Randy Smallwood, CEO of Wheaton Precious Metals (NYSE: WPM), told Bloomberg Television in October that he was "confident" gold prices would hit $5,000 per ounce within the next year. Gold had just surged 21% in under two months at that time. In the three months since, gold prices have climbed another 15% and are now within striking distance of $5,000 per ounce.
If gold maintains its momentum, Smallwood's market call will come true with about six months to spare. Analysts at JPMorgan, Citigroup, and Bank of America have laid out scenarios where gold hits $6,000, though not necessarily this year.
Wheaton Precious Metals shares have returned 128% over the last year, beating gold's 68% rise. The Vancouver-based company has 44 full-time employees. It is a precious metals streaming company that provides financing upfront for mining projects in return for the right to buy a fixed amount of the mine's production at a discount to spot price.
In November, the company announced a streaming deal with Hemlo Mining to help acquire a mine north of Lake Superior. Wheaton Precious Metals is providing $300 million to Hemlo to develop its mine. In return, it can buy 10% of payable gold output until 135,750 ounces are delivered, then nearly 7% until another 117,998 ounces are delivered, then 4.5% for the rest of the mine's production lifetime.
Wheaton Precious Metals can buy these tiers of payable gold at just 20% the spot price of gold, an 80% discount. With gold at $4,626 per ounce, its right to buy up to 135,750 ounces from the first threshold alone would net $502 million in profit. If gold prices rise another 10%, it would net $553 million on that first threshold.
Last November, the company announced another streaming deal on a project in Nevada that entitles it to buy 300,000 ounces of the mine's first 8% of payable gold at an 80% discount. The company has a portfolio of 23 operating mines around the world, all in politically stable countries. These mines have an average proven and probable "mine life" of 27 years.
Wheaton Precious Metals has outperformed gold and silver over one-year, three-year, five-year, and 10-year intervals. The stock provides a dividend. In 2025, the company raised its dividend by 6.5% and now pays a yield of 0.5%.
The Motley Fool Stock Advisor analyst team identified what they believe are the 10 best stocks for investors to buy now, and Wheaton Precious Metals was not one of them. The team noted that when Netflix made their list on December 17, 2004, a $1,000 investment would have grown to $474,578. When Nvidia made their list on April 15, 2005, a $1,000 investment would have grown to $1,141,628.
Stock Advisor's total average return is 955%, compared to 196% for the S&P 500. Citigroup, JPMorgan Chase, and Bank of America are advertising partners of Motley Fool Money. William Dahl has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends JPMorgan Chase.