What has been the basis of Wesdome Gold Mines’ success over the last three years?

Wesdome has a crystal clear strategy about building Canada’s next mid-tier gold producer. For us, mid-tier has a floor of 200,000 ounces of annual production. The way we are going to succeed in this strategy is through the company’s two primary assets – the Eagle River Mine in Ontario and the Kiena Mine in Quebec. Eagle River has been in production for many years, and the exploration and production success we have had with this mine since 2016 certainly has given us the confidence that we will be able to develop a platform of at least 100,000 oz of annual production with an expanding mine life and profitability. 

Can you provide details of Wesdome’s flagship project: the Eagle River complex?

Currently the reserves at the Eagle River complex stand at just over 400,000 oz at 12 g/mt. We have been very fortunate in 2019 to be mining in areas that are reconciling very well, especially our 303 Zone. The guidance for 2019 was 72,000 to 80,000 oz, all coming from the Eagle River complex with the majority coming from the underground mine and a small portion from the open pit, which is starting to deplete. Initially we thought that we were going to mine 16 g/mt, but we have been producing at 21 g/mt. Wesdome’s success on this project has allowed the company to accelerate the investment program into Eagle River, a complex that was largely undercapitalized and underexplored. This includes enhancing the tailings capacity, improving the mill by adding a Falcon gravity concentrator and developing the proper drilling platforms within the mine.

Moving forward, we would like to understand what lies at depth and we are investing for the future. Based on current projections, we have at least seven years of mine life left, and I am fully confident that this will keep increasing as we discover new resources.

What is the current status of the Kiena project and timeline for its development?

The Kiena project is in advanced exploration stages. The advantage Wesdome has is that this project is a fully built, fully permitted mine, and the resources that we have been able to explore and define better are incredibly high grade – almost 18 g/mt in the indicated and 15 g/mt in the inferred resource. The timeframe and capital input to get the Kiena mine restarted is estimated to be fairly low. We have recently updated our resource estimate and combined measured and indicated resources are approximately 740,000 oz in our high grade A Zone. The updated estimate includes drill data as of August 6, 2019 and includes an additional 140 drill holes, for a total of 36,050 m drilled since October 12, 2018. Of these 140 new drill holes, 66 are in Kiena Deep A Zones, resulting in the inclusion of an additional 18,365 m of drill data. The indicated resource grade is 18.55 g/mt for 405,000 oz and the inferred resources grade at 15.2 g/mt for 332,000 oz. We have more than doubled the resource of high grade in less than a year. We continue to believe that the Kiena project has excellent geological potential that will deliver value to shareholders.

This year we will have spent C$27 million on the Kiena project, completely funded by the Eagle River project. Wesdome has invested heavily in exploration at Kiena over the last four years as we believe that we really have a superior geological asset. We are in the process of completing a PEA, of which some of the sections are conducted at a PFS level, with results expected to be released in April 2020. This will define the company’s next steps.

Do you expect M&A activity to pick up as precious metals prices continue to rise?

The M&A space has been quiet for some time as people who had made a foray into such activities were punished by low commodity prices and poor market reaction. Mining was not showing great returns for investors, who then started to look at other industries. Industry-wide we are seeing a lack of exploration by majors, but I believe that we will start seeing more M&A activity moving forward. The recent acquisition of North American Palladium by Impala Platinum, for example, is good for the M&A front.  Since the rules have changed and companies are now allowed a 105-day window, more companies are seeking partnerships and mergers.

Where would you like to see Wesdome by the end of 2020, and what is the focus of the company moving forward?

By 2020, I would like to see the Eagle River project ramping up towards a production of 100,000 oz. I would also like to have a restart plan in place for the Kiena mine and perhaps have some pre-production activities underground.

We are confident that we will be able to keep growing the company organically. We believe that the only way to show value to our shareholders is through continued exploration success, and we still have a significant amount of exploration potential. Wesdome is currently focused on the Abitibi belt, and once we are well on our way to restarting Kiena and have reached 100,000 oz of production at Eagle River, the company will be in a position to look at acquiring more assets.