2018 Fourth Quarter and Full Year Financial Results Indicate a Successful Year for Wesdome
Wesdome Gold Mines Ltd. today announces fourth quarter (“Q4 2018”) and full year 2018 financial results. All figures are stated in Canadian dollars unless otherwise noted.
“In 2018, we delivered at the top end of our grade guidance of 11.7 grams per tonne gold (“gpt or g/t”) (11.3 – 11.7 gpt guidance) at Eagle River, and the midpoint of our raised production guidance range of 71,625 ounces," said Duncan Middlemiss, President and CEO of Wesdome Gold Mines Ltd.
Key highlights of 2018:
Eagle River Complex free cash flow generation of $30 million
Company free cash flow generation of $2.8 million
Adjusted net earnings increased 119% over 2017
Operating cash flow increased by 65% over 2017
Production increased by 21% over 2017
Cash costs decreased by 17% over 2017
"These results are 11% and 21% better than 2017, respectively. Accordingly, our cash costs of $905 per ounce (US$699) and all in sustaining costs of $1,276 per ounce (US$985) for the year were both below our guidance ranges of $925 – $1,000 (US$720 – US$770) per ounce and $1,350 - $1,425 per ounce (US$1,050 - US$1,100). This beat in cost metrics is primarily attributable to higher mined grades, and improvements in underground mining efficiencies, which we expect to continue in 2019," Middlemiss added.
“Free cash flow for the fourth quarter was an outflow of $4.5 million or ($0.03 per share), the only quarter in five quarters to have a negative cash flow. This is due to the timing of major projects in 2018, such as the construction of a new mine dry at Eagle, as well as ramping up the drill metres (“m”) at the Kiena Complex in Val d’Or, Quebec in preparation for an updated resource estimate in the Kiena Deep A-Zone later this year. Free cash flow for the year was $2.8 million, or $0.02 per share, versus an outflow of $12.1 million or ($0.09) per share in 2017. Eagle River operations have been funding all the Company’s sustaining and project capital and exploration, including the $21.5 million 2018 exploration and development program at the Kiena Complex in Val d’Or, Quebec.
“Looking ahead, in 2019 we expect to produce 72,000 – 80,000 ounces of gold, primarily from the Eagle River Underground mine, where we forecast 69,000 – 76,000 ounces of gold, above reserve grade at 15.5 – 16.5 gpt. Higher grades are expected due to more H2 production within the high grade 303 lens."
The Mishi Open Pit will contribute 3,000 – 4,000 ounces at a grade of 2.0 – 2.4 gpt in the first half of the year. Throughout the year we expect lower cash costs than 2018, of $830 - $900 per ounce (US$640 – US$690), and flat all-in sustaining costs of $1,280 - $1,350 per ounce (US$985 – US$1,040). 2019 all-in sustaining cost guidance remains the same as 2018 actuals due to higher underground development rates and slightly higher in-mine exploration.
New development is underway at the Eagle River Underground mine to provide drill platforms for the planned 51,000 m of exploration drilling and 43,000 m of definition drilling to better define and expand the current resource base at the high grade 303 East Zone up and down plunge, the 711 and 300 W Zone down plunge, and at various locations along the 8 Zone. At Kiena, there are currently five drills in operation on the A Zone and remain focused on the up and down plunge potential in advance of an updated mineral resource estimate later in 2019. Four drills are on the 1050 m level exploration ramp completing the infill and plunge extension drilling, and a 5th drill is now drilling at the 670 m elevation to test the interpreted up plunge extension of the A Zone towards the VC zone area. Recent drilling has continued to return very high-grade results both up and down plunge from the area of the current resource estimate and we are confident this will continue to grow. Hole 6398 was the first hole drilled from the new development to intersect the up-plunge extension of the A Zone and returned 19.2 g/t Au, or 9.2 g/t Au cut over 5.4 m true width. The mineral resource estimate only includes drilling over approximately 400 m of the potential 1.2 km of plunge length interpreted from our recent 3D geologic modelling and will be the Company’s focus going forward.”
For more information: https://wesdome.com/