Wesdome Announces 2022 First Quarter Results and Appointment of Chief Operating Officer
Wesdome Announces 2022 First Quarter Results and Appointment of Chief
Operating Officer
TORONTO, May 11, 2022 -- Wesdome Gold Mines Ltd. (TSX: WDO) (“Wesdome” or the “Company”) today announces first
quarter (“Q1 2022”) financial results. All figures are stated in Canadian dollars unless otherwise noted.
Duncan Middlemiss, President and CEO commented, “In Q1, with combined production of 25,611 ounces we increased cash
flow from operations by 36%, and cash margins by 39% over the same period last year, ending the quarter with $52.5 million
in cash. This is sufficient to fund our final year of elevated growth capex as we finish projects related to the ramp up at Kiena,
such as the fleet purchase, tailings dam, and paste fill plant construction.
It was a challenging quarter due to the unpredictable supply chain, inflationary pressures seen across the industry, as well as
the Omicron variant surge which impacted work force availability. Q1 production at Kiena was impacted by the unscheduled
downtime of the underground crusher (since rectified) and the delay in the delivery of underground mobile equipment, which
was received at the end of the quarter. Ground conditions within the Kiena Deep A Zone, specifically the schist and komatiite
rock types which are in the foot wall of the zone, are challenging as expected. We look forward to the completion of the paste
fill plant (now expected to be commissioned in the summer) in order to speed up our production cycle and mitigate delays.
While the Kiena restart is generally progressing as planned, the aforementioned challenges have impacted various aspects of
the project to date. The addition of paste fill capabilities in Q3 will have significant production benefits. Wesdome is very
fortunate to have commenced this start up activity in June of 2021, as most major components critical to commercial restart of
operations have now been received at site.
Combined cash costs for the quarter of $1,295 per ounce (US $1,023) and AISC costs of $1,695 per ounce (US$1,339) were
higher than the upper end of full-year guidance ranges due to planned lower production (the low for 2022)) and increased
corporate and general expenses. A more detailed breakdown of costs for each operation is provided in the table below. Free
cash outflow was $6.8 million, net of an investment of $28.4 million in Kiena, or ($0.05) per share. The Company expects to
return to positive free cash flow status in the second half of the year as production ramps up and growth capital spending is
significantly reduced.
At Eagle, we are continuing to open up additional stopes in the high-grade Falcon Zone, with the mine plan calling for higher
production in the second half of the year.
Executive Appointments
Subsequent to quarter-end, the Company is pleased to announce two new executive management updates. Frederic Mercier-
Langevin has been appointed as Chief Operating Officer, effective June 15, 2022.
Frederic brings over 17 years of project execution and operational experience with Agnico Eagle Mines Limited. Most recently,
Mr. Langevin served as General Manager of Agnico Eagle’s Meliadine mine in Nunavut, which produced 391,687 koz Au in
2021 from both underground and open pit operations. Prior to his role at Meliadine, Mr. Langevin held roles of increasing
responsibility, including overseeing the execution of the Goldex project and Lapa Mine in Val d’or, Quebec where he was
eventually appointed General Manager. He is bilingual in English and French and holds a Bachelor of Science degree in Mining
Engineering and a M.Sc. in Mining Engineering (Rock Mechanics) from Laval University.
The Company also announces that Joanna Miller has been promoted to the position of Vice President, Sustainability and
Environment (previously Director Sustainability).
Joanna is an experienced sustainability strategist with over 15 years experience in the mining industry in consulting, site-
based and corporate roles, managing external affairs, Indigenous relations, ESG reporting and social & environmental risk.
She joined Wesdome in 2020 as the Director of Sustainability & Environment, having previously spent 6 years with Centerra
Gold and Thompson Creek Metals in British Columbia. Prior to her work in the mining industry, Joanna managed engagement
and investment campaigns for clients including Scotiabank, Hyundai and Loblaws. She holds a Bachelor of Arts from Queen’s
University and has completed certification programs in Indigenous law and environmental management. Joanna is the current
Vice-Chair of the Ontario Mining Association’s Indigenous Relations Committee.
“Frederic’s experience in Canadian gold mining operations, and the Abitibi region specifically will be a tremendous asset to our
team, as we ramp up Kiena to commercial production. Joanna, who has been working with us for the last eighteen months in a
director role, has significantly improved our ESG disclosure and performance, and brings a wealth of knowledge and
experience to this role.”
Key operating and financial highlights of the Q1 2022 results include:
• Gold production of 25,611 ounces, including 5,112 Kiena pre-commercial ounces, is a 13% increase over the same
period of the previous year (Q1 2021: 22,565 ounces):
◦ Eagle River Underground milled 53,217 tonnes at a head grade of 11.6 grams per tonne for 19,334 ounces
produced, a 10% decrease over the same period in the previous year (Q1 2021: 21,396 ounces).
◦ Mishi Open Pit milled 11,873 tonnes at a head grade of 3.6 grams per tonne for 1,165 ounces produced (2021:
1,169 ounces).
◦ Kiena milled 21,162 tonnes at a head grade of 7.7 grams per tonne for 5,112 pre-commercial ounces produced.
• Revenue2 of $66.7 million, a 45% increase over the same period of the previous year (Q1 2021: $46.0 million).
• Ounces sold3 were 28,000 at an average sales price of $2,379/oz (Q1 2021: 20,664 ounces at an average price of
$2,223/oz).
• Cash margin1,2,4 of $30.3 million, a 39% increase over the same period of the previous year (Q1 2021: $21.8 million).
• Operating cash flows2,4 increased by 36% to $29.9 million or $0.21 per share1 as compared to $22.0 million or $0.16
per share for the same period in 2021.
• Free cash outflow of $6.8 million, net of an investment of $28.4 million in Kiena, or ($0.05) per share1 (Q1 2021: free
cash inflow of $0.1 million or $nil per share).
• Net income2,4 and Adjusted net income attributable to shareholders of $7.1 million or $0.05 per share (Q1 2021: $7.1
million or $0.05 per share).
• Cash position at the end of the quarter of $52.5 million.
• Cash costs 1,4,5 of $1,295/oz or US$1,023/oz, a 20% increase over the same period in 2021 (Q1 2020: $1,076/oz or
US$850/oz);
• AISC1,5 increased by 13% to $1,695/oz or US$1,339/oz (Q1 2021: $1,497 or US$1,182 per ounce) due to lower ounces
sold and increased corporate and general expenses.
1. Refer to the Company’s 2021 Annual Management Discussion and Analysis section entitled “Non-IFRS
Performance Measures” for the reconciliation of these non-IFRS measurements to the consolidated financial
statements.
2. Q1 2021 excludes $3.9 million of revenue from the Kiena bulk sample, which was processed in Q4 2020 and
sold in Q1 2021. The incidental revenue was credited against the cost of the Kiena exploration asset.
3. Q1 2021 excludes 1,793 ounces from the Kiena bulk sample, which was processed in Q4 2020 and sold in Q1
2021.
4. Includes a $0.4 million charge for product inventory costs from the sale of 1,793 ounces of gold from the Kiena
bulk sample, which was processed in Q4 2020 and sold in Q1 2021.
5. In determining the Cash cost per ounce and AISC per ounce, the total ounces sold includes 1,793 ounces of
gold from the Kiena bulk sample, which was processed in Q4 2020 and sold in Q1 2021.
Production and Exploration
Highlights
Achievements
Eagle River Complex
• Q1 2022 Eagle River underground ore production decreased by 10% from Q1 2021 to
19,334 ounces of gold due to a planned decrease in head grade. Head grade at Eagle
River in Q1 2022 averaged 11.6 g/t, which exceeded the plan, but is slightly below the
2022 grade guidance of 12.1 – 13.4 g/t Au as expected.
• Q1 2022 cash cost of $1,262 (US$997) per ounce of gold sold 1 increased by 10% or
$113 from Q1 2021 due to a 9% decrease in ounces sold. Despite inflationary pressure
and pandemic related impacts, the overall aggregate cash costs remained consistent
with Q1 2021.
• Q1 2022 AISC of $1,771 (US$1,399) per ounce of gold sold 1 increased by 9% or $164
from Q1 2021 due to a 9% decrease in ounces sold.
• Generated a cash margin in Q1 2022 of $21.3 million compared to $22.2 million in Q1
2021 due to the 9% decrease in ounces sold; partially offset by an 8% higher average
realized Canadian gold price of $2,396/oz (Q1 2021 - $2,223/oz).
• Definition drilling is focused at the Falcon Zone and 300 E Zone. A record Inferred
Resource inventory provides a platform for potential increase Reserve replacement for
2022.
• Underground exploration is focused on extending the high grade 300 E and Falcon
zones and targeting parallel zones in the volcanic rocks. Additionally, drilling is
planned at the recently discovered North Contact zone.
• Surface drilling is ongoing with 2 drills both east and west of the mine to follow up on
encouraging values returned from the regional drilling program in 2021.
Kiena
• Generated $9.0 million in cash margin despite the high cash costs of $1,364 per ounce
of gold sold1 due to planned low pre-commercial production levels.
• Q1 2022 cash cost of $1,364 (US$1,023) per ounce of gold sold 1 and AISC of $1,541
(US$1,217) per ounce of gold sold1.
• Kiena Deep continues to show potential to add additional ounces in the resource base
and additional ounces are planned for conversion to reserves with 2022 drilling,
particularly at the Footwall Zone where an inferred resource has been defined.
• Additionally, underground drills have been moved onto the 33 level to test historic
zones and encouraging drill results further to the east along strike from the Kiena mine.
• Initial surface drilling has focused on the Presqu’ile and Shawkey areas located
northwest and southeast of the Kiena Mine, respectively.
• Surface drilling is ongoing and will be accelerated once the ice has melted utilizing the
two barges at site. Planned drilling is concentrated around the Shawkey and newly
discovered Bourgo zone.
Technical Disclosure
The technical content of this release has been compiled, reviewed and approved by Jacqueline Wheeler, P. Eng, Director,
Corporate Development and Technical Projects 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 2022 First Quarter Financial Results Conference Call
North American Toll Free: + 1 (844) 202-7109
International Dial-In Number: +1 (703) 639-1272
Conference ID: 9471808
Webcast link: https://edge.media-server.com/mmc/p/xgum6kaa
The webcast can also be accessed under the News and Events section of the Company’s website (www.wesdome.com )
COVID-19
The health and safety of our employees, contractors, vendors, and consultants is the Company’s top priority. In response to
the COVID-19 outbreak, Wesdome has adopted all public health guidelines regarding safety measures and protocols at all of
its mine operations and corporate office. These protocols are still in place at all sites despite the loosening of some provincial
public health guidelines. In addition, our internal COVID-19 Taskforce continues to monitor developments and implement
policies and programs intended to protect those who are engaged in business with the Company.
Through care and planning, to date the Company has successfully maintained operations; however, there can be no assurance
that this will continue despite the Company’s best efforts, with the emergence of new, highly contagious variants such as
Omicron. To date, the Company has been impacted by this most recent variant outbreak, with employees at both operations
and corporate office becoming infected, which may negatively impact our ability to maintain projected timelines and objectives.
Consequently, the Company’s actual future production and production guidance is subject to higher levels of risk than usual.
The Company is continuing to monitor the situation closely and will provide updates as they become available.
ABOUT WESDOME
Wesdome is Canadian focused with two producing underground gold mines. The Company’s goal is to build Canada’s next
intermediate gold producer, producing over 200,000 ounces from two mines in Ontario and Québec. The Eagle River
Underground Mine in Wawa, Ontario is currently producing gold at a rate of 95,000 – 105,000 ounces per year. The Company
is currently milling the final stockpile of ore from the Mishi Pit with 1,000 – 2,000 ounces expected. The recently re-started
Kiena Complex in Val d’or, Quebec is a fully permitted underground mine and milling operation and the Kiena Mine is
expected to produce 64,000 – 73,000 ounces in 2022. On a combined basis, 2022 guidance is 160,000 ounces – 180,000
ounces. Wesdome is actively exploring underground and on surface within the mine areas and more regionally at the Eagle
River and Kiena Complex. The Company also retains meaningful exposure to the Moss Lake gold deposit, located 100
kilometres west of Thunder Bay, Ontario through its equity position in Goldshore Resources Inc. The Company has
approximately 142.5 million shares issued and outstanding and trades on the Toronto Stock Exchange under the symbol
“WDO,” with a secondary listing on the OTCQX under the symbol “WDOFF.
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,
2022 2021
Operating data
Milling (tonnes)
Eagle River 53,217 53,540
Mishi 11,873 17,219
Kiena 21,162 0
Throughput 2 86,252 70,759
Head grades (g/t)
Eagle River 11.6 12.8
Mishi 3.6 2.5
Kiena 7.7 0.0
Recovery (%)
Eagle River 97.4 97.1
Mishi 84.8 84.8
Kiena 98.0 0.0
Production (ounces)
Eagle River 19,334 21,396
Mishi 1,165 1,169
Kiena 5,112 0
Total gold produced 2 25,611 22,565
Total gold sales (ounces) 4 28,000 22,457
Eagle River Complex (per ounce of gold sold)1
Average realized price $ 2,396 $ 2,223
Cash costs $ 1,262 $ 1,076
Cash margin $ 1,134 $ 1,147
All-in Sustaining Costs 1 $ 1,771 $ 1,497
Mine operating costs/tonne milled 1 $ 385 $ 335
Average 1 USD → CAD exchange rate 1.2662 1.2660
Cash costs per ounce of gold sold (US$)1 $ 997 $ 850
All-in Sustaining Costs ( US$)1 $ 1,399 $ 1,182
Kiena Mine (per ounce of gold sold)1
Average realized price $ 2,344 $ 0
Cash costs 3, 5 $ 1,364 $ 238
Cash margin $ 980 $ 0
All-in Sustaining Costs 1, 3, 5 $ 1,541 $ 0
Mine operating costs/tonne milled 1 $ 579 $ 0
Average 1 USD → CAD exchange rate 1.2662 1.2660
Cash costs per ounce of gold sold (US$)1 $ 1,077 $ 0
All-in Sustaining Costs ( US$)1 $ 1,217 $ 0
Financial Data
Cash margin1 $ 30,342 $ 21,776
Net income $ 7,061 $ 7,103
Net income adjusted1 $ 7,061 $ 7,103
Earnings before interest, taxes, depreciation and amortization1 $ 20,650 $ 18,662
Operating cash flow $ 29,893 $ 22,033
Free cash flow1 $ (6,796) $ 99
Per share data
Net income $ 0.05 $ 0.05
Adjusted net income1 $ 0.05 $ 0.05
Operating cash flow1 $ 0.21 $ 0.16
Free cash flow1 $ (0.05) $ 0.00
1. Refer to the Company’s 2021 Annual Management Discussion and Analysis section entitled “Non-IFRS Performance
Measures” for the reconciliation of these non-IFRS measurements to the consolidated financial statements.
2. Totals for tonnage and gold ounces may not add due to rounding.
3. Q1 2021 includes a $0.4 million charge for product inventory costs from the sale of 1,793 ounces of gold from the Kiena
bulk sample, which was processed in Q4 2020.
4. Q1 2021 includes 1,793 ounces of gold from the Kiena bulk sample, which was processed in Q4 2020
5. In determining the Cash cost per ounce and AISC per ounce, the total ounces sold includes 1,793 ounces of gold from
the Kiena bulk sample, which was processed in Q4 2020 and sold in Q1 2021.
Wesdome Gold Mines Ltd.
Consolidated Statements of Financial Position
(Unaudited, expressed in thousands of Canadian dollars)
As at March 31,
2022 As at December 31,
2021
Assets
Current
Cash and cash equivalents $ 52,472 $ 56,764
Receivables and prepaids 13,621 13,793
Share consideration receivable 3,924 4,560
Inventories 21,142 17,918
Total current assets 91,159 93,035
Restricted cash 657 657
Deferred financing costs 674 758
Mining properties, plant and equipment 208,945 212,394
Mines under development 241,955 214,089
Exploration properties 1,139 1,139
Marketable securities 2,370 1,860
Share consideration receivable 9,131 10,729
Investment in associate 18,441 19,058
Total assets $ 574,471 $ 553,719
Liabilities
Current
Payables and accruals $ 53,791 $ 40,093
Income and mining tax payable 2,297 5,490
Current portion of lease liabilities 8,216 7,789
Total current liabilities 64,304 53,372
Lease liabilities 5,649 6,786
Deferred income and mining tax liabilities 79,689 77,195
Decommissioning provisions 19,250 21,191
Total liabilities 168,892 158,544
Equity
Equity attributable to owners of the Company
Capital stock 192,367 187,911
Contributed surplus 4,246 5,859
Retained earnings 208,696 201,645
Accumulated other comprehensive income (loss) 270 (240)
Total equity attributable to owners of the Company 405,579 395,175
Total liabilities and equity $ 574,471 $ 553,719
Wesdome Gold Mines Ltd.
Consolidated Statements of Income and Comprehensive Income
(Expressed in thousands of Canadian dollars except for per share amounts)
Three Months Ended
March 31
2022 2021
Revenues $ 66,694 $ 45,973
Cost of sales (44,706) (30,264)
Gross profit 21,988 15,709
Other expenses
Corporate and general 3,375 2,391
Stock-based compensation 76 310
Exploration and evaluation 2,956 -
Gain on disposal of mining equipment (2) -
Total other expenses 6,405 2,701
Operating income 15,583 13,008
Fair value adjustment on share consideration receivable (2,234) -
Interest expense (263) (259)
Accretion of decommissioning provisions (171) (110)
Share of loss of associate (412) -
Loss on dilution of ownership (205) -
Other expense (265) (303)
Income before income and mining taxes 12,033 12,336
Income and mining tax expense
Current 2,488 1,096
Deferred 2,494 4,137
Total income and mining tax expense 4,982 5,233
Net income $ 7,051 $ 7,103
Other comprehensive income
Change in fair value of marketable securities 510 -
Total comprehensive income $ 7,561 $ 7,103
Earnings per share
Basic $ 0.05 $ 0.05
Diluted $ 0.05 $ 0.05
Weighted average number of common
shares (000s)
Basic 141,830 139,732
Diluted 143,467 142,617
Wesdome Gold Mines Ltd.
Consolidated Statements of Total Equity
(Unaudited, expressed in thousands of Canadian dollars)
Accumulated
Other
Capital Contributed Retained Comprehensive Total
Stock Surplus Earnings Income (Loss) Equity
Balance, December 31, 2020 $ 179,540 $ 6,472 $ 70,357 $ - $ 256,369
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 $ 77,460 $ - $ 264,103
Balance, December 31, 2021 $ 187,911 $ 5,859 $ 201,645 $ (240) $ 395,175
Net income for the period ended
March 31, 2022 - - 7,051 - 7,051
Other comprehensive income - - - 510 510
Exercise of options 2,767 - - - 2,767
Value attributed to options exercised 1,051 (1,051) - - -
Value attributed to RSUs exercised 638 (638) - - -
Stock-based compensation - 76 - - 76
Balance, March 31, 2022 $ 192,367 $ 4,246 $ 208,696 $ 270 $ 405,579
Wesdome Gold Mines Ltd.
Consolidated Statements of Cash Flows
(Unaudited, expressed in thousands of Canadian dollars)
Three Months Ended
March 31,
2022 2021
Operating Activities
Net income $ 7,051 $ 7,103
Depreciation and depletion 8,354 6,067
Stock-based compensation 76 310
Accretion of decommissioning provisions 171 110
Deferred income and mining tax expense 2,494 4,137
Amortization of deferred financing cost 84 105
Interest expense 263 259
Gain on disposal of mining equipment (2) -
Share of loss of associate 412 -
Loss on dilution of ownership 205 -
Fair value adjustment on share consideration receivable 2,234 -
Foreign exchange gain on lease financing (32) (29)
Net changes in non-cash working capital 14,264 4,170
Mining and income tax paid (5,681) (199)
Net cash from operating activities 29,893 22,033
Financing Activities
Exercise of options 2,767 321
Deferred financing costs - (239)
Repayment of lease liabilities (2,086) (1,516)
Interest paid (263) (259)
Net cash from (used in) financing activities 418 (1,693)
Investing Activities
Additions to mining properties (6,190) (8,519)
Additions to mines under development (28,413) -
Additions to exploration properties - (11,899)
Net changes in non-cash working capital - 482
Net cash used in investing activities (34,603) (19,936)
(Decrease) increase in cash and cash equivalents (4,292) 404
Cash and cash equivalents - beginning of period 56,764 63,480
Cash and cash equivalents - end of period $ 52,472 $ 63,884
Cash and cash equivalents consist of:
Cash $ 52,472 63,884
$ 52,472 $ 63,884
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