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Wesdome announces 2021 First Quarter Results

May 17, 2021

“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," said Mr. Duncan Middlemiss, President and CEO. "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.

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