Wheaton River surges in 3Q

The third quarter was kind to Wheaton River Minerals (WRM-T), contributing US$14.7 million to the fledgling mid-tier producer’s bottom line.

The US3-per-share profit came on revenue of US$63.1 million and compares with earnings of US$949,000 (or US1 per share) in the three-month period ended Sept. 30, 2002, when revenue topped US$15.8 million. It also boosts earnings in the first nine months of this year to US$55.1 million — 886% higher than a year earlier.

Wheaton also reported considerably higher cash flow, recording US$26.6 million for the recent quarter and US$55.1 million for the nine-month period. These compare with US$3.09 and US$1.67 million for the respective periods of last year.

The financial improvement reflects the partial acquisition of the Alumbrera mine in Argentina and full takeover of the Peak mine in Australia. Both were acquired in the first quarter, and Wheaton has since increased its stake in Alumbrera to 37.5%.

Wheaton also owns two operations in Mexico, having recently sold La Guitarra to Genco Resources (GGC-V) for 1.38 million shares and a promissory note worth US$4 million. The debt can be repaid in cash or shares, at a rate of US$500,000 per year.

Wheaton acquired the so-called Luismin operations in mid-2002. As part of the deal, the company recently had to print another 11.4 million treasury shares on account of the increase in silver prices.

During the quarter, Wheaton’s attributable production rang in at 141,800 oz. gold-equivalent (120,900 oz. gold and 1.52 million oz. silver) and 41.3 million lbs. copper. Of that, 15,700 oz. gold-equivalent and 13 million lbs. copper remained in inventory.

Total cash costs came to US$98 per oz. gold, net of silver and copper credits. This is half what was recorded a year ago, reflecting the inclusion of the Alumbrera and Peak results.

On Sept. 30, Wheaton had about US$138.6 million in working capital and about US$116 million in long-term debt. Among the company’s current assets is US$128 million in cash or marketable securities, more than enough to cover the current portion (US$36.4 million) of long-term debt.