Wheaton River nine-month results
Wheaton River Minerals Ltd WRM
Shares issued 40,393,507 Oct 14 close $0.38
Fri 15 Oct 99 News Release
Mr. Ian McDonald reports
The company, in spite of recent record low gold prices, achieved its best
financial performance ever during the first nine months to Sept. 30, 1999.
Net earnings were $8,408,530 or 21 cents per share for the 1999 period, or
an increase of 277 per cent over the net earnings of $2,228,615 or six
cents per share for the same period of 1998. Cash flow from operations rose
by 25 per cent to $11,654,133 or 29 cents per share during the first nine
months of 1999, compared with $9,298,574 or 24 ceents per share during the
same period of 1998. Sales were $32,017,374, and earnings from mining
operations were $11,535,601 for the nine-month period in 1999, compared
with $15,163,776 and $3,793,736 in the 1998 period. Wheaton River ended the
quarter with a cash balance of $11,756,730.
Gold sales from the company's Golden Bear mine reached a record 67,900
ounces in the first nine months of 1999 or an increase of 32,800 ounces
over the comparable 1998 period. By the end of the 1999 production season
in October, more than 70,000 ounces of gold will be produced.
SELECTED FINANCIAL DATA
Nine months ended Sept. 30
(thousands of dollars)
1999 1998
Sales $ 32,017 $ 15,164
Earnings from
mining operations 11,536 3,794
Net earnings 8,409 2,229
Cash from
operating activities 11,654 9,299
At Sept. 30
Cash 11,757 10,096
Working capital 15,146 10,314
Net assets 25,101 17,245
SELECTED FINANCIAL DATA
Nine months ended Sept. 30
Per Share
1999 1998
Sales 79 cents 39 cents
Earnings from
mining operations 28 cents 10 cents
Net earnings 21 cents 6 cents
Cash from
operating activities 29 cents 24 cents
At Sept. 30
Cash 29 cents 25 cents
Working capital 38 cents 25 cents
Net assets 63 cents 42 cents
Gold sales from the Golden Bear mine in northwestern British Columbia
exceeded feasibility study projections for the third year in a row. The
increased production resulted from mining better than predicted grade and
ore tonnage in the Ursa open pit, where 390,000 tonnes grading 5.65 grams
gold per tonne were mined, crushed and stacked on the Totem Creek heap
leach pad. This is up from the estimated 325,000 tonnes grading 5.25 grams
gold per tonne in the original feasibility study. Gold recoveries from ore
produced from the Kodiak A deposit stacked on both the Totem Creek and
Fleece Bowl leach pads also exceeded feasibility estimates and contributed
to the improved results. Total cash costs for the nine months to Sept. 30,
1999, were $159 (U.S.) per ounce compared with $149 (U.S.) per ounce during
the first nine months of 1998. As anticipated, the higher waste stripping
ratio in the Ursa pit led to higher mining costs in 1999. Realized selling
prices achieved for gold sales in the first nine months were $318 (U.S.)
per ounce in 1999 and $287 (U.S.) per ounce in 1998.
Wheaton River announced in September that the Costa Rican Ministry of
Environment and Energy, Technical and Environmental Branch (SETENA) has
acknowledged that the current Environmental Impact Assessment (EIA)
covering the company's Bellavista gold project is in good standing,
alleviating the need to apply for another one as previously thought. The
SETENA is reviewing the company's new environmental management plan, which
was recently submitted. This development paves the way for construction of
the project, which is anticipated to produce 63,000 ounces of gold
annually, to begin next year. Wheaton River is in discussions with
financial institutions regarding financing for the Bellavista project.
Kit Resources Ltd. entered into an option agreement with Kinross Gold
Corporation covering the George Lake gold project in the Nunavut Territory.
Kinross can earn a 70-per-cent interest in the project by spending
$20-million over a five-year period. A minimum $2-million drilling program
is slated to begin in early 2000. The George Lake project hosts an
indicated resource of 4,238,000 tonnes grading 9.80 grams of gold per
tonne, and an additional inferred resource of 2,222,000 tonnes grading 9.69
grams gold/tonne. Wheaton River owns 23 per cent of the outstanding shares
of Kit.
Wheaton River purchased 1,432,500 of its own common shares for cancellation
under a normal course issuer bid during the one-year period preceding Sept.
14, 1999, for an average price of 22 cents per share. The Toronto Stock
Exchange has approved another normal course issuer bid for one year
beginning Sept. 29, 1999. During the period, Wheaton River may purchase up
to 2,019,675 of its own common shares. There were 40,393,507 common shares
outstanding on Sept. 30, 1999. The company believes its common shares have
been and are trading in a price range that does not reflect their value in
relation to Wheaton River's business and its future business prospects.
The recent rise in gold prices has caused some concern among the investment
community about the exposure of gold mining companies to margin calls
resulting from their hedge positions. Wheaton River is pleased to report
that it has only recently sold forward most of its 2000 production and half
of its 2001 production. The average price on these hedges is over $300
(U.S.) per ounce. Its hedge position remains well within its current margin
limits and additional limits are obtainable if necessary. This hedge covers
less than 15 per cent of the company's proven and probable recoverable
reserves.
As previously reported with respect to the Year 2000 issue, the company has
assessed its internal software and hardware systems and believes all
systems are ready for the year 2000. Most key suppliers have indicated that
they have dealt, or they will shortly deal, with their Year 2000 issues.
Wheaton River believes that with the well-publicized announcements
regarding limits on gold sales and leasing by the European banks, the worst
of the bear market in gold prices is now behind it. The company is
committed to a program of growth with a focus on acquiring and developing
mid-sized gold deposits, which can produce for total cash costs of $200
(U.S.) per ounce or less, and is currently evaluating several potential
acquisitions.
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