Wesdome Reports Second Quarter 2024 Financial Results
TORONTO, Aug. 14, 2024 (GLOBE NEWSWIRE) -- Wesdome Gold Mines Ltd. (TSX:WDO, OTCQX:WDOFF) (“Wesdome” or the “Company”) today announced its results for the three and six months ended June 30, 2024 (“Q2 2024” and “H1 2024”) and for the three and six months ended June 30, 2023 (“Q2 2023” and “H1 2023”). Preliminary operating results for Q2 2024 and H1 2024 were disclosed on July 9, 2024. Management will host a conference call tomorrow, Thursday, August 15 at 10:00 a.m. Eastern Time to discuss this quarter’s results.
All amounts are expressed in Canadian dollars unless otherwise indicated
Q2 2024 Highlights
- Consolidated gold production was 44,035 ounces at cash costs per ounce1 of $1,286 (US$940) and all-in sustaining costs (“AISC”) per ounce1 of $1,977 (US$1,445).
- Net income increased to $29.1 million, or $0.19 per share, an increase of $34.1 million from the corresponding quarter in 2023 and $18.4 million from the first quarter of 2024.
- Cash margin1 increased to $76.2 million or by more than 2.5 times relative to the prior year quarter mainly due to an increase in ounces sold, a higher average realized gold price and lower cash costs.
- Operating cash flow was $57.1 million, or $0.38 per share1, $43.1 million higher than the corresponding period in 2023 mainly due to the higher cash margin.
- Free cash flow1 of $28.4 million was $33.7 million higher than the corresponding period in 2023 mainly due to higher operating cash flow partially offset by an increase in capital expenditures.
- Available liquidity of $200.7 million includes $50.7 million in cash and $150.0 million of undrawn capacity available under the Company’s revolving credit facility.
Anthea Bath, President and CEO, commented: “The second quarter marked a breakthrough with records set in terms of safety, production, and free cash flow, which allowed for the repayment of the remaining balance on our revolving credit facility. Our company is now well positioned as a Canadian growth platform with two high-grade profitable mines and a debt-free balance sheet.
“The highlight of the quarter, and a milestone for Wesdome, was the mining and processing of high-grade Kiena Deep ore from the 129-level horizon at Kiena. The step-change increase in production substantially reduced the site’s all-in sustaining costs by over 60% relative to the first quarter, putting Kiena on track to achieve its annual guidance. At Eagle River, steady development rates together with positive grade reconciliation position our long-running Ontario operation to deliver on its targets.
“With both operations running well, we are focused on strategic initiatives that will fully leverage the spare capacity of our processing infrastructure and position Wesdome for long-term sustainable growth. By executing Wesdome’s largest self-funded exploration program and advancing the Presqu’île ramp, we are validating our commitment to enhancing our organic growth pipeline at both assets. Complementing ongoing exploration success, we expect to create additional value through continued optimization of our mine plans and cost management.
“Based on strong performance from our operations through the first half of 2024, we are confident we will deliver on our full-year production and cost guidance.”
Consolidated Financial and Operating Highlights
| Q2 2024 | Q2 2023 | H1 2024 | H1 2023 | |
| Financial results | ||||
| Revenue2 | 127,799 | 84,555 | 228,721 | 161,256 |
| Cost of sales | 74,110 | 84,048 | 152,789 | 145,466 |
| Cash margin1 | 76,239 | 28,722 | 122,863 | 63,130 |
| EBITDA1 | 67,863 | 22,020 | 108,538 | 48,144 |
| Net income (loss) | 29,135 | (5,014) | 39,843 | (5,359) |
| Net income (loss) per share | 0.19 | (0.03) | 0.27 | (0.04) |
| Adjusted net income (loss)1 | 29,135 | (5,014) | 39,843 | (1,757) |
| Adjusted net income (loss) per share1 | 0.19 | (0.03) | 0.27 | (0.01) |
| Operating cash flow | 57,083 | 13,979 | 103,585 | 19,099 |
| Operating cash flow per share1 | 0.38 | 0.09 | 0.69 | 0.13 |
| Net cash (used in) from financing activities | (29,330) | 49 | (39,499) | 9,737 |
| Net cash used in investing activities | (25,308) | (17,021) | (54,760) | (39,954) |
| Free cash flow1 | 28,437 | (5,279) | 47,885 | (24,876) |
| Free cash flow per share1 | 0.19 | (0.04) | 0.32 | (0.17) |
| Operating results | ||||
| Gold produced (oz) | 44,035 | 30,992 | 77,357 | 59,360 |
| Gold sold (oz) | 40,000 | 32,000 | 75,700 | 62,000 |
| Average realized gold price1 ($/oz) | 3,192 | 2,640 | 3,018 | 2,598 |
| Average realized gold price1 (US$/oz) | 2,333 | 1,966 | 2,221 | 1,928 |
| Per ounce of gold sold1 | ||||
| Cost of sales ($/oz) | 1,853 | 2,627 | 2,018 | 2,346 |
| Cost of sales (US$/oz) | 1,354 | 1,956 | 1,486 | 1,928 |
| Cash costs1 ($/oz) | 1,286 | 1,743 | 1,395 | 1,580 |
| Cash costs1 (US$/oz) | 940 | 1,298 | 1,027 | 1,172 |
| AISC1 ($/oz) | 1,977 | 2,238 | 2,095 | 2,111 |
| AISC1 (US$/oz) | 1,445 | 1,666 | 1,542 | 1,567 |
| Financial Position | ||||
| Cash | 50,697 | 22,067 | 50,697 | 22,067 |
| Working capital | 31,204 | (2,914) | 31,204 | (2,914) |
| Total assets | 644,288 | 601,320 | 644,288 | 601,320 |
| Current liabilities | 64,398 | 73,690 | 64,398 | 73,690 |
| Total liabilities | 172,407 | 173,862 | 172,407 | 173,862 |
Notes:
1 Refer to the section in this press release entitled “Non-IFRS Performance Measures” for the reconciliation of these non-IFRS measurements to the financial statements.
2 Revenues include insignificant amounts from the sale of by-product silver.
Eagle River – Ontario
| Eagle River Operating Results | Q2 2024 | Q2 2023 | H1 2024 | H1 2023 |
| Ore milled (tonnes) | ||||
| Eagle River | 52,552 | 64,672 | 104,184 | 112,805 |
| Mishi | ̶ | ̶ | ̶ | 6,150 |
| Total ore milled | 52,552 | 64,672 | 104,184 | 118,955 |
| Head grade (grams per tonne, "g/t") | ||||
| Eagle River | 11.8 | 11.4 | 13.6 | 12.3 |
| Mishi | ̶ | ̶ | 0.0 | 2.3 |
| Total head grade | 11.8 | 11.4 | 13.6 | 11.8 |
| Average mill recoveries (%) | ||||
| Eagle River | 96.3 | 96.5 | 96.7 | 96.7 |
| Mishi | ̶ | ̶ | ̶ | 72.5 |
| Total gold recovery | 96.3 | 96.5 | 96.7 | 96.4 |
| Gold production (oz) | ||||
| Eagle River | 19,272 | 22,845 | 44,171 | 43,004 |
| Mishi | ̶ | ̶ | ̶ | 332 |
| Total gold production | 19,272 | 22,845 | 44,171 | 43,336 |
| Gold sold (oz) | ||||
| Eagle River | 17,500 | 22,500 | 44,860 | 46,159 |
| Mishi | ̶ | ̶ | ̶ | 341 |
| Total gold sold | 17,500 | 22,500 | 44,860 | 46,500 |
| Production costs per tonne milled1 | 596 | 503 | 584 | 474 |
| Costs per oz sold ($/oz) | ||||
| Cost of sales | 2,276 | 2,104 | 1,938 | 1,855 |
| Cash costs1 | 1,695 | 1,526 | 1,410 | 1,353 |
| All-in sustaining costs1 | 2,545 | 2,019 | 2,006 | 1,859 |
| Costs per oz sold (US$/oz) | ||||
| Cost of sales | 1,663 | 1,567 | 1,427 | 1,377 |
| Cash costs1 | 1,239 | 1,136 | 1,038 | 1,004 |
| All-in sustaining costs1 | 1,860 | 1,504 | 1,477 | 1,380 |
During Q2 2024, Eagle River produced 19,272 ounces of gold as compared to 22,845 ounces in Q2 2023 primarily due to a 19% decrease in throughput in part due to a maintenance shutdown during the last week of June which drove lower tonnage. For the first six months of 2024, driven by a 15% increase in head grade, Eagle River produced 44,171 ounces of gold as compared to 43,336 ounces in H1 2023, which included the processing of the Mishi stockpile. Eagle River head grade in H1 2024 was 13.6 g/t compared to 11.8 g/t in H1 2023.
In Q2 2024, Eagle River generated $55.9 million in revenue from the sale of 17,500 ounces of gold compared to $59.1 million from the sale of 22,500 ounces in Q2 2023. Revenue decreased by 5% compared to Q2 2023 primarily due to lower ounces sold partially offset by a higher average realized Canadian dollar gold price.
In H1 2024 Eagle River generated $133.4 million in revenue from the sale of 44,860 ounces of gold as compared to $120.2 million from the sale of 46,500 ounces in H1 2023. Revenue increased by 11% compared to H1 2023 due to the higher average realized Canadian dollar gold price partially offset by lower ounces sold.
Cost of sales in Q2 2024 was $39.8 million, a decrease of 16%, compared to the corresponding period in 2023 primarily due to a $6.0 million increase in inventory levels and a $2.9 million decrease in depreciation expense driven by a 19% decrease in throughput. Cost of sales H1 2024 was higher by 1% compared to H1 2023.
In Q2 2024, cash costs per ounce of gold sold were $1,695 (US$1,239), an increase of 11%, compared to $1,526 (US$1,136) in Q2 2023 primarily due to a decrease in ounces sold. Cash costs per ounce of gold sold in H1 2024 were $1,410 (US$1,038), an increase of 4%, compared to $1,353 (US$1,004) in H1 2023, primarily due to lower ounces sold.
In Q2 2024, AISC per ounce of gold sold were $2,545 (US$1,860), a 26% increase, compared to $2,019 (US$1,504) in Q2 2023, primarily due to lower ounces sold and higher sustaining capital expenditures. AISC per ounce of gold sold in H1 2024 were $2,006 (US$1,477), an increase of 8%, compared to $1,859 (US$1,380) in H1 2023, primarily due to lower ounces sold and higher operating costs and sustaining capital expenditures.
In 2024, Eagle River is expected to produce 80,000 to 90,000 ounces, with production in the second half of the year expected to be similar to the first half of the year, at cash costs per ounce of $1,275 to $1,425 and AISC per ounce of $2,050 to $2,250 (US$1,550 to US$1,700). Eagle River’s 2024 anticipated gold production is in-line with the prior year, as contribution of tonnes and ounces is expected to shift away from 720F Falcon Zone and towards 300 Zone at depth.
Kiena Mine – Quebec
| Kiena Operating Results | Q2 2024 | Q2 2023 | H1 2024 | H1 2023 |
| Ore milled (tonnes) | 57,669 | 51,824 | 103,013 | 94,148 |
| Head grade (g/t) | 13.5 | 5.0 | 10.1 | 5.4 |
| Average mill recoveries (%) | 99.0 | 97.7 | 98.8 | 97.8 |
| Gold production (oz) | 24,763 | 8,147 | 33,186 | 16,024 |
| Gold sold (oz) | 22,500 | 9,500 | 30,840 | 15,500 |
| Production costs per tonne milled1 | 391 | 379 | 424 | 430 |
| Costs per oz sold ($/oz) | ||||
| Cost of sales | 1,520 | 3,857 | 2,130 | 3,810 |
| Cash costs1 | 967 | 2,257 | 1,374 | 2,261 |
| All-in sustaining costs1 | 1,536 | 2,755 | 2,223 | 2,868 |
| Costs per oz sold (US$/oz) | ||||
| Cost of sales | 1,111 | 2,873 | 1,568 | 2,827 |
| Cash costs1 | 707 | 1,681 | 1,011 | 1,677 |
| All-in sustaining costs1 | 1,123 | 2,052 | 1,636 | 2,128 |
During Q2 2024, the Kiena mine produced 24,763 ounces of gold as compared to 8,147 ounces in Q2 2023 primarily due to a 170% increase in head grade due to the ramp-up in mining of high-grade Kiena Deep ore from the 129-level horizon in mid-April and an 11% increase in throughput. Kiena’s head grade increased to 13.5 g/t in Q2 2024 from 5.0 g/t in Q2 2023. Gold recovery increased to 99.0% from 97.7% in the corresponding period in 2023. In Q2 2024, the mill processed 57,669 tonnes throughput as compared to 51,824 tonnes in Q2 2023.
In H1 2024, Kiena produced 33,186 ounces of gold as compared to 16,024 ounces in H1 2023 primarily due to an 88% increase in head grade and a 9% increase in throughput. Head grade at Kiena increased to 10.1 g/t in H1 2024 from 5.4 g/t in H1 2023. The rate of gold recovery increased to 98.8% from 97.8% in the corresponding period in 2023. In H1 2024, the mill processed throughput of 103,013 tonnes compared to 94,148 tonnes in H1 2023. In the second quarter Kiena began processing higher grade material from the new 129-level horizon of Kiena Deep, which is expected to continue over the balance of 2024.
In Q2 2024, Kiena generated $71.8 million in revenue from the sale of 22,500 ounces of gold as compared to $25.4 million from the sale of 9,500 ounces in Q2 2023. Revenue increased by 182% compared to Q2 2023 due to higher ounces sold and a higher average realized Canadian dollar gold price. In H1 2024, Kiena increased revenue to $95.1 million from the sale of 30,840 ounces of gold, an increase of 132% compared to $40.9 million in revenue from the sale of 15,500 ounces in H1 2023. Revenue in H1 2024 increased due to higher ounces sold and a higher average realized Canadian dollar gold price.
Cost of sales in Q2 2024 was $34.2 million, a decrease of 7% over the corresponding period in 2023 primarily due to a $2.9 million decrease in inventory levels and a $2.8 million decrease in non-cash depletion and depreciation resulting from an increase in inventories partially offset by a $3.2 million increase in mine operating costs, which was due to 11% higher throughput. Cost of sales in H1 2024 was $65.7 million, 11% higher than the corresponding period in 2023 primarily due to an increase in the aggregate mine operating costs as a result of a 9% increase in throughput.
Cash costs per ounce of gold sold in Q2 2024 were $967 (US$707), a decrease of 57% compared to $2,257 (US$1,681) in Q2 2023 primarily due to a 137% increase in ounces sold. Cash costs per ounce of gold sold in H1 2024 decreased by 39% to $1,374 (US$1,011) compared to $2,261 (US$1,677) in H1 2023 primarily due to a 99% increase in ounces sold partially offset by higher aggregate mine operating expenses due to increased throughput.
AISC per ounce of gold sold decreased by 44% in Q2 2024 to $1,536 (US$1,123) from $2,755 (US$2,052) in Q2 2023 primarily due to an increase in ounces sold partially offset by an increase in sustaining capital expenditures. AISC per ounce of gold sold decreased by 22% in H1 2024 to $2,223 (US$1,636) from $2,868 (US$2,128) in H1 2023 primarily due to a 99% increase in ounces sold partially offset by an increase in sustaining capital expenditures.
Kiena’s 2024 guidance is for 80,000 to 90,000 ounces with production expected to be backend-weighted in the second half of the year, at cash costs per ounce of $875 to $975 and AISC per ounce of $1,475 to $1,625 (US$1,100 to US$1,225). Higher annual production levels reflect a declining production contribution from the Martin Zone relative to higher grade ore from the Kiena Deep 129-level horizon. Overall development performance subsequent to quarter end has met internal expectations, with higher grade ore expected to continue to be processed in the second half of the year.
Exploration Updates
Development and Drilling
This year’s exploration program at Eagle River is prioritizing the expansion of the existing resource base of known zones and identifying targets near existing infrastructure. Eagle River’s budget for underground exploration is nearly $10 million and includes expansion, infill and delineation drilling.
Recent drilling results at Eagle River underscore the prospectivity across this asset, particularly as the high grade 6 Central Zone continues to expand down-plunge to the east, and the continuity and extension potential of the Falcon 311 and 300 zones is now being confirmed in follow-up drilling.
The 6 Central Zone, discovered in 2023, is located close to existing infrastructure and at relatively shallower depths of 600 to 750 metres. The 6 Central Zone has been delineated 180 metres in plunge and 145 metres on strike based on a 3D model completed in 2023. Drill results to date have been promising, extending the zone down-plunge by 150 metres to the east and 100 metres along strike. Recent drilling returned 93.7g/t Au over 3.0 m core length (59.7g/t Au capped, 2.6 m true width), including 339.4 g/t Au uncut over 0.4 m core length.
Based on drilling to date, the Falcon 311 Zone has been delineated to extend at least 250 metres along plunge and nearly 115 metres along strike. Drilling continues to confirm the potential for the zone to expand down plunge and potentially extend to surface, similar to the adjacent Falcon 7 Zone discovered in 2019. One hole returned 33.0 g/t Au over 5.0 m core length (31.8 g/t Au capped, 3.5 m true width).
With development platforms recently installed at the 1201-level, underground drilling has focused on infill drilling and to test areas down-plunge of 300 Zone that were not previously accessible. Recent infill drilling returned 39.7 g/t Au over 8.7 m core length (32.5g/t Au capped, 6.6 m true width), including 275.1 g/t Au uncut over 0.3 m core length.
Surface Exploration
Initial surface drilling within the volcanic rocks 150 metres east and down dip of the previously mined 2 Zone intersected altered volcanic rocks with quartz veining and VG. One previously drilled hole returned 233.0 g/t Au over 0.4 metres. Current drilling is designed to test volcanic rocks east of the mine diorite having similar potential to the Falcon zones previously discovered west of the mine diorite proximal to the historic 2 Zone.
Kiena
Development and Drilling
Over the past several years, underground drilling has been focused on exploration to test sectors proximal to the Kiena Deep A Zones, which now extends continuously from 1,100 m to approximately 2,000 m below surface and remains open at depth. As part of this exploration focus, early success discovered the Footwall Zones. Then in 2022, exploration confirmed the presence of the South limb in the folded Kiena Deep A Zone at depth, and also intersected two new zones in the hanging wall basalt. These new basalt zones all occur below an observed bend or steepening in the plunge of the Kiena Deep A Zone.
As the main ramp at Kiena Deep progresses towards the 136-level by year end, additional drill platforms are being established to facilitate drilling in previously discovered but not fully explored zones. Initial drilling at both the Footwall and South Limb zones is being used to better define the high-grade mineralization with a view to converting existing Inferred Resources to the Indicated category. Drilling is also expected to continue to build upon our early success and aim to expand and extend the known size of these zones. Growth in resource inventory in these areas has the potential to increase ounces per vertical metre and thereby provide opportunities for operational flexibility and increasing production from each level. Additional drill platforms at depth will also provide an opportunity to test the previously discovered Hanging Wall Zone in the Basalt as well as follow up on areas northeast of Kiena Deep for a parallel structure.
The Wish area has remained underexplored until 2024. Initial reconnaissance drilling in 2024 approximately one kilometre east of the Kiena mine from the existing 33-level development has intersected narrow, high grade gold mineralization from quartz veining within a horizon of competent basalt, in contact with sheared ultramafic rocks. These results, combined with historic hole 4344 (65.5 g/t Au over 1.0 m core length), have identified gold mineralization proximal to the contact over 300 metres along strike. Follow-up drilling is ongoing in this area to provide an initial assessment of the size and potential continuity of the mineralization. Furthermore, as 33 level development is currently being rehabilitated further east of this zone, we expect to have more optimal drilling platforms available from the eastern side of the interpreted zone in the second half of 2024.
Currently, we are seeing immediate returns from this stepped-up effort at Kiena, with results that are not only expanding and defining existing zones at Kiena Deep, but also identifying potentially significant gold mineralization in historically underexplored areas like the Wish area from the 33-level. Kiena’s budget for underground exploration is nearly $10 million and includes expansion, infill and delineation drilling.
Surface Exploration Drilling
The excavation of an exploration ramp from surface to access the near-surface Presqu’île Zone has been underway since Q4 2023. Drilling is expected to commence in the coming months to identify additional zones of mineralization that could be mined with the Presqu’île ramp development. Barge drilling at Dubuisson commenced in July 2024.
Management and Board Changes
The Company announces changes to its management and board composition. Frédéric Mercier-Langevin will be stepping down as Chief Operating Officer effective September 30, 2024 for personal reasons. In addition, independent director and audit committee chair Charles Main has indicated he will be retiring from the industry and has stepped down from the Board as of the end of day today.
Ms. Bath commented, “I have had the pleasure of working with both Fred and Charles for just over a year, and their experience and expertise will be truly missed.
“Under Fred’s leadership, we recorded marked improvements in safety performance while delivering on our operational commitments and guidance. During his tenure, Fred also developed a strong technical team, which is well positioned to execute on our strategic plans.
“Charles has been a highly respected member of our board since 2017, bringing with him decades of invaluable expertise in industry, accounting, tax, and finance. His deep knowledge and strategic insights have been crucial in guiding the company through a significant period of growth and transformation. We greatly appreciate his dedication and the pivotal role he has played in our continued success.
“On behalf of the Board and everyone at Wesdome, I would like to express our gratitude to Fred and Charles for their many contributions to Wesdome and wish each of you all the best in the future.”
With respect to both roles, the Company is conducting a search for qualified candidates to ensure the continued adherence to Wesdome’s standards of operational excellence and financial discipline.
Q2 2024 Conference Call and Webcast
Management will host a conference call and webcast to discuss the Company’s Q2 2024 financial and operating results. A question-and-answer session will follow management’s prepared remarks. Details of the webcast are as follows:
| Date and time: | Thursday, August 15, 2024 at 10:00 a.m. ET | |
| Participant registration: | https://register.vevent.com/register/BI2bc416f598494ba087c522f097da6d5a Click on the link above and complete the online registration form. Upon registering you will receive the dial-in info and a unique PIN to join the call as well as an email confirmation with the details. | |
| Webcast link: | https://edge.media-server.com/mmc/p/arvjmvq8 | |
| Notes: | Pre-registration is required for this event. It is recommended you join 10 minutes prior to the start of the event. The webcast can also be accessed under the news and events section of the Company’s website. | |
The financial statements and management discussion and analysis will be available on the Company’s website at www.wesdome.com and on SEDAR+ www.sedarplus.ca.
About Wesdome
Wesdome is a Canadian-focused gold producer with two high grade underground assets, the Eagle River mine in Ontario and the 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.
For further information, please contact:
Raj Gill, SVP, Corporate Development & Investor Relations
Trish Moran, VP, Investor Relations
Phone: +1 (416) 360-3743
E-Mail: invest@wesdome.com
Responsibility for Technical Information
The technical and scientific information relating to exploration activities disclosed in this document was prepared under the supervision of and verified and reviewed by Frederic Langevin, Eng, Chief Operating Officer of Wesdome, and Michael Michaud, P.Geo., Exploration and Resources Consultant for Wesdome (formerly Senior Vice President, Exploration and Resources of Wesdome until July 11, 2024), and each a "Qualified Person" as defined in National Instrument 43-101 - Standards of Disclosure for Mineral Projects.
Data verification involves data input and review by senior project geologists at site, scheduled weekly and monthly reporting to senior exploration management and the completion of project site visits by senior exploration management to review the status of ongoing project activities and data underlying reported results. All drilling results for exploration projects or supporting resource and reserve estimates referenced in this document have been previously reported in news release disclosures by the Company and have been prepared in accordance with NI 43-101 - Standards of Disclosure for Mineral Projects. The sampling and assay data from drilling programs are monitored through the implementation of a quality assurance - quality control (“QA-QC”) program designed to follow industry best practice.
Forward Looking Statements
This news release contains “forward-looking information” which involve a number of risks and uncertainties. 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.
Forward-looking statements or information contained in this press release include, but are not limited to, statements or information with respect to the Company’s expectations around: production, costs and expenses, processing, grade and recoveries; production and free cash flow generation in 2024 and 2025; the success, potential and objectives of its exploration programs; the Company’s future growth and value creation; the achievement of production and cost guidance and the price of gold and other commodities. Forward-looking statements and forward-looking information by their nature are based on assumptions and 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 such forward-looking statements or information.
We have made certain assumptions about the forward-looking statements and information, including assumptions around economic parameters relating to our mineral reserves and mineral resource estimates described herein. Even though management believes that the assumptions made, and the expectations represented by such statements or information, are reasonable in the circumstances, there can be no assurance that the forward-looking statement or information will prove to be accurate. Many assumptions may be difficult to predict and are beyond the Company’s control.
Furthermore, should one or more of the risks, uncertainties or other factors materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in forward-looking statements or information. These risks, uncertainties and other factors including those risk factors discussed in the sections titled “Cautionary Note Regarding Forward Looking Information” and “Risks and Uncertainties” in the Company’s most recent Annual Information Form. Readers are urged to carefully review the detailed risk discussion in our most recent Annual Information Form which is available on SEDAR+ and on the Company’s website.
There can be no assurance that forward-looking statements or information 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.
Non-IFRS Performance Measures
Wesdome uses non-IFRS performance measures throughout this news release as it believes that these generally accepted industry performance measures provide a useful indication of the Company’s operational performance. These non-IFRS performance measures do not have standardized meanings defined by IFRS and may not be comparable to information in other gold producers’ reports and filings. Accordingly, it is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.
The non-IFRS performance measures include:
- Average realized price of gold sold
- Cash costs per ounce of gold sold
- Production costs per tonne milled
- Cash margin
- All-in sustaining costs
- Free cash flow, operating cash flow per share and free cash flow per share
- Adjusted net income (loss) and adjusted net income (loss) per share
- EBITDA
Average realized price per ounce of gold sold
Average realized price per ounce of gold sold is a non-IFRS measure and does not constitute a measure recognized by IFRS and does not have a standardized meaning defined by IFRS. Average realized price per ounce of gold sold is calculated by dividing gold sales proceeds received by the Company for the relevant period by the ounces of gold sold. It may not be comparable to information in other gold producers’ reports and filings.
| In 000s, except per unit amounts | Q2 2024 | Q1 2024 | Q4 2023 | Q3 2023 | Q2 2023 | Q1 2023 | Q4 2022 | Q3 2022 | H1 2024 | H1 2023 | ||||||||||
| Revenues per financial statements | 127,799 | 100,922 | 102,221 | 69,696 | 84,555 | 76,701 | 75,035 | 61,823 | 228,721 | 161,256 | ||||||||||
| Silver revenue from mining operations | (126 | ) | (134 | ) | (73 | ) | (77 | ) | (70 | ) | (86 | ) | (60 | ) | (54 | ) | (260 | ) | (156 | ) |
| Gold revenue from mining operations (a) | 127,673 | 100,788 | 102,148 | 69,619 | 84,485 | 76,615 | 74,975 | 61,769 | 228,461 | 161,100 | ||||||||||
| Ounces of gold sold (b) | 40,000 | 35,700 | 37,620 | 27,000 | 32,000 | 30,000 | 31,500 | 27,500 | 75,700 | 62,000 | ||||||||||
| Average realized price gold sold CAD (c) = (a) ÷ (b) | 3,192 | 2,823 | 2,715 | 2,579 | 2,640 | 2,554 | 2,380 | 2,246 | 3,018 | 2,598 | ||||||||||
| Average 1 USD → CAD exchange rate (d) | 1.3684 | 1.3488 | 1.3619 | 1.3414 | 1.3428 | 1.3525 | 1.3578 | 1.3056 | 1.3586 | 1.3477 | ||||||||||
| Average realized price gold sold USD (c) ÷ (d) | 2,333 | 2,093 | 1,994 | 1,923 | 1,966 | 1,888 | 1,753 | 1,720 | 2,221 | 1,928 | ||||||||||
Cash costs per ounce of gold sold
Cash cost per ounce of gold sold is a non-IFRS performance measure and does not constitute a measure recognized by IFRS and does not have a standardized meaning defined by IFRS, as well it may not be comparable to information in other gold producers’ reports and filings. The Company has included this non-IFRS performance measure throughout this document as Wesdome believes that this generally accepted industry performance measure provides a useful indication of the Company’s operational performance. 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. Accordingly, it is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. The following table provides a reconciliation of total cash costs per ounce of gold sold to cost of sales per the financial statements for each of the last eight quarters:
| In 000s, except per unit amounts | Q2 2024 | Q1 2024 | Q4 2023 | Q3 2023 | Q2 2023 | Q1 2023 | Q4 2022 | Q3 2022 | H1 2024 | H1 2023 | ||||||||||
| Cost of sales per financial statements | 74,110 | 78,679 | 78,506 | 71,450 | 84,048 | 61,418 | 61,997 | 56,294 | 152,789 | 145,466 | ||||||||||
| Depletion and depreciation | (22,550 | ) | (24,381 | ) | (23,861 | ) | (23,987 | ) | (28,215 | ) | (19,125 | ) | (13,428 | ) | (11,464 | ) | (46,931 | ) | (47,340 | ) |
| Silver revenue from mining operations | (126 | ) | (134 | ) | (73 | ) | (77 | ) | (70 | ) | (86 | ) | (60 | ) | (54 | ) | (260 | ) | (156 | ) |
| Cash costs (a) | 51,434 | 54,164 | 54,572 | 47,386 | 55,763 | 42,207 | 48,509 | 44,776 | 105,598 | 97,970 | ||||||||||
| Ounces of gold sold (b) | 40,000 | 35,700 | 37,620 | 27,000 | 32,000 | 30,000 | 31,500 | 27,500 | 75,700 | 62,000 | ||||||||||
| Cash costs per ounce of gold sold (c) = (a) ÷ (b) | 1,286 | 1,517 | 1,451 | 1,755 | 1,743 | 1,407 | 1,540 | 1,628 | 1,395 | 1,580 | ||||||||||
| Average 1 USD → CAD exchange rate (d) | 1.3684 | 1.3488 | 1.3619 | 1.3414 | 1.3428 | 1.3525 | 1.3578 | 1.3056 | 1.3586 | 1.3477 | ||||||||||
| Cash costs per ounce of gold sold USD (c) ÷ (d) | 940 | 1,125 | 1,065 | 1,308 | 1,298 | 1,040 | 1,134 | 1,247 | 1,027 | 1,172 | ||||||||||
Production costs per tonne milled
Mine-site cost per tonne milled is a non-IFRS performance measure and does not constitute a measure recognized by IFRS and does not have a standardized meaning defined by IFRS, as well it may not be comparable to information in other gold producers’ reports and filings. As illustrated in the table below, this measure is calculated by adjusting cost of sales, as shown in the statements of income for non-cash depletion and depreciation, royalties and inventory level changes and then dividing by tonnes processed through the mill. Management believes that mine-site cost per tonne milled provides additional information regarding the performance of mining operations and allows Management to monitor operating costs on a more consistent basis as the per tonne milled measure reduces the cost variability associated with varying production levels. Management also uses this measure to determine the economic viability of mining blocks. As each mining block is evaluated based on the net realizable value of each tonne mined, the estimated revenue on a per tonne basis must be in excess of the production cost per tonne milled in order to be economically viable. Management is aware that this per tonne milled measure is impacted by fluctuations in throughput and thus uses this evaluation tool in conjunction with production costs prepared in accordance with IFRS. This measure supplements production cost information prepared in accordance with IFRS and allows investors to distinguish between changes in production costs resulting from changes in production versus changes in operating performance.
| In 000s, except per unit amounts | Q2 2024 | Q1 2024 | Q4 2023 | Q3 2023 | Q2 2023 | Q1 2023 | Q4 2022 | Q3 2022 | H1 2024 | H1 2023 | ||||||||||
| Cost of sales per financial statements | 74,110 | 78,679 | 78,506 | 71,450 | 84,048 | 61,418 | 61,997 | 56,294 | 152,789 | 145,466 | ||||||||||
| Depletion and depreciation | (22,550 | ) | (24,381 | ) | (23,861 | ) | (23,987 | ) | (28,215 | ) | (19,125 | ) | (13,428 | ) | (11,464 | ) | (46,931 | ) | (47,340 | ) |
| Royalties | (1,200 | ) | (1,342 | ) | (1,267 | ) | (1,029 | ) | (1,172 | ) | (998 | ) | (1,172 | ) | (766 | ) | (2,542 | ) | (2,170 | ) |
| Bullion and in-circuit inventory adjustments | 3,471 | (2,267 | ) | (3,908 | ) | 384 | (2,526 | ) | 2,524 | 1,288 | (3,518 | ) | 1,204 | (2 | ) | |||||
| Mining and processing costs, before inventory adjustments (a) | 53,831 | 50,689 | 49,470 | 46,818 | 52,135 | 43,819 | 48,685 | 40,546 | 104,520 | 95,954 | ||||||||||
| Ore milled (tonnes) (b) | 110,221 | 96,976 | 104,318 | 102,504 | 116,496 | 96,607 | 109,725 | 71,954 | 207,197 | 213,103 | ||||||||||
| Production costs per tonne milled (a) ÷ (b) | 488 | 523 | 474 | 457 | 448 | 454 | 444 | 563 | 504 | 450 | ||||||||||
Cash margin
Cash margin is a non-IFRS measure and does not constitute a measure recognized by IFRS and does not have a standardized meaning defined by IFRS, as well it may not be comparable to information in other gold producers’ reports and filings. It is calculated as the difference between gold sales revenue from mining operations and cash mine site operating costs (see Cash cost per ounce of gold sold under this Section above) per the Company’s Financial Statements. The Company believes it illustrates the performance of the Company’s operating mines and enables investors to better understand the Company’s performance in comparison to other gold producers who present results on a similar basis.
| In 000s, except per unit amounts | Q2 2024 | Q1 2024 | Q4 2023 | Q3 2023 | Q2 2023 | Q1 2023 | Q4 2022 | Q3 2022 | H1 2024 | H1 2023 | ||||||||||
| Gold revenue from mining operations (per above) | 127,673 | 100,788 | 102,148 | 69,619 | 84,485 | 76,615 | 74,975 | 61,769 | 228,461 | 161,100 | ||||||||||
| Cash costs (per above) | 51,434 | 54,164 | 54,572 | 47,386 | 55,763 | 42,207 | 48,509 | 44,776 | 105,598 | 97,970 | ||||||||||
| Cash margin | 76,239 | 46,624 | 47,576 | 22,233 | 28,722 | 34,408 | 26,466 | 16,993 | 122,863 | 63,130 | ||||||||||
| Per ounce of gold sold (Canadian dollar): | ||||||||||||||||||||
| Average realized price (a) | 3,192 | 2,823 | 2,715 | 2,579 | 2,640 | 2,554 | 2,380 | 2,246 | 3,018 | 2,598 | ||||||||||
| Cash costs (b) | 1,286 | 1,517 | 1,451 | 1,755 | 1,743 | 1,407 | 1,540 | 1,628 | 1,395 | 1,580 | ||||||||||
| Cash margin (a) – (b) | 1,906 | 1,306 | 1,264 | 824 | 897 | 1,147 | 840 | 618 | 1,623 | 1,018 | ||||||||||
All-in sustaining costs
All-in sustaining costs (“AISC”) include mine site operating costs incurred at Wesdome mining operations, sustaining mine capital and development expenditures, mine site exploration expenditures and equipment lease payments related to the mine operations and corporate administration expenses. The Company believes that this measure represents the total costs of producing gold from current operations and provides Wesdome and other stakeholders with additional information that illustrates the Company’s operational performance and ability to generate cash flow. This cost measure seeks to reflect the full cost of gold production from current operations on a per-ounce of gold sold basis. New project and growth capital are not included.
| In 000s, except per unit amounts | Q2 2024 | Q1 2024 | Q4 2023 | Q3 2023 | Q2 2023 | Q1 2023 | Q4 2022 | Q3 2022 | H1 2024 | H1 2023 | ||||||||||
| Cost of sales, per financial statements | 74,110 | 78,679 | 78,506 | 71,450 | 84,048 | 61,418 | 61,997 | 56,294 | 152,789 | 145,466 | ||||||||||
| Depletion and depreciation | (22,550 | ) | (24,381 | ) | (23,861 | ) | (23,987 | ) | (28,215 | ) | (19,125 | ) | (13,428 | ) | (11,464 | ) | (46,931 | ) | (47,340 | ) |
| Silver revenue from mining operations | (126 | ) | (134 | ) | (73 | ) | (77 | ) | (70 | ) | (86 | ) | (60 | ) | (54 | ) | (260 | ) | (156 | ) |
| Cash costs | 51,434 | 54,164 | 54,572 | 47,386 | 55,763 | 42,207 | 48,509 | 44,776 | 105,598 | 97,970 | ||||||||||
| Sustaining mine exploration and development | 15,492 | 15,942 | 10,190 | 9,683 | 9,024 | 8,484 | 7,179 | 5,134 | 31,434 | 17,508 | ||||||||||
| Sustaining mine capital equipment | 5,250 | 4,275 | 6,779 | 10,360 | 1,598 | 3,200 | 5,585 | 2,232 | 9,525 | 4,798 | ||||||||||
| Tailings management facility | 210 | 256 | 342 | 15 | 12 | 2 | 1,597 | 3,692 | 466 | 14 | ||||||||||
| Corporate and general | 5,972 | 3,969 | 5,955 | 4,707 | 4,007 | 3,662 | 2,309 | 2,918 | 9,941 | 7,669 | ||||||||||
| Less: Corporate development | (14 | ) | (50 | ) | (276 | ) | (161 | ) | (210 | ) | (31 | ) | (72 | ) | (87 | ) | (64 | ) | (241 | ) |
| Payment of lease liabilities | 754 | 909 | 780 | 1,208 | 1,410 | 1,784 | 2,167 | 2,300 | 1,663 | 3,194 | ||||||||||
| AISC (a) | 79,098 | 79,465 | 78,342 | 73,198 | 71,604 | 59,308 | 67,274 | 60,965 | 158,563 | 130,912 | ||||||||||
| Ounces of gold sold (b) | 40,000 | 35,700 | 37,620 | 27,000 | 32,000 | 30,000 | 31,500 | 27,500 | 75,700 | 62,000 | ||||||||||
| AISC (c) = (a) ÷ (b) | 1,977 | 2,226 | 2,082 | 2,711 | 2,238 | 1,977 | 2,136 | 2,217 | 2,095 | 2,111 | ||||||||||
| Average 1 USD → CAD exchange rate (d) | 1.3684 | 1.3488 | 1.3619 | 1.3414 | 1.3428 | 1.3525 | 1.3578 | 1.3056 | 1.3586 | 1.3477 | ||||||||||
| AISC USD (c) ÷ (d) | 1,445 | 1,650 | 1,529 | 2,021 | 1,666 | 1,462 | 1,573 | 1,698 | 1,542 | 1,567 | ||||||||||
Free cash flow and operating and free cash flow per share
Free cash flow is calculated by taking net cash provided by operating activities less cash used in capital expenditures and lease payments as reported in the Company’s financial statements. Free cash flow per share is calculated by dividing free cash flow by the weighted average number of shares outstanding for the period.
Operating cash flow per share is a non-IFRS measure and does not constitute a measure recognized by IFRS and does not have a standardized meaning defined by IFRS. Operating cash flow per share is calculated by dividing cash flow from operating activities in the Company’s Financial Statements by the weighted average number of shares outstanding for each year. It may not be comparable to information in other gold producers’ reports and filings.
| In 000s, except per share amounts | Q2 2024 | Q1 2024 | Q4 2023 | Q3 2023 | Q2 2023 | Q1 2023 | Q4 2022 | Q3 2022 | H1 2024 | H1 2023 | ||||||||||
| Net cash provided by operating activities per financial statements (c) | 57,083 | 46,502 | 37,176 | 45,076 | 13,979 | 5,120 | 10,267 | 12,945 | 103,585 | 19,099 | ||||||||||
| Sustaining mine exploration and development | (15,492 | ) | (15,942 | ) | (10,190 | ) | (9,683 | ) | (9,024 | ) | (8,484 | ) | (7,179 | ) | (5,134 | ) | (31,434 | ) | (17,508 | ) |
| Sustaining mine capital equipment | (5,250 | ) | (4,275 | ) | (6,779 | ) | (10,360 | ) | (1,598 | ) | (3,200 | ) | (5,585 | ) | (2,232 | ) | (9,525 | ) | (4,798 | ) |
| Tailings management facility | (210 | ) | (256 | ) | (342 | ) | (15 | ) | (12 | ) | (2 | ) | (1,597 | ) | (3,692 | ) | (466 | ) | (14 | ) |
| Capitalized development, exploration and evaluation expenditures | - | - | - | - | - | - | (4,284 | ) | (5,550 | ) | - | - | ||||||||
| Mines under development capital equipment | - | - | - | - | - | - | (13,958 | ) | (17,230 | ) | - | - | ||||||||
| Growth mine exploration and development | (4,344 | ) | (4,203 | ) | (4,154 | ) | (4,111 | ) | (4,316 | ) | (4,360 | ) | (919 | ) | - | (8,547 | ) | (8,676 | ) | |
| Growth mine capital equipment | (2,596 | ) | (1,469 | ) | (7,132 | ) | (7,485 | ) | (2,898 | ) | (6,687 | ) | (5,668 | ) | - | (4,065 | ) | (9,585 | ) | |
| Purchase of mineral properties | - | - | - | - | - | (200 | ) | - | - | - | (200 | ) | ||||||||
| Funds held against standby letters of credit | - | - | - | (1,542 | ) | - | - | (519 | ) | - | - | - | ||||||||
| Payment of lease liabilities | (754 | ) | (909 | ) | (780 | ) | (1,208 | ) | (1,410 | ) | (1,784 | ) | (2,167 | ) | (2,300 | ) | (1,663 | ) | (3,194 | ) |
| Free cash flows (a) | 28,437 | 19,448 | 7,799 | 10,672 | (5,279 | ) | (19,597 | ) | (31,609 | ) | (23,193 | ) | 47,885 | (24,876 | ) | |||||
| Weighted number of shares (000s) (b) | 149,548 | 149,068 | 148,965 | 148,952 | 148,001 | 144,463 | 142,782 | 142,487 | 149,308 | 146,242 | ||||||||||
| Per Share data | ||||||||||||||||||||
| Operating cash flow (c) ÷ (b) | 0.38 | 0.31 | 0.25 | 0.30 | 0.09 | 0.04 | 0.07 | 0.09 | 0.69 | 0.13 | ||||||||||
| Free cash flow (a) ÷ (b) | 0.19 | 0.13 | 0.05 | 0.07 | (0.04 | ) | (0.14 | ) | (0.22 | ) | (0.16 | ) | 0.32 | (0.17 | ) | |||||
Adjusted net income (loss) and adjusted net income (loss) per share
Adjusted net income (loss) and adjusted net income (loss) per share are non-IFRS performance measures and do not constitute a measure recognized by IFRS and do not have standardized meanings defined by IFRS, as well both measures may not be comparable to information in other gold producers’ reports and filings. Adjusted net income (loss) is calculated by removing the one-time gains and losses resulting from the disposition of non-core assets, non-recurring expenses and significant tax adjustments (mining tax recognition and exploration credit refunds) not related to current period’s income, as detailed in the table below. Wesdome discloses this measure, which is based on its financial statements, to assist in the understanding of the Company’s operating results and financial position.
| In 000s, except per share amounts | Q2 2024 | Q1 2024 | Q4 2023 | Q3 2023 | Q2 2023 | Q1 2023 | Q4 2022 | Q3 2022 | H1 2024 | H1 2023 | ||||||||||
| Net income (loss) per financial statements | 29,135 | 10,708 | 2,420 | (3,248 | ) | (5,014 | ) | (345 | ) | (3,527 | ) | (3,899 | ) | 39,843 | (5,359 | ) | ||||
| Adjustments for: | ||||||||||||||||||||
| Impairment of investment in associate | - | - | - | 900 | - | 2,700 | - | - | - | 2,700 | ||||||||||
| Retirement costs | - | - | - | - | - | 2,102 | - | - | - | 2,102 | ||||||||||
| Total adjustments | - | - | - | 900 | - | 4,802 | - | - | - | 4,802 | ||||||||||
| Related income tax effect | - | - | - | (225 | ) | - | (1,200 | ) | - | - | - | (1,200 | ) | |||||||
| - | - | - | 675 | - | 3,602 | - | - | - | 3,602 | |||||||||||
| Adjusted net income (loss) (a) | 29,135 | 10,708 | 2,420 | (2,573 | ) | (5,014 | ) | 3,257 | (3,527 | ) | (3,899 | ) | 39,843 | (1,757 | ) | |||||
| Weighted number of shares (000s) (b) | 149,548 | 149,068 | 148,965 | 148,952 | 148,001 | 144,463 | 142,782 | 142,487 | 149,308 | 146,242 | ||||||||||
| Per share data | ||||||||||||||||||||
| Adjusted net income (loss) (a) ÷ (b) | 0.19 | 0.07 | 0.02 | (0.02 | ) | (0.03 | ) | 0.02 | (0.02 | ) | (0.03 | ) | 0.27 | (0.01 | ) | |||||
EBITDA
Earnings before interest, taxes and depreciation and amortization (“EBITDA”) is a non-IFRS financial measure which excludes the following items from net income (loss): interest expense; mining and income taxes and depletion and depreciation expenses. The Company believes that, in addition to conventional measures prepared in accordance with IFRS, the Company and certain investors use EBITDA as an indicator of Wesdome’s ability to generate liquidity by producing operating cash flow to fund working capital needs, service debt obligations and fund capital expenditures. EBITDA is intended to provide additional information to investors and analysts and do not have any standardized definition under IFRS and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. EBITDA excludes the impact of cash costs of financing activities and taxes, and the effects of changes in operating working capital balances, and therefore are not necessarily indicative of operating profit or cash flow from operations as determined under IFRS. Other producers may calculate EBITDA differently. The following table provides a reconciliation of net income in the Company’s financial statements to EBITDA:
| In 000s | Q2 2024 | Q1 2024 | Q4 2023 | Q3 2023 | Q2 2023 | Q1 2023 | Q4 2022 | Q3 2022 | H1 2024 | H1 2023 | ||||||||||
| Net income (loss) per financial statements | 29,135 | 10,708 | 2,420 | (3,248 | ) | (5,014 | ) | (345 | ) | (3,527 | ) | (3,899 | ) | 39,843 | (5,359 | ) | ||||
| Adjustments for: | ||||||||||||||||||||
| Mining and income tax expense (recovery) | 15,358 | 4,550 | 10,761 | (9,820 | ) | (2,356 | ) | 1,233 | 10,129 | (3,339 | ) | 19,908 | (1,123 | ) | ||||||
| Depletion and depreciation | 22,550 | 24,381 | 23,861 | 23,987 | 28,215 | 19,125 | 13,428 | 11,464 | 46,931 | 47,340 | ||||||||||
| Non-recurring expenses | - | - | - | 900 | - | 4,802 | - | - | - | 4,802 | ||||||||||
| Interest expense | 820 | 1,036 | 1,214 | 1,114 | 1,175 | 1,309 | 1,279 | 588 | 1,856 | 2,484 | ||||||||||
| EBITDA | 67,863 | 40,675 | 38,256 | 12,933 | 22,020 | 26,124 | 21,309 | 4,814 | 108,538 | 48,144 | ||||||||||
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