Rivals woo Iamgold shareholders

Wheaton River Minerals (WRM-T) and Golden Star Resources (GSC-T) both applied a bit of spit and polish to their assets on Tuesday looking to entice Iamgold (IMG-T) shareholders to accept their competing bids.

Wheaton was first off the blocks announcing a 20% increase in ore reserves at the Alumbrera gold-copper mine in Argentina.

Wheaton says that an ongoing delineation-drilling program has added some 80 million tonnes of reserves containing 350,000 tonnes of copper and 1.2 million oz. of gold. The increase is good enough to extend the mine’s life by 2.5 years and ensure gold production until mid-2015.

The increase also reflects a re-optimization of the mine plan to include a new geological model and higher metal prices of US$350 per oz. of gold and US90 per lb. of copper. The new ore is situated predominantly in the north and northwest, both inside and outside previous pit limits.

Wheaton’s chief executive Ian Telfer says the new reserves boost the life-of-mine cash flow by more than $200 million.

Definition drilling continues, and a new ore reserve calculation is expected in the second half of the year.

Wheaton owns a 37.5% interest in the open-pit operation; the remainder is held by operator Xstrata, with 50%, and Northern Orion Resources (NNO-T) with 12.5%.

Later in the day, Golden Star fired back, boasted a 33% increase in resources at its 90%-owned Wassa gold project in Ghana.

There, 10,250 meters of reverse-circulation drilling and 1,600 metres of diamond drilling targeted extensions to the planned open pits. Indicated resources now stand at 14.8 million tonnes averaging 1.2 grams gold, including 3.8 million tonnes of heap-leach material grading 0.5 grams gold; another 38.4 million tonnes running 1.2 grams gold fall in the inferred resource category.

An updated reserve calculation is due early in the third quarter. At the end of 2003 Wassa’s reserves were pegged at 16.2 million tonnes grading 1.3 grams gold.

Earlier this year, Wheaton and Iamgold unveiled plans to merge at the rate of 0.55 of an Iamgold share for one Wheaton share. Rivals Golden Star and Coeur d’Alene Mines (CDE-N) later stepped with competing bids for Iamgold and Wheaton, respectively.

Golden Star has offered Iamgold shareholders 1.15 of its own shares for each Iamgold share tendered. Coeur d’Alene recently boosted the cash portion of its bid for Wheaton by $285 million, to bring the minimum cash value to $1 per share. In all Coeur’s offer values Wheaton’s shares at about $5 apiece.

Iamgold shareholders are slated to vote on which plan to accept on June 29; Wheaton shareholders will follow on July 6.


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