Wesdome Announces 2021 First Quarter Financial Results
Wesdome Announces 2021 First Quarter Financial Results
TORONTO, May 12, 2021 (GLOBE NEWSWIRE) -- Wesdome Gold Mines Ltd. (TSX: WDO) (“Wesdome” or the “Company”)
today announces first quarter (“Q1 2021”) financial results. All figures are stated in Canadian dollars unless otherwise noted.
Mr. Duncan Middlemiss, President and CEO commented, “During the first quarter, a significant milestone was achieved at
Kiena, with the completion of the A Zone bulk sample reconciliation which has produced 6% more gold at a feed grade of 15.7
g/t versus 14.7 g/t in the resource block model grade. Additionally, the bulk sample generated an additional $3.9 million from
the sale of 1,793 ounces of gold in the quarter. Significant progress was also made towards projects that would benefit the
mine re-start, such as development, mill refurbishment, shaft and other construction projects, and work at the tailing
management area. The PFS is near completion and the Company intends to release the results of the PFS later in the
quarter.
During the quarter a total of $14.0 million was spent on growth and capital projects (Q1 2020: $10.6 million). Consequently,
free cash flow decreased compared to the same period in 2020, and the cash position remained flat quarter over quarter with
$63.9 million as of March 31 (December31 2020: $63.5 million), sufficient to fund all exploration, sustaining, and growth capital
projects including the potential restart of the Kiena mine
The Eagle River Underground Mine produced 53,540 tonnes at a head grade of 12.8 grams per tonne (“g/t Au”) for 21,396
ounces produced, within our expectations. Eagle River grades were slightly below the low end of our guidance, however
increased throughout the quarter. The Company expects to be within guidance for the year, and remains on track to produce
92,000 – 105,000 ounces from the Eagle River Complex, plus an additional 15,000 – 25,000 from Kiena pending a restart
decision.
Exploration activities at both sites ramped up during Q1 and produced very positive results. At Eagle, the Company is
embarking on its’ $16M exploration campaign with 5 drills underground and 2-3 rigs on surface. Currently a regional structural
compilation is underway which will aid in the understanding of the current Eagle River deposit and generate high quality mine
and regional targets. As well, definition drilling at the Falcon Zone advanced rapidly, and initial sill development is expected to
commence in Q2, thereby providing an opportunity to assess the gold mineralization of the Falcon Zone within volcanic rocks.
At Kiena, an exciting new discovery was made – a new high grade gold zone was discovered in the footwall of the A Zone.
This drilling highlights the potential to add ounces, not only in this area but illustrates the untested potential of the entire gold
system around the Kiena mine. This footwall zone will be one of the zones of focus for the continued drilling.”
The Company has performed well during the quarter despite the Covid-19 pandemic. Hygiene protocols are well implemented
and the operations have been Covid free throughout. We continue to operate diligently keeping our workplaces safe for our
employees, contractors, and vendors.
Key operating and financial highlights of the Q1 2021 results include:
• Gold production of 22,564 ounces from the Eagle River Complex, a 10% decrease over the same period in the previous
year (Q1 2020: 25,122 ounces):
◦ Eagle River Underground 53,540 tonnes at a head grade of 12.8 grams per tonne for 21,396 ounces produced,
13% decrease over the previous year (Q1 2020: 24,457 ounces).
◦ Mishi Open Pit 17,219 tonnes at a head grade of 2.5 g/t Au for 1,169 ounces produced (Q1 2020: 665 ounces).
• Revenue of $46.0 million, a 19.8% decrease over the previous year (Q1 2020: $57.3 million).
• Ounces sold 22,457, which includes 1,793 ounces from the Kiena bulk sample at an average sales price of $2,219/oz
(Q1 2019: 26,500 ounces at an average price of $2,162/oz).
• Cash margin1 of $21.8 million, a 21.0% decrease over Q1 2020 (Q1 2020 - $27.6 million).
• Operating cash flow of $22.0 million or $0.16 per share1 as compared to $33.5 million or $0.24 per share for the same
period in 2020.
• Free cash flow of $0.1 million, net of an investment of $12.6 million in Kiena, or nil per share1 (Q1 2020: free cash flow
of $16.7 million or $0.12 per share).
• Net income and Net income (adjusted)1 of $7.1 million or $0.05 per share (Q1 2020: $11.5 million or $0.08 per share).
• Cash position increased to $63.9 million compared to $63.5 million in the previous quarter.
• Cash costs 1 of $1,076/oz or US$850/oz, a 4% decrease over the same period in 2020 (Q1 2020: $1,120/oz or
US$833/oz) due to the inclusion of 1,793 lower cost ounces from the Kiena bulk sample, which was processed in Q4
2020 and sold in Q1 2020.
• All-in sustaining costs (“AISC”) 1 of $1,497/oz or US$1,182/oz, a 5% increase over the same period in 2020 (Q1 2020:
$1,423/oz or US$1,058/oz), due to lower ounces sold and higher sustaining capital, which was partially offset by the
inclusion of 1,793 lower cost ounces from the Kiena bulk sample, which was processed in Q4 2020 and sold in Q1
2021. This includes approximately $30/ounce in COVID-19 safety related costs.
1. Refer to the Company’s 2021 First Quarter Management Discussion and Analysis, section entitled “Non-IFRS
Performance Measures” for the reconciliation of these non-IFRS measurements to the financial statements.
Production and
Exploration
Highlights
Achievements
Eagle River
• The Eagle River underground ore production averaged 641 tpd in Q1 2021 due to the ventilation
system upgrade, which included the development of the 640 m ramp to provide a connection with
the main ramp, a new ventilation raise underground, and the installation of a second fan
• At the Falcon Zone, initial sill development is expected to commence in Q2, thereby providing an
opportunity to assess the gold mineralization of the Falcon Zone in the volcanic rocks. The
Company is continuing to explore the 311 West Zone along the western margin of the mine diorite.
The zone has transitioned from the diorite into the adjacent mafic volcanics, again highlighting the
potential of the volcanic rocks to host gold mineralization.
• Surface drilling in ongoing both east and west of the mine to follow up on anomalous values returned
from regional drilling program in 2020.
• A comprehensive analysis of the structural geology is being completed at the mine and the
surrounding volcanic rocks to aid in exploration targeting.
• Total metres drilled in 2021 are budgeted to range between 164,000 and 174,000 m for five
underground and three surface drill rigs, including underground exploration of 60,000 - 70,000 m,
underground definition drilling of 50,000 m, and surface exploration drilling 54,000 m.
Kiena
• A total of 7,032 tonnes were processed from the Kiena Deep A zone bulk sample at the Kiena mill
in Q4 2020. The bulk sample recovered 6% more gold than the MRE with a feed grade of 15.7 g/t
versus model grade of 14.7 g/t. Total gold produced was 3,479 ounces with gold recovery in the
Kiena mill of 98.2%. To date, 3,293 ounces of gold have been sold, which includes 1,500 ounces in
Q4 2020 and 1,793 ounces in Q1 2021, with the remaining to be sold in Q2.
• A new high grade gold zone was discovered in the footwall of the A Zone. This drilling highlights the
potential to add ounces not only in this area but illustrates the untested potential of the entire gold
system around the Kiena mine.
• Recent drilling continues to expand the Kiena Deep A Zone predominantly along the lateral
extensions of the zone. The high grades intersected will be included in future resource updates and
are expected to add to the current resource base including Hole 6739W3: 46.2 g/t Au over 24.2 m
core length (36.6 g/t Au cut, 6.7 m true width) A1 Zone.
• The Pre-Feasibility Study ("PFS") is progressing well, and it is expected to be completed in Q2,
with a scheduled re-start decision shortly thereafter. The pre-production timeframe is forecast to be
less than six months, potentially driving the Kiena Mine into commercial production in Q4 of this
year.
• The 2021 exploration program at Kiena consists of 65,000 m of underground drilling and 42,000 m of
surface drilling.
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 2021 First Quarter Financial Results Conference Call
North American Toll Free: + 1 (844) 202-7109
International Dial-In Number: +1 (703) 639-1272
Conference ID: 2264519
Webcast link: https://edge.media-server.com/mmc/p/87za7n4c
Webcast can also be accessed under the News and Events section of the Company’s website (www.wesdome.com )
ABOUT WESDOME
Wesdome Gold Mines is a 100% Canadian focused Company that has had over 30 years of continuous gold mining operations
in Canada. The Company’s strategy is to build an intermediate gold producer, producing 200,000+ ounces from two mines in
Ontario and Quebec. The Eagle River Complex in Wawa, Ontario is currently increasing gold production from the high-grade
Eagle River Underground Mine. 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 is
currently completing a PFS in support of a production restart decision. The Company is in the process of divesting of its Moss
Lake gold deposit, located 100 kilometres (“kms”) west of Thunder Bay, Ontario. The Company has approximately 139.4
million shares issued and outstanding and trades on the Toronto Stock Exchange under the symbol “WDO.”
For further information, please contact:
Duncan Middlemiss or Lindsay Carpenter Dunlop
President and CEO VP Investor Relations
416-360-3743 ext. 2029 416-360-3743 ext. 2025
[email protected] [email protected]
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.
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,
2021 2020
Operating data
Milling (tonnes)
Eagle River 53,540 55,874
Mishi 17,219 11,047
Throughput 2 70,759 66,921
Head grades (g/t)
Eagle River 12.8 14.0
Mishi 2.5 2.5
Recovery (%)
Eagle River 97.1 97.3
Mishi 84.8 74.8
Production (ounces)
Eagle River 21,396 24,457
Mishi 1,169 665
Total gold produced 2 22,564 25,122
Total gold sales (ounces) 3 22,457 26,500
Eagle River Complex (per ounce of gold sold) 1
Average realized price $ 2,223$ 2,162
Cash costs 1,076 1,120
Cash margin $ 1,147$ 1,042
All-in Sustaining Costs 1 $ 1,497$ 1,423
Mine operating costs/tonne milled 1 $ 335$ 425
Average 1 USD → CAD exchange rate 1.2660 1.3449
Cash costs per ounce of gold sold (US$) 1 $ 850$ 833
All-in Sustaining Costs ( US$) 1 $ 1,182$ 1,058
Financial Data
Cash margin 1 $ 21,776$ 27,619
Net income $ 7,103$ 11,513
Net income adjusted 1 $ 7,103$ 11,513
Earnings before interest, taxes, depreciation and amortization 1 $ 18,662$ 25,414
Operating cash flow $ 22,033$ 33,491
Free cash flow $ 99$ 16,734
Per share data
Net income $ 0.05$ 0.08
Adjusted net income 1 $ 0.05$ 0.08
Operating cash flow 1 $ 0.16$ 0.24
Free cash flow 1 $ 0.00$ 0.12
Wesdome Gold Mines Ltd.
Consolidated Statements of Financial Position
(Expressed in thousands of Canadian dollars)
As at March 31,
2021 As at December
31, 2020
Assets
Current
Cash and cash equivalents $ 63,884 $ 63,480
Receivables and prepaids 3,999 4,243
Sales tax receivable 4,773 4,731
Inventories 13,606 12,451
Non-current assets held for sale 10,326 -
Total current assets 96,588 84,905
Restricted cash 657 657
Deferred financing cost 960 827
Mineral properties, plant and equipment 132,047 128,670
Exploration properties 145,097 143,524
Total assets $ 375,349 $ 358,583
Liabilities
Payables and accruals $ 25,117 $ 21,123
Income and mining tax payable 4,378 3,481
Current portion of lease liabilities 6,243 5,901
Total current liabilities 35,738 30,505
Lease liabilities 5,723 5,604
Deferred income and mining tax liabilities 41,491 37,354
Decommissioning provisions 21,813 22,270
Total liabilities 104,765 95,733
Equity
Equity attributable to owners of the Company
Capital stock 180,802 179,540
Contributed surplus 5,841 6,472
Retained earnings 83,941 76,838
Total equity attributable to owners of the Company 270,584 262,850
$ 375,349 $ 358,583
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
March 31
2021 2020
Revenues $ 45,973 $ 57,332
Cost of sales (30,264) (37,590)
Gross profit 15,709 19,742
Other expenses
Corporate and general 2,391 1,971
Stock-based compensation 310 404
2,701 2,375
Operating income 13,008 17,367
Interest expense (259) (324)
Accretion of decommissioning provisions (110) (125)
Interest and other income (303) 364
Income before income and mining taxes 12,336 17,282
Income and mining tax expense
Current 1,096 2,270
Deferred 4,137 3,499
5,233 5,769
Net income and total
comprehensive income $ 7,103 $ 11,513
Earnings per share
Basic $ 0.05 $ 0.08
Diluted $ 0.05 $ 0.08
Weighted average number of common
shares (000s)
Basic 139,732 138,464
Diluted 142,617 142,024
Wesdome Gold Mines Ltd.
Consolidated Statements of Total Equity
(Expressed in thousands of Canadian dollars)
Capital Contributed Retained Total
Stock Surplus Earnings Equity
Balance, December 31, 2019 $ 174,789 $ 5,590 $ 26,123 $ 206,502
Net income for the period ended
March 31, 2020 - - 11,513 11,513
Exercise of options 682 - - 682
Value attributed to options exercised 324 (324) - -
Value attributed to RSUs exercised 577 (577) - -
Stock-based compensation - 404 - 404
Balance, March 31, 2020 $ 176,372 $ 5,093 $ 37,636 $ 219,101
Balance, December 31, 2020 179,540 6,472 76,838 262,850
Net income for the period ended
March 31, 2021 - - 7,103 7,103
Exercise of options 321 - - 321
Value attributed to options exercised 155 (155) - -
Value attributed to RSUs exercised 786 (786) - -
Stock-based compensation - 310 - 310
Balance, March 31, 2021 $ 180,802 $ 5,841 $ 83,941 $ 270,584
Wesdome Gold Mines Ltd.
Consolidated Statements of Cash Flows
(Unaudited, expressed in thousands of Canadian dollars)
Three Months Ended
March 31
2021 2020
Operating Activities
Net income 7,103 11,513
Depreciation and depletion 6,067 7,877
Stock-based compensation 310 404
Accretion of decommissioning provisions 110 125
Deferred income and mining tax expense 4,137 3,499
Amortization of deferred financing cost 106 62
Interest expense 259 324
Foreign exchange loss on lease financing (30) 351
18,062 24,155
Net changes in non-cash working capital 4,170 10,656
Mining and income tax paid (199) (1,320)
Net cash from operating activities 22,033 33,491
Financing Activities
Exercise of options 321 682
Deferred financing cost (239) (30)
Repayment of borrowings - (3,636)
Repayment of lease liabilities (1,516) (1,057)
Interest paid (259) (324)
Net cash used in financing activities (1,693) (4,365)
Investing Activities
Additions to mining properties (8,519) (6,546)
Additions to exploration properties (11,899) (9,154)
Net changes in non-cash working capital 482 315
Net cash used in investing activities (19,936) (15,385)
Increase (decrease) in cash and cash equivalents 404 13,741
Cash and cash equivalents - beginning of the period 63,480 35,657
Cash and cash equivalents - end of the period 63,884 49,398
Cash and cash equivalents consist of:
Cash $ 63,884 $ 49,398
$ 63,884 $ 49,398
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