Wesdome Gold Mines Ltd. - 2007 Third Quarter Results



    TORONTO, Nov. 14 /CNW/ -

    
    OPERATING HIGHLIGHTS
    --------------------

    Eagle River Mine

                                                      3 months      3 months
                                                        ending        ending
                                                       Sept 30,      Sept 30,
                                                          2007          2006
                                                  ------------- -------------

      Tonnes milled                                     13,813        31,100
      Recovered grade (g/t)                               16.9          11.6
      Ounces produced                                    7,491        11,600
      Ounces sold                                       11,900        13,900

    Mishi Mine

      Tonnes milled                                     21,568             -
      Recovered grade (g/t)                                3.5             -
      Ounces produced                                    2,402             -
      Ounces sold                                            -             -

    Total Ontario Mines

      Ounces produced                                    9,893        11,600
      Ounces sold                                       11,900        13,900
      Bullion inventory (oz)                             9,886         4,200
                                                  ------------- -------------
      Bullion revenue (in thousands)              $      8,468  $      9,394
      - Operating + development costs
        (in thousands)                            $      6,382  $      7,269
    -------------------------------------------------------------------------
      Mine operating profit                       $      2,086  $      2,125
      Gold price realized ($Cdn/oz)               $        710  $        676

    Kiena Mine Complex

                                                      3 months      2 months
                                                        ending        ending
                                                       Sept 30,      Sept 30,
                                                          2007        2006(*)
                                                  ------------- -------------

      Tonnes milled                                     63,281        43,500
      Recovered grade (g/t)                                3.5           3.2
      Ounces produced                                    7,145         4,500
      Ounces sold                                       11,100           700
      Bullion inventory (oz)                             2,100         2,000
      Bullion revenue (in thousands)              $      7,911  $        479
      - Operating + development costs
        (in thousands)                            $      8,801  $      3,082
    -------------------------------------------------------------------------
      Mine operating profit                       $       (890) $     (2,603)
      Gold price realized ($Cdn/oz)               $        712  $        684


    Total

                                                      3 months      9 months
                                                         ended         ended
                                                       Sept 30,      Sept 30,
                                                          2007        2007(*)
                                                  ------------- -------------

      Production (oz)                                   17,038        59,416
      Sales (oz)                                        23,000        55,000
      Revenue (in thousands)                            16,379        40,710
      - Operating + development costs
        (in thousands)                                  15,183        39,327
    -------------------------------------------------------------------------
      Mine operating profit (in thousands)               1,196         1,383
      Bullion Inventory (oz)                            11,986        11,986

    (*) Includes 2 months' commercial production from August 1, 2006.
    


    Wesdome Gold Mines Ltd. owns the Eagle River gold mining operations in
Wawa, Ontario and the Kiena Mining Complex in Val d'Or, Quebec. The Eagle
River mine has been operating since 1996. The Kiena mine has been in
commercial production since August 1, 2006.
    During the third quarter, 2007, bullion revenue totalled $16.4 million
from 23,000 ounces sold at an average price of Cdn$711 per ounce. In addition
to the ounces sold, 11,986 ounces of gold remained unsold and are carried at
September 30, 2007, market value of $740.25 per ounce as gold bullion on the
balance sheet. This gold will be recognized as revenue in the fiscal period in
which it is sold.
    For combined operations, the cost of sales for the third quarter totalled
$15.2 million resulting in a mine operating profit of $1.2 million, or about
$52 per ounce. In addition to these direct operating and development costs,
other costs, including royalty payments, corporate and general costs and
interest costs, totalled $1.0 million bringing the overall cash operating
profit to $0.2 million.
    In Ontario, the Eagle River mine provided 13,800 tonnes of millfeed at
16.9 gAu/tonne recovered grade. Halfway through the quarter, milling switched
to Mishi Pit ore supplying 21,600 tonnes at 3.5 gAu/tonne recovered grade.
Grades were higher than expected from both sources. We plan to continue
milling Mishi ore through November, then switch back to Eagle River. A surface
stockpile of Eagle River ore is accumulating, sourced partially from
successful development of the high grade 811 zone between depths of 275 and
415 metres.
    At Kiena, July was a slow month as planned maintenance, construction and
backfill activities were undertaken, as previously discussed. A total of
63,300 tonnes were milled at a recovered grade of 3.5 gAu/tonne. A significant
portion of the mill feed came from low grade broken ore from the old parts of
the mine. This is being phased out and we expect grades to improve
progressively.
    Tight labour, equipment and materials markets continue to exert
inflationary pressure on costs. These underlying influences were accompanied
by a parabolic rise in the value of the Cdn$ vis a vis its US$ counterpart. To
put this in perspective, from January 1, 2007, to September 30, 2007, the
price of gold rose US$90 per ounce while declining Cdn$30 per ounce.
    As previously released, (see February 27, 2007, press release) the
Company's proven and probable reserves increased year over year, net of
production. The planned 2008 exploration programs have been designed to try to
continue this upward trend.

    OUTLOOK
    -------
    At Eagle River, production to date has exceeded expectations, while Kiena
operations have battled to maintain production and complete an aggressive
development program. Scheduling has been tight and grades lower than initially
forecast. At Kiena, a cost control and optimization program has downsized
operating rates to 21,000 tonnes per month from 30,000 tonnes per month. This
has been accompanied by declining costs and we currently project a breakeven
position by December, 2007.
    We continue to forecast 70,000 ounces of production in 2007. We now
attribute half the production forecast from Ontario operations and half from
Québec operations.
    We are accelerating our exploration efforts at both operations and
project increased exploration through 2008. We continue to project increased
production in 2008 reflecting a full year of production at both mines.
    The Company is also excited by its planned interception of the Shawkey
"22" Zone on the 330m level towards year end. This will represent the
culmination of 2 years of development work drifting a total of 2.5km to the
east of the Kiena mine towards a large mineralized zone.
    We continue to forecast a stronger 2008 with full-year above average
grade production from both mines. Management believes that the gold market
will improve dramatically and continue to increase the Company's leverage to
the gold price. The market value of bullion inventory at September 30, 2007
was $8.87 million.

    Wesdome Gold Mines Ltd. is an established Canadian gold producer with
mining operations in Wawa, Ontario and Val d'Or, Quebec. The Company has
97.0 million shares issued and trades on the TSX Exchange under the symbol
"WDO".

    This news release contains "forward-looking information" which may
include, but is not limited to, statements with respect to the future
financial or operating performance of the Company and its projects. 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.
    Consolidated Balance Sheets
                                                       Sept 30        Dec 31
                                                          2007          2006
    -------------------------------------------------------------------------
                                                    (Unaudited)     (Audited)
    Assets
    Current
      Cash and cash equivalents                   $  4,085,669  $  5,262,530
      Term deposits                                     62,572        47,721
      Gold bullion                                   8,875,321     5,796,006
      Receivables                                    4,037,000     9,301,938
      Supplies and other                             1,495,105     1,225,928
      Marketable securities                            100,000             -
                                                  ------------- -------------
                                                    18,655,667    21,634,123

    Funds held against letters of guarantee          2,522,600     2,477,075
    Deferred financing costs                           629,438             -
    Capital assets                                      13,903        12,428
    Mining properties                               57,839,989    53,012,950
    Exploration properties                          25,396,187    17,259,661
    Property held for sale                           1,078,105     1,828,105
                                                  ------------- -------------

                                                  $106,135,889  $ 96,224,342
                                                  ------------- -------------
                                                  ------------- -------------

    -------------------------------------------------------------------------

    Liabilities
    Current
      Payables and accruals                       $  8,499,939  $ 11,215,497
      Current portion of obligations
       under capital leases                          1,359,133     1,044,809
                                                  ------------- -------------
                                                     9,859,072    12,260,306

    Obligations under capital leases                 2,209,397     1,497,326
    Convertible 7% debentures                        9,805,852             -
    Reclamation obligation                           1,056,250     1,009,000
    Future income taxes                              2,348,000     2,360,000
                                                  ------------- -------------
                                                    25,278,571    17,126,632
                                                  ------------- -------------

    Minority interest in Moss Lake Gold Mines Ltd.     424,950       438,642
                                                  ------------- -------------
    Shareholders' Equity
    Capital stock                                   96,908,101    88,889,627
    Common share purchase warrants                      81,022        81,022
    Contributed surplus                              2,447,778     1,938,737
    Accumulated other comprehensive income            (100,000)            -
    Equity component of convertible debentures       2,079,776             -
    Deficit                                        (20,984,309)  (12,250,318)
                                                  ------------- -------------
                                                    80,432,368    78,659,068
                                                  ------------- -------------

                                                  $106,135,889  $ 96,224,342
                                                  ------------- -------------
                                                  ------------- -------------

    -------------------------------------------------------------------------



    -------------------------------------------------------------------------
    Wesdome Gold Mines Ltd.
    Interim Consolidated Statements of Operations and Deficit
    (Unaudited)

                       Nine Months Ended Sept 30  Three Months Ended Sept 30
                              2007          2006          2007          2006
    -------------------------------------------------------------------------

    Revenue
    Gold and silver
     bullion          $ 40,710,301  $ 20,264,991  $ 16,379,930  $  9,891,320
      Interest and
       other               151,368       266,933        70,162       126,824
                      ------------- ------------- ------------- -------------
                        40,861,669    20,531,924    16,450,092    10,018,144
                      ------------- ------------- ------------- -------------

    Costs and expenses
      Operating costs   31,095,149    14,191,107    11,864,559     7,921,855
      Development
       costs             8,238,294     4,596,053     3,325,964     2,428,702
      Amortization
       of mining
       properties        8,058,417     5,062,196     3,212,218     2,496,408
      Production
       royalties           359,549       332,461        69,574        84,884
      Corporate and
       general           1,184,798     1,186,201       333,332      (128,481)
      Stock
       compensation
       expense             465,138       645,741        58,382        64,322
      Debenture
       issuance costs       44,960             -        44,960             -
      Interest on
       long-term debt      823,286        74,363       543,209        29,399
      Other interest        28,686        69,099         7,425         4,266
      Amortization
       of office
       equipment             2,244             -           748        (5,804)
      Accretion of
       reclamation
       obligation           47,250        41,667        21,750        14,750
                      ------------- ------------- ------------- -------------
                        50,347,771    26,198,888    19,482,121    12,910,301
                      ------------- ------------- ------------- -------------
    Loss before the
     following          (9,486,102)   (5,666,964)   (3,032,029)   (2,892,157)
    Dilution gain on
     Moss Lake Gold
     Mines Ltd.             17,504             -             -             -
                      ------------- ------------- ------------- -------------
                        (9,468,598)   (5,666,964)   (3,032,029)   (2,892,157)
    Recovery of
     future income
     taxes                 700,000             -             -             -
    Minority interest       34,607        70,198        11,024        13,432
                      ------------- ------------- ------------- -------------
    Net loss            (8,733,991)   (5,596,766)   (3,021,005)   (2,878,725)
    Deficit,
     beginning of
     period            (12,250,318)   (2,767,895)  (17,963,304)   (5,485,936)
                      ------------- ------------- ------------- -------------
    Deficit, end
     of period        $(20,984,309) $ (8,364,661) $(20,984,309) $ (8,364,661)
                      ------------- ------------- ------------- -------------
                      ------------- ------------- ------------- -------------
    Loss per
     common share
      Basic and
      diluted         $      (0.09) $      (0.07) $      (0.03) $      (0.03)
                      ------------- ------------- ------------- -------------
                      ------------- ------------- ------------- -------------

    -------------------------------------------------------------------------



    -------------------------------------------------------------------------
    Wesdome Gold Mines Ltd.
    Interim Consolidated Statements of Comprehensive Income and Accumulated
    Other Comprehensive Income
    (Unaudited)

                       Nine Months Ended Sept 30  Three Months Ended Sept 30
                              2007          2006          2007          2006
    -------------------------------------------------------------------------

    Net loss          $ (8,733,991) $ (5,596,766) $ (3,021,005) $ (2,878,725)

    Other comprehensive
     income (loss)
      Change in fair
       value of
       available-for-
       sale marketable
       securities         (100,000)            -       (46,809)            -
                      ------------- ------------- ------------- -------------
    Comprehensive
     income           $ (8,833,991) $ (5,596,766) $ (3,067,814) $ (2,878,725)
                      ------------- ------------- ------------- -------------
                      ------------- ------------- ------------- ------------- 
  --------------------------------------------------------------------------

    Accumulated other
     comprehensive
     loss, beginning
     of period        $          -  $          -  $    (53,191) $          -
    Other
     comprehensive
     income (loss)    $   (100,000) $          -  $    (46,809) $          -
                      ------------- ------------- ------------- -------------
    Accumulated other
     comprehensive
     loss, end of
     period           $   (100,000) $          -  $   (100,000) $          -
                      ------------- ------------- ------------- -------------
                      ------------- ------------- ------------- -------------



    -------------------------------------------------------------------------
    Wesdome Gold Mines Ltd.
    Interim Consolidated Statements of Cash Flows
    (Unaudited)

                       Nine Months Ended Sept 30  Three Months Ended Sept 30
                              2007          2006          2007          2006
    -------------------------------------------------------------------------

    Increase
     (decrease) in
     cash and cash
     equivalents
      Operating
       activities
        Net loss      $ (8,733,991) $ (5,596,766) $ (3,021,005) $ (2,878,725)
        Amortization
         of mining
         properties      8,058,417     5,062,196     3,212,218     2,496,408
        Loan interest
         paid with
         issuance
         of shares               -        14,201             -             -
        Accretion
         expense on
         convertible
         debentures        346,628             -       259,971             -
        Dilution gain
         on Moss Lake
         Gold Mines
         Ltd.              (17,504)            -             -             -
        Minority
         interest          (34,607)      (70,198)      (11,024)      (13,432)
        Stock
         compensation
         expense           465,138       645,741        58,382        64,322
        Amortization
         of office
         equipment           2,244             -           748        (5,804)
        Future income
         taxes            (700,000)            -             -             -
        Accretion of
         reclamation
         obligation         47,250        41,667        21,750        14,750
                      ------------- ------------- ------------- -------------
                          (566,425)       96,841       521,040      (322,481)
        Net changes in
         non-cash
         working
         capital        (3,538,956)      (46,914)    1,151,585        69,661
                      ------------- ------------- ------------- -------------
                        (4,105,381)       49,927     1,672,625      (252,820)
                      ------------- ------------- ------------- -------------
      Financing
       activities
        Convertible
         7% debenture   11,539,000             -             -             -
        Common shares
         and warrants
         issued, net
         of costs          (44,099)   19,147,685       (44,099)      (16,000)
        Loan from
         Western Québec
         Mines Inc.        759,447     1,800,000             -             -
        Senior Secured
         notes
         repayment      (1,374,450)            -    (1,374,450)            -
        Exercise of
         options           350,835       277,269       186,421        16,269
        Exercise of
         common share
         purchase
         warrants                -      (907,292)            -      (962,828)
        Exercise of
         warrants                -     5,125,644             -     4,374,390
        Shares issued
         by a
         subsidiary of
         the company
         to third
         parties            40,000             -             -             -
        Repayment of
         obligations
         under capital
         leases         (1,583,515)     (149,049)     (864,635)     (280,795)
                      ------------- ------------- ------------- -------------
                         9,687,218    25,294,257    (2,096,763)    3,131,036
                      ------------- ------------- ------------- -------------
        Net changes in
         non-cash
         working capital   117,106     1,598,365       117,106     1,561,506
                      ------------- ------------- ------------- -------------
                         9,804,324    26,892,622    (1,979,657)    4,692,542
                      ------------- ------------- ------------- -------------
      Investing
       activities
        Mining and
         exploration
         properties    (10,278,359)  (14,177,124)   (2,762,266)   (6,291,611)
        Cash acquired
         upon
         amalgamation    1,188,401       303,361     1,188,401             -
        Transaction
         costs                   -      (599,702)            -             -
        Deferred
         financing
         costs            (629,438)            -        44,960             -
        Capital assets      (3,719)   (2,547,333)            -             -
        Proceeds on
         option to sell
         property          550,000             -             -             -
        Funds held
         against
         letters of
         guarantee         (45,525)      (35,411)      (17,474)      (24,613)
                      ------------- ------------- ------------- -------------
                        (9,218,640)  (17,056,209)   (1,546,379)   (6,316,224)
        Net changes in
         non-cash
         working
         capital         2,357,687      (784,428)    2,357,687             -
                      ------------- ------------- ------------- -------------
                        (6,860,953)  (17,840,637)      811,308    (6,316,224)
                      ------------- ------------- ------------- -------------
    Increase (decrease)
     in cash and
     cash equivalents   (1,162,010)    9,101,912       504,276    (1,876,502)
    Cash and cash
     equivalents,
     beginning of
     period              5,310,251       160,215     3,643,965    11,138,629
                      ------------- ------------- ------------- -------------
    Cash and cash
     equivalents,
     end of period    $  4,148,241  $  9,262,127  $  4,148,241  $  9,262,127
                      ------------- ------------- ------------- -------------
                      ------------- ------------- ------------- -------------

    -------------------------------------------------------------------------
    





For further information:

For further information: Rowland Uloth, President, Donovan Pollitt, VP
Corporate Development, 8 King St. East, Suite 1305, Toronto, ON, M5C-1B5, Toll
Free: 1-866-4-WDO-TSX, Phone: (416) 360-3743, Fax: (416) 360-7620, Email:
invest@wesdome.com, Website: www.wesdome.com

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