Wheaton River Resources (WRM-T) has raised the necessary funds to buy a quarter-interest in the Bajo de la Alumbrera copper-gold mine in Argentina and a full stake in the Peaks gold mine in Australia.
In January, Wheaton agreed to pay Rio Tinto (RTP-N) US$210 million for its interests in the mines. The two have since signed a definitive agreement, and most of the $333.5 million in proceeds from the financing are being held in escrow, pending regulatory and third-party approvals.
Combined, the two operations are expected to average 269,500 oz. gold annually at a cash cost of US$74 per oz. from 2003 to 2005. Wheaton’s share will propel it to the number-eight slot among Canadian gold producers, increasing its annual output to 458,000 oz. gold-equivalent from the 190,000 oz. originally budgeted for 2003.
Wheaton River currently produces 100,000 oz. gold and 6 million oz. silver per year from three Mexican mines: San Martin, San Dimas and La Guitarra. It acquired the Mexican assets last year from Minas Luismin for US$75 million and 9 million shares.
The new mines also are expected to reduce Wheaton’s cash cost per gold-equivalent ounce to US$124 in 2003 from US$187 in 2002. Based on current metal prices, the company believes cash flow from existing operations and the acquired assets will put it in a positive net cash position by the end of 2004
The financing consisted of 230 million units priced at $1.45 apiece. A unit consists of a share and one-quarter of a warrant, with a full warrant entitling the holder to purchase an additional share until June 2007, at $1.65 each.
Be the first to comment on "Wheaton River raises Alumbrera funds"