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Wesdome decides to restart Kiena gold mine, commencing immediately

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(Kitco News) - Canada-focused gold mining company Wesdome Gold Mines (TSX:WDO) announced today that based on the positive results of the prefeasibility study (PFS), the company’s board of directors has made a restart decision for the Kiena Complex, commencing immediately.

The company said that future production mining will utilize the long hole stope method and development will be advanced utilizing conventional drilling and blasting methods. The overall strategy is to maximize throughput from the high grade Kiena Deep A Zone and to augment the production from the other zones. Over the life of mine, a total of 592,113 oz of gold (payable) (average annual: 83,574 oz) will be produced.

On an after-tax basis, the base case financial model resulted in an IRR of 98% (PEA: 102%) and an NPV of $366.6M (PEA: $416.1M) with a gold price of US$1,600/oz, increasing to an NPV of $491 million at US$1,900 gold price, using a 5% discount rate at a CAD/USD exchange rate of $1.32. The after-tax payback period after start of operations is 2.7 years.

President and CEO Duncan Middlemiss commented, “We are excited to be moving ahead with the Kiena re-start, less than five years following the discovery of the Kiena Deep A Zone. This transformational project continues to present compelling economics and represents a strong step toward Wesdome becoming a diversified mid-tier producer. We now expect to see initial production from Kiena as early as Q3 2021. To that end, we will maintain our previously released guidance of 15,000 – 25,000 ounces at Kiena until later in the year, when we will reassess based upon start up performance.”

Wesdome Gold Mines is a 100% Canadian focused company that has had over 30 years of continuous gold mining operations in Canada. The company’s Eagle River Complex in Wawa, Ontario is currently increasing gold production from the high grade Eagle River underground mine. Wesdome is actively exploring its brownfields asset, the Kiena Complex in Val d’Or, Quebec. The Kiena Complex is a fully permitted former mine with a 930-metre shaft and 2,000 tonne-per-day mill, and a restart of operations was announced on May 26, 2021.

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