Wesdome Announces 2017 Fourth Quarter and Full Year Financial Results
Wesdome Announces 2017 Fourth Quarter and Full Year Financial Results
TORONTO, March 21, 2018 -- Wesdome Gold Mines Ltd. (TSX:WDO) (“Wesdome” or the “Company”) today announces fourth
quarter (“Q4 2017”) and full year 2017 financial results. All figures are stated in Canadian dollars unless otherwise noted.
Mr. Duncan Middlemiss, President and CEO commented, “Our 2017 results exhibit several operational and financial
improvements at Wesdome. We slightly exceeded the upper end of our production guidance, mined significantly higher head
grades, improved profits, and met the mid-point for our cash cost and all-in sustaining cost guidance. Looking ahead, we
expect this trend to continue with 2018 costs to decrease a further 10% and gold production to increase by approximately
10% to 62,000 – 68,000 ounces as per our guidance.”
“In 2018 at the Eagle River Complex, we are committing all exploration efforts to the Eagle River Underground Mine, where
reserves currently stand at 416,000 ounces at 12.2 grams per tonne. A main goal of this program is to identify additional
mineralization along the eastern extension of the 300 and 7 zone parallel structures, located to the north and parallel to the
main 8 zone, to create additional workplaces and thereby realize our objective of providing additional high grade ore to the mill.
We are beginning a higher grade mining cycle at this operation that should continue for the foreseeable future.”
“At Kiena, the exploration ramp is nearing completion and last week we resumed drilling, with two drills on the higher grade
Zone A and Upper Quartz Zone of the Kiena Deep discovery. A third drill is expected to be added in April to this area. The plan
at Kiena this year is to complete 50,000 metres of underground drilling, in order to be in a position to generate a potential
resource calculation on the Kiena Deep discovery. This will determine timing and next steps at this asset.”
Key operating and financial highlights of the full year 2017 results include:
• Gold production of 58,980 ounces from the Eagle River Complex, a 24% increase over the previous year (2016: 47,737
ounces):
◦ Eagle River Underground 157,250 tonnes at a head grade of 10.6 grams per tonne (“g/t Au”) for 50,996 ounces
produced, a 27% increase over the previous year (2016: 40,252 ounces).
◦ Mishi Open Pit 152,591 tonnes at a head grade of 2.0 g/t Au for 7,985 ounces produced, a 7% increase over the
previous year (2016: 7,485 ounces).
• Revenue of $96.1 million, a 14% increase over the previous year (2016: $84.0 million).
• Ounces sold 57,770 at an average sales price of $1,643/oz (2016: 48,680 ounces at an average price of $1,676/oz).
• Cash costs1 of $1,097/oz or US$845/oz, a 10% decrease over the previous year (2016: $1,218/oz or US$919/oz).
• All-in sustaining costs (“AISC”) 1 of $1,489/oz or US$1,146/oz, a 12% decrease over the previous year (2016: $1,681/oz or
US$1,268/oz).
• Earned mine profit1 of $31.5 million, a 41% increase over the previous year (2016 - $22.3 million).
• Operating cash flow of $27.2 million or $0.20 per share1 a 21% increase over the previous year (2016: $22.4 million or $0.18
per share).
• Free cash outflow of $9.3 million or ($0.07) per share1 (2016: outflow of $4.2 million or ($0.03) per share).
• Net income of $1.3 million or $0.01 per share (2016: $7.8 million or $0.06 per share). Net income (adjusted) 1 before a one-
time deferred mining tax adjustment of $3.9 million and a non-recurring $2.2 million restructuring cost was $6.8 million or $0.05
per share.
• Cash position of $22.1 million.
• Wesdome been approved by the Ontario Ministry of Northern Development and Mines (“MNDM”) for an entry into the Northern
Industrial Electricity Rate (“NIER”) program. Upon acceptance by MNDM, the Company is qualified for a retroactive electricity
cost rebate to the extent of approximately $1.0 million for the period of April 1, 2017 and up to December 31, 2017.
• Mineral Reserves at the Eagle River Underground Mine of 416,000 contained gold ounces (1.1 million tonnes at 12.2 g/t Au)
(2016 1.2 million tonnes at 9.2 g/t Au for 344,000 ounces).
Key operating and financial highlights of Q4 2017 results include:
• Eagle River Complex gold production of 15,797 ounces (2016: 11,887 ozs).
•19,351 gold ounces sold (2016: 13,490 ozs).
• Cash costs1 of $1,019/oz (US$801/oz) (2016: $1,215/oz or US$911/oz).
• AISC1 of $1,284/oz or US$1,010/oz (Q4 2106: $1,631/oz or US$1,222/oz).
• Earned mine profit1 of $11.6 million (Q4 2016: $5.9 million).
• Operating cash flow of $13.5 million or $0.10 per share1 (Q4 2016: $7.7 million or $0.06 per share).
• Free cash flow generation of $5.7 million or $0.04 per share 1 (Q4 2016: out flow of $2.2 million or ($0.02) per share).
• Net loss of $0.6 million or nil, on a per share basis. Net income (adjusted)1 before the one-time mining tax adjustment was
$3.4 million or $0.03 per share.
1. Refer to the Company’s 2017 Annual Management Discussion and Analysis on pages 26 – 31, entitled “Non-IFRS
Performance Measures” for the reconciliation of these non-IFRS measurements to the financial statements.
Exploration & Corporate Development Highlights for 2017
Eagle River
• At Eagle River, continued drilling has now traced the 300E structure from 750 metres (“m”) depth to 1,000 m
depth and remains open up and down plunge. Drilling highlights include 51.93 g/t Au (23.18 g/t Au cut) over
11.96 m true width.
• Development to date on the 300E Zone has identified seven subzones on the 844-metre level (“m-level”).
The combined ore strike length of the subzones are 173.7 m with a weighted average width of 2.85 m and
cut and uncut gold grades of 22.62 g/t Au and 34.79 g/t Au, respectively.
• Continued drilling to explore the 300W Zone has now traced the mineralization 300 m up-plunge and
remains open to the west and up-plunge. Highlights include 41.99 g/t Au cut over 2.72 m true width.
• Resource definition drilling at Mishi completed in 2017 returned positive results from two areas located 600
m and 1,700 m west of the existing open pit mining operations. Wesdome is currently assessing these
occurrences and building them into a long-term growth scenario for mining at Mishi.
Kiena
• Development of the Kiena Deep exploration ramp continued with 878 linear metres completed to date and
is expected to be completed by the end of March 2018. Early results from Kiena Deep B zone indicate
moderate to locally higher gold grades obtained with occasional visible gold observed. Results include
34.37 g/t Au uncut (24.16 g/t cut) over 4.5 m core length (1.6 m true width) in hole 6186.
• As the ramp development is continuing, one drill has been actively drilling several auxiliary targets near
existing underground development including the S-50 and VC zone sectors and has returned encouraging
results, including 6.68 g/t Au uncut (6.02 g/t Au cut) over 37.6 m core length and 17.89 g/t Au uncut (16.3 g/t
Au cut) over 6.0 m core length from S-50 zone.
• Ramping is expected to be completed in March and will enable the Company to drill the higher grade
Kiena Deep A zone shortly thereafter.
Moss Lake
• Drilling at Moss Lake was completed along the strike of the existing resources to significantly extend
mineralization over an additional strike length of 4.5 kilometres. The project has been kept on care and
maintenance since the fall of 2017 to allow the geological team to focus its attention on the Eagle River
Complex and the Kiena gold deposits.
Corporate
• The appointment of two former mining executives as directors and a new management team in mid-year to
steer the Company to increase production and profitability.
Technical Disclosure
The technical content of this release has been compiled, reviewed and approved by Marc-Andre Pelletier, P. Eng, Chief
Operating Officer, 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.
Wesdome Gold Mines 2017 Fourth Quarter and Full Year Financial Results Conference Call:
North American Toll Free: + 1 (844) 202-7109
International Dial-In Number: +1 (703) 639-1272
Conference ID: 8836599
Webcast link: https://edge.media-server.com/m6/p/cjgs5kz3
Webcast can also be accessed under the News and Events section of the Company’s website (www.wesdome.com )
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 Years Ended
December 31, December 31,
2017 2016 2017 2016
Operating data
Milling (tonnes)
Eagle River 39,291 42,607 157,250 170,369
Mishi 38,197 30,714 152,591 138,668
Throughput 2 77,488 73,321 309,841 309,037
Head grades (g/t)
Eagle River 11.3 8.2 10.6 7.9
Mishi 2.3 1.6 2.0 2.0
Recovery (%)
Eagle River 94.3 94.6 95.0 93.5
Mishi 81.4 81.6 83.0 85.4
Production (ounces)
Eagle River 13,499 10,595 50,996 40,252
Mishi 2,298 1,292 7,985 7,485
Total gold produced 2 15,797 11,887 58,980 47,737
Total gold sales (ounces) 19,351 13,490 57,770 48,680
Eagle River Complex (per ounce of gold sold) 1
Average realized price $ 1,618 $ 1,655 $ 1,643 $ 1,676
Cash costs 1,019 1,215 1,097 1,218
Cash margin $ 599 $ 440 $ 546 $ 458
All-in Sustaining Costs 1 $ 1,284 $ 1,631 $ 1,489 $ 1,681
Mine operating costs/tonne milled 1 $ 206 $ 206 $ 204 $ 184
Average 1 USD → CAD exchange rate 1.2712 1.3344 1.2986 1.3253
Cash costs per ounce of gold sold (US$) 1 $ 801 $ 911 $ 845 $ 919
All-in Sustaining Costs ( US$) 1 $ 1,010 $ 1,222 $ 1,146 $ 1,268
Financial Data
Mine profit 1 $ 11,606 $ 5,931 $ 31,537 $ 22,293
Net income (loss) $ (567) $ 1,600 $ 1,287 $ 7,786
Net income (loss) adjusted 1 $ 3,357 $ 1,600 $ 6,798 $ 6,789
Operating cash flow $ 13,468 $ 7,663 $ 27,225 $ 22,424
Free cash flow $ 5,655 $ (2,169) $ (9,344) $ (4,211)
Per share data
Net income (loss) $ 0.00 $ 0.01 $ 0.01 $ 0.06
Adjusted net earnings 1 $ 0.03 $ 0.01 $ 0.05 $ 0.05
Operating cash flow $ 0.10 $ 0.06 $ 0.20 $ 0.18
Free cash flow 1 $ 0.04 $ (0.02) $ (0.07) $ (0.03)
Notes
1. Refer to the Company’s 2017 Annual Management Discussion and Analysis on pages 26 – 31, entitled “Non-IFRS
Performance Measures” for the reconciliation of these non-IFRS measurements to the financial statements.
2. Totals for tonnage and gold ounces information may not add due to rounding.
Wesdome Gold Mines Ltd.
Consolidated Statements of Financial Position
(Expressed in thousands of Canadian dollars)
As of As of
December 31, 2017 December 31, 2016
Assets
Current
Cash and cash equivalents $ 22,092 $ 26,760
Receivables and prepaids 3,821 776
Tax receivable 1,932 2,906
Inventories 5,314 5,929
Total current assets 33,159 36,371
Restricted funds - 6,920
Deferred income tax assets 5,450 7,009
Mining properties, plant and equipment 81,375 74,241
Exploration properties 59,929 38,373
Total assets $ 179,913 $ 162,914
Liabilities
Current
Payables and accruals $ 17,003 $ 11,831
Mining and income taxes payable 671 -
Current portion of obligations under finance leases 2,541 2,079
Convertible debentures - 6,900
Total current liabilities 20,215 20,810
Obligations under finance leases 3,983 4,223
Deferred mining tax liability 6,300 -
Decommissioning provisions 11,192 10,480
Total liabilities 41,690 35,513
Equity
Equity attributable to owners of the Company
Capital stock 164,161 156,402
Contributed surplus 3,967 2,173
Equity component of convertible debentures - 932
Deficit (29,905) (32,106)
Total equity attributable to owners of the Company 138,223 127,401
Total liabilities and equity $ 179,913 $ 162,914
Wesdome Gold Mines Ltd.
Consolidated Statements of Income (loss) and Comprehensive Income (loss)
(Expressed in thousands of Canadian dollars except for per share amounts)
Three Months Ended Years Ended
December 31, December 31,
2017 2016 2017 2016
Revenues $ 31,544 $ 22,166 $ 96,057 $ 84,031
Cost of sales 23,780 18,188 74,228 66,360
Gross profit 7,764 3,978 21,829 17,671
Other expenses
Corporate and general 1,248 1,278 4,943 4,777
Share based payments 520 781 2,778 1,734
Kiena care and maintenance 329 695 1,096 2,245
Restructuring costs - - 2,159 686
Write-down of mining equipment 316 - 316 -
2,413 2,754 11,292 9,442
Operating income 5,351 1,224 10,537 8,229
Interest on long-term debt (60) (264) (462) (1,030)
Accretion of decommissioning provisions (14) 78 (210) 20
Interest and other (4) (34) (67) 17
Exploration credits refund - - - 2,620
Income before income tax 5,273 1,004 9,798 9,856
Mining and income tax (expense) recovery
Current (571) 900 (722) 900
Deferred (5,269) (304) (7,789) (2,970)
(5,840) 596 (8,511) (2,070)
Net income (loss) and total comprehensive income (loss) $ (567) $ 1,600 $ 1,287 $ 7,786
Net earnings (loss) per share
Basic $ 0.00 $ 0.01 $ 0.01 $ 0.06
Diluted $ 0.00 $ 0.01 $ 0.01 $ 0.06
Weighted average number of common shares (000s)
Basic 133,889 130,205 132,871 126,158
Diluted 135,058 132,732 134,927 128,086
Wesdome Gold Mines Ltd.
Consolidated Statements of Total Equity
(Expressed in thousands of Canadian dollars)
Equity
Component
Capital Contributed of Convertible Total
Stock Surplus Debentures Deficit Equity
Balance, December 31, 2015 $ 137,126 $ 1,729 $ 932 $ (40,289) $ 99,498
Net income for the year ended December 31, 2016 - - - 7,786 7,786
Exercise of options 1,356 - - - 1,356
Value attributed to options exercised 893 (893) - - -
Value attributed to options expired - (397) - 397 -
Share based payments - 1,734 - - 1,734
Shares issued to acquire Moss Lake area properties 750 - - - 750
Shares issued under prospectus 17,267 - - - 17,267
Share issue cost, net of tax (990) - - - (990)
Balance, December 31, 2016 $ 156,402 $ 2,173 $ 932 $ (32,106) $ 127,401
Net income for the year ended December 31, 2017 - - - 1,287 1,287
Conversion/maturity of convertible debentures 4,912 - (932) 932 4,912
Exercise of options 1,915 - - - 1,915
Value attributed to options exercised 932 (932) - - -
Value attributed to options expired - (52) - 52 -
Tax related to share issue cost - - - (70) (70)
Share based payments - 2,778 - - 2,778
Balance, December 31, 2017 $ 164,161 $ 3,967 $ - $ (29,905) $ 138,223
Wesdome Gold Mines Ltd.
Consolidated Statements of Cash Flows
(Unaudited, expressed in thousands of Canadian dollars)
Three Months Ended Years Ended
December 31, December 31,
2017 2016 2017 2016
Operating activities
Net income (loss) $ (567) $ 1,600 $ 1,287 $ 7,786
Depletion and depreciation 3,842 1,798 10,608 7,067
Deferred mining and income tax expense 5,269 304 7,789 2,970
Mining tax received - (900) 900 (900)
Share based payments 520 781 2,778 1,734
Decommissioning provisions 14 (78) 210 (20)
Interest on long-term debt (50) 176 359 692
Accretion of discount on convertible debentures - 88 103 338
Loss on disposal of equipment 55 184 214 260
Write-down of mining equipment 316 - 316 -
9,399 3,953 24,564 19,927
Net changes in non-cash working capital 4,069 3,710 2,661 2,497
Funds provided by operating activities 13,468 7,663 27,225 22,424
Financing activities
Repayment of convertible debentures - - (2,091) -
Exercise of options - 257 1,915 1,356
Finance lease payments (674) (554) (2,753) (1,914)
Interest paid (60) (299) (469) (692)
Shares issued under prospectus, net of issue cost - - - 16,017
Funds (used) provided by financing activities (734) (596) (3,398) 14,767
Investing activities
Additions to mining properties (3,241) (4,034) (15,020) (18,150)
Additions to exploration properties (4,598) (4,677) (21,556) (10,214)
Funds released from (held against) standby letters of credit - - 6,920 (4,385)
Proceeds on sale of exploration properties - - - 7,000
Proceeds on sale of equipment - 26 90 69
Net changes in non-cash working capital 583 (613) 1,071 (175)
Funds used by investing activities (7,256) (9,298) (28,495) (25,855)
Increase (decrease) in cash and cash equivalents 5,478 (2,231) (4,668) 11,336
Cash and cash equivalents, beginning of period 16,614 28,991 26,760 15,424
Cash and cash equivalents, end of period $ 22,092 $ 26,760 $ 22,092 $ 26,760
Cash and cash equivalents consist of:
Cash $ 13,092 $ 8,999 $ 13,092 $ 8,999
Term deposits 9,000 17,761 9,000 17,761
$ 22,092 $ 26,760 $ 22,092 $ 26,760
ABOUT WESDOME
Wesdome Gold Mines is in its 31st 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 near 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 Company has further upside at its Moss
Lake gold deposit, located 100 kilometres west of Thunder Bay, Ontario. The Company has approximately 134 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. 29
or
Lindsay Carpenter Dunlop
VP Investor Relations
416-360-3743 ext. 25
8 King St. East, Suite 811
Toronto, ON, M5C 1B5
Toll Free: 1-866-4-WDO-TSX
Phone: 416-360-3743, Fax: 416-360-7620
Website: www.wesdome.com
This news release contains “forward-looking information” which may include, but is not limited to, statements with respect to
the future financial or operating performance of the Company and its projects. Often, but not always, forward-looking
statements can be identified by the use of words such as “plans”, “expects”, “is expected”, “budget”, “scheduled”, “estimates”,
“forecasts”, “intends”, “anticipates”, or “believes” or variations (including negative variations) of such words and phrases, or
state that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. Forward-
looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results,
performance or achievements of the Company to be materially different from any future results, performance or achievements
expressed or implied by the forward-looking statements. Forward-looking statements contained herein are made as of the date
of this press release and the Company disclaims any obligation to update any forward-looking statements, whether as a result
of new information, future events or results or otherwise. There can be no assurance that forward-looking statements will prove
to be accurate, as actual results and future events could differ materially from those anticipated in such statements. The
Company undertakes no obligation to update forward-looking statements if circumstances, management’s estimates or
opinions should change, except as required by securities legislation. Accordingly, the reader is cautioned not to place undue
reliance on forward-looking statements. The Company has included in this news release certain non-IFRS performance
measures, including, but not limited to, mine operating profit, mining and processing costs and cash costs. Cash costs per
ounce reflect actual mine operating costs incurred during the fiscal period divided by the number of ounces produced. These
measures are not defined under IFRS and therefore should not be considered in isolation or as an alternative to or more
meaningful than, net income (loss) or cash flow from operating activities as determined in accordance with IFRS as an
indicator of our financial performance or liquidity. The Company believes that, in addition to conventional measures prepared in
accordance with IFRS, certain investors use this information to evaluate the Company's performance and ability to generate
cash flow.