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Canada's Wheaton Precious Metals plans London listing amid surge in gold prices

·2-min read
A visitor touches a 220 kg (485 lbs.) gold bar, worth around $12.8 million at today's price, on display at the Jinguashi Gold Ecological Park in Xinbei city September 16, 2011. The Jinguashi Gold Ecological Park said the gold bar is Taiwan's largest. REUTERS/Pichi Chuang (TAIWAN - Tags: BUSINESS SOCIETY TPX IMAGES OF THE DAY)
A visitor touches a 220kg gold bar at Jinguashi Gold Ecological Park, Taiwan. Photo: Pichi Chuang/Reuters

Canada’s Wheaton Precious Metals (WPM) has announced plans to list on the London Stock Exchange (LSE.L) as demand for precious metals from investors has been surging amid turbulence in equity markets of late.

Wheaton, one of the world’s largest companies involved in buying gold and silver, has a market capitalisation of about $23bn (£17.6bn), and is listed in Toronto and New York. On those indices, its shares have risen more than 70% this year.

Gold prices have risen this year by roughly 28% and hit a record high of above $2,000 an ounce in August. Silver has also been gaining, up 50% to $27 an ounce.

The precious metal's value has been up this year amid investor fears in the equities market.
The precious metal's value has been up this year amid investor fears in the equities market. Chart: Yahoo Finance

“News that Canada’s Wheaton Precious Metals is looking to list in London gives fans of gold and silver another investment option to consider, especially as the firm is not a miner,” said Russ Mould, AJ Bell investment director.

“Instead, it specialises in royalty streams from mines, as it acquires the right to buy metal from producers in the future in return for cash payments upfront and on delivery.”

Mould stressed that “investors must do their research before they consider whether to put capital at risk, just as they would for any other security.”

Wheaton is not planning on raising any money alongside the listing, and is instead applying for a standard rather than a premium listing. By doing so, it will be required to uphold basic listing standards for international issuers and not be included in the prestigious UK FTSE Index Series.

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Still, by joining the LSE, it will be an unique investment option for investors looking to take advantage of strong precious metal prices.

Other than Russia-focused Polymetal, there are few options for investors on the FTSE for large gold mining stocks since the acquisition of Africa-focused gold miner Randgold by Canada’s Barrick Gold last year.

“There is a bit of a void on the mining side in London and we think the streaming business model is a much better way of investing in precious metals,” Randy Smallwood, chief executive of Wheaton, told the Financial Times.