CdA Mines urges Wheaton revolt

COEUR d’ALENE — Rebuffed a second time by opposing management, Coeur d’Alene Mines Corp. on Monday called on stockholders of Wheaton River Minerals Ltd. to reject another merger deal and at least review Coeur’s offer.

“Coeur’s proposal is clearly superior,” Chairman Dennis Wheeler said in a statement. The comment was issued in response to a statement from the Wheaton River board earlier in the day that it was rejecting the offer in favor of following through a merger deal with IAMGold Corp., also based in Toronto.

In a late night meeting on Sunday, the Wheaton River board listened to a 30-minute presentation from Wheeler and other Coeur executives but then reiterated its support for the IAMGold deal.

The Wheaton River board maintained that Coeur’s increased offer last week did not significantly improve the bid compared to IAMGold.

The board also cited Coeur’s history of losses and negative cash flow and the fact that the Coeur debt financing plan would inhibit future growth and undermine cash flow.

With the increase offered last week, Coeur proposed taking over Wheaton River for about $2 billion in equity and over $130 million in assumed debt. The company said the deal would increase silver production by 45 percent and create a top 10 global gold producer with among the lowest cash costs of production in the industry.

Coeur d’Alene Mines has seen a revival in the past year. From a stock price of barely over a dollar a share last summer, the company surged to a stock price of nearly $8 a share in February before settling back between $4 and $5 the past six weeks.

Even with the slight price erosion of Coeur’s stock in recent days, Wheeler claimed his company’s offer was still a quarter per share higher than IAMGold’s.

Although the Wheaton River board refused to delay today’s shareholder meeting to consider the IAMGold deal, Wheeler pointed out that one of Wheaton River’s biggest shareholders and one of Canada’s independent proxy advisory firms both are against the IAMGold deal.

The Ontario Teachers’ Pension Fund, which owns 5.6 million shares of Wheaton River, announced last week it was voting against the deal, and advisory firm Fairvest reversed its earlier decision and recommended rejection on grounds that shareholders had not gotten time to evaluate the Coeur offer.