Wesdome Gold Mines Ltd. - Press Release - 2006 Year end results



    TORONTO, April 5 /CNW/ -

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

    Eagle River Mine
                                       Three          Eleven          Twelve
                                   Months to       Months to       Months to
                                Dec 31, 2006    Dec 31, 2006    Dec 31, 2006
    -------------------------------------------------------------------------
    Tonnes milled                     36,200         125,400         135,100
    Recovered grade (g/t)                8.9             9.9            10.1
    Ounces produced                   10,385          40,001          43,669
    Ounces sold                        9,500          38,600          42,600
    Bullion inventory (oz)             5,086           5,086           5,086
    Bullion revenue ($x1000)           6,744          26,644
    - Operating + development
      costs ($x1000)                   5,985          21,724
    -------------------------------------------------------------------------
    Mine operating profit                759           4,920

    Gold price realized ($Cdn/oz)        710             663


    Kiena Mine Complex

                                             Three Months to  Five Months to
                                                Dec 31, 2006    Dec 31, 2006
    -------------------------------------------------------------------------
    Tonnes milled                                     50,700          94,200
    Recovered grade (g/t)                                2.9             3.1
    Ounces produced                                    7,500           9,300
    Ounces sold                                        5,400           6,100
    Bullion inventory (oz)                             2,705           2,705
    Gold in process (oz)                                 500             500
    -------------------------------------------------------------------------

    Bullion revenue ($x1000)                           3,790           4,269
    - Operating + development costs ($x1000)           5,165           8,248
    -------------------------------------------------------------------------
    Mine operating loss                                1,375           3,979

    Gold price realized ($Cdn/oz)                        702             700
    

    The Company 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 and completed its first full year of production
since operations were scaled down in late 2005. The Kiena mine was in
pre-production development stage until August 1, 2006 when commercial
production commenced.
    As previously released, (see February 27, 2007 press release), the
Company's proven and probable reserves increased year over year, net of
production. Reserves increased dramatically from 78,000 ounces to 218,000
ounces.
    Since the February 1, 2006 merger, bullion revenue totalled $30.9 million
from 46,300 ounces sold at an average price of Cdn$668 per ounce. In addition
to the ounces sold, some 7,800 ounces of gold remained unsold and are carried
at December 31, 2006 market value of $740 per ounce, or $5.8 million, as gold
bullion on the balance sheet. Revenue for this gold will be recognized in the
fiscal period in which it is sold.
    For combined operations, the costs of sales totalled $29.9 million
resulting in a gross profit, or mine operating profit of $1.0 million, or
about $20 per ounce.
    The Eagle River mine generated a mine operating profit of $4.9 million
over the eleven month period, while Kiena generated a mine operating loss of
$3.9 million over the five month period since production commenced. Eagle
River production exceeded forecasts. However, production at Kiena was below
forecast as both throughput and grades were lower due to the mining sequence
and mechanical availability of equipment. This slow start-up is expected to
ease as higher grade stopes come onstream, new equipment is delivered and
ongoing development provides more flexibility in the mine plan.
    Capital costs for the Company totalled $22.5 million, including
$12.4 million for Kiena prior to production and $5.6 million subsequently.
$2.0 million of the $22.5 million capital costs were financed through mining
equipment leases which will be paid in subsequent periods. Eagle River
incurred $4.5 million in capital expenditures with major items including mill
tailings pond expansion, equipment and underground development.
    At year end, the Company had working capital of $9.4 million. From an
operating view, cash operating costs exceeded revenues by $0.79 million. The
net loss of $9.5 million was essentially composed of non-cash items plus the
$0.79 million. The Company's cash flow from operations was negative
$0.8 million primarily as a result of a slow start-up at Kiena.

    OUTLOOK
    -------

    Capital cost estimates to maintain and increase capacity in 2007 include
$8.5 million in capital expenditures on equipment and development at Kiena and
$5.3 million in development and infrastructure at Eagle River. At Eagle River
operating activities are expected to fund commitments for the first half of
the year. During the second half of the year, production will decrease as
investment in developing the west end of the mine continues. This investment
will put Eagle River in shape to maintain or increase capacity through mid
2009.
    At Kiena, the first half of 2007 will be slow as we continue production
from low grade stopes and invest in development. The second half will be much
stronger. In particular, installation of track on the 520 metre haulage drift
during the VC zone fill cycle will result in millfeed from primarily lower
grade stopes from May to July. Production for the first 6 months will total
about 16,000 ounces, or about 2,700 ounces per month, while production in the
second half will total 24,000 ounces, or about 4,000 ounces per month. In
total, 338,000 tonnes at 3.90 gAu/tonne is forecast to be milled producing
40,000 ounces for the year.
    In 2007, Kiena is forecast to generate revenues of $29 million and incur
operating costs of $26.1 million at a gold price of CDN$690 per ounce.
    A review of the operating budget, mine plan and capital investment
schedule at Kiena for 2008 and beyond is currently in progress.
    In summary, we are currently forecasting approximately 70,000 ounces of
production in 2007, with 30,000 ounces from Eagle River and 40,000 ounces from
Kiena. At Kiena, the first half will be slow as we continue production from
low grade stopes and invest in development. The second half will be stronger.
At Eagle River the first half will be strong and the second half will involve
a net investment to develop the high grade 808 and 811 zones in the west end
of the mine. These areas remain open at depth and will provide production
until at least mid-2009.
    We continue to forecast a very strong 2008 with full-year above average
grade production from both mines.

    Wesdome Gold Mines Ltd. is an established Canadian gold producer with
mining operations and development projects in Wawa, Ontario and Val d'Or,
Quebec. The Company has 90.5 million shares issued and trades on the TSX
Exchange under the symbol "WDO".


    
    Wesdome Gold Mines Ltd.
    Consolidated Balance Sheets
    December 31                                         2006            2005
    -------------------------------------------------------------------------

    Assets
    Current
      Cash and cash equivalents                 $  5,262,530    $    127,767
      Term deposits                                   47,721          32,448
      Gold bullion                                 5,796,006               -
      Receivables                                  9,301,938       3,991,343
      Supplies and other                           1,225,928               -
    -------------------------------------------------------------------------
                                                  21,634,123       4,151,558

    Funds held against letters of guarantee        2,477,075         671,215
    Capital assets                                    12,428       1,738,704
    Mining properties                             53,012,950               -
    Exploration properties                        17,259,661      38,120,720
    Property held for sale                         1,828,105       2,807,476
    -------------------------------------------------------------------------

                                                $ 96,224,342    $ 47,489,673
    -------------------------------------------------------------------------

    Liabilities
    Current
      Payables and accruals                     $ 11,215,497    $  2,808,720
      Current portion of obligations under
       capital leases                              1,044,809               -
    -------------------------------------------------------------------------
                                                  12,260,306       2,808,720
    Obligations under capital leases               1,497,326               -
    Reclamation obligation                         1,009,000         354,000
    Future income taxes                            2,360,000       3,220,000
    -------------------------------------------------------------------------
                                                  17,126,632       6,382,720
    -------------------------------------------------------------------------

    Minority interest in Moss Lake Gold Mines Ltd.   438,642               -
    -------------------------------------------------------------------------

    Shareholders' Equity
    Capital stock                                 88,889,627      42,204,970
    Common share purchase warrants                    81,022         749,328
    Contributed surplus                            1,938,737         920,549
    Deficit                                      (12,250,318)     (2,767,894)
    -------------------------------------------------------------------------
                                                  78,659,068      41,106,953
    -------------------------------------------------------------------------

                                                $ 96,224,342    $ 47,489,673
    -------------------------------------------------------------------------



    Wesdome Gold Mines Ltd.
    Consolidated Statements of Operations and
     Deficit
    Years Ended December 31                             2006            2005
    -------------------------------------------------------------------------

    Revenue
      Gold and silver bullion                   $ 30,912,397    $          -
      Interest and other                             385,226          86,703
    -------------------------------------------------------------------------
                                                  31,297,623          86,703
    -------------------------------------------------------------------------

    Costs and expenses
      Operating costs                             22,782,407               -
      Development costs                            7,190,236               -
      Amortization of mining properties            7,936,543               -
      Write-down of property held for sale           959,371               -
      Production royalties                           448,539               -
      Corporate and general                        1,477,158         860,397
      Stock compensation expense                     668,110         269,987
      Interest on long term debt                     111,773               -
      Other interest                                  74,600         189,717
      Amortization of office equipment                     -          18,121
      Accretion of reclamation obligation             44,417          26,000
    -------------------------------------------------------------------------
                                                  41,693,154       1,364,222
    -------------------------------------------------------------------------

    Loss before the following                    (10,395,531)     (1,277,519)

    Dilution gain on Moss Lake Gold Mines Ltd.        21,778               -
    -------------------------------------------------------------------------

    Net loss before income tax and minority
     interest                                    (10,373,753)     (1,277,519)

    Recovery of future income taxes                  860,000               -

    Minority interest                                 31,329               -
    -------------------------------------------------------------------------

    Net loss                                      (9,482,424)     (1,277,519)

    Deficit, beginning of year                    (2,767,894)     (1,490,375)
    -------------------------------------------------------------------------

    Deficit, end of year                        $(12,250,318)   $ (2,767,894)
    -------------------------------------------------------------------------

    Loss per common share
      Basic and diluted                         $      (0.11)   $      (0.03)
    -------------------------------------------------------------------------



    Wesdome Gold Mines Ltd.
    Consolidated Statements of Cash Flows
    Years Ended December 31                             2006            2005
    -------------------------------------------------------------------------

    Increase (decrease) in cash and cash
     equivalents

      Operating activities
        Net loss                                $ (9,482,424)   $ (1,277,519)
        Amortization of mining properties          7,936,543               -
        Loan interest paid with issuance of
         shares                                       14,201               -
        Write-down of property held for sale         959,371               -
        Dilution gain on Moss Lake Gold Mines Ltd.   (21,778)              -
        Minority interest                            (31,329)              -
        Stock compensation expense                   668,110         269,987
        Amortization of office equipment                   -          18,121
        Future income taxes                         (860,000)              -
        Accretion of reclamation obligation           44,417          26,000
    -------------------------------------------------------------------------
                                                    (772,889)       (963,411)

        Net changes in non-cash working capital   (2,692,484)         30,055
    -------------------------------------------------------------------------
                                                  (3,465,373)       (933,356)
    -------------------------------------------------------------------------

      Financing activities
        Common shares and warrants issued net of
         costs                                    20,296,619       4,864,299
        Loan from Western Québec Mines Inc.        1,800,000               -
        Exercise of options                          331,132               -
        Exercise of warrants                       4,956,180               -
        Shares issued by a subsidiary of the
         company to third parties                     50,000               -
        Repayment of obligations under capital
         leases                                     (817,387)              -
    -------------------------------------------------------------------------
                                                  26,616,544       4,864,299

        Net changes in non-cash working capital      (28,907)         28,030
    -------------------------------------------------------------------------
                                                  26,587,637       4,892,329
    -------------------------------------------------------------------------

      Investing activities
        Mining and exploration properties        (16,210,613)     (8,828,057)
        Property held for sale                       (30,000)          2,628
        Cash acquired upon amalgamation              303,361               -
        Transaction costs                           (599,702)              -
        Capital assets                               (12,428)          5,424
        Proceeds on option to sell property           50,000               -
        Funds held against letters of guarantee      (49,931)              -
    -------------------------------------------------------------------------
                                                 (16,549,313)     (8,820,005)

        Net changes in non-cash working capital   (1,422,915)     (1,780,675)
    -------------------------------------------------------------------------
                                                 (17,972,228)    (10,600,680)
    -------------------------------------------------------------------------

    Increase (decrease) in cash and cash
     equivalents                                   5,150,036      (6,641,707)

    Cash and cash equivalents, beginning of year     160,215       6,801,922
    -------------------------------------------------------------------------

    Cash and cash equivalents, end of year      $  5,310,251    $    160,215
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    





For further information:

For further information: 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

Organization Profile

Wesdome Gold Mines Ltd.

More on this organization


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890