Wesdome Announces 2019 First Quarter Financial Results
Wesdome Announces 2019 First Quarter Financial Results
TORONTO, May 08, 2019 -- Wesdome Gold Mines Ltd. (TSX: WDO) (“Wesdome” or the “Company”) today announces first
quarter (“Q1 2019”) financial results. All figures are stated in Canadian dollars unless otherwise noted.
“Mr. Duncan Middlemiss, President and CEO commented, “In Q1 2019, the Eagle River underground mine delivered a head
grade of 18.5 grams per tonne, versus guidance of 15.5 – 16.5 grams per tonne, primarily due to higher grades than
anticipated within the 303 lens. As a result, both cash and all-in sustaining costs per ounce were at the lower end of guidance
ranges. A number of other accomplishments were completed in Q1 including increased mine development rates, a build of up
a surface stockpile for both Eagle and Mishi ore for next quarter’s production, and the early completion of mill improvements
originally scheduled for Q2. Free cash flow for the quarter was neutral, which was within expectations. We expect to return to
positive free cash flow generation in the second half of the year when production increases and underground development rates
decrease slightly. The Eagle River operation continues to fund the company’s major exploration and development programs at
both Eagle River and Kiena mines.”
Key operating and financial highlights of the Q1 2019 results include:
• Gold production of 19,010 ounces from the Eagle River Complex, a 6% increase over the same period in the previous
year (Q1 2018: 17,948 ounces):
◦ Eagle River Underground 30,941 tonnes at a head grade of 18.5 grams per tonne (“g/t Au”) for 17,955 ounces
produced, 9% increase over the previous year (Q1 2018: 16,398 ounces).
◦ Mishi Open Pit 18,470 tonnes at a head grade of 2.2 g/t Au for 1,055 ounces produced (Q1 2018: 1,550 ounces).
• Revenue of $32.5 million, a 24% increase over the previous year (Q1 2018: $26.2 million).
• Ounces sold 18,760 at an average sales price of $1,733/oz (Q1 2018: 15,430 ounces at an average price of $1,698/oz).
• Cash costs 1 of $866/oz or US$651/oz, a 13% decrease over the same period in 2018 (Q1 2018: $999/oz or
US$790/oz).
• All-in sustaining costs (“AISC”) 1 of $1,311/oz or US$986/oz, a 2% decrease over the same period in 2018 (Q1 2018:
$1,342/oz or US$1,061/oz).
• Earned mine profit1 of $16.3 million, a 51% increase over Q1 2018 (Q1 2018 - $10.8 million).
• Operating cash flow of $12.6 million or $0.09 per share1 as compared to $12.4 million or $0.09 per share for the same
period in 2018.
• Invested $6.6 million in exploration expenditures at Eagle River and Kiena Complexes during the quarter (Q1 2018 -
$5.0 million)
• Free cash outflow of $0.4 million or nil, on a per share1 basis (Q1 2018: free cash flow of $3.2 million or $0.02 per
share).
• Net income of $8.1 million or $0.06 per share (Q1 2018: $2.9 million or $0.02 per share). Net income (adjusted) 1 was
$5.7 million or $0.04 per share (Q1 2018: $2.9 million or $0.02 per share).
• Cash position of $27.8 million.
1 Refer to the Company’s 2019 First Quarter Management Discussion and Analysis, section entitled “Non-IFRS Performance Measures” for the reconciliation of these non-
IFRS measurements to the financial statements.
Exploration Highlights for Q1 2019
Eagle River
• The mining of the 303 Zone between the 844 metre level (“m-level”) and the first sub-level above continued to confirm
the continuity of the strong grades and the geometry of the mineralized zone. Exploration drilling continued on the 925
m-level to prepare the 300E zone for mining and will continue to be the focus of mining development in 2019.
• Ongoing development on 1,038 metre level (“m-level”) has now extended 7 Zone over 146 m in strike length and grading
30.5 g/t Au over an average true thickness of 2.61 m and recent drilling has now confirmed that this longer strike length
extends to depth over an addition 100 m to the 1,250 m-level and remains open down dip. Recent drilling has now
confirmed that the 7 Zone extends along strike to the southeast side of a northeast transecting diabase dyke that
offsets the eastern extension approximately 20 m. This extension is a substantial addition of potential resources
compared to previous interpretations, and thus will be the focus of 2019 drilling.
• Ongoing drilling and initial drift development along the 300W Zone has confirmed the continuity and strike length of 145
m grading 28.8 g/t Au with a 1.8 m average width and has extended the mineralized zone to west in excess of 50 m
further west than the previously interpreted diorite contact and remains open to the west and remains a focus for 2019
drilling.
• Exploration drilling from the 758 m-level in the eastern half of the mine diorite has continued during the quarter to better
define the new intersected Zones that is interpreted to be parallel zones north of the past producing 6 and 8 zones and
could be the possible extensions of the parallel 7 Zone and 300 Zone structures being mined further to the west.
Surface drilling in the volcanics to the west of the mine diorite encountered two sub-parallel structures, namely Falcon
7 and Falcon 300 zones, that returned 18.5 g/t Au over 5.8 m core length. These zones are interpreted to be
extensions of the 300 and 7 zone structures which lie approximately 200 m to the east within the mine diorite.
Kiena
• Since the October 12th cut-off date for drill data used in the recent resource estimate released on December 12, 2018,
exploration and definition drilling has been ongoing with 5 drills at the Kiena Deep A Zone. Four drills are in operation
on the 1,050 m-level exploration ramp completing the infill and plunge extension drilling, and a 5th drill is operating on
the 670 m elevation to test the interpreted up plunge extension of the A Zone towards the VC zone area. Since
October 12th, approximately 16,910 m in 64 holes have been added to the Kiena Deep A Zone, in addition to a number
of additional exploration holes within the immediate vicinity.
• The ongoing definition/infill drilling has continued to confirm the overall continuity of the geometry and the high grade
gold mineralization of the Kiena Deep A Zone. Drilling to date 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.
• Additionally, the ongoing drilling has continued to expand the Kiena Deep A Zone up and down plunge. Down plunge,
the zone has been extended 60-100 m and shows good continuity. Up plunge, drilling has now extended the A zone
over 70-100 m since the December 12th resource estimate extending zone above the 1050 level.
• Also, drilling is now only starting to test the more vertical, eastern structure/fold limb that is interpreted to be the
previously named Upper Quartz Zone that extends the entire plunge length of the A Zone. Recent drilling along this
structure returned 7.1 g/t Au over 25.5 m in Hole 6438A. This hole intersected VG in quartz veins hosted by an unit of
mafic flow breccia near the vertical contact with a komatiite, named A Zone Extension.
• Drilling from 67 level is continuing to test the potential up plunge of the A Zone in the vicinity of the VC zone area.
Limited drilling to date confirms that the basalt – schist contact associated with the A zone mineralization continues to
the area of the VC zone. The hosting schist is interpreted to split into 2 subparallel shears on either side of a thicker
portion of basalt. The recent drilling on the northeastern flank intersected VG mineralization in quartz veining at the
980 metre level. Historic hole 6146 returned 6.7 g/t Au over 11.0 m. One adjacent recent hole, 6437, returned 6.9 g/t
Au over 7.0 m. Other holes have intersected VG in quartz veins similar to the style of gold mineralization of the A
Zone at the 980 m-level and given this potential, is now the focus for the drilling from 67 and 105 levels.
Our 2019 underground exploration program calls for 50,000 m of drilling with 5 drills in preparation for an updated resource
estimate at the Kiena gold deposit in the second half of this year. This information will then lead into a Preliminary Economic
Assessment.
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 2019 First Quarter Financial Results Conference Call:
May 9, 2019 at 10:00 am ET:
North American Toll Free: + 1 (844) 202-7109
International Dial-In Number: +1 (703) 639-1272
Conference ID: 9496715
Webcast link: https://edge.media-server.com/m6/p/evgw6ovv
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
March 31
2019 2018
Operating data
Milling (tonnes)
Eagle River 30,941 44,480
Mishi 18,470 32,846
Throughput 2 49,411 77,326
Head grades (g/t)
Eagle River 18.5 12.0
Mishi 2.2 1.8
Recovery (%)
Eagle River 97.6 95.4
Mishi 80.6 81.6
Production (ounces)
Eagle River 17,955 16,398
Mishi 1,055 1,550
Total gold produced 2 19,010 17,948
Total gold sales (ounces) 18,760 15,430
Eagle River Complex (per ounce of gold sold) 1
Average realized price $ 1,733 $ 1,698
Cash costs 866 999
Cash margin $ 867 $ 699
All-in Sustaining Costs 1 $ 1,311 $ 1,342
Average 1 USD → CAD exchange rate 1.3295 1.2647
Cash costs per ounce of gold sold (US$) 1 $ 651 $ 790
All-in Sustaining Costs ( US$) 1 $ 986 $ 1,061
Financial Data
Mine profit 1 $ 16,259 $ 10,774
Net income $ 8,092 $ 2,859
Net income adjusted 1 $ 5,723 $ 2,859
Operating cash flow $ 12,581 $ 12,423
Free cash flow (outflow) 1 $ (429) $ 3,216
Per share data
Net income $ 0.06 $ 0.02
Adjusted net earnings 1 $ 0.04 $ 0.02
Operating cash flow $ 0.09 $ 0.09
Free cash flow (outflow) 1 $ - $ 0.02
Notes
1. Refer to the Company’s 2019 First Quarter Management Discussion and Analysis, section 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.
Condensed Interim Consolidated Statements of Financial Position
(Unaudited, expressed in thousands of Canadian dollars)
As of
March 31,
2019
As of
December 31,
2018
Assets
Current
Cash and cash equivalents $ 27,847 $ 27,378
Receivables and prepaids 1,351 548
Sales tax receivable 4,058 2,342
Inventories 11,977 8,302
Total current assets 45,233 38,570
Mining properties, plant and equipment 93,545 89,643
Exploration properties 86,962 81,424
Total assets $ 225,740 $ 209,637
Liabilities
Current
Payables and accruals $ 22,175 $ 22,526
Income and mining tax payable 1,149 180
Current portion of lease liabilities 5,153 4,552
Total current liabilities 28,477 27,258
Lease liabilities 5,718 5,248
Deferred income and mining tax liabilities 11,375 8,259
Decommissioning provisions 11,868 11,663
Total liabilities 57,438 52,428
Equity
Equity attributable to owners of the Company
Capital stock 169,475 166,387
Contributed surplus 5,631 5,777
Deficit (6,804) (14,955)
Total equity attributable to owners of the Company 168,302 157,209
Total liabilities and equity $ 225,740 $ 209,637
Wesdome Gold Mines Ltd.
Condensed Interim Consolidated Statements of Income and Comprehensive Income
(Unaudited, expressed in thousands of Canadian dollars except for per share amounts)
Three Months Ended
March 31
2019 2018
Revenues $ 32,535 $ 26,217
Cost of sales 20,185 18,764
Gross profit 12,350 7,453
Other expenses
Corporate and general 2,008 1,077
Share-based payments 1,099 867
Kiena care and maintenance - 456
Write-off of mining equipment - 281
3,107 2,681
Operating income 9,243 4,772
Quebec exploration credits refund 2,867 -
Interest on long-term debt (112) (51)
Accretion of decommissioning provisions (115) (104)
Interest and other 294 44
Income before mining and income tax 12,177 4,661
Income and mining tax expense
Current 968 481
Deferred 3,117 1,321
4,085 1,802
Net income and total comprehensive income $ 8,092 $ 2,859
Net earnings per share
Basic $ 0.06 $ 0.02
Diluted $ 0.06 $ 0.02
Weighted average number of common shares (000s)
Basic 135,788 134,132
Diluted 139,550 135,148
Wesdome Gold Mines Ltd.
Condensed Interim Consolidated Statements of Changes in Equity
(Unaudited, expressed in thousands of Canadian dollars)
Capital Contributed Total
Stock Surplus Deficit Equity
Balance,December 31,2017 $ 164,161$ 3,967 $ (29,905) $ 138,223
Net income for the period ended
March 31, 2018 - - 2,859 2,859
Exercise of options 220 - - 220
Value attributed to options exercised 128 (128) - -
Value attributed to options expired - (33) 33 -
Share based payments - 867 - 867
Balance, March 31, 2018 $ 164,509$ 4,673 $ (27,013) $ 142,169
Balance,December 31,2018 $ 166,387$ 5,777 $ (14,955) $ 157,209
Net income for the period ended
March 31, 2019 - - 8,092 8,092
Exercise of options 1,902 - - 1,902
Value attributed to options exercised 933 (933) - -
Value attributed to options expired - (59) 59 -
Share-based payments - 1,099 - 1,099
Value attributed to RSU exercised 253 (253) - -
Balance, March 31, 2019 $ 169,475 $ 5,631 $ (6,804) $ 168,302
Wesdome Gold Mines Ltd.
Condensed Interim Consolidated Statements of Cash Flows
(Unaudited, expressed in thousands of Canadian dollars)
Three Months Ended
March 31
2019 2018
Operating activities
Net income $ 8,092 $ 2,859
Depletion and depreciation 3,909 3,321
Share based payments 1,099 867
Accretion of decommission provisions 115 104
Deferred income and mining tax expense 3,117 1,321
Interest on long-term debt 112 51
Write-off of mining equipment - 281
16,444 8,804
Net changes in non-cash working capital (3,863) 3,619
Net cash from operating activities 12,581 12,423
Financing activities
Exercise of options 1,902 220
Payments of lease liabilities (1,255) (659)
Interest paid (112) (51)
Net cash from (used in) provided by financing activities 535 (490)
Investing activities
Additions to mining properties (6,217) (3,556)
Additions to exploration properties (5,538) (4,992)
Net changes in non-cash working capital (892) 983
Net cash used in investing activities (12,647) (7,565)
Increase in cash and cash equivalents 469 4,368
Cash and cash equivalents, beginning of period 27,378 22,092
Cash and cash equivalents, end of period $ 27,847 $ 26,460
Cash and cash equivalents consist of:
Cash $ 17,847 $ 17,460
Term deposits 10,000 9,000
$ 27,847 $ 26,460
ABOUT WESDOME
Wesdome Gold Mines has had over 30 years of continuous gold mining operations in Canada. The Company is 100%
Canadian focused with a pipeline of projects in various stages of development. The Company’s strategy is to build Canada’s
next intermediate gold producer, producing 200,000+ ounces from two mines in Ontario and Quebec. 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. The Company has approximately
136.4 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. 2029
or Lindsay Carpenter Dunlop
VP Investor Relations
416-360-3743 ext. 2025
220 Bay St, Suite 1200
Toronto, ON, M5J 2W4
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.
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