Wheaton of­fers a golden op­por­tu­nity with plan to float in Lon­don

The Daily Telegraph - Business - - Business - By Rachel Mil­lard

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.

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