Wesdome Announces 2021 Fourth Quarter and Full Year Financial Results

2022-03-10 / @nasdaq

 

TORONTO, March 10, 2022 (GLOBE NEWSWIRE) -- Wesdome Gold Mines Ltd. (TSX: WDO) (“Wesdome” or the “Company”) today announces fourth quarter (“Q4 2021”) and full year financial results. All figures are stated in Canadian dollars unless otherwise noted.

Key Highlights:

  • Record full year production at the Eagle River Complex of 101,403 ounces
  • Decreased Eagle River cash costs by 6%
  • Increased revenues and cash margins by 22%
  • Increased operating cash flows by 28%
  • Increased Eagle River reserve grade by 15%
  • Increased Eagle River resources (exclusive of reserves) by 25%
  • Kiena Mine embarked on a construction and mining ramp up as per the May 2021 Pre-Feasibility study – fully funded from internally generated cash flow
  • Successfully restarted Kiena in Q3, producing 22,440 pre-commercial ounces
  • Increased Kiena Measured and Indicated Resources (exclusive of reserves) by 7%

Mr. Duncan Middlemiss, President and CEO commented, “Q4 2021 demonstrated strong operating and financial performance with total gold production of 41,559 ounces and 37,544 ounces sold. Operating cash flows increased by 274% to $48.2 million or $0.34 per share1  (Q4 2020: $12.9 million or $0.09 per share). Net income and net income (adjusted)1 for the quarter were $24.8 million or $0.18 per share (2020: $8.5 million or $0.06 per share).

We are very pleased with both our operating and financial results in 2021. Total gold production of 123,843 ounces was pre-released, and both cash and all-in sustaining costs (“AISC”) of $990 and $1,408 respectively, within guidance of $900 - $1000 and $1,300 - $1,450 per ounce. Operating cash flows increased by 28% to $131.0 million (2020: $102.3 million) and cash margins increased by 22% to $145.4 million (2020: $119.3 million). We successfully restarted the Kiena operation fully funded by internally generated cash flow, spending $99.6 million during the year and producing our first ounces in Q3 2021. Kiena precommercial production generated $17.6 million of cash margin. We ended the year with $56.8 million in cash, sufficient to carry out all exploration and project work in 2022.

We have determined the 2021 year end resources using a 3D block model, in accordance with the industry best practises and standards. At Eagle, current reserves stand at 524,000 ounces of gold from 1.1 M tonnes at an average grade of 15.3 g/t Au. Reserve ounces declined modestly by 10% after depleting Eagle’s record year of production, but saw a significant grade increase of 15% compared to 2020, which will improve mine margins going forward. A record Inferred Resource inventory of 255,000 ounces, an increase of 24% compared to 2020, provides a platform for potential increased Reserve replacement for YE 2022. Near term infill drilling is expected to increase confidence of current resources which could be deemed economic for reserve inclusion next year.”

At Kiena, the Kiena Deep geological interpretation was improved on from the PFS model with additional drilling and silling along the zone in 2021, the new interpretation provided higher confidence in the Resource and will add to the successful mining of the zone. Due to successful infill and step out drilling the MI&I Resource (inclusive of reserves) increased 11% from the 2021 PFS, with a 7% increase in M&I leading to an overall Reserve increase by 8% with a very small decrease in grade due to bringing additional material from A1 and A2 zones which are lower grade compared to the A Zone.

Full MRMR data can be found in the Eagle River Complex and Kiena reserves and resources section below.

In 2022, production guidance is 160,000 – 180,000 ounces, and consolidated cash cost per ounce sold guidance to range between $875 - $970 per ounce (US $700 - $775), and AISC to range between $1,270 and $1,400 per ounce (US$ 1,015 – $1,125), slightly lower than 2021’s results.”

Key operating and financial highlights of the full year 2021 results include:

  • Gold production of 123,843 ounces, which includes 22,440 Kiena pre-commercial ounces, is a 37% increase over the same period in the previous year (2020: 90,278 ounces):
    • Eagle River Underground 228,759 tonnes at a head grade of 13.8 grams per tonne for 99,120 ounces produced, 13% increase over the previous year (2020: 87,560 ounces).
    • Mishi Open Pit 36,508 tonnes at a head grade of 2.4 grams per tonne for 2,283 ounces produced (2020: 2,718 ounces).
    • Kiena 68,470 tonnes at a head grade of 10.4 grams per tonne for 22,440 pre-commercial ounces produced.
  • Revenue2 of $262.9 million, a 22% increase over the previous year (2020: $215.5 million).
  • Ounces sold3 were 116,708 at an average sales price of $2,250/oz (2020: 91,229 ounces at an average price of $2,360/oz).
  • Cash margin1,2,4 of $145.4 million, a 22% increase over the previous year (2020 - $119.3 million).
  • Operating cash flows2,4 increased by 28% to $131.0 million or $0.93 per share1 as compared to $102.3 million or $0.74 per share for the same period in 2020.
  • Free cash outflow of $21.3 million, net of an investment of $99.6 million in Kiena, or ($0.15) per share1 (2020: free cash flow of $29.0 million or $0.21 per share). 
  • Net income2,4 of $131.3 million or $0.94 per share (2020: $50.7 million or $0.36 per share) and Net income (adjusted)1,2,4 of $69.9 million or $0.50 per share (2020: $50.7 million or $0.36 per share). 
  • Cash position at the end of the year of $56.8 million.
  • Cash costs1,4,5 of $990/oz or US$789/oz, a 6% decrease over the same period in 2020 (2020: $1,053/oz or US$785/oz);
  • AISC1,5 increased by 1% to $1,408/oz or US$1,123/oz (2020: $1,396 or US$1,040 per ounce) due to higher sustaining capital, corporate and general expenses and lease payments.
  • Eagle River Proven and Probable reserves of 1.1 M tonnes at an average grade of 15.3 grams per tonne for 524,000 ounces
  • Eagle River Measured and Indicated Resources (exclusive of reserves) of 465,000 tonnes grading 10.2 for 153,000 ounces

  • Eagle River Inferred Resources (exclusive of reserves) 596,000 tonnes grading 13.3 g/t for 255,000

  • Kiena Proven and Probable Reserves of 1.8 M tonnes at 11.1 g/t for 651,000 ounces
  • Kiena Measured and Indicated Resources (exclusive of reserves) of 734,000 tonnes grading 4.8 g/t for 113,000 ounces
  • Kiena Inferred Resources (exclusive of reserves) of 4 M tonnes grading 5.9 g/t for 761,000 ounces

Other Achievements for 2021 include:

  • Combined revenue from gold sales of $262.6 million (which excludes an additional $3.9 million from a bulk sample at the Kiena Mine).

  • Published Kiena Pre-Feasibility Study (“PFS”); IRR 98%.

  • Monetized Moss Lake via vend-in transaction with Goldshore Resources for aggregate consideration of $57 million including $12.5 million upfront in cash and 30% of issued and outstanding shares at closing

  • Included in TMX 30 recognition program for the third consecutive year. This flagship program showcases the TSX’s 30 top-performing stocks based on dividend adjusted share price appreciation.

Key operating and financial highlights of Q4 2021 results include:

  • Gold production of 41,559 ounces, which includes 16,929 Kiena pre-commercial ounces, is a 108% increase over the same period in the previous year (Q4 2020: 20,006 ounces):
    • Eagle River Underground 56,159 tonnes at a head grade of 13.7 grams per tonne for 24,267 ounces produced, 23% increase over the previous year (Q4 2020: 19,667 ounces).
    • Mishi Open Pit 6,215 tonnes at a head grade of 2.1 grams per tonne for 363 ounces produced (Q4 2020: 339 ounces).
    • Kiena 38,000 tonnes at a head grade of 14.1 grams per tonne for 16,929 pre-commercial ounces produced.
  • Revenue of $85.5 million, a 77% increase over the previous year (Q4 2020: $48.4 million).
  • Ounces sold were 37,544 at an average sales price of $2,275/oz (Q4 2020: 19,889 ounces at an average price of $2,430/oz).
  • Cash margin1 of $47.7 million, an 89% increase over the previous year (Q4 2020 - $25.2 million).
  • Operating cash flows increased by 274% to $48.2 million or $0.34 per share1 as compared to $12.9 million or $0.09 per share for the same period in 2020.
  • Free cash outflow of $3.2 million, net of an investment of $35.5 million in Kiena, or ($0.02) per share1 (Q4 2020: free cash outflow of $8.8 million or ($0.06) per share). 
  • Net income and Net income (adjusted)1of $24.8 million or $0.18 per share (2020: $8.5 million or $0.06 per share).
  • Cash costs1 of $1,005/oz or US$797/oz, a 14% decrease over the same period in 2020 (Q4 2020: $1,162/oz or US$892/oz);
  • AISC1 decreased by 10% to $1,412/oz or US$1,121/oz (Q4 2020: $1,567 or US$1,203 per ounce).

  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. FY 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. FY 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.

Eagle River Complex Reserves and Resources

MINERAL RESERVES – EAGLE RIVER (see notes)December 31, 2021December 31, 2020
  Tonnes
(000s)		Grade
(g/t Au)		Contained ouncesTonnes
(000s)		Grade
(g/t Au)		Contained ounces
        
Eagle RiverProven11611.342,00037012.6150,000
 Probable95115.8482,00098213.7431,000
 Proven + Probable1,06615.3524,0001,35213.4581,000
        

Notes:

  1. Mineral reserves are founded on measured and indicated mineral resources with an effective date of December 31, 2021
  2. The Qualified Person for the Mineral Reserves estimate as per NI 43-101 is Gary Poxleitner P. Eng, SRK Consulting, and independent of the Company
  3. Mineral Reserves are reported using a 5.5 g/t Au cut off
  4. Mineral Reserves demonstrated economic viability with the following parameters:
    1. gold price of C$1,820 (US$1,400) per ounce for the Reserves, with a USD:CAD exchange rate of 1.3.
    2. a 1.5 m minimum width,
    3. 1.0 m of external dilution (0.5m in HW, 0.5m in FW),
    4. 90% mine recovery,
    5. mining cost of C$161.7/t,
    6. milling cost of C$64.3/t,
    7. surface and G&A cost of C$78.2/t,
    8. Royalty of 2% of gold sold,
    9. selling cost of C$7.65/oz and
    10. metallurgical recoveries of 97.0%.
    11. A bulk density factor of 2.7 tonnes per cubic m (t/m3)
  5. Mineral Reserves have been estimated in accordance with the Standards of the Canadian Institute of Mining, Metallurgy and Petroleum (“CIM”)
  6. Rounding as required by reporting guidelines may result in apparent summation differences between tonnes, grade, and metal content
MINERAL RESOURCES
(Exclusive of Mineral Reserves)
(see notes)		December 31, 2021December 31, 2020
  Tonnes
(000s)		Grade
(g/t Au)		Contained ouncesTonnes
(000s)		Grade
(g/t Au)		Contained ounces
        
EAGLE RIVERMeasured 126 13.454,000 2312.19,000
 Indicated 339 9.1 99,000 3209.093,000
 Measured + Indicated 465 10.2 153,000 3439.2102,000
 Inferred 59613.3 255,000 51012.5205,000
        
  1. The effective date of the estimate is December 31, 2021
  2. The estimate was prepared by Sandeep Prakash, P. Geo., Senior Resource Geologist of the Company, under the supervision of the André M. Deiss, BSc (Hons), Pri.Sci.Nat. of SRK Consulting (Canada) Inc., who is a “Qualified Person” under NI 43-101
  3. Mineral resources are reported exclusive of mineral reserves; mineral resources that are not mineral reserves do not have demonstrated economic viability
  4. Mineral resources are considered for underground extraction and have been reported within potentially mineable volumes without external dilution. Must take material inside these volumes below the stated block grade cut-off has been included in the total.
  5. A bulk density factor of 2.7 tonnes per cubic m (t/m3) was applied
  6. Resources have been reported considering mining progress as of December 31, 2021
  7. Resources are reported using a 4.22 g/t Au cut-off grade
  8. Economic parameters for the determination of the cut-off grade include:
    1. a gold price of US$1,500 per ounce, a USD/CAD exchange rate of 1.30 (resulting in C$1,950 per ounce gold price);
    2. mining cost C$107.6/t milled;
    3. processing cost C$64.3/t;
    4. G&A C$78.2/t milled;
    5. 97.0% mill recovery
    6. Royalty of 2% of gold sold, and
    7. selling cost at C7.65$/oz
  9. Mineral resources are classified in accordance with CIM standards
  10. Rounding as required by reporting guidelines may result in apparent summation differences between tonnes, grade, and metal content
MINERAL RESOURCES (Exclusive of Mineral Reserves) (see notes)December 31, 2021December 31, 2020
  Tonnes
(000s)		Grade
(g/t Au)		Contained ouncesTonnes
(000s)		Grade
(g/t Au)		Contained ounces
        
MISHI       
Open pitIndicated------
 Inferred  2,300 1.6120,0002,8081.6147,000
UndergroundIndicated------
 Inferred   3735.465,000
MISHI TOTALIndicated------
 Inferred  2,300 1.6120,0003,1822.1212,000
        

Notes – Mishi

  1. The effective date of the estimate is December 31, 2021
  2. The estimate was prepared by Dr. Lars Weiershäuser, P. Geo., Director, Geology of the Company, who is a “Qualified Person” under NI 43-101
  3. Mineral resources are reported exclusive of mineral reserves; mineral resources that are not mineral reserves do not have demonstrated economic viability
  4. Mineral resources are amenable for open pit extraction and have been reported within a conceptual pit shell.
  5. A bulk density factor of 2.7 tonnes per cubic m (t/m3) was applied
  6. Resources have been reported considering mining progress as of December 31, 2021
  7. Resources are reported using an in-situ marginal cut-off grade of 0.52 g/t
  8. Ounces are contained ounces
  9. Economic parameters for the determination of the cut-off grade include:
    1. a gold price of US$1,500 per ounce, a USD/CAD exchange rate of 1.30 (resulting in C$1,950 per ounce gold price);
    2. Mining cost C$5.00/t;
    3. Processing cost C$21.00/t including base processing, sustaining CAPEX, variable and G&A
    4. Refining and transport cost $7.65/oz gold recovered
    5. Royalty of 2% of gold sold and
    6. 82% mill recovery
  10. Assumed pit slope angles between 36.8 and 52.4 degrees
  11. Mineral resources are classified in accordance with CIM standards
  12. Rounding as required by reporting guidelines may result in apparent summation differences between tonnes, grade, and metal content

Kiena Complex Mineral Reserves and Resources

MINERAL RESERVES – KIENA (see notes)

December 31, 2021
May 26, 2021 Pre-Feasibility Study
Tonnes
(000s)		Grade
(g/t Au)		Contained ouncesTonnes
(000s)		Grade
(g/t Au)		Contained ounces
KienaProven7113.230,000954.112,000
 Probable1,75811.0621,0001,38713.0577,000
 Proven and Probable1,82911.1651,0001,57412.0602,000
        
  1. Mineral reserves are founded on measured and indicated mineral resources with an effective date of December 31, 2021
  2. The Qualified Person for the Mineral Reserves estimate as per NI 43-101 is Simon Fontaine P. Eng, Mining Engineer at Kiena Mine and employee of the Company
  3. Mineral Reserves are reported using a 3.7 g/t Au cut off
  4. Mineral Reserves demonstrated economic viability with the following parameters:
    1. gold price of C$1,820 (US$1,400) per ounce for the Reserves, with a USD:CAD exchange rate of 1.3.
    2. a 2.1 m minimum width,
    3. 15% external dilution in the A Zone, H1ZA1, BZA1, BZA2, S50, and Martin, 12% external dilution in the VC Zone and 25% external dilution in the A1 and A2 Zones,
    4. S50 considers a dilution grade of 0.7 g/t Au, all other zones consider 0.0 g/t Au dilution grade.
    5. 90% mine recovery,
    6. mining cost of C$113.7/t,
    7. milling cost of C$40.3/t,
    8. surface and G&A cost of C$58.3/t,
    9. selling cost of C$ 1.59/t, and 97% metallurgical processing recovery for the S50, VC & Martin Zones and 98.5% for the Kiena Deep Zones
    10. A bulk density factor of 2.8 tonnes per cubic m (t/m3)
  5. Kiena Deep incorporates, Zone A, A1, A2, H1ZA, BZA1, BZA2
  6. Mineral Reserves have been estimated in accordance with the Standards of the Canadian Institute of Mining, Metallurgy and Petroleum (“CIM”)
  7. Rounding as required by reporting guidelines may result in apparent summation differences between tonnes, grade, and metal content.
MINERAL RESOURCES
(Exclusive of Mineral Reserves)
(see notes)		December 31, 2021December 31, 2020
  Tonnes
(000s)		Grade
(g/t Au)		Contained ouncesTonnes
(000s)		Grade
(g/t Au)		Contained ounces
        
KIENAMeasured219.66,000---
 Indicated7134.6106,0006437.6157,000
 Measured + Indicated7344.8113,0006437.6157,000
 Inferred4,0115.9761,0003,4045.9649,000
        

Notes:

  1. The effective date of the estimate is December 31, 2021
  2. The estimate was prepared by Karine Brousseau, P. Eng., Senior Engineer – Mineral Resources of the Company, who is a “Qualified Person” under NI 43-101
  3. Mineral resources are reported exclusive of mineral reserves; mineral resources that are not mineral reserves do not have demonstrated economic viability
  4. Mineral resources are considered for underground extraction and have been reported below a 100m crown pillar and within potentially mineable volumes without external dilution. Must take material inside these volumes below the stated block grade cut-off has been included in the total.
  5. A bulk density factor of 2.8 tonnes per cubic m (t/m3) was applied
  6. Resources have been reported considering mining progress as of December 31, 2021
  7. Resources are reported using a 3.0 g/t Au cut-off grade
  8. Economic parameters for the determination of the cut-off grade include:
    1. a gold price of US$1,500 per ounce, a USD/CAD exchange rate of 1.30 (resulting in C$1,950 per ounce gold price);
    2. mining cost C$85.7/t milled;
    3. processing cost C$40.3/t;
    4. G&A C$58.3/t milled;
    5. 98.5% mill recovery and
    6. selling cost at C1.59$/oz
  9. Mineral resources are classified in accordance with CIM standards
  10. Rounding as required by reporting guidelines may result in apparent summation differences between tonnes, grade, and metal content.

Production and Exploration Highlights		Achievements
Eagle River
  • FY 2021 Eagle River underground ore production increased by 13% from 2020 to 99,120 ounces of gold, due to a 16% increase in total throughput; offset partially by a 3% decrease in head grade. Head grade at Eagle River in 2021 averaged 13.8 g/t.

  • FY 2021 cash cost of $978 (US$780) per ounce of gold sold1 decreased by 7% or $74 from FY 2020 primarily due to a 10% increase in ounces sold.

  • FY 2021 AISC of $1,456 (US$1,162) per ounce of gold sold1 increased by 4% or $60 from FY 2020 primarily due to higher mine development and infrastructure spending; partially offset by a 10% increase in ounces sold.

  • Generated $127.7 million in cash margin in FY 2021 compared to $119.3 million in FY 2020, despite the average realized Canadian gold price being 5% lower at $2,250/oz (2020 - $2,360/oz).

  • Current mineral reserves at Eagle River as of December 31, 2021 are 525,000 ounces of gold from 1.1 Mt at an overall grade of 15.3 g/t Au. Measured and Indicated resources were impacted by reduced definition drilling and a revised, more conservative classification criteria, leading to a slightly smaller, higher grade reserve estimate for YE 2021. Reserve ounces declined modestly 11% after depleting Eagle’s record year of production, but saw a significant grade increase of 15% compared to 2020 further improving the mines margin.

  • A record Inferred Resource inventory of 255,000 ounces provides a platform for potential increase Reserve replacement for YE 2022. Near term infill drilling is expected to increase confidence of current resources which could be deemed economic for reserve inclusion next year.

  • Current strategy for the corporation is to have production from the Eagle River operations to be in the 100,000 ounces per annum range by focused exploration and development of the Eagle River Mine thereby generating higher margin tonnes. This is supplemented by a growing production profile at Kiena.

  • Underground exploration is focused on extending the high grade 300 E and Falcon zones and targeting parallel zones in the volcanic rocks. Additionally, drilling is planned at the recently discovered North Contact zone.

  • Surface drilling is ongoing with 2 drills both east and west of the mine to follow up on anomalous values returned from the regional drilling program in 2021.
Kiena
  • In Q2 2021, based on the positive results of the Preliminary Feasibility Study (“PFS”), a Kiena restart decision was made.  In H2 2021, Kiena produced 22,240 pre-commercial ounces.  Total throughput was 68,470 tonnes or 372 tpd and the head grade averaged 10.4 g/t. The mill start-up in July went according to plan with no major issues. Mine operations were halted for 18 days in September for upgrading of the hoist system which has now been completed. Progress on the paste fill plant and tailings management area construction is on schedule. All key mobile equipment has been ordered and the mine has already received four underground haulage trucks with the remainder of the equipment scheduled to arrive by Q2 of 2022.

  • Despite the planned low pre-commercial production levels, FY 2021 cash cost was $1,052 (US$839) per ounce of gold sold1 and AISC was $1,138 (US$908) per ounce of gold sold1.

  • Generated $17.6 million in cash margin despite the high cash costs of $1,052 per ounce of gold sold1 due to planned low pre-commercial production levels.

  • Successful underground exploration at Kiena resulted in a 11% increase in the 2021 MI&I Resource (inclusive of reserves) from the 2021 PFS MI&I Resource at a slightly lower grade on average. An increase in the Measured and Indicated resources lead to an 8% increase of Reserves.

  • Current mineral reserves at Kiena as of December 31, 2021 are 651,000 ounces of gold from 1.8 Mt at an overall grade of 11.1 g/t Au.

  • Kiena Deep continues to show potential to add additional ounces in the resource base and additional ounces are planned for conversion to reserves with 2022 drilling, particularly at the Footwall Zone where an inferred resource has been defined.

  • The discovery of a 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 the 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.

  • 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. One hole returned 132.1 g/t Au over 7.4 m core length (27.6 g/t Au capped, 3.9 m true width).

  • Initial surface drilling has focused on the Presqu’ile and Shawkey areas located northwest and southeast of the Kiena Mine, respectively. Since July 2021, two drills on barges have been testing the continuity of some gold anomalies in the Jacola Formation which host the Kiena mine. Recent drilling at Presqu’ìle zones returned 1515.0 g/t Au over 0.5 m core length.

  • Wesdome finalized the purchase of 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 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.

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 Fourth Quarter and Full Year Financial Results Conference Call

March 11, 2022 at 10:00 am ET

North American Toll Free: + 1 (844) 202-7109
International Dial-In Number: +1 (703) 639-1272
Conference ID:  1763095  
Webcast link: https://edge.media-server.com/mmc/p/yynhs6r8

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

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.  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 our 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. Impacts of significant numbers of employees being absent have been limited so far however future conditions may warrant reduced or suspended production activities which could 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. We are continuing to closely monitor the situation 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 92,000 – 105,000 ounces per year. The recently re-started Kiena Complex in Val d’or, Quebec is a fully permitted underground mine and milling operation Wesdome is actively exploring both underground and on surface within the mine areas and more regionally at both 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 141.9 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.”

For further information, please contact:    
                       
Duncan Middlemiss
President and CEO
416-360-3743   ext. 2029
duncan.middlemiss@wesdome.com
 or Lindsay Carpenter Dunlop
VP Investor Relations
416-360-3743   ext. 2025
lindsay.dunlop@wesdome.com
     
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		    
     

This news release contains “forward-looking information” which may include, but is not limited to, statements with respect to the future financial or operating performance of the Company and its projects. 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. The Company has included in this news release certain non-IFRS performance measures, including, but not limited to, mine operating profit, mining and processing costs and cash costs. Cash costs per ounce reflect actual mine operating costs incurred during the fiscal period divided by the number of ounces produced.  These measures are not defined under IFRS and therefore should not be considered in isolation or as an alternative to or more meaningful than, net income (loss) or cash flow from operating activities as determined in accordance with IFRS as an indicator of our financial performance or liquidity. The Company believes that, in addition to conventional measures prepared in accordance with IFRS, certain investors use this information to evaluate the Company's performance and ability to generate cash flow.

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
 Years Ended
  December 31, December 31,
  2021  2020  2021  2020
 
Operating data         
Milling (tonnes)         
Eagle River 56,159  53,551  228,759  196,441 
Mishi 6,215  3,555  36,508  39,856 
Kiena 38,000  0  68,470  0 
Throughput 2 100,374  57,106  333,737  236,297 
Head grades (g/t)         
Eagle River 13.7   11.7  13.8   14.2 
Mishi 2.1   3.5  2.4   2.7 
Kiena 14.1   0.0  10.4   0.0 
Recovery (%)         
Eagle River 97.8   98.0  97.5   97.7 
Mishi 88.1   84.5  82.4   77.8 
Kiena 98.1   0.0  98.0   0.0 
          
Production (ounces)         
Eagle River 24,267  19,667  99,120  87,560 
Mishi 363  339  2,283  2,718 
Kiena 16,929  0  22,440  0 
Total gold produced 2 41,559  20,006  123,843  90,278 
Total gold sales (ounces) 4 37,544  19,889  118,501  91,229 
          
Eagle River Complex (per ounce of gold sold) 1       
Average realized price$2,279 $2,430 $2,250 $2,360 
Cash costs$1,017 $1,162 $978 $1,053 
Cash margin$1,262 $1,268 $1,272 $1,307 
All-in Sustaining Costs 1$1,608 $1,567 $1,456 $1,396 
          
Mine operating costs/tonne milled 1$391 $400 $357 $389 
          
Average 1 USD → CAD exchange rate 1.2603  1.3030  1.2535  1.3415 
          
Cash costs per ounce of gold sold (US$) 1$807 $892 $780 $785 
All-in Sustaining Costs (US$) 1$1,276 $1,203 $1,162 $1,041 
          
Kiena Mine (per ounce of gold sold) 1         
Average realized price$2,267 $0 $2,249 $0 
Cash costs 3, 5$983 $0 $1,052 $0 
Cash margin$1,284 $0 $1,197 $0 
All-in Sustaining Costs 1, 3, 5$1,051 $0 $1,138 $0 
          
Mine operating costs/tonne milled 1$335 $0 $325 $0 
          
Average 1 USD → CAD exchange rate 1.2603  1.3030  1.2535  1.3415 
          
Cash costs per ounce of gold sold (US$) 1$780 $0 $839 $0 
All-in Sustaining Costs (US$) 1$834 $0 $908 $0 
          
Financial Data         
Cash margin 1$47,681  $25,211 $145,354  $119,250 
Net income$24,762  $8,491 $131,288  $50,715 
Net income adjusted 1$24,762  $8,491 $69,903  $50,715 
Earnings before interest, taxes, depreciation and amortization 1$44,235  $18,017 $132,199  $102,342 
Operating cash flow$48,160  $12,893 $130,958  $102,292 
Free cash flow 1$(3,172)$(8,813)$(21,291)$29,009 
Per share data         
Net income$0.18  $0.06 $0.94  $0.36 
Adjusted net income 1$0.18  $0.06 $0.50  $0.36 
Operating cash flow 1$0.34  $0.09 $0.93  $0.74 
Free cash flow 1$(0.02)$(0.06)$(0.15)$0.21 
             

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. FY 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. FY 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)

 As at
December 31,
2021		 As at
December 31,
2020 1
Assets   
Current   
Cash and cash equivalents$         56,764   $63,480 
Receivables and prepaids 13,793    8,974 
Share consideration receivable 4,560    - 
Inventories 17,918    12,451 
Total current assets 93,035    84,905 
    
Restricted cash 657    657 
Deferred financing cost 758    827 
Mineral properties, plant and equipment 212,394    128,670 
Mines under development 214,089    - 
Exploration properties 1,139    133,221 
Marketable securities 1,860    - 
Share consideration receivable 10,729    - 
Investment in associate 19,058    - 
Total assets$        553,719   $348,280 
    
Liabilities    
Current   
Payables and accruals$         40,093   $21,123 
Income and mining tax payable 5,490    3,481 
Current portion of lease liabilities 7,789    5,901 
Total current liabilities 53,372    30,505 
    
Lease liabilities 6,786    5,604 
Deferred income and mining tax liabilities 77,195    33,532 
Decommissioning provisions 21,191    22,270 
Total liabilities 158,544    91,911 
    
Equity   
Equity attributable to owners of the Company   
Capital stock 187,911    179,540 
Contributed surplus 5,859    6,472 
Retained earnings 201,645    70,357 
Accumulated other comprehensive loss (240)  - 
Total equity attributable to owners of the Company 395,175    256,369 
    
Total liabilities and equity$        553,719   $348,280 
        

1. Refer to the Company’s 2021 consolidated financial statements for details regarding changes in the Company’s accounting policies which impacted the balances from prior periods.

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

 Three Months Ended Years Ended
 December 31 December 31
  2021    2020   2021    2020 
        
Revenues$         85,505   $48,362  $     262,907   $215,466 
Cost of sales (45,945)  (30,483)  (145,619)  (125,386)
Gross profit 39,560    17,879   117,288    90,080 
        
Other expenses       
Corporate and general 2,817    2,231   10,614    7,378 
Stock-based compensation 533    524   2,604    2,786 
Exploration and evaluation 471    -   471    - 
Reversal of impairment charges   -      -   (58,563)  - 
(Gain) loss on disposal of mining equipment   -      -   (3)  - 
Write-down of mining equipment   -      427   -   427 
Impairment charge on exploration properties   -      2,034   7,507    2,034 
  3,821    5,216   (37,370)  12,625 
        
Operating income  35,739    12,663   154,658    77,455 
        
Gain on sale of Moss Lake exploration properties   -      -   34,330    - 
Interest expense (339)  (294)  (1,194)  (1,096)
Accretion of decommissioning provisions (146)  (89)  (556)  (354)
Share of loss of associate (393)  -   (497)  - 
Fair value adjustment on share consideration receivable 1,038    -   1,947    - 
Other expenses (124)  (902)  (363)  (1,105)
Income before income and mining taxes 35,775    11,378   188,325    74,900 
        
Income and mining tax expense       
Current 4,720    4,425   13,375    10,660 
Deferred 6,293    (1,538)  43,662    13,525 
Total income and mining tax expense 11,013    2,887   57,037    24,185 
        
Net income$         24,762   $8,491  $      131,288   $50,715 
        
Other comprehensive loss       
Change in fair value of marketable securities net of tax effect (240)  -   (240)  - 
        
Total comprehensive income$         24,522   $8,491  $      131,048   $50,715 
        
Earnings per share       
Basic$             0.18   $0.06  $           0.94   $0.36 
Diluted$             0.17   $0.06  $           0.92   $0.36 
        
Weighted average number of common shares (000s)       
Basic 141,156    139,482   140,195    139,045 
Diluted 143,200    142,874   142,787    142,569 
                

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

       Accumulated  
       Other  
 Capital Contributed Retained Comprehensive Total
 Stock Surplus Earnings 1 Loss Equity 1
          
Balance, December 31, 2019$        174,789   $          5,590   $       19,642   $-  $      200,021  
Net income for the year ended December 31, 2020 -   -   50,715   -   50,715 
Exercise of options 2,847   -   -   -   2,847 
Value attributed to options exercised 1,327   (1,327)  -   -   - 
Value attributed to RSUs exercised 577   (577)  -   -   - 
Stock-based compensation -   2,786   -   -   2,786 
          
Balance, December 31, 2020$179,540  $6,472  $70,357  $-  $256,369 
          
Net income for the year ended December 31, 2021 -   -   131,288    -   131,288  
Other comprehensive loss -   -   -   (240)  (240)
Exercise of options 5,154    -   -   -   5,154  
Value attributed to options exercised 2,431    (2,431)  -   -   - 
Value attributed to RSUs exercised 786    (786)  -   -   - 
Stock-based compensation -   2,604    -   -   2,604  
Balance, December 31, 2021$        187,911   $          5,859   $      201,645   $          (240) $      395,175  
                    

1. Refer to the Company’s 2021 consolidated financial statements for details regarding changes in the Company’s accounting policies which impacted the balances from prior periods.

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

 Three Months Ended  Years Ended 
 December 31 December 31
  2021    2020   2021    2020 
        
Operating Activities       
Net income$         24,762   $8,491  $      131,288   $50,715 
Depreciation and depletion 8,121    6,345   28,066    26,346 
Stock-based compensation 533    524   2,604    2,786 
Accretion of decommissioning provisions 146    89   556    354 
Deferred income and mining tax expense 6,293    (1,539)  43,662    13,525 
Amortization of deferred financing cost 84    111   412    370 
Interest expense 339    294   1,194    1,096 
Reversal of impairment charges  -     -   (58,563)  - 
Gain on sale of Moss Lake exploration properties  -     -   (34,330)  - 
Impairment charge on exploration properties  -     2,034   7,507    2,034 
(Gain) loss on disposal of mining equipment  -     -   (3)  - 
Write-down of mining equipment  -     427    -   427 
Share of loss of associate 393    -   497    - 
Fair value adjustment on share consideration receivable (1,038)  -   (1,947)  - 
Foreign exchange gain on lease financing (8)  (140)  (23)  (36)
Net changes in non-cash working capital 11,726    (35)  21,403    13,272 
Mining and income tax paid (3,191)  (3,708)  (11,365)  (8,597)
Net cash from operating activities 48,160    12,893   130,958    102,292 
        
Financing Activities       
Exercise of options 2,110    442   5,154    2,847 
Deferred financing costs (4)  -   (342)  (209)
Repayment of borrowings  -     -    -     (3,636)
Repayment of lease liabilities (3,501)  (1,316)  (8,778)  (4,847)
Interest paid (339)  (294)  (1,194)  (1,096)
Net cash used in financing activities (1,734)  (1,168)  (5,160)  (6,941)
        
Investing Activities       
Additions to mining properties (12,374)  (8,984)  (42,867)  (27,956)
Additions to mines under development (35,456)  -   (76,337)  - 
Additions to exploration properties  -     (11,406)  (23,267)  (40,480)
Purchase of exploration property  -     -   (1,000)  - 
Cash proceeds on sale of Moss Lake, net of transaction costs  -     -   11,762    - 
Investment in marketable securities (2,100)  -   (2,100)  - 
Proceeds on disposal of mining assets  -     -   73    - 
Net changes in non-cash working capital (9,205)  (1,367)  1,222    908 
Net cash used in investing activities (59,135)  (21,757)  (132,514)  (67,528)
        
(Decrease) increase in cash and cash equivalents (12,709)  (10,033)  (6,716)  27,823 
Cash and cash equivalents - beginning of year 69,473    73,513   63,480    35,657 
Cash and cash equivalents - end of year$         56,764   $63,480  $       56,764   $63,480 
        
Cash and cash equivalents consist of:       
Cash$         56,764   $63,480  $       56,764   $63,480 
 $         56,764   $63,480  $       56,764   $63,480 
                

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