Wesdome Gold Mines Ltd. - 2007 Second Quarter Results



    TORONTO, Aug. 16 /CNW/ -

    
    OPERATING HIGHLIGHTS
    --------------------
    Eagle River Mine
                                                      3 months      3 months
                                                        ending        ending
                                                       June 30,      June 30,
                                                          2007          2006
                                                      ---------     ---------
      Tonnes milled                                     23,200        35,200
      Recovered grade (g/t)                               19.5          11.0
      Ounces produced                                   14,544        12,500
      Ounces sold                                        5,400         8,700
      Bullion inventory (oz)                            11,893         6,626
                                                      ---------     ---------
      Bullion revenue (in thousands)                  $  4,040      $  6,336
    - Operating + development costs (in thousands)    $  3,103      $  4,364
    -------------------------------------------------------------------------
      Mine operating profit                           $    937      $  1,972
      Gold price realized ($Cdn/oz)                   $    748      $    728


    Kiena Mine Complex
                                                      3 months      3 months
                                                        ending        ending
                                                       June 30,      June 30,
                                                          2007          2006
                                                      ---------     ---------
      Tonnes milled                                     87,000             -
      Recovered grade (g/t)                                3.9             -
      Ounces produced                                   11,011             -
      Ounces sold                                        9,800             -
      Bullion inventory (oz)                             6,057             -
                                                      ---------     ---------
      Bullion revenue (in thousands)                  $  7,413      $      -
    - Operating + development costs (in thousands)    $  6,659      $      -
    -------------------------------------------------------------------------
      Mine operating profit                           $    754      $      -
      Gold price realized ($Cdn/oz)                   $    756      $      -
    


    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 second quarter, 2007, bullion revenue totalled $11.45 million
from 15,200 ounces sold at an average price of Cdn$753 per ounce. In addition
to the ounces sold, 17,950 ounces of gold remained unsold and are carried at
June 30, 2007 market value of $692 per ounce for Kiena and at $533 per ounce
cost for Eagle River 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 second quarter
totalled $9.76 million resulting in a mine operating profit of $1.69 million,
or about $111 per ounce. In addition to these direct operating and development
costs, other costs, including royalty payments, corporate and general costs
and interest costs, totalled $1.48 million bringing the overall cash operating
profit to $0.21 million.
    At Eagle River, a severe ice storm and transformer failure resulted in an
eight day shutdown. Despite this setback, very high grades resulted in strong
quarterly production. We are now well ahead of our production forecast despite
a slow first quarter and a slow start to the second quarter in April.
    The Kiena mine showed steady progress. Mill throughput averaged 960
tonnes per day in the second quarter compared to 790 tonnes per day in the
first quarter. Kiena generated its first quarterly mine operating profit since
production began on August 1, 2006. Steady production at 1,000 tonnes per day
has been attained and costs are improving, averaging $72 per tonne in June.
    Tight labour, equipment and materials markets continue to exert
inflationary pressure on costs. These underlying influences were accompanied
in the second quarter by a remarkable rise in the $Cdn/$US exchange rate which
rose 8.4% from 0.866 Cdn/US to close March, 2007 to 0.939 Cdn/US to close
June, 2007.
    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.

    OUTLOOK
    -------
    In 2007, the Company completed its net investment of $6.0 million at
Kiena in the first half of the year and $7.0 million will be invested at Eagle
River primarily in the second half. Capital expenditures totalled $3.7 million
in the second quarter and $7.5 million for the first half of 2007.
    At Eagle River, operating activities have funded 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 exceeded management's forecast of 16,000
ounces by 3,451 ounces. Production was sourced from lower grade stopes and the
Company continued to invest in development. The second half should be stronger
with a total of 40,000 ounces forecast for the year. A review of the operating
budget, mine plan and capital investment schedule at Kiena for 2008 and beyond
is currently being finalized.
    In summary, 2007 is a year of investment in our operations to increase
production and provide for a strong future. The results of this investment
will be seen in 2008 and onwards. We continue to forecast 70,000 ounces for
the year with 30,000 ounces from Eagle River and 40,000 ounces from Kiena. We
are excited about the potential to significantly increase reserves in the west
end of the Eagle River mine where very high grade zones remain open at depth.
Drilling to extend these high grade zones is currently underway.
    We continue to forecast a very strong 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 June 30, 2007 was
$12.4 million.

    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 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

                                                       June 30        Dec 31
                                                          2007          2006
    -------------------------------------------------------------------------
                                                    (Unaudited)     (Audited)

    Assets
    Current
      Cash and cash equivalents                   $  3,586,472  $  5,262,530
      Term deposits                                     57,493        47,721
      Gold bullion                                  10,779,843     5,796,006
      Receivables                                    7,990,885     9,301,938
      Supplies and other                             1,657,535     1,225,928
      Marketable securities                            146,809             -
                                                  ------------- -------------
                                                    24,219,037    21,634,123

    Funds held against letters of guarantee          2,505,126     2,477,075
    Deferred financing costs                           674,398             -
    Capital assets                                      14,651        12,428
    Mining properties                               57,672,815    53,012,950
    Exploration properties                          17,274,533    17,259,661
    Property held for sale                           1,078,105     1,828,105
                                                  ------------- -------------

                                                  $103,438,665  $ 96,224,342
                                                  ------------- -------------

    -------------------------------------------------------------------------
    Liabilities
    Current
      Payables and accruals                       $ 10,629,347  $ 11,215,497
      Loan from Western Québec Mines Inc.              759,447             -
      Current portion of obligations under
       capital leases                                1,465,123     1,044,809
                                                  ------------- -------------
                                                    12,853,917    12,260,306

    Obligations under capital leases                 2,358,555     1,497,326
    Convertible 7% debentures                        9,545,881             -
    Reclamation obligation                           1,040,500     1,009,000
    Future income taxes                              1,963,000     2,360,000
                                                  ------------- -------------
                                                    27,761,853    17,126,632
                                                  ------------- -------------

    Minority interest in Moss Lake Gold Mines Ltd.     435,975       438,642
                                                  ------------- -------------

    Shareholders' Equity
    Capital stock                                   88,821,275    88,889,627
    Common share purchase warrants                      81,022        81,022
    Contributed surplus                              2,275,259     1,938,737
    Accumulated other comprehensive income             (53,191)            -
    Equity component of convertible debentures       2,079,776             -
    Deficit                                        (17,963,304)  (12,250,318)
                                                  ------------- -------------
                                                    75,240,837    78,659,068
                                                  ------------- -------------

                                                  $103,438,665  $ 96,224,342
                                                  ------------- -------------

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

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

                        Six Months Ended June 30  Three Months Ended June 30
                              2007          2006          2007          2006
    -------------------------------------------------------------------------

    Revenue
      Gold and silver
       bullion        $ 24,330,371  $ 10,373,671  $ 11,452,764  $  6,205,948
      Interest and
       other                81,206       140,109        51,592       130,215
                      ------------- ------------- ------------- -------------
                        24,411,577    10,513,780    11,504,356     6,336,163
                      ------------- ------------- ------------- -------------

    Costs and expenses
      Operating costs   19,230,590     6,269,252     7,934,733     3,186,719
      Development costs  4,912,330     2,167,351     1,826,134     1,176,845
      Amortization of
       mining
       properties        4,846,199     2,565,788     2,117,107     1,181,162
      Production
       royalties           289,975       247,577       190,899       174,836
      Corporate and
       general             851,466     1,314,682       395,360       735,805
      Stock
       compensation
       expense             406,756       581,419       119,203       548,897
      Interest on
       long-term debt      280,077        44,964       226,518        28,867
      Other interest        21,261        64,833        14,460        47,853
      Amortization of
       office equipment      1,496         5,804           748         2,902
      Accretion of
       reclamation
       obligation           25,500        26,917        12,750        14,750
                      ------------- ------------- ------------- -------------
                        30,865,650    13,288,587    12,837,912     7,098,636
                      ------------- ------------- ------------- -------------

    Loss before the
     following          (6,454,073)   (2,774,807)   (1,333,556)     (762,473)
    Dilution gain on
     Moss Lake Gold
     Mines Ltd.             17,504             -        17,504             -
                      ------------- ------------- ------------- -------------
                        (6,436,569)            -    (1,316,052)            -

    Recovery of future
     income taxes          700,000             -             -             -

    Minority interest       23,583        56,766         4,374        49,041
                      ------------- ------------- ------------- -------------

    Net loss            (5,712,986)   (2,718,041)   (1,311,678)     (713,432)

    Deficit, beginning
     of period         (12,250,318)   (2,767,895)  (16,651,626)   (4,772,504)
                      ------------- ------------- ------------- -------------
    Deficit, end of
     period           $(17,963,304) $ (5,485,936) $(17,963,304) $ (5,485,936)
                      ------------- ------------- ------------- -------------
    Loss per common
     share
      Basic and
       diluted        $      (0.06) $      (0.04) $      (0.01) $      (0.01)
                      ------------- ------------- ------------- -------------

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

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

                        Six Months Ended June 30  Three Months Ended June 30
                              2007          2006          2007          2006
    -------------------------------------------------------------------------

    Net loss          $ (5,712,986) $ (2,718,041) $ (1,311,678) $   (713,432)

    Other comprehensive
     income (loss)
      Change in fair
       value of
       available-for-
       sale marketable
       securities          (53,191)            -         6,383             -
                      ------------- ------------- ------------- -------------
    Comprehensive
     income           $ (5,766,177) $ (2,718,041) $ (1,305,295) $   (713,432)
                      ------------- ------------- ------------- -------------

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

    Accumulated other
     comprehensive
     loss, beginning
     of period        $          -  $          -  $    (59,574) $          -

    Other
     comprehensive
     income (loss)    $    (53,191) $          -  $      6,383  $          -
                      ------------- ------------- ------------- -------------

    Accumulated other
     comprehensive
     loss, end of
     period           $    (53,191) $          -  $    (53,191) $          -
                      ------------- ------------- ------------- -------------



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

                        Six Months Ended June 30  Three Months Ended June 30
                              2007          2006          2007          2006
    -------------------------------------------------------------------------

    Increase (decrease)
     in cash and cash
     equivalents

    Operating
     activities
      Net loss        $ (5,712,986) $ (2,718,041) $ (1,311,678) $   (713,431)
      Amortization of
       mining
       properties        4,846,199     2,565,788     2,117,107     1,181,162
      Loan interest
       paid with
       issuance of
       shares                    -        14,201             -             -
      Accretion
       expense on
       convertible
       debentures           86,657             -        86,657             -
      Dilution gain
       on Moss Lake
       Gold Mines Ltd.     (17,504)            -       (17,504)            -
      Minority interest    (23,583)      (56,766)       (4,374)      (49,042)
      Stock
       compensation
       expense             406,756       581,419       119,204       548,897
      Amortization of
       office equipment      1,496         5,804           748         2,902
      Future income
       taxes              (700,000)            -             -             -
      Accretion of
       reclamation
       obligation           25,500        26,917        12,750        14,750
                      ------------- ------------- ------------- -------------
                        (1,087,465)      419,322     1,002,910       985,238
      Net changes in
       non-cash
       working capital  (4,837,350)     (116,575)   (5,292,585)     (391,313)
                      ------------- ------------- ------------- -------------
                        (5,924,815)      302,747    (4,289,675)      593,925
                      ------------- ------------- ------------- -------------

    Financing
     activities
      Convertible 7%
       debenture        11,539,000             -    11,539,000             -
      Common shares and
       warrants issued,
       net of costs              -    19,163,685             -       903,049
      Loan from Western
       Québec Mines Inc.   759,447     1,800,000       759,447             -
      Exercise of
       options             164,414       261,000        99,999        66,000
      Exercise common
       share purchase
       warrants                  -        55,536             -        55,536
      Exercise of
       warrants                  -       751,254             -       190,327
      Shares issued by
       a subsidiary of
       the company to
       third parties        40,000             -        40,000             -
      Marketable
       securities          146,809             -         6,383             -
      Repayment of
       obligations
       under capital
       leases             (718,880)      131,746      (385,892)      263,722
                      ------------- ------------- ------------- -------------
                        11,930,790    22,163,221    12,058,937     1,478,634
      Net changes in
       non-cash
       working capital           -        36,859             -      (150,391)
                      ------------- ------------- ------------- -------------
                        11,930,790    22,200,080    12,058,937     1,328,243
                      ------------- ------------- ------------- -------------

    Investing
     activities
      Mining and
       exploration
       properties       (7,516,093)   (7,885,513)   (3,703,536)   (5,229,990)
      Cash acquired
       upon
       amalgamation              -       303,361             -             -
      Transaction costs          -      (599,702)            -             -
      Deferred
       financing costs    (674,398)            -      (674,398)            -
      Capital assets        (3,719)   (2,547,333)       (1,186)   (2,524,954)
      Proceeds on
       option to sell
       property            550,000             -             -             -
      Funds held
       against letters
       of guarantee        (28,051)      (10,798)      (28,051)      (10,798)
                      ------------- ------------- ------------- -------------
                        (7,672,261)  (10,739,985)   (4,407,171)   (7,765,742)

      Net changes in
       non-cash working
       capital                   -      (784,428)            -    (1,316,308)
                      ------------- ------------- ------------- -------------
                        (7,672,261)  (11,524,413)   (4,407,171)   (9,082,050)
                      ------------- ------------- ------------- -------------

    Increase (decrease)
     in cash and cash
     equivalents        (1,666,286)   10,978,414     3,362,091    (7,159,882)

    Cash and cash
     equivalents,
     beginning of
     period              5,310,251       160,215       281,874    18,298,511
                      ------------- ------------- ------------- -------------

    Cash and cash
     equivalents, end
     of period        $  3,643,965  $ 11,138,629  $  3,643,965  $ 11,138,629
                      ------------- ------------- ------------- -------------

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





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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