A geological engineer by trade, Randy Smallwood is spending most of his time these days explaining to potential investors why Wheaton Precious Metals Corp. stock is such a good buy.
Wheaton is a pure precious metals play with predictable costs, exploration upside and a diverse asset base, Mr. Smallwood points out. Wheaton pays a dividend, it is leveraged to gold and silver prices and – oh yes – it’s cheap, or as the company says, it has a “compelling valuation.”
Mr. Smallwood is president and chief executive officer of Wheaton, a Vancouver-based silver and gold streaming company formerly known as Silver Wheaton that was spun out of Goldcorp Inc. in 2008.
Persuasive as his argument may be, it’s been a tough sell because investors hate uncertainty. Simply put, Wheaton Precious Metals’s stock has been beaten down relative to its peers because of its dispute with the Canada Revenue Agency over streaming income from mines in other countries.
The CRA takes the position that income earned by Wheaton’s foreign subsidiaries from mines located outside Canada should be taxable in Canada. Wheaton argues that income earned by its foreign subsidiaries from mines outside Canada should not be subject to Canadian tax.
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