Wesdome Gold Mines Ltd. (TSX: WDO) 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 margin^1,2,4 of $30.3 million, a 39% increase over the same period of the previous year (Q1 2021: $21.8 million).
• Operating cash flows^2,4 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 income^2,4 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);
• AISC^1,5 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.

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.

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.

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)

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)

Wesdome Gold Mines Ltd.
Consolidated Statements of Income and Comprehensive Income
(Expressed in thousands of Canadian dollars except for per share amounts)

Wesdome Gold Mines Ltd.
Consolidated Statements of Total Equity
(Unaudited, expressed in thousands of Canadian dollars)

Wesdome Gold Mines Ltd.
Consolidated Statements of Cash Flows
(Unaudited, expressed in thousands of Canadian dollars)