Wheaton shifts gears

With all mining and crushing completed at its 89%-owned seasonal Golden Bear mine in northwestern British Columbia, Wheaton River Minerals (WRM-T) says it intends to turn its attention to becoming a mid-tier gold producer.

The company has $24 million in its coffers and plans to become one of the consolidators in the junior gold-mining industry.

"We are going to use that money as a base to grow Wheaton River into a mid-tier gold producer,” says Ian McDonald, the company’s chairman. "There are quality gold assets for sale all over the world right now, priced at a fraction of their original costs. There has never been a better time to build a gold company."

Golden Bear was one of the first heap-leach gold mines built in Canada. Over its life, it has produced more than 265,000 oz. gold at a cash cost of about US$170 per oz., providing about $43 million in cash flow during a period of record low gold prices. The mine’s production peaked in 2000 at 94,000 oz.

"We are now decommissioning and re-vegetating the site," says John Kalmet, Wheaton’s president. "This is the last year of operations at the mine and we will beat our estimates in 2001 by 10%, producing 33,000 oz. That will make it five better-than-expected years in a row for us."

During the recent second quarter, Golden Bear, running in leach-only mode, produced 18,984 oz. gold at a total cost of US$197 per oz.

Since production began in 1997, the mine has repeatedly exceeded feasibility predictions, which pegged the mine’s lifetime production at 215,000 oz. at US$233 per oz.

Wheaton’s other assets include the Bellavista heap-leach deposit in Costa Rica, where the company awaits a rebound in gold prices before forging ahead. The project has been granted various tax and customs advantages but Wheaton wants to hedge a significant portion of production at no less than US$350 per oz. This would require a spot price around US$300 per oz.

In Nunavut, Kinross Gold (K-T), which can earn a 70% interest, is advancing the George Lake project with 3,000 metres of drilling.

This program is focused on a possible down-plunge extension of the Goose Lake deposit to between 400 and 500 metres below surface. Goose Lake is the largest of six deposits at George Lake. Scout drilling will test several other known prospects.

The company also has an 89% interest in the Red Mountain deposit in northern British Columbia. A feasibility study there is focusing on the viability of relocating the Golden Bear mill to process a high-grade core of 700,000 tonnes grading 12 grams gold over 4-5 years.