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WESDOME G
The only mining company to feature in t
MINING | WESDOME GOLD MINES
GOLD MINES
the TSX30 for the third consecutive year
When the latest list of the 30 top performing companies on Toronto Stock Exchange (TSX) by average three-year share price was released in the middle of September, 14 mining companies were included, matching the sector’s contribution in 2020. However, only one name from the mining industry has appeared in all three editions of the TSX30 since its launch in 2019: Wesdome Gold Mines. This recognition of the company’s consistent delivery of shareholder value over the last three years is actually the culmination of over 30 years of continuous gold mining in Canada, through various guises. The current incarnation of Wesdome is rapidly evolving into a mid-tier player in the gold space with production heading towards 200,000 ounces per annum from its assets in Val d’Or, Québec and Wawa, Ontario. President and CEO Duncan Middlemiss salutes the ‘amazing accomplishment’ of the Wesdome team for its inclusion in the TSX30 for the third year in a row. “Operational turnaround and optimisation are what facilitates our success,” he says. “The second step is investment in exploration at what we view as high potential underground properties. We’ve had operational success and have been able to fund a robust exploration programme. The third aspect of this trifecta for inclusion in the TSX30 is our jurisdiction here in Canada. Overall, we’ve got a team that delivers and we’re really proud of that.”
MINING | WESDOME GOLD MINES
Since RGN last featured Wesdome in 2020, the company has continued to churn out more ounces at the Eagle River mine in Ontario, alongside brownfields exploration work across the Eagle Mine Complex and at the Kiena mine in Québec, which started producing gold again in Q3 after eight years on care and maintenance. But at the start of the year, Wesdome announced it would be divesting the remaining asset on its portfolio – the large-scale Moss Lake gold project, located 100 km West of Thunder Bay in Ontario – to Canadian junior Goldshore Resources for a total fee of C$57 million. “We wanted to remain focused on our core high-grade underground operations, which are best suited to this team’s DNA if you ask me. We like Moss Lake but recognise there will have to be a lot of heavy lifting in order to advance the project,” Middlemiss explains.
“We sold the asset but retain meaningful exposure to the Moss Lake gold deposit through our equity position in Goldshore. This is a very well respected junior company in the space; a lot of the individuals have a good track record and that’s good for our shareholders in terms of upside participation. It’s also great to see investment in the ground at Moss Lake, after Goldshore started to drill there recently.”
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MINING | WESDOME GOLD MINES
Restarting Kiena
The project’s average annual
There has also been significant
gold production is estimated
news flow coming out of
at 84,000 ounces per year with
Wesdome this year with
all-in sustaining costs at $676
regards to the Kiena mine. In
per ounce over a current seven
Q2, the company published
year mine life. However, the
a pre-feasibility study (PFS)
company expects to build
for the restart project,
significantly greater value
which headlined with an
into the Kiena mine through
IRR of 98% and an after-tax
optimisation and exploration
NPV(5%) of US$367 million at
and is already delivering on
a conservative gold price of
this after the discovery of the
$1,600 per ounce.
Footwall Zone in Q1.
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MINING | WESDOME GOLD MINES
Since the discovery of this
looking at production rates
The report also noted a
new high-grade gold zone
of around 65,000 ounces per
further alignment with the
in the footwall of the Kiena
annum until we reach 100,000
Sustainability Accounting
Deep A Zone, Wesdome
ounces after that. There’s
Standards Board reporting
has undertaken drilling in
good opportunity to grow that
standard for Metals & Mining.
order to further define the
already with the Footwall Zone
“What’s really come out of
mineralisation within the 50
discovery, which remains open
this ESG focus is the fact that
metres wide corridor. None
laterally and along plunge.”
we have to do a better job
of these potential ounces
reporting on what we do and
were baked into the Kiena
Eyes on ESG
PFS, which is why Middlemiss
Wesdome’s ESG report for
junior company and definitely
describes the study as ‘a base
2020 was published in June,
hitting above our weight
case’, with the potential for
in another important news
class, so we had to get more
expansion now in clear view.
release for the company and
technical help in.”
how we do it. We’re a fairly
its stakeholders. The second The company was able to
annual report of its kind
restart the 2,000 tonnes per
provided a comprehensive
day (tpd) mill at Kiena in July
overview of the company’s
and has been processing ore
ESG performance last year,
since then, largely thanks to
along with ongoing strategies,
the sound condition of the
policies and commitments.
mill and mine throughout the entire period of care and
During the year, Wesdome
maintenance, along with the
committed $56 million to local
preparatory work undertaken
procurement expenditures
by Wesdome since the restart
(resembling 36% of total
was approved by the board in
procurement expenditures)
Q2.
from the Eagle River and Kiena complexes, in a continuation
“We see Q3-Q4 as a ramp up
of its long-term role as a
period at Kiena,” Middlemiss
positive socio-economic actor
says. “Then I think 2022 and
in the regions close to its
2023 will be base case years
operations.
“In the next 18 months we’re going to be tracking towards a total of 200,000 ounces per annum production. We’ve certainly delivered operational improvements and that’s been beneficial for our shareholders, which goes back to our recognition on the TSX30” – Duncan Middlemiss, Wesdome Gold Mines president and CEO
Here, Middlemiss is referring to the appointment of Joanna Miller last year as the company’s director for sustainability and environment. In this role, she draws on her experience in stakeholder engagement and community investment campaigns across Canada to deliver positive social and environmental outcomes in Québec and Ontario. “Last year’s report was much more polished compared to
WES D O M E G O L D M I N ES AT A G L A N C E
STOCK TICKER: TSX:WDO MARKET CAPITALISATION: US$1.1 billion (as of October 06, 2021) j
MINING | WESDOME GOLD MINES
the previous year and I expect that trend to continue. I think we’re all in this together and we have to act responsibly for our employers and our communities in which we operate in globally,” says the chief executive.
Exploring Eagle River Wesdome’s Eagle River mine, located along Ontario’s Mishibishu Greenstone Belt, has been in production for well over 25 years now and remains one of the richest gold mines on the planet. In fact, the 12.8 g/t gold grade reported in Q1 makes Eagle River the 5th highest grade gold mine in the world. However, the company’s recent brownfields exploration efforts show there is potentially decades of life left in this mature mining complex. Eagle River is situated on a 20 km mineralised shear zone, although all of the mine’s resources to date have been extracted from just a 2.5 km diorite intrusive plug.
“We’re very excited about the Falcon Zone. The mineralisation and reserves and resources sitting out in the surrounding volcanics has just opened up another 18 km of strike length for us to continue exploring”
But the discovery of the
opened up another 18 km of
Falcon Zone in nearby
strike length for us to continue
volcanic rock outside of the
exploring.
diorite has transformed the company’s perception of the
“We started to mine our first
geology at Eagle River while
stope [from the Falcon Zone
providing an opportunity to
in Q3] so we’re excited about
enhance reserves and improve
that too. We think there is a
operational flexibility.
certain amount of repeatability in terms of mineralisation
“We’re very excited about
through the volcanics, which is
the Falcon Zone. The
something we will be looking
mineralisation and reserves
at in the future.”
and resources sitting out in the surrounding volcanics has just
MINING | WESDOME GOLD MINES
In addition, Wesdome has
“Ultimately the goal would be
And while Wesdome is just
just started getting into some
- with exploration success - to
getting started at Kiena, it
surface exploration drilling
fill the mill with high-grade
has set a guidance of 15-
for parallel zones, employing
Eagle River ore, since we will
25,000 ounces of gold in 2021,
cutting-edge science and
finish mining from the lower
ahead of its first full year of
rigour to its programmes in
grade Mishi pit this year.”
production in 2022. “I think in
a comprehensive manner for
the next 18 months we’re going
the first time at Eagle River,
A golden year
according to Middlemiss.
As we enter the final quarter
of 200,000 ounces per annum
of 2021, Middlemiss casts
production.
to be tracking towards a total
“We’d love to discover
his mind towards the annual
something like the Falcon
production and cost guidance
“That’s quite a milestone as
Zone again around the existing
made by the company earlier
this company started with
mine infrastructure. That’s a
in the year. The production
just 50,000 ounces back in
win-win situation where you’re
guidance for Eagle River was
2016. Kiena was closed and
able to feed the mill with ready
92,500-105,000 ounces – a
didn’t have the best prospects
production and then have
larger range than normal due
until the discovery of the A
something in the pipeline
to ongoing uncertainty around
Zone and Eagle River wasn’t
which can be turned on later.”
the pandemic and availability
firing on all cylinders. There’s
of manpower.
been a lot of balls in the air,
Wesdome is targeting an
but we’ve certainly delivered
increased mining rate of 650
We’re sitting at 53,000 ounces
operational improvements
tpd in 2021, which is still
produced in the first half, so
and that’s been beneficial for
less than the total nameplate
I don’t see any issue hitting
our shareholders, which goes
capacity of 850 tpd at Eagle
our guidance and really over
back to our recognition on the
River’s mill, although the
100,000 ounces should be
TSX30.”
firm is looking to bridge
our goal this year. There is a
the gap with reserves from
little bit of cost pressure due
new underground zones
to the inflationary conditions
(including Falcon), as well as
in the wider market. But we
infrastructural developments
can mitigate that by becoming
such as increased ventilation
smarter and more productive.”
capacity and renewal of the fleet.
MINING | WESDOME GOLD MINES
Published by Anderson Murray Media Ltd
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