Release Date: November 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Wesdome Gold Mines Ltd (WDOFF, Financial) achieved record gold production of 45,109 ounces in Q3 2024, a 62% increase over Q3 2023.
- The company reported a significant reduction in all-in sustaining costs at Kiena to $1,119 per ounce, placing it in the bottom quartile of the gold mining industry.
- Revenue increased by 111% year over year to CAD 147 million, driven by higher production and a 33% increase in realized gold prices.
- The company recorded a net income of CAD 39 million, or CAD 0.26 per share, a significant increase over prior periods.
- Wesdome Gold Mines Ltd (WDOFF) is debt-free after repaying the balance of its revolving credit facility, with a strengthened balance sheet and working capital of CAD 70 million.
Negative Points
- The company adjusted its 2024 guidance for Kiena, reducing the lower end of the production range by 3,000 ounces due to internal forecasts indicating production at the lower end of initial guidance.
- There was a slight decrease in grade at Kiena in Q3 compared to Q2, attributed to higher than expected dilution in some areas.
- The company noted that a material component of the cost update includes tactical investment decisions not originally contemplated, impacting cost guidance.
- Wesdome Gold Mines Ltd (WDOFF) expects to be fully taxed at about a 35% effective tax rate going forward, impacting cash flow.
- The company is facing challenges in optimizing its cost structure, with a focus on ramp-up execution rather than cost control in 2024.
Q & A Highlights
Q: Anthea, I was intrigued by your commentary at Eagle about the transition from a contractor to an owner model. When could we think of that transitioning as starting, and do you think there are material performance improvements that could be realized?
A: We will see that happening during 2025, with implementation from March to September. The focus is on optimizing efficiency and productivity, and there's a lot of work going on to see how much more value we can add through leveraging those parameters. β Anthea Bath, President, CEO & Director
Q: Regarding the Eagle Development and specifically the six Central zone, what are the mining widths in that area, and how could that impact your thinking about the six central zone coming into this near-term mine plan?
A: In terms of the six central zone, we see geological widths in excess of 1.5 to 6 meters. We are planning to mine from the sixth central in the near term. β Niel de Bruin, Director, Geology
Q: Does the modest revision to Keenan guidance reflect any variations versus your expectations in ramp advancement or stoke development?
A: We continue to learn as we ramp up and apply these learnings to our plan. The block models reconcile well, and we are taking a prudent approach to maximize value. β Anthea Bath, President, CEO & Director
Q: Are the initiatives to further advance Eagle going to fall within normal sustaining CapEx, or would you expect a growth CapEx line item for next year?
A: Some initiatives are part of everyday operations with limited capital expenditure, but there will be initiatives with capital implications aligned with growth. β Anthea Bath, President, CEO & Director
Q: With the Presque ramp and the shaft sharing capacity with people and equipment, what do you think the max movement rate is from underground to surface, and how does that match up with the plant throughput?
A: The Presque ramp is separate from the underground shaft and unlocks material handling constraints. We become fully capable to leverage the full capacity inside the world of 2040 tons a day, potentially beyond that. β Anthea Bath, President, CEO & Director
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
