Wheaton River keeps head above water

Junior producer Wheaton River Minerals (WRM-T) remains in the black, thanks to higher output and lower costs at its seasonal Golden Bear mine in northern British Columbia.

For the nine months ended Sept. 30, the company earned $2.2 million (or 6 cents per share) on gold sales of $15 million, compared with $1.8 million on sales of $14.3 million in the year-ago period. The 1997 earnings included a gain of $2.2 million from the sale of former subsidiary YGC Resources (YGC-V).

Wheaton sold its production for US$341 per oz. — $30 per oz. less than that realized in 1997.

Production at Golden Bear, which is 87%-owned and operated by Wheaton, topped 35,100 oz. in the recent 9-month period, and another 800 oz. are expected to be liberated from the leach pad in the remainder of the season. Total cash costs in the period averaged US$149 per oz., or $80 per oz. less than in the comparable period in 1997, when 30,900 oz. were produced.

Wheaton says this year’s operating results reflect higher-than-expected gold grades in the Kodiak A deposit and a 2.2% increase in recovery rates, to 89%. The company has stockpiled 200,000 tonnes from that now-depleted deposit and will treat the material when mining begins at the Ursa deposit next June. Ursa hosts open-pit reserves of 519,400 tonnes grading 6.9 grams gold per tonne.

Meanwhile, a feasibility study is in progress at Wheaton’s wholly owned Bellavista gold project in Costa Rica. The study, which is due early in 1999, is focusing on a portion of a deposit that hosts 9.6 million tonnes grading 1.66 grams gold. Wheaton believes the deposit is potentially minable by open-pit methods.

According to an independent prefeasibility study, Bellavista is capable of producing 51,500 oz. gold per year over 7.5 years. Total cash costs are pegged at US$181 per oz., while capital costs are estimated at US$21.8 million.

Wheaton is debt-free and has $10.1 million in cash.

Regulators recently approved a plan by Wheaton to repurchase 2 million of its shares on the open market.

The company has one year to complete the transaction and will cancel any shares acquired, which, if totalling the maximum allowed, would reduce by 5% the number of outstanding shares (currently 40.6 million). Each share will be purchased at a price prevailing at the time of acquisition.