Wesdome Announces 2023 First Quarter Financial Results
Wesdome Announces 2023 First Quarter Financial Results
TORONTO, May 10, 2023 -- Wesdome Gold Mines Ltd. (TSX: WDO) (“Wesdome” or the “Company”) today announces first
quarter (“Q1 2023”) financial results. All figures are stated in Canadian dollars unless otherwise noted.
Warwick Morley-Jepson, Board Chair and Interim CEO commented, “The year is off to a solid start with combined production
results of 28,368 ounces coming in ahead of budget. We continued to make excellent progress on the Kiena production ramp,
currently at the 123 level. Once the ramp reaches the 129 level late this year and we can develop 129L station, we will be able
to take advantage of the significant ounces per vertical metre increase which is expected to result in materially better unit
economics in 2024. At Eagle River, production exceeded our internal targets. Grade reconciliation in the Falcon Zone has
significantly improved now that additional drilling and ore development is in place. Our balance sheet is also continuing to
benefit from higher production and gold prices, as well as disciplined use of our ATM financing. During the quarter, we paid
down $8 million of debt, $12 million in Accounts Payables and expect to continue aggressively paying down our credit facility
throughout the rest of the year.”
Q1 2023 Q1 2022
Ore milled (tonnes)
Eagle River 48,133 53,217
Mishi 6,150 11,873
Kiena 42,324 21,162
Total Ore Milled 96,607 86,252
Head grade (grams per tonne, “g/t”)
Eagle River 13.5 11.6
Mishi 2.3 3.6
Kiena 5.9 7.7
Gold production (ounces)
Eagle River 20,159 19,334
Mishi 332 1,165
Kiena 7,877 5,112
Total Gold Production 28,368 25,611
Production sold (ounces) 30,000 28,000
First quarter 2023 highlights:
• At Eagle, production exceeded our internal targets. Grade reconciliation in the Falcon Zone has significantly improved
now that additional drilling and ore development is in place. Q1 2023 cash costs of $1,192 (US$881) per ounce and
AISC of $1,709 (US$1,264) per ounce of gold were below combined guidance and are expected to be maintained.
• At Kiena, we continued to make excellent strides towards the successful ramp-up of mining activities in 2023 and
beyond. Development of the ramp to the 129L giving access to the A Zone of Kiena Deep continued to track ahead of
schedule which positions the mine well for increased production levels in 2024. Longer term, excavation of an
exploration ramp from surface to access the near-surface Presqu’ile Zone is expected to proceed in H2 2023 after the
required permits are secured. With an existing large resource base, efforts in 2023 will focus on converting a portion of
these resources to reserves. The Kiena mill has excess capacity with a permitted rate of 2,000 tonnes per day,
therefore bringing a potential new source of ore into the mine plan could be accomplished quickly and for low costs.
• Kiena Cash costs of $2,267 per ounce, ($US1,676) and AISC costs of $3,048 per ounce ($US2,254) were higher than
guidance due to increased staffing in preparation for the production ramp up and associated construction costs. Costs
are expected to decrease throughout the second half of the year and further in 2024 as the mine reaches higher
production levels taking advantage of the higher grades and larger ore volumes at depth.
• Total Cash margin was $34.4 million, a 13% increase over Q1 2022, however net income and free cash flows were
negative as the Company completes the final projects on the production ramp up at Kiena, namely the ramp to the 129
metre level. Assuming that all else remains the same, the Company expects, at current gold prices, to be free cash
flow neutral this year, positioning itself well to be free cash flow positive in 2024.
• The Company is well positioned to deliver on its production guidance of 110,000 – 130,000 ounces and cash cost
guidance of $1,500 - $1,670 per ounce (US$1,150 - $1,290), as well as AISC of $2,100 - $2,340 per ounce, (US$1,620 -
$1,800).
• Wesdome raised $20.1 million of net proceeds from issuing 2,987,500 common shares under the ATM program. The
Company ended the quarter with $25.1 million in cash, and a $47 million balance on the revolving credit facility
(December 31, 2022 $55 million) in accordance with our strategy to accelerate the paydown of the outstanding balance
on our credit facility, thereby de-risking our balance sheet.
Operations and Financial Results Comparison to Q1 2022
Gold production of 28,368
ounces.
Gold production increased by 11% (Q1 2022 - 25,611 ounces) due to Kiena
producing 7,877 ounces in Q1 2023 compared to 5,112 ounces in Q1 2022, and
Eagle River complex producing 20,491 ounces, which is consistent with the same
period in the prior year.
Cash costs of $1,407 (US$1,040)
per ounce of gold sold 1.
Cash costs 1 in Canadian dollars increased by 9% from Q1 2022 of $1,295
(US$1,023) per ounce due to a 16% increase in aggregate mine operating costs;
partially offset by a 7% increase in ounces sold. The aggregate cash costs
increased by $4.9 million or 21% at Eagle River mainly due to increased ore
development metres (timing), waste movement, improvements made to strengthen
the technical and mine management team at site, general maintenance of site
infrastructure and inflationary pressure. Kiena’s aggregate cash costs increased by
$1.1 million or 8% primarily due to a 100% increase in throughput and increased
staffing levels required to support commercial production, which was declared on
December 1, 2022.
AISC of $1,977 (US$1,462) per
ounce of gold sold 1.
AISC1 in Canadian dollars increased by 17% from Q1 2022 of $1,695 (US$1,339) per
ounce due to the increased cash costs, an increase in capital spending at Eagle
River resulting from the replacement of aging site infrastructure and the inclusion of
sustaining mining exploration and development costs at Kiena.
Cash margin of $34.4 million 1. Cash margin1 increased by 13% or $4.1 million from Q1 2022 due to higher ounces
sold and a higher Canadian dollar realized gold price; partially offset by increased
cash operating costs.
Operating cash flow of $5.1
million or $0.04 per share 1.
Decreased by 83% or $24.8 million (Q1 2022 - $29.9 million or $0.21 per share 1)
primarily due to the decrease in cash from working capital changes; partially offset
by the higher cash margin.
Free cash outflow of $19.6
million or ($0.14) per share 1.
The free cash outflow1 increased by $12.8 million (Q1 2022 - $6.8 million or ($0.05)
per share1) primarily due to the decrease in cash from working capital changes;
partially offset by the higher cash margin and reduced capital spending. Invested
$22.7 million in capital expenditures at Eagle River and Kiena in the quarter as
compared to $34.6 million in Q1 2022.
Net loss attributable to
shareholders of $0.3 million or
$nil per share.
Adjusted net income 1
attributable to shareholders of
$3.3 million or $0.02 per share.
Net income decreased by $7.4 million (Q1 2022 - $7.1 million or $0.05 per share)
because of the increased depletion and depreciation of $10.8 million resulting from a
larger depreciable asset base as the Kiena assets are now being depreciated, the
after-tax impairment of the investment in associate of $2.0 million and the after-tax
retirement costs of $1.6 million; partially offset by the higher cash margin.
After removing these one-time items, the adjusted net income 1 decreased by $3.8
million from Q1 2022.
1. Refer to the section entitled “Non-IFRS Performance Measures” for the reconciliation of these non-IFRS measurements to the Financial Statements.
Production Metrics
and Exploration
Updates
UpdaHighlights
Performance
Eagle River Complex
• Overall gold production from the Eagle River Complex remained consistent in Q1 2023
compared to Q1 2022 with 20,491 ounces produced. Despite lower throughput from the Eagle
River underground, Q1 2023 gold production increased by 4% from Q1 2022 and exceeded
internal targets due to processing additional higher-grade ounces from the Falcon Zone. Mishi
produced 332 ounces in Q1 2023, and the stockpile has now been fully depleted.
◦ Eagle River Underground 48,133 tonnes at a head grade of 13.5 grams per tonne for
20,159 ounces produced, 4% increase over the same period in the previous year (Q1
2022: 19,334 ounces).
◦ Mishi Open Pit 6,150 tonnes at a head grade of 2.3 grams per tonne for 332 ounces
produced (Q1 2022: 1,165 ounces).
• Q1 2023 cash cost of $1,192 (US$881) per ounce of gold sold 1 decreased by 6% or $70 per
ounce from Q1 2022 due to a 28% increase in ounces sold; partially offset by a 21%
increase in overall aggregate site operating costs resulting from higher operating costs
incurred due to more ore development metres, waste movement, improvements made to
strengthen the technical and mine management teams at site, general maintenance
improvements and inflationary pressures, driven by higher labour costs and an increase in
commodity inputs, including higher fuel and energy costs.
• Q1 2023 AISC of $1,709 (US$1,264) per ounce of gold sold 1 decreased by 3% or $62 per
ounce from Q1 2022 due to a 28% increase in ounces sold; partially offset by the higher cash
costs and site infrastructure spending.
• Generated $20.1 million in cash margin net AISC 1 in Q1 2023 compared to $11.8 million in
Q1 2022 due to the 28% increase in ounces sold and the higher average Canadian dollar gold
price; partially offset by the 21% increase in overall aggregate site operating costs and the
51% increase in site infrastructure spending.
• At December 31, 2022, Eagle River’s proven and probable mineral reserves totaled 400,000
ounces (762,000 tonnes grading 16.3 g/t Au); measured and indicated mineral resources
(exclusive of reserves) were 186,000 (466,000 tonnes grading 12.4 g/t gold); and inferred
mineral resources were 281,000 ounces (586,000 tonnes grading 14.9 g/t gold).
• As a result of drilling to the west of Eagle River, the Company believes there is potential for
the delineation of a parallel Falcon structure and further to the East along the down dip
extension of the high grade 300 Zone that could meaningfully enhance future operational
flexibility of the asset. With an existing large resource base, efforts in 2023 will focus on
converting a portion of these resources to reserves. Total metres budgeted for 2023 are
97,000 m by five underground drills, including 49,000 m of definition drilling, 40,000 m of
underground exploration drilling and 8,000 m of surface exploration drilling.
Kiena
• Q1 2023 production increased by 54% from Q1 2022 to 7,877 ounces due to a 100%
increase in throughput; partially offset by a 23% decrease in head grade. The head grade is
above the 2023 grade guidance of 3.7 – 4.7 due to an overall positive reconciliation of
recovered diluted material from removal of material from previously mined stopes. Grades are
still expected to align with guidance for the remainder of the year.
• Q1 2023 cash cost of $2,267 (US$1,676) per ounce of gold sold1 increased by 66% or $904
primarily due to a 35% decrease in ounces sold, and an increase in overall aggregate cash
costs resulting from throughput increasing by 100% and increased staffing levels required to
support commercial production, which was declared on December 1, 2022. Kiena produced
42,324 tonnes at a head grade of 5.9 grams per tonne for 7,877 ounces, 54% increase over
the same period of the previous year (Q1 2022: 5,112 ounces)
• Q1 2023 AISC of $3,048 (US$2,254) per ounce of gold1 sold increased by 98% or $1,507 per
ounce as compared to $1,541 (US$1,217) in Q1 2022 due to a 35% decrease in ounces sold,
the increased cash costs and the sustaining mine exploration and development costs.
• Q1 2023 cash margin net AISC 1 of negative $2.8 million decreased by $10.1 million
compared to $7.4 million in Q1 2022 due to a 35% decrease in ounces sold and the inclusion
of sustaining development and exploration costs.
• The pastefill plant, which was commissioned in Q4 of 2022, has performed well, achieving its
design throughput and quality of product. Yielding the expected improvements in stope cycle
times and reduction in dilution.
• Development of the ramp to the 129L which provides access to the A Zone of Kiena Deep
continued to track ahead of schedule during Q1 2023, which positions the mine well for
increased production levels in 2024.
• At Kiena, proven and probable mineral reserves totalled 606,000 ounces (1,658,000 tonnes
grading 11.4 g/t Au); measured and indicated mineral resources (exclusive of reserves) were
164,000 (971,000 tonnes grading 5.3 g/t gold); and inferred mineral resources were 668,000
ounces (3,498,000 tonnes grading 5.9 g/t gold).
• The Company is following up on multiple initial discoveries made last year, including the
south limb of the A Zone and several adjacent hanging wall zones which remain outside the
current mineral reserves.
• Recent drill results have extended the Kiena Deep A Zone 125 m down plunge. The A Zone
now extends continuously from 1,100 m to approximately 2,000 m below surface and
remains open at depth.
• Additionally, the latest drilling results have also continued to better define and expand the
Footwall Zones. Lenses FWZ_1 to FWZ_4 were intersected by holes N112-6861, N112-
6861W1, and N112-6862W2.
• The excavation of an exploration ramp from surface to access the near-surface Presqu’ile
Zone is expected to proceed in H2 2023 after the required permits are secured. With an
existing large resource base, efforts in 2023 will focus on converting a portion of these
resources to reserves.
• Total metres budgeted for 2023 is 33,000 m, which is made up from 18,000 m of underground
exploration drilling, 10,000 m of definition drilling and 5,000 m of surface exploration drilling on
a barge.
1. Refer to the section entitled “Non-IFRS Performance Measures” for the reconciliation of these non-IFRS measurements to the Financial Statements.
Technical Disclosure
The technical content of this release has been compiled, reviewed and approved by Frédéric Langevin, Eng, Chief Operating
Officer of the Company 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.
First Quarter 2023 Conference Call and Webcast
The Company will release its first quarter 2023 financial results after market close on Wednesday, May 10, 2023. At that time,
the financial statements and management discussion and analysis will be available on the company’s website at
www.wesdome.com and on SEDAR www.sedar.com A conference call and webcast to discuss these results will be held on
Thursday May 11 at 10:00 am ET.
• Participants may register for the call at the link below to obtain dial in details. Preregistration is required for this event. It
is recommended you join 10 minutes prior to the start of the event.
• Participant Registration Link:
https://register.vevent.com/register/BI10a0c8d0e83a4371b94467e2f3eb1722
• Webcast Link:
https://edge.media-server.com/mmc/p/zcqburxt
• The webcast can also be accessed under the news and events section of the company’s website
The webcast can also be accessed under the News and Events section of the Company’s website (www.wesdome.com )
ABOUT WESDOME
Wesdome is a Canadian focused gold producer with two high grade underground assets, the Eagle River mine in Ontario and
the recently commissioned Kiena mine in Quebec. The Company also retains meaningful exposure to the Moss Lake gold
deposit in Ontario through its equity position in Goldshore Resources Inc. The Company’s primary goal is to responsibly
leverage this operating platform and high-quality brownfield and greenfield exploration pipeline to build Canada’s next
intermediate gold producer. Wesdome 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:
Warwick Morley-Jepson
Board Chair & Interim 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
FORWARD-LOOKING INFORMATION
This news release contains “forward-looking information” which may include, but is not limited to, statements with respect to
the benefits of achieving commercial production at Kiena, the Company’s expected capital expenditure in 2023, the timing
around reaching the Kiena Deep A Zone, the Company’s ability to be cash flow positive and its annual production run rate.
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.
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,
2023 2022
Operating data
Milling (tonnes)
Eagle River 48,133 53,217
Mishi 6,150 11,873
Kiena 42,324 21,162
Throughput 2 96,607 86,252
Head grades (g/t)
Eagle River 13.5 11.6
Mishi 2.3 3.6
Kiena 5.9 7.7
Recovery (%)
Eagle River 96.9 97.4
Mishi 72.5 84.8
Kiena 97.9 98.0
Production (ounces)
Eagle River 20,159 19,334
Mishi 332 1,165
Kiena 7,877 5,112
Total gold produced 2 28,368 25,611
Total gold sales (ounces) 30,000 28,000
Eagle River Complex (per ounce of gold sold) 1
Average realized price $ 2,545 $ 2,396
Cash costs 1,192 1,262
Cash margin $ 1,353 $ 1,134
All-in Sustaining Costs 1 $ 1,709 $ 1,771
Mine operating costs/tonne milled 1 $ 475 $ 385
Average 1 USD → CAD exchange rate 1.3525 1.2662
Cash costs per ounce of gold sold (US$) 1 $ 881 $ 997
All-in Sustaining Costs ( US$) 1 $ 1,264 $ 1,399
Kiena Mine (per ounce of gold sold) 1
Average realized price $ 2,588 $ 2,344
Cash costs 3, 5 2,267 1,364
Cash margin $ 321 $ 980
All-in Sustaining Costs 1 $ 3,048 $ 1,541
Mine operating costs/tonne milled 1 $ 426 $ 579
Average 1 USD → CAD exchange rate 1.3525 1.2662
Cash costs per ounce of gold sold (US$) 1 $ 1,676 $ 1,077
All-in Sustaining Costs ( US$) 1 $ 2,254 $ 1,217
Financial Data
Cash margin 1 $ 34,408 $ 30,342
Net income (loss) $ (345) $ 7,051
Net income adjusted 1 $ 3,257 $ 7,051
Earnings before interest, taxes, depreciation and amortization 1 $ 26,124 $ 20,650
Operating cash flow $ 5,120 $ 29,893
Free cash flow $ (19,597) $ (6,796)
Per share data
Net income $ 0.00 $ 0.05
Adjusted net income 1 $ 0.02 $ 0.05
Operating cash flow 1 $ 0.04 $ 0.21
Free cash flow 1 $ (0.14) $ (0.05)
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.
Wesdome Gold Mines Ltd.
Condensed Interim Statements of Financial Position
(Unaudited, expressed in thousands of Canadian dollars)
As at March
31, 2023
December 31,
2022
Assets
Current
Cash and cash equivalents $ 25,060 $ 33,185
Receivables and prepaids 13,862 12,755
Inventories 30,786 22,119
Income and mining tax receivable 7,515 6,494
Share consideration receivable 1,943 2,994
Total current assets 79,166 77,547
Restricted cash 1,176 1,176
Deferred financing costs 1,279 1,411
Mining properties, plant and equipment 528,141 525,860
Exploration properties 1,339 1,139
Marketable securities 630 960
Share consideration receivable 1,591 2,576
Investment in associate 5,402 8,458
Total assets $ 618,724 $ 619,127
Liabilities
Current
Payables and accruals $ 42,514 $ 54,734
Borrowings 46,744 54,697
Current portion of lease liabilities 4,620 6,160
Total current liabilities 93,878 115,591
Lease liabilities 2,208 3,126
Deferred income and mining tax liabilities 82,165 82,950
Decommissioning provisions 20,119 18,941
Total liabilities 198,370 220,608
Equity
Equity attributable to owners of the Company
Capital stock 227,360 205,361
Contributed surplus 7,870 7,359
Retained earnings 186,594 186,939
Accumulated other comprehensive loss (1,470) (1,140)
Total equity attributable to owners of the Company 420,354 398,519
Total liabilities and equity $ 618,724 $ 619,127
Wesdome Gold Mines Ltd.
Condensed Interim Statements of Income and Comprehensive Income
(Unaudited, expressed in thousands of Canadian dollars except for per share amounts)
Three Months Ended March 31,
2023 2022
Revenues $ 76,701 $ 66,694
Cost of sales (61,418) (44,706)
Gross profit 15,283 21,988
Other expenses
Corporate and general 3,662 3,375
Stock-based compensation 1,774 76
Retirement costs 1,190 -
Exploration and evaluation 960 2,956
Loss (gain) on disposal of mining equipment 218 (2)
Total other expenses 7,804 6,405
Operating income 7,479 15,583
Impairment of investment in associate (2,700) -
Fair value adjustment on share consideration receivable (2,036) (2,234)
Interest expense (1,309) (263)
Accretion of decommissioning provisions (244) (171)
Share of loss of associate (356) (412)
Loss on dilution of ownership - (205)
Other expenses 54 (265)
Income before income and mining taxes 888 12,033
Income and mining tax expense (recovery)
Current 2,018 2,488
Deferred (785) 2,494
Total income and mining tax expense 1,233 4,982
Net (loss) income $ (345) $ 7,051
Other comprehensive (loss) income
Change in fair value of marketable securities (330) 510
Total comprehensive (loss) income $ (675) $ 7,561
(Loss) Earnings per share
Basic $ (0.00) $ 0.05
Diluted $ (0.00) $ 0.05
Weighted average number of common
shares (000s)
Basic 144,463 141,830
Diluted 144,463 143,467
Wesdome Gold Mines Ltd.
Condensed Interim Statements of Changes in Equity
(Unaudited, expressed in thousands of Canadian dollars)
Accumulated
Other
Capital Contributed Retained Comprehensive Total
Stock Surplus Earnings (Loss) Income Equity
Balance, December 31, 2021 $ 187,911 $ 5,859 $ 201,645 $ (240) $ 395,175
Net income for the period ended - - 7,051 - 7,051
March 31, 2022
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
Balance, December 31, 2022 $ 205,361 $ 7,359 $ 186,939 $ (1,140) $ 398,519
Net loss for the period ended (345) (345)
March 31, 2023
At-the-Market offering:
Common shares issued for cash 20,990 - - - 20,990
Agents' fees and issuance costs (930) - - - (930)
Other comprehensive loss - - - (330) (330)
Exercise of options 676 - - - 676
Value attributed to options exercised 276 (276) - - -
Value attributed to RSUs exercised 616 (616) - - -