Wheaton offers a golden opportunity with plan to float in London
ONE of the world’s largest precious metals companies is set to list in London, marking potentially the largest mining listing since Glencore’s blockbuster float in 2011.
Wheaton Precious Metals, valued at C$30bn (£18bn) on the Toronto stock exchange, will announce plans this morning for a secondary listing on the main market of the London Stock Exchange. The business, which also has a dual listing in New York, funds miners’ projects in return for rights over metals, providing an alternative source of funding rather than equity or debt.
It has long-term purchase agreements with 17 companies including Vale, Glencore and Sibanye-Stillwater. They cover assets including Vale’s Salobo mine, the largest copper deposit in Brazil, from which gold is a by-product; and Newmont Goldcorp’s Penasquito, Mexico’s largest gold mine.
Randy Smallwood, the president and chief executive, argues the streaming model provides less risky exposure to gold and silver compared to investing directly into a mining company.
He said: “We have an upfront payment, the capital cost, and then we have a production payment as the metal gets delivered. Those are known and forecastable. That’s the key difference between us and any other mining company. It’s a new investment model that has really taken off.
“We try to focus on finding the best mines; they are among the highestquality mines in the world.”
Canadian mining businesses have increasingly been eyeing listings in London in recent years, given its wellestablished base of mining investors. Wheaton’s shares on the Toronto stock exchange have climbed 74pc this year, from C$38.59 to C$67.53.
Wheaton pays 30pc of average quarterly operating cash flows out in dividends, and Mr Smallwood said he expected this proportion to rise as part of a “gradual transition from a growthfocused into a yield-focused company”. As well as gold and silver, Wheaton has a relatively small interest in palladium, and in cobalt through Vale’s Voisey’s Bay mine in Canada.
But Mr Smallwood said he did not expect cobalt to be a growth area for the company, despite its use in electric car batteries. “We are focused on the traditional precious metals,” he said. “We are pretty sensitive to political risk.”
Wheaton intends to list in London before the end of the year.