Wheaton achieves record earnings in nine-month results
Wheaton River Minerals Ltd WRM
Shares issued 55,024,697 Oct 12 close $0.38
Fri 13 Oct 2000 News Release
Mr. Ian McDonald reports
Wheaton River Minerals has continued its three-year unbroken string of
record earnings. Net earnings for the nine months to Sept. 30, 2000, were
$12,420,223, or an increase of 48 per cent over the net earnings of
$8,408,530 for the same period of 1999. Earnings per share increased by
four cents to a record 25 cents in 2000 despite a considerably higher
number of shares outstanding arising from the merger earlier this year with
Kit Resources Ltd. Cash flow from operations also rose, to $18,562,874 or
37 cents per share, compared with $11,794,598 or 29 cents per share during
the same period of 1999. Sales were $42,378,781 and earnings from mining
operations were $13,813,402 for the nine-month period in 2000, compared
with $32,017,374 and $11,535,601 respectively in the 1999 period. Wheaton
River ended the quarter with a cash balance of $21,450,282.
Gold sales from the company's Golden Bear mine in northwestern British
Columbia reached a record 87,787 ounces during the first nine months of
2000, or an increase of 19,887 ounces over the comparable 1999 period. By
the end of the 2000 season, an estimated 95,000 ounces will be produced.
Gold production from the Golden Bear mine exceeded feasibility study
projections for the fourth year in a row. As in the past, the increased
production resulted from mining better-than-predicted ore tonnage in the
Ursa open pit, where 295,026 tonnes grading 8.3 grams gold per tonne were
mined, crushed and stacked on the Totem Creek heap-leach pad during 2000.
Planned ore production had been 223,596 tonnes grading 8.7 grams gold per
tonne. A further 90,887 tonnes of material grading 0.4 of a gram per tonne
which was previously designated as waste was stacked directly onto the pad.
Gold recoveries also exceeded feasibility estimates and contributed to the
improved results. Furthermore, 85,581 tonnes of ore grading 7.2 grams gold
were mined from an underground working in the Kodiak B deposit and stacked
on the pad. This ore was originally scheduled to be mined in 2001.
Total cash costs for the nine months to Sept. 30, 2000, were $180 (U.S.)
per ounce, compared with $159 (U.S.) per ounce during the first nine months
of 1999. Realized selling prices achieved for gold sales in the first nine
months were $326 (U.S.) in 2000 and $318 (U.S.) per ounce in 1999.
PRODUCTION AND FINANCIAL DATA
Nine months to Sept. 30
2000 1999
Gold sales (ounce) 87,787 67,900
Realized prices
per ounce (in U.S. $) $326 $318
Cash operating
costs per ounce
(in U.S. $) 170 149
Total cash cost
per ounce (in U.S. $) 180 159
Net earnings
per share (in
Canadian $) 0.25 0.21
Cash flow from
operating activities
per share (in
Canadian $) 0.37 0.29
Cash per share,
end of period (in
Canadian $) 0.41 0.29
Partly as a result of mining the Kodiak B ahead of schedule, production for
the 2001 season has been reduced to an estimated 24,000 ounces. All mining
operations at Golden Bear are scheduled to be completed later this year,
and operations in 2001 will be restricted to crushing, stacking and heap
leaching of the remaining ore. A further 4,000 ounces are expected to be
recovered in 2002, as cleanup and reclamation of the Golden Bear mine site
takes place.
Wheaton River has been informed by the government of Costa Rica that the
technical review of the company's Bellavista project has been completed and
there are no environmental impediments in the mine design or operating plan
which would prevent the construction of a heap-leach mine on the site.
However, Wheaton River will not be proceeding with the construction of the
Bellavista project in December of this year as originally hoped, for two
reasons. First, final permitting by government authorities continues to be
delayed, primarily because of the continuing inability of the SETENA to
schedule a required public hearing into the project. However, the company
remains optimistic that a resolution will be forthcoming in the near
future. The second reason for the delay is the continued slump in the price
of gold. As previously stated, Wheaton River would prefer to hedge a
significant portion of Bellavista gold production at a price of no less
than $350 (U.S.) per ounce before beginning construction. Depending on
forward sales prices for gold, a spot price of $290 (U.S.) to $300 (U.S.)
is needed to build this hedge book.
Wheaton River is very pleased with the results of drilling by Kinross Gold
Corporation on the George Lake gold project in the Nunavut Territory. A
program of 39 holes totalling approximately 11,000 metres were drilled in
the vicinity of the Goose Lake deposit, and encountered numerous high-grade
gold intercepts over minable widths. Some of the better results were: 13.3
metres grading 23.6 grams gold per tonne, 6.4 metres grading 29.6 grams and
17 metres grading 14.9 grams. In all, the program produced 43 intercepts
grading higher than 10 grams gold per tonne over widths greater than two
metres. Although the drilling was too widely spaced to add to the
two-million-ounce resource at the project, it did extend the deposit to the
north, south and to depth, indicating that a significantly larger deposit
may exist.
Throughout the prolonged slump in world gold prices, Wheaton River has been
able to manage its affairs better than most other gold companies. The
company has built up a strong cash position, has acquired and advanced a
number of projects so it can proceed to production quickly should gold
prices rebound, and has avoided the debt spiral that has put so many other
companies in trouble these past few years. However, with the effective
completion of gold production at the Golden Bear mine next year, the board
of directors has some momentous decisions to make on the future direction
of Wheaton River. All possibilities that will maximize shareholder value
will be given consideration.
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