November Building Canada s Next Mid-Tier Gold Producer

Transcription

1 November 2018 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 Guidance: 70,000 75,000 ozs (YTD 2018: 54,371 ozs) Drilling High grade discovery at Kiena Complex 3 Eagle River Operations funding $23 M exploration and development at Kiena YTD 2018 free cash flow generation of $7.3 M 1 2 Q fourth consecutive quarter of free cash flow generation Eagle River Complex, Wawa, Ont. Operating Mine Complex, two deposits feed central ~850 tpd Past Prod.: 1.1 M oz Reserves: P&P 518,000 oz Resources: M&I 342,000 oz, Inf. 225,000 oz Kiena, Val d Or, Quebec Production Suspended 2013 Past Prod.: 1.75 M oz Resources: M&I 450,000 oz, Inf. 400,000 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 $4.19/$1.64 (Average daily volume 800,000 shares) Market Capitalization $515M ($3.80 November 9, 2018) Cash Position $30M (November 1, 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 One Year Six Month Three Year Five Year 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 Q3 & YTD 2018 Operating Results Amounts are denominated in Canadian dollars Third Quarter Year -to-date Variance % +/( -) Variance % +/( -) Ore milled (tonnes) Eagle River 46,777 44,421 2,356 5% 134, ,959 16,676 14% Mishi 4,076 38,638 (34,562) (89)% 62, ,396 (52,241) (46)% 50,854 83,058 (32,204) (39)% 196, ,355 (35,565) (15)% Head grade (grams per tonne, g/t ) Eagle River % % Mishi % % Gold production (ounces) Eagle River 19, ,313 6, % 50,602 37,498 13,104 35% Mishi 358 2,181 (1,823) (84)% 3,769 5,687 (1,918) (34)% Total gold production 19,795 15,493 4,302 28% 54,371 43,185 11,186 26% Production sold (ounces) 18,401 13,069 5,332 41% 52,404 38,419 13,985 36% Revenue from gold sales ($ millions) 2 $28.9 $2 1.2 $ % $86.6 $64.5 $ % Average realized price per ounce 3 $1,571 $1,619 ($48) (3)% $1,651 $1,656 ($5) - % Notes: Numbers may not add due to rounding. Revenue for year-to-date 2017 includes $0.9 million in gold sales from the cleanup of the Kiena mill. Average realized price per ounce is a non-gaap measure and is calculated by dividing the reported revenue from gold sales by the number of ounces sold for a given period. TSX:WDO 7

8 2018 Production Guidance Raised to 70,000 75,000 Ounces TSX:WDO 8

9 Q Financial Results, 4 Consecutive Quarters of Free Cash Flow Generation 1 Refer to the section entitled Non-IFRS Performance Measures for the reconciliation of these non-ifrs measurements to the financial statements. 3 Revenues for Q2, 2018, Q and Q includes insignificant amounts from the sale of by-product silver (nil for other periods). 4 Revenues in Q and Q3/Q include $0.9 million and $2.4 million, respectively in revenue generated from gold recovery from the clean up of the Kiena mill (nil for other periods). TSX:WDO 9

10 Mineral Reserves (2017 Year End) 21% increase in Eagle River ounces; grade increased by 32% 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 26, 2018 and AIF dated March 21, 2018 available on the Company s website and sedar.com TSX:WDO 10

11 Eagle River Parallel Structure Reserve Breakdown Structure Tonnage Grade (gau/tonne) Contained Ounces Percentage of P + P Reserve Ounces Proven and Probable Reserves No , ,000 17% No , ,000 53% No , ,000 23% Other 112, ,000 7% Total 1,059, , % 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 26, 2018 and AIF dated March 21, 2018 available on the Company s website and sedar.com TSX:WDO 11

12 Exploration: Two Properties Attain Highest Grade Hits in 2017 Source: Mining Intelligence/Mining.com TSX:WDO 12

13 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 2017 Production: 50,996 ounces (152, g/t) 7 Zone Surface TSX:WDO 13

14 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 300 Zone began in Q3 2015, 7 Zone in production since Q Recent widths at 300 North and 303 East Zones wider than previously encountered 100 m open TSX:WDO 14

15 Eagle Drilling to Diversify Production Locations Longitudinal Section Looking North Untested Potential in Parallel Zones 303 Lens 864m drift highlights Lens Strike Length (m) Aver age Widt h (m) Uncut Grade (g/t Au) Cut Grade (g/t Au) 300B C N Lens structure currently traced from 750 m to 1000 m depth and remains open 7 Zone drifting highlights Level Strike Length (m) Avera ge Width (m) Uncut Grade (g/t Au) Grade Cut (g/t Au) 1006 E W Combi ned 1022 E W 1022 Combi ned TSX:WDO 15

16 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 16

17 Eagle Surface Exploration Drill Targets N N 3D View (looking northwest) 10,000 m of drilling commencing September 2018 TSX:WDO 17

18 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 18

19 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 19

20 Kiena Complex Location, Location, Location! Property Size: 65 Square Kilometres TSX:WDO 20

21 Kiena Complex Regional Geological Potential Wesdome Deposit 0.4 M oz Resource Siscoe Mine 0.9 M oz prod Presqu ile Deposit 0.1 M oz Resource Kiena Deep Kiena Mine 1.8 M oz TSX:WDO 21

22 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 40,000 metre underground drill program in 2018 Drilling 25 x 25 metre spacing Goal to establish indicated resources by Q418 TSX:WDO 22

23 A Zone and Exploration Potential Parallel A Zone Structures A Zone TSX:WDO 23

24 Kiena Deep A Zone Longitudinal Section S50 Zone VC Zone A Zone Up Plunge Extension B Zone A Zone Open TSX:WDO 24

25 Kiena Deep A Zone - Open Up and Down Plunge and Dip A1 Zone 250 m A2 Zone Kiena Deep A Zone TSX:WDO 25

26 Kiena Deep A Zone - Up Plunge Potential 600 m plunge potential 600 m plunge defined TSX:WDO 26

27 Kiena Deep A Zone Flattens at Depth with Multiple Zones TSX:WDO 27

28 Extended Ramp Development and Recent Results Average thickness 7 m 48 out of 50 holes visible gold showings TSX:WDO 28

29 VC Zone Near-Term Production Potential Highlights include: g/t or (17.70 g/t cut to g/t) over 5.6 m true width in hole 6205 (A Zone?) g/t or (8.56 g/t cut to g/t) over 3.0 m true width in hole g/t (9.26 g/t cut) over 3.0 m true width in hole 6208 VC Zones Important Aspect of restart program TSX:WDO 29

30 Kiena Deep A Zone Maiden Resoruce December 2018 TSX:WDO 30

31 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 31

32 2018 Exploration Summary Sustained Investment $10.8 M Exploration Drilling Budget Eagle: 4 Underground Drills 1 Surface Drill (September) Kiena: 4 Underground Drills Property 2018 Metres 2017 Metres 2016 Metres 2015 Metres Eagle Underground Exploration Drilling Eagle River Underground Definition Drilling 25,000 24,000 27,000 22,000 25,000 35,000 32,000 20,000 Eagle Surface Exploration Drilling 10,000 15,000 25,000 0 Mishi Exploration Drilling 0 15,000 25,000 5,000 Kiena Complex 50,000 45,000 10,000 0 Moss Lake 0 25,000 4,000 0 Total 110, , ,000 47,000 TSX:WDO 32

33 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 33

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

35 Appendix

36 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 36

37 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 37

38 Notes to Technical Disclosure Technical Disclosure Mineral Resources This presentation contains information regarding mineral resources estimated at the Company s projects. Mineral resources are not mineral reserves and do not have demonstrated economic viability. Further, the quantity and grade of reported inferred mineral resources are uncertain in nature and it cannot be assumed that further exploration will result in all or any part of an inferred mineral resource being upgraded to an indicated or measured mineral resource category. Qualified Person - Ontario The technical information contained in this presentation has been reviewed and approved by Michael Michaud, P.Geo, M.ScA, VP Exploration for the Company and a Qualified Person within the meaning of National Instrument Standards of Disclosure of Mineral Projects ( NI ). Qualified Person Quebec The technical information contained is this presentation pertaining to Quebec properties, ( Kiena Complex and Kiena Deep ) has been approved and verified by Marc Ducharme, P. Geo, Chief Exploration Geologist for the Company and a Qualified Person within the meaning of National Instrument Standards of Disclosure of Mineral Projects ( NI ). Additional Information Additional information about each of the mineral projects as required by NI , including key assumptions, parameters and methods used to estimate the mineral resources presented in respect of the Company s projects, can be found in Technical Reports filed for each respective property on SEDAR at Other important operating information can be found in the Company's AIF, MD&A and press releases. Financial Disclosure Unless otherwise indicated, all dollar values herein are in CDN$. TSX:WDO 38

39 Mineral Resources (2017 Year End) Operating Assets Category Tonnes Grade (gau/tonne) Contained Ounces Eagle River Underground Resources Indicated 50, ,000 Inferred 334, ,000 Mishi Open Pit Resources Indicated 3,679, ,000 Inferred 764, ,000 Mishi Underground Resources Indicated 567, ,000 Inferred 437, ,000 Total M + I Resources 342,000 Total Inferred Resources 225,000 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 22, 2017 and AIF dated March 21, 2018 available on the Company s website and sedar.com TSX:WDO 39

40 Mineral Resources (2016 Year End) Development & Exploration Assets Category Tonnes Grade (gau/tonne) Contained Ounces Kiena Complex Resources Measured 63, ,300 Indicated 2,439, ,000 Total M + I Resources 2,500, ,300 Total Inferred Resources 1,563, ,400 Moss Lake Resources Total M + I Resources 39,795, ,377,000 Total Inferred Resources 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 40

41 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 41

42 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 42

43 New Discovery Located Near Existing Infrastructure Existing Indicated Resources Zone Cut Grade (cut to g/t) Tonnes Ounces S50 Deep A ,111 60,511 S50 Deep AH ,722 18,885 S50 Deep B ,100 53,100 TOTAL OUNCES 132,466 TSX:WDO 43

44 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 44

45 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 45

46 Kiena Deep A Zone TSX:WDO 46

47 Kiena Complex Drill Core August 2016 TSX:WDO 47