TORONTO, Aug. 11, 2021 (GLOBE NEWSWIRE) -- Wesdome Gold Mines Ltd. (TSX: WDO) (“Wesdome” or the “Company”) today announces second quarter (“Q2 2021”) financial results. All figures are stated in Canadian dollars unless otherwise noted.

Mr. Duncan Middlemiss, President and CEO commented, “Strong gold production in the second quarter of 30,375 ounces drove significant improvement in cost performance. Cash costs of $814 per ounce (US$663) and AISC of $1,240 (US$1,009), a decrease of 24% and 17% respectively over Q1 2021. H1 2021 production of 52,939 ounces, and cash costs of US$745 per ounce and AISC of US$1,085 per ounce has us well positioned to deliver on both our production and cost guidance for the year at Eagle River Mine Complex (92,000 – 105,000 ounces at cash costs of US$680 – 770 and AISC of US$980 – 1,090). Cash margins also improved quarter on quarter with $40.1 million earned in Q2 compared to $21.8 million in Q1. Cash position increased to $67.8 million compared to $63.9 million in the previous quarter.

During Q2, there were some one-time non-cash items which impacted net income. After announcing a restart of operations at Kiena on May 26, we recorded an impairment reversal charge of $58.6 million pre-tax ($36.3 million after-tax), as well, we had an after-tax gain on the disposal of the Moss Lake mineral properties of $34.5 million. Consequently, net income was $87.8 million, or $0.63 per share. Net income adjusted for these one-off items was $17.0 million, or $0.12 per share.

As a result of the above items and also due to a higher capital spending rate at Kiena, free cash outflow for the quarter was $9.1 million. A total of $24.1M was spent at Kiena in Q2 in preparation for the production restart that was approved by the Board of Directors of the Company late in May. This decision was based on the positive outcome of the independent Pre-Feasibility Study published earlier this year. The investment includes $13.7 of mine development and restart costs, $7.2M on mobile and fixed equipment purchases, including headframe bin repairs and hoist system upgrades. As a result of the preparatory work the mill was restarted on July 12, and has been successfully processing S50 ore since then. As well, work is underway to prepare the A Zone for its first production stope starting in August, slightly ahead of schedule. In addition, $3.2M was spent in surface and underground exploration, which has confirmed the discovery of the new footwall zone in the Kiena Deep.”

Key operating and financial highlights of the Q2 2021 results include:

Gold production of 30,375 ounces from the Eagle River Complex, a 21% increase over the same period in the previous year (Q2 2020: 25,142 ounces):
Eagle River Underground 63,057 tonnes at a head grade of 15.1 grams per tonne for 29,836 ounces produced, 24% increase over the previous year (Q2 2020: 24,117 ounces).
Mishi Open Pit 9,347 tonnes at a head grade of 2.4 g/t Au for 539 ounces produced (Q2 2020: 1,026 ounces).
Revenue of $63.9 million, a 17% increase over the previous year (Q2 2020: $54.8 million).
Ounces sold were 28,500 at an average sales price of $2,239/oz (Q2 2020: 23,140 ounces at an average price of $2,365/oz).
Cash margin1 of $40.6 million, a 18.0% increase over Q2 2020 (Q2 2020 - $34.3 million).
Operating cash flow of $26.9 million or $0.19 per share1 as compared to $30.3 million or $0.22 per share for the same period in 2020.
Free cash outflow of $9.1 million, net of an investment of $24.1 million in Kiena, or ($0.07) per share1 (Q2 2020: free cash flow of $17.8 million or $0.13 per share).
Net income of $87.8 million or $0.63 per share (Q2 2020: $16.1 million or $0.12 per share) and Net income (adjusted)1 of $17.0 million or $0.12 per share (Q2 2020: $16.1 million or $0.12 per share).
Cash position increased to $67.8 million compared to $63.9 million in the previous quarter.
Cash costs1 of $814/oz or US$663/oz, an 8% decrease over the same period in 2020 (Q2 2020: $882/oz or US$637/oz).
All-in sustaining costs (“AISC”) 1 of $1,240/oz or US$1,009/oz, a 2% increase over the same period in 2020 (Q2 2020: $1,218/oz or US$879/oz), due to higher sustaining capital, corporate and general expenses and lease payments, which was partially offset by a 23% increase in ounces sold.
Refer to the Company’s 2021 Second Quarter Management Discussion and Analysis, section entitled “Non-IFRS Performance Measures” for the reconciliation of these non-IFRS measurements to the financial statements.


Production and Exploration Highlights Achievements
Eagle River
The Eagle River underground ore production increased to 693 tpd in Q2 2021 due to the ventilation system upgrade that occurred in the previous quarter, which included the development of the 640 m ramp to provide a connection with the main ramp, a new ventilation raise underground, and the installation of a second fan on surface. Operational efficiencies have also contributed positively.
Definition drilling and initial sill development continues at the Falcon Zone, which will provide an opportunity to assess the gold mineralization of the Falcon Zone in the volcanic rocks. The Company is continuing to develop and explore the 311 West Zone along the western margin of the mine diorite. The zone has transitioned from the diorite into the adjacent mafic volcanics, again highlighting the potential of the volcanic rocks to host gold mineralization, similar to that observed at the neighbouring Falcon 7 zone.
Surface drilling is ongoing both east and west of the mine to follow up on anomalous values returned from regional drilling program in 2020.
Kiena
The Preliminary Feasibility Study (“PFS”) was completed in Q2 2021 and based on the positive results the operations will restart in H2 2021. Mineral reserves are over 1.5M tonnes at a head grade of 11.89 g/t for a total of 602,000 ounces. Remaining mineral resources (exclusive of mineral reserves) for the Kiena Complex total 0.6M tonnes grading 7.6 g/t Au totaling 156,500 ounces of gold and remaining inferred resources totaling 3.4 million tonnes grading 5.9 g/t Au for 649, 200 ounces.
The reconciliation of the A zone bulk sample that was processed in Q4 2020 recovered 6% more gold than the MRE with a feed grade of 15.7 g/t Au versus model grade of 14.7 g/t Au. Total gold produced from the 7,032 tonnes milled was 3,479 ounces with gold recovery in the Kiena mill of 98.2%
The new Footwall Zone was initially announced in March of this year. To date, the Footwall Zone is defined by new intersections of gold mineralization located within a 50 metre (‘m’) wide corridor adjacent to the footwall of A2 Zone. The Footwall Zone corridor remains open laterally and down plunge. The location of new gold intercepts in recent holes suggest that the Footwall Zone extends over 300 m along plunge. The deepest hole returned 41.2 g/t Au (uncapped) over 51.2 m core length.
The discovery of the high-grade Footwall Zone could have significant positive impacts on the resources, the ounces per vertical metre, and the overall project economics. This drilling highlights the potential to add ounces not only in this area but illustrates the untested potential of the entire gold system around the Kiena mine. This footwall zone will be one of the zones of focus for the continuing drilling.
Ongoing drilling also continues to better define and expand the Kiena Deep A Zone predominantly along the lateral extensions of the zone. The high grades intersected will be included in future resource updates. Hole 6750 returned 122.1 g/t Au over 7.5 m core length (26.7 g/t Au capped, 4.7 m true width).
Surface drilling is ongoing with a 42,000 m drilling program. These initial targets are located along the Marbenite Fault (within 1.5 km from Kiena Mine Complex).
Wesdome purchased the Tarmac Gold Property from Globex Mining Enterprises. The Property consists of 6 claims covering 94 hectares located entirely within Wesdome’s Kiena Mine Complex and less than 2 kilometers northeast of the Kiena underground mine, all located beneath Lac De Montigny.
Technical Disclosure

The technical content of this release has been compiled, reviewed and approved by Marc-Andre Pelletier, P. Eng, Chief Operating Officer, 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 2021 Second Quarter Financial Results Conference Call

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The webcast can also be accessed under the News and Events section of the Company’s website (www.wesdome.com)