I am trying to analyze the WPM dealI am assuming that the price of Au is $1800 and PT is $970. As I undertand it WPM gets 100% of the first 150,000 oz of Au which is esstentially all that is currently estimated. They pay 18% of the market price for these ounces which would be $325 giving them a profit of $1475 which would total $221M. They also get 22% of the PT produces up to 120,000 oz (the current estimate is GENM will produce 537,000 oz so they get 22% of the entire production). WPM will pay $175 for these ounces netting them a profit of $95M. So WPM gets a total return of $316M. They will pay GEMN $240M (C) or around $180M USD. If you assue that WPM receives its 316M in equal annual payments over the 13 year mine life(approximately $25M per annum). The the return on its investment of $180M(USD) is less than 10%. I have no idea what rate of return WPM seeks when it enters a stearming deal but I think one with a junior miner that has not yet commenced production or even obtained all the necessary approvals would not be desirable if the ROI was less than 10%.
WPM is a very sophisticated company and one of the largest streamers that exist. They know what they are doing. WPM makes a lot more if the
amount of Au and Pt exceed the current estimates or if the price of those metals increases over the 13 years currently estimated both of which I think are likely.
Frankly I am guessing tehy would not have done this deal unless they were convinced that one or both of those will happen.
I am shocked that we ended the day at $.82. I think this is looking like a very attractive investment and a far bettter deal when I first investeed earlier this year. If I can find some extra cash I will add to what for me is a prettty large position already.
I would appreciate anyone challenging my calculations.