Wesdome Announces Third Quarter 2023 Financial Results

2023-11-08 / @GlobeNewswire

 

TORONTO, Nov. 08, 2023 (GLOBE NEWSWIRE) -- Wesdome Gold Mines Ltd. (TSX: WDO) (“Wesdome” or the “Company”) today announces third quarter (“Q3 2023”) financial results. Management will host a conference call tomorrow, Thursday November 9, 2023, at 10:00 a.m. Eastern time to discuss the results. Dial-in details for the call can be found near the end of this press release.

Third Quarter 2023 Highlights

  • Payable gold production in the third quarter was 27,760 ounces at cash costs per ounce1 of $1,755 (US$1,308) and all-in sustaining costs (“AISC”) per ounce 1 of $2,711 (US$2,021). Q3 was forecasted as the lightest cash flow quarter of the year due to timing of capital outlays and planned downtime at Eagle River.
  • At Kiena, development of the ramp to the 129-level mining horizon tracked ahead of schedule. Delineation drilling to date has also confirmed the continuity, thickness, and high grade of the A zone at depth, as per the reserve block model.
  • Cash margins1 were $22.2 million, and free cash flow1 was $10.7 million. During the quarter Wesdome received a $12.5 million tax refund.
  • Quarterly net loss of $3.2 million ($0.02) per share in the third quarter of 2023 and adjusted net loss1 of $2.6 million  ($0.02) per share. Positive operating cash flow of $45.1 million ($0.30 per share).
  • Available liquidity of $142.6 million, including $31.6 million in cash and $111 million of undrawn availability under the Company’s revolving credit facility.
  • Reaffirming consolidated 2023 production guidance of 110,000 to 130,000 ounces as well as cost guidance for cash costs, all-in sustaining costs and capital expenditures.

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

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. 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.

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.

We are expecting a strong finish to this year and based on our year-to-date performance, we are well positioned to deliver on the mid-point of production and cost guidance. Looking ahead, preliminary plans for 2024 continue to point to a  production and operating cash flow rebound which will support total capital investment levels similar to this year.”

Financial and Operating Highlights

A summary of the Company’s consolidated financial and operating results for the nine months ended September 30, 2023 are presented below:

 (in thousands of Canadian dollars, unless otherwise indicated)Q3 2023Q3 2022YTD 2023YTD 2022
 Financial Results    
     
Revenues69,696 61,823 230,952 190,448 
Cost of sales71,450 56,294 216,916 152,374 
Cash margin122,233 16,993 85,393 69,208 
Net loss attributable to shareholders(3,248)(3,899)(8,607)(11,179)
Net income ($/sh)(0.02)(0.03)(0.06)(0.08)
Adjusted attributable net loss1(2,573)(3,899)(4,330)(2,329)
Adjusted attributable net loss1 ($/sh)(0.02)(0.03)(0.03)(0.02)
Operating cash flow45,076 12,945 64,175 54,939 
Operating cash flow ($/sh)0.30 0.09 0.44 0.39 
Cash flow from financing activities(2,370)21,961 7,367 20,128 
Cash flow from investing activities(33,191)(33,681)(73,145)107,090 
Free cash flow110,672 (23,193)(14,204)(58,565)
Free cash flow1 ($/sh)0.07 (0.16)(0.10)(0.41)
     
Operating Results    
Gold produced (oz)27,760 22,883 87,119 75,734 
Gold sold (oz)27,000 27,500 89,000 81,500 
     
Average realized gold price ($/oz)2,579 2,246 2,592 2,334 
Average realized gold price (US$/oz)1,923 1,720 1,926 1,819 
     
Cash costs1 ($/oz)1,755 1,628 1,633 1,485 
All-in sustaining costs1 ($/oz)2,711 2,217 2,293 1,975 
All-in sustaining costs1 (US$/oz)2,021 1,698 1,704 1,539 
     
Financial Position    
Cash and cash equivalents31,582 24,741 31,582 24,741 
Working capital(18,839)(35,457)(18,839)(35,457)
Total assets605,364 578,762 605,364 578,762 
Current liabilities87,577 93,733 87,577 93,733 
Total liabilities180,981 190,542 180,981 190.542 
     

Notes:

  1. Refer to the section entitled “Non-IFRS Performance Measures” for the reconciliation of these non-IFRS measurements to the financial statements

Eagle River, Ontario

 Q3 2023Q3 2022YTD 2023YTD 2022
     
Ore milled (tonnes)    
Eagle River55,15352,247167,959165,428
Mishi-3,5956,15023,153
Total Ore Milled55,15355,842174,109188,581
     
Head grade (grams per tonne, “g/t”)    
Eagle River11.910.712.110.6
Mishi-2.82.33.2
Total head grade11.910.212.19.7
     
Recoveries (%)    
Eagle River96.796.696.796.6
Mishi-83.072.583.5
Total Gold recovery96.796.396.796.0
     
Gold production (ounces)    
Eagle River20,39117,40563,39554,495
Mishi-2703322,005
Total Gold Production20,39117,67563,72756,500
     
Production sold (ounces)19,60018,80066,10057,600
     
Production costs per tonne milled1503475485412
     
Cash margin1 ($/oz)1,1347741,202966
Cash costs1 ($/oz)1,4421,4731,3801,377
All-in sustaining costs1 ($/oz)2,4672,2592,0391,989
     

For the three months ended September 30, 2023 and 2022, production increased by 15% from Q3 2022 to 20,391 ounces due to a 16% increase in head grade offset by a 1% decrease in throughput; higher grades and lower tonnes processed are due in part to the Mishi Pit stockpile being fully depleted in Q1 2023, therefore not contributing to 2023 Q3 production. In 2022, Mishi had contributed 3,595 tonnes grading 2.82g/t to production. Higher grades were also achieved from the underground mine as a result of strong performances in the Falcon and 300 zones, in line with expectations. The mill performed its annual two weeks maintenance in July.

Q3 2023 cash cost of $1,442 (US$1,075) per ounce of gold sold1 decreased by 2% or $31 per ounce from Q3 2022 primarily due to a 4% increase in ounces sold.

Q3 2023 AISC of $2,467 (US$1,839) per ounce of gold sold1 increased by 9% or $208 per ounce from Q3 2022 due to higher cash costs and site infrastructure spending; partially offset by a 4% increase in ounces sold.

Generated $2.1 million in cash margin net AISC1 in Q3 2023 compared to $(0.2) million in Q3 2022 primarily due to the 4% increase in ounces sold and the higher average Canadian dollar gold price; partially offset by the 2% increase in overall aggregate site operating costs and the 50% increase in site infrastructure spending.

Kiena, Quebec

 Q3 2023Q3 2022YTD 2023YTD 2022
     
Ore milled (tonnes)47,35116,112141,49963,752
     
Head grade (grams per tonne, “g/t”)4.910.25.29.5
     
Recoveries (%)98.498.598.098.4
     
Gold production (ounces)7,3695,20823,39219,234
     
Production sold (ounces)7,4008,70022,90023,900
     
Production costs per tonne milled1402869419643
     
Cash margin1 ($/oz)0280258568
Cash costs1 ($/oz)2,5851,9632,3651,746
All-in sustaining costs1 ($/oz)3,3592,1263,0271,941
     

For the three months ended September 30, 2023 and 2022, production increased by 41% from Q3 2022 to 7,369 ounces due to a 194% increase in throughput offset by a 52% decrease in head grade; the lower grades achieved so far in 2023 are the result of mining lower grade ore from the Martin and S50 zones to supplement limited production from Kiena Deep. Positive reconciliation continued into Q3, with the newly commissioned A2 zone (satellite zone running parallel to A Zone on levels 118, 116 and 114 and located entirely in the footwall schists) being a significant contributor. Development of the ramp to the 129 level mining horizon continued to track ahead of schedule during Q3 2023, positioning the mine to ramp up gold production in 2024. Delineation drilling into the 129 level horizon was initiated during the quarter from the ramp, and preliminary results confirm the continuity, thickness and high grade of the A zone at depth, as per the reserve block model.

Q3 2023 cash cost of $2,585 (US$1,927) per ounce of gold sold1 increased by 32% or $622 per ounce from Q3 2022 primarily due to a 15% decrease in ounces sold and 12% increase in aggregate mine operating costs.

Q3 2023 AISC of $3,359 (US$2,504) per ounce of gold1 sold increased by 58% or $1,233 per ounce as compared to Q3 2022 due to the increased cash costs and the sustaining mine exploration and development costs, mine capital equipment costs and a 15% decrease in ounces sold. The costs remain consistent with the plan and will decrease as the mine increases gold production levels in 2024.

Q3 2023 cash margin net AISC1 of negative $5.7 million decreased by $6.7 million compared to $1.0 million in Q3 2022 due to the increased overall aggregate cash cost, the inclusion of sustaining development and exploration costs and a 15% decrease in ounces sold; offset partially by the higher average Canadian dollar gold price.

Exploration Updates

Eagle River

Recent exploration drilling within the mine diorite, has extended the 300 East Zone to the 1,600 m-level and remains open down plunge.

The drilling has confirmed the continuity of the mineralization at depth, thus suggesting that many other similar parallel zones, such as 808, 811, 818, 711 and 7 East, have this same potential to continue at depth and will be tested with ongoing drilling.

Initial surface and underground exploration drilling, commenced in July 2023 to test the volcanic rocks west of the mine diorite, has returned high grades within 200 metres from surface, while the first underground hole 750 metres down plunge has also intersected similar mineralization. Highlights of the initial surface drilling of the volcanic rocks returned 64.4 g/t Au over 0.4 m core length. These intersections suggest that a newly defined shoot could be located in this area.

Kiena

Underground exploration drilling has been focused on better delineating Kiena Deep A zones in advance of the planned mining. Limited exploration has been completed to extend and better define the deeper portion of the Kiena Deep zones. This drilling will be increased in the future once more optimal drill platforms are established.

Recent surface drilling at the Presqu’ile zone has confirmed not only the continuity of the gold mineralization and the validity of the geologic model, but also the potential for down plunge extensions towards the east. Highlights of recent in-fill drilling include 32.5 g/t over 3.0 m core length. The drilling will be used to convert resources into reserves at year end.

The excavation of an exploration ramp from surface to access the near-surface Presqu’ile Zone will be underway in Q4 2023 now that the necessary permits have been secured.

2023 Outlook

 2023 GuidanceYTD 2023 Performance
Gold production  
Eagle River80,000 – 90,000 ounces63,395 ounces
Mishi-332 ounces
Kiena30,000 – 40,000 ounces23,392 ounces
Total110,000 – 130,000 ounces87,119 ounces
Head grade (g/t Au)  
Eagle River11.5 – 12.512.1
Mishi-2.3
Kiena3.7 – 4.75.2
Cash cost per ounce 1$1,500 - $1,670
(US$1,150 – US$1,290)
$1,633
(US$1,214)
AlSC per ounce 1$2,100 - $2,340
(US$1,620 – US$1,800)
$2,293
(US$1,704)

1 Operating cost per ounce sold and all-in sustaining cost per ounce are non-IFRS measures, please reference the Company’s interim management discussion and analysis for the period ended September 30, 2023

Third Quarter 2023 Conference Call and Webcast

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. A conference call and webcast to discuss these results will be held on November 9, at 10:00 am ET.  

Technical Disclosure

The technical content of this release has been compiled, reviewed and approved by Frédéric Langevin, Eng, Chief Operating Officer of the Company 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.

About Wesdome
Wesdome is a Canadian focused gold producer with two high grade underground assets, the Eagle River mine in Ontario and the recently commissioned 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. Wesdome 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:

Lindsay Carpenter Dunlop
VP Investor Relations
416-360-3743 ext. 2025
invest@wesdome.com

To receive Wesdome’s news releases by email, please register using the Wesdome website at www.wesdome.com

Cautionary Note Regarding Forward-Looking Information and Statements
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.

FINANCIAL AND OPERTAIONAL RESULTS        
          
  Three Months EndedSix Months Ended 
  June 30, June 30, 
  2023  2022  2023  2022  
Operating data         
Milling (tonnes)         
Eagle River 64,672  59,964  112,805  113,181  
Mishi 0  7,685  6,150  19,558  
Kiena 51,824  26,478  94,148  47,640  
Throughput 2 116,496  94,127  213,103  180,379  
Head grades (g/t)         
Eagle River 11.4  9.6  12.3  10.6  
Mishi 0.0  2.8  2.3  3.3  
Kiena 5.0  10.6  5.4  9.3  
Recovery (%)         
Eagle River 96.5  95.6  96.7  96.6  
Mishi 0.0  81.2  72.5  83.6  
Kiena 97.7  98.5  97.8  98.3  
          
Production (ounces)         
Eagle River 22,845  17,756  43,004  37,090  
Mishi 0  570  332  1,735  
Kiena 8,147  8,914  16,024  14,026  
Total gold produced 2 30,992  27,240  59,360  52,851  
Total gold sales (ounces) 32,000  26,000  62,000  54,000  
          
Eagle River Complex (per ounce of gold sold) 1       
Average realized price$2,625 $2,382 $2,584 $2,389  
Cash costs 1,526  1,395  1,353  1,330  
Cash margin$1,099 $987 $1,231 $1,059  
All-in Sustaining Costs 1$2,019 $1,940 $1,859 $1,858  
          
Mine operating costs/tonne milled 1$503 $387 $474 $386  
          
Average 1 USD → CAD exchange rate 1.3428  1.2768  1.3477  1.2715  
          
Cash costs per ounce of gold sold (US$) 1$1,136 $1,093 $1,004 $1,046  
All-in Sustaining Costs (US$) 1$1,504 $1,519 $1,379 $1,461  
          
Kiena Mine (per ounce of gold sold) 1         
Average realized price$2,676 $2,372 $2,642 $2,355  
Cash costs 3, 5 2,257  2,018  2,261  1,622  
Cash margin$419 $354 $381 $733  
All-in Sustaining Costs 1$2,755 $2,284 $2,868 $1,834  
          
Mine operating costs/tonne milled 1$379 $557 $430 $567  
          
Average 1 USD → CAD exchange rate 1.3428  1.2768  1.3477  1.2715  
          
Cash costs per ounce of gold sold (US$) 1$1,681 $1,581 $1,678 $1,276  
All-in Sustaining Costs (US$) 1$2,052 $1,789 $2,128 $1,442  
          
Financial Data         
Cash margin 1$28,722 $21,873 $63,130 $52,215  
Net loss$(5,014)$(14,331)$(5,359)$(7,280) 
Net income (loss) adjusted 1$(5,014)$(5,481)$(1,757)$1,570  
Earnings before interest, taxes, depreciation and amortization 1$22,020 $8,844 $48,144 $29,494  
Operating cash flow$13,979 $12,101 $19,099 $41,994  
Free cash outflow 1$(5,279)$(28,576)$(24,876)$(35,372) 
Per share data         
Net income$(0.03)$(0.10)$(0.04)$(0.05) 
Adjusted net income 1$(0.03)$(0.04)$(0.01)$0.01  
Operating cash flow 1$0.09 $0.08 $0.13 $0.30  
Free cash flow 1$(0.04)$(0.20)$(0.17)$(0.25) 
          



Wesdome Gold Mines Ltd. 
Condensed Interim Statements of Financial Position 
(Unaudited, expressed in thousands of Canadian dollars) 
      
   As at September 30, 2023 As at December 31, 2022 
Assets     
Current     
Cash $ 31,582  $33,185  
Receivables and prepaids  9,962   12,755  
Inventories  25,636   22,119  
Income and mining tax receivable  -   6,494  
Share consideration receivable  1,558   2,994  
Total current assets  68,738   77,547  
      
Restricted cash  2,718   1,176  
Deferred financing costs  1,014   1,411  
Mining properties, plant and equipment  525,649   525,860  
Exploration properties  1,339   1,139  
Marketable securities  480   960  
Share consideration receivable  1,425   2,576  
Investment in associate  4,001   8,458  
Total assets $ 605,364  $619,127  
      
Liabilities      
Current     
Payables and accruals $ 43,056  $54,734  
Borrowings  38,766   54,697  
Income and mining tax payable  2,317   -  
Current portion of lease liabilities  3,438   6,160  
Total current liabilities  87,577   115,591  
      
Lease liabilities  1,453   3,126  
Deferred income and mining tax liabilities  72,670   82,950  
Decommissioning provisions  19,281   18,941  
Total liabilities  180,981   220,608  
      
Equity     
Equity attributable to owners of the Company     
Capital stock  237,922   205,361  
Contributed surplus  9,749   7,359  
Retained earnings  178,332   186,939  
Accumulated other comprehensive loss  (1,620)  (1,140) 
Total equity attributable to owners of the Company  424,383   398,519  
Total liabilities and equity $ 605,364  $619,127  
      



Wesdome Gold Mines Ltd.
Condensed Interim Statements of Loss and Comprehensive Loss
(Unaudited, expressed in thousands of Canadian dollars except for per share amounts)
        
 Three Months Ended September 30, Nine Months Ended September 30,
  2023   2022   2023   2022 
        
        
Revenues$ 69,696  $61,823  $ 230,952  $190,448 
Cost of sales (71,450)  (56,294)  (216,916)  (152,374)
Gross profit (1,754)  5,529   14,036   38,074 
        
Other expenses       
Corporate and general 4,707   2,918   12,376   9,514 
Stock-based compensation 328   823   3,653   2,453 
Retirement costs -   -   1,190   - 
Exploration and evaluation 2,935   5,273   5,162   12,442 
(Gain) loss on disposal of mining equipment (5)  74   312   62 
Total other expenses 7,965   9,088   22,693   24,471 
        
Operating (loss) income  (9,719)  (3,559)  (8,657)  13,603 
        
Impairment of investment in associate (900)  -   (3,600)  (11,800)
Interest expense (1,114)  (588)  (3,598)  (1,167)
Fair value adjustment on share consideration receivable (1,010)  (1,552)  (2,587)  (7,391)
Share of (loss) income of associate (328)  155   (994)  (388)
Accretion of decommissioning provisions (269)  (239)  (759)  (618)
(Loss) gain on dilution of ownership (91)  (35)  137   (669)
Other income (expense) 363   (1,420)  508   (1,363)
Loss before income and mining taxes (13,068)  (7,238)  (19,550)  (9,793)
        
Income and mining tax expense (recovery)       
Current (4,202)  325   (662)  4,601 
Deferred (5,618)  (3,664)  (10,281)  (3,215)
Total income and mining tax expense (recovery) (9,820)  (3,339)  (10,943)  1,386 
        
Net loss$ (3,248) $(3,899) $ (8,607) $(11,179)
        
Other comprehensive loss       
Change in fair value of marketable securities (120)  (360)  (480)  (1,260)
Total comprehensive loss$ (3,368) $(4,259) $ (9,087) $(12,439)
        
Loss per share       
Basic$ (0.02) $(0.03) $ (0.06) $(0.08)
Diluted$ (0.02) $(0.03) $ (0.06) $(0.08)
        
Weighted average number of common       
  shares (000s)       
Basic 148,952   142,487   147,155   142,260 
Diluted 148,952   142,487   147,155   142,260 
        



Wesdome Gold Mines Ltd.
Condensed Interim Statements of Changes in Equity
(Unaudited, expressed in thousands of Canadian dollars)
          
       Accumulated  
       Other  
 Capital Contributed Retained ComprehensiveTotal
 Stock Surplus Earnings Loss Equity
          
          
Balance, December 31, 2021$187,911  $5,859  $201,645  $(240) $395,175 
Net loss for the period ended         
September 30, 2022 -   -   (11,179)  -   (11,179)
Other comprehensive loss -   -   -   (1,260)  (1,260)
Exercise of options 3,031   -   -   -   3,031 
Value attributed to RSUs exercised 638   (638)  -   -   - 
Stock-based compensation -   2,453   -   -   2,453 
Balance, September 30, 2022$192,753  $6,501  $190,466  $(1,500) $388,220 
          
          
Balance, December 31, 2022$205,361  $7,359  $186,939  $(1,140) $398,519 
Net loss for the period ended         
September 30, 2023 -   -   (8,607)  -   (8,607)
At-the-Market offering:         
Common shares issued for cash 31,988   -   -   -   31,988 
Agents' fees and issuance costs (1,366)  -   -   -   (1,366)
Other comprehensive loss -   -   -   (480)  (480)
Exercise of options 676   -   -   -   676 
Value attributed to options exercised 276   (276)  -   -   - 
Value attributed to RSUs exercised 616   (616)  -   -   - 
Value attributed to PSUs exercised 371   (371)  -   -   - 
Stock-based compensation -   3,653   -   -   3,653 
Balance, September 30, 2023$ 237,922  $ 9,749  $ 178,332  $ (1,620) $ 424,383 



Wesdome Gold Mines Ltd.
Condensed Interim Statements of Cash Flows
(Unaudited, expressed in thousands of Canadian dollars)
          
   Three Months Ended September 30, Nine Months Ended September 30,
    2023   2022   2023   2022 
          
          
Operating Activities         
Net loss  $ (3,248) $(3,899) $ (8,607) $(11,179)
Depreciation and depletion   23,987   11,464   71,327   31,134 
Stock-based compensation   328   823   3,653   2,453 
Accretion of decommissioning provisions   269   239   759   618 
Deferred income and mining tax recovery   (5,618)  (3,664)  (10,281)  (3,215)
Amortization of deferred financing cost   133   99   397   268 
Interest expense   1,114   588   3,598   1,167 
(Gain) loss on disposal of mining equipment   (5)  74   312   62 
Impairment of investment in associate   900   -   3,600   11,800 
Fair value adjustment on share consideration receivable   1,010   1,552   2,587   7,391 
Share of loss (income) of associate   328   (155)  994   388 
Loss (gain) on dilution of ownership   91   35   (137)  669 
Foreign exchange loss (gain) on borrowings   4   1,569   (3)  1,460 
Net changes in non-cash working capital   13,275   6,978   (13,498)  25,884 
Mining and income tax refund (paid)   12,508   (2,758)  9,474   (13,961)
Net cash from operating activities   45,076   12,945   64,175   54,939 
          
Financing Activities         
Proceeds from At-the-Market offering   -   -   31,988   - 
Agents' fees and issuance costs   (35)  -   (1,366)  - 
Proceeds from revolving credit facility   10,000   25,928   10,000   40,884 
Repayment of revolving credit facility   (10,013)  -   (25,931)  (14,810)
Exercise of options   -   -   676   3,031 
Repayment of lease liabilities   (1,208)  (2,300)  (4,402)  (6,731)
Deferred financing costs   -   (1,079)  -   (1,079)
Interest paid   (1,114)  (588)  (3,598)  (1,167)
Net cash (used in) from financing activities   (2,370)  21,961   7,367   20,128 
          
Investing Activities         
Additions to mining properties   (31,654)  (11,058)  (72,235)  (24,380)
Additions to mines under development   -   (22,780)  -   (82,393)
Purchase of exploration property   -   -   (200)  - 
Funds held against standby letter of credit   (1,542)  (25)  (1,542)  (519)
Proceeds on disposal of mining equipment   5   182   832   202 
Net cash used in investing activities   (33,191)  (33,681)  (73,145)  (107,090)
          
Increase (decrease) in cash   9,515   1,225   (1,603)  (32,023)
Cash - beginning of period   22,067   23,516   33,185   56,764 
Cash - end of period  $ 31,582  $24,741  $ 31,582  $24,741 
          

Cautionary Note Regarding Non-GAAP Financial Measures

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 amountsQ3 2023Q3 2022YTD 2023YTD 2022
     
Revenues per financial statements69,696  61,823 230,952  190,448 
Silver revenue from mining operations(77)(54)(233)(203)
Gold revenue from mining operations (a)69,619  61,769 230,719  190,245 
     
Ounces of gold sold (b)27,000  27,500 89,000  81,500 
     
Average realized price gold sold CAD (c) = (a) ÷ (b)2,579  2,246 2,592  2,334 
     
Average 1 USD → CAD exchange rate (d)1.3414 1.3056 1.3456  1.2828 
     
Average realized price gold sold USD (c) ÷ (d)1,923  1,720 1,926  1,819 
     

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 amountsQ3 2023Q3 2022YTD 2023YTD 2022
     
Cost of sales per financial statements71,450  56,294 216,916  152,374 
Depletion and depreciation(23,987)(11,464)(71,327)(31,134)
Silver revenue from mining operations(77)(54)(233)(203)
Cash costs (a)47,386  44,776 145,356  121,037 
     
Ounces of gold sold (b)27,000  27,500 89,000  81,500 
     
Cash costs per ounce of gold sold (c) = (a) ÷ (b)1,755  1,628 1,633  1,485 
     
Average 1 USD → CAD exchange rate (d)1.3414  1.3056 1.3456  1.2828 
     
Cash costs per ounce of gold sold USD (c) ÷ (d)1,308  1,247 1,214  1,158 
     

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 amountsQ3 2023Q3 2022YTD 2023YTD 2022
     
Cost of sales per financial statements71,450  56,294 216,916  152,374 
Depletion and depreciation(23,987)(11,464)(71,327)(31,134)
Royalties(1,029)(766)(3,199)(2,491)
Inventory adjustments384  (3,518)382  35 
Mining and processing costs, before inventory adjustments (a)46,818  40,546 142,772  118,784 
     
Ore milled (tonnes) (b)102,505  71,954 315,608  252,333 
     
Production costs per tonne milled (a) ÷ (b)457  563 452  471 
     

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 amountsQ3 2023Q3 2022YTD 2023YTD 2022
     
Gold revenue from mining operations (per above)69,61961,769230,719190,245
Cash costs (per above)47,38644,776145,356121,037
Cash margin22,23316,99385,36369,208
     
Per ounce of gold sold (Canadian dollar):    
     
Average realized price (a)2,5792,2462,5922,334
Cash costs (b)1,7551,6281,6331,485
Cash margin (a) – (b)824618959849
     

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 amountsQ3 2023Q3 2022YTD 2023YTD 2022
     
Cost of sales, per financial statements71,450  56,294 216,916  152,374 
Depletion and depreciation(23,987)(11,464)(71,327)(31,134)
Silver revenue from mining operations(77)(54)(233)(203)
Cash costs47,386  44,776 145,356  121,037 
Sustaining mine exploration and development9,683  5,134 27,191  15,686 
Sustaining mine capital equipment10,360  2,232 15,158  4,298 
Tailings management facility15  3,692 29  3,897 
Corporate and general4,707  2,918 12,376  9,514 
Less: Corporate development(161)(87)(402)(224)
Payment of lease liabilities1,208  2,300 4,402  6,731 
All-in Sustaining costs (AISC) (a)73,198  60,965 204,110  160,939 
     
Ounces of gold sold (b)27,000  27,500 89,000  81,500 
     
AISC (c) = (a) ÷ (b)2,711  2,217 2,293  1,975 
     
Average 1 USD → CAD exchange rate (d)1.3414  1.3056 1.3456  1.2828 
     
AISC USD (c) ÷ (d)2,021  1,698 1,704  1,539 
     

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 amountsQ3 2023Q3 2022YTD 2023YTD 2022
     
Net cash provided by operating activities per financial statements (c)45,076 12,945 64,175 54,939 
Sustaining mine exploration and development(9,683)(5,134)(27,191)(15,686)
Sustaining mine capital equipment(10,360)(2,232)(15,158)(4,298)
Tailings management facility(15)(3,692)(29)(3,897)
Ventilation project- - - (499)
Capitalized development, exploration and evaluation expenditures- (5,550)- (21,644)
Mines under development capital equipment- (17,230)- (60,749)
Growth mine exploration and development(4,111)- (12,787)- 
Growth mine capital equipment(7,485)- (17,070)- 
Purchase of mineral properties- - (200)- 
Surface exploration at Eagle River- - - - 
Funds held against standby letters of credit(1,542)- (1,542)- 
Payment of lease liabilities(1,208)(2,300)(4,402)(6,731)
Free cash flows (a)10,672 (23,193)(14,204)(58,565)
     
Weighted number of shares (000s) (b)148,952 142,487 147,155 142,260 
     
Per Share data    
Operating cash flow (c) ÷ (b)0.30 0.09 0.44 0.39 
Free cash flow (a) ÷ (b)0.07 (0.16)(0.10)(0.41)
     

Net income (adjusted) and Adjusted net income 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 amountsQ3 2023Q3 2022YTD 2023YTD 2022
     
Net (loss) income per financial statements(3,248)(3,899)(8,607)(11,179)
     
Adjustments for:    
Impairment of investment in associate900 - 3,600 11,800 
Retirement costs- - 2,102 - 
Total adjustments900 - 5,702 11,800 
Related income tax effect(225)- (1,425)(2,950)
 675 - 4,277 8,850 
Net (loss) income adjusted (a)(2,573)(3,899)(4,330)(2,329)
     
Weighted number of shares (000s) (b)148,952 142,487 147,155 142,260 
     
Per Share data    
Net adjusted (loss) income (a) ÷ (b)(0.02)(0.03)(0.03)(0.02)
     


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