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Wesdome Announces 2022 Second Quarter Financial Results

TORONTO, Aug. 10, 2022 (GLOBE NEWSWIRE) — Wesdome Gold Mines Ltd. (TSX: WDO) (“Wesdome” or the “Company”) today announces its second quarter financial results. All figures are stated in Canadian dollars unless otherwise noted.

Duncan Middlemiss, President and CEO commented, “At Eagle River, the one-time challenges which temporarily impacted production, such as the hoist rope manufacturing defect and the leach tank failure have since been addressed. Head grade at Eagle River in Q2 averaged 9.6 g/t, which is below the 2022 grade guidance of 12.1 -13.4 g/t Au. However, once both issues were resolved, we were able to mine and process the significantly higher-grade ore originally planned for June.

At Kiena, the supply chain challenges, which delayed delivery of the underground equipment in Q1 2022 and negatively affected our development rates, have also delayed delivery of key electrical components for the completion of the paste backfill plant. Consequently, the mining rate has been slower to ramp up, which now puts us approximately 3-4 months behind our original 2022 plan. We look forward to the completion of the paste fill plant (now expected to be commissioned in Q4 2022) to speed up our production cycle and mitigate delays.

As previously disclosed on July15, combined production in Q2 was 27,240 ounces resulting in total H1 2022 production of 52,851 ounces. Challenges such as global supply chain related delays, inflationary cost pressures, and lost productivity from COVID related absences persisted into Q2 and beyond. Subsequent to the quarter both operations were shut down for planned maintenance. During July, the Kiena hoist was shutdown for three weeks for planned refurbishment and at Eagle the mill was shutdown for two weeks for annual scheduled maintenance and thickener refurbishment.

As a result of lower production and sales than planned, both cash costs for the quarter of $1,538 (US$1,205) and AISC of $2,020 (US$1,582) were above our guidance range of $875 – $970 (US$700 – $775) for cash costs and $1,270 – $1,400 (US$1,015 – $1,125) per ounce. Free cash outflow for the quarter was $28.6 million, net of an investment of $31.2 million in Kiena, or ($0.20) per share. This is our final year of elevated growth capital (primarily at Kiena) as commercial production is expected in Q4.

In the beginning of the year, the Company set full year 2022 combined production guidance at 160,000 – 180,000 ounces. At Kiena, commercial production will be declared with the successful commissioning of the paste fill plant, which is now expected in Q4. As a result of the paste fill plant delays and the development deficit, we are revising Kiena guidance to 34,000 – 43,000 ounces. At Eagle River Mine, our recent development into the Falcon Zone has indicated that there is more grade variability than initially demonstrated from the 2021 diamond drilling, and we are forecasting lower grades in this zone for the remainder of 2022. However, this has been a zone which has already demonstrated good upside as well with our successful Falcon mining in late 2021 and we would expect this zone to demonstrate the variability associated with high grade chutes of this nature. Consequently, we are revising Eagle’s guidance to 85,000 – 95,000 ounces. As a result of the lower production and continued inflationary pressures affecting labour cost and availability, ongoing supply chain issues, and the ongoing pandemic, the company is revising both its cash and AISC costs for the year as per the below table.

2022 Guidance Initial Revised YTD 2022

Achievement
Gold production      
Eagle River 95,000 – 105,000 ounces 85,000 – 95,000 ounces 37,090 ounces
Mishi 1,000 – 2,000 ounces 1,000 – 2,000 ounces 1,735 ounces
Kiena 64,000 – 73,000 ounces 34,000 – 43,000 ounces 14,026 ounces
  160,000 – 180,000 ounces 120,000 – 140,000 ounces 52,851 ounces
       
Head grade (g/t Au)      
Eagle River 12.1 – 13.4 10.5 – 11.7 10.6
Mishi 2.0 – 2.5 2.9 – 3.3 3.3
Kiena 10.6 – 11.8 8.6 – 9.5 9.3
       
Cash cost per ounce 1 $875 – $970

(US$700 – US$775)
$1,260 – $1,390

   (US$980 – US$1085)
$1,412

(US$1,111)
AlSC per ounce 1 $1,270 – $1,400

(US$1,015 – US$1,125)
$1,765 – $1,950

(US$1,370 – US$1,520)
$1,851

(US$1,456)


“The Company is continuing its aggressive exploration and drilling program for 2022. We are pleased with the recent expansion of the high grade A Zones and Footwall Zones as well as the discovery of the South Limb zone at Kiena. Similarly at Eagle River, the surface and underground drilling has continued to expand known zones such as 300E and Falcon 7 and identified new areas of mineralization both within the mine diorite and surrounding volcanic rocks. The continued discovery of new mineralization demonstrates the upside exploration potential at both sites.”

Key operating and financial highlights of the Q2 2022 results include:

  • Gold production of 27,240 ounces, including 8,914 Kiena pre-commercial ounces, is a 10% decrease over the same period of the previous year (Q2 2021: 30,375 ounces):
    • Eagle River Underground milled 59,964 tonnes at a head grade of 9.6 grams per tonne for 17,756 ounces produced, a 40% decrease over the same period in the previous year (Q2 2021: 29,836 ounces).
    • Mishi Open Pit milled 7,685 tonnes at a head grade of 2.8 grams per tonne for 570 ounces produced (Q2 2021: 539 ounces).
    • Kiena milled 26,478 tonnes at a head grade of 10.6 grams per tonne for 8,914 pre-commercial ounces produced.
  • Revenue of $61.9 million, a 3% decrease over the same period of the previous year (Q2 2021: $63.9 million).
  • Ounces sold were 26,000 at an average sales price of $2,380/oz (Q2 2021: 28,500 ounces at an average price of $2,239/oz).
  • Cash margin1 of $21.9 million, a 46% decrease over the same period of the previous year (Q2 2021: $40.6 million).
  • Operating cash flows decreased by 55% to $12.1 million or $0.08 per share1 as compared to $26.9 million or $0.19 per share for the same period in 2021.
  • Free cash outflow of $28.6 million, net of an investment of $31.2 million in Kiena, or ($0.20) per share1 (Q2 2021: free cash outflow of $9.1 million or ($0.07) per share1).  
  • Net loss of $14.3 million or ($0.10) per share (Q2 2021: Net income – $84.9 million or $0.63 per share) and Net loss (adjusted)1 of $5.5 million or ($0.04) per share (Q2 2021: $20.6 million or $0.15 per share)
  • Cash position at the end of the quarter of $23.5 million.
  • Cash costs1 of $1,538/oz or US$1,205/oz, an 89% increase over the same period in 2021 (Q2 2021: $814/oz or US$663/oz);
  • AISC1 increased by 63% to $2,020/oz or US$1,582/oz (Q2 2021: $1,240 or US$1,009 per ounce) due to lower ounces sold and increased corporate and general expenses.
    1. Refer to the Company’s 2021 Annual Management Discussion and Analysis section entitled “Non-IFRS Performance Measures” for the reconciliation of these non-IFRS measurements to the consolidated financial statements.


Production and

Exploration Highlights
Achievements  
Eagle River Complex
  • Q2 2022 Eagle River underground ore production decreased by 40% from Q2 2021 to 17,756 ounces of gold due to a manufacturing defect on a new hoist rope, resulting in two weeks of lower productivity as ore was trucked to surface, while a new rope was sourced, and one of the leach tanks at the mill, which was previously scheduled to be replaced later this year, failed in mid-June, impacting nearly one week of mill production. Head grade at Eagle River in Q2 2022 averaged 9.6 g/t, which is below the 2022 grade guidance of 12.1 -13.4 g/t Au. Once both issues were resolved, we were able to mine and process the significantly higher grade ore planned for June.
  • Q2 2022 cash cost of $1,395 (US$1,093) per ounce of gold sold1 increased by 71% or $580 per ounce from Q2 2021 due to a 30% decrease in ounces sold, and a 14% increase in overall aggregate site operating costs resulting from increased operating development, general maintenance, and inflationary pressures, driven by higher labour costs and an increase in commodity inputs, including higher fuel and energy costs.
  • Q2 2022 AISC of $1,940 (US$1,519) per ounce of gold sold1 increased by 57% or $701 per ounce from Q2 2021 due to a 30% decrease in ounces sold and a 14% increase in overall aggregate site operating costs resulting from increased operating development, general maintenance, and inflationary pressures, driven by higher labour costs and an increase in commodity inputs, including higher fuel and energy costs.
  • Generated a cash margin in Q2 2022 of $19.7 million compared to $40.6 million in Q2 2021 due to the 30% decrease in ounces sold, the 14% increase in overall aggregate site operating costs; partially offset by a 6% higher average realized Canadian gold price of $2,382 per ounce (Q2 2021 – $2,239 per ounce).
  • Definition drilling is focused at the Falcon Zone and 300 E Zone. A record Inferred Resource inventory provides a platform for a potential increase in Reserve replacement for 2022.Definition and expansion drilling has continued to return high grade gold mineralization from the Falcon 7 zone with 90.2 g/t Au over 4.9 m core length (21.2 g/t Au capped, 3.4 m true width) and 87.1 g/t Au over 6.6 m core length. The discovery and initial production from the Falcon 7 Zone reaffirms the potential of the surrounding volcanic rocks to host sizeable deposits of gold mineralization and remains a focus for drilling. New development is being completed along the 355 m Level extending 400 m west of the mine diorite and will provide platforms to test for gold mineralization further along strike, and for parallel zones where surface exploration has returned encouraging results from a region of the mine that has historically been given very little attention.
  • Meanwhile, underground exploration drilling is being completed down plunge at the 300E, 711 and 811 zones that remain open down plunge. Additional underground exploration is ongoing further to the east of the current mining areas, in the east-central area of the mine, to test for parallel zones north of the historic 8 and 6 Zones.
  • Surface drilling is ongoing with one drill to test the up plunge extension of the Falcon 7 zone near surface and other zones along this trend further to the west. The recent drilling has intersected several well altered and mineralized areas with VG, which is interpreted to be the up plunge extension of the Falcon 7 zone.
  • Drilling within the central portion of the mine diorite has intersected the interpreted eastern extension of the 7 zone. Several holes in this area have intersected VG and in the future will be better drilled from underground.
  • Also, drilling within the volcanic rocks east of the mine diorite approximately 150 m down dip and the previously mined 2 Zone intersected quartz veining and alteration.   
 
Kiena
  • Generated $2.1 million in cash margin despite the high cash costs of $2,018 (US$1,581) per ounce of gold sold1 due to low pre-commercial production levels. The global supply chain challenges, which delayed delivery of the underground equipment in Q1 2022, have also delayed delivery of key electrical components for the completion of the paste backfill plant. Consequently, the mining rate has been slower to ramp up, which now puts us approximately 3-4 months behind our original 2022 plan. We look forward to the completion of the paste fill plant (now expected to be commissioned in Q4 2022) to speed up our production cycle and mitigate delays.
  • Most recently, underground exploration drilling at the Kiena Deep A Zones area has discovered a new mineralized interval (hole 6752W10) located 100 metres below the known limit of A zone resource returning 13.9 g/t Au over 83.2 m core length (9.9 g/t Au capped) (see June 1, 2022 press release).
  • Recent drilling has discovered the lateral extension of the A Zone along the South limb of the fold returning 16.5 g/t au over 4.7 m and 17.8 g/t Au over 4.2 m. The discovery of the South limb of the A Zone could significantly add to the resource base.
  • Additionally, underground drills have been moved onto the 33 level to test historic zones and encouraging drill results further to the southeast along strike from the Kiena mine.

    Surface drilling is focused on discovering new zones at the Shawkey and Bourgo zones, where previous drilling has returned encouraging results, and defining and extending the historical Presqu’ile and Shawkey Dubuisson areas located northwest and southeast of the Kiena Mine, respectively. These areas are close to the mine infrastructure and represent a potential additional source of ore for the Kiena mill.

 



Wesdome Gold Mines 2022 Second Quarter Financial Results conference call:

August 11, 2022 at 10:00 am ET. Registration is required.

Registration Link: https://register.vevent.com/register/BI6fabe85cad5f48ea97a0b7087d4cb9cb

Webcast link:

https://edge.media-server.com/mmc/p/8ft6b4im

The webcast can also be accessed under the News and Events section of the Company’s website (www.wesdome.com)

Technical Disclosure

The technical content of this release has been compiled, reviewed and approved by Frederic Langevin, Eng, Chief Operating Officer, a “Qualified Person” as defined in National Instrument 43-101 –Standards of Disclosure for Mineral Projects.

COVID-19

The health and safety of our employees, contractors, vendors, and consultants is the Company’s top priority. In response to the COVID-19 outbreak, Wesdome has adopted all public health guidelines regarding safety measures and protocols at all of its mine operations and corporate office. These protocols are still in place at all sites despite the loosening of some provincial public health guidelines. In addition, our internal COVID-19 Taskforce continues to monitor developments and implement policies and programs intended to protect those who are engaged in business with the Company.

Through care and planning, to date the Company has successfully maintained operations, however there can be no assurance that this will continue despite our best efforts with the emergence of new, highly contagious variants such as Omicron. To date, the company has been impacted by this most recent variant outbreak, with employees at both operations and corporate office becoming infected which may negatively impact our ability to maintain projected timelines and objectives. Consequently, the Company’s actual future production and production guidance is subject to higher levels of risk than usual. We are continuing to closely monitor the situation and will provide updates as they become available.

ABOUT WESDOME

Wesdome is a Canadian focused gold producer with two high grade underground assets, the Eagle River mine in Ontario and the recently re-started Kiena mine in Quebec. The Company also retains meaningful exposure to the Moss Lake gold deposit in Ontario through its equity position in Goldshore Resources Inc. The Company’s primary goal is to responsibly leverage this operating platform and high-quality brownfield and greenfield exploration pipeline to build Canada’s next intermediate gold producer. Wesdome trades on the Toronto Stock Exchange under the symbol “WDO,” with a secondary listing on the OTCQX under the symbol “WDOFF.”

For further information, please contact:



This news release contains “forward-looking information” which may include, but is not limited to, statements with respect to the future financial or operating performance of the Company and its projects. Often, but not always, forward-looking statements can be identified by the use of words such as “plans”, “expects”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates”, or “believes” or variations (including negative variations) of such words and phrases, or state that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Forward-looking statements contained herein are made as of the date of this press release and the Company disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or results or otherwise. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. The Company undertakes no obligation to update forward-looking statements if circumstances, management’s estimates or opinions should change, except as required by securities legislation. Accordingly, the reader is cautioned not to place undue reliance on forward-looking statements. The Company has included in this news release certain non-IFRS performance measures, including, but not limited to, mine operating profit, mining and processing costs and cash costs. Cash costs per ounce reflect actual mine operating costs incurred during the fiscal period divided by the number of ounces produced. These measures are not defined under IFRS and therefore should not be considered in isolation or as an alternative to or more meaningful than, net income (loss) or cash flow from operating activities as determined in accordance with IFRS as an indicator of our financial performance or liquidity. The Company believes that, in addition to conventional measures prepared in accordance with IFRS, certain investors use this information to evaluate the Company’s performance and ability to generate cash flow.


Wesdome Gold Mines Ltd.

Summarized Operating and Financial Data

(Unaudited, expressed in thousands of Canadian dollars, except per share and per unit amounts and otherwise indicated)

    Three Months Ended Six Months Ended
    June 30,   June 30,
    2022     2021     2022     2021  
Operating data                
Milling (tonnes)                
Eagle River   59,964     63,057     113,181     116,597  
Mishi   7,685     9,347     19,558     26,566  
Kiena   26,478         47,640      
Throughput 2   94,127     72,404     180,379     143,163  
Head grades (g/t)                
Eagle River   9.6     15.1     10.6     14.1  
Mishi   2.8     2.4     3.3     2.4  
Kiena   10.6         9.3      
Recovery (%)                
Eagle River   95.6     97.4     96.6     97.3  
Mishi   81.2     76.1     83.6     81.9  
Kiena   98.5         98.3      
                 
Production (ounces)                
Eagle River   17,756     29,836     37,090     51,232  
Mishi   570     539     1,735     1,707  
Kiena   8,914         14,026      
Total gold produced 2   27,240     30,375     52,851     52,939  
Total gold sales (ounces) 4   26,000     28,500     54,000     50,957  
                 
Eagle River Complex (per ounce of gold sold) 1            
Average realized price $ 2,382   $ 2,239   $ 2,389   $ 2,232  
Cash costs   1,395     814     1,330     930  
Cash margin $ 987   $ 1,425   $ 1,059   $ 1,302  
All-in Sustaining Costs 1 $ 1,940   $ 1,240   $ 1,858   $ 1,353  
                 
Mine operating costs/tonne milled 1 $ 387   $ 324   $ 386   $ 330  
                 
Average 1 USD → CAD exchange rate   1.2768     1.2282     1.2715     1.247  
                 
Cash costs per ounce of gold sold (US$) 1 $ 1,093   $ 663   $ 1,046   $ 745  
All-in Sustaining Costs (US$) 1 $ 1,519   $ 1,009   $ 1,461   $ 1,085  
                 
Kiena Mine (per ounce of gold sold) 1                
Average realized price $ 2,372   $   $ 2,355   $  
Cash costs 3, 5   2,018         1,622     238  
Cash margin $ 354   $   $ 733   $ (426 )
All-in Sustaining Costs 1, 3, 5 $ 2,284   $   $ 1,834   $ 238  
                 
Mine operating costs/tonne milled 1 $ 557   $   $ 567   $  
                 
Average 1 USD → CAD exchange rate   1.2768     1.2282     1.2715     1.247  
                 
Cash costs per ounce of gold sold (US$) 1 $ 1,581   $   $ 1,276   $ 191  
All-in Sustaining Costs (US$) 1 $ 1,789   $   $ 1,442   $ 191  
                 
Financial Data                
Cash margin 1 $ 21,873   $ 40,590   $ 52,215   $ 62,366  
Net income $ (14,331 ) $ 84,937   $ (7,280 ) $ 92,040  
Net income adjusted 1 $ (5,481 ) $ 20,630   $ 1,570   $ 27,733  
Earnings before interest, taxes, depreciation and amortization 1 $ 8,844   $ 37,454   $ 29,494   $ 56,116  
Operating cash flow $ 12,101   $ 26,875   $ 41,994   $ 48,908  
Free cash flow $ (28,576 ) $ (9,131 ) $ (35,372 ) $ (9,032 )
Per share data                
Net income $ (0.10 ) $ 0.61   $ (0.05 ) $ 0.66  
Adjusted net income 1 $ (0.04 ) $ 0.15   $ 0.01   $ 0.20  
Operating cash flow 1 $ 0.08   $ 0.19   $ 0.30   $ 0.35  
Free cash flow 1 $ (0.20 ) $ (0.07 ) $ (0.25 ) $ (0.06 )
                 
  1. Refer to the Company’s 2021 Annual Management Discussion and Analysis section entitled “Non-IFRS Performance Measures” for the reconciliation of these non-IFRS measurements to the consolidated financial statements.
  2. Totals for tonnage and gold ounces may not add due to rounding.
  3. YTD 2021 includes a $0.4 million charge for product inventory costs from the sale of 1,793 ounces of gold from the Kiena bulk sample, which was processed in Q4 2020.
  4. YTD 2021 includes 1,793 ounces of gold from the Kiena bulk sample, which was processed in Q4 2020
  5. In determining the Cash cost per ounce and AISC per ounce, the total ounces sold includes 1,793 ounces of gold from the Kiena bulk sample, which was processed in Q4 2020 and sold in Q1 2021.

Wesdome Gold Mines Ltd.

Condensed Interim Statements of Financial Position

(Unaudited, expressed in thousands of Canadian dollars)

     As at

June 30, 2022
  As at

December 31, 2021
Assets        
Current        
Cash and cash equivalents   $ 23,516     $ 56,764  
Receivables and prepaids     8,343       13,793  
Inventories     22,864       17,918  
Income and mining tax receivable     1,438        
Share consideration receivable           4,560  
Total current assets     56,161       93,035  
         
Restricted cash     1,151       657  
Deferred financing costs     590       758  
Mining properties, plant and equipment     205,390       212,394  
Mines under development     272,699       214,089  
Exploration properties     1,139       1,139  
Marketable securities     960       1,860  
Share consideration receivable     6,117       10,729  
Investment in associate     9,414       19,058  
Total assets   $ 553,621     $ 553,719  
         
Liabilities        
Current        
Payables and accruals   $ 53,325     $ 40,093  
Income and mining tax payable           5,490  
Current portion of lease liabilities     7,371       7,789  
Total current liabilities     60,696       53,372  
         
Lease liabilities     5,036       6,786  
Deferred income and mining tax liabilities     77,644       77,195  
Decommissioning provisions     18,589       21,191  
Total liabilities     161,965       158,544  
         
Equity        
Equity attributable to owners of the Company        
Capital stock     192,753       187,911  
Contributed surplus     5,678       5,859  
Retained earnings     194,365       201,645  
Accumulated other comprehensive loss     (1,140 )     (240 )
Total equity attributable to owners of the Company     391,656       395,175  
Total liabilities and equity   $ 553,621     $ 553,719  

Wesdome Gold Mines Ltd.

Condensed Interim Statements of Income and Comprehensive Income

(Expressed in thousands of Canadian dollars except for per share amounts)

  Three Months Ended   Six Months Ended
  June 30,   June 30,
    2022       2021 1       2022       2021 1  
               
Revenues $ 61,931     $ 63,881     $ 128,625     $ 109,854  
Cost of sales   (51,374 )     (29,774 )     (96,080 )     (60,038 )
Gross profit   10,557       34,107       32,545       49,816  
               
Other expenses              
Corporate and general   3,221       2,841       6,596       5,232  
Stock-based compensation   1,554       1,203       1,630       1,513  
Exploration and evaluation   4,213             7,169        
Reversal of impairment charges         (58,563 )           (58,563 )
Impairment charge on exploration properties         3,113             3,113  
Gain on disposal of mining equipment   (10 )           (12 )      
Total other expenses   8,978       (51,406 )     15,383       (48,705 )
               
Operating income   1,579       85,513       17,162       98,521  
               
Gain on sale of Moss Lake exploration properties         34,330             34,330  
Impairment of investment in associate   (11,800 )           (11,800 )      
Fair value adjustment on share consideration receivable   (3,605 )     1,521       (5,839 )     1,521  
Interest expense   (316 )     (271 )     (579 )     (530 )
Accretion of decommissioning provisions   (208 )     (124 )     (379 )     (234 )
Share of loss of associate   (131 )     (89 )     (543 )     (89 )
Loss on dilution of ownership   (429 )           (634 )      
Other income (expense)   322       (400 )     57       (703 )
(Loss) income before income and mining taxes   (14,588 )     120,480       (2,555 )     132,816  
               
Income and mining tax expense              
Current   1,788       4,250       4,276       5,346  
Deferred   (2,045 )     31,293       449       35,430  
Total income and mining tax expense   (257 )     35,543       4,725       40,776  
               
Net (loss) income $ (14,331 )   $ 84,937     $ (7,280 )   $ 92,040  
               
Other comprehensive loss              
Change in fair value of marketable securities   (1,410 )           (900 )      
Total comprehensive (loss) income $ (15,741 )   $ 84,937     $ (8,180 )   $ 92,040  
               
               
(Loss) Earnings per share              
Basic $ (0.10 )   $ 0.61     $ (0.05 )   $ 0.66  
Diluted $ (0.10 )   $ 0.60     $ (0.05 )   $ 0.65  
               
Weighted average number of common shares (000s)              
Basic   142,478       139,754       142,146       139,587  
Diluted   142,478       142,630       142,146       142,454  
               
  1. Q2 2021 has been restated to correct an error in the valuation of the share consideration receivable related to the sale of the Moss Lake Project which closed on May 31, 2021.  The proceeds have been restated to $44.7 million from $49.5 million, which has decreased the gain on sale of the Moss Lake properties to $30.2 million (net of tax of $4.1 million) from $34.6 million (net of tax of $4.5 million).  The Q2 2021 net income has decreased by $2.9 million, which includes a $1.5 million gain resulting from the mark-to-market of the share consideration receivable.  Basic earnings per share for Q2 2021 changed from $0.63 to $0.61 per share and basic earnings per share for Q2 YTD 2021 changed from $0.68 to $0.66 per share.

Wesdome Gold Mines Ltd.

Condensed Interim Statements of Changes in Equity

(Unaudited, expressed in thousands of Canadian dollars)

              Accumulated    
              Other    
  Capital   Contributed   Retained   Comprehensive Total
  Stock   Surplus   Earnings 1   Loss   Equity 1
                   
Balance, December 31, 2020 $ 179,540     $ 6,472     $ 70,357     $     $ 256,369  
Net income for the period ended                  
June 30, 2021               92,040             92,040  
Exercise of options   1,231                         1,231  
Value attributed to options exercised   587       (587 )                  
Value attributed to RSUs exercised   786       (786 )                  
Stock-based compensation         1,513                   1,513  
Balance, June 30, 2021 $ 182,144     $ 6,612     $ 162,397     $     $ 351,153  
                   
                   
Balance, December 31, 2021 $ 187,911     $ 5,859     $ 201,645     $ (240 )   $ 395,175  
Net loss for the period ended                  
June 30, 2022               (7,280 )           (7,280 )
Other comprehensive loss                     (900 )     (900 )
Exercise of options   3,031                         3,031  
Value attributed to options exercised   1,173       (1,173 )                  
Value attributed to RSUs exercised   638       (638 )                  
Stock-based compensation         1,630                   1,630  
Balance, June 30, 2022 $ 192,753     $ 5,678     $ 194,365     $ (1,140 )   $ 391,656  
                   
  1. See footnote in the condensed interim statements of income and comprehensive income for details of the restatement in Q2 2021.

Wesdome Gold Mines Ltd.

Condensed Interim Statements of Cash Flows

(Unaudited, expressed in thousands of Canadian dollars)

  Three months ended June 30,   Six months ended June 30,
    2022       2021 1       2022       2021 1  
               
Operating Activities              
Net (loss) income $ (14,331 )   $ 84,937     $ (7,280 )   $ 92,040  
Depreciation and depletion   11,316       6,483       19,670       12,550  
Stock-based compensation   1,554       1,203       1,630       1,513  
Accretion of decommissioning provisions   208       124       379       234  
Deferred income and mining tax expense   (2,045 )     31,293       449       35,430  
Amortization of deferred financing cost   85       119       169       224  
Interest expense   316       271       579       530  
Reversal of impairment charges         (58,563 )           (58,563 )
Gain on sale of Moss Lake exploration properties         (34,330 )           (34,330 )
Impairment charge on exploration properties         3,113             3,113  
Gain on disposal of mining equipment   (10 )           (12 )      
Impairment of investment in associate   11,800             11,800        
Fair value adjustment on share consideration receivable   3,605       (1,521 )     5,839       (1,521 )
Share of loss of associate   131       89       543       89  
Loss on dilution of ownership   429             634        
Foreign exchange gain on borrowings   (77 )     (50 )     (109 )     (79 )
Net changes in non-cash working capital   4,642       (1,131 )     18,906       3,039  
Mining and income tax paid   (5,522 )     (5,162 )     (11,203 )     (5,361 )
Net cash from operating activities   12,101       26,875       41,994       48,908  
               
Financing Activities              
Proceeds from revolving credit facility   14,956             14,956        
Repayment of revolving credit facility   (14,810 )           (14,810 )      
Exercise of options   264       910       3,031       1,231  
Deferred financing costs         (95 )           (334 )
Repayment of lease liabilities   (2,345 )     (1,884 )     (4,431 )     (3,400 )
Interest paid   (316 )     (271 )     (579 )     (530 )
Net cash used in financing activities   (2,251 )     (1,340 )     (1,833 )     (3,033 )
               
Investing Activities              
Additions to mining properties   (7,132 )     (10,050 )     (13,322 )     (17,873 )
Additions to mines under development   (31,200 )     (12,704 )     (59,613 )     (13,400 )
Additions to exploration properties         (11,368 )           (23,267 )
Cash proceeds on sale of Moss Lake, net of transaction costs         11,762             11,762  
Funds held against standby letter of credit   (494 )           (494 )      
Proceeds on disposal of mining equipment   20             20        
Net changes in non-cash working capital         740             1,222  
Net cash used in investing activities   (38,806 )     (21,620 )     (73,409 )     (41,556 )
               
(Decrease) increase in cash and cash equivalents   (28,956 )     3,915       (33,248 )     4,319  
Cash and cash equivalents – beginning of period   52,472       63,884       56,764       63,480  
Cash and cash equivalents – end of period $ 23,516     $ 67,799     $ 23,516     $ 67,799  
               
Cash and cash equivalents consist of:              
Cash $ 23,516     $ 67,799     $ 23,516     $ 67,799  
  $ 23,516     $ 67,799     $ 23,516     $ 67,799  
               
  1. See footnote in the condensed interim statements of income and comprehensive income for details of the restatement in Q2 2021.

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