WDO.TO · 2019-02-21 12:00:00

Wesdome Announces 2018 Fourth Quarter and Full Year Financial Results

Financials

TORONTO, Feb. 21, 2019 -- Wesdome Gold Mines Ltd. (TSX: WDO) (“Wesdome” or the “Company”) today announces fourth

quarter (“Q4 2018”) and full year 2018 financial results. All figures are stated in Canadian dollars unless otherwise noted.

Key highlights of 2018:

• Eagle River Complex free cash flow generation of $30 million

• Company free cash flow generation of $2.8 million

• Adjusted net earnings increased 119% over 2017

• Operating cash flow increased by 65% over 2017

• Production increased by 21% over 2017

• Cash costs decreased by 17% over 2017

Mr. Duncan Middlemiss, President and CEO commented, “In 2018, we delivered at the top end of our grade guidance of 11.7

grams per tonne gold (“gpt or g/t”) (11.3 – 11.7 gpt guidance) at Eagle River, and the midpoint of our raised production

guidance range of 71,625 ounces. These results are 11% and 21% better than 2017, respectively. Accordingly, our cash costs

of $905 per ounce (US$699) and all in sustaining costs of $1,276 per ounce (US$985) for the year were both below our

guidance ranges of $925 – $1,000 (US$720 – US$770) per ounce and $1,350 - $1,425 per ounce (US$1,050 - US$1,100). This

beat in cost metrics is primarily attributable to higher mined grades, and improvements in underground mining efficiencies,

which we expect to continue in 2019.

“Free cash flow for the fourth quarter was an outflow of $4.5 million or ($0.03 per share), the only quarter in five quarters to have

a negative cash flow. This is due to the timing of major projects in 2018, such as the construction of a new mine dry at Eagle,

as well as ramping up the drill metres (“m”) at the Kiena Complex in Val d’Or, Quebec in preparation for an updated resource

estimate in the Kiena Deep A-Zone later this year. Free cash flow for the year was $2.8 million, or $0.02 per share, versus an

outflow of $12.1 million or ($0.09) per share in 2017. Eagle River operations have been funding all the Company’s sustaining

and project capital and exploration, including the $21.5 million 2018 exploration and development program at the Kiena

Complex in Val d’Or, Quebec.

“Looking ahead, in 2019 we expect to produce 72,000 – 80,000 ounces of gold, primarily from the Eagle River Underground

mine, where we forecast 69,000 – 76,000 ounces of gold, above reserve grade at 15.5 – 16.5 gpt. Higher grades are expected

due to more H2 production within the high grade 303 lens. The Mishi Open Pit will contribute 3,000 – 4,000 ounces at a grade

of 2.0 – 2.4 gpt in the first half of the year. Throughout the year we expect lower cash costs than 2018, of $830 - $900 per

ounce (US$640 – US$690), and flat all-in sustaining costs of $1,280 - $1,350 per ounce (US$985 – US$1,040). 2019 all-in

sustaining cost guidance remains the same as 2018 actuals due to higher underground development rates and slightly higher

in-mine exploration. New development is underway at the Eagle River Underground mine to provide drill platforms for the

planned 51,000 m of exploration drilling and 43,000 m of definition drilling to better define and expand the current resource

base at the high grade 303 East Zone up and down plunge, the 711 and 300 W Zone down plunge, and at various locations

along the 8 Zone. At Kiena, there are currently five drills in operation on the A Zone and remain focused on the up and down

plunge potential in advance of an updated mineral resource estimate later in 2019. Four drills are on the 1050 m level

exploration ramp completing the infill and plunge extension drilling, and a 5 th drill is now drilling at the 670 m elevation to test

the interpreted up plunge extension of the A Zone towards the VC zone area. Recent drilling has continued to return very high-

grade results both up and down plunge from the area of the current resource estimate and we are confident this will continue to

grow. Hole 6398 was the first hole drilled from the new development to intersect the up-plunge extension of the A Zone and

returned 19.2 g/t Au, or 9.2 g/t Au cut over 5.4 m true width. The mineral resource estimate only includes drilling over

approximately 400 m of the potential 1.2 km of plunge length interpreted from our recent 3D geologic modelling and will be the

Company’s focus going forward.”

Operating and financial highlights of the full year 2018 results include:

• Gold production of 71,625 ounces from the Eagle River Complex (2017: 58,980 ounces):

° Eagle River Underground 185,171 tonnes at a head grade of 11.7 g/t Au for 67,315 ounces produced (2017: 50,996

ounces).

° Mishi Open Pit 70,633 tonnes at a head grade of 2.3 g/t Au for 4,310 ounces produced (2017: 7,985 ounces).

• Revenue of $116.0 million (2017: $96.1 million).

• Ounces sold 70,480 at an average sales price of $1,645/oz (2017: 57,770 ounces at an average price of $1,643/oz).

• Cash costs 1 of $905/oz or US$699/oz (2017: $1,097/oz or US$845/oz).

• All-in sustaining costs (“AISC”) 1 of $1,276/oz or US$985/oz (2017: $1,490/oz or US$1,148/oz).

• Earned mine profit1 of $52.1 million (2017 - $31.5 million).

• Operating cash flow of $46.3 million or $0.34 per share1 (2017: $27.2 million or $0.20 per share).

• Free cash flow1 of $2.8 million or $0.02 per share1 (2017: outflow of $12.1 million or ($0.09) per share).

• Net income of $14.9 million or $0.11 per share (2017: $1.3 million or $0.01 per share).

• Cash position of $27.4 million.

• Mineral Reserves at Eagle of 404,000 contained gold ounces (1,048,000 tonnes at 12.0 g/t Au).

• Indicated & Measured and Inferred Mineral Resources at Eagle increased to 31,300 contained gold ounces (109,000

tonnes at 9.0 g/t Au) and 159,300 gold ounces (433,000 tonnes grading 11.4 g/t Au) as a result of increased exploration

drilling.

• Mineral Reserves at Mishi of 11,000 contained gold ounces (124,000 tonnes at 2.8 g/t Au).

Operating and financial highlights of Q4 2018 results include:

• Eagle River Complex gold production of 17,254 ounces (2017: 15,797 ozs).

• 18,077 gold ounces sold (2017: 19,351 ozs).

• Cash costs 1 of $937/oz (US$710/oz) (2017: $1,019/oz or US$801/oz).

• AISC1 of $1,371/oz or US$1,038/oz (Q4 2107: $1,284/oz or US$1,010/oz).

• Earned mine profit1 of $12.5 million (Q4 2017: $11.6 million).

• Operating cash flow of $8.6 million or $0.06 per share1 (Q4 2017: $13.5 million or $0.10 per share).

• Free cash outflow of $4.5 million or $(0.03) per share 1 (Q4 2017: free cash flow of $5.0 million or $0.04 per share).

• Net income of $2.6 million or $0.02 per share.

1. Refer to the Company’s 2018 Annual Management Discussion and Analysis on pages 29 – 35, entitled “Non-IFRS Performance Measures” for the reconciliation of these

non-IFRS measurements to the financial statements.

Duncan Middlemiss, President and CEO, added, “At the Eagle River Underground Mine, we were able to maintain the Mineral

Reserves at 404,000 ounces of gold from 1.0 million tonnes at an overall grade of 12.0 gpt Au; as compared to the Mineral

Reserves as of December 31, 2017 of 1.1 million tonnes at a grade of 12.2 gpt Au containing 416,000 ounces of gold. There

was a slight depletion in reserves this year due to our in mine exploration program, targeting the parallel zones, only

accessing beneficial drill platforms later in the year. We view the current parallel zones exploration program, targeting both up

and down plunge and to the east, as a three year project with encouraging results to date. The theory that the parallel zones

may continue across the mine diorite, similar to the 8 Zone, is entirely valid at this point. As such, the 7 Zone reserves

increased 30% from 97,000 ounces in 2017 to 126,000 ounces in 2018, while maintaining a grade of 13 gpt. A review of the

mineral resources and reserves during 2018 has resulted in a significant decrease in mineral reserves at the Mishi Pit. Poor

ore reconciliation on the lower benches, which in turn has increased the stripping ratio of waste to ore, has negatively affected

the current pit economics. Our strategy is to become Canada’s next mid-tier producer and therefore have 100% production

from the Wawa operations to be entirely from the high grade Eagle River Underground mine, thereby generating additional

ounces at higher margins.”

EAGLE RIVER COMPLEX RESERVES AND RESOURCES

MINERAL RESERVES

– EAGLE RIVER (see notes)

December 31, 2018 December 31, 2017

Tonnes

(‘000s)

Grade

(g/t Au)

Contained

ounces

Tonnes

(000s)

Grade

(g/t Au)

Contained

ounces

Eagle River Proven 188.0 14.7 89,000 212.0 12.2 83,000

Probable 860.0 11.4 315,000 847.0 12.2 333,000

Proven +

Probable 1,048.0 12.0 404,000 1,059.0 12.2 416,000

MINERAL RESERVES

– MISHI (see notes)

December 31, 2018 December 31, 2016

Tonnes

(‘000s)

Grade

(g/t Au)

Contained

ounces

Tonnes

(000s)

Grade

(g/t Au)

Contained

ounces

MISHI Proven 14.0 2.3 1,000 259.0 1.8 15,000

Probable 109.5 2.9 10,000 1,361.0 2.0 87,000

Proven +

Probable 123.5 2.8 11,000 1,620.0 2.0 102,000

Note: Comparative information is as at December 31, 2016.

MINERAL

RESOURCES (Exclusive

of Mineral Reserves) (see

notes)

December 31, 2018 December 31, 2017

Tonnes

(000s)

Grade

(g/t Au)

Contained

ounces

Tonnes

(000s)

Grade

(g/t Au)

Contained

ounces

EAGLE

RIVER Measured 11.0 10.4 3,700 - - -

Indicated 97.0 8.8 27,600 50.7 7.3 12,000

Measured

Indicated

109.0 9.0 31,300 50.7 7.3 12,000

Inferred 433.0 11.4 159,300 334.0 8.0 85,000

MINERAL

RESOURCES (Exclusive

of Mineral Reserves) (see

notes)

December 31, 2018 December 31, 2016

Tonnes

(000s)

Grade

(g/t Au)

Contained

ounces

Tonnes

(000s)

Grade

(g/t Au)

Contained

ounces

MISHI

Open pit Indicated - - - 3,679.0 2.1 248,000

Inferred 2,808.4 1.8 147,000 746.0 2.4 59,000

Underground Indicated - - - 567.0 9.2 82,000

Inferred 373.4 5.4 65,000 437.0 7.8 81,000

MISHI

TOTAL Indicated - - - 4,246.0 2.4 330,000

Inferred 3,181.8 2.1 212,000 1,183.0 3.7 250,000

Note: Comparative information is as at December 31, 2016.

EAGLE RIVER PROVEN AND PROBABLE RESERVE BREAKDOWN BY ZONE1

The following table provides a breakdown of Mineral Reserves and Resources at Eagle River by structure to illustrate the

growing significance of these recent developments.

December 31, 2018 December 31, 2017

Structure Tonnes

(000s)

Grade

(g/t Au)

Contained

Ounces Percent

Tonnes

(000s)

Grade

(g/t Au)

Contained

Ounces Percent

No.8 135.0 11.1 48,000 12 205.0 10.5 69,000 17

No. 300 503.0 12.4 201,000 50 514.0 13.4 222,000 53

No. 7 300.0 13.1 126,000 31 228.0 13.2 97,000 23

Other 110.0 8.2 29,000 7 112.0 7.8 28,000 7

TOTAL 1,048.0 12.0 404,000 100 1,059.0 12.2 416,000 100

1. Numbers reflect rounding to nearest 1,000 tonnes and ounces.

2. Mineral Resources are exclusive of reserves.

3. Mineral Resources are not in the current mine plan and therefore do not have demonstrated economic viability.

4. All Mineral Reserves and Mineral Resources estimates have been made in accordance with the Standards of the

Canadian Institute of Mining, Metallurgy and Petroleum and NI 43-101 and assume a gold price of $1,550 (US$1,200)

per ounce for the reserves and a gold price of $1,700 (US$1,318) per ounce for the resources, with a $1 USD → CAD

exchange rate of 1.29.

5. Mineral Resources are reported in-situ with no dilution provision.

6. A density or tonnage factor of 2.7 tonnes per cubic m (t/m 3) is applied at both Eagle River Mine and Mishi Mine.

7. At Eagle River Mine, all high assays are cut to either 60.0 – 140.0 g/t Au for individual zones.

8. All Mineral Reserves at Eagle River employ a 1.5 m minimum width, a 3.0 g/t Au minimum grade for continuity and

include 1.0 m of external dilution and 10% lost ore and metallurgical recoveries of 95.5%.

9. At Mishi the 7 lenses considered in the Mineral Resource calculations are cut between 6.0 to 45.0 g/t Au. All high

blasthole assays are cut to 10 g/t Au.

10. All In-Pit Mineral Reserves at Mishi employ a 1.0 g/t cut-off grade and a 3.0 m minimum width. Estimates provide for

10% dilution, 10% lost ore and metallurgical recoveries of 83%.

11. Mishi Mineral Reserves currently have a life of mine stripping ratio of 2.3 tonnes of waste per tonne of ore.

12. Mishi In-Pit Mineral Resources extend to a depth of 110.0 m, employing a 0.5 g/t cut-off grade, a 3.0 m minimum width

and are reported in-situ with no dilution or lost ore provisions.

13. Mishi Underground Mineral Resources are reported in-situ employing a 3.0 g/t cut-off grade and a 1.5 m minimum

mining width.

14. Qualified Persons for the Mineral Reserves and Mineral Resources estimates as per NI 43-101 include Marc-André

Pelletier P. Eng, COO, and Michael Michaud, P.Geo., VP Exploration of Wesdome.

Exploration Highlights Achievements

Eagle River

• Initial mining of the 300E Zone between the 864 and 844 metre level (“m-level ”) has

continued to confirm the continuity of the strong grades and the geometry of the mineralized

zone defined by drifts and the encompassing drill holes. The 303E Zone accounts for

approximately 20% of the current mineral reserves and will continue to be the focus of mining

development in 2019.

• Ongoing development on 1038 m-level has now confirmed that mineralization east of the

western core of the 7 Zone, have merged to form one zone now defined over 146 m in strike

length and grading 30.5 g/t Au over an average true thickness of 2.61 m. Further, limited

drilling indicates that the eastern extension of the 7 Zone occurs to the southeast side of a

northeast transecting diabase dyke that is interpreted to offset the eastern extension

approximately 20 m. Drilling is planned for this area in 2019.

• A 20,000 m surface drilling program is planned for 2019 to identify new zones along strike

and to the east of the 7 and 300 zones at upper levels of the mine that would have the

potential to positively impact the gold production from the Eagle River underground mine. In

addition, a fourth underground drill has been added to test this area at depth.

Kiena

• Drilling of the Kiena Deep A Zone is ongoing with 5 drill rigs. 2018 drilling from the

exploration ramp has continued to intersect often multiple high grade lenses comprised of

shear zone hosted quartz veins, including 177.3 g/t Au over 5.1 m core length (6.5 g/t Au cut,

5.1 m true width) in hole 6321 and 163.8 g/t Au over 3.0 m core length (13.1 g/t Au over 2.6 m

true width) in hole 6338.

• Following the continued success of the ongoing diamond drill program, the Company

extended the current exploration platforms by a total of 504 m.

• 2018 drilling of the A Zone has identified a well-defined, moderate plunge of approximately 45

degrees to the SE to the gold mineralization that occurs predominantly along the basalt –

chlorite-carbonate schist boundary. It is now understood that the A Zone occurs along a

connecting structure between the regional structure hosting the S50 and VC zones,

respectively. Four drills are in operation on the 1050 m-level exploration ramp completing the

infill and plunge extension drilling, and a 5th drill is now drilling at the 670 m elevation to test

the interpreted up plunge extension of the A Zone towards the VC zone area. This up plunge

extension is interpreted to be in excess of 425 m and would be in addition to the 500 m of

plunge length already defined by drilling. A 50,000 m drill program is underway. This could

significantly expand the potential resource base of the A Zone and will be the focus of drilling

this year and into 2019.

• An interim resource estimate was completed on December 12, 2018 with total Indicated

Resources stand at 574,300 ounces of gold corresponding to a total of 3.1 million tonnes

(“Mt”) at 5.84 g/t Au; Inferred Resources stand at 1,007,200 ounces of gold corresponding to

a total of 4.1 Mt at 7.57 g/t Au; and the Exploration target for the Kiena Deep A Zones

represents of a range of 300,000 t - 450,000 t grading between 8.0 and 11.0 g/t Au for 80,000-

160,000 ounces of gold. Wesdome plans to update the mineral resource estimate at the

Kiena gold deposit in the second half of this year.

Technical Disclosure

The technical content of this release has been compiled, reviewed and approved by Marc-André 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 2018 Fourth Quarter and Full Year Financial Results Conference Call:

February 22, 2019 at 10:00 am ET

North American Toll Free: + 1 (844) 202-7109

International Dial-In Number: +1 (703) 639-1272

Conference ID: 6884996

Webcast link: https://edge.media-server.com/m6/p/hm9wut3y

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 Year Ended

December 31, December 31,

2018 2017 2018 2017

Operating data

Milling (tonnes)

Eagle River 50,536 39,291 185,171 157,250

Mishi 8,478 38,197 70,633 152,591

Throughput 2 59,014 77,488 255,804 309,841

Head grades (g/t)

Eagle River 10.6 11.3 11.7 10.6

Mishi 2.4 2.3 2.3 2.0

Recovery (%)

Eagle River 97.0 94.3 96.4 95.0

Mishi 81.9 81.4 82.4 83.0

Production (ounces)

Eagle River 16,712 13,499 67,315 50,996

Mishi 542 2,298 4,310 7,985

Total gold produced 2 17,254 15,797 71,625 58,980

Total gold sales (ounces) 18,077 19,351 70,480 57,770

Eagle River Complex (per ounce of gold sold) 1

Average realized price $ 1,628 $ 1,618 $ 1,645 $ 1,643

Cash costs 937 1,019 905 1,097

Cash margin $ 691 $ 599 $ 741 $ 546

All-in Sustaining Costs 1 $ 1,371 $ 1,284 $ 1,276 $ 1,490

Mine operating costs/tonne milled 1 $ 306 $ 206 $ 250 $ 204

Average 1 USD → CAD exchange rate 1.3204 1.2712 1.2957 1.2986

Cash costs per ounce of gold sold (US$) 1 $ 710 $ 801 $ 699 $ 845

All-in Sustaining Costs ( US$) 1 $ 1,038 $ 1,010 $ 985 $ 1,148

Financial Data

Mine profit 1 $ 12,495 $ 11,606 $ 52,124 $ 31,537

Net income (loss) $ 2,643 $ (567) $ 14,858 $ 1,287

Net income adjusted 1 $ 2,643 $ 3,357 $ 14,858 $ 6,798

Operating cash flow $ 8,632 $ 13,468 $ 46,300 $ 27,225

Free cash flow $ (4,491) $ 4,981 $ 2,824 $ (12,097)

Per share data

Net income (loss) $ 0.02 $ 0.00 $ 0.11 $ 0.01

Adjusted net earnings 1 $ 0.02 $ 0.03 $ 0.11 $ 0.05

Operating cash flow 1 $ 0.06 $ 0.10 $ 0.34 $ 0.20

Free cash flow 1 $ (0.03) $ 0.04 $ 0.02 $ (0.09)

Notes

1. Refer to the Company’s 2018 Annual Management Discussion and Analysis on pages 29 – 35, 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, 2018 December 31, 2017

Assets

Current

Cash and cash equivalents $ 27,378 $ 22,092

Receivables and prepaids 548 3,821

Tax receivable 2,342 1,932

Inventories 8,302 5,314

Total current assets 38,570 33,159

Deferred income tax assets - 5,450

Mining properties, plant and equipment 89,643 81,375

Exploration properties 81,424 59,929

Total assets $ 209,637 $ 179,913

Liabilities

Current

Payables and accruals $ 22,526 $ 17,003

Income and mining tax payable 180 671

Current portion of obligations under finance leases 4,552 2,541

Total current liabilities 27,258 20,215

Obligations under finance leases 5,248 3,983

Deferred income and mining tax liability 8,259 6,300

Decommissioning provisions 11,663 11,192

Total liabilities 52,428 41,690

Equity

Equity attributable to owners of the Company

Capital stock 166,387 164,161

Contributed surplus 5,777 3,967

Deficit (14,955) (29,905)

Total equity attributable to owners of the Company 157,209 138,223

Total liabilities and equity $ 209,637 $ 179,913

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 Year Ended

December 31, December 31,

2018 2017 2018 2017

Revenues $ 29,462 $ 31,544 $ 116,042 $ 96,057

Cost of sales 22,162 23,780 81,930 74,228

Gross profit 7,300 7,764 34,112 21,829

Other expenses

Corporate and general 1,337 1,248 5,259 4,943

Share-based payments 349 520 2,614 2,778

Kiena care and maintenance 565 329 1,695 1,096

Restructuring costs - - - 2,159

Write-off of mining equipment - 316 290 316

2,251 2,413 9,858 11,292

Operating income 5,049 5,351 24,254 10,537

Interest on long-term debt (83) (60) (274) (462)

Accretion of decommissioning provisions (99) (14) (412) (210)

Interest and other 184 (4) 1,412 (67)

Income before income and mining taxes 5,051 5,273 24,980 9,798

Income and mining tax expense

Current 842 571 2,713 722

Deferred 1,566 5,269 7,409 7,789

2,408 5,840 10,122 8,511

Net income and total

comprehensive income $ 2,643 $ (567) $ 14,858 $ 1,287

Net earnings per share

Basic $ 0.02 $ 0.00 $ 0.11 $ 0.01

Diluted $ 0.02 $ 0.00 $ 0.11 $ 0.01

Weighted average number of common

shares (000s)

Basic 135,132 133,890 134,577 132,871

Diluted 138,531 135,058 136,451 134,927

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 31,2016 $ 156,402 $ 2,173 $ 932 $ (32,106) $ 127,401

Net income for the year ended December 31,

2017 - - - 1,287 1,287

Conversion 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

Balance, December 31,2017 $ 164,161 $ 3,967 $ - $ (29,905) $ 138,223

Net income for the year ended December 31,

2018 - - - 14,858 14,858

Exercise of options 1,514 - - - 1,514

Value attributed to options exercised 712 (712) - - -

Value attributed to options expired - (92) - 92 -

Share-based payments - 2,614 - - 2,614

Balance, December 31, 2018 $ 166,387 $ 5,777 $ - $ (14,955) $ 157,209

Wesdome Gold Mines Ltd.

Consolidated Statements of Cash Flows

(Unaudited, expressed in thousands of Canadian dollars)

Three Months Ended Year Ended

December 31, December 31,

2018 2017 2018 2017

Operating activities

Net income (loss) $ 2,643 $ (567) $ 14,858 $ 1,287

Depletion and depreciation 5,195 3,842 18,012 10,608

Share-based payments 349 520 2,614 2,778

Decommissioning provisions 99 14 412 210

Deferred income and mining tax expense 1,566 5,269 7,409 7,789

Interest on long-term debt 83 (50) 274 359

Accretion of discount on convertible debentures - - - 103

Write-off of mining properties and fixed assets - 316 290 316

Loss on disposal of equipment 24 55 24 214

9,959 9,399 43,893 23,664

Net changes in non-cash working capital 1,184 4,069 5,611 2,712

Mining tax (paid) received (2,511) - (3,204) 849

Net cash from operating activities 8,632 13,468 46,300 27,225

Financing activities

Repayment of convertible debentures - - - (2,091)

Exercise of options 515 - 1,514 1,915

Repayment of obligations under finance leases (1,086) (674) (3,632) (2,753)

Interest paid (83) (60) (274) (469)

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