Wesdome Announces Third Quarter 2023 Financial Results
Third Quarter 2023 Highlights
Wesdome Gold Mines Ltd. (TSX: WDO) (“Wesdome” or the “Company”) has announced its financial results for the third quarter of 2023. Payable gold production for the quarter was 27,760 ounces, with cash costs per ounce of $1,755 (US$1,308) and all-in sustaining costs per ounce of $2,711 (US$2,021). The quarter was projected to have the lightest cash flow due to capital outlays and planned downtime at the Eagle River mine. Development of the ramp to the 129-level mining horizon at the Kiena mine is ahead of schedule, and drilling has confirmed the continuity and high grade of the A zone at depth. Cash margins were $22.2 million, and free cash flow was $10.7 million. The Company received a $12.5 million tax refund during the quarter. Wesdome reaffirmed its production guidance for 2023 and its cost guidance for cash costs, all-in sustaining costs, and capital expenditures.
President and CEO's Comments
Anthea Bath, President and CEO of Wesdome, commented on the company's progress and future plans. She mentioned the solid progress made in advancing development and de-risking strategic plans during the recent quarter. The Eagle River mine reported consistent results after completing mill and infrastructure upgrades during the annual shutdown. The Kiena mine's ramp development is ahead of schedule, and access to the 129-meter level was achieved in November. Bath also highlighted efforts to de-risk the 2024 mine plans and ongoing exploration and development activities. She mentioned the launch of an asset optimization initiative at the Eagle River mine to optimize the unit cost structure and investigate alternative mining and material handling methods. Bath expressed confidence in a strong finish to the year and a rebound in production and operating cash flow in 2024.
Financial and Operating Highlights
The Company reported revenues of $69.7 million for the third quarter of 2023, with a net loss of $3.2 million ($0.02 per share). Adjusted net loss was $2.6 million ($0.02 per share). Operating cash flow was $45.1 million ($0.30 per share), and free cash flow was $10.7 million ($0.07 per share). Gold production for the quarter was 27,760 ounces, with average realized gold prices of $2,579 per ounce. Cash costs per ounce were $1,755, and all-in sustaining costs per ounce were $2,711.
Exploration Updates
The Company provided updates on exploration activities at its Eagle River and Kiena mines. Recent drilling at the Eagle River mine extended the 300 East Zone to the 1,600-meter level and confirmed the continuity of mineralization at depth. Surface and underground exploration drilling at Kiena showed promising results, with high-grade intersections near the surface and down-plunge extensions of the Presqu’ile zone. The Company also announced the start of an exploration ramp at the Presqu’Île zone.
2023 Outlook
Wesdome reaffirmed its production guidance for 2023, with an expected production range of 110,000 to 130,000 ounces of gold. The Company also provided cost guidance for cash costs and all-in sustaining costs, as well as capital expenditures. It expects a strong finish to the year and a rebound in production and operating cash flow in 2024.
Conference Call and Webcast
The Company will host a conference call on November 9, 2023, at 10:00 a.m. Eastern time to discuss the third quarter financial results. The financial statements and management discussion and analysis are available on the Company's website.
Impact of Wesdome's Q3 2023 Financial Results on New Businesses
Wesdome Gold Mines Ltd.'s Q3 2023 financial results provide valuable insights for new businesses, particularly in the mining sector. Despite the quarter being projected to have the lightest cash flow due to capital outlays and planned downtime, the company managed to maintain a solid cash margin and free cash flow.
Strategic Planning and Risk Management
Wesdome's strategic planning and risk management, as highlighted by CEO Anthea Bath, can serve as a blueprint for new businesses. The company's efforts in advancing development, de-risking strategic plans, and optimizing the unit cost structure demonstrate the importance of proactive planning and operational efficiency.
Exploration and Production Outlook
Wesdome's exploration activities and production outlook underscore the importance of continual investment in growth opportunities. The company's exploration updates and reaffirmed production guidance for 2023 offer a promising outlook. New businesses can learn from Wesdome's approach to balance operational costs while investing in exploration and development activities.
In conclusion, Wesdome's Q3 2023 financial results and strategic initiatives offer valuable lessons for new businesses in managing operational costs, strategic planning, risk management, and investing in growth opportunities.
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