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Wesdome Announces Fourth Quarter and Full Year 2023 Production Results; Provides Multi-Year Guidance and Management Update

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Wesdome Announces Fourth Quarter and Full Year 2023 Production Results; Provides Multi-Year Guidance and Management Update

 

 

 

 

 

Wesdome Gold Mines Ltd. (TSX: WDO) (OTCQX: WDOFF) announces fourth quarter) and full year 2023 production results. The Company is also providing multi-year production and operating guidance, as well as a management update. All figures are in Canadian dollars unless otherwise stated.

 

Q4 and 2023 Production Performance

 

    Q4 2023 Q4 2022 FY 2023 FY 2022
Ore milled          
Eagle River (tonnes) 54,669 58,306 228,777 246,887
Kiena (tonnes) 49,649 51,419 191,148 115,171
           
Head grade          
Eagle River (g/t) 14.1 14.0 12.4 10.7
Kiena (g/t) 7.7 5.9 5.9 7.9
           
Gold production          
Eagle River (ounces) 24,072 25,502 87,799 82,002
Kiena (ounces) 12,144 9,614 35,536 28,848
Total Gold production (ounces) 36,216 35,116 123,335 110,850
Production sold (ounces) 37,620 31,500 126,620 113,000

 

Anthea Bath, President and CEO of Wesdome, commented:

 

“Reflecting on 2023, it was a year with significant change. I am proud of the site and corporate teams who came together to address the challenges we faced and am pleased to report we ended the year on a strong note. Delivering on operating guidance was a strategic imperative and was made possible by the dedication and resiliency of our employees at every level of the company.

 

Looking ahead, we enter 2024 with two producing high-grade operations in Ontario and Quebec, supporting our expectations for record production levels, lower costs and a rebound in free cash flow generation. At Kiena, we expect to complete level development and ramp up production from the Kiena Deep A Zone early in the second quarter. At Eagle River, we will continue to seek ways to optimize the operation and reduce costs while we advance key development towards the 300 Zone at depth. Successful execution this year will also set the stage for further production growth and lower unit costs, with internal plans supporting initial guidance of 175,000 to 210,000 ounces in 2025.

 

We expect to focus on delivering on the fundamentals, where comprehensive asset optimization, cost control and exploration will be at the forefront. This approach is designed to make new discoveries, increase asset value and leverage our existing infrastructure to deliver high quality reserve and resource inventory growth. In total, an underground and surface exploration drilling budget of approximately $30 million has been approved, developed through coordination between exploration and internal planning teams. Projects like Presqu’île at Kiena and the recently discovered Falcon 311 Zone at Eagle River are consistent with the Company’s track record of generating high return, self-funded organic growth opportunities through the drill bit.

 

Overall, the business is in a solid position both operationally and financially as we begin 2024, and we look forward to delivering on strong production growth, and free cash flow generation”, Anthea concluded.

 

2024 Production and Operating Guidance

 

    Eagle River Kiena Consolidated Guidance
Production        
Feed Grade (g/t) 12.2 – 13.4 12.0 – 13.5 12.0 – 13.5
Gold Production (ounces) 80,000 – 90,000 80,000 – 90,000 160,000 – 180,000
         
Operating Costs        
Depreciation and Depletion ($M) $40 $60 $100
Corporate and General1 ($M) $10 $10 $20
Exploration and Evaluation2 ($M) $4 $7 $11
Cash Costs3 ($/oz) $1,275 – $1,425 $875 – $975 $1,075 – $1,200
All-in sustaining costs3 ($/oz) $2,050 – $2,250 $1,475 – $1,625 $1,750 – $1,950
All-in sustaining costs3 (US$/oz) $1,550 – $1,700 $1,100 – $1,225 $1,325 – $1,475
         
Capital Investment        
Total Capital4 ($M) $55 $65 $120
Sustaining Capital3 ($M) $55 $45 $100
Growth Capital3 ($M)   $20 $20

 

Note:

  1. Corporate and General does not include an estimated $4 million in stock-based compensation. Corporate G&A allocated to each site is included in site all-in sustaining cost calculation.
  2. Exploration and Evaluation primarily includes surface drilling activities and regional office expenses.
  3. This is a financial measure or ratio that is a non-IFRS financial measure or ratio. Certain additional disclosures for non-IFRS financial measures and ratios have been incorporated by reference and additional detail can be found at the end of this press release and in the section ‘Non-IFRS Performance Measures’ in the Company’s management discussion and analysis for the three and nine months ended September 30, 2023 (the “Q3 MD&A”).
  4. Capital Investment guidance is net of an estimated $5 million in capital leasing activities. Total capital expenditures are the sum of sustaining and growth capital expenditures and are reported under investing activities on the statements of cash flows.

 

2024 Consolidated Gold production is expected to be between 160,000 and 180,000 ounces, approximately 37% higher than 2023. Production is expected to strengthen in the second half of the year, with the first quarter of 2024 representing approximately 20% of annual output.

 

  • Eagle River gold production of 80,000 to 90,000 ounces is in-line with the prior year, as contribution of tonnes and ounces is expected to shift away from 720F Falcon Zone and towards 300 Zone at depth. The second half of the year is expected to represent approximately 55% of annual production.
  • Kiena gold production of 80,000 to 90,000 ounces represents a significant increase over 2023, as production is expected to be primarily from the Kiena Deep A Zone. As production from Martin Zone is expected to decline in the first half of the year, mining from the Kiena Deep 129L horizon will begin to access high grade stopes. On-going delineation drilling has confirmed a substantial portion of 2024 planned mining areas, providing management confidence in the block model.

 

2024 Consolidated Cash Costs are expected to be $1,075 to $1,200 per ounce, lower than the prior year as a result of higher production and sales volumes from Kiena. All-in sustaining costs are expected to be $1,750 to $1,950 per ounce, lower than the prior year also due to higher sale volumes from Kiena.

 

  • Eagle River cash costs are expected to be $1,275 to $1,425 per ounce, in-line with 2023 levels despite inflationary pressures and lower tonnes processed.
  • Kiena cash costs are expected to be $875 to $975 per ounce, as higher production output offsets higher planned development and delineation costs.

 

Consolidated sustaining and growth capital investment is expected to be $120 million, net of leasing activities. Total capital spend in 2024 reflects investments in development, infrastructure, equipment upgrades and underground exploration at both sites, all of which are expected to enhance asset value and reduce operating risk. At both sites, a higher level of deferred development relative to the prior year is intended to facilitate access to a greater quantity of mineable drilled inventory in 2025, thereby providing additional operational flexibility. Further, transitory investments in infrastructure and select mine equipment will facilitate both cost optimization initiatives and a transition to owner operated activities. Lastly, the Company has budgeted approximately $20 million in underground delineation and exploration drilling classified as sustaining capital, with the goal of increasing reserves and resources adjacent to mine infrastructure and to a lesser extent, test conceptual targets.

 

  • Total capital investment at Eagle River is expected to be $55 million in 2024, including approximately $23 million in deferred development and $10 million in delineation and exploration drilling. Capital outlays at Eagle River are expected to be 60% weighted towards the second half of the year.
  • Total capital investment at Kiena is expected to be $65 million in 2024. Sustaining capital is expected to be $45 million, including approximately $17 million in deferred development and $10 million in delineation and exploration drilling. Growth capital is expected to be $20 million, mostly related to an exploration ramp from surface to the Presqu’île Zone and also includes level 33 rehabilitation. Approximately 1,700 metres of the exploration ramp will be completed in 2024, with the remaining 550 metres in development to connect to the main mine infrastructure in 2025.

 

Presqu’île Project Development Update

The Presqu’île deposit is located 1.3 kilometres west of the Kiena mine and has been identified as five gold-rich zones cross-cutting mafic rocks (Zones PR-1, 2 and 2A) and ultramafic rocks (Zones PR-3 and 4). Presqu’île is just one of several underexplored near-surface deposits on the Kiena land package that could leverage spare capacity at the Company’s 2,040 tonne per day Kiena mill and extend mine life. While exploration drilling has been conducted from surface since 2020, development of the exploration ramp in 2024 and 2025 will provide a platform from which to grow the current Indicated Resource of 138,000 tonnes grading 8.2 g/t Au totalling 37,000 oz and Inferred Mineral Resource of 202,000 tonnes grading 7.4 g/t and totalling 48,000 oz of gold from the three lenses as of December 31, 2022. The results of 2023 surface drilling at Presqu’île will be incorporated into the Company’s annual Mineral Reserve and Resource update disclosure in March 2024.

 

The results of a recent internal Presqu’île project study scoped 250 to 400 tonnes per day of feed starting in late 2025, supporting production of 15,000 to 20,000 ounces per year at all-in sustaining costs consistent with the Kiena operation. Leveraging the planned exploration ramp, the operation is expected to self-fund approximately $30 million in Presqu’île development and equipment capital in 2025.

 

2025 Production Guidance

 

    Eagle River Kiena Consolidated Guidance
Gold Production (ounces) 90,000 – 105,000 85,000 – 105,000 175,000 – 210,000

 

Gold production in 2025 is expected to be 175,000 to 210,000 ounces, representing an almost 60% increase from 2023 levels. Increased Eagle River production will be primarily driven by 300 Zone material, making planned ramp development in 2024 a strategic priority for the operation. At Kiena, a full year of mining in Kiena Deep A and initial contribution of Presqu’île ore development is expected to drive an increase in processed ore and gold production.

 

Management Update

Wesdome is announcing the promotions of Michael Michaud to the position of Senior Vice President of Exploration & Resources, and Raj Gill to the position of Senior Vice President of Corporate Development & Investor Relations.

 

Michael Michaud joined Wesdome in 2017 and most recently held the role of Vice President, Exploration. Mr. Michaud is a licensed Professional Geologist in Ontario with over 30 years of experience in Canadian and international gold exploration and mining with IAMGOLD, St Andrew Goldfields and SRK Consulting. Mr. Michaud holds a Bachelor of Science with honors from the University of Waterloo, and a Masters of Science from Lakehead University.

 

Raj Gill joined Wesdome in 2020 and most recently held the role of Vice President, Corporate Development. Mr. Gill has over 14 years of mining industry experience in progressive roles that include corporate development, technical studies, and equity research with Kinross Gold, and Cormark Securities. Mr. Gill is a CFA ® charterholder, and holds a Global Professional Master of Laws degree, and Bachelor of Applied Science in Lassonde Mineral Engineering degree from the University of Toronto.

 

The Company is also announcing that just prior to quarter-end, Ms. Lindsay Dunlop advised that she will be leaving Wesdome to pursue other opportunities. Ms. Dunlop will remain in her position until March 31, 2024.

 

Anthea commented, “Over the past several years, Michael and Raj have made notable contributions to the success of the Company. We see a very exciting period ahead for the Company and look forward to the continued contribution to the success of Wesdome by Mike and Raj in their expanded roles. The promotions of Michael and Raj are part of an organizational restructure which is designed to enhance the operational, technical and capital markets capacity of the Company.

 

I would also like to extend my thanks, and that of the Board of Directors, to Lindsay who has been a critical part of the leadership team at Wesdome for over 9 years, having joined the Company in 2014 where she established the Company’s first investor relations program. We wish her every success in her future endeavors”, Anthea added.

 

About Wesdome Gold Mines Ltd.

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’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.

 

Posted January 16, 2024

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