WDOFF - Earnings call transcript Q4 2020

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Operator

Good morning, everyone, and welcome to Wesdome Gold Mines Fourth Quarter and Year-End 2020 Financial Results Conference Call. I will now give it over to Heather Laxton to begin today.

Heather Laxton

Great. Thanks, operator, and good morning, everyone. Thanks for joining us today.

like this this our call, and forward-looking we’d everyone to business begin, make during that we statements. we to opportunity take remind outlook Before will discuss of our and on based are comments expectations These as today. predictions XXXX. Actual dated events to due the including a the to release, detailed uncertainties, management cause March cautionary of and and in mentioned Company’s differ and yesterday’s risks press materially number those results or could XX, outcomes in analysis note discussion contained in are our on documents SEDAR. Both and on available website that all Canadian note figures Please call discussed are dollars on in stated. this unless otherwise used a will website. call this slides The the for presentation recording of Company’s on posted and this be now, And Relations. Dunlop, Investor President, to over Lindsay Vice

Lindsay Dunlop

Thanks, Heather.

we Duncan CEO. this President us morning with Here have Middlemiss, and

Duncan Middlemiss

Good morning.

Lindsay Dunlop

Scott Gilbert, Chief Financial Officer.

Scott Gilbert

Hello, everybody.

Lindsay Dunlop

Marc-Andre Operating Pelletier, Officer. Chief

Marc-Andre Pelletier

Marc-Andre. is This Hello.

Lindsay Dunlop

President, Exploration. Vice Michaud, Mike

Mike Michaud

Good morning.

Lindsay Dunlop

President, Vice Gill, Development. Corporate Raj

Raj Gill

morning. Good

Lindsay Dunlop

discussion achievements from with guidance more We versus XXXX by today review detailed forecasts operational will begin on XXXX followed a Marc-Andre. Duncan’s our and

from update We financial move by review a followed exploration will to Mike. Scott, an then from

conclude and a will Finally, summary please outlook. go Duncan with ahead. Duncan,

Duncan Middlemiss

Great. advancing this XXXX to COVID River able that do navigated were Eagle we incident safely one our COVID-XX operating its our and without Thanks we challenges at was during I’m very any way the to pandemic. proud or Lindsay. of of offices without Kiena as not sites.

and health Our and commended. safety implementation rigorous response of the be team’s measures is to

all-in production at which the surrounding We generate With and Ontario. came costs. had end meters, front in protocol that call. pandemic XX,XXX guidance first time than felt XX,XXX River the Social to in production, come impact prudent costs, we about we In consequently, circumstances on generated talk an Eagle in distancing impacted higher mandated at load and the and drilled second the and ounces did the safety in in both shutdown efficiencies and it negatively the production the aspects definitely the guidance half less ounces. was uncertain, there low and of we half to end ability year, of costs, was the about of did sustaining on very the a because regards COVID event at our the push we’ll cash to later were than

$X identified to safety understanding took million a and costs operational almost and up costs direct related efficiencies we that COVID-XX. into also. in health hit Meanwhile, those rolled Additionally, our certainly

XXXX, to at guiding ahead the to we’re ounces Complex. Looking Eagle XXX,XXX XX,XXX River

higher you As see we’re costs. on can factoring slightly the slide, in

in ounces production, about We’re operations. on also talk guiding XX,XXX Marc-Andre, an I’ll detailed more and now who hand over a it we’ll to that XX,XXX the later based of of Kiena provide restart review call. decision, additional QX a will to

Marc-Andre Pelletier

planned to production throughput mine line XXXX than due average was geotechnical has of grams ton. mainly XXX allow due stopes is challenges but negatively were [ph] were per reserve grade, and mine one Daily improvements. Grades Duncan. of ton in will Thanks The of grams the mine mine ventilation upgrade in per the mill XX with in XXXX, increased tons crusher the lower our XX the in performance and completed the compared per efficiencies now to us to to increase Eagle up XXXX. significantly at to production day affecting grade QX. key impacted guidance grade

made stope have that our We modifications issue. some address to design in

much quarter. of ounces at zone per are the expect At reserves The in and over mechanical mainly we toward year, The ton and underway in with December. per downtime availability XX mill continue mill more ton. represent reserves Those now potential the the crusher experienced newly at clearly despite to average achievement per to year. on-time near close or able pit, milling. is stockpiled near XXXX grade them increase came meters mined the increases ton Development and operations X% depletion cone reserves associated due the The XX% well, all XXX,XXX at discovered per grading bulk great Eagle. ounces, the was very as grams tons Mishi As the between X.X future. grams low ounces. with the Those X was existing replace to for Eagle Falcon at will results for drilled grades the XX,XXX mine zone XX for in XX have pandemic. Company XX,XXX evolving by plan, all adding mining finished of from are ounces profitable demonstrate a and to infrastructures there less to gram close available the XX,XXX Falcon This and a

Now, review. over financial to Scott for

Scott Gilbert

XXXX. Kiena income generated Despite later assets, net the programs X.X cash and cash price we in million, over an XXXX, sustaining with ended projects. on $XXX million challenges X.X We is budgeted per and to average Marc. operating by on mine execute $XX.X more million $XX Net in growth $XX.X spent the increased at times a restart year sales on profit net ounce, is million which year of of at sufficient income and in of both than $XXX site. free this million flow $XX balance capital adjusted which the exploration major $X,XXX gold mine per of million and Thanks,

to for an Mike update. over Now, exploration

Mike Michaud

Thanks, Scott.

pleased River even Eagle than the But, have was to planned. mined some. at add we are As what drilling Marc-Andre replaced mentioned, and less

this and to over now meters have we’re a program ramping currently year, larger of planned up XXX,XXX this. for exploration, achieve We much

region by will on controls results We the midst mine The respected better exploration our well the well little targeting. of firm. consulting us help the with understand of and mineralization completing the help are in structural gold a a surrounding and review area as

now our zones to area. mineralized the mine find goal Our of east is mining diorite within current

to down of The to continuity this in a year. drilling grades Ongoing plunge. XXXX-meter and good extension the to confidence doubt the grade now production and East and been importantly, is the resource and No expected later. results and of given intersections, gives to done going years. X exceptional been the mine continued East And infrastructure, zone the lot to on definition Moss will a zone have of zones We Lake extended the this Falcon delineating have continued coming significant down remained of the have impact finding players this really zone production return year mine XXX gold has us has achieving X it a drilling return job last compared high Falcon speak that as and The to high and good adjacent open zone. is XXX in This this plunge. remains level grades will star Raj unchanged mineral year, forward. has this

walls in In the the potential of zone XX addition, and zones XXX over XX meters highlights additional per meters zone, that drilling has the extended footwall returning level ton of XXXX. grams finding XXX-meter from the mineralization since a mine intersected gold. to with This East allow X elevation priority been the a for limited has and and gold completed been XXX-meter XXX the returning over one X,XXX-meter of drilling sub-parallel per north, and the hole ton This the XX completed really remains new in has additional the elevation, it hanging to meters. on now development the this in drilling within time, to grams Falcons zone intersection Falcon Meanwhile, zone. is area, of X approximately throughout was

area of mining. getting mine focus and up zones potential. year. So, the is with also Falcon such and near discovering close also to exploration The the regional the two will now XX-kilometers turning later drilling the Zones, Surface on first drills testing in ramping more, drills as

Over the of indicated underground of an resulted be that on ongoing A resources. study. past Zone This mineral to in indicated reduced Kiena, resources definition year could focus converting to then of the drilling large in drilling was in the the resource inferred at XX% used increase impact the drilling prefeasibility the

initial been was other by from the sample, mineralization bulk exploration, be sill mill circuit XXX on Zone final start prospective the grade end cleanup the strike. year, of reconciliation completed ounces of mill and the all the the bulk of development within Kiena total refocused will Zone C Level. More since gold at addition, have Since sold and to not has by of to A of in once zones, the of the has followed has sample the the drilling high which on area. restarted process along drilling the gold of the Deep QX, targets refined and development been Zone been but date. the was A information A X,XXX expansion the mine A recovered B, is available. continuity December, on confirmed The The a In only

mined plunge VCX plunge at that and from expanded additional September very return closeout could successfully XX,XXX of of potential that at of the ton As drills has this initial in drilled to be per has exists A zone along over being last drilling to completed grade The Zone. future extension additional drilling meters Zone, depth will on of new follow-up around the part to in perimeter and the of number core down A contribute zones the been zones length. hole A planned of XXX zone C using in this of of This underexplored drilling the and developed. Level XX XXX of expected confirmed XXX high grams underground year, developed date to platforms are recently Level last already focus, B, mineralization a A meters Level. including VCX There estimate is with extends have continued area. with updates. Also, gold resource that the returned this discover down one has existing meters Zone a area. found eight the currently intersections XXX size excellent X now be resource Since exciting the for Any area zone mineral drilling to exploration the this

So, to Over Raj. tuned. stay you,

Raj Gill

we allowing mines. you, a on of dedicated payments, transaction meaningful long-term exposure equity our record January, with asset were in to core a the focus Mike. Resources underground team with and to portfolio value, into Goldshore track will The strong enter Lake. now proceeds our milestone $XX.X while Moss balance creating pleased Duncan. sheet The Zone grade via monetize West has royalty. In enhance to for million upside Back asset Thanks, high further a stake an with to a of upfront to agreement maintaining

Duncan Middlemiss

to significantly a into being nobody reducing a my I to And as XXXX the single Kiena Great. bring appreciation will expected. a year attentiveness and thanks and extend safety. be want contractors transformational Thanks, plan asset Raj. to with was we production, producer. XXXX associated to that all their our employees year risk for us, for

At which year. XXXX. with the sample, is expectations. forecasting targets We’re very far staple happy of would A $XX the in regionally. track Kiena same to at well XX,XXX the with within Zone, is progressing exceeding half XX,XXX the up the ounces, second successful process on we’re our so is mine of more production carrying bulk time, program study numerous quarter. second and in mill slightly released alone A meters At focused the the XXX,XXX exploration restart prefeasibility and begin We the be from to Eagle, our The out we’re on expect to in and the million to a results Zone

targets additional to Lake well-positioned the you million Moss cash updated back open the and exploration operator. analysis. program to to year, our excited as will to the Eagle sale, keeping forward look around generated unfold. session, position proceeds structural in now with We’re through year, $XX start plans on it plus solid our the many for the the a equally from and I With about they being question-and-answer and we’re execute all up this

Operator

you. Topping question comes Thank with Alliance. [Operator Instructions] from Industrial George First

George Topping

and I Just the used that you more be How that’s on next representative infer Can on deposit, your seen reconciliation information in so or of that bulk week very in two deposit? what the grade release? you but in changes, much type cost. from physical example, give the we’ve representative sample positive mining And us rest area? another mentioned interested expect. the high or was how during cap it the lower as for complex would positive, press will can How of

Mike Michaud

here. Mike it’s George,

visible mineralized I think, was in the the bulk easy certainly development. see that really the and showed to core gold And positive of sample saw was we the that underground in geometry zones. the

would And already Zone in three-stage we see model doing was when on grams capping at the and But, muck underground, of But, for in So, hole predicted. a and XD about the of X,XXX you data. to per more from A the the used we is a recovered the XX the happy drilling, process. from were we we’ll say, drill sampling model around that. data, against ounces sort I rest cap probably can edge data chip the But, that And overall, block currently be underground a compare process facility. we block the there, that ton. deposit. we of we’ll in the and we that what off a just the compare based we good chance we’ve recover originally on the model that have smaller that capping than gold, is gold the we what site block saw to found It original

maybe it the and if only to X,XXX we’re probably tons. tons my we confirmed because model thought be But, positive, confirmed even XX,XXX -- representative. I do XX,XXX with a the than bit be think going just I or by we’ll over away, better and the little happy about it’s block was mean, experience, the for maybe little sample, little by a would change more So, drilling out a going don’t I I is right I we’re uncapped rush the think, to model. block in what think bulk mean, geometry

happy seen positive. So, But, get with I to we’ve if going we’d get and far. some adjustments what so the be results going mining really our and But, in there that back makes that some would model like see more very forward. with think

George Topping

day year, in to cut the of underground up had development to this Is because speed and for well get you tons -- to that year? and back production per the The up rate this to good. do Okay, advanced COVID. early enough XXX

Marc-Andre Pelletier

budget, Yes. the I Marc. on social protocol, mean, and on well Good morning, we’ve and This year, George. on track. Despite last we’re done is or quite distancing the development COVID basically

in year is this So, very already with half about we are position developed. good production the of

zone. second the And we developing already of are Falcon the are we with starting at development basically, So look to half new production. XXXX the

in So, good we’re shape.

Operator

is Our next Bank. from question Don with DeMarco National

Don DeMarco

is mitigated question. on program me challenges an in faced pretty that got exploration front, you tell for And Are Maybe extension limited this have But, Can respect they up bit those George’s of many a too? how at to set drilling, to heavy drilling some exploration XXXX. with I XXXX. each a site? rigs you you know fully the

Mike Michaud

certainly it’s Mike running -- Look, here. underground. seven Don, Kiena, we have drills we Hey at

months meters. the We’re really we the comfortable hurt production, with that what problem down achieving those shut up for the really government couldn’t that. Really is, when two with last drills But with productivity that. meters, current hurt seven and back on no that in everything straight, see, the year catch

even you drilling. as think we might us see get an more I year drills you is a that there, underground exploration we this doing something adding start And into new, exciting there. have if few -- might

On ice, great. with is drills. before. do have three completely which we’re one the And drilling we We be drill that drilling think some would areas were untested really on So, surface, now great. I right

we easy have But to drilling little And see the excited of catch we of targets, harder have so, drill. on But find certainly a big to -- we’re some kind that. always to drills. can at a surface seen little always of We another your programs. add bit up because is

who drills So, back us. want again to At us to the going We’ve surface hook drilling there, it’s up for That’s to well. problem. now. on drilling Eagle, with easier get no two contractors up ramped

that to they a drill push we’ll We that underground. get have surface there this little Typically at there run put only we Eagle to drills, sitting action. year is have start area back into now. five fly longer, we harder The on when have a and four we

distancing camp, up fixed fifth rooms. end shortly. drill that we’ll drill the the Part that. Duncan is the with have We of required, shortage going as problem social of We later. starting the be to had probably mentioned, And we’ve sixth there,

help a XX-men add trailer to And in. another rooms, coming that’s then be drill. in, able sixth have and coming we’ll another provide going We camp more to

through our And hard those gone just really having board So, are to we sure getting with we budgeted for meters pushing cycle they’re anxious going. hit year. the meters here, very make the

Don DeMarco

was hear. of to reserves with what last grade? that Yes, and XX,XXX even mentioned see managed prior truncated because Falcon reserve still the How year, I some good accretion. that program was And Okay, point, much Eagle. Mac the there you ounces at to targeted was that X,

Marc-Andre Pelletier

For the Falcon?

Don DeMarco

Yes.

Marc-Andre Pelletier

XX,XXX...

Mike Michaud

Yes. reserve. That’s the

So…

Marc-Andre Pelletier

So, that’s XX reserves, XX,XXX grams. ounces,

Don DeMarco

XX grams.

Okay.

Mike Michaud

Yes.

drift So, Falcon. getting we’re the to at close actually footwall the really established

to the have of we definitely sort and further want and really, bit some see in a reserves, Falcon. and to excited definitely there. forward But, about of to existing continue want little high shoot, go along can but upgrade silling grade to west twofold. them the go ore. we to over there looking some the So is We convert very if Falcon very resources getting and we’re to

Don DeMarco

Okay.

XX.X. to at confirm, have numbers XXX,XXX you zone, ounces grading the just Mike, So,

So, of at of XX is ton? grams XX,XXX you’re that saying, there Falcon ounces per

Mike Michaud

No, it’s separate, Don.

Don DeMarco

number from X? Separate

Mike Michaud

yes. is link meters. the around Falcon But its own at they entity is reserves. yes, Yes, Falcon -- X,XXX in

Don DeMarco

it or variability, per like Okay. last guiding was bit a you’re then, the going that variable final we’ll to grade it’s you XXXX And quarter-to-quarter. just think Do In see from year? XX a little little question you grams was ton. a did more little consistent bit XXXX, be -- more

Mike Michaud

No.

some I our not it. some certainly of grade, I Eagle’s even got the to high we of right? to, able take And, example, we reserves of sequencing, blended grams an are obviously or comes very when less, XX you mine it’s what, not here it I couple right are big So, boy, all like buckets reserves, a out mine, as lumpy now. to in the call a know in mean, reserves mean, around or XX.X mean, and You whatever. those you’re mine, because And them you’re as it. it and a of at XX grams, feel

basically, mean, the the grades of So with at saw we meters were and back top that XX everything. in mining I our XXXX the XXX. spectacular, especially

So, it grade terms difficult this very to performance I in was that at said, smooth is of it was good. mine. like But out a

Operator

comes Walker Partners. question next from Our with Echelon Ryan

Ryan Walker

congratulate just performance. commendable, COVID very first you Just want It’s guys to on just great. off, your

expect Is creeping turning sticky? that to you be mostly Just costs, do again, increase? COVID-related, back to so unit up the that

Duncan Middlemiss

see, of X What mean, million direct Yes. I we costs. identified we

easy The inefficiency, said that capture. I But think attribute because XX% cost cost can they them. to is of if of those think to that had I creeping they are that COVID. costs So, mean, we are there McKinsey, in identify I the to listen didn’t creep, and you about

It’s example, Ryan, even in and is at of a an have not XX. of as got but that. production, to drilling developing a capacity so, And in caves which now I Kiena, used X. capacity The we’re mean,

I’d protocols not And lucky because So, to in is knock really say, I having extremely terms establish due on working. disruption are have longer kind of we though, to everything and taking any COVID. that mean that of wood, been of have the to operational get. to kind

our are they’re difficult. going I things team that is forward And the first Eagle. vaccination. at Actually, we vaccinated just look get more see responders as mine to However, to do little rescue a

back the of kind So, normal getting focus in and we our can we’re to of see back all and that. half more year starting get second really that the and to efficiencies hopefully now on

Ryan Walker

to operation, we then, a at come to start that? out news have each aggressive got you drill programs questions forward, of flow lot been the assays expect very asked. going can see of when And But,

Mike Michaud

producing say, some so in and say running, core, shortly. lot and would Kiena great I with is many of there. a drills areas I’d we’re just Certainly,

the Eagle, good And and produce to target-rich results, surely, year. out put I I typically, about every would environment throughout we going mean, that��s go good So, months, and news. some that’s really of some couple we say.

side. pretty So, on exciting the year exploration to a yes, it’s going be

Duncan Middlemiss

four -- release have be every Like weeks probably six you to to Yes. exploration see an you’ll apart. news

Operator

Our with from is Phil Financial. next Ker question PI

Phil Ker

Just a questions. couple of

cost. further some you And little further Kiena you at could if touched of kind only just the into time, per on holding but on elaborate a specifics Eagle? detail of of could over curious the Just you site-related, four COVID go at

Scott Gilbert

Hi. Scott Sure. here. It’s

concepts we’ve site. we keeping as identified in the so, the And were people overtime, direct Duncan some at cost, we of the looked indicated, longer incremental of at

export some during with also costs. distancing social safety to those areas. the certain We are protocols main to regards And implemented down

operational As to Duncan lot sort weren’t a costs said, the -- But, looking there that’s capture. that of of inefficiencies just we main at. with the was we’re to able regards related that to

Duncan Middlemiss

PPE, ability the like security, additional I mean, do like Yes, that, we to things and rapid Phil, test. have

of we health course, own at unit now Of have case at Eagle. kind the our basically our

all costs So, yes, that money.

So, the said, to of we costs that’s And and so. operational where we capture it did that. inefficiencies, got like we not

Phil Ker

production Could then, you we’re seem really for ton here, is, year And the and And weakest XX-gram our second just this anticipating, sort a great that guidance some the tap could into you on again? material, towards looking here question maybe the was of mine XXXX potential, profile refresh plan higher and but if and material. whether expand grade QX, memory to that like profile per just year. and any XXXX, of the it grade the doesn’t on

Marc-Andre Pelletier

going in basically year our bit the to see the have because grade and guidance this In we basically, higher, be a I think, QX, what XXX in the stope a we’re go expected are our to within through year. is going budget zone. is to So, mining we

So, there, within we our higher but expect a grade guidance. bit overall,

before, of I Flacon to we we’re newly zone the production as in to mentioned begin budget, going XXXX benefit discovery the we toward and the As are the are see there. certainly going developing

is XXXX production. into grade Falcon Eagle bringing new other the to for higher with targeting were increase the cycle we from and continuing throughput what think, I So, zone

Phil Ker

of later cost, numbers production is Kiena. study? feasibility the fine of question within this last some going the to of kind expectations half or on second be just tuning maybe respect to those costs XX,XXX perhaps ounces XX,XXX And in year, maybe to I on there more or of declaring here noted the with year. quickly, But,

Duncan Middlemiss

They’re in to Yes. be going in captured PFS. the the

see that. So, you’ll

mine be available Of course, production life will of through there.

see ramping So, Yes. how you’ll up. we’re

table completion, say is I -- decision exploration I’d support of think get production a not after. a QX, that doing in here Kiena I always for very think while, shortly support said like, we’re, sort they’re of mid-QX, development been and, really So, be we’ve going restart And for but to also mean, I production long. going it’s to of quickly. take in we’ve

relatively generating it’s shorter to So, ounces. going some timeframe to be start

Operator

Thank you. And ladies and Have gentlemen, this concludes our you Q&A session day. and your for program great for today. participation. Thank a

You disconnect. may now

Wesdome Gold Mines (WDOFF) 11 Mar 212020 Q4 Earnings call transcript