TORONTO, July 17, 2012 /CNW/ - Wesdome Gold Mines Ltd (TSX: WDO) is pleased to announce preliminary production and sales figures for the second quarter and first half ended June 30, 2012. Production numbers are subject to final refining balances.
Donovan Pollitt, President, commented "Overall we see a 20% increase in production over the first quarter, 2012 and a 44% increase in production relative to the second quarter, 2011. For the first half, 2012, production increased 12% compared to the first half of 2011. Realized gold prices have increased 16% over those realized in the first half of 2011. We still have a lot of work to do to get back to a highly profitable position, but are encouraged by the short term production trends."
During the second quarter, 2012, gold production from the Company's Eagle River, Mishi and Kiena mines totalled 15,100 ounces, a 44% improvement over the second quarter, 2011. Production for the first half 2012 totalled 27,600 ounces, a 12% increase over 2011's first half performance.
During the second quarter, 2012, the Eagle River mine produced 8,600 ounces from 51,900 tonnes milled at a recovered grade of 5.2 gAu/tonne. First half production totalled 16,100 ounces from 91,000 tonnes milled at a grade of 5.5 gAu/tonne.
During the second quarter, 2012, the Mishi mine produced 1,100 ounces from 15,600 tonnes milled at an average recovered grade of 2.2 gAu/tonne. For the first half Mishi has produced 2,500 ounces of gold from 34,700 tonnes milled at a grade of 2.2 gAu/tonne. This is about half of what was planned for the period as higher grade Eagle River ore was available for millfeed. The Mishi ore stockpile at the mill grew to over 32,000 tonnes at a similar grade.
At Kiena second quarter 2012 production totalled 5,400 ounces from 66,200 tonnes milled at a recovered grade of 2.5 gAu/tonne. This is an 8% increase over 2011 second quarter and a big step up from first quarter 2012 production when the mine was catching up on development. For the first half, 2012, Kiena produced 9,000 ounces from 126,200 tonnes milled at a recovered grade of 2.2 gAu/tonne. This was down 21% compared to 2011 due to the development investment in the first quarter, 2012.
Kiena remains our biggest challenge. In May, 2012, the Company initiated a restructuring program to cut costs by 20%. The results of this effort start appearing in June, 2012. Kiena remains extremely leveraged to future gold prices.
Gold sales in the second quarter, 2012, totalled $25.9 million with 16,000 ounces sold at an average realized price of $1,620 per ounce. This compares to sales of $19.2 million from 13,000 ounces sold at $1,475 per ounce in the second quarter, 2011.
Year to date bullion sales total $47.9 million from 29,000 ounces sold at an average realized price of $1,653 per ounce. This compares to 30,000 ounces sold at $1,424 per ounce for sales of $42.8 million during the first half of 2011.
At June 30, 2012, the Company's refined gold bullion inventory stood at 7,200 ounces with a market value of about $11.7 million.
SECOND QUARTER FINANCIAL RESULTS
We expect to release our second quarter financial results the week of August 6, 2012.
We continue to aim for a 60,000 ounce annual production target. The improvement over the first quarter is encouraging. Eagle River and Mishi continue to offer flexibility in milling schedules. Under Kiena's cost reduction program, annual production guidance here has been reduced to about 20,000 ounces as previously announced.
We continue to believe the gold price will resume its upward climb in the second half of 2012 and are well positioned to benefit from this.
Wesdome is celebrating its 25th year of continuous mining operations in Canada. It currently has three producing gold mines with wholly-owned mining and milling complexes located in Wawa, Ontario and Val d'Or, Québec. The Company has 101.9 million shares issued and outstanding and trades on the Toronto Stock 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.
For further information:
Donovan Pollitt, P.Eng., CFA
President & CEO
416-360-3743 ext 25
George Mannard, P.Geo.
Vice President Exploration
416-360-3743 ext 22