Wesdome Gold Mines Ltd. (TSX: WDO) announces third quarter financial results.

Third Quarter 2023 Highlights

• Payable gold production in the third quarter was 27,760 ounces at cash costs per ounce¹ of $1,755 (US$1,308) and all-in sustaining costs per ounce ¹ of $2,711 (US$2,021). Q3 was forecasted as the lightest cash flow quarter of the year due to timing of capital outlays and planned downtime at Eagle River.
• At Kiena, development of the ramp to the 129-level mining horizon tracked ahead of schedule. Delineation drilling to date has also confirmed the continuity, thickness, and high grade of the A zone at depth, as per the reserve block model.
• Cash margins¹ were $22.2 million, and free cash flow¹ was $10.7 million. During the quarter Wesdome received a $12.5 million tax refund.
• Quarterly net loss of $3.2 million ($0.02) per share in the third quarter of 2023 and adjusted net loss¹ of $2.6 million  ($0.02) per share. Positive operating cash flow of $45.1 million ($0.30 per share).
• Available liquidity of $142.6 million, including $31.6 million in cash and $111 million of undrawn availability under the Company’s revolving credit facility.
• Reaffirming consolidated 2023 production guidance of 110,000 to 130,000 ounces as well as cost guidance for cash costs, all-in sustaining costs and capital expenditures.

Anthea Bath, President and CEO, commented, “In the recent quarter, we made solid progress in advancing development and de-risking our future strategic plans. Eagle River reported consistent results after the completion of mill and infrastructure upgrades during an annual shutdown, and Kiena’s ramp development remains ahead of schedule, with  access to the 129-metre level achieved  after quarter end in November. Elevated cost levels during the quarter were due to planned downtime and timing of capital outlays.

Reaching the 129-level metre at Kiena was an important milestone for Wesdome as it will enable access to the higher-grade Deep A zone stopes in the first half of next year. Also, efforts continue to further de-risk our 2024 mine plans, with delineation drilling reinforcing our block model and overall mine strategy. Site preparation for the Presqu’Île ramp portal and related infrastructure is also underway following the receipt of permits at the end of the quarter.

At Eagle River, performance on various fronts continues to exceed budget. An asset optimization initiative is being launched internally to optimize the unit cost structure of the asset with a view to value by investigating alternative mining and material handling methods, cut-off grade levels, and planning methodologies.

We are expecting a strong finish to this year and based on our year-to-date performance, we are well positioned to deliver on the mid-point of production and cost guidance. Looking ahead, preliminary plans for 2024 continue to point to a  production and operating cash flow rebound which will support total capital investment levels similar to this year.”

Financial and Operating Highlights

A summary of the Company’s consolidated financial and operating results for the nine months ended September 30, 2023 are presented below:

Notes:

1. Refer to the section entitled “Non-IFRS Performance Measures” for the reconciliation of these non-IFRS measurements to the financial statements

Eagle River, Ontario

For the three months ended September 30, 2023 and 2022, production increased by 15% from Q3 2022 to 20,391 ounces due to a 16% increase in head grade offset by a 1% decrease in throughput; higher grades and lower tonnes processed are due in part to the Mishi Pit stockpile being fully depleted in Q1 2023, therefore not contributing to 2023 Q3 production. In 2022, Mishi had contributed 3,595 tonnes grading 2.82g/t to production. Higher grades were also achieved from the underground mine as a result of strong performances in the Falcon and 300 zones, in line with expectations. The mill performed its annual two weeks maintenance in July.

Q3 2023 cash cost of $1,442 (US$1,075) per ounce of gold sold¹ decreased by 2% or $31 per ounce from Q3 2022 primarily due to a 4% increase in ounces sold.

Q3 2023 AISC of $2,467 (US$1,839) per ounce of gold sold¹ increased by 9% or $208 per ounce from Q3 2022 due to higher cash costs and site infrastructure spending; partially offset by a 4% increase in ounces sold.

Generated $2.1 million in cash margin net AISC¹ in Q3 2023 compared to $(0.2) million in Q3 2022 primarily due to the 4% increase in ounces sold and the higher average Canadian dollar gold price; partially offset by the 2% increase in overall aggregate site operating costs and the 50% increase in site infrastructure spending.

Kiena, Quebec

For the three months ended September 30, 2023 and 2022, production increased by 41% from Q3 2022 to 7,369 ounces due to a 194% increase in throughput offset by a 52% decrease in head grade; the lower grades achieved so far in 2023 are the result of mining lower grade ore from the Martin and S50 zones to supplement limited production from Kiena Deep. Positive reconciliation continued into Q3, with the newly commissioned A2 zone (satellite zone running parallel to A Zone on levels 118, 116 and 114 and located entirely in the footwall schists) being a significant contributor. Development of the ramp to the 129 level mining horizon continued to track ahead of schedule during Q3 2023, positioning the mine to ramp up gold production in 2024. Delineation drilling into the 129 level horizon was initiated during the quarter from the ramp, and preliminary results confirm the continuity, thickness and high grade of the A zone at depth, as per the reserve block model.

Q3 2023 cash cost of $2,585 (US$1,927) per ounce of gold sold¹ increased by 32% or $622 per ounce from Q3 2022 primarily due to a 15% decrease in ounces sold and 12% increase in aggregate mine operating costs.

Q3 2023 AISC of $3,359 (US$2,504) per ounce of gold¹ sold increased by 58% or $1,233 per ounce as compared to Q3 2022 due to the increased cash costs and the sustaining mine exploration and development costs, mine capital equipment costs and a 15% decrease in ounces sold. The costs remain consistent with the plan and will decrease as the mine increases gold production levels in 2024.

Q3 2023 cash margin net AISC¹ of negative $5.7 million decreased by $6.7 million compared to $1.0 million in Q3 2022 due to the increased overall aggregate cash cost, the inclusion of sustaining development and exploration costs and a 15% decrease in ounces sold; offset partially by the higher average Canadian dollar gold price.

Exploration Updates

Eagle River

Recent exploration drilling within the mine diorite, has extended the 300 East Zone to the 1,600 m-level and remains open down plunge.

The drilling has confirmed the continuity of the mineralization at depth, thus suggesting that many other similar parallel zones, such as 808, 811, 818, 711 and 7 East, have this same potential to continue at depth and will be tested with ongoing drilling.

Initial surface and underground exploration drilling, commenced in July 2023 to test the volcanic rocks west of the mine diorite, has returned high grades within 200 metres from surface, while the first underground hole 750 metres down plunge has also intersected similar mineralization. Highlights of the initial surface drilling of the volcanic rocks returned 64.4 g/t Au over 0.4 m core length. These intersections suggest that a newly defined shoot could be located in this area.

Kiena

Underground exploration drilling has been focused on better delineating Kiena Deep A zones in advance of the planned mining. Limited exploration has been completed to extend and better define the deeper portion of the Kiena Deep zones. This drilling will be increased in the future once more optimal drill platforms are established.

Recent surface drilling at the Presqu’ile zone has confirmed not only the continuity of the gold mineralization and the validity of the geologic model, but also the potential for down plunge extensions towards the east. Highlights of recent in-fill drilling include 32.5 g/t over 3.0 m core length. The drilling will be used to convert resources into reserves at year end.

The excavation of an exploration ramp from surface to access the near-surface Presqu’ile Zone will be underway in Q4 2023 now that the necessary permits have been secured.

2023 Outlook

¹ Operating cost per ounce sold and all-in sustaining cost per ounce are non-IFRS measures, please reference the Company’s interim management discussion and analysis for the period ended September 30, 2023

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 as required by Canadian securities regulatory authorities. The United States Securities and Exchange Commission 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.

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’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.