This Gold Stock Made $1.8 Billion With 44 Full-Time Employees: Should You Buy Shares?

Core Insights - The company Wheaton Precious Metals has significantly outperformed gold, achieving a 4,153% return since going public in 2005, compared to gold's 1,012% increase during the same period [1] - The company's business model involves providing upfront financing to mining projects in exchange for the right to purchase a portion of the mine's future output at discounted prices, which mitigates risks associated with traditional mining operations [4][6] Financial Performance - Wheaton Precious Metals generated $35 million in gross profit per full-time employee last quarter, with only 44 full-time employees [2] - The company has a market capitalization of $60 billion and pays a dividend yield of 0.43%, which is uncommon in precious metal investments [2][4] Business Model - The company operates under a streaming model, allowing it to secure gold at an 80% discount to the spot price, enhancing profitability [4][6] - A recent deal with Hemlo Mining involved a $300 million financing agreement for the right to purchase 10.13% of gold output at a significantly reduced price [5] Profitability Analysis - With current gold prices at $4,893 per ounce, Wheaton Precious Metals can purchase the first 136,000 ounces for $133 million, which would have a market value of $665.5 million, resulting in a profit of $232.5 million after accounting for the initial financing [7]