RGN | Wesdome Gold Mines by Anderson Murray Media

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WESDO G

Building Canadaâ&#x20AC;&#x2122;s next mid-tier gold

MINING | WESDOME GOLD MINES

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d producer

Wesdome Gold Mines is an established player in the worldleading Canadian mining sector with over 30 years of continuous gold production in the country. The next big target for the TSX-listed company is to break into the mid-tier rank of producers in Canada with a total annual output figure exceeding 200,000 ounces of gold. Wesdome’s current portfolio is arguably located in the most fertile geological region in the world and contains three assets along a 1,000 km stretch between Thunder Bay in Northwestern Ontario and Val d’Or in Northwestern Québec. The company’s president and CEO Duncan Middlemiss reveals to RGN that Wesdome was constrained to only minimal growth in the last downturn of the mining cycle, but since 2015 it has been able to optimise the performance of its Eagle River mine in Wawa, Ontario while investing heavily in exploration across the portfolio. The crowning glory of Wesdome’s resurgence was achieved last year when it was included in the inaugural TSX30 list of top performing stocks across the entire exchange. Wesdome was even able to retain its place on this year’s TSX30 ranking after averaging share price growth of 285% over the last three years. “[Our success is down to] everybody coming together to understand the geological potential of the properties we have. To define that potential, you have to invest in exploration and our recent efforts have gone very well at Eagle River in Ontario and Kiena in Québec.”

Wesdome’s current incarnation is a product of three decades of evolution from its early days under the name Western Québec Mines, when it owned several properties that were eventually amalgamated into the current Kiena Complex.

A storied history In 1994, Western Québec acquired a property in Ontario and spun out the assets – including Wesdome’s current Eagle River and Moss Lake assets – to a company called River Gold Mines, and in 1999 Wesdome Gold Mines was created in order to develop a portfolio of properties in Val d’Or. “Wesdome bought the Kiena mine from the Québec government in 2005 and it was probably the deal of the century,” Middlemiss claims. “It cost only $5 million and now we are looking at the very positive future Kiena has with us.” By 2007, River Gold and Wesdome completed a merger

MINING | WESDOME GOLD MINES

and this is the point in the

thought when it first started

highs of 2011-12) and a lack of

company’s history that you

producing.”

subsequent drilling to sustain

see the current assets come

activity at the property.

together under one portfolio

Meanwhile, the Kiena mine

umbrella.

was in production under

However, a bull run has been

Wesdome from 2006 to 2013,

gathering pace in the gold

“Eagle River has been in

but has been in care and

market since around 2016,

commercial production since

maintenance ever since,

and the price reached new

1996, so it’s been operating

with Middlemiss citing

highs earlier this year in

now for 25 years and has had

a suppressed gold price

response to the major financial

a great mine life compared to

environment (following the

uncertainty triggered by the

what people may have initially

MINING | WESDOME GOLD MINES

COVID-19 pandemic. This

Complex, despite the troubling

in camp to allow for social

brighter environment for gold

emergence of COVID-19 and

distancing. Unfortunately, we

miners over the last four years

the wide-ranging impact of the

had to suspend all diamond

has allowed Wesdome to re-

virus on mining operations

drilling, which is something

instigate drilling programmes

and the wider mineral

we definitely didn’t want to do

at Kiena, with encouraging

resources supply chain.

because we were quite excited

results thus far.

about that programme.” “Eagle River in Wawa,

Meanwhile, the company

Ontario is a camp situation,”

Other large-scale projects

expects to produce between

Middlemiss explains. “So what

were also deferred to the

90-100,000 ounces of gold

we had to do back in March

latter stages of the year in the

this year at the Eagle River

was reduce the numbers

aftermath of the deadly first

“Wesdome bought the Kiena mine from the Québec government in 2005 and it was probably the deal of the century. It cost only $5 million and now we are looking at the very positive future Kiena has with us” Duncan Middlemiss, Wesdome Gold Mines president and CEO

wave from around March to

Wesdome has since managed

June. Projects completed in

to bring back online four

Q3 included upgrades to the

drills (three underground, one

hoist and ventilation systems

near-surface) with a focus on

and work to increase tailings

follow-up delineation of the

capacity. These projects are

Falcon Zone – a new section to

expected to bring underground the West of the mine. production to 600 tonnes per day in 2021.

Return of the drill rigs

“This is something we discovered from our surface drilling programme of 2019. It’s a very high grade shoot that

There had been up to seven

links with the mineralisation

exploration drills turning at

at the 7 Zone within the

Eagle River pre-pandemic, but

existing mine. We are now in

MINING | WESDOME GOLD MINES

RGN editor Jacob Ambrose Willson interviews interviews Wesdome Gold Mines CEO and president Duncan Middlemiss, October 22, 2020

a process of exploring from

exploration work can add

“In terms of our drilling, we

appropriate underground

further years to the life of the

didn’t catch stride again until

platforms.

mine, which is already into its

around June or July. But we

26th year of production.

now have seven drills turning

“We’re also doing surface exploration, which involves a

underground and one onOver in Val d’Or, Wesdome

surface at the Kiena property.

lot of delineation of the various had to comply with a Québec

The goal for us this year is to

shoots we have. Essentially,

government mandate to close

convert a lot of our inferred

we would like to continue the

all mining operations at the

resources into indicated so we

growth of our resource there.”

peak of the pandemic, which

can then do a pre-feasibility

contributed to around eight

study in support of a restart

Last year, Wesdome grew the

weeks of lost work that it

decision for the Kiena mine.”

total reserve at Eagle River

had dedicated to exploration

from 400,000 ounces to 550,000

drilling at the Kiena mine.

A preliminary economic

ounces and the company is

assessment (PEA) of the

confident that its current

project was completed in

May and provides strong supporting evidence towards a restart, which will be considered by the board during the first half of 2021. The PEA indicated just US$35 million will be required in pre-production capital expenditure, a figure that Middlemiss ensures will be fully funded by the company. The study also estimated that Kiena will provide an after-tax IRR of 102% and will generate gross revenue of $1.4 billion, alongside other attractive economic metrics.

W ES D O M E GOLD

AT A G L A N C E

STOCK TICKER TSX:WDO

MARKET CAPITALISATION

US$1.4 billion (as of October 28, 2020)

MINING | WESDOME GOLD MINES

within the company that the

The rise of ESG investing

time is fast approaching to

Away from the exploration

– in August. Miller will help

ramp up mineral development

side of the business, Wesdome

lead community engagement

at the Moss Lake property

– like a multitude of resources

programmes at Eagle River

near the city of Thunder Bay in

firms in recent years – has

and Kiena while managing

Ontario.

heightened the spotlight on

the firm’s environmental and

its commitment to sustainable

social pledges.

There is also a mounting belief

for sustainability and environment - Joanna Miller

Moss Lake is in fact Wesdome’s

and responsible mining, in

largest mineral resource

response to a new wave of

One could deduce that

with indicated resources of

ESG-driven investors.

Wesdome’s focus on ESG

40 million tonnes at 1.1 g/t

programmes over the last

of gold, totalling 1.4 million

“ESG has really come to the

few years has been suitably

ounces. Previous drilling in

forefront and is something I

recognised by the investment

2017 extended the strike length

think we did in the past, but

community, especially

mineralisation from 2.5 km

perhaps didn’t talk about when

considering the company’s

to 8 km and the geophysical

we were a junior company.

inclusion on the TSX30 for the

expression (IP) extends over

We were a small group and

second consecutive year.

the entire strike length, with

didn’t have the capacity to do

potential to significantly add to

comprehensive reporting. But

Middlemiss believes that the

existing resources.

now you see the investment

expansion of Wesdome’s ESG

community is very focused on

focus has occurred in tandem

“Moss Lake is envisioned to

ESG and we are definitely here

with the overall growth of

be a large resource, low grade

to do the right thing across all

the company, which goes

operation. In order to develop

facets of our operations and

to show just how entwined

this mine, we have to get the

the reporting of our progress

sustainability is with success

drills back there and do a

on these fronts.”

for the modern-day mining

substantial programme in

firm.

order to further upgrade the

The company has begun to

resource.”

‘staff-up’ to better manage

“I would say that we are on

the growing expectations of

the right track, people are

the investment community,

recognising that we are trying

hiring a new director

to do the right thing and we have received credit for it.”

MINING | WESDOME GOLD MINES

Pushing for mid-tier status Wesdome’s primary aim over the next few years is to become a mid-tier gold producer. Reaching this level would see it churning out at least 200,000 ounces per annum, Middlemiss is confident that this goal is within reach given the company’s recent success

“Eagle River has been in commercial production since 1996, so it’s been operating now for 25 years and has had a great mine life compared to what people may have initially thought when it first started producing”

in adding resources at Eagle River through exploration,

maintain our commitment to

which is ongoing at the

exploration.”

sprawling complex in Ontario. In addition to the exploration Since 2016, Wesdome

opportunities in Wawa and

has doubled annual gold

Val d’Or, Wesdome could

production to 100,000 ounces

also benefit from a bolt-on

at Eagle River and it has the

situation at the 2,000 tonnes

Kiena mine waiting in the

per day mill within the Kiena

wings, which will add another

Complex.

100,000 ounces per year according to the PEA.

“Northwestern Québec is a very prospective area,

“Once we give the go ahead

particularly Val d’Or and

for the restart, it would be

Rouyn-Noranda. It’s got a great

two years until Kiena is back

history and is very active right

up and running. At that point

now in terms of exploration,

I would say we have a soft

so we’re definitely monitoring

base of 200,000 ounces, but

the situation there to see if

I would speculate that Eagle

we can augment the mill with

River and Kiena can together

additional feed.”

produce 250,000 ounces if we

Published by Anderson Murray Media Ltd

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