Wheaton looks north as Golden Bear naps

With little ore left to tap at its Golden Bear mine in northwestern British Columbia, Wheaton River Minerals (WRM-T) saw its earnings slip to $525,000 in the three months ended June 30.

The profit, which translates into 1 per share, compares with earnings of $4.9 million (10 per share) in the corresponding period a year earlier. Revenue between the periods was nearly halved to $8.1 million.

Golden Bear, which is scheduled to shut down this year, produced 18,984 oz. at a total cost of US$197 per oz. Production is off considerably from a year ago, when total cash costs rang in at US$168 per oz, owing to the depletion of reserves.

The leach pads are expected to release 33,000 oz. in 2001 at a cash operating cost of less than US$200 per oz.

Reclamation activities are under way. A partial refund from reclamation deposits may be granted if key requirements are satisified by year-end.

Wheaton sold its production at an average of US$279 per oz, or US$52 per oz. less than the second quarter of 2000. The reduction reflects a greater reliance on spot prices over hedging.

Meanwhile, Wheaton continues to await a rebound in gold prices before forging ahead at the Bellavista open-pit deposit in Costa Rica. In May, the government granted the project various tax advantages and the right to quick, on-site customs inspections.

The company wants to hedge a significant portion of production at no less than US$350 per oz. This would require a spot price of roughly US$300 per oz.

Bellavista, which centres on an epithermal gold-silver deposit, hosts 11.2 million tonnes grading 1.54 grams gold per tonne. This is sufficient to yield 60,000 oz. annually over more than seven years at a total operating cost of US$179 per oz.

Capital costs are pegged at US$28 million.

In Nunavut, Kinross Gold (K-T) is advancing the George Lake project with 3,000 metres of drilling. The program is focused on a possible down-plunge extension of the Goose Lake deposit, to between 400 and 500 metres below surface.

The deepest holes drilled to date cut mineralization at 320 metres, returning 13.3 metres of 23.6 grams gold per tonne. Two other intercepts averaged 33.7 grams over 2 metres and 22.4 grams gold over 2.8 metres.

Goose Lake is the largest of six deposits at George Lake. Several prospects are also known, a few of which will be tested by scout driling.

Kinross can earn a 70% interest in George Lake by spending $20 million on exploration by Nov. 30, 2004.

At June 30, Wheaton had $23.4 million in working capital, mostly in the form of cash or equivalents. This is expected to increase considerably by year-end.