GOLD MERGER NEWS Wheaton River, IamGold Tie Knot (April 07, 2004)

TORONTO Canadian mid-tier miners IAMGOLD and WHEATON RIVER MINERALS have agreed to merge, creating one of the world's top 10 gold producers, the two said in a joint statement.

The combined company, with interests in seven gold mines in Latin America, West Africa and Australia, is forecast to produce 1.0 million oz of gold per year at total cash costs of less than US$100/oz gold equivalent in 2004, they said. Output is forecast to increase to over 1.3 million oz of gold equivalent in 2006.

The deal involves Wheaton River exchanging one of its shares for 0.55 of an IamGold share, representing a 22% premium over the five-day average closing price of Wheaton's shares as of March 30. As a result, the new company will be owned 68% by existing shareholders of Wheaton River and 32% by IamGold.

"The combination creates a very strong platform from which to grow to the next stage, whatever that might be," Wheaton River CEO Ian Telfer said at a conference call to discuss the agreement. Both companies believe that the gold industry is about to enter a period of considerable consolidation and, "We decided to pick the best dance partner early in this process," he added.

But analyst Victor Flores at HSBC said he thought the deal lacked benefits for IamGold shareholders. "The smaller, more attractively-valued company, IamGold, is paying a premium to acquire the more expensive company. What's so good about that?" he asked.

The transaction is subject to due diligence, expected to be complete before the end of April, and the agreement of two-thirds of the votes cast by Wheaton River shareholders and a majority of IamGold shareholders at meetings scheduled to take place in June.

The new company will be led by Joseph Conway as president and CEO and Ian Telfer as executive co-chairman of the board of directors. The expanded board will include the eight current IamGold directors and the eight current Wheaton directors, the statement said.

Wheaton River's assets include a 37.5% stake in the Alumbrera copper-gold mine in Argentina and the Luismin mines in Mexico (www.WheatonRiver.com). IamGold has operating mines in West Africa and a portfolio of exploration properties in South America (www.IamGold.com).