WMC offers `technical, financial’ backing to Canadian companies

** over ** With a number of company operations currently being expanded and several mines under development, Australia’s Western Mining Corp. believes that “additional diversification outside of Australia would be beneficial to the over-all group.”

In the past month the company has announced plans to acquire Northgate Mines, Seabright Resources, Grandview Resources and Western Goldfields, all of which are significant gold producers. The last two companies’ gold production is confined to the United States.

Discussing Western Mining’s plans from its Melbourne office, D. W. Morley, director of finance, emphasized that the company’s acquisition program is premised on it obtaining “good value for our investment.”

“We believe that our offers are very fair but hopefully we will bring sufficient resources to the operations to ensure that we get a satisfactory return from our investment,” he told The Northern Miner.

Morley said the companies were “well run at an operational level, they have good ore reserves, and were producing gold profitably.” But he concluded that the technical and financial resources of Western Mining “may assist in developing such operations further and hopefully derive a satisfactory return from our investment.”

He said Western Mining will initially finance the acquisitions by equity while noting “the most recent estimate of our cash balances was approximately $1.3 billion(A).” Last year’s profit before extraordinary items was $83 million, most of which was derived from gold income and from Western Mining’s investment in Alcoa Australia. He added that nickel operations in the 1986/87 fiscal year were “essentially only break-even.”

The equity of the company in gold production during that year was approximately 360,000 oz and he estimated production for the latest fiscal year will exceed 450,000 oz before taking into account any production from North America.

Besides nickel and aluminum, Western Mining sells talc and has developments for the production of copper and uranium. It also produces oil and gas. “However, at this time we have no specific interest in acquiring such assets in North America,” he said.