(All figures are stated in Canadian dollars unless otherwise noted.)
TORONTO, Aug. 10, 2023 (GLOBE NEWSWIRE) -- Wesdome Gold Mines Ltd. (TSX: WDO, OTCQX:WDOFF) (“Wesdome” or the “Company”) today announces second quarter (“Q2 2023”) financial results. Management will host a conference call tomorrow, Friday August 11, 2023, at 10:00 a.m. Eastern time to discuss the results. Dial-in details for the call can be found near the end of this press release.
Second quarter 2023 highlights
- Payable gold production in the second quarter of 2023 was 30,992 ounces at Cash costs per ounce of $1,743 (US$1,298) and all-in sustaining costs (“AISC”) per ounce of $2,238 (US$1,666). These results compared well relative to internal targets for the quarter and reflect consistent performance from Eagle River and the successful ongoing ramp-up of mining activities at Kiena.
- At Kiena, execution of development of the ramp to the 129 level giving access to the A Zone of Kiena Deep continues to track ahead of schedule, positioning the mine well for increased production levels in the first half of 2024. Excavation of an exploration ramp from surface to access a drilling platform to test the near-surface Presqu’ile Zone is expected to proceed in the second half of 2023 after the required permits are secured.
- Cash margins were $28.7 million, however free cash flow was negative $5.3 million as the Company completes final projects related to the production ramp up at Kiena, primarily the ramp to 129 level. While on track to meet 2023 capital spend guidance, timing of expenditures are planned to be highest in the third quarter, before easing in the fourth quarter.
- Adjusted net loss attributable to shareholders of $5.0 million, or $0.03 per share. Operating cash flow of $14 million, or $0.09 per share.
- The Company reaffirms its production guidance of 110,000 to 130,000 ounces and cash cost guidance of $1,500 to $1,670 per ounce (US$1,150 to US$1,290), as well as AISC of $2,100 to $2,340 per ounce, (US$1,620 to $1,800).
- Available liquidity of $133 million, including $22.1 million in cash, and $111 million in available credit, reflecting $11 million of gross issuance under the at-the-market (“ATM”) program during the period.
- Subsequent to quarter end, a careful review of near-term operating and financial projections concluded that use of the ATM facility is no longer required.
Charles Main, Lead Independent Director during Warwick Morley-Jepson’s tenure as Interim President and CEO, commented, "On behalf of the Board, we want to thank Warwick for his dedication and leadership in stabilizing the Company over the last six months. We look forward to working with Warwick in his continuing role as independent Chair of the Board.”
Following the appointment of a permanent CEO and Warwick’s return to the independent Chair position the Company has eliminated the Lead Director role. Mr. Main will resume his position as Independent Director.
Anthea Bath, President and CEO of Wesdome stated, “Since starting as President and Chief Executive Officer on July 1, 2023, I have had the privilege to visit both sites and spend time with our teams and stakeholders. I come away confident that Wesdome will become a responsible, efficient, and value-driven free cash flow platform for growth.
“In the second quarter of 2023, Wesdome delivered a solid operational quarter and continues to track well relative to guidance, with production at Eagle River and Kiena delivering above our quarterly budget despite impacts from regional forest fires in the period. During the quarter we also made strong progress on our key projects including ramp development to the 129 level at Kiena, which remains ahead of schedule. Looking ahead to the second half of 2023, we completed our planned shut down at Eagle River for mill upgrades in July, with the mill offline for two weeks. With higher capital spending also planned for the third quarter, we now expect to see an improving cash flow profile in the back end of the year. This cash flow will allow us to continue improving working capital levels.”
Anthea concluded, “Finally, after a careful and deliberate review of our preliminary operating and financial plans, we have greater confidence in the near-term grade profile at Kiena and, therefore, anticipate a production and free cash flow rebound next year. Combined with an improved liquidity position, backstopped by the strength of our credit facility, we now believe that equity issuance under the ATM facility is no longer required. As Wesdome turns a corner late this year, we will remain committed to reducing borrowings under our $150 million credit facility as well as advancing and optimizing our high-quality portfolio.”
Management Update
Subsequent to the quarter-end, Mr. Scott Gilbert advised that he will be leaving Wesdome to pursue another opportunity in the mining industry. Mr. Gilbert has already initiated the process of transitioning his responsibilities and will be available to provide support as needed.
The Company has appointed Mr. Jonathan Singh as Interim Chief Financial Officer effective September 12, 2023. Mr. Singh is a professional accountant (CPA, CGA) with more than 19 years of experience in progressive senior financial leadership roles within the resource industry. The Company has commenced a recruitment process to select a permanent CFO.
Anthea commented, “Scott has been an invaluable member of the leadership team at Wesdome for nearly 6 years, having joined the Company in 2018 and serving as our Chief Financial Officer since 2020. I would like to thank Scott on behalf of the entire team and Board at Wesdome for his leadership, hard work, and financial acumen, all of which have been instrumental in growing the business into a diversified gold producer. We wish him every success in his future endeavors.”
| Q2 2023 | Q1 2023 | Q2 2022 | YTD 2023 | YTD 2022 | ||
| Ore milled (tonnes) | ||||||
| Eagle River | 64,672 | 48,133 | 59,964 | 112,805 | 113,181 | |
| Mishi | 0 | 6,150 | 7,685 | 6,150 | 19,558 | |
| Kiena | 51,824 | 42,324 | 26,478 | 94,148 | 47,640 | |
| Total Ore Milled | 116,496 | 96,607 | 94,127 | 213,103 | 180,379 | |
| Head grade (grams per tonne, “g/t”) | ||||||
| Eagle River | 11.4 | 13.5 | 9.6 | 12.3 | 10.6 | |
| Mishi | 0.0 | 2.3 | 2.8 | 2.3 | 3.3 | |
| Kiena | 5.0 | 5.9 | 10.6 | 5.4 | 9.3 | |
| Gold production (ounces) | ||||||
| Eagle River | 22,845 | 20,159 | 17,756 | 43,004 | 37,090 | |
| Mishi | 0 | 332 | 570 | 332 | 1,735 | |
| Kiena | 8,147 | 7,877 | 8,914 | 16,024 | 14,026 | |
| Total Gold Production | 30,992 | 28,368 | 27,240 | 59,360 | 52,851 | |
| Production sold (ounces) | 32,000 | 30,000 | 26,000 | 62,000 | 54,000 | |
| Operations and Financial Results | Comparison to Q2 2022 |
| Gold production of 30,992 ounces. | Gold production increased by 14% compared to 27,240 ounces in Q2 2022 primarily due to higher grade at the Eagle River Complex, and despite the impact from the regional forest fires in June at Kiena. New quarterly throughput records established at both sites. YTD gold production of 59,360 ounces, an increase of 12% when compared to YTD 2022 production of 52,851 ounces. |
| Cash costs of $1,743 (US$1,298) per ounce of gold sold1. | Cash costs1 in Canadian dollars increased by 13% from Q2 2022 of $1,538 (US$1,205) per ounce due to a 39% increase in aggregate mine operating costs; partially offset by a 23% increase in ounces sold. At Eagle River, the aggregate cash costs increased by 23% due to more ore development metres, waste movement, improvements to strengthen the technical and mine management team and general maintenance of aging site infrastructure. At Kiena the aggregate cash costs increased by 77% due to a 96% increase in throughput and increased staffing levels required to support commercial production, which was declared on December 1, 2022. |
| AISC of $2,238 (US$1,666) per ounce of gold sold1. | AISC1 in Canadian dollars increased by 11% from Q2 2022 of $2,020 (US$1,582) per ounce due to the increased cash costs, an increase in capital spending at Eagle River resulting from the replacement of aging site infrastructure, and the inclusion of sustaining mining exploration and development costs at Kiena. |
| Cash margin of $28.7 million1. | Cash margin1 increased by 31% or $6.8 million from Q2 2022 due to higher ounces sold and a higher Canadian dollar realized gold price; partially offset by increased cash operating costs. |
| Operating cash flow of $14.0 million or $0.09 per share1. | Increased by 16% or $1.9 million (Q2 2022 - $12.1 million or $0.08 per share1) due to the higher cash margin, reduced tax instalments; partially offset by the decrease in cash from working capital changes. |
| Free cash outflow of $5.3 million or ($0.04) per share1. | The free cash outflow1 decreased by $23.3 million (Q2 2022 - $28.6 million or ($0.20) per share1) primarily due to the increased operating cash flow and decreased capital spending. Invested $17.8 million in capital expenditures at Eagle River and Kiena in the quarter as compared to $38.3 million in Q2 2022. |
| Net loss and adjusted net loss1 attributable to shareholders of $5.0 million or ($0.03) per share. | Net loss decreased by $9.3 million (Q2 2022 - $14.3 million or ($0.10 per share) primarily because of the Q2 2022 after-tax impairment of an investment in associate of $8.9 million. After removing these one-time items, the adjusted net loss1 decreased by $0.4 million from Q2 2022. |
- Refer to the section entitled “Non-IFRS Performance Measures” for the reconciliation of these non-IFRS measurements to the Financial Statements.
Production Metrics and Exploration Updates | Performance |
| Eagle River Complex |
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| Kiena |
|
- Refer to the section entitled “Non-IFRS Performance Measures” for the reconciliation of these non-IFRS measurements to the Financial Statements.
Technical Disclosure
The technical content of this release has been compiled, reviewed and approved by Frédéric Langevin, Eng, Chief Operating Officer of the Company and Michael Michaud, P.Geo., Vice President, Exploration of the Company and each a "Qualified Person" as defined in National Instrument 43-101 -Standards of Disclosure for Mineral Projects.
Cautionary Note to United States Investors Concerning Estimates of Reserves and Resources
The mineral reserve and resource estimates reported in this news release were prepared in accordance with National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”) as required by Canadian securities regulatory authorities. The United States Securities and Exchange Commission (the “SEC”) applies different standards in order to classify and report mineralization. This news release uses the terms “measured”, “indicated” and “inferred” mineral resources, as required by NI 43-101. Readers are advised that although such terms are recognized and required by Canadian securities regulations, the SEC does not recognize such terms. Canadian standards differ significantly from the requirements of the SEC. Readers are cautioned not to assume that any part or all of the mineral deposits in these categories constitute or will ever be converted into mineral reserves. In addition, “inferred” mineral resources have a great amount of uncertainty as to their existence and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource exists, is economically or legally mineable or will ever be upgraded to a higher category of mineral resource.
Second Quarter 2023 Conference Call and Webcast
The financial statements and management discussion and analysis will be available on the company’s website at www.wesdome.com and on SEDAR+ www.sedar.com A conference call and webcast to discuss these results will be held on Friday August 11, 2023 at 10:00 am ET.
- Participants may register for the call at the link below to obtain dial in details. Preregistration is required for this event. It is recommended you join 10 minutes prior to the start of the event.
- Participant Registration Link: https://register.vevent.com/register/BI252d24d221d547208182c6cda6381b58
- Webcast Link: https://edge.media-server.com/mmc/p/5gdxhx26
- The webcast can also be accessed under the news and events section of the company’s website
About Wesdome
Wesdome is a Canadian focused gold producer with two high grade underground assets, the Eagle River mine in Ontario and the recently commissioned Kiena mine in Quebec. The Company’s primary goal is to responsibly leverage this operating platform and high-quality brownfield and greenfield exploration pipeline to build Canada’s next intermediate gold producer. Wesdome trades on the Toronto Stock Exchange under the symbol “WDO,” with a secondary listing on the OTCQX under the symbol “WDOFF.”
For further information, please contact:
Lindsay Carpenter Dunlop
VP Investor Relations
(647) 812-5312
[email protected]
| Wesdome Gold Mines Ltd. Summarized Operating and Financial Data (Unaudited, expressed in thousands of Canadian dollars, except per share and per unit amounts and otherwise indicated) | |||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||
| June 30, | June 30, | ||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||
| Operating data | |||||||||||||
| Milling (tonnes) | |||||||||||||
| Eagle River | 64,672 | 59,964 | 112,805 | 113,181 | |||||||||
| Mishi | 0 | 7,685 | 6,150 | 19,558 | |||||||||
| Kiena | 51,824 | 26,478 | 94,148 | 47,640 | |||||||||
| Throughput 2 | 116,496 | 94,127 | 213,103 | 180,379 | |||||||||
| Head grades (g/t) | |||||||||||||
| Eagle River | 11.4 | 9.6 | 12.3 | 10.6 | |||||||||
| Mishi | 0.0 | 2.8 | 2.3 | 3.3 | |||||||||
| Kiena | 5.0 | 10.6 | 5.4 | 9.3 | |||||||||
| Recovery (%) | |||||||||||||
| Eagle River | 96.5 | 95.6 | 96.7 | 96.6 | |||||||||
| Mishi | 0.0 | 81.2 | 72.5 | 83.6 | |||||||||
| Kiena | 97.7 | 98.5 | 97.8 | 98.3 | |||||||||
| Production (ounces) | |||||||||||||
| Eagle River | 22,845 | 17,756 | 43,004 | 37,090 | |||||||||
| Mishi | 0 | 570 | 332 | 1,735 | |||||||||
| Kiena | 8,147 | 8,914 | 16,024 | 14,026 | |||||||||
| Total gold produced 2 | 30,992 | 27,240 | 59,360 | 52,851 | |||||||||
| Total gold sales (ounces) | 32,000 | 26,000 | 62,000 | 54,000 | |||||||||
| Eagle River Complex (per ounce of gold sold) 1 | |||||||||||||
| Average realized price | $ | 2,625 | $ | 2,382 | $ | 2,584 | $ | 2,389 | |||||
| Cash costs | 1,526 | 1,395 | 1,353 | 1,330 | |||||||||
| Cash margin | $ | 1,099 | $ | 987 | $ | ||||||||
