$250 Billion Funding Gap Boosts Streaming Finance Model as Low-Risk Choice in Mining Cycle Upturn

Mining streaming and royalty companies could become key financiers for an industry facing rising capital costs for precious metals and critical minerals.

The business model is straightforward. Streamers provide upfront capital to mine operators, typically without equity dilution, in exchange for the right to purchase future production at a fixed or discounted price. In many cases, the metal is a byproduct—silver or gold from copper mines—that diversified operators may not receive full market credit for.

Once a project passes completion tests, the streamer's risk exposure shifts dramatically. It typically has no obligation to fund sustaining capital, exploration, or operating cost inflation. This approach creates an advantage when miners face labor shortages, rising construction costs, and permitting delays.

In recent interviews, Wheaton Precious Metals Corp. CEO Haytham Hodaly said the structure remains built around long-life, low-cost mines in stable jurisdictions. About 80% of the company's portfolio sits in the lower half of the cost curve, helping ensure operators keep assets producing during downturns.

"We come in and support these companies without equity," Hodaly said.

Larger deal sizes

The scale of opportunity has changed. Wheaton's $4.3 billion deal for a silver stream on BHP Group Limited's Antamina copper-zinc mine in Peru marks a new era.

Antamina highlights the due diligence advantage streamers seek. "What the market perceives as a 10- or 12-year mine life," Hodaly said, could extend 30 to 50 years in Wheaton's assessment.

He believes Wheaton can complete roughly one deal of this size per year over the next three to four years, supported by approximately $2.7 billion in annual free cash flow and over $2.5 billion in revolving credit facilities. Hodaly is also highly bullish on silver.

"We think silver is going to go higher, much higher, over the long term," he said.

Filling the capital gap

Streaming producers have traditionally worked with precious metals, but veteran investor Rick Rule says the next wave could come from copper.

He said the largest producers need about $250 billion just to maintain current output, creating a funding gap that traditional debt and equity cannot fill.

This dynamic makes streaming attractive. Rule said silver cash flows buried within base metal miners could be valued at 6 to 7 times cash flow, but the same cash flows within a dedicated streaming company could trade closer to 15 times.

"It's a truly win-win deal," he said of Antamina.

Rule expects $30 billion to $75 billion in unconventional financing will be needed, with syndicates led by major streamers potentially including mid-tier royalty companies and private funds. But he warned that quick deals without structural advantages could signal overheated premiums.

Operator pushback

Not every mine builder is enthusiastic, though. McEwen Inc. founder and chairman Rob McEwen has long criticized the model, warning that streams and royalties weaken operators by giving up future profits.

"They lose resilience in lower markets," McEwen said. In earlier interviews, he compared the model to "sirens on the rocks, luring sailors in."

Still, he acknowledges investor appeal. For those seeking low-risk exposure to gold or silver, "you might look at streaming companies or royalty companies," he clarified.