Q2 2023 Wesdome Gold Mines Ltd Earnings Call

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Yeah.

Good morning, welcome to watch them Gold mines, Q2, 2020 financial results Conference call I will now turn the call over to Heather Laxton.

Keith governance officer to begin today.

Great. Thanks, operator, and good morning, everyone welcome to the Western coal mines second quarter 2023.

Thanks, Tom.

I released yesterday should be read in conjunction with our MD&A and financial statements all of which can be found on SEDAR and on our website.

In the prepared remarks.

All figures discussed on this call are in Canadian dollars unless otherwise noted.

Before we begin we'd like to take this opportunity to remind you that during this call well discuss our business outlook and the forward looking statements.

These comments are based on our predictions and expectations.

Actual events or results could cause outcomes to differ materially due to a number of risks and uncertainties, including those mentioned in the detailed cautionary note contained in yesterday's press release and in the company's management's discussion and analysis.

Both documents are available on our website and on SEDAR.

I've used for this presentation and the reporting of this call will be posted on the company's website.

I'll now turn the call over to Ken.

Thanks, Heather and good morning, everyone I'll step out.

Yeah, but.

A warm welcome.

Okay.

Okay.

It's one of the best partner.

Yeah.

I'm awake.

Sure.

It's one of the opportunities.

Honestly I think Eddie generation.

Yes.

Speaking on the call.

Oh, yes, yes.

No.

Oh go ahead I'm sorry.

Yes.

And our VP exploration partnership.

Before we delve into the operational details I'd like to share.

You talked about it.

In the second quarter.

Solid operations.

And sequentially excuse me of the first quarter.

Right I see.

Despite facing challenges.

Yes.

You bet.

Thank you Tim.

Looking ahead, we are well positioned to meet the midpoint of annual guidance.

I don't know of any.

Any color on.

The U S dollar one.

Uh huh.

Useful.

Yes.

Hi, Scott.

And in the.

It's a planned maintenance shutdown at Eagle.

Any of that yet.

I think.

Operation literally H b.

The company committed to developing and implementing a strategy on the long term.

It does shape and that's not the issue.

Yeah.

And that's just it.

Martin M D.

Awesome.

These initiatives in addition to increased focus on shipping.

Well that's my study.

You know rich payment skeptical Jonathan.

Shifting to our balance sheet.

And after extensive analysis.

Yep.

We have two children.

No nothing.

Let me update lots of money.

And we look forward to issuing at these two years.

Sure.

Okay.

A potential credit lines.

Got it.

We have more than enough liquidity to mutual funds.

And my Thanks to Scott Wilson.

Okay.

Okay.

<unk> enjoyed a relationship with mixing debit, but I know, you'll do a great job.

Oh, well, that's with that over to Fred.

Once in operation.

Yes.

Thank you.

Everyone and thank you for attending this morning.

And then you mentioned, we're happy to report another strong quarter of execution pulp operations.

With either in line or slightly better than internal targets again in Q2.

Yeah.

Starting with Eagle River Q2 production of 32845 was an improvement over Q1 and slightly higher than internal production.

I'm going to Miss you stockpile is depleted.

First of all at the mill from the underground.

And the underground really delivered.

A record throughput of 64000 tons.

Tons or 700 tons per day, a testament to the efforts of our people in place to focus activity with particular emphasis on material movement.

Similarly development performances and continue to target and we cannot predict when the phase III.

To be a record year for lateral development.

He has hired a great result, and slightly higher operating costs.

Cost in 2023 and.

Absolutely.

Sure.

Well for 'twenty.

Q2 production came in at 8147 ounces, a slight improvement over Q1.

Higher than our internal projections.

Rate was slightly higher than the upper end of guidance in Q2.

The higher than anticipated grades.

Decommission <unk> zone and continued positive reconciliation that they've recovered diluted mine.

Areas.

Given the positive results seen in reconciliation, we're now expecting greater keynote <unk> slightly higher than the upper end of the guidance for the year.

Throughput in Q2 was also a record since.

Since we start with 51824 times purchases all of this despite the fact operations had to be suspended sporadically over the entire month of June due.

Due to the forest fires raging in region.

It's all underground mine last 15 shifts from end of May.

At the end of June .

If I'm a performances were also excellent at Kenai in Q2, and the key to the brand continues to track ahead of budget.

And earlier commissioning of 149 level of R&D positions us very well to deliver on increased production levels in 'twenty.

It also enables us to proceed with delineation drilling ahead of mining validating worries in shape and firming up our geological understanding of this area informing the 'twenty 'twenty four budget process.

We also continued to advance preparation work and ready to proceed as soon as the authorizations are got it.

Initial results of our internal technical study have been positive.

On the it processed approximately 7500 tonnes of ore from <unk>.

Which are natural numbers on page five.

Has enabled us to use some of our excess mill capacity and the added operational benefits.

Aside from that even some profit improving stope cycle time underground by increasing the availability of the pizza.

This agreement was put in place and complete it in Q2 and no further agreements are being discussed at the moment.

So all in all a strong quarter on the execution side for both mines, where our teams continued to show disciplined operation consistently achieving clients despite headwinds from weak weather events.

And now I'll pass it on to Scott to walk through the financial highlights.

Thank you Brad.

We generated $84 6 million revenue.

32000.

$2500 a quiver nine.

<unk> $9500.

Of the cash margin of $28 7 million.

Four 7 million was generated.

Yes.

The company's gross profit was approximately 5 million G&A depreciation and depletion charges.

<unk> of 28.

Depreciation and depletion has increased by $16 $9 million compared to the same period.

Great.

Primarily due to the $14 8 million.

Commercial production.

Okay, Great Alright.

Depreciation is based on.

Yes.

Judy.

Although the Q Q2 cash cost of 743 grams.

The guidance level.

Cash cost of 15 around some amazing the middle of the range.

<unk> $2111 per ounce at the lower end of guidance.

H, one we have spent $46 million.

Currently forecasting scatter over $100 million.

Our original guidance.

At June 30 cash balances.

$39 million drawn on that.

$2 million or.

Yeah.

$2 9 million.

Yes.

Thanks, Mike.

To date, we have raised $45 1 million.

Yeah.

Based on our most turn ill use of the ATM choice no longer required.

We need to we are comfortable with it.

Yeah.

And over to you Mike.

Thanks Scott.

Well I think wherever explorations going strong we are continuing with very aggressive drilling program in 2023 with underground drilling focused on converting large inferred resource base and the indicated and subsequently into reserves at year end.

The majority of the starting with the.

Completed that the high grade 300 East zone at depth.

As announced in June drilling up to 300, some returned a number of exciting intersections with high grades and wider wins, including 78 grams per ton gold over $9 4 billion correlate or approximately 40 grams per tonne gold capped over six years with this is approximately four times the average thickness of the current base.

Mike.

These wider hits occur at the intersection of two shear zones as characteristic of the previously mined three with relentless you'll recall that the 303 lens was buying primarily in 2019 with an average grade inaccessible one ounce per ton.

Confirming the extension of the 300 eastern down plunge bodes well for the neighborhood zones, such as up to 800 700 series seems to have similar down plunge potential and as such these will be tested as part of a deeper directional drilling program to commence in Q3.

On surface of comprehensive <unk> litho structure model has been developed to diet exploration drilling in the volcanic rocks immediately west of the mine direct.

As John has designed to discover mineralization similar to that of the South consented zone, that's currently being mined.

Limited drilling in the past has returned several high grade hits that could be part of a network of safety plunging shoots within the volcanic rocks.

The first phase of drilling approximately 8000 meters started in July .

Any resources discovered here convenience meaningfully enhanced the future operational flexibility.

Uh huh.

Drilling at the Kina deep zone as continued to return good results from the South.

Are you more of a salt zones at depth.

And the importance of these zones I announcements to the resource base closely spaced drilling will be completed once more optimal doing platforms are established in depth.

Meanwhile in surface.

Initial drilling is ongoing at the Briscoe, So which is located less than two kilometers west of <unk>.

I joined this designed to convert the inferred resources to indicated and reserves by year end.

As part of this exploration ramp will be driven to provide the ideal platform to test the mineralization at depth, where it remains open.

The startup the excavation of the exploration ramp is expected to commence in HQ2023. After the required permits are secured.

An added benefit of the exploration ramp is that it could be connected to <unk> existing underground ramp network.

<unk> access to surface for the existing operation and provides a second access for conveyance of material and personnel freeing time for additional ore hoisting shaft.

Additionally, surface drilling east of the keep in mind returned encouraging results from several zones with vastly different styles of Goldman sees.

This highlights the amount of gold in the system.

And the number of different gold deposits that could exist in this region. For example drilling as a shock absorber returned two three grams per ton gold over 72 meters within direct reps.

It represents a more bulk mineable opportunity.

The <unk> zone drilling returned 10 grams over 25 meters from a shear zone.

Finding holes in various forms makes this relatively under explored part of the property very excited.

Not just for the prospecting, but also due to the fact is proximal to the 33 level tractors that extends over three kilometers east of the mine shaft.

Any or around here will provide a second source of mill feed from the underutilized.

Over to you. Thanks.

Thanks to that piece of the two indications.

I'll be using the next box.

Collaboration with.

As Robin attended towards any fallout.

All of this done in the country.

But you've got apples and most importantly, ensuring the safety of our people.

My number one priority.

Thanks for listening today.

On the call today.

Two questions.

Thank you as a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced to withdraw your question. Please press star one again.

One moment for questions.

Our first question comes from Don Demarco with National Bank You May proceed.

Okay.

You operator, and good morning, everyone. Good morning, Andy and team.

Just a couple of questions first off on the cost volatility at Eagle.

And I see the throughput increased mining rates throughput, increasing but can you just give a little bit more color as to whether that's like a one off and you expect it.

Rebound and to costs lower in Q3 Q4.

Yes, Thanks, John It's Scott here.

So when we look at the cost on an aggregate basis, there are going to be very.

Fairly consistent throughout the year, however in Q1.

Received a credit on our inventory movement and that would be just because that we actually can go down a little bit early.

Maintenance. So therefore, we had a little bit higher on the stockpile and then the only other fluctuating factor.

As ever with the absorption of inventory.

We're dependent on.

Great at the time that we're processing integrated higher material at that point.

We could.

Are you more in the circuit at the end of the.

And therefore, yes carrying.

Carrying value of the inventory will be higher so therefore.

Okay.

And the next quarter usually.

Okay, good to hear and saw the news on the ATM.

So it's no longer required just a couple of quick questions first did you draw anything on the ATM in Q3 prior to last night's release and also do you plan to terminate it then so when or just one or would you plan to just let it expire.

Okay.

Right now John we didn't draw anything in Q3.

As Youre aware.

Drive factory, a blackout period, so we have drew about $11 million or a rate of about $11 million in Max Q.

The intentions are that based on our liquidity.

Goodbye.

At this point.

Okay.

Yes go ahead.

Thank you Scott.

Youre not using the ATM.

Okay, you wont be using it going forward okay.

Thank you so much that's all for me good luck with Q3.

Yeah.

Thank you and as a reminder to ask a question. Please press star one on your telephone.

Yeah.

One moment for questions.

Our next question comes from Ralph <unk> with eight capital you May proceed.

Thanks, operator, good morning AT&T.

Two questions from me first one maybe for Fred.

Is there any of the 120 level or even 121 or $1 23 at keener, that's going to be available for mining.

2023 or is that mostly sort of a 2020 for planar and if so maybe you can help us for context around when and how much do you expect to be mining from those areas.

Okay. Thanks for the question Ralph.

Ultimately yes.

The upper part of that once we deny horizon will be available for mining, but only later into <unk> and into 'twenty five because the mining sequence as we as we drop or if you will from the ore body has to start.

From the bottom up so we start from re drive the ramp down all the way down to $1 nine can start stoping, there and then stoping upwards.

Okay.

Okay, great that sounds very encouraging for ounces per vertical meter.

The second question maybe for Scott.

Got it all goes according to plan with regards to sort of these internal forecast.

How much if any of the credit facility will be required into year end to address capex and working capital needs.

Hi.

When we look at the external forecast and look at the numbers, we're not going to use the majority of the revolver.

We're very comfortable with the level that we have at this point and.

That's why we decided to add.

And at this point.

Yeah understood Okay.

MTN team for the color I appreciate it.

Thank you. This concludes the Q&A session and this concludes today's conference call. Thank you for participating you may now disconnect.

Okay.

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