February Building Canada s Next Mid-Tier Gold Producer

Transcription

1 February 2019 Building Canada s Next Mid-Tier Gold Producer

2 Cautionary Statements Forward-Looking Information This presentation contains statements or information concerning the business, operations and financial performance and condition of Wesdome Gold Mines Ltd. ( Wesdome or the Company ) which constitute forward-looking statements or information (collectively, forward-looking statements ) within the meaning of applicable Canadian securities legislation. Forward-looking statements relate to future events or the anticipated performance the Company and reflect management s expectations or beliefs regarding such future events and anticipated performance as of the date of this presentation. Forward-looking statements include, but are not limited to, statements with respect to the timing and amount of future production, costs of production, targeted cost reductions, capital expenditures, the success of exploration activities, permitting time lines, government regulation of mining operations, the future price of gold and other minerals, and the timing and issuance of permits. Generally, forward-looking information can be identified by the use of words such as plans, expects, is expected, budget, scheduled, estimates, forecasts, intends, anticipates, believes and variations of such words and phrases or statements that certain actions, events, or results may, could, would, might, or will, occur or be achieved or the negative connotation thereof. By their nature, forward-looking statements involve numerous assumptions, inherent risks and uncertainties, both general and specific, that contribute to the possibility that the predicted outcomes could differ materially from those contained in such statements. These risks and uncertainties include, but are not limited to, fluctuations in prices of commodities, fluctuations in currency markets, actual results of additional exploration and development activities at the Company s projects, the timing and amount of estimated future production and the costs thereof, capital expenditures, the availability of any additional capital required to bring future projects into production, the failure of plant, equipment or processes to operate as anticipated, accidents, or labour disputes. Risks and uncertainties about Wesdome s business are more fully discussed in the disclosure material filed with the securities regulatory authorities in Canada and available on SEDAR under the Company s profile at Readers are urged to read these materials and should not place undue reliance on the forward-looking statements contained in this presentation. Wesdome assumes no obligation to update the forward-looking information relating to beliefs, opinions, projections, or other factors, should they change, except as required by applicable securities laws. TSX:WDO 2

3 Canadian Gold Company with Three 100% Owned Projects Over 30 years of continuous gold production 2018 Production of 71,625 ounces 2019 Guidance: 72,000 80,000 ounces Drilling High grade discovery at Kiena Complex 3 Eagle River Operations funding $23 M exploration and development at Kiena 2018 free cash flow generation of $2.8 M Eagle River free cash flow generation of $30 M Eagle River Complex, Wawa, Ont. Operating Mine Complex, two deposits feed central ~850 tpd Past Prod.: 1.1 M oz Reserves: P&P 415,000 oz Resources: M&I 31,300 oz, Inf. 371,300 oz Kiena, Val d Or, Quebec Production Suspended 2013 Past Prod.: 1.75 M oz Resources: M&I 582,600 oz, Inf. 1,007,200 oz Fully Permitted Mine/Mill Complex on Standby Moss Lake, Thunder Bay, Ont. Open Pit Gold Deposit Resources: Indicated 1.4M oz, Inferred 1.7M oz TSX:WDO 3

4 Corporate Structure Symbol TSX:WDO Shares Outstanding M Options and RSU s 7.2 M Warrants 0 Fully Diluted M 52 Week High/Low $5.43/$1.70 (Average daily volume 800,000 shares) Market Capitalization $720 M ($5.35 February 19, 2019) Cash Position $27.4M (December 31, 2018) No Debt Management and Directors 2.2% Analyst Coverage BMO Capital Markets Canaccord Genuity Clarus Securities Desjardins Capital Markets Echelon Wealth Partners Eight Capital Partners Industrial Alliance Laurentian Bank Mackie Research National Bank Financial PI Financial Major Shareholders 1832 Asset Management, Van Eck, Oppenheimer, Royal Bank Investment Management, Mackenzie Financial, US Global, Gabelli TSX:WDO 4

5 Share Price Performance WDO vs Global Mining Index WDO vs Global Gold Index WDO vs Gold Price TSX:WDO 5

6 Building Canada s Next Mid-Tier Gold Producer Proven building blocks to increase shareholder Low risk expansion of existing mines in proven mining camps New high-grade gold discovery in permitted, dewatered former producing mine Assets in top rated jurisdictions Ontario and Quebec TSX:WDO 6

7 2018 Production and Cost Results vs Guidance, and 2019 Guidance 2018 Guidance 2018 Achieved 2019 Guidance Gold production Eagle River 64,000 67,000 ounces 67,315 ounces 69,000 76,000 ounces Mishi 6,000 8,000 ounces 4,310 ounces 3,000 4,000 ounces 70,000 75,000 ounces 71,625 ounces 72,000 80,000 ounces Head grade (g/t Au) Eagle River Mishi Cash cost per ounce 1 $925 - $1,000 (US$720 US$770) $905 US$699 $830 - $900 (US$640 US$690) AlSC per ounce 1 $1,350 - $1,425 (US$1,050 US$1,100) $1,276 US$985 $1,280 - $1,350 (US$985 US$1,040) H1: 31,000 35,000 ounces H2: 41,000 45,000 ounces Development in H of a second stope in the 303 lens for production in H TSX:WDO 7

8 Q Operational Results In $000s Three months ended December 31, Increase/ Year ended December 31, decrease Increase/ decrease Ore milled (tonnes) Eagle River 50,536 39,291 29% 185, ,250 18% Mishi 8,478 39,197 (78)% 70, ,591 (54)% Throughput 59,015 78,488 (25)% 255, ,841 (17)% Head Grade (g/t Au) Eagle River (6)% % Mishi % % Recoveries (percent) Eagle River % % Mishi % (1)% Gold production (ounces) Eagle River 16,712 13,499 24% 67,315 50,996 32% Mishi 542 2,298 (76)% 4,310 7,985 (46)% 17,254 15,797 9% 71,625 58,980 21% Gold Sold (ounces) 18,077 19,351 (7)% 70,480 57,770 22% Refer to the section entitled Non-IFRS Performance Measures for the reconciliation of these non-ifrs measurements to the financial statements. Totals for tonnage and gold ounces information may not add due to rounding. TSX:WDO 8

9 Q4 and FY 2018 Financial Results In $000s, except per units and per share amounts Year ended Q4/18 Q3/18 Q2/18 Q1/18 Q4/17 Q3/17 Q2/17 Q1/ Financial results Revenues 3,4 29,462 28,920 31,443 26,217 31,544 21,165 23,248 20, ,042 96,057 Mine operating profit 1 12,495 13,898 14,957 10,774 11,606 7,921 5,883 6,127 52,124 31,537 Net income (loss) 2,643 3,631 5,725 2, ,858 1,287 Net income adjusted 1 2,643 3,631 5,725 2,859 3,357 1, ,858 6,798 Operating cash flow 8,632 12,823 12,422 12,423 13,468 3,541 5,898 4,318 46,300 27,225 Free cash flow 1-4,491 2,137 1,962 3,216 4,981-6,517-4,619-5,942 2,824-12,097 Per share information: Net earnings (loss) Adjusted net earnings Operating cash flow Free cash flow Selected Financial Statement data: Cash and cash equivalents 27,378 30,714 26,719 26,460 22,092 16,614 22,681 29,593 27,378 22,092 Working capital 11,312 14,982 14,521 12,742 12,944 12,934 17,815 20,514 11,312 12,944 Total assets 209, , , , , , , , , ,913 Total non-current liabilities 25,170 23,040 23,056 21,112 21,475 14,920 15,389 15,047 25,170 21,475 Per ounce of gold sold 1 Average realized price 1,628 1,571 1,692 1,698 1,618 1,619 1,715 1,631 1,645 1,643 Cash costs ,019 1,013 1,264 1, ,097 Cash margin AISC 1 1,370 1,160 1,242 1,342 1,284 1,446 1,718 1,613 1,276 1,490 Production costs/tonne milled Average 1 USD CAD exchange rates Cost Metrics (in USD) Cash costs AISC 1 1, ,061 1,010 1,154 1,277 1, ,148 TSX:WDO 9

10 Mineral Reserves (2018 Year End) MINERAL RESERVES EAGLE December 31, 2018 December 31, 2017 RIVER (see notes) Tonnes ( 000s) Grade (g/t Au) Contained ounces Tonnes (000s) Grade (g/t Au) Contained ounces Eagle River Proven , ,000 Probable , ,000 Proven + Probable 1, ,000 1, ,000 MINERAL RESERVES MISHI (see notes) Tonnes ( 000s) December 31, 2018 December 31, 2016 Grade (g/t Au) Contained ounces Tonnes (000s) Grade (g/t Au) Contained ounces MISHI Proven , ,000 Probable ,000 1, ,000 Proven + Probable ,000 1, ,000 Reserves and Resources as at December 31, Mineral Resources exclusive of Mineral Reserves. The contents of this slide have been verified and approved by Michael Michaud, P. Geo, VP Exploration for the Company and a Qualified Person within the meaning of NI For details, please refer to the Company s press release dated February 21, 2019 and AIF dated February 21, 2019 available on the TSX:WDO 10 Company s website and sedar.com

11 Eagle River Parallel Structure Reserve Breakdown Structure December 31, 2018 December 31, 2017 Tonnes (000s) Grade (g/t Au) Contained Ounces Percent Tonnes (000s) Grade (g/t Au) Contained Ounces Percent No , , No , , No , , Other , ,000 7 TOTAL 1, , , , Reserves and Resources as at December 31, The contents of this slide have been verified and approved by Michael Michaud, P. Geo, M.ScA, VP Exploration for the Company and a Qualified Person within the meaning of NI For details, please refer to the Company s press release dated February 21, 2019 and AIF dated February 21, 2019 available TSX:WDO 11 on the Company s website and sedar.com

12 Eagle River Mine: 1.1 M oz of Production Quartz diorite intrusive (2 km x 0.5 km) hosts 1.1 M oz of past production at Eagle River from 8, 6 and 2 Zone structures (1995 to 2017) Parallel 7 and 300 Zones to north offer new potential throughout the mine 2018 Production: 67,315 ounces (185, g/t) 7 Zone Surface TSX:WDO 12

13 Eagle River Parallel Gold Zones Remain Open open open 4200 elev 4200 elev open Section 9400E (looking west) Section 9400E (looking west) Discovery of two new parallel gold zones in 2013 Exploration in leads to reserve growth with expanding potential within mine footprint Mining of 303 lens commenced in 2018 Recent widths at 300 North and 303 East Zones wider than previously encountered 100 m open TSX:WDO 13

14 Eagle Drilling to Diversify Production Locations Longitudinal Section Looking North TSX:WDO 14

15 Eagle Exploration Targeting Parallel Zones Targeting areas where E-W structures intersection WNW structures, and areas where structures enter/exit Diorite 7 Zone 300 Zone N 8 Zone Plan View TSX:WDO 15

16 Mishi Deposit Future Potential 600 m West of Pit 1.95 g/t over 29.8 m TW 3.08 g/t over 15.5 m TW 3.48 g/t over 17.7 m TW 2.14 g/t over 22.1 m TW 2.52 g/t over 18.8 m TW 2.38 g/t over 11.9 m TW Under Explored 2017 New Area Mishi Pit 2017 New Area 3D View (looking northwards) TSX:WDO 16

17 Kiena Complex, Val d Or, Quebec Mine on care and maintenance since mid ,000 TPD permitted mill 930 Metre shaft Ramp system to 1000 m Underground de-watered Past production ,500, g/t = 1.75 M ounces produced TSX:WDO 17

18 Kiena Complex Location, Location, Location! Property Size: 65 Square Kilometres TSX:WDO 18

19 Kiena Complex Regional Geological Potential Wesdome Deposit Siscoe Mine 0.9 M oz prod Presqu ile Deposit Kiena Deep Kiena Mine 1.8 M oz prod TSX:WDO 19

20 Kiena Deep Discovery Why Kiena Deep: Large Regional Structures Multiple zones of ductile and brittle deformation for openings for Au Ultramafic contact tends to pool liquids ~50,000 metre underground drill program in 2019 TSX:WDO 20

21 Kiena Deep A Zone Longitudinal Section S50 Zone VC Zone A Zone Up Plunge Extension B Zone A Zone Open TSX:WDO 21

22 Kiena Deep A Zone - Up Plunge Potential TSX:WDO 22

23 Kiena Deep A Zone Flattens at Depth with Multiple Zones TSX:WDO 23

24 Updated Resources Kiena Deep A, B, VC, and S- 50 Zones Kiena Complex Resources: A Zone Tonnes (000s) Gold Grade (g/t Au) * Gold Ounces Measured Indicated ,300 Total M+I ,300 Inferred ,100 Kiena Complex Resources: In Mine (Resource Estimate Kiena Deep A, B, VC, and S-50 Zones Tonnes (000s) Gold Grade (g/t Au) * Gold Ounces Measured Indicated 1, ,100 Total M+I 1, ,100 Inferred ,400 Mineral Resources exclusive of Mineral Reserves The contents of this slide have been verified and approved by Michael Michaud, P. Geo, M.ScA, VP Exploration for the Company and a Qualified Person within the meaning of NI For details, please refer to the Company s AIF dated February 21, 2019 available on the Company s website and sedar.com TSX:WDO 24

25 Total Kiena Complex Resources Tonnes (000s) Gold Grade (g/t Au) * Gold Ounces Within Crown Pillar Measured Indicated ,900 Total M+I ,900 Inferred 1, ,600 Below Crown Pillar Measured ,300 Indicated 2, ,400 Total M+I 2, ,700 Inferred 3, ,600 Total Project Measured ,300 Indicated 3, ,300 Total M+I 3, ,600 Inferred 4, ,007,200 Mineral Resources exclusive of Mineral Reserves The contents of this slide have been verified and approved by Michael Michaud, P. Geo, M.ScA, VP Exploration for the Company and a Qualified Person within the meaning of NI For details, please refer to the Company s AIF dated February 21, 2019 available on the Company s website and sedar.com TSX:WDO 25

26 Drill Intercepts Post 12/2018 Resource Estimate First 48 out of 50 holes visible gold showings TSX:WDO 26

27 A Zone and Exploration Potential Parallel A Zone Structures A Zone TSX:WDO 27

28 Moss Lake Optionality on Gold Price Dominant land holdings, 36 km along Shebandowan Gold Belt containing four deposits open for expansion Moss Lake Deposit remains open Pit and Mineral Resource constrained by property boundary 2017 drilling extends strike length mineralization from 2kms to 4.5 kms Geophysical expression (IP) extends over a strike length of 8 kms Potential to significantly add to resources TSX:WDO 28

29 2019 Exploration Summary Sustained Investment $13.8 M Exploration Drilling Budget Eagle: 4 Underground Drills 1 Surface Drill Kiena: 5 Underground Drills 1 Surface Drill (Summer) Property 2019 Metres 2018 Metres 2017 Metres 2016 Metres 2015 Metres Eagle Underground Exploration Drilling Eagle River Underground Definition Drilling Eagle Surface Exploration Drilling 51,000 25,000 24,000 27,000 22,000 43,000 25,000 35,000 32,000 20,000 20,000 10,000 15,000 25,000 0 Mishi Exploration Drilling ,000 25,000 5,000 Kiena Complex 59,000 50,000 45,000 10,000 0 Moss Lake ,000 4,000 0 Total 173, , , ,000 47,000 TSX:WDO 29

30 Summary LOW RISK: Expansion of existing mines in proven mining camps LOW CAPEX: Kiena: New gold discovery in existing, permitted, dewatered former producing mine HIGHLY EXECUTABLE: Eagle River: new highgrade parallel zones close to infrastructure Aggressive Exploration Programs in Wawa and Val d Or Pipeline of development projects Operations in safe jurisdiction, Canada Experienced Management team with proven track records TSX:WDO 30

31 Contact Info Duncan Middlemiss President and CEO Lindsay Dunlop Vice President, Investor Relations ext ext. 25

32 Appendix

33 Executive Management Team Duncan Middlemiss, P. Eng Chief Executive Officer - Professional engineer with over 25 years experience in operational management, mine rehabilitation, development and gold production - Over 10 years of executive management experience - Most recently Chief Executive Officer of St Andrew Goldfields until its sale to Kirkland Lake Gold in January 2016 Ben Au, CPA, CA Chief Financial Officer Marc-Andre Pelletier, P.Eng Chief Operating Officer Michael Michaud, P.Geo VP, Exploration Lindsay Carpenter Dunlop VP, Investor Relations Stacy Kimmett VP, Human Resources Heather Laxton Corporate Secretary & CGO Vincent Ramcharan, P.Eng Director of Sustainability - Over 35 years of experience in financial management and reporting, regulatory compliance, M&A, and P&L management - Over 11 years at Agnico Eagle Mines in increasingly senior financial reporting roles - Most recently Chief Financial Officer of St Andrew Goldfields Ltd until its acquisition by Kirkland Lake Gold - Professional engineer with over 20 years experience in operating gold mines in Canada - Over 9 years at Barrick Gold in increasingly senior operational management roles - Most recently VP Operations at St Andrew Goldfields until its acquisition by Kirkland Lake Gold - Professional geologist with over 30 years experience in domestic and international gold exploration and mining - Former Principal of SRK Consulting Inc - Most recently Chief Geologist at Iamgold - Over 10 years experience in the development and execution of investor relations programs for publicly traded resource companies - Most recently 5 years as Director of Investor Relations at Kirkland Lake Gold - Over 20 year experience in human resources focusing on policy development, compliance, and change management - Most recently Sr. Director, Human Resources at St Andrew Goldfields - 20 years of corporate secretarial, corporate governance and securities regulation experience with a focus on the mining sector in Canada, Europe, Russia and West Africa - Most recently Corporate Secretary at Kirkland Lake Gold - Professional engineer with 20+ years mining experience in operations, construction, sustainability, environment, indigenous peoples, and permitting - Corporate and management experience with Cliffs, International Minerals, SNC-Lavalin(for Barrick, Inmet, BHP, Sherritt, Gold Reserves) - Most recently Director, Sustainability at Richmont Mines (acquired by Alamos Gold in November 2017) TSX:WDO 33

34 Board of Directors Charles Page, P.Geo Chairman - Over 40 years experience in the mineral exploration and mining industry - Most recently President and CEO of Queenston Mining, leading the discovery and development of the Upper Beaver deposit in the Kirkland Lake gold camp, until its acquisition by Osisko Mining Charles Main, CPA, CA Duncan Middlemiss, P. Eng Chief Executive Officer Nadine Miller, P. Eng Warwick Morely-Jepson Rolly Uloth Bill Washington, MBA - Chartered Professional Accountant and member of the Chartered Professional Accountants of Ontario and Canada - Over 30 years experience in finance and mining industries - Most recently Chief Financial Officer of Yamana Gold from Professional engineer with over 25 years experience in operational management, mine rehabilitation, development and gold production - Over 10 years of executive management experience - Most recently Chief Executive Officer of St Andrew Goldfields until its sale to Kirkland Lake Gold in January Over 15 years experience in geotechnical engineering and project management in the mining space - Former Business Development Manager at SNC-Lavalin s Mining and Metallurgy unit - Over 35 years experience in the mining industry within operations, project and business development - Formerly Chief Operating Officer and Executive VP of Kinross Gold Corp - Over 45 years of senior management experience - Co founder of Rosedale Transport, fifth largest trucking company in Ontario - Former Head of Global Mining and Metals at National Bank Financial Markets - Over 25 years experience in capital markets, focused exclusively on the mining sector TSX:WDO 34

35 Cautionary Statements Estimates of Mineral Resources This presentation contains information regarding the mineral resource estimate at the Company s Kiena Mine Complex, which has been classified in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum s CIM Definition Standards on Mineral Resources and Mineral Reserves incorporated by reference into National Instrument Standards of Disclosure for Mineral Projects ( NI ). Mineral resources are not economic mineral reserves and the economic viability of resources that are not mineral reserves has not been demonstrated. The estimate of mineral resources may be materially affected by geology, environmental, permitting, legal, title, socio-political, marketing or other relevant issues. It is uncertain in all cases whether further exploration will result in upgrading the inferred mineral resources to an indicated or measured mineral resource category. Qualified Person The scientific and technical information in this presentation has been reviewed and approved by Michael Michaud, P. Geo and Vice President, Exploration of the Company, who is a qualified person within the meaning of NI TSX:WDO 35

36 Mineral Resources (2017 Year End) Operating Assets MINERAL RESOURCES (Exclusive of Mineral Reserves) (see notes) Tonnes (000s) December 31, 2018 December 31, 2017 Grade (g/t Au) Contained ounces Tonnes (000s) Grade (g/t Au) Contained ounces EAGLE RIVER Measured , Indicated , ,000 Measured + Indicated , ,000 Inferred , ,000 MINERAL RESOURCES (Exclusive of Mineral Reserves) (see notes) Tonnes (000s) December 31, 2018 December 31, 2016 Grade (g/t Au) Contained ounces Tonnes (000s) Grade (g/t Au) Contained ounces MISHI Open pit Indicated , ,000 Inferred 2, , ,000 Underground Indicated ,000 Inferred , ,000 MISHI TOTAL Indicated , ,000 Inferred 3, ,000 1, ,000 Reserves and Resources as at December 31, Mineral Resources exclusive of Mineral Reserves. The contents of this slide have been verified and approved by Michael Michaud, P. Geo, M.ScA, VP Exploration for the Company and a Qualified Person within the meaning of NI For details, please refer to the Company s press release dated February 21, 2019 and AIF dated February 21, 2019 available on the Company s website and sedar.com TSX:WDO 36

37 Eagle River/Mishi Complex Central Ontario Located in Hemlo/Wawa Gold Camp Celebrating 20 years of production 1,000, g/t Au Current operations ~800 tpd Mill located adjacent to Mishi open pit deposit (permitted to 1,200 tpd) Eagle River underground mine located 15 kms to south TSX:WDO 37

38 Latest Drifting Results 300E Structure 864 m Level m of strike length/2.8 m average width/19.6 g/t Au cut/28.3 g/t Au uncut TSX:WDO 38

39 S-50 Zone Isometric View North S-50 Zone - Conceptual Isometric 3D View S-50 Zone depleted portion (red wireframe) Majority of Kiena s production (10M tons or 1.6 M oz Au) was mined from the S-50 zone where widths range from ~15 to 50 metres wide Thicker gold mineralized breccia zones interpreted to be part of a large deformed sigmoidal structure extending northward from the S-50 tabular shear hosted mineralized zone Level 91 Drill holes TSX:WDO 39

40 2013 Moss Lake PEA (2.5 M oz. study) NE open SW NE open 300 m 2.5 km SW General View of Mineralized Zones Longitudinal and Plan View of Moss Lake Pit Highlights Open pit mine and CIL Processing at 40,000 tpd Life of mine strip ratio of 2.5 : 1 10 year mine life averaging 244,000 oz. per year - years 1-5 average 296,000 oz. per year - years 6-10 average 192,000 oz. per year Mill recovery: 79.2% to 84.2% (Gravity CIL) Pre-production Capital: $543 M CDN Operating costs $17.56 CDN per tonne ($922 per oz.) Payback period: 1.75 years After Tax NPV: $196 M at 5% discount rate After Tax IRR of 12% (assumes Au price of $1551 CDN) TSX:WDO 40

41 Moss Lake Resources Category Tonnes Grade (gau/tonne) Contained Ounces Moss Lake Resources Total M + I Resources Total Inferred Resources 39,795, ,377,000 50,364, ,751,000 Reserves and Resources as at December 31, Mineral Resources exclusive of Mineral Reserves The contents of this slide have been verified and approved by Michael Michaud, P. Geo, M.ScA, VP Exploration for the Company and a Qualified Person within the meaning of NI For details, please refer to the Company s AIF dated March 21, 2018 available on the Company s website and sedar.com TSX:WDO 41

42 Kiena Deep A Zone TSX:WDO 42

43 Kiena Complex Drill Core August 2016 TSX:WDO 43