Luismin powers Wheaton’s quarter

Having wrapped up its acquisition of Luismin in mid-June, Wheaton River Minerals (WRM-T) quickly reversed course to post a tidy profit during the third quarter.

During the three months ended Sept. 30, Wheaton earned US$949,000 or (a penny per share), compared with a year-earlier net loss of US$11.8 million (22 per share). Revenue between the two periods more than doubled to US$15.8 million from US$6.9 million (mostly from the sale of non-core assets). Cash consumed by operations was US$1.9 million, in contrast to the nearly US$4 million generated in 2001.

The turnaround is even more dramatic over the nine-month period. For the first nine months of 2002, Wheaton’s rang up net earnings of just more than US$3 million (3 per share) on revenue US$16.8 million, compared with a year-ago net loss of US$13.4 million (25 per share) on US$8.9 million in 2001. Operation ate through US$948,000, compared with positive cash flow of about US$2.1 million in 2001.

Wheaton’s recent third quarter benefited from a full quarter’s worth of production from Luismin’s three Mexican mines — San Dimas, La Guitarra and San Martin, which combined churned out 47,835 equivalent gold oz. (including 25,867 oz. of gold) at a total cash cost of US$182 apiece. During the corresponding period of 2001, the Golden Bear mine in northwestern British Columbia poured 25,626 oz. at US$170 per oz. The lower costs at Golden Bear reflect the cessation of mining activity in 2001.

For the nine-month period, production came to 50,744 equivalent oz. (including 27,392 oz. gold) at US180 per oz. During the first three quarter’s of 2001 production amounted to 33,393 gold oz. at US$179 apiece.

Wheaton realized an average of US$ 331 for each ounce produced during the third quarter (up from US$270 per oz. a year earlier), and US$330 per oz. for the nine months (US$278).

On the exploration front, Wheaton recently inked two deals on two of its Mexican exploration properties that will see Placer Dome (PDG-T) spend US$4 million by the end of 2006, and Geologix spend US$2.25 million by the end of 2003.

The company is also shopping around for joint venture partners to advance some of the forty or so early stage exploration properties it inherited via the Luismin acquisition. Wheaton acquired Luismin, from Sanluis, a Mexican-based autoparts manufacturer, for US$75 million.

At the end of September, the company had US$19 million in cash and equivalents, and was debt-free.