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Sunday, Dec 3, 2023
Mugglehead Magazine
Alternative investment news based in Vancouver, B.C.


Wesdome Gold Mines reports gold production up 21%, cash flow of $10.7M in Q3

The company expects a strong finish this year based on its year-to-date performance.

Wesdome Gold Mines reports gold production up 21%, cash flow of $45.1M in Q3
Kiena Mine Complex, Val d'Or, Quebec. Photo via Wesdome Gold Mines

During the third quarter, Wesdome Gold Mines Ltd. (TSX: WDO) cut its losses, and its gold production grew by 21 per cent to 27,760 ounces.

On Thursday, the company announced its financial results for Q3 2023 and reported cash costs per ounce at $1,755 and all-in-sustaining costs of $2,711. Wesdome reduced its losses to $3.2 million from $3.9 million in the previous quarter.

Despite being projected as the lightest cash flow quarter due to planned downtime at Eagle River and capital outlay, the company achieved a positive operating cash flow of $45.1 million. It reported cash margins of $22.2 million and free cash flow of $10.7 million.

The development of the ramp at Kiena to the 129-level mining horizon exceeded expectations. Cash margins reached $22.2 million, and free cash flow amounted to $10.7 million, including a $12.5 million tax refund received during the quarter.

Wesdome maintained its 2023 production guidance of 110,000 to 130,000 ounces and reaffirmed cost guidance for cash, all-in-sustaining, and capital expenditures.

The company’s available liquidity stood at $142.6 million, comprising $31.6 million in cash and $111 million in undrawn availability under its revolving credit facility.

“In the recent quarter, we made solid progress in advancing development and de-risking our future strategic plans,” Wesdome CEO Anthea Bath said.

“Eagle River reported consistent results after the completion of mill and infrastructure upgrades during an annual shutdown, and Kiena’s ramp development remains ahead of schedule, with access to the 129-metre level achieved after quarter end in November. Elevated cost levels during the quarter were due to planned downtime and timing of capital outlays.”

Wesdome Gold Mines reports gold production up 21%, cash flow of $45.1M in Q3

Table via Wesdome Gold Mines.

Read more: Wesdome Gold Mines expands Ontario mine and reports high-grade intercepts

Read more: Wesdome Gold Mines appoints Anthea Bath as new President and CEO

Read more: Wesdome Gold Mines reports over 28k gold ounces produced in Q1 2023

At the Kiena mine, there was a 41 per cent increase in production compared to the same period in 2022, reaching 7,369 ounces. This increase was mainly because of a 194 percent rise in throughput, although there was a 52 per cent decrease in head grade. The lower grades in 2023 are due to mining less valuable ore from the Martin and S50 zones to supplement production from Kiena Deep.

“Reaching the 129-level metre at Kiena was an important milestone for Wesdome as it will enable access to the higher-grade Deep A zone stopes in the first half of next year,” Bath added.

“Also, efforts continue to further de-risk our 2024 mine plans, with delineation drilling reinforcing our block model and overall mine strategy. Site preparation for the Presqu’Île ramp portal and related infrastructure is also underway following the receipt of permits at the end of the quarter.”

The company reported that production at its Eagle River project increased by 15 per cent to 20,391 ounces because of a 16 per cent increase in head grade. This was offset by a 1 per cent decrease in throughput. Higher grades and tonnes were lower because the Mishi Pit stockpile was fully depleted in Q1 2023 and did not contribute to Q3 production.

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

The company says preliminary plans for next year point to a rebound in production and operating cash flow to support total capital investment levels.

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