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Wheaton River Minerals [gold] (Toronto: WRM/ Amex:WHT): Follow-Up NO 1

-- Posted Wednesday, 30 April 2003 | Digg This ArticleDigg It!

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Purchase Date

No. of Shares

Purchase Price

Cost ($)

Price Today

Value Today

April 29,2003












Profit (in %)





Business Summary

Wheaton River Minerals is a leading gold and precious metals producer with significant assets and operations in Mexico, Australia and Argentina. Based in Vancouver, British Columbia, Wheaton is the 8th largest gold producer in Canada, with a production of over 450,000 gold equivalent ounces per year at cash costs below US$130 per ounce. As of March 2003, proven and probable reserves totaled 3.3 million gold equivalent ounces and inferred resources exceeded 3 million gold equivalent ounces.




In Australia, the company operates the Peak mine, which is located 600 kilometers west of Sydney. This operation consists of several underground and open-pit ore bodies, and is expected to produce 110,000 ounces at a cash cost of less than US$190. This mine has in excess of 700,000 ounces of gold in proven and probable reserves and successful exploration could increase this number. Wheaton acquired 100% of the Peak mine in March 2003.




In Argentina, the company acquired a 25% interest in Bajo de la Alumbrera, a large open-pit gold and copper mine, in March 2003. Bajo de la Alumbrera is located in the northwest of Argentina, in the province of Catamarca. At the end of 2002, Wheaton's share of proven and probable reserves stood at 1.8 million ounces of gold and 1 billion pounds of copper. Wheaton's share of gold production in 2003 is expected to exceed 140,000 ounces, at a cash cost of negative US$18 net of copper credits. This mine is expected to last in excess of 10 years.




In Mexico, the company produces 195,000 gold equivalent ounces (100,000 oz gold and 5.8 million oz silver) at total cash costs of US$187 per ounce. The largest operation, San Dimas, is a world-class epithermal vein system accounting for 70% of the production and the majority of Wheaton's inferred resources. These operations have consistently converted 90% of resources into reserves over the last 12 years. Wheaton acquired a 100% interest in the Mexican operations and its extensive exploration portfolio in June 2002.



Extensive Exploration potential in Mexico




Wheaton River Minerals Ltd. (“Wheaton River”) has announced and agreement to sell its La Guitarra silver/gold mine in Mexico to Genco Resources Ltd. (“Genco”) for US$5 million, subject to regulatory approval on behalf of Genco. The US$5 million purchase price consists of US$100,000 cash and US$900,000 of Genco shares to be delivered on closing and US$4 million to be paid in cash or Genco shares, at Genco’s option, over eight years.

La Guitarra is located 100 kilometers southwest of Mexico City, and is the smallest and highest cost of the mining operations acquired in connection with the Luismin acquisition, completed in June 2002. La Guitarra produced 13,400 gold equivalent ounces in 2002.


“This transaction will allow Luismin technical staff to focus on the continued growth and expansion of our other operations, and with Genco, La Guitarra will receive the attention required for a continued healthy operation,” commented Chairman and CEO, Ian Telfer.



Wheaton River has also announced a joint venture agreement with Capstone Gold Corp. (“Capstone”) of Vancouver on the Ventanas Project, 120 kilometers west of Durango City, Durango, Mexico. Ventanas is considered a geological twin to the prolific San Dimas epithermal gold/silver district (30 kilometers to the north), where Wheaton subsidiary Luismin operates the Tayoltita, Santa Rita, and San Antonio mines. To date, over a dozen different epithermal systems have been identified at Ventanas. Under the terms of the agreement, Capstone will spend US$5 million over four years to earn a 70% interest in Ventanas, at which point Wheaton River has the option to buy back to a controlling interest.


Fundamental Considerations


Proven & probable mineral reserves are at 3.3 million gold equivalent. The company  will be on a par with Goldcorp, IAMgold and Meridian, and surpasses, in annual production, Glamis and Agnico’s yields. Cash costs should be comparable to low-cost intermediates.


Moreover, Wheaton River Minerals has excellent exploration potential.



Technical Considerations



As the price of gold has fallen back to the lower boundary of the long-term up-trend, we are once again presented with an excellent buying opportunity.



Since the start of the year 2002, the trading volume has significantly increased, reflecting investors’ interest in this company.


The up-trend of the share price is well established and the recent rectification, which has run parallel to the correction in the price of gold, offers once again the chance to buy this share at a reasonable price with the potential to make significant capital gains.

Our recommendation: Buy!


If you wish to receive our follow-ups on the above recommended gold shares simple register at


Yours sincerely,


Peter Zihlmann


April 30, 2003


Disclosure: The author has not been paid to write this article, nor has he

received any other inducement to do so. The author is a shareholder in the

company and will benefit from any increase in the company’s share price.

Disclaimer: The author’s objective in writing this article is to invoke an

interest on the part of potential investors in this stock to the point where

they are encouraged to conduct their own further diligent research. Neither

the information, nor the opinions expressed should be construed as a

solicitation to buy or sell this stock. Investors are recommended to obtain

the advice of a qualified investment advisor before entering into any transactions in the stock. *********************************************************************************************************

-- Posted Wednesday, 30 April 2003 | Digg This Article


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