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Wesdome tops 90,000oz and $215 million in revenue in 2020

Mar 11, 2021

“2020 was a unique, and at times challenging year as we were faced with the ongoing COVID-19 pandemic," said Mr. Duncan Middlemiss, President and CEO. 

"First and foremost, I am very pleased to report that none of our sites or offices had any reported cases of the COVID-19 virus. Despite having to operate both sites at reduced capacities in order to protect our employees, we were able to achieve a number of important milestones this year, such as achieving our production guidance at Eagle River, increasing free cash flow by $22.3 million over 2019, and advancing the Kiena Complex through to mining and milling of a bulk sample.

Wesdome Gold Mines Ltd. has released full year 2020 financial results.   The company’s full consolidated financial statements and management discussion & analysis are available on SEDAR at www.sedar.com and on the Company’s website at www.wesdome.com. All figures are stated in Canadian dollars unless otherwise noted.

Key highlights of 2020:

  • Production of 90,278 ounces.
  • Company free cash flow1 generation of $29.0 million, net of investing $40.5 million into the Kiena Complex, an increase of 332% over 2019.
  • Net income increased by 24% from 2019 and adjusted net income1 increased by 31% from 2019.
  • Operating cash flow increased by 44% from 2019.
  • Increased Eagle River Reserves by 5% net of 93,132 ounces of depletion. 
  • Increased Eagle River inferred Resources by 22%. 
  • Kiena Mine Complex Mineral Resources total 796,000 ounces of indicated and 656,000 ounces inferred. 
  • Inferred Resources in the Kiena Deep A Zones of 120,400 ounces. 
  • Processed a portion of the bulk sample from Kiena generating $3.6 million.
  1. Refer to the Company’s 2020 Annual Management Discussion and Analysis on pages 28 – 35, entitled “Non-IFRS Performance Measures” for the reconciliation of these non-IFRS measurements to the financial statements.

Loss of operational efficiencies due to the evolving pandemic did have an impact on costs, and the volume of diamond drilling. Both operating and AISC costs came in higher than guidance as a result of these measures and the inherent inefficiencies of social distancing in underground operations. We have taken the continuing pandemic into account when forecasting our 2021 cost guidance. Production guidance for the year is 92,000 – 105,000 ounces with grades expecting to average between 13.0 and 15.0 g/t.

At the Eagle River mine, we completed 50,000 metres of drilling, replaced 93,132 ounces of depletion, and added an additional 30,000 ounces. As well, we increased the inferred resources by 22%, while slightly increasing grade to 12.5 g/t. Current mineral reserves at Eagle River as of December 31, 2020 are 581,000 ounces of gold from 1.4 Mt at an overall grade of 13.4 g/t Au; as compared to the mineral reserves as of December 31, 2019 of 1.2 Mt at a grade of 14.4 g/t Au containing 550,000 ounces of gold. In 2021, we plan to conduct significantly more drilling with metres budgeted to range between 164,000 and 174,000 metres. This is split out as 60,000 – 70,000 metres of underground exploration drilling, 50,000 metres of underground definition drilling, and 54,000 metres of surface drilling. The exploration drilling will focus on the 300 E Zone, Falcon 7 Zone and west of 7 Zone, and east of currently mined areas in the central area of the mine diorite.

At Kiena, while we were not able to generate the planned volume of drilling due to the Quebec government mandated shut down of operations and the ongoing effects of regional quarantines, we were still able to convert a large portion of A Zone inferred resources to indicated ounces, which has been used as the basis for our PFS, on track to be published in Q2 2021. We expect to be in a position to make a restart decision shortly thereafter which would set us on a path in a short timeframe to Wesdome realizing a second producing asset. We expect to have our final reconciliation of the bulk sample in the near term and early indications are very positive in terms of grades and tonnes. We are also guiding first production for the Kiena mine this year of 15,000 – 25,000 ounces.”

Operating and financial highlights of the full year 2020 results include:

  • Gold production of 90,278 ounces from the Eagle River Complex (2019: 91,688 ounces): 
    • Eagle River Underground 196,441 tonnes at a head grade of 14.2 grams per tonne (“g/t”) Au for 87,560 ounces produced (2019: 88,617 ounces).
    • Mishi Open Pit 39,856 tonnes at a head grade of 2.7 g/t Au for 2,718 ounces produced (2019: 3,072 ounces).
  • Revenue of $215.5 million (2019: $164.0 million) from 91,229 ounces of gold sold at an average sales price of $2,360/oz (2019: 88,423 ounces at an average price of $1,853/oz).
  • Cash costs1 of $1,053/oz or US$785/oz (2019: $825/oz or US$621/oz).
  • All-in sustaining costs1 (“AISC”) of $1,396/oz or US$1,040/oz (2019: $1,293/oz or US$975/oz).
  • Earned mine profit1 of $119.3 million (2019 - $90.9 million).
  • Operating cash flow of $102.3 million or $0.74 per share1 (2019: $71.2 million or $0.52 per share).
  • Free cash flow1 of $29.0 million or $0.21 per share1 (2019: $6.7 million or $0.05 per share).
  • Net income of $50.7 million or $0.36 per share (2019: $40.9 million or $0.30 per share).
  • Adjusted net income1 of $50.7 million or $0.36 per share (2019: $38.6 million or $0.28 per share).
  • Earnings before interest, taxes and depreciation and amortization (“EBITDA”) for 2020 of $102.3 million (2019: $80.7 million).
  • Cash position at the end of the year of $63.5 million.

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