Canadian firm spurns CdA Mines’ offer

A Canadian gold mining company isn’t interested in a $1.8 billion buyout offer from Coeur d’Alene Mines Corp., its board of directors said Monday.

Wheaton River Minerals Ltd. will continue to pursue a merger with another Canadian firm, IAMGold Corp. of Toronto, according to a company press release.

A merger with IAMGold does more to advance Wheaton River’s goals of becoming a large, low-cost gold producer, said Ian Telfer, Wheaton River’s chairman. Telfer also raised questions about Coeur d’Alene Mines’ financial performance. The Coeur d’Alene-based silver producer lost more than $500 million since 1996, and it continued losing money during the past three years, even as gold and silver prices rose, Telfer noted.

“In contrast, Wheaton’s cash flow and earnings have been extremely robust … .,” Telfer said in a statement. “Similar to Wheaton, IAMGold has a history of positive earnings.”

A merger of the two firms would create a new company, expected to produce nearly 1 million ounces of gold this year. Wheaton River, based in Vancouver, B.C., mines gold, silver and copper in North and South America, and Australia. IAMGold has gold properties in West Africa.

On June 8, Wheaton River’s shareholders will vote on an all-stock merger offer from IAMGold Corp. Two-thirds of the shareholders must approve of the deal for the merger to take place.

Last week, Coeur d’Alene Mines made an unsolicited bid for Wheaton River. The company is offering stock, plus up to $205 million in cash, for Wheaton River. The offer represents about 50 cents more per share than IAMGold’s proposal, according to Dennis Wheeler, chairman of Coeur d’Alene Mines.

Wheeler said he’s meeting this week with some of Wheaton River’s largest shareholders to answer questions about the offer. But the company doesn’t have any plans to pursue a hostile takeover, he said.

Acquiring Wheaton River would significantly strengthen Coeur d’Alene Mines, raising its silver production by nearly 50 percent. The merged companies would become North America’s fourth largest gold and silver producer.

Wheeler called Telfer’s comments about Coeur d’Alene Mines’ financial position a “red herring.” The company has been on a turnaround since last year, paying off its debt and working to develop low-cost gold and silver mines, he said.

“Coeur d’Alene Mines is a new company,” Wheeler said. “Wheaton itself has a checkered past, before they became the strong company we’re interested in.”