Wesdome Gold Mines Ltd.
WESDOME ANNOUNCES 2021 FIRST QUARTER FINANCIAL RESULTS
TORONTO, May 12, 2021 (GLOBE NEWSWIRE) -- Wesdome Gold Mines Ltd. (TSX: WDO) (“Wesdome” or the “Company”) today announces first quarter (“Q1 2021”) financial results. All figures are stated in Canadian dollars unless otherwise noted.
Mr. Duncan Middlemiss, President and CEO commented, “During the first quarter, a significant milestone was achieved at Kiena, with the completion of the A Zone bulk sample reconciliation which has produced 6% more gold at a feed grade of 15.7 g/t versus 14.7 g/t in the resource block model grade. Additionally, the bulk sample generated an additional $3.9 million from the sale of 1,793 ounces of gold in the quarter. Significant progress was also made towards projects that would benefit the mine re-start, such as development, mill refurbishment, shaft and other construction projects, and work at the tailing management area. The PFS is near completion and the Company intends to release the results of the PFS later in the quarter.
During the quarter a total of $14.0 million was spent on growth and capital projects (Q1 2020: $10.6 million). Consequently, free cash flow decreased compared to the same period in 2020, and the cash position remained flat quarter over quarter with $63.9 million as of March 31 (December31 2020: $63.5 million), sufficient to fund all exploration, sustaining, and growth capital projects including the potential restart of the Kiena mine
The Eagle River Underground Mine produced 53,540 tonnes at a head grade of 12.8 grams per tonne (“g/t Au”) for 21,396 ounces produced, within our expectations. Eagle River grades were slightly below the low end of our guidance, however increased throughout the quarter. The Company expects to be within guidance for the year, and remains on track to produce 92,000 – 105,000 ounces from the Eagle River Complex, plus an additional 15,000 – 25,000 from Kiena pending a restart decision.
Exploration activities at both sites ramped up during Q1 and produced very positive results. At Eagle, the Company is embarking on its’ $16M exploration campaign with 5 drills underground and 2-3 rigs on surface. Currently a regional structural compilation is underway which will aid in the understanding of the current Eagle River deposit and generate high quality mine and regional targets. As well, definition drilling at the Falcon Zone advanced rapidly, and initial sill development is expected to commence in Q2, thereby providing an opportunity to assess the gold mineralization of the Falcon Zone within volcanic rocks.
At Kiena, an exciting new discovery was made – a new high grade gold zone was discovered in the footwall of the A Zone. This drilling highlights the potential to add ounces, not only in this area but illustrates the untested potential of the entire gold system around the Kiena mine. This footwall zone will be one of the zones of focus for the continued drilling.”
The Company has performed well during the quarter despite the Covid-19 pandemic. Hygiene protocols are well implemented and the operations have been Covid free throughout. We continue to operate diligently keeping our workplaces safe for our employees, contractors, and vendors.
Key operating and financial highlights of the Q1 2021 results include:
- Gold production of 22,564 ounces from the Eagle River Complex, a 10% decrease over the same period in the previous year (Q1 2020: 25,122 ounces):
- Eagle River Underground 53,540 tonnes at a head grade of 12.8 grams per tonne for 21,396 ounces produced, 13% decrease over the previous year (Q1 2020: 24,457 ounces).
- Mishi Open Pit 17,219 tonnes at a head grade of 2.5 g/t Au for 1,169 ounces produced (Q1 2020: 665 ounces).
- Revenue of $46.0 million, a 19.8% decrease over the previous year (Q1 2020: $57.3 million).
- Ounces sold 22,457, which includes 1,793 ounces from the Kiena bulk sample at an average sales price of $2,219/oz (Q1 2019: 26,500 ounces at an average price of $2,162/oz).
- Cash margin1 of $21.8 million, a 21.0% decrease over Q1 2020 (Q1 2020 - $27.6 million).
- Operating cash flow of $22.0 million or $0.16 per share1 as compared to $33.5 million or $0.24 per share for the same period in 2020.
- Free cash flow of $0.1 million, net of an investment of $12.6 million in Kiena, or nil per share1 (Q1 2020: free cash flow of $16.7 million or $0.12 per share).
- Net income and Net income (adjusted)1 of $7.1 million or $0.05 per share (Q1 2020: $11.5 million or $0.08 per share).
- Cash position increased to $63.9 million compared to $63.5 million in the previous quarter.
- Cash costs1 of $1,076/oz or US$850/oz, a 4% decrease over the same period in 2020 (Q1 2020: $1,120/oz or US$833/oz) due to the inclusion of 1,793 lower cost ounces from the Kiena bulk sample, which was processed in Q4 2020 and sold in Q1 2020.
- All-in sustaining costs (“AISC”) 1 of $1,497/oz or US$1,182/oz, a 5% increase over the same period in 2020 (Q1 2020: $1,423/oz or US$1,058/oz), due to lower ounces sold and higher sustaining capital, which was partially offset by the inclusion of 1,793 lower cost ounces from the Kiena bulk sample, which was processed in Q4 2020 and sold in Q1 2021. This includes approximately $30/ounce in COVID-19 safety related costs.
- Refer to the Company’s 2021 First Quarter Management Discussion and Analysis, section entitled “Non-IFRS Performance Measures” for the reconciliation of these non-IFRS measurements to the financial statements.
Production and Exploration Achievements
Highlights
- The Eagle River underground ore production averaged 641 tpd in Q1 2021 due to the ventilation system upgrade, which included the development of the 640 m ramp to provide a connection with the main ramp, a new ventilation raise underground, and the installation of a second fan
- At the Falcon Zone, initial sill development is expected to commence in Q2, thereby providing an opportunity to assess the gold mineralization of the Falcon Zone in the volcanic rocks. The Company is continuing to explore the 311 West Zone along the western margin of the mine diorite. The zone has transitioned from the diorite into the adjacent mafic volcanics, again highlighting the potential of the volcanic rocks to host gold mineralization.
Eagle River
- Surface drilling in ongoing both east and west of the mine to follow up on anomalous values returned from regional drilling program in 2020.
- A comprehensive analysis of the structural geology is being completed at the mine and the surrounding volcanic rocks to aid in exploration targeting.
- Total metres drilled in 2021 are budgeted to range between 164,000 and 174,000 m for five underground and three surface drill rigs, including underground exploration of 60,000 - 70,000 m, underground definition drilling of 50,000 m, and surface exploration drilling 54,000 m.
- A total of 7,032 tonnes were processed from the Kiena Deep A zone bulk sample at the Kiena mill in Q4 2020. The bulk sample recovered 6% more gold than the MRE with a feed grade of 15.7 g/t versus model grade of 14.7 g/t. Total gold produced was 3,479 ounces with gold recovery in the Kiena mill of 98.2%. To date, 3,293 ounces of gold have been sold, which includes 1,500 ounces in Q4 2020 and 1,793 ounces in Q1 2021, with the remaining to be sold in Q2.
- A new high grade gold zone was discovered in the footwall of the A Zone. This drilling highlights the potential to add ounces not only in this area but illustrates the untested potential of the entire gold system around the Kiena mine.
Kiena
- Recent drilling continues to expand the Kiena Deep A Zone predominantly along the lateral extensions of the zone. The high grades intersected will be included in future resource updates and are expected to add to the current resource base including Hole 6739W3: 46.2 g/t Au over 24.2 m core length (36.6 g/t Au cut, 6.7 m true width) A1 Zone.
- The Pre-Feasibility Study ("PFS") is progressing well, and it is expected to be completed in Q2, with a scheduled re-start decision shortly thereafter. The pre-production timeframe is forecast to be less than six months, potentially driving the Kiena Mine into commercial production in Q4 of this year.
- The 2021 exploration program at Kiena consists of 65,000 m of underground drilling and 42,000 m of surface drilling.
Wesdome Gold Mines 2021 First Quarter Financial Results Conference Call
North American Toll Free: + 1 (844) 202-7109
International Dial-In Number: +1 (703) 639-1272
Conference ID: 2264519
Webcast link: https://edge.media-server.com/mmc/p/87za7n4c
Webcast can also be accessed under the News and Events section of the Company’s website (www.wesdome.com)
ABOUT WESDOME
Wesdome Gold Mines is a 100% Canadian focused Company that has had over 30 years of continuous gold mining operations in Canada. The Company’s strategy is to build an intermediate gold producer, producing 200,000+ ounces from two mines in Ontario and Quebec. The Eagle River Complex in Wawa, Ontario is currently increasing gold production from the high-grade Eagle River Underground Mine. Wesdome is actively exploring its brownfields asset, the Kiena Complex in Val d’Or, Quebec. The Kiena Complex is a fully permitted former mine with a 930-metre shaft and 2,000 tonne-per-day mill. The Company is currently completing a PFS in support of a production restart decision. The Company is in the process of divesting of its Moss Lake gold deposit, located 100 kilometres (“kms”) west of Thunder Bay, Ontario. The Company has approximately 139.4 million shares issued and outstanding and trades on the Toronto Stock Exchange under the symbol “WDO.”
For further information, please contact:
Duncan Middlemiss
President and CEO
416-360-3743 ext. 2029
duncan.middlemiss@wesdome.com
or Lindsay Carpenter Dunlop
VP Investor Relations
416-360-3743 ext. 2025
lindsay.dunlop@wesdome.com
Source: https://www.wesdome.com/news/press-releases/#4364993559e45d644e0975462550a5db
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IT Analyst
This position is responsible for supporting end-users primarily at our Eagle River Mine Complex.
Junior Accountant
This position is accountable for supporting accounting processes as well as the processing of accounts payable in a manner consistent with established policies and procedures.
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Ensure that all buildings, and infrastructures on Wesdome property, as well as roads, culverts, & bridges are properly maintained Work in a safe, environmentally friendly, and cost-effective manner.
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