Wheaton Precious Metals Surges 2.8% on Hemlo Mine Expansion—Is This the Start of a Bull Run?

Summary
• Wheaton Precious Metals (WPM) surges 2.837% to $112.37, hitting an intraday high of $112.40.
• The stock secures a $300M gold stream with Hemlo Mining, adding 0.19M oz of reserves and boosting long-term production visibility.
• Technical indicators signal a short-term bullish trend, with RSI at 60.9 and MACD above its signal line.

Wheaton Precious Metals is riding a wave of optimism as its recent Hemlo Mine deal locks in a steady gold production stream. The stock’s 2.8% intraday gain reflects investor confidence in the company’s expanding reserves and cash flow potential. With gold and silver prices surging and the Fed’s rate decision looming, WPM’s strategic positioning in the precious metals sector is under the spotlight.

Hemlo Gold Stream Fuels Optimism
Wheaton Precious Metals’ 2.8% rally is directly tied to its $300 million gold stream agreement with Hemlo Mining, which secures 0.19 million ounces of proven and probable gold reserves. This deal extends Wheaton’s contracted production life and enhances cash flow visibility, addressing a key catalyst for long-term growth. The transaction aligns with the company’s strategy of acquiring high-quality streaming assets, a narrative that has historically driven its valuation premium. Analysts highlight that the Hemlo stream, combined with a modest dividend increase to $0.165 per share through 2025, reinforces management’s commitment to shareholder returns while navigating a competitive streaming market.

Precious Metals Sector Gains Momentum
The broader precious metals sector is surging, with gold and silver hitting record highs amid expectations of Fed rate cuts. Wheaton’s 2.8% gain outperforms Newmont (NEM), which fell 0.186% despite being the sector leader. This divergence underscores Wheaton’s unique positioning as a streaming play, benefiting from rising gold prices and reserve expansion. While NEM’s decline reflects near-term production challenges, Wheaton’s focus on contracted ounces and margin-accrual through streams positions it to capitalize on structural tailwinds in the gold market.

Options Playbook: Leveraging WPM’s Bullish Momentum
• 200-day average: 91.86 (below current price); RSI: 60.9 (neutral); MACD: 1.73 (bullish); Bollinger Bands: 98.90–111.98 (price near upper band).
• Key levels: Support at $107.14–108.04 (200D range), resistance at $112.40 (intraday high).
• Short-term outlook: A break above $112.40 could target $114.36 (52W high), while a pullback to $108.81 (intraday low) may test 200D support.

Top Options Contracts:
• WPM20251219C111 (Call):
- Strike: $111; Expiry: 2025-12-19; IV: 43.96%; Leverage: 28.08%; Delta: 0.5837; Theta: -0.3772; Gamma: 0.0477; Turnover: 3,677.
- IV (Implied Volatility): High, reflecting market uncertainty; Leverage (Return Potential): Strong for a 5% upside; Delta (Price Sensitivity): Moderate; Theta (Time Decay): Aggressive; Gamma (Delta Sensitivity): Favorable for price swings.
- Payoff: At 5% upside ($117.99), payoff = $6.99 per contract. Ideal for capitalizing on a breakout above $112.40.
• WPM20251219C112 (Call):
- Strike: $112; Expiry: 2025-12-19; IV: 37.60%; Leverage: 37.44%; Delta: 0.5366; Theta: -0.3419; Gamma: 0.0568; Turnover: 9,295.
- IV (Implied Volatility): Mid-range, indicating balanced risk; Leverage (Return Potential): High; Delta (Price Sensitivity): Moderate; Theta (Time Decay): Strong; Gamma (Delta Sensitivity): Excellent for volatility.
- Payoff: At 5% upside ($117.99), payoff = $5.99 per contract. Offers a balance of liquidity and reward for a sustained rally.

Action Insight: Aggressive bulls should consider WPM20251219C111 for a breakout above $112.40, while WPM20251219C112 provides a safer, high-liquidity entry. Both contracts benefit from rising gold prices and Wheaton’s reserve expansion narrative.

Backtest Wheaton Precious Stock Performance
The backtest of WPM's performance after an intraday surge of at least 3% from 2022 to the present shows favorable results. The 3-day win rate is 54.72%, the 10-day win rate is 56.89%, and the 30-day win rate is 62.01%, indicating a higher probability of positive returns in the short term. The maximum return during the backtest was 6.09%, which occurred on day 59, suggesting that WPM can deliver decent gains following a 3% intraday surge.

Seize the Bull Run—But Watch for Sector Headwinds
Wheaton Precious Metals’ 2.8% surge is a testament to its strategic reserve expansion and the sector’s tailwinds. However, the stock’s 41.9x P/E and a 21% upside to its fair value estimate suggest valuation risks if streaming margins compress. Investors should monitor the Fed’s rate decision and gold’s trajectory, as a $4,200 level could test market sentiment. For now, WPM20251219C111 and WPM20251219C112 offer leveraged exposure to a breakout, but keep an eye on Newmont’s -0.186% move as a sector barometer. Act now: Buy calls if $112.40 holds, or short-term puts if gold dips below $4,100.