Wesdome Announces 2022 Fourth Quarter and Full Year Financial Results

TORONTO, Feb. 22, 2023 - Wesdome Gold Mines Ltd. (TSX: WDO) ("Wesdome" or the "Company") today announces fourth quarter ("Q4 2022") and full year financial results. All figures are stated in Canadian dollars unless otherwise noted.

Key Highlights:

Eagle River

• Eagle River underground mine processed 223,735 tonnes at an average grade of 11.5 gpt to produce 79,997 ounces with the underground producing 231,000 tonnes of broken ore.
• Completed additional drilling and ore development at the Falcon Zone which is improving production and grade forecasting; results in 2023 so far are showing positive reconciliation at the Falcon Zone

Kiena

• Successfully commissioned the pastefill plant and declared commercial production
• Drilling expanded the size of the A Zones and Footwall Zones, which supports future mine life extension potential
• Drilling better defined and expanded the Presqu'ile Zone potentially justifying the installation of an exploration ramp

Other

• Named to the Globe & Mail's 2022 Report on Business Women Lead Here list. This annual editorial benchmark identifies best-in-class executive gender diversity in corporate Canada
• Placed 6^th out of 34 TSX-listed materials companies in the annual Globe and Mail Board Games report on corporate governance

Warwick Morley-Jepson, Interim CEO commented, "2022 was a challenging year for Wesdome, and we have leveraged our experiences to ensure better operational and financial performance going forward. Production misses at both mines resulted in a net loss of $14.7 million or ($0.10) per share.

Previously disclosed grade reconciliation issues at the Falcon zone that impacted 2022 production have been addressed through additional ore development and drilling. Eagle operations are recovering well, with 2023 grade so far reconciling higher than guidance.

At Kiena, despite the challenging backdrop of the fractured supply chains we are very pleased to have put a second mine into production, financed almost entirely from internally generated cash flow. The delays encountered in 2022 are behind us, and all required equipment is on site. The next milestone is the continued development of the ramp giving access to mining operations in the A zone. Ramp advancement will position us to mine in the areas where the ounces per vertical metre significantly increase, and grade is expected to improve. Year to date, this project is tracking slightly ahead of schedule. As well, 2022 saw the hiring of key technical personnel including a Director, Engineering and Operations who will support daily mine operations.

Production guidance for 2023 is expected to range between 110,000 - 130,000 ounces with production back end weighted through the year. Until the ramp reaches the 129 metre level at Kiena, lower processed grades are expected to continue into 2023. We will continue to supply the mill with lower grade ore from the Martin, S50, and VC zones to supplement the Kiena Deep material that will be available to mine, which is mostly lower grade fringe material and diluted ore from previously mined areas.

We consider this year to be a transition year as we get Kiena back on schedule, setting up 2024 to be a stronger year operationally, as well as financially. In this regard, an at-the-market equity program was established in December to accelerate balance sheet de-levering."

Key operating and financial performance of the full year 2022 results include:

• Gold production of 110,850 ounces is a 10% decrease over the same period in the previous year (2021: 123,843 ounces):
  • Eagle River underground processed 223,734 tonnes at a head grade of 11.5 grams per tonne for 79,997 ounces produced, 19% decrease over the previous year (2021: 99,120 ounces).
  • Mishi Open Pit 23,153 tonnes at a head grade of 3.2 grams per tonne for 2,005 ounces produced (2021: 2,283 ounces).
  • Kiena 115,171 tonnes at a head grade of 7.9 grams per tonne for 28,848 ounces produced, 29% increase over previous year (2021: 22,440)
• Revenue² of $265.5 million, a 1% increase over the previous year (2021: $262.9 million).
• Ounces sold³ were 113,000 at an average sales price of $2,347/oz (2021: 116,708 ounces at an average price of $2,250/oz).
• Cash margin^1,2,4 of $95.7 million, a 34% decrease over the previous year (2021 - $145.4 million).
• Operating cash flows^2,4 decreased by 50% to $65.2 million or $0.46 per share¹ as compared to $131.0 million or $0.93 per share for the same period in 2021.
• Free cash outflow of $90.2 million, net of an investment of $108.9 million in Kiena, or ($0.63) per share¹ (2021: free cash outflow of $21.3 million or ($0.15) per share).
• Net loss of $14.7 million or ($0.10) per share (2021: Net income^2,4 $131.3 million or $0.94 per share) and Net loss (adjusted)¹ of $5.9 million or ($0.04) per share (2021: Net income (adjusted)^1,2,4 $69.9 million or $0.50 per share).
• Cash position at the end of the year of $33.2 million, with total borrowings of $54.7 million drawn on the senior secured revolving credit facility.Cash costs^1,4,5 of $1,500/oz or US$1,153/oz, a 52% increase over the same period in 2021 (2021: $990/oz or US$789/oz) due to a 9% increase in aggregate operating costs at Eagle River and the costs of ramping up operations at Kiena in anticipation of declaring commercial production;
• AISC^1,5 increased by 43% to $2,020/oz or US$1,552/oz (2021: $1,408 or US$1,123 per ounce) due to a 9% increase in aggregate operating costs and increased spending at Eagle River to replace aging infrastructure and the costs of ramping up operations at Kiena in anticipation of declaring commercial production.

Key operating and financial performance of Q4 2022 results include:

• Gold production of 35,116 ounces, which includes a 16% decrease over the same period in the previous year (Q4 2021: 41,559 ounces):
  • Eagle River underground 58,306 tonnes at a head grade of 14.0 grams per tonne for 25,502 ounces produced, 5% increase over the previous year (Q4 2021: 24,267 ounces).
  • Kiena 51,419 tonnes at a head grade of 5.9 grams per tonne for 9,614 ounces produced, 43% decrease over the previous year (Q4 2021: 16,929 ounces).
• Revenue of $75.1 million, a 12% decrease over the previous year (Q4 2021: $85.5 million).
• Ounces sold were 31,500 at an average sales price of $2,380/oz (Q4 2021: 37,544 ounces at an average price of $2,275/oz).
• Cash margin¹ of $26.5 million, an 44% decrease over the previous year (Q4 2021 - $47.7 million).
• Operating cash flows decreased by 79% to $10.3 million or $0.07 per share¹ as compared to $48.2 million or $0.34 per share for the same period in 2021.
• Free cash outflow of $31.6 million, net of an investment of $26.5 million in Kiena, or ($0.22) per share¹ (Q4 2021: free cash outflow of $3.2 million or ($0.02) per share).
• Net loss and Net loss (adjusted)¹of $3.5 million or ($0.02) per share (2021: Net income and Net income (adjusted)¹ $24.8 million or $0.18 per share).
• Cash costs¹ of $1,540/oz or US$1,134/oz, a 53% increase over the same period in 2021 (Q4 2021: $1,005/oz or US$797/oz);
• AISC¹ increased by 51% to $2,136/oz or US$1,573/oz (Q4 2021: $1,412 or US$1,121 per ounce).
  
  
  1. Refer to the Company's 2022 Annual Management Discussion and Analysis section entitled "Non-IFRS Performance Measures" for the reconciliation of these non-IFRS measurements to the financial statements.
  2. FY 2021 excludes $3.9 million of revenue from the Kiena bulk sample, which was processed in Q4 2020 and sold in Q1 2021. The incidental revenue was credited against the cost of the Kiena exploration asset.
  3. FY 2021 excludes 1,793 ounces from the Kiena bulk sample, which was processed in Q4 2020 and sold in Q1 2021.
  4. Includes a $0.4 million charge for product inventory costs from the sale of 1,793 ounces of gold from the Kiena bulk sample, which was processed in Q4 2020 and sold in Q1 2021.
  5. In determining the Cash cost per ounce and AISC per ounce, the total ounces sold includes 1,793 ounces of gold from the Kiena bulk sample, which was processed in Q4 2020 and sold in Q1 2021.

Technical Disclosure

The technical content of this release has been compiled, reviewed and approved by Frédéric Langevin, Eng, Chief Operating Officer of the Company and Michael Michaud, P.Geo., Vice President, Exploration of the Company and each a "Qualified Person" as defined in National Instrument 43-101 -Standards of Disclosure for Mineral Projects.

Cautionary Note to United States Investors Concerning Estimates of Reserves and Resources

The mineral reserve and resource estimates reported in this news release were prepared in accordance with National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101") as required by Canadian securities regulatory authorities. The United States Securities and Exchange Commission (the "SEC") applies different standards in order to classify and report mineralization. This news release uses the terms "measured", "indicated" and "inferred" mineral resources, as required by NI 43-101. Readers are advised that although such terms are recognized and required by Canadian securities regulations, the SEC does not recognize such terms. Canadian standards differ significantly from the requirements of the SEC. Readers are cautioned not to assume that any part or all of the mineral deposits in these categories constitute or will ever be converted into mineral reserves. In addition, "inferred" mineral resources have a great amount of uncertainty as to their existence and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource exists, is economically or legally mineable or will ever be upgraded to a higher category of mineral resource.

Wesdome Gold Mines 2022 Fourth Quarter and Full Year Financial Results Conference Call

February 23, 2023 at 10:00 am ET

• Participants may register for the call at the link below to obtain dial in details. Preregistration is required for this event. It is recommended you join 10 minutes prior to the start of the event.
• Participant Registration Link:
  https://register.vevent.com/register/BIcb64cd10b9f843d79897899900fca10c
• Webcast Link:
  https://edge.media-server.com/mmc/p/oab6ykxp
• The webcast can also be accessed under the news and events section of the company's website

ABOUT WESDOME
Wesdome is a Canadian focused gold producer with two high grade underground assets, the Eagle River mine in Ontario and the recently commissioned Kiena mine in Quebec. The Company also retains meaningful exposure to the Moss Lake gold deposit in Ontario through its equity position in Goldshore Resources Inc. The Company's primary goal is to responsibly leverage this operating platform and high-quality brownfield and greenfield exploration pipeline to build Canada's next intermediate gold producer. Wesdome trades on the Toronto Stock Exchange under the symbol "WDO," with a secondary listing on the OTCQX under the symbol "WDOFF."

For further information, please contact:

220 Bay St, Suite 1200
Toronto, ON, M5J 2W4

Toll Free: 1-866-4-WDO-TSX
Phone: 416-360-3743, Fax: 416-360-7620
Website: www.wesdome.com

FORWARD-LOOKING INFORMATION

This news release contains "forward-looking information" which may include, but is not limited to, statements with respect to the benefits of achieving commercial production at Kiena, the Company's expected capital expenditure in 2023, the timing around reaching the Kiena Deep A Zone, the Company's ability to be cash flow positive and its annual production run rate. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or "believes" or variations (including negative variations) of such words and phrases, or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Forward-looking statements contained herein are made as of the date of this press release and the Company disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or results or otherwise. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. The Company undertakes no obligation to update forward-looking statements if circumstances, management's estimates or opinions should change, except as required by securities legislation. Accordingly, the reader is cautioned not to place undue reliance on forward-looking statements.

Wesdome Gold Mines Ltd.
Summarized Operating and Financial Data
(Unaudited, expressed in thousands of Canadian dollars, except per share and per unit amounts and otherwise indicated)

1. Refer to the Company's 2022 Annual Management Discussion and Analysis section entitled "Non-IFRS Performance Measures" for the reconciliation of these non-IFRS measurements to the financial statements.
2. Totals for tonnage and gold ounces may not add due to rounding.
3. FY 2021 includes a $0.4 million charge for product inventory costs from the sale of 1,793 ounces of gold from the Kiena bulk sample, which was processed in Q4 2020.
4. FY 2021 includes 1,793 ounces of gold from the Kiena bulk sample, which was processed in Q4 2020
5. In determining the Cash cost per ounce and AISC per ounce, the total ounces sold includes 1,793 ounces of gold from the Kiena bulk sample, which was processed in Q4 2020 and sold in Q1 2021.
   
   

Wesdome Gold Mines Ltd.
Statements of Financial Position
(Expressed in thousands of Canadian dollars)

Wesdome Gold Mines Ltd.
Statements of Income (Loss) and Comprehensive Income (Loss)
(Unaudited, expressed in thousands of Canadian dollars except for per share amounts)

Wesdome Gold Mines Ltd.
Statements of Total Equity
(Expressed in thousands of Canadian dollars)

Wesdome Gold Mines Ltd.
Statements of Cash Flows
(Unaudited, expressed in thousands of Canadian dollars)

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