Silver Lining? A (Slightly Anxious) Investor’s Log

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Right. So, silver. It was the thing, wasn’t it? Everyone piling in, convinced it was going to solve all their problems. Honestly, the frenzy was a bit much. It shot up, naturally, from a reasonable-ish $70 to over $110. Inflation, government policy…the usual suspects. Then Trump nominated Warsh for the Fed Chair, and suddenly, it all felt…wobbly. Down it came, to the low $80s. Still, a long way from the truly depressing lows of last year. It’s all a bit…emotional, isn’t it? Like dating.

Which brings me to Wheaton Precious Metals (WPM 0.13%). I’ve been looking at it. Trying to be rational. It’s not exactly sexy, precious metals investing, but it’s…solid. And frankly, after the cryptocurrency debacle (Units of Cryptocurrency Lost: 12. Hours Spent Watching Charts: 9. Number of Panicked Texts to Friends: 24.), I need solid. Here’s why it’s currently winning the ‘least likely to cause a full-blown anxiety attack’ award in my portfolio.

A Different Kind of Shiny

You can invest in silver in so many ways, can’t you? Jewelry (tempting, but impractical). Coins (dust collectors). Bars (slightly intimidating). ETFs (fine, but…soulless?). Mining stocks (risky. So, so risky). The problem with mining stocks is, well, everything. Mines get delayed. Costs overrun. It’s like trying to plan a wedding. Everything always takes longer and costs more than you think. Wheaton, though…it’s different. It’s like being the bank, rather than the bride.

They don’t actually mine anything. Clever, really. They provide the money to mining companies – a sort of ‘here’s a loan, and in return, you give me a chunk of whatever you dig up’ arrangement. It’s called a streaming agreement. So, they funded the Peñasquito mine in Mexico (apparently the second-largest silver mine there) with $485 million. In return, they get 25% of its silver output for the life of the mine, at a fixed price of $4.56 an ounce (plus a bit of inflation adjustment, thankfully). It’s…predictable. And predictability is good. I’m starting to think I need a spreadsheet just to track my anxiety levels.

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Low-Cost Silver (and a Little Gold)

Peñasquito is just one of 23 mines they’ve got tied up. Last year, they were expecting around 20.5 to 22.5 million ounces of silver, 350,000 to 390,000 ounces of gold, and a smattering of other metals (cobalt, palladium – the exotic stuff). Apparently, about 39% of their revenue comes from silver, 59% from gold, and the rest from the slightly more obscure metals. It’s a diversified portfolio. Which is what my therapist keeps telling me I need.

The best bit? They buy silver at an average of $5.75 an ounce through 2029. And gold at $473. Seriously? That’s…remarkable. It’s like finding a vintage designer dress at a car boot sale. And their mining partners are expanding production, which means more volume. They’ve got another 25 streams in the pipeline. They’re predicting a 40% increase in production by 2029. It’s…optimistic. I’m cautiously optimistic. (List of Things I’m Cautiously Optimistic About: 1. Wheaton Precious Metals. 2. The possibility of a full night’s sleep. 3. Finding matching socks.)

Cashing In (Hopefully)

Few companies are as well-positioned to benefit from higher silver prices as Wheaton. Their contracts lock in those low purchase prices. Even if silver loses some of its luster (and let’s be honest, everything eventually loses its luster), they should generate a lot of cash.

A silver price of $70 (and $4,300 for gold) – which is well below recent prices – would give them over $3 billion in annual cash flow. That’s a lot of money. Enough to pay dividends (they recently raised their payout by 6.5%) and invest in new streams. It’s…sensible. And frankly, sensible is a welcome change. I’m not saying it’s a guaranteed success, of course. Nothing ever is. But it’s a reasonably solid investment. And right now, reasonably solid is exactly what I need. (Number of Deep Breaths Taken While Writing This: 17.)

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2026-02-02 18:54