CA - Wesdome Mines: Margins Dip In Q1 But A Stronger H2 Likely Ahead

2024-05-23 14:40:36 ET

Summary

• Wesdome Mines had a mediocre Q1 with better than expected grades at Eagle River, but similar production levels year-over-year and higher costs at Kiena.
• However, while AISC remained elevated at Kiena ($3,023/oz), this was a transition period ahead of accessing high-grade Kiena Dee pore and costs will decline materially in upcoming quarters.
• In this update we'll dig into the Q1 results, recent developments, and how Wesdome's valuation stacks up relative to its peers after its 40% year-to-date return.

The Q1 Earnings Season for the Gold Juniors Index ( GDXJ ) has started, and one of the first junior producers to release its results was Wesdome Mines ( WDOFF ). The company had a mediocre Q1 overall with better than expected results from Eagle River but more of the same lower-grade ore at Kiena, with Kiena's AISC spiking above $3,000/oz temporarily. However, the remainder of 2024 will look entirely different from Q1 from an output/cost standpoint, with back-end weighted production at Kiena that will contribute to ~45,000 ounce production quarters (company-wide) starting in Q3....

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