Make Kitco Your Homepage

Wesdome declares commercial production at the Kiena gold mine in Quebec

Kitco News

Editors Note: With so much market volatility, stay on top of daily news! Get caught up in minutes with our speedy summary of todays must-read news and expert opinions. Sign up here!

(Kitco News) - Wesdome Gold Mines (TSX: WDO) today announced that commercial production has been achieved at the company's Kiena gold mine in Val d'Or, Quebec effective December 1st, 2022.

In its press release, the company said that the commissioning of the paste fill plant has progressed well in November, with an underground test pour successfully completed on November 17th.

"Demonstrating the viability of the paste fill plant was the final element for Kiena to meet its commercial production criteria," it added.

Wesdome noted that, as expected, it has also received notice from its syndicate of credit providers of a C$70 million increase to the company's existing C$80 million-dollar revolving credit facility, for a total of C$150 million.

The Kiena Mine is located in the highly prospective Val d'Or, Quebec gold camp. The Kiena Deep A Zone, discovered in 2016 is located within the mines existing infrastructure, including a 930 metre deep shaft and 2,000 tonne per day mill, and is fully permitted. After successful completion of a PFS study, a restart of operations was announced on May 26, 2021.

The company expects average annual gold production of 84,000 ounces per year, with over 100,000 per year run rate expected in 2024. According to a PFS study, the project's IRR is 98% and after-tax NPV5% is C$367 million, with average annual free cash flow (2022 – 2027) of C$85.5 million at US$1,600/oz of gold, or C$109.5 million at US $1,900/oz.

Since 2017, the company said it has invested approximately C$250 million into Kiena, including exploration, development, studies, and infrastructure, primarily financed from free cash flow generated from the Eagle River mine.

President and CEO Duncan Middlemiss commented, "Kiena is our second operating mine in Canada, significantly de-risking our status as a single mine operator and adding another source of revenue for the company. Although capital spending at Kiena is expected to decline next year, due to development delays we now expect to have the development in place to access the bulk of the high-grade Kiena Deep A Zone in 2024, which will allow us to achieve positive free cash flow and an annual production run rate consistent with the 2021 Kiena Mine Complex Pre-Feasibility study. The company will release its 2023 production and cost guidance, which reflects this progressive ramp up of tonnes and grade in January."

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.

Generation Mining receives environmental approval for its Marathon palladium copper project

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.