Having just acquired
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%.
Wheaton and an unidentified arm’s-length third party will split the cost and each take home a 12.5% share. Wheaton plans to finance its portion of the acquisition with debt and does not anticipate issuing additional equity. Subject to board and regulatory approvals, the deal is expected to wrap up in June.
In mid-March, Wheaton acquired its initial 25% interest in Alumbrera, along with the Peaks gold mine in Australia, from Rio Tinto for US$210 million. A $333.5-milion equity financing funded that acquisition.
In the end, Wheaton will hold 37.5% of the Alumbrera mine, which churned out 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).
Australian-based M.I.M. Holdings owns the remaining half of Alumbrera.
Wheaton expects its latest acquisition to boost annual production to 450,000 oz. gold and 6.5 million oz. silver at an estimated cash cost (including byproduct copper credits) of US$99 per oz.
In 2002, Wheaton racked up net earnings of US$5.6 million (or 4 per share) on revenue of US$35 million for 2002. A year earlier, the company suffered a net loss of US$10.7 million (or 18 per share) on revenue of US$9 million in 2001. The turnaround reflects the June 2002 acquisition of Minas Luismin and its three gold and silver operations in Mexico.
At the end of 2002 Wheaton’s cash and equivalents totalled US$22.9 million, up from US$1.7 million the previous year.
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