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Silver Wheaton tapped investors for $607-million through a stock offering a month ago.

Silver Wheaton Corp. acknowledges that competition is growing in the red-hot business of funding cash-strapped miners, but says its size and experience will allow it to defend its turf against newer rivals.

So-called streaming companies such as Silver Wheaton provide mining companies with cash today in exchange for metal tomorrow. The streamers buy the right to purchase "streams" of a mine's future production at a fixed, heavily discounted price. Silver Wheaton pioneered such transactions 12 years ago, but now faces a horde of rivals, including well-established firms such as Royal Gold Inc.

Newer entrants ranging from Sandstorm Gold Ltd. to private-equity firms have also shouldered their way into the space.

"I've always said the ultimate form of compliment is when someone copies you, and we are having a few people out there copy the business model," Randy Smallwood, chief executive of Silver Wheaton, said in a conference call with analysts. "Fortunately, we have the advantage of 12 years of experience, plus a very strong technical team."

In one sign of enthusiasm for the sector, Silver Wheaton tapped investors for $607-million (U.S.) through a stock offering a month ago. In another indication of streaming's growing appeal, Elliott Management Corp. is backing a new Toronto-based company to be headed by Shaun Usmar, the former chief financial officer at Barrick Gold Corp.

Details of the new streaming venture, to be known as Triple Flag, have yet to be formally announced, but observers say it will likely open within the next month and be looking to deploy an initial $1-billion or so.

The rush of money into streaming reflects a rare opportunity to play the gap between the hard times in base-metal prices and the rapidly improving outlook for precious metals.

Despite a recent rally, prices for base metals such as copper and nickel remain mired far below their levels of four years ago. The brutal declines have put many base-metal producers under severe financial pressure.

These miners often generate significant amounts of silver and gold as by-products. To raise cash, they are increasingly willing to sell rights to their precious metal output to streaming companies at attractive prices.

However, the streamers still face challenges, ranging from unpredictable metal prices to production issues. On Monday, Silver Wheaton announced results for the first quarter that fell short of analysts' expectations, in part because of weak silver prices and a production shortfall at the San Dimas mine in Mexico.

Sales jumped to $187.5-million from $130.5-million a year earlier. However, net earnings tumbled to $41-million, down from $49.4-million the previous year, as depletion expenses more than doubled. Earnings of 10 cents a share were well below analysts' forecasts of 13 cents a share.

The Vancouver company is in a dispute with the Canada Revenue Agency, which wants to reassess it for the 2005 to 2010 tax years.

The tax collector does not like how Silver Wheaton handled international transactions conducted through a subsidiary in the Cayman Islands, and wants $353.4-million (Canadian) in taxes, interest and penalties. Silver Wheaton says it is confident it has done everything correctly and is appealing the decision to the Tax Court of Canada.

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