Luismin powers Wheaton to record first-quarter earnings

Paced by a higher gold price, Wheaton River Minerals (WRM-T) saw its first-quarter earnings soar to US$4.1 million thanks in large to operations added via last summer’s Luismin acquisition.

The earnings tally to 2 per share, and compare with year-ago earnings of just US$262,000 (nil per share). Sales topped out at US$17.9 million; in the corresponding period of 2002, the company had no sales as the company’s Golden Bear mine in B.C. wrapped up operations in 2001.

During the first three months of 2003, Luismin’s three gold and silver mines in Mexico generated net earnings of US$3.3 million. Quarterly sales came to 1.56 million ounces of silver, or 20,533 gold equivalent ounces, based on an equivalency factor of 76 ounces of silver to 1 ounce of gold. Cash costs were US$185 per gold equivalent ounce, up from US$182 in fiscal 2002.

In mid-March, Wheaton acquired its initial 25% interest in the Bajo de la Alumbrera gold-copper mine in Argentina, from Rio Tinto (RTP-N) for US$210 million. Wheaton’s quarter-stake of Alumbrera netted it $516,000 during the two weeks of ownership during the quarter. The mine sold 4,712 ounces of gold and 1,611 tonnes of copper. Cash costs were minus US$81 per ounce for the two-week period (net of by-product copper credits). Wheaton also recently received a US$11.2-million cash distribution thanks to its shareholding in the mine.

At the same time, Wheaton grabbed the Peak gold mine in New South Wales, Australia. Peak suffered a net loss of US$191,000 for the two-week period on sales of 4,844 ounces. The loss came thanks to lower-grade ore from pit operations. Cash costs were US$330 per oz.

Wheaton recently teamed up with Northern Orion Explorations (NNO-T) to acquire a further quarter-interest in the operation, this time from BHP Billiton (BHP-N). The two will split the US$180 million price tag and each take home a 12.5% share. The deal is slated to close by the end of June.

Overall, the quarter’s average realized gold price was US$351 per ounce.

Once another 12.5% of Alumbrera is in hand, Wheaton figures its annualized production at more than 500,000 gold equivalent ounces at an estimated cash cost of less than US$125 apiece (net of by-product copper credits).

At quarter’s end, Wheaton had cash and equivalents of US$20.5 million, down from US$23 million at the end of 2002. Working capital stood at US$17.9 million, down from US$24.4 million.