WDO:TSX
TORONTO, Nov. 6, 2014 /CNW/ - Wesdome Gold Mines Ltd.
(TSX: WDO) today announces its financial and operational results
for the third quarter and first nine months of 2014. All figures
are in Canadian dollars unless stated otherwise.
Mr. Rolly Uloth, President and
CEO commented, "I am pleased to report that the third quarter is
the fourth consecutive quarter the Company has generated positive
free cash flow, building our cash position to $10.7 million from $8.3
million in the previous quarter. Some profits were used to
be active on our Normal Course Issuer Bid, where during the quarter
203,500 shares were bought back and retired. Over the last year,
the Company has been expanding its milling capacity and
reliability, and the benefits of these programs are beginning to
take effect. During the third quarter, throughput increased by 54%
and production based cash costs on a per tonne basis decreased by
33%. A profit growth approach to production while managing unit
costs remains a priority as we continue to demonstrate financial
strength. Guidance for 2014 was revised upwards to 52,000 ounces
last quarter, which we are on track to meet or exceed. Initial
guidance for 2015 is 55,000 ounces, with the increase coming
primarily from the low-cost Mishi open pit. Current mill capacity
supports this increased production rate."
HIGHLIGHTS:
- During the third quarter, the Company generated CAD$3.4 million in free cash flow, or
$0.03 per share during the third
quarter in 2014. Free cash flow for the first nine months of the
year totalled CAD$7.6 million or
$0.07 per share.
- Revenue generated for the quarter totalled CAD$22.3 million, cash flow from operations
totalled CAD$7.9 million, and net
income totalled CAD$2.2 million or
$0.02 per share. For the first nine
months of the year revenue, cash flow from operations and net
income were CAD$61.5 million,
CAD$19.7 million, and CAD$9.3 million or $0.09 per share, respectively.
- During the third quarter 12,456 ounces of gold were produced at
a recovered grade of 10.1 grams per tonne at Eagle River and 2.4 grams per tonne at
Mishi. Overall, the Eagle River Complex produced 45% more
gold in the current quarter over the same period in 2013.
Total year to date production is 39,776 ounces at a recovered grade
of 12.0 grams per tonne at the Eagle River mine. The Company
is on track to meet or exceed its upward revised guidance of 52,000
ounces.
- Sales for the quarter were 15,878 ounces at an average price of
CAD$1,407 (USD$1,292).
- Total production cash costs per ounce for the third quarter
decreased 19% to average CAD$975
(USD$895) per ounce, compared to
CAD$1,208 (USD$1,164) during the same period in 2013.
Production cash costs per ounce were slighter higher in the third
quarter than the second quarter (CAD$859, USD$788)
due to grade sequencing, and one-time, non-recurring expenditures
related to improving mill performance.
- Total all-in sustaining costs (which includes total cash costs,
exploration, development and sustaining capital, project capital,
corporate G & A and corporate taxes) on ounces produced were
CAD$1,389 per ounce (USD$1,275), compared to CAD$1,242 per ounce (USD$1,139) in the previous quarter due to lower
grades. This is a significant 15% improvement over all-in
sustaining cost in the same period last year of CAD$1,631 per ounce (USD$1,576). All-in sustaining costs for the
third quarter on ounces sold were CAD$1,292 per ounce (USD$1,185).
- Total all-in sustaining costs on a per tonne basis were reduced
to CAD$323 (USD$297) per tonne in the third quarter from
$CAD486 (USD$446) per tonne in the
second quarter due to higher throughput.
- Average daily throughput rates increased 53% in the third
quarter to 583 tonnes per day, compared to 382 tonnes per day in
the second quarter. The Company exited the third quarter at a
rate of 700 tonnes per day and expects to exit the fourth quarter
at a rate of 1,000 tonnes per day.
- The Company was active with its Normal Course Issuer Bid during
the third quarter, buying back 203,500 shares at an average price
of $0.78 and retiring them.
Current shares outstanding stand at 110,881,591.
- Exploration programs at the Eagle River Complex continued
throughout the quarter. The Company is aggressively drilling to
delineate and define new parallel zones initially recognized in
2013 at the Eagle River Mine. This drilling demonstrates the
No 7 Zone is opening up at depth (see press release dated
September 15, 2014). To date, this
zone has demonstrated strong continuity, grades and widths over a
200 metre by 100 metre longitudinal area and remains open to the
west and at depth.
- The No 7 Zone is located 200 metres north and parallel to the
main 8 Zone structure. Encouraging results also continue from
the 300 Zone (located 400 metres north and parallel to the main
structure). Results have prompted a decision to access and
develop this zone from a crosscut currently being driven on the 750
metre level. We are currently 170 metres away from the 300
zone.
- Additionally, a crosscut is being driven to the south of the
main structure to examine the continuity and grade of the No Name
Lake Zone. The development of these three parallel structures
has implications to potentially increase significantly our tonnage
per vertical metre, mining flexibility and possibly production
rates in the future.
ABOUT WESDOME
Wesdome Gold Mines Ltd. is in its 28th year of
continuous gold mining operations in Canada that employs a profit growth approach
to operations. The Company is currently producing from its
Eagle River and Mishi gold mines
in Wawa, Ontario, which have
earned consistent free cash flow during times of low gold prices.
Wesdome's corporate goal is to build a profitable, long-life,
sustainable gold mining Company with modest initial capital costs.
This strategy has enabled the Company to acquire strategic property
and infrastructure assets in two politically stable and
historically proven mining camps. Wesdome has significant upside
through ownership of its two other properties, the Kiena Mine
Complex in Val d'Or, Québec and
the Moss Lake gold deposit located 100 kilometres west of
Thunder Bay, Ontario. These
assets are being explored and evaluated to be developed in the
appropriate gold price environment. The Company has approximately
110.8 million shares issued and outstanding and trades on the
Toronto Stock Exchange under the symbol "WDO."
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.
SOURCE Wesdome Gold Mines Ltd.