Silver Wheaton

Silver Wheaton (NYSE: SLW) is the largest silver streamer in the world.A “silver streamer” is essentially a company that purchases the silver byproduct
from base-metal miners. Simply put, when a copper miner (or zinc miner or iron miner) extracts ore from his mine, that rock likely includes
a lot of minerals other than copper – including silver. The copper miner doesn’t want the hassle of smelting and dealing with the silver from
his mine. Approximately 70% of the world’s silver is produced as a byproduct from other metal mines… So a silver streamer, like Silver Wheaton, is there to
take it off his hands. Silver Wheaton will swoop in and make a deal upfront for the silver. It’s a good deal for the base-metal miner because he gets guaranteed income for his silver. And it’s a great deal for Silver Wheaton because it gets a guaranteed supply of silver without the hassles and risks of actually mining it.

Silver Wheaton has dozens of long-term agreements across 23 gold and silver mining assets with companies like Barrick, Goldcorp, Glencore Mining, and Lundin Mining. In 2013, Silver Wheaton’s streaming agreements produced about 26.8 million ounces of silver equivalent in 2013. Over time, other mines already covered by agreements with Silver Wheaton will be built, and the company expects production to hit 48 million silver ounces
by 2018.

The company carries no goodwill or intangible assets on its balance sheet, so we’ll use its total assets valuation. At the time of writing this, the company’s market cap sits around $10 billion. That’s a 79% premium based on its total assets valuation.