CA - Wesdome Mines: Significant Production Growth On Deck

2024-04-18 11:17:18 ET

Summary

• Wesdome had a slow start to 2024 with it still mining lower grade ore from the Martin Zone, but it expects to see 40% output growth this year.
• This is expected to translate to a significant increase in its free cash flow generation year-over-year, and a material improvement in margins after a high-cost transition year in 2023.
• In this update, we'll dig into its preliminary Q1 results, recent developments, and its valuation after its year-to-date outperformance.

The Q1 earnings season for gold miners ( GDX ) is just around the corner, and it's one of the most awaited earnings season in years. This is because the industry will benefit from their highest average realized gold price on average (~$2,070/oz) in the upcoming quarter, setting up improved free cash flow generation year-over-year for most producers and helping to offset the impact of mid single-digit inflation felt sector-wide. One name that's set to be a beneficiary of these higher gold prices and will receive significantly more for each ounce left in the ground in 2023's transition year is Wesdome Gold Mines ( WDOFF ) which is set to up to enjoy ~40% production growth this year, albeit largely due to lapping easy year-over-year comparisons....

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