Wesdome Announces First Quarter 2017 Financial Results

May 5, 2017 @ 08:05

Wesdome Gold Mines Ltd. has announced the financial results for the first quarter of 2017. All figures are stated in Canadian dollars unless otherwise noted.

Mr. Duncan Middlemiss, President and CEO, commented, “We enjoyed a strong start to the year producing 15,162 ounces in the quarter. This firmly puts us within our stated production guidance of 52,000 – 58,000 ounces for 2017. Production cash costs this quarter of $1,056 (US$798) per ounce were on the lower end of our 2017 cost guidance of $1,030 – $1,130 (US$765 – $835) per ounce. This is primarily due to higher mined grades and we expect this trend to continue throughout the year. All-in sustaining costs of $1, 474 (US$1,113) per ounce were also in the lower end of our cost guidance of $1,450 – $1,550 (US$1,075 – $1,150) per ounce. At Eagle, investments in power and ventilation systems during 2017 will lower mine operating costs and allow for more mining flexibility. During the quarter, we sold 12,320 ounces of gold, however with production being nearly 2,800 ounces higher this affected our net income. These ounces have been booked in the second quarter, at a higher gold price.”

“Additionally our exploration efforts at Eagle River are yielding excellent results, and are having positive short term production implications. The 303 Lens is currently being developed on the 844 level in anticipation for production in the fourth quarter this year. On the western limb of the 300 Zone, the up plunge extension of the 300W Zone announced in April means that we will have access to increased stope production from this area for 2017 and beyond.”

“At Kiena we have decided to drive an exploration ramp, which will provide us with an enhanced drilling platform to explore the high grade Kiena Deep Discovery. As previously announced, drill access was limited by existing mine infrastructure, making conditions very difficult to reach the intended targets. Completion of the exploration ramp will provide ability to drill shorter holes at better angles, and accelerated access to the Upper Quartz Vein Zone. This project is expected to take 9 – 10 months at a cost of approximately $7.6 M. This confirms our commitment to advancing the Kiena Deep Discovery to the next level. We will continue exploring with two drills testing upper targets.”

2017 FIRST QUARTER HIGHLIGHTS

  • Over three and half years without a lost time incident
  • Gold production of 15,162 ounces (Q1 2016: 8,036) increased due to higher production from the Eagle River Mine
    • Eagle River Mine underground production of 13,588 ounces (Q1 2016: 6,254) at a head grade of 11.5 grams per tonne (“g/t”) (Q1 2016: 5.6) with a mill recovery of 95.3% (Q1 2016: 88.0%)
    • Mishi Open Pit mine production of 1,574 ounces (Q1 2016: 1,782) at a head grade of 1.7 g/t (Q1 2016: 1.8) with a mill recovery of 80.9% (Q1 2016: 85.0%)
  • 2017 Guidance remains at 52,000 – 58,000 ounces
  • Total mill throughput of 75,219 tonnes (Q1 2016: 76,126) averaging 836 tonnes per calendar day (“tpd”) (Q1 2016: 837)
  • Revenue of $20.1 million (Q1 2016: $13.3 million) on gold sales of 12,320 ounces (Q1 2016: 8,100) at an average realized price of $1,631 or US$1,233 per ounce (Q1 2016: $1,640 or US $1,193)
  • Mine operating profit1 of $6.6 million (Q1 2016: loss of $(1.1) million) increased compared to the comparative quarter due to higher production and sales
  • Net income of $0.7 million (Q1 2016: loss of $(3.3) million), or $0.01 per share (Q1 2016: $(0.03))
  • Operating cash flow of $5.4 million (Q1 2016: $(2.8) million), or $0.041 per share (Q1 2016: $(0.02)) increased due to higher production and sales
  • Free cash flow1 of $(4.2) million improved by $3.0 million compared to Q1 2016 of $(7.2) million). The negative outflow in Q1 2017 is due to the heightened combined exploration activities at Eagle River, Kiena and Moss Lake. Q1 2017 exploration was $5.8 million compared to only $0.5 million in Q1 2016
  • Production cash costs per ounce1 were $1,056 or US$798 (Q1 2016: $1,766 or US$1,285). The 40% decrease in unit cost is due to an 89% increase in gold production
  • All-in sustaining costs per ounce (“AISC”)1 on a production basis of $1,474 or US$1,113 (Q1 2016: $2,428 or US$1,767), a decrease of 39% over Q1 2016 due to increased gold production in Q1 2017
  • Cash and cash equivalents of $29.6 million, 4,059 ounces gold in process at market price of $6.7 million and working capital of $20.5 million as at March 31, 2017

2017 First Quarter Exploration and Corporate Development Highlights

  • Eagle River underground drilling results encounter wide, high grade intersections at the 303E Zone
  • Eagle River underground drilling results extend the 300W Zone up plunge
  • Mishi surface drilling extends zone westward
  • Kiena Deep drilling expands its potential to 550 metres laterally and over a depth range of 400 metres. Wesdome continues its accelerated drilling program with the goal of determining the extent, continuity and geometry of the Kiena Deep gold system. Ramp development will commence in Q3 2017
  • Moss Lake surface drilling continues with goal of doubling footprint of mineralization
  • Marc-Andre Pelletier appointed as Vice-President of Quebec Operations
Financial Results – 1st Quarter 2017 and 2016
Quarter ended March 31
2017 2016
(in $000, except per share amounts)
Revenue 20,100 13,284
Mine operating profit (loss) 1 6,555 (1,105)
Net income (loss) 695 (3,300)
Net income (loss) adjusted 1 916 (2,854)
Basic income (loss) per share 0.01 (0.03)
Basic income (loss) per share adjusted 1 0.01 (0.02)
Cash flows from operating activities 5,392 (2,786)
Cash flows from operating activities adjusted 1 5,613 (2,340)
Free cash flow 1 (4,199) (7,190)
Cash and cash equivalents 29,593 8,100
Working capital 20,530 3,972
Operational Results – 1st Quarter 2017 and 2016
Quarter ended March 31
2017 2016
Eagle tonnes milled 38,578 39,839
Mishi tonnes milled 36,641 36,287
Total tonnes milled 75,219 76,126
Eagle grade (g/t) 11.5 5.6
Mishi grade (g/t) 1.7 1.8
Eagle River Mine mill recovery (%) 95.3 88.0
Mishi Mine mill recovery (%) 80.9 85.0
Eagle recovered grade (g/t) 11.0 4.9
Mishi recovered grade (g/t) 1.3 1.5
Eagle ounces produced 13,588 6,254
Mishi ounces produced 1,574 1,782
Total ounces produced 15,162 8,036
Ounces sold 12,320 8,100
Average realized price (CAD$/oz) 1,631 1,640
Average realized price (US$/oz) 1,233 1,193
Production cash costs (CAD$/oz) 1,056 1,766
Production cash costs (US$/oz) 798 1,285
All-in-sustaining costs (CAD$/oz) 1,474 2,428
All-in-sustaining costs (US$/oz) 1,113 1,767
Average 1 USD to CAD exchange rate 1.3236 1.3742
Notes:
1 Refer to the section entitled “Non-IFRS Performance Measures” in the Q1 2017 Management Discussion and Analysis for the reconciliation of these non-IFRS measurements to the financial statements.
Wesdome Gold Mines is in its 29th year of continuous gold mining operations in Canada. The Company is 100% Canadian focused with a pipeline of projects in various stages of development. The Eagle River Complex in Wawa, Ontario is currently producing gold from two mines, the Eagle River Underground Mine and the Mishi Open pit, from a central mill. 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 has further upside at its Moss Lake gold deposit, located 100 kilometres west of Thunder Bay, Ontario, which is being explored and evaluated to be developed in the appropriate gold price environment. The Company has approximately 130 million shares issued and outstanding and trades on the Toronto Stock Exchange.

 

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