GLW might have turn the corner as of today with a 10% increase in SP and 21 m shares traded , that is 10 times the average volume . The fact is that as gold price increases it's foothold over the $1000 mark and seems to be on it's way to record breaking ground for what appears to be a sustained rise , GLW stands to make increase profit from it's hedging business and make good of the $100 million debt financing closed last may.
It also made a fantastic deal With FIU last december at a time where credit was nowhere to be found wich closed in march to buy gold from FIU at a cost of $400 !! (
Gold Wheaton has purchased a minimum of 20,000 ounces of gold in 2009 (up to a maximum of 25 percent of the gold production) and thereafter 25 percent of the life-of-mine gold production from First Uranium's Mine Waste Solutions tailings recovery operation in South Africa ("MWS"). Gold Wheaton has previously paid US$50 million (the "First Payment") to First Uranium.
Under the terms of the gold purchase agreement Gold Wheaton will continue to make ongoing payments equal to the lesser of US$400 per ounce and the prevailing spot price (subject to an annual inflation adjustment of 1 percent, commencing after the fourth anniversary of the First Payment).
"We are pleased to make the second payment to complete the gold purchase agreement of 25% of the gold produced over the life of First Uranium's MWS tailings retreatment operations. The facility is operating well and is a very low risk and long life operation," said David Cohen, Chairman and CEO of Gold Wheaton. "We have been receiving gold since December 2008 and anticipate that gold production from MWS will approximately double over the next 18 months." )
So as gold prices keep increasing and production from FIU keeps rising the cost of GLW's own financing will decrease in the face of increasing profits .
So far it's my personal opinion that the market has undervalued that deal caused by the uncertainty affecting the longer term outlook for the price of gold as well as the cost induced from GLW's own finacing , i think now the market is turning around as it considers the longer term prospect for the price of gold .
The next couple of months should prove interesting for shareholders .
