Wheaton posts record profits

Higher grades and recovery rates at the Golden Bear heap-leach mine in northern British Columbia have translated into record earnings for Wheaton River Minerals (WRM-T).

In 1999, the company turned a profit of $7.6 million (or 19 per share) on revenue of $33.3 million, or 322% and 113%, respectively, more than in the previous year. Cash flow from operations doubled to $13.1 million (32 per share).

The Golden Bear mine, which Wheaton operates and in which it owns an 89% interest, churned out 71,300 oz. at a total cash cost of US$162 per oz. The company sold its gold for an average US$314 per oz.

The mine is Wheaton’s sole producer and operates from May to October, producing most of its gold in the third quarter. Reserves stand at 407,496 tonnes grading 8.7 grams per tonne, sufficient for another two years of profitable operations. An additional 428,900 tonnes grading 12.3 grams are classified as an inferred resource.

Wheaton also owns Bellavista, an advanced gold deposit in Costa Rica, and may soon acquire the George Lake gold project in Nunavut provided a proposed merger with Kit Resources (KIT-T) is concluded (T.N.M., Dec. 6/99). The latter is under option to Kinross Gold (K-T), which can earn a 70% interest by spending $20 million by Nov. 30, 2004.

Proven and probable reserves at Bellavista stand at 11.2 million tonnes at 1.54 grams per tonne. At peak performance, 5,745 tonnes of that material would be mined daily from surface.

Annual production is forecast at 60,000 oz. gold, with cash costs expected to average US$179 per oz. Reserves are sufficient for seven years of operation, and capital costs are pegged at US$28.3 million.

In 1999, Wheaton spent $3.2 million at Bellavista, compared with $4.3 million in the previous year. At year-end, the company had $12.3 million in cash and $14.6 million in working capital.