Wheaton River profits from early spring

An early start at its seasonal Golden Bear mine translated into record production and profits for Wheaton River Minerals (WRM-T) in the first half of the year.

Earnings for the six months ended June 30 topped $4.5 million (or 9 per share) on revenue of $15.3 million, compared with a loss of $741,166 (2 per share) on $893,345 in the corresponding period a year ago.

Cash flow in the recent period was $4.7 million.

Situated in northwestern British Columbia, the heap-leach operation produced 31,196 oz. gold during the recent period, up 29,162 oz. from the first half of 1999. The mine, which Wheaton operates and in which it holds an 89% interest, traditionally pours most its gold in the third quarter.

Cash operating costs in the first half of 2000 averaged US$157 per oz.; total cash costs, US$168 per oz. Wheaton realized US$331 per oz. for its recent production, or 13% more than a year ago.

Wheaton now expects to produce 85,000 oz. by year-end, owing to the longer leaching time available. However, this means that only 26,000 oz. will be produced in 2001, with residual leaching of about 5,000 oz. anticipated in the following year.

Meanwhile, metallurgical, surface and logistical studies are under way at the Red Mountain project, also in northwestern British Columbia. The project, formerly owned by Royal Oak Mines, was acquired by Wheaton earlier this year to replace production from Golden Bear.

Royal Oak and previous owners spent about US$38 million at Red Mountain, driving a 1,000-metre production-sized decline and developing 2,000 metres of underground workings, as well as sinking 127,000 metres in 467 core holes.

Resources are pegged at 12 million tonnes grading 2.54 grams gold per tonne. Based on its own technical review, Wheaton believes a higher-grade core of 700,000 tonnes averaging 12 grams can be mined over five years to yield 250,000 oz. gold.

Wheaton paid $413,360 for the project. This overall price included a large complement of mining equipment, a $1.5 million cash reclamation fund that is lodged with the province’s Mines Ministry, and an office/warehouse building in the nearby town of Stewart.

As part of its efforts, Wheaton is studying the feasibility of relocating the Golden Bear mill to Red Mountain.

Meanwhile, construction at the Bellavista gold project, in Costa Rica, is expected to begin in the fourth quarter. The access roads are complete, and final regulatory approval for the heap-leach project is expected shortly.

Also, a first phase of drilling at the George Lake property, in Nunavut, has been completed. The 11,000-metre program was managed by Kinross Gold (k-t), which can earn a 70% interest in the project by spending $20 million before Nov. 30, 2004.

George Lake is 70 km south of Bathurst Inlet and hosts 6.5 million tonnes grading 9.76 grams gold per tonne spread among six deposits. The second largest of those deposits, called Goose Lake, was the focus of the recent program.

Available results include 17 metres grading 14.9 grams and 6.4 metres grading 29.6 grams. These and other values suggest that the deposit, last estimated at 1.62 million tonnes grading 9.53 grams, is larger and richer than previously thought.

On June 30, Wheaton had $10.7 million in cash and equivalents.