Wheaton River soars to new heights in latest quarter

Wheaton River Minerals (WRM-T) has returned to profitability following a sluggish start at the beginning of the year.

For the nine months ended Sept. 30, the junior miner earned a record $8.4 million (or 21 cents per share) on revenue of $32 million, compared with $2.2 million (6 cents per share) on $15.2 million in the corresponding period of 1998.

These latest results make up for losses in the first two quarters of 1999, when the seasonal Golden Bear mine in northern British Columbia was still shaking off its winter slumber.

Cash flow between the periods jumped to $11.65 million from $9.3 million.

Production topped 67,900 oz. gold, or 32,800 oz. more than the year-ago period; the gold was sold for an average US$318 per oz., or US$31 more per oz. Offsetting the recent period were higher mining costs, with the average total cash cost ringing in at US$159 per oz., compared with US$149 in the first nine months of 1998. The increase flowed from higher water levels in the Ursa pit, where mining is currently focused.

Wheaton operates and owns an 89% interest in Golden Bear. The mine is one of two heap-leach projects operating in northern climates. Since it is active from May to October, the mine produces most of its gold in the third quarter.

In total, 390,000 tonnes grading 5.65 grams gold per tonne were mined, crushed and placed on the leach pad. This is better than anticipated, owing to the fact that some material blocked out as waste was actually ore. Also, gold recoveries of ore stockpiled from the mined-out Kodiak A deposit proved higher than expected.

Wheaton now expects to produce more than 70,000 oz. before laying Golden Bear to bed — well ahead of feasibility projections. Excluding this year’s activities, the Ursa deposit holds 519,400 tonnes in reserves at a grade of 6.9 grams gold.

Meanwhile, the company’s environmental impact assessment for its Bellavista gold project has been accepted by Costa Rica’s environment ministry. Also, a new environmental management plan has also been submitted, and, if accepted, construction would begin forthwith.

A study has concluded that Bellavista is capable of producing 60,000 oz. gold annually at a total cash cost of US$179 per oz.

Proven and probable reserves stand at 11.2 million tonnes grading 1.54 grams gold — sufficient for just over seven years of production. Another 9.9 million tonnes grading 1.2 grams are classified as resources.

Capital costs are pegged at US$28.3 million. The company is currently in negotiations with interested parties for financing and could begin mining as early as next year.

At peak performance, 5,745 tonnes would be mined each day on surface, with the life-of-mine stripping ratio estimated at 1.32-to-1. High-grade ore would be agglomerated with lower-grade material, with recovery rates expected to top 79%.

Wheaton is debt-free and, at the end of September, had $11.8 million in cash. The company plans to repurchase 2 million of its own shares for cancellation over the next year, adding to the 1.4 million bought the previous year. It currently has 40.4 million shares outstanding.