Why Precious Metals Investors Are Turning to Streaming Models in 2026

The precious metals market has experienced significant momentum in recent years, though recent volatility has reshaped investor strategies. Silver prices surged from approximately $30 per ounce a year ago to over $110 at their recent peak—a remarkable rally driven by concerns about inflation and monetary policy shifts. However, with Federal Reserve policy potentially shifting toward higher interest rates (following the appointment of Kevin Warsh as the new Fed Chair), silver has retreated to the low-$80s range. Despite this pullback, prices remain substantially elevated compared to historical levels. For investors seeking to capitalize on precious metals without the traditional risks of mining stocks, a growing number are exploring alternative approaches to invest in precious metals through specialized companies that operate on different business models.

Understanding Different Ways to Invest in Precious Metals

There are numerous pathways for investors to participate in the precious metals market. Direct ownership through coins, bars, and jewelry offers tangible assets but limited growth potential. Exchange-traded funds (ETFs) provide diversified exposure with liquidity and transparency. Traditional mining stocks offer leveraged returns as companies expand production, yet they carry significant risks—development delays, cost overruns, and operational challenges can cause individual mining companies to dramatically underperform the underlying metals they produce.

One lesser-known approach—the streaming model—has gained attention from sophisticated investors seeking a middle ground. Streaming contracts represent a fundamentally different risk-return profile. Under this model, companies provide upfront capital to mining operations to fund development and expansion. In return, they secure the right to purchase a fixed percentage of a mine’s production at a locked-in price for the life of the mine, with pricing typically adjusted annually for inflation.

Wheaton Precious Metals’ Competitive Edge: The Streaming Contract Advantage

Wheaton Precious Metals (NYSE: WPM) stands as a premier example of this streaming approach. The company operates 23 active mining streams across its portfolio, with another 25 streams in development. Rather than bearing the operational risks of running mines themselves, Wheaton provides capital and receives production rights—a significantly lower-risk model compared to traditional mining companies.

Consider the company’s flagship asset: the Peñasquito mine in Mexico, the second-largest silver producer in the country. Wheaton made an upfront investment of $485 million to support the mine’s development. In exchange, the company can purchase 25% of the mine’s silver output for the life of the operation at a starting price of just $4.56 per ounce, with annual adjustments based on inflation metrics. This locked-in pricing structure creates a powerful advantage when silver prices fluctuate.

Last year, Wheaton’s streaming contracts were projected to generate 20.5 to 22.5 million ounces of silver, along with 350,000 to 390,000 ounces of gold and smaller quantities of cobalt and palladium. The revenue mix reflects the company’s diversification strategy: approximately 39% from silver streams, 59% from gold, with the remainder from other metals. Critically, Wheaton can purchase silver at an average cost of $5.75 per ounce through 2029 and gold at an average of $473 per ounce—prices that remain substantially below recent market levels.

Strong Profit Potential Despite Silver Price Volatility

The mathematics of Wheaton’s business model become compelling when analyzing profitability scenarios. Even if silver prices moderate to $70 per ounce and gold settles at $4,300 per ounce—both well below recent trading ranges—the company would generate over $3 billion in annual cash flow through the end of the decade. This substantial cash generation capability provides the company with flexibility to maintain its dividend (which was recently increased by 6.5%) while simultaneously investing in new streaming contracts and expanding the portfolio.

Volume growth represents another significant tailwind. Wheaton expects its production volumes to increase by 40% by 2029 as its mining partners expand existing operations and bring development-stage projects into production. This combination of locked-in low costs and expanding volumes creates a two-pronged earnings growth engine.

Comparing Returns: Historical Context and Forward Outlook

The investment case for Wheaton rests on a principle validated by market history: companies positioned at favorable structural inflection points can deliver extraordinary returns. Historical examples illustrate this potential. Netflix, when recommended as a top investment opportunity in December 2004, delivered returns of $450,256 on a $1,000 investment. Similarly, Nvidia’s inclusion on top-10 stock lists in April 2005 would have generated $1,171,666 on an equivalent investment—both showcasing the power of identifying structural advantages early. While past performance provides no guarantee of future results, Wheaton’s positioning in a secular trend toward higher precious metals demand suggests meaningful upside potential.

Conclusion: A Strategic Approach to Precious Metals Investment

For investors evaluating how best to invest in precious metals in the current environment, the streaming model merits consideration alongside traditional approaches. Wheaton Precious Metals exemplifies a business structure that insulates shareholders from typical mining industry risks while maintaining meaningful leverage to precious metals prices. The combination of locked-in acquisition costs, expanding production volumes, and robust cash generation creates a compelling profile for investors seeking exposure to silver and gold through a lower-risk vehicle than conventional mining stocks.