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Wesdome Announces 2019 First Quarter Financial Results

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TORONTO, May 08, 2019 (GLOBE NEWSWIRE) -- Wesdome Gold Mines Ltd. (WDO.TO) (“Wesdome” or the “Company”) today announces first quarter (“Q1 2019”) financial results. All figures are stated in Canadian dollars unless otherwise noted.

“Mr. Duncan Middlemiss, President and CEO commented, “In Q1 2019, the Eagle River underground mine delivered a head grade of 18.5 grams per tonne, versus guidance of 15.5 – 16.5 grams per tonne, primarily due to higher grades than anticipated within the 303 lens. As a result, both cash and all-in sustaining costs per ounce were at the lower end of guidance ranges. A number of other accomplishments were completed in Q1 including increased mine development rates, a build of up a surface stockpile for both Eagle and Mishi ore for next quarter’s production, and the early completion of mill improvements originally scheduled for Q2. Free cash flow for the quarter was neutral, which was within expectations. We expect to return to positive free cash flow generation in the second half of the year when production increases and underground development rates decrease slightly. The Eagle River operation continues to fund the company’s major exploration and development programs at both Eagle River and Kiena mines.”

Key operating and financial highlights of the Q1 2019 results include:

  • Gold production of 19,010 ounces from the Eagle River Complex, a 6% increase over the same period in the previous year (Q1 2018: 17,948 ounces):

    • Eagle River Underground 30,941 tonnes at a head grade of 18.5 grams per tonne (“g/t Au”) for 17,955 ounces produced, 9% increase over the previous year (Q1 2018: 16,398 ounces).

    • Mishi Open Pit 18,470 tonnes at a head grade of 2.2 g/t Au for 1,055 ounces produced (Q1 2018: 1,550 ounces).

  • Revenue of $32.5 million, a 24% increase over the previous year (Q1 2018: $26.2 million).

  • Ounces sold 18,760 at an average sales price of $1,733/oz (Q1 2018: 15,430 ounces at an average price of $1,698/oz).

  • Cash costs1 of $866/oz or US$651/oz, a 13% decrease over the same period in 2018 (Q1 2018: $999/oz or US$790/oz).

  • All-in sustaining costs (“AISC”) 1 of $1,311/oz or US$986/oz, a 2% decrease over the same period in 2018 (Q1 2018: $1,342/oz or US$1,061/oz).

  • Earned mine profit1 of $16.3 million, a 51% increase over Q1 2018 (Q1 2018 - $10.8 million).

  • Operating cash flow of $12.6 million or $0.09 per share1 as compared to $12.4 million or $0.09 per share for the same period in 2018.

  • Invested $6.6 million in exploration expenditures at Eagle River and Kiena Complexes during the quarter (Q1 2018 - $5.0 million)

  • Free cash outflow of $0.4 million or nil, on a per share1 basis (Q1 2018: free cash flow of $3.2 million or $0.02 per share).

  • Net income of $8.1 million or $0.06 per share (Q1 2018: $2.9 million or $0.02 per share). Net income (adjusted) 1 was $5.7 million or $0.04 per share (Q1 2018: $2.9 million or $0.02 per share).

  • Cash position of $27.8 million.

1 Refer to the Company’s 2019 First Quarter Management Discussion and Analysis, section entitled “Non-IFRS Performance Measures” for the reconciliation of these non-IFRS measurements to the financial statements.

Exploration Highlights for Q1 2019

Eagle River

Kiena

Our 2019 underground exploration program calls for 50,000 m of drilling with 5 drills in preparation for an updated resource estimate at the Kiena gold deposit in the second half of this year. This information will then lead into a Preliminary Economic Assessment.

Technical Disclosure

The technical content of this release has been compiled, reviewed and approved by Marc-Andre Pelletier, P. Eng, Chief Operating Officer, and Michael Michaud, P.Geo., Vice President, Exploration of the Company and each a "Qualified Person" as defined in National Instrument 43-101 -Standards of Disclosure for Mineral Projects.

Cautionary Note to United States Investors Concerning Estimates of Reserves and Resources

The mineral reserve and resource estimates reported in this news release were prepared in accordance with National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”) as required by Canadian securities regulatory authorities. The United States Securities and Exchange Commission (the “SEC”) applies different standards in order to classify and report mineralization. This news release uses the terms “measured”, “indicated” and “inferred” mineral resources, as required by NI 43-101. Readers are advised that although such terms are recognized and required by Canadian securities regulations, the SEC does not recognize such terms. Canadian standards differ significantly from the requirements of the SEC. Readers are cautioned not to assume that any part or all of the mineral deposits in these categories constitute or will ever be converted into mineral reserves. In addition, “inferred” mineral resources have a great amount of uncertainty as to their existence and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource exists, is economically or legally mineable or will ever be upgraded to a higher category of mineral resource.

Wesdome Gold Mines 2019 First Quarter Financial Results Conference Call:

May 9, 2019 at 10:00 am ET:

North American Toll Free: + 1 (844) 202-7109
International Dial-In Number: +1 (703) 639-1272
Conference ID: 9496715
Webcast link: https://edge.media-server.com/m6/p/evgw6ovv

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

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

March 31

2019

2018

Operating data

Milling (tonnes)

Eagle River

30,941

44,480

Mishi

18,470

32,846

Throughput 2

49,411

77,326

Head grades (g/t)

Eagle River

18.5

12.0

Mishi

2.2

1.8

Recovery (%)

Eagle River

97.6

95.4

Mishi

80.6

81.6

Production (ounces)

Eagle River

17,955

16,398

Mishi

1,055

1,550

Total gold produced 2

19,010

17,948

Total gold sales (ounces)

18,760

15,430

Eagle River Complex (per ounce of gold sold) 1

Average realized price

$

1,733

$

1,698

Cash costs

866

999

Cash margin

$

867

$

699

All-in Sustaining Costs 1

$

1,311

$

1,342

Average 1 USD → CAD exchange rate

1.3295

1.2647

Cash costs per ounce of gold sold (US$) 1

$

651

$

790

All-in Sustaining Costs (US$) 1

$

986

$

1,061

Financial Data

Mine profit 1

$

16,259

$

10,774

Net income

$

8,092

$

2,859

Net income adjusted 1

$

5,723

$

2,859

Operating cash flow

$

12,581

$

12,423

Free cash flow (outflow) 1

$

(429

)

$

3,216

Per share data

Net income

$

0.06

$

0.02

Adjusted net earnings 1

$

0.04

$

0.02

Operating cash flow

$

0.09

$

0.09

Free cash flow (outflow) 1

$

-

$

0.02

Notes

  1. Refer to the Company’s 2019 First Quarter Management Discussion and Analysis, section entitled “Non-IFRS Performance Measures” for the reconciliation of these non-IFRS measurements to the financial statements..

  2. Totals for tonnage and gold ounces information may not add due to rounding.

Wesdome Gold Mines Ltd.
Condensed Interim Consolidated Statements of Financial Position
(Unaudited, expressed in thousands of Canadian dollars)

As of
March 31,
2019

As of
December 31,
2018

Assets

Current

Cash and cash equivalents

$

27,847

$

27,378

Receivables and prepaids

1,351

548

Sales tax receivable

4,058

2,342

Inventories

11,977

8,302

Total current assets

45,233

38,570

Mining properties, plant and equipment

93,545

89,643

Exploration properties

86,962

81,424

Total assets

$

225,740

$

209,637

Liabilities

Current

Payables and accruals

$

22,175

$

22,526

Income and mining tax payable

1,149

180

Current portion of lease liabilities

5,153

4,552

Total current liabilities

28,477

27,258

Lease liabilities

5,718

5,248

Deferred income and mining tax liabilities

11,375

8,259

Decommissioning provisions

11,868

11,663

Total liabilities

57,438

52,428

Equity

Equity attributable to owners of the Company

Capital stock

169,475

166,387

Contributed surplus

5,631

5,777

Deficit

(6,804

)

(14,955

)

Total equity attributable to owners of the Company

168,302

157,209

Total liabilities and equity

$

225,740

$

209,637

Wesdome Gold Mines Ltd.
Condensed Interim Consolidated Statements of Income and Comprehensive Income
(Unaudited, expressed in thousands of Canadian dollars except for per share amounts)

Three Months Ended

March 31

2019

2018

Revenues

$

32,535

$

26,217

Cost of sales

20,185

18,764

Gross profit

12,350

7,453

Other expenses

Corporate and general

2,008

1,077

Share-based payments

1,099

867

Kiena care and maintenance

-

456

Write-off of mining equipment

-

281

3,107

2,681

Operating income

9,243

4,772

Quebec exploration credits refund

2,867

-

Interest on long-term debt

(112

)

(51

)

Accretion of decommissioning provisions

(115

)

(104

)

Interest and other

294

44

Income before mining and income tax

12,177

4,661

Income and mining tax expense

Current

968

481

Deferred

3,117

1,321

4,085

1,802

Net income and total comprehensive income

$

8,092

$

2,859

Net earnings per share

Basic

$

0.06

$

0.02

Diluted

$

0.06

$

0.02

Weighted average number of common shares (000s)

Basic

135,788

134,132

Diluted

139,550

135,148

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

Capital

Contributed

Total

Stock

Surplus

Deficit

Equity

Balance,December 31,2017

$

164,161

$

3,967

$

(29,905

)

$

138,223

Net income for the period ended

March 31, 2018

-

-

2,859

2,859

Exercise of options

220

-

-

220

Value attributed to options exercised

128

(128

)

-

-

Value attributed to options expired

-

(33

)

33

-

Share based payments

-

867

-

867

Balance, March 31, 2018

$

164,509

$

4,673

$

(27,013

)

$

142,169

Balance,December 31,2018

$

166,387

$

5,777

$

(14,955

)

$

157,209

Net income for the period ended

March 31, 2019

-

-

8,092

8,092

Exercise of options

1,902

-

-

1,902

Value attributed to options exercised

933

(933

)

-

-

Value attributed to options expired

-

(59

)

59

-

Share-based payments

-

1,099

-

1,099

Value attributed to RSU exercised

253

(253

)

-

-

Balance, March 31, 2019

$

169,475

$

5,631

$

(6,804

)

$

168,302

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

Three Months Ended

March 31

2019

2018

Operating activities

Net income

$

8,092

$

2,859

Depletion and depreciation

3,909

3,321

Share based payments

1,099

867

Accretion of decommission provisions

115

104

Deferred income and mining tax expense

3,117

1,321

Interest on long-term debt

112

51

Write-off of mining equipment

-

281

16,444

8,804

Net changes in non-cash working capital

(3,863

)

3,619

Net cash from operating activities

12,581

12,423

Financing activities

Exercise of options

1,902

220

Payments of lease liabilities

(1,255

)

(659

)

Interest paid

(112

)

(51

)

Net cash from (used in) provided by financing activities

535

(490

)

Investing activities

Additions to mining properties

(6,217

)

(3,556

)

Additions to exploration properties

(5,538

)

(4,992

)

Net changes in non-cash working capital

(892

)

983

Net cash used in investing activities

(12,647

)

(7,565

)

Increase in cash and cash equivalents

469

4,368

Cash and cash equivalents, beginning of period

27,378

22,092

Cash and cash equivalents, end of period

$

27,847

$

26,460

Cash and cash equivalents consist of:

Cash

$

17,847

$

17,460

Term deposits

10,000

9,000

$

27,847

$

26,460

ABOUT WESDOME
Wesdome Gold Mines has had over 30 years of continuous gold mining operations in Canada. The Company is 100% Canadian focused with a pipeline of projects in various stages of development. The Company’s strategy is to build Canada’s next intermediate gold producer, producing 200,000+ ounces from two mines in Ontario and Quebec. The Eagle River Complex in Wawa, Ontario is currently producing gold from two mines, the Eagle River Underground Mine and the Mishi Open pit, from a central mill. Wesdome is actively exploring its brownfields asset, the Kiena Complex in Val d’Or, Quebec. The Kiena Complex is a fully permitted former mine with a 930-metre shaft and 2,000 tonne-per-day mill. The Company has further upside at its Moss Lake gold deposit, located 100 kilometres west of Thunder Bay, Ontario. The Company has approximately 136.4 million shares issued and outstanding and trades on the Toronto Stock Exchange under the symbol “WDO”.

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.

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