Gold

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"Gold's time to shine is coming very soon," said Randy Smallwood of Wheaton Precious Metals. He also shared takeaways from the company's Q3 results.

Randy Smallwood: Gold Never More Important, Wheaton Gearing Up for Dealsyoutu.be

Wheaton Precious Metals' (TSX:WPM,NYSE:WPM) third quarter results are in, and after some setbacks in Q2, President and CEO Randy Smallwood is pleased with the company's direction.

"It's pretty exciting times for us. We've got a lot of projects that are getting underway in terms of construction over the next while, and we're really busy on the corporate development front," he said. "We're looking for ways to put our capital back to work."

The company's second quarter results included a downward revision in guidance to an estimated 640,000 to 680,000 gold equivalent ounces, largely due to underperformance from Vale's (NYSE:VALE) Salobo operation in Brazil. With its challenges fading into the distance, Smallwood said the asset is on track to return to its former glory.


He's looking forward to securing new streams for Wheaton in the first half of 2023, and said the company has more than 20 projects under review — the largest amount it's ever evaluated at one time.

Smallwood reiterated that Wheaton is focused on single asset developers, and said most of the companies it's looking at have market caps in the $100 million to $300 million range, with some as high as $400 million. Generally these companies would use debt or equity to fund their work, but debt is expensive and equity support isn't strong right now.

That's made streaming capital attractive, but Smallwood emphasized that companies like Wheaton won't be able to support developers indefinitely. "It's just not sustainable for streamers to be the only source of capital on the equity side," he explained. "We do need some investor support to balance how these projects move forward.

When it comes to the forecast for gold, Smallwood's positive outlook is intact. While the US dollar remains a strong headwind, he said he doesn't think the currency's strength is supported by fundamentals.

"Eventually those fundamentals do have to work their way through the system and lay that out, and I think that's the point that you're going to start seeing a correction in terms of how gold gets valued in US dollars," he said.

Smallwood added, "Gold's time to shine is coming very soon."

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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.

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