‘Another Strong Year’ for Canadian Gold Company

Source: Streetwise Reports 03/12/2020

The highlights of Wesdome Gold Mines’ 2019 are presented in an iA Securities report.

In a March 11, 2020 research note, iA Securities analyst George Topping reported that Wesdome Gold Mines Ltd. (WDO:TSX) had “another strong year” in 2019.

The analyst reviewed the highlights. Production in 2019 of 91,700 ounces (91.7 Koz) fell in the high end of guidance. Throughput was decreased but made up for by Eagle underground mine gold grades of 28.6 grams per ton (28.6 g/t). For 2020, iA Securities models higher production, of 94 Koz, at lower gold grades, of 18.2 g/t.

As for the exploration and development company’s 2019 financials, Topping noted they were in line. Free cash flow was CA$6.6 million, cash flow per share was CA$0.15 and EBITDA was CA$25.6 million, all as expected. All in sustaining cost (AISC) was US$988 per ounce, also in line with iA Securities’ forecast. Wesdome ended the year with CA$36 million in cash and CA$41.5 million available through its credit facility.

Also noteworthy, Topping wrote, is that New Eagle’s mineral reserve was expanded by 36%. It now stands at 550 Koz at 14.4 g/t gold, which “supports a typical six-year mine life at a 95 Koz per year production rate.” Impressive drill results, particularly from the 303 lens, resulted in this 20% grade boost, he stated.

Topping noted there are two upcoming catalysts for Wesdome. One is drilling at the Kiena project. With the drilling platforms done, drill testing of the up-plunge extension is taking place. The second potential stock moving event is completion of a preliminary economic assessment for Kiena, which is expected in Q2/20.

Topping concluded that with New Eagle and Kiena, “Wesdome will be a 200–270 Koz producer at sub-US$1,000 AISC, possibly as soon as three years from restart.”

IA Securities has a Buy rating and a CA$13.40 per share target price on Wesdome Gold, whose stock is trading now at around CA$8.41 per share.

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Disclosures from iA Securities, Wesdome Gold Mines Ltd., Research Update, March 11, 2020

Conflicts of Interest: The research analyst and or associates who prepared this report are compensated based upon (among other factors) the overall profitability of iA Securities, which may include the profitability of investment banking and related services. In the normal course of its business, iA Securities may provide financial advisory services for the issuers mentioned in this report. iA Securities may buy from or sell to customers the securities of issuers mentioned in this report on a principal basis.

Analyst’s Certification: Each iA Securities research analyst whose name appears on the front page of this research report hereby certifies that (i) the recommendations and opinions expressed in the research report accurately reflect the research analyst’s personal views about the issuer and securities that are the subject of this report and all other companies and securities mentioned in this report that are covered by such research analyst and (ii) no part of the research analyst’s compensation was, is, or will be directly or indirectly, related to the specific recommendations or views expressed by such research analyst in this report.

Analyst Trading: iA Securities permits analysts to own and trade in the securities and or the derivatives of the issuer under their research coverage, subject to the following restrictions. No trades can be executed in anticipation of coverage for a period of 30 days prior to the issuance of the report and 5 days after the dissemination of the report to our clients. For a change in recommendation, no trading is allowed for a period of 24 hours after the dissemination of such information to our clients. A transaction against an analyst’s recommendation can only be executed for a reason unrelated to the outlook of the stock for the issuer and with the prior approval of the Director of Research and the Chief Compliance Officer.

Company Related Disclosures:
Wesdome Gold Mines Ltd.:
The analyst has visited the issuer’s operations. No payment or reimbursement was received from the issuer for the associated travel costs.

( Companies Mentioned: WDO:TSX,

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