Northern Orion joins Wheaton

Vancouver — the Unidentified Third Party That Agreed to Share the Us$180-Million Price Tag for a 25% Stake in the Bajo De La Alumbrera Gold-Copper Project Has Been Unmasked. Northern Orion Explorations (NNO-T) Has Inked a Deal With Wheaton River Minerals (WRM-T) to Take a 12.5% Stake in the Large Argentine Project.

Situated just 34 km from Northern Orion’s Agua Rica copper-gold deposit, Alumbrera produced 759,360 oz. gold and 199,550 tonnes copper during the year ended June 30, 2002. Cash costs (including copper credits) came in at minus US$18 per oz. gold. Over the next five years, the operation is expected to pour 540,000 oz. gold and 180,000 tonnes copper annually (T.N.M., Jan. 20-26/03).

The junior expects to benefit from substantial cash flow over the next 10 years, which could be used to bring the Agua Rica desposit into production without equity financing. Northern Orion is currently acquiring the remaining 72% stake own from BHP Billiton (BHP-N).

“The acquisition of a strategic and cash-flow-positive stake in Alumbrera, combined with our acquisition of the remaining 72% of the Agua Rica project, is a quantum step in the continuing growth of Northern Orion into an intermediate copper producer,” says President David Cohen.

In mid-March, Wheaton acquired an initial 25% interest in the low-cost Alumbrera operation, along with the Peaks gold mine in Australia, from Rio Tinto (RTP-N) for US$210 million. A $333.5-milion equity financing funded that acquisition. Shortly thereafter, the junior picked up another quarter-interest in the operation, this time from Rio Algom, a subsidiary of BHP Billiton.

The price tag on the latest deal is US$180 million, with up to US$50 million deferrable until May 30, 2005. The deferred portion will bear interest at a London Interbank Offer Rate plus 2%. The acquisition is slated to close on June 23.

In the end, Wheaton will hold 37.5% of the Alumbrera mine, Northern Orion will have a 12.5% stake, and Australian-based M.I.M. Holdings will own half.

In February 2003, Northern Orion agreed to pay BHP Billiton US$3.6 million before April 30 plus a final payment of US$9 million by the end of June 2005 for the major’s 72% stake in the neighbouring Agua Rica property.

Situated in the northwestern Argentina’s Catamarca province, Agua Rica hosts a proven and probable geological resource of 750 million tonnes grading 0.66% copper and 0.23 gram gold per tonne using a cutoff grade of 0.4% copper. Over US$50 million has been spent delineating the resource.