterton called us up. It wasn't even a competitive process. We just uh ran through the Spring Valley process uh without having to go through an auction because uh they had faith in us being a fair and uh and uh you know equal partner in terms of uh trying to unlock value for all parties. And so uh it's a good example of why Weaten works. >> And Randy, the project is fully financed with 1.3 billion in committed capital. When will construction start? >> Construction's starting uh shortly. We expect to have production coming up by the end of 2027 probably uh or early early 2028. I would say by the end of 27 is is is possible because there's not as much uh there. One of the reasons they wanted to accelerate was they've already got a bunch of the equipment uh purchase contracts in place and so a lot of the mobile equipment is starting to get put together and delivered to site and uh and so we're expecting construction shortly. They uh they've got to work their way through a couple of last little local permits. game. You know, our money is drip fed over the construction period, so we don't have to pay until the construction starts. Uh but yeah, we expect it to start imminently. >> So, I want to get an update on one of your corner store flagship assets, and that's the Lobo. And this is the largest copper deposit in Brazil. Valet is the owner operator. There's been a major expansion going on there. So, maybe you can give us an update on how things are progressing. >> Yeah, it's it's a it's the gift that keeps on giving. Um, you know, uh, Slobo of course is, uh, has, I think, returned to its glory. We signed the original SLOBO contract back in 2013, and really from 2013 to 2020, that asset outperformed even our expectations. So rare in this industry. Um, had had a few challenges through COVID, a couple of years where it missed guidance and uh, and uh, you know, we all suffered as part of that. Uh and it was it was a combination of uh just a a breakdown in the preventative maintenance program that uh that kept the mine running it. So uh but Sean Usmar is the new uh CEO of Valet base metals. Uh he's capitalized on some previous efforts uh and has done a great job in terms of pushing this asset back up to to being the outperformer that it that it has a long history of being. And so uh to have a stream we get 75% of the gold from this uh this mine and to have a stream on this asset as a flagship is great. It's a valet which is a fantastic partner to have. It's Brazil a great country to invest into from a resource perspective and and then of course the Silo mine. Uh perhaps most exciting is that uh during the recent valet day uh uh investor day um they committed to um a a um coarse particle flotation process that should increase throughput capacity over the next four years by about 15%. Um, now it's going to mean some lower grade material going through, but it does mean ultimately, I would say, about 10% more gold production than what we were forecasting. And for an asset like that, that means an additional 25,000 ounces a year to our credit. Uh, the nice thing about the uh Slobo contract is that the uh the price is fixed. It's not a 20% of spot price. It is down in that 400 uh I think it's $430 or $450 an ounce range. And so uh very very high margin ounces and again it's as a flagship asset it just keeps getting better. We keep on trying to grow the company around it but Salobo grows as fast as we can add uh new assets to the portfolio and uh it's a great problem to have. So we talked about a number of your assets and why don't we talk about your growth profile. Now, production is expected to grow 40% by 2029. And this will take your gold equivalent ounces to 870,000 versus the range right now of 600 to 670,000. But what assets will be driving this growth over the next few years? >> Well, in fact, Jimmy, it's uh it's even better than that. Uh that that was the guidance that we came out back in February with. But what we have seen is with these record high gold and uh and silver prices uh dramatic acceleration of expansion plans from just about all of our partners. And so we're seeing just incredible uh drive for growth over the uh over the entire portfolio. Uh, and so I'm pleased to to to to uh to share with you that it looks to me like we will actually break through a million gold equivalent ounces by 2029, which is uh, you know, probably 60% growth instead of the 40% growth that we promised back in February. And and really some of that uh comes from as we already talked about Salobo uh by by 2029 we'll have another 15% of throughput capacity. uh Artemis Blackwater uh that project uh has just gone on to a continuous expansion uh plan. The original process there was three phases to that and it was going to be phase one, run it for a while, phase two, run it for a while, phase three. We weren't expecting phase 3 till 2032, 2033. It now looks like they'll be finished phase three expansion by 2028. And so we're going to see a dramatic uptick in production from uh from Artemis at Blackwater. Um the Plat Reef project uh Robert Freedelland it's finally started production as uh to quote Robert the baby mine which is only a million tons perom coming up the shaft has just started but their expectations are is to have that up to 10.7 million tons perom by 2029. Um that that's significantly faster. We had that again scheduled for 2033 2034 and uh but um Robert I think has realized that there's an excellent opportunity with platinum and palladium prices right now to get Plat Reef up and going at max capacity and so they are pushing hard to get to that production level by 2029. Uh you know a bunch of lesser expansions um uh but but definitely still contributing to it. uh Aerys Mining uh the Marmato deep zone. Uh shortly after we announced our guidance earlier this year, they came out and updated their throughput capacity for the new mill they're building by increasing throughput capacity by 25%. So we'll probably see 20 to 25% more gold production from Marmato than we were expected. um Montage at the Kone project. Uh first off, ahead of schedule. Looks like they'll actually be uh producing gold by the end of 2026, which is uh you know 3 to 6 months earlier than what we were forecasting or at least 3 months earlier than what we were forecasting. But not only that, they've actually found some much higher grade material on an ongoing expiration program where it looks like the grades may be as much as twice as high as what uh was originally forecast. And so if they can phase that in in the early years and bring that into the production profile, instead of the 60,000 ounces a year that we get that we get 20% of whatever gold is produced at that, it looks like that mine will now be producing well over 300,000 ounces, probably closer to 400,000 ounces a year. There's still a lot of work to do in that drilling, but uh but you know, as that gets phased in early, it's within kilometers of the existing mill. uh bringing that higher grade material in could dramatically bump up our production level from 30 to maybe even as high as 40 45,000 ounces a year from that uh from that asset and so or sorry 60 to 70 to 80,000 ounces a year because we do get 20% of whatever the production is at that site and so um you know everywhere we look a bunch of other smaller things Rio2 uh is doing really well at the Phoenix project uh Congreos taken over by Seamok bought from Lumina uh and Seamok has been in our office here just recently telling us how they expect to have that mine up and running by 2028. We didn't have that scheduled until 2032 2033. That's going to add another 15 to 20,000 ounces of production. Uh Elmo Silver Corp again advancing forward and looks like it's going to be pushing uh forward. Uh Santa Domingo with Capstone uh they've they've formed a partnership with Orion. Looks like they're going to be moving that project forward. And again, that was one we didn't have scheduled until the 2030s. And so all the way across the board, we just see dramatic uh um improvement in in in pushing forward production. Combine that with acquiring Spring Valley and Hemllo, and all of that adds up to over a million gold equivalent ounces a year by 2029, a 60% growth profile, by far the strongest uh growth profile. And and the bulk of that is in construction already. Um it's already being done. There's a couple of projects that are just waiting for that commitment. You know, we've got Copper World just waiting for that commitment, finishing off the feasibility. We'll be in construction by the end of this year. I would imagine Santa Domingo will be like that. Congreos is uh probably starting construction next year. All of these are good, solid projects that uh that have us very excited about our near-term. >> I want to talk about your revenue mix now. And many people might not know this, but Weaten was formerly known as Silver Weaten. So, a large percentage of your revenues comes from silver. What's the breakdown between silver and gold? >> Well, it uh I mean it has been about 35% but with silver outperforming gold the way it is, it may be jumping up to about 40% of the revenue. We do have healthy silver production. In fact, I was just looking at a database yesterday and uh I think we rank as about the fifth largest silver producer in the world. And so uh well over 20 million ounces of silver expected this year with silver outperforming gold the way it has and with stronger fundamentals behind silver. Uh you know who knows we may get back up to that uh 50% silver production and have some I've had a few people argue that we should go back to the name silver wheat. And we do have some good silver exposure coming down the pipe, but we but I I'll be honest, we see a lot more gold opportunities. We do silver and so so I don't think that'll ever happen. and I think we'll continue to grow more in the gold space. But we do have Mineral Park coming on stream uh strong silver producer. Rosemont or sorry copper world now it's called copper world with Hud Bay as a dominant silver producer. We have a bit of silver production coming in from uh from Blackwater and uh and uh and of course Elmo and uh and such and so uh so you know we do have some growth in the silver space but we have much more growth in the uh in the gold space. And so uh so even though silver is outperforming, I'm pretty confident that you know we'll we'll probably stay in that 35 to 40% range of uh of of total revenues from silver. So uh probably I would argue and you know I would argue by far the lowest cost base uh in the silver space and so uh being fifth largest in terms of gross production probably one of the most profitable silver companies in the in in the space. Randy, I want to move on now and just touch on your balance sheet. Uh what's your cash position and how will you allocate cash in the coming year? >> Well, at the end of Q3, we had about 1.2 billion cash on hand. Uh we are generating this year, we should clear over $2 billion in free cash flow. Uh and and as I said, with the growth profile that we've got, in four or five years, we'll be up over $3 billion a year in cash flow. So very very strong cash flow. the construction financings that we have over the next 5 years uh total up to somewhere around $2.7 billion. And so we we do have those commitments coming down, but that's the only commitment we have other than new acquisitions that we have in terms of going forward. And so uh that that all combined, in fact, sorry, we just paid the hemllo, so I think we're it's actually about 2.4 billion now because we just paid the $300 million hemllo stream. And so um the you know, we're in excellent excellent position. We also have a $2.5 billion revolver that's readily and immediately available for us uh if we ever need it. Uh I don't think we'll ever issue shares again because our preference is to use debt to uh to finance big growth. I am excited about the near term because I do think that there's some big copper builds coming and those copper builds, building copper mines, uh the potential for the non-core precious metals byproduct, the gold byproduct and even a bit of silver byproduct from those mines could result in multi-billion dollar streams. Uh we have seen streaming proposals go out in the 2.5 to3 billion range here of late on some of these large scale projects. And so so we've got a good strong balance sheet that I think is uh preparing itself for the for the age of multi-billion dollar streams which is uh not far down the road. Uh and so really excited about helping uh you know helping the the mining industry uh build big go big copper mines again by purchasing the the non-core precious metals byproduct from those mines through streaming agreements. our cost of capital is incredibly attractive and uh and when you look at the value that we deliver for that uh precious metal byproduct from those copper mines, it's really tough to ignore us as a financing mechanism to help get those mines built. So uh I'm really excited about that opportunity over the next few years. >> And do you think and so you're expecting more activity on the copper side, but is this because of where copper is and it's trading at or near all-time highs? Yeah, it's at at or near all-time highs, but I still think there's another leg up for copper. Uh when I look at the demand fundamentals, uh and then where supply is coming from, there is going to be a shortfall that's going to have to drive developments. And so I I do think that because most of these large scale copper projects are are 5 to 10 to 15 billion dollars in terms of builds or multi- you know, multi multi-billions of of dollars. um that it's going to take a good strong stable price platform for for companies to make the decision to commit that capital in terms of a build. And I just don't even though we're at near record highs, I I think it needs a little bit more. And so, uh give it a couple of years and I think we'll start to see those commitments coming down the pipe. >> Randy, as we wrap up, what can shareholders and investors expect in terms of news flow from Wheat and Precious Metals in the first half of 2026? >> Well, we're still very active on the corporate development front. still looking at a lot of new opportunities with record uh gold, silver and now copper prices. There's a lot of companies moving forward with either uh you know starting up new mines or expanding existing operations and typically that needs capital and so if there's outside capital needed uh we uh you know we'll be in there having a look at it to see and we are selective about how we invest um you know we are very very defensive we focus on good strong security and parent guarantees uh unlike some of our peers who take uh greater risks on that front our promise to our shareholders is very very low risk, very very profitable precious metals production, good strong growth in that space and uh and high quality asset base because we invest dominantly in the base metal space. They have uh we have extensive expansive reserves and resources and so uh um I always our objective at Weaten has always been to be the foundation investment in anyone's gold portfolio. Everyone should have some gold in their in their investment portfolio. Especially in today's world, today's uh times we're seeing lots of evidence that the sovereign wealth funds and the central banks of the world believe that it doesn't uh that doesn't end there. It should be at everyone's portfolio. 10 to 15% is probably at a a good minimum. Wheaten should be that foundation investment in there. Uh you know, we're we're never going to make you look bad. Our costs are limited. Our risks are limited. very very low risk, very very high margin precious metals production. That's what we're going to continue to deliver. >> Well, I always like to finish on a strong note and I think you just delivered there. So once again, I want to thank you very much for spending time with us today and sharing the Wheaten story and look forward to seeing you in 2026. >> Always enjoy it. Thank you.