Wheaton River Minerals Ltd. landed in Mexico with both feet in April 2002 through the acquisition of Luismin, Mexico's 3rd largest mining company. This one act alone vaulted them into a mid-tier producer with perfect timing to catch the current increase in precious metal prices. They followed up with acquisition of 100% of Miranda Mining Corp. for US$38.6M in November, 2003 and gobbled up Teck's part of the Los Filos gold deposit for and additionas US$48.4 million to own 100%. They optioned El Oro to Placer and vended the La Guitarra Mine in Mexico State outright to Genco Resources.
Wheaton River Minerals Ltd. WRM (TSE)
Wheaton River Minerals Ltd. (WRM: TSE) announced that it has entered into an agreement to acquire all of the outstanding shares of Minas Luismin, S.A. de C.V., one of Mexico's largest producers of gold and silver. This acquisition will result in Wheaton becoming an intermediate gold and silver producer with Luismin's 2002 production expected to exceed 183,000 gold equivalent ounces at a cash cost of approximately US$195 per ounce.
Luismin owns three mining operations that have produced over 1.5 million gold equivalent ounces since 1991. Production in 2001 totalled 98,000 ounces of gold and 5.75 million ounces of silver (190,600 gold equivalent ounces at a cash cost of US$198 per ounce), making it the third largest producer of silver and second largest producer of gold in Mexico.
Luismin has proven and probable mineral reserves of 0.86 million gold equivalent ounces and mineral resources of 3.8 million gold equivalent ounces of which approximately 41% is gold. Over the past ten years Luismin has converted more than 80% of their mineral resources to mineral reserves. In addition to the operating mines, Wheaton is also acquiring a select portfolio of over 40 exploration projects located in prospective geological regions of Mexico.
Under the agreement, Wheaton will acquire Luismin from a subsidiary of SANLUIS Corporacion, S.A. de C.V. in exchange for a consideration of US$75 million in cash (some of which may be deferred), of which it is anticipated that US$20 million will be bank financed to replace an existing Luismin banking facility, and US$7.5 million in common shares of Wheaton which will be issued at a 25% premium to the market price. An additional Silver Price Adjustment Payment of US$7.5 million in Wheaton common shares will be paid if the price of silver averages US$5 or more over a period of 60 consecutive trading days during the 24 months following completion of the transaction.
Completion of the Luismin acquisition is subject to a number of conditions and consents including Wheaton obtaining all requisite regulatory approvals and raising the required funds. At the present time Wheaton has US$20 million in cash and marketable securities. An investment banking syndicate lead by Griffiths McBurney & Partners and including BMO Nesbitt Burns Inc., Canaccord Capital Corporation and Haywood Securities Inc. will assist in a special warrant equity financing. The Company expects that the transaction will close about the middle of June 2002.
Following the closing Antonio Madero, the Chairman and CEO of SANLUIS and Eduardo Luna, the President of Luismin will join the Board of Directors of Wheaton. Mr. Luna will continue in his current role and will become an executive of Wheaton, based in Mexico.
Antonio Madero is a mining engineer and a graduate of the Harvard Graduate School of Business. He serves as a Director of numerous corporate and cultural organizations including Deere and Company, ING Mexico, Grupo Mexico and Scotiabank Inverlat. He is also a member of the International Advisory Board of J.P. Morgan Chase Inc. of New York.
Eduardo Luna is a mining engineer, President of the Mexican Mining Chamber and a former President of the Silver Institute. He has led Luismin for the past ten years as production and reserves have more than doubled.
"We welcome both Antonio Madero and Eduardo Luna to our Board and look forward to working with them to expand the great mining company that they have created" said Ian Telfer Chairman and CEO of Wheaton.
"This is a great day for the shareholders," Mr. Telfer added. "Our shareholders have waited patiently for the past six months and I trust it has been worth the wait. We were fortunate to be able to acquire a low cost gold and silver producer with a large reserve and resource base, a strong experienced management team and significant potential for growth.
"Over the past six months we have raised cash and disposed of certain development properties in preparation for an acquisition. Over the next five years we expect to increase annual production to over 250,000 gold equivalent ounces per year and make improvements that will result in cash costs declining to less than US$170 per ounce. We are also very excited about a number of the exploration properties that are well advanced. The acquisition of Luismin is the first of a series of acquisitions designed to create a new mid-sized gold mining company focused on increasing production, reserves and cash flow."
"I am very pleased about this transaction and I am looking forward to joining the Board of Wheaton," said Antonio Madero. "The combination of their technical track record and financial expertise makes them a perfect partner for Luismin."
Pierre Lassonde, President of Newmont Mining Corp., and a member of the Wheaton Advisory Board commented "I am pleased that management was able to acquire such a high quality, long life asset at what I believe is the early stage of a prolonged rally in the price of gold."
In addition to Griffiths McBurney & Partners, Wheaton was also advised by Roman Friedrich and Company and Endeavour Financial. SANLUIS was advised by Rothschild Inc.
The 860,000 gold equivalent ounces of mineral reserves are comprised of (i) approximately 224,000 gold ounces and 13.7 million silver ounces of proven reserves, and (ii) approximately 180,000 gold ounces and 16.6 million silver ounces of probable reserves. The 3.8 million gold equivalent ounces of mineral resources are comprised of approximately 1.5 million gold ounces and 152 million silver ounces of inferred mineral resources. The mineral resource and mineral reserve estimates are as of December 31, 2001. Mineral reserves and mineral resources are calculated using conventional block estimation techniques. Gold and silver prices for the mineral reserve calculation are US$271/oz. and US$4.37/oz., respectively. The cut off grades are based upon historical metal recovery for each mine together with current operating costs of US$45/t at Tayoltita, US$44/t at Santa Rita, US$48/t at San Antonio, US$22/t at San Martin and US$57/t at La Guitarra. Mineral resources which are not mineral reserves do not have demonstrated economic viability.
Press Release 24Apr02
El Oro Gold District, Mexico. Placer Dome enters agreement with Wheaton River Minerals over El Oro Au-Ag Project, Mexico Wheaton River Minerals Ltd. ("Wheaton") (TSX:WRM - News) is pleased to announce the signing of an agreement with Placer Dome CLA Ltd. ("Placer") on the El Oro Project, 150 kilometres northwest of Mexico City, in Mexico. The agreement calls for Placer to conduct exploration on the project, with staged expenditures of US$4 million by December 1, 2006 to earn a 75% interest. Placer can earn a further 10% interest by completing a bankable feasibility study. Upon completion of the feasibility study, Wheaton will also have the right to purchase back 10%, effectively maintaining its position at 25%.
The El Oro Project was acquired by Wheaton as one of the more than 40 exploration projects throughout Mexico included in the Minas Luismin, S.A. de C.V. acquisition, completed on June 19, 2002. El Oro is well known as one of the best examples of a world class bonanza style epithermal gold-silver vein system, with historic production totalling over 8 million ounces of gold and 110 million ounces of silver. The last significant production from the El Oro camp was in the 1920's, and modern exploration methods have yet to be tested in the area. Placer intends to employ proprietary exploration methods in the search for parallel vein systems.
Wheaton continues to entertain joint venture partners interested in advancing other projects in its Mexican exploration portfolio.
Press Release 15Oct02
Luismin S.A. de C.V.
Luismin, S.A. de C.V. a Mexican mining company that produces gold and silver in the form of dore, which is exported as well as gold and silver concentrate, which it sells to Mexican companies for refining . Luismin operates seven mines in Mexico of which some have been in operation for over 100 years. In 1997, Luismin sold 86,000 ounces of gold and 5.9 million ounces of silver, increases of 13% and 15%, respectively, as compared to 1996. Measured in dollars, net sales for 1997 were US $55 million, a -5.7% decrease over the prior year.
Luismin traces its origin to the formation of the San Luis Mining Company, which was founded in 1891 to engage in gold and silver mining activities in the San Dimas district near the town of Tayoltita in the north-central state of Durango. In 1911, the Mexican Candelaria Company was established, operating mines in the same district. These two companies merged in 1961 under the name of Minas de San Luis, S.A. de C.V. (currently "Minas SANLUIS"). In 1962, Luismin was created as a holding company for Minas de San Luis and other mining interests whose shares were traded for the first time on the Mexican Stock Exchange in 1967. During 1969, to comply with changes made in the Mexican mining law which limited foreign investment in the Mexican mining sector, 51% of the shares of Minas de San Luis were bought by Mexican investors. In 1979, the remaining 49% was acquired by Luismin.
Luismin operates 7 mines in 3 mining districts and had numerous joint-ventures with other partners throughout Mexico. See table for details.
San Dimas District Durango: Tayoltita, Promontario, Casteilana
San Dimas District, Sinaloa: San Antonio, Rosario
San Martin District, Queretaro: San Martin Gold Mine
Temascaltepec District, Mexico: La Guitarra Mine.
Significant current minority interest Joint-Venture projects include:
Metates Project, Durango with Cambior Resources
San Nicolas VMS, Zacatecas wthe Western Copper and Teck Reosurces
Miranda Mining Corporation's objective was to prospect, acquire, explore, develop and put into production gold, silver and base metals deposits, located in the United Mexican States (“Mexico”).
Wheaton River Minerals Ltd. acquired 100% interest in Miranda Mining Corporation for US$38.6 million
Press Release 03Nov03
Miranda Mining Corporation
Wheaton River Minerals Ltd. acquired 100% interest in Miranda Mining Corporation for US$38.6 million
Press Release 03Nov03
Enrique R. Miranda Paz is CEO of MRM. On November 21, 2001 Miranda Mining & Development Company, a private Mexican company, amalgamated into Malaspina Capital Ltd and was renamed Miranda Mining Corporation.
Miranda has several operating subsidiaries some of which are in JV with Canadian companies on various projects. These are listed below but if you really want loads of very good information including color maps of various projects go to MRM's own website: It lists 5 active projects/properties: Nukay, NuTeck, Media Luna, Ana Paula and Xichu. Roger Scammell, ex-Teck Resources' Mexico Office Manager is geologic advisor to the company.
Nukay/La Aguita Gold Mine, Guerrero. Cia. Minera Nukay S.A. de C.V. is a 70/30 exploitation JV with Teck Resources on the Nukay/La Aguita open pit and La Subida underground gold mines in Guerrero. A small vat-leach operation in the same location as the Nukay Project below
Nukay Project, Guerrero. A 30/70 Joint-Venture with Teck Resources is Cia. Minera NuTeck S.A. de C.V. (70% Teck) which is focused on the Nukay Open-Pit Gold Project especially the areas of Los Filos, Creston Rojo, Dona Maria and La Peninsular.
El Caracol Project, Guerrero. A 40/60 Exploration Joint-Venture with Brandon Gold Corp. on exploration of the 50,274 ha El Caracol concession, Morelos Reserve Area near claims controlled by Farallon Resources. Brandon can earn an undivided 60% interest by spending $4 million over 3 years.
Minera Nafta S.A. de C.V. is an exploration focused subsidiary active in Gurerrero, Oaxaca and Durango. El Oregano Claim in Durango, Vaticano Norte, Sur, Poniente and AgAu claims in Guerrero, Natividad Sur Project and the old San Carlos Mine in Oaxaca. Two large new additional claims in Guerrero are Jaleaca (125,896 ha) and Orejas (17,060 ha).