Wheaton River to remain unhedged, expects gold price to go higher in 2006
Wheaton River to remain unhedged, expects gold price to go higher in 2006 01:43 PM EST Mar 08 CRAIG WONG
VANCOUVER (CP) - Wheaton River Minerals, which recently approved a $2.4-billion merger with Goldcorp Inc., plans to remain unhedged and expects the price of gold to push higher next year, executives said Tuesday.
Wheaton River chief Ian Telfer, who was recently appointed president and CEO of Goldcorp, told a conference call with analysts that he expects the price of gold to remain between $400 and $500 US per ounce this year.
"In 2006 we think it is going to trend higher from there, so we're very bullish on the price," Telfer said.
The merger of Goldcorp (TSX:G) and Wheaton River was accepted by shareholders last month. Telfer, who was head of Wheaton River, replaces Goldcorp CEO Rob McEwen, who became non-executive chairman of the enlarged firm.
Telfer said the company will continue with its strategy to be unhedged - lacking set prices for future sales - and set aside some of its production at Goldcorp's Red Lake mine in northwestern Ontario to take advantage of what it hopes will be higher prices of gold in the future.
"We are going to continue holding back gold at Red Lake until such time as we may have a place to spend some of that gold," Telfer said. "But in the absence of needing that money, I think we'll stay with that policy for now."
In 2005, Wheaton expects to produce 675,000 gold equivalent ounces. Capital expenditures planned in 2005 will be about $152 million US.
The company also announced Monday that its proven and probable gold reserves had increased to 5.1 million ounces as of Dec. 31, 2004.
For 2004, Wheaton River (TSX:WRM) earned $142.1 million US or 22 cents per diluted share on revenue of $419.2 million US. That compared with a profit of $57.7 million US or 13 cents per share on revenue of $212.6 million US.
The Vancouver-based mining company is expected to be formally taken over by Goldcorp at a shareholder meeting April 12.
Under the deal, Wheaton River shareholders will receive one Goldcorp share for every four Wheaton River shares they hold.
In trading Tuesday on the Toronto Stock Exchange, Wheaton River Minerals shares were up 14 cents at $4.49, while Goldcorp shares were up 50 cents at $18.
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