September A Solid Foundation for a Promising Future

Transcription

1 September 2016 A Solid Foundation for a Promising Future

2 Cautionary Statements Cautionary Language regarding Forward-Looking Information This presentation contains and refers to forward-looking information based on current expectations, intentions, and beliefs of the Company with respect to the future business activities and operating performance of the Company. The words may, would, could, should, will, intend, plan, anticipate, believe, estimate, expect and similar expressions, as they relate to the Company, are intended to identify such forward-looking statements. All other statements other than statements of historical fact included in this release including, without limitation, statements regarding processing and development plans and future plans and objectives of Wesdome Gold Mines Ltd. (the Company ) are forward-looking statements (or forward-looking information) that involve various risks and uncertainties. These forward-looking statements are made as of the date hereof and there can be no assurance that such statements will prove to be accurate, such statements are subject to significant risks and uncertainties, and actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements that are included herein. Important factors could cause actual results to differ materially from the Company s expectations. Such factors include, among others: the actual results of additional exploration and development activities at the Company s projects; the timing and amount of estimated future production and the costs thereof; capital expenditures; the availability of any additional capital required to bring future projects into production; future prices of commodities; the failure of plant, equipment or processes to operate as anticipated; accidents; labour disputes; Please refer to the Risk Factors in materials filed with securities regulatory authorities in Canada. Technical Disclosure All technical disclosure contained in this presentation respects National Instrument standards and is disclosed fully on SEDAR filings ( The Qualified Person who has reviewed the technical content of this presentation is George N. Mannard, P. Geo. and Vice President, Exploration of Wesdome. TSX:WDO 2

3 Corporate Structure Symbol TSX:WDO Shares Outstanding 130 M Options 4.9 M Warrants 0 Fully Diluted M Management and Directors 2.2% 52 Week High/Low $2.90/$0.89 (Average daily volume 800,000 shares) Market Capitalization $340M ($2.69 September ) Cash Position $26.2 M (September 1, 2016) Debt $7 M Convertible Debenture (due May 23, $2.50/share) Analyst Coverage Clarus Securities Dundee Securities Echelon Wealth Partners M Partners Mackie Research National Bank Financial PI Financial Major Shareholders Resolute Funds, Gabelli, Royal Bank Investment Management, US Global, Oppenheimer, Mackenzie Financial, 1832 Asset Management, BMO Asset Management TSX:WDO 3

4 Canadian Gold Company with Three 100% Owned Projects 28 years of continuous gold production Eagle River primary asset produced 50,470 oz. in 2015 from 2 high grade mines Positive operating cash flow $10.1 M or $0.09/share Executing a company wide exploration program on existing assets Moss Lake, Thunder Bay, Ont. Open Pit Gold Deposit Resources: Indicated 1.4M oz, Inferred 1.7M oz Eagle River Complex, Wawa, Ont. Operating Mine/Mill Complex Past Prod.: 1.1 M oz Reserves: P&P 431,000 oz Resources: M&I 330,000 oz, Inf. 310,000 oz 1 2 Kiena, Val d Or, Quebec Production Suspended 2013 Past Prod.: 1.75 M oz Resources: M&I 450,000 oz, Inf. 450,000 oz Fully Permitted Mine/Mill Complex on Standby 3 TSX:WDO 4

5 Corporate Strategy Near Term - Stabilize and improve Wawa operations through mine development of additional high grade zones, providing additional production flexibility - Near mine exploration to diversify working stope locations Longer Term -Pipeline of development projects: - Early success at brownfields exploration at Kiena Complex (shaft and permitted mill) - Drill program at newly consolidated Moss Lake property - Near mine exploration on surface at Eagle River and step out at Mishi Open Pit Potential for diversified production from three mines in two provinces, Ontario and Quebec Objective- - Increased output and lowered costs TSX:WDO 5

6 Investment Highlights Operational Turnaround Executed Over Last 24 Months Mill Production Increased from 375 TPD to ~900 TPD, additional room for organic growth Experienced management team and new board with combined decades of mining and public company experience High Grade Operations in One of the Best Mining Jurisdictions - Canada $25.2 M Cash; $7 M in Convertible Debentures (May 31, 2017) No Other Debt New Exploration Potential in Under-explored Gold Camps (Eagle River, Mishi, Kiena/Val d Or Camp, Moss Lake) Major Exploration program launched, 7 drills targeting Eagle River and Mishi Mines Since 2013, 70% Reserve Growth at Eagle River, Two New Parallel High Grade Zones added to Production Profile New high-grade discovery at Kiena Complex announced August 2016, 4 drills targeting a repetition of the S-50 Zone TSX:WDO 6

7 A Solid Foundation for a Promising Future Previous management has assembled a quality asset package across Canada for minimal share dilution and little debt Wawa and Kiena assets underdeveloped and underexplored 2013 Present New management team and board developed timely strategic investment projects to boost production, lower costs, and stay well ahead of development Increased exploration programs to unlock potential Management and board aligned with Company strategy TSX:WDO 7

8 Operating Two of Canada s High Grade Gold Mines Eagle River Underground Ranks 2nd Mishi Open Pit Ranks 3rd Reserve Grade (g/t) Reserve Grade (g/t) Source: National Bank Financial TSX:WDO 8

9 Eagle River Complex Operations 1,000,000+ g/t in the Hemlo/Wawa gold camp Two high grade gold deposits feeding a central mill Mill and mine expansion initiated in 2015 Since Q1 2014, 60% increase in mill throughput Mill operating at 800 1,000 tonnes/day Eagle River Underground (Reserve grade 9.2 g/t Au) Exploration drilling in progress with potential to double mine life at both operations Increased exploration spend at brownfields Kiena asset, new discovery August 2016 Mishi Open Pit (Reserve grade 2.1g/t Au) TSX:WDO 9

10 Operations Optimization Development Fleet Renewal: 2 new 6-yard scoop trams delivered in Q2 are improving availability Development into higher grade reserve blocks accelerated Faulty blasting equipment replaced Grade Mill Drifting on 7 Zone at the 890 metre level ( g/t cut Drifting on 7 Zone at the 945 metre level ( g/t cut) Bringing this zone into production Q4, well ahead of schedule Cash flow positive H Filtration system improved with new velvet backing on drum filters Adding filtration capacity with the recommissioning of belt filter by Q3 Will improve mill availability, capacity utilization and recoveries going forward TSX:WDO 10

11 Increasing Production, Lowering Costs Ounces Produced 7 Zone Mining Begins Q4 Cost CAD$ / OZ Au Production Cash Costs AISC $1.30 exchange rate CAD:USD TSX:WDO 11

12 Eagle River Mine: 1.1 M oz of Production Quartz diorite stock (2 km x 0.5 km) hosts 1 M oz of production at Eagle River from 8, 6 and 2 Zone structures (1995 to 2015) Parallel 7 and 300 Zones to north offer new potential 2015 Production: 41,013 oz. (173, g/t) 7 Zone Surface TSX:WDO 12

13 Eagle River Parallel Gold Zones Remain Open open open 4200 elev 4200 elev open Section 9400E (looking west) Section 9400E (looking west) Discovery of two new parallel gold zones in 2013 Exploration in 2014 and 2015 leads to reserve growth with expanding potential within mine footprint Mining of 300 Zone began in Q3 2015, 7 Zone in development for production in Q Recent widths at 300 North Zone wider than previously encountered 100 m open TSX:WDO 13

14 2015 Eagle Drilling Expanding Reserve/Resource Potential Longitudinal Section Looking North 300 Zone W 300 Zone E 7 Zone TSX:WDO 14

15 2016 Drill Results Extend 7 Zone Towards Surface, Production Commencing Q Drill Highlights 2016 Underground drilling extends 7 Zone 200 metres towards surface 15 holes in Zone average: 17.3 g/t Au over 3.2 m (true width) 7 Zone hosts highest grade reserves (166, g/t Au) 7 Zone adjacent to existing mine infrastructure Zone remains open to depth and to surface 890 Drift Sampling 33.2 g/t over 1.5 m along drift length of 42 m 945 M Drift g/t over 3.32 m average width along drift length of 63 m TSX:WDO 15

16 300 Zone Drift Results, September 2016 Drilling expands 300 East Lens 150 m to east and down plunge New 300 North Lens discovered intersecting wide widths up to 32.4 m 300 Zone thickening down plunge where it remains open New 300 Zone being developed in Q3/ m drift g/t over average width of 1.61 m over 141 m drift TSX:WDO 16

17 2016 Surface Drilling Exploration Program Longitudinal Section Looking North 7 Zone Exploration Targeting zone up dip and along strike of existing reserve/ mining block 29 wide spaced drill holes testing zone at 200 m centres along productive Mine Diorite Drilling coverage: 500 m X 1600 m Longitudinal Section Looking North Zone 300 Exploration Targeting zone up dip and along strike of existing reserve/mining block 32 wide spaced drill holes testing zone at 200 m centres along productive Mine Diorite Drilling coverage: 300 m X 1600 m TSX:WDO 17

18 2016 Eagle River Exploration Program 220 m Level Plan Expanded underground drilling program First expanded surface exploration program since wide-spaced surface drill holes targeting untested package of mafic volcanic rocks north of Mine Diorite and up-dip projection of 300 Zone and 7 Zone TSX:WDO 18

19 Mishi Open Pit Mine Mine recommences production in 2012 at rate of 200 t/d (2012 production 4,800 oz) Since 2002 deposit has intermittently produced 35,000 oz to date at a grade of 2.8 g/t Au 2015 Production 9, g/t Au grade (450 tpd) Deposit remains open to depth and along strike TSX:WDO 19

20 Mishi Operations M6 Zone open West Extension M2 Zone MISHI MINE Current Operations M2 Zone East Extension open Plan View Section 3550 E Section 3750 E Section 3550 E (looking W) Section 3750 E (looking W) TSX:WDO 20

21 Mishi Exploration 2015 Exploration Highlights West of Pit East of Pit MW15-65A: 10.4 g/t over 18.4 m MW15-74: 6.4 g/t over 7.4 m MW15-63: 2.3 g/t over 7.1 m MW15-76: 1.7 g/t over 11.9 m ME15-02: 1.3 g/t over 8.4 m ME15-11: 1.3 g/t over 8.5 m ME15-07: 1.4 g/t over 7.0 m ME15-13: 1.1 g/t over 10.8 m 2015 Reserves increase by 8% net of depletion to g/t Au (131,000 oz) Resources: g/t Au (248,000 oz indicated) g/t (59,000 oz inferred) 2016 Exploration: 25,000 m of drilling targeting mine trend to west and to depth TSX:WDO 21

22 Kiena Complex, Val d Or, Quebec TSX:WDO 22

23 Kiena Complex Plan View Mine on care and maintenance since mid ,000 TPD permitted mill 930 Metre shaft bottom Ramp system to 100 m Underground de-watered Past production ,500, g/t = 1.75 M ounces produced The contents of this slide have been verified and approved by the Company s VP Exploration, George Mannard, P. Geo a Qualified Person for the purpose of National Instrument Standards of Disclosure for Mineral Projects Please refer to Company AIF available on the Company s website and sedar.com TSX:WDO 23

24 S-50 Zone Isometric View North S-50 Zone - Conceptual Isometric 3D View S-50 Zone depleted portion (red wireframe) Most of Kiena s 10M tons (1.6 M oz Au) were depleted from upper part ranging from ~15 to 50 metres wide Thicker gold mineralized breccia zones interpreted to be part of a large deformed sigmoidal structure extending northward from the S-50 tabular shear hosted mineralized zone Level 91 Drill holes TSX:WDO 24

25 Kiena Complex: New Discovery 2016 Two drills testing for repetition along a Z-fold interpretation metres below existing infrastructure Highlights: grams per tonne (g/t) gold over m uncut (18.03 g/t cut) in hole U g/t gold over m uncut (18.80 g/t cut) in hole U-6125 The contents of this slide have been verified and approved by the Company s VP Exploration, George Mannard, P. Geo a Qualified Person for the purpose of National Instrument Standards of Disclosure for Mineral Projects TSX:WDO 25 Please refer to Company AIF available on the Company s website and sedar.com

26 Moss Lake - Coldstream Acquisition April 2016 Coldstream and Hamlin Properties are adjacent to Moss Lake deposit Purchased for $400,000 cash; and 454,545 common shares Acquisition eliminates historic property boundary along strike of Moss Lake deposit Dominant land holdings, 36 km along Shebandowan Gold Belt containing four deposits open for expansion Exploration drilling planned for late 2016 TSX:WDO 26

27 Moss Lake Project Optionality Moss Lake Stock Original Property Boundary open Central Intermediate to Felsic Metavolcanic Belt Moss Lake Deposit 1.4 M oz 1.1 g/t) 1.7 M oz 1.1 g/t) Head Lake Stock Shebandowan Greenstone Belt Moss Lake Deposit remains open Pit and Mineral Resource constrained by property boundary Drill Program planned in 2016 to expand deposit to the northeast onto the Coldstream acquisition Potential to double resources TSX:WDO 27

28 2013 Moss Lake PEA (2.5 M oz. study) NE open SW NE open 300 m 2.5 km SW General View of Mineralized Zones Longitudinal and Plan View of Moss Lake Pit Highlights Open pit mine and CIL Processing at 40,000 tpd Life of mine strip ratio of 2.5 : 1 10 year mine life averaging 244,000 oz. per year - years 1-5 average 296,000 oz. per year - years 6-10 average 192,000 oz. per year Mill recovery: 79.2% to 84.2% (Gravity CIL) Pre-production Capital: $543 M CDN Operating costs $17.56 CDN per tonne ($922 per oz.) Payback period: 1.75 years After Tax NPV: $196 M at 5% discount rate After Tax IRR of 12% (assumes Au price of $1551 CDN) TSX:WDO 28

29 2016 Eagle River Complex Exploration Summary $6.3 M Drilling Budget at Eagle River, $3 M Kiena, $3M Moss Lake (est) Eagle: 3 UG Drills and 2 Surface Mishi: 2 drills Kiena: 2 drills moving to 4 Property 2016 Metres 2015 Metres Eagle Underground Exploration Drilling 40,000 17,000 Eagle Surface Exploration Drilling 25,000 N/A Eagle Definition Drilling 36,800 34,000 Mishi Exploration Drilling 25,000 5,000 Kiena Complex 10,000+ 5,000 Moss Lake TBD 0 Total 136,800 61,000 TSX:WDO 29

30 Summary Kiena: New gold discovery in existing, permitted, dewatered former producing mine Free cash flow growth for modest capital investment = Heathy rate of return Eagle River: Low risk expansion of existing mines in proven mining camp Eagle River: Discovering new highgrade parallel zones close to infrastructure Pipeline of development projects Operations in safe jurisdiction, Canada Experienced Management team with proven track records 2016 Aggressive Exploration at Eagle River and Mishi TSX:WDO 30

31 Appendix

32 Executive Management Team Duncan Middlemiss, P. Eng Chief Executive Officer - Professional engineer with over 25 years experience in operational management, mine rehabilitation, development and gold production - Over 10 years of executive management experience - Most recently Chief Executive Officer of St Andrew Goldfields until its sale to Kirkland Lake Gold in January 2016 Hemdat Sawh, CPA, CA Chief Financial Officer - Former principal at Grant Thorton LLP - Over 16 years executive management experience at publicly traded mining companies - Most recently Chief Financial Officer of Scorpio Mining until its merger with US Silver Philip Ng, P.Eng, M.Eng Chief Operating Officer George Mannard, P,Geo, MSc.A VP, Exploration Benoit Laplante, P.Eng, MSc.A VP, Corporate Development Lindsay Carpenter Dunlop VP, Investor Relations Heather Laxton Corporate Secretary - Professional engineer with over 20 years experience in Canadian underground and open pit mines - Most recently held the position of COO at Queenston Mining prior to its takeover by Osisko Mining; prior to that spent 5 years as VP Operations at Claude Resources - Professional geologist with over 30 years experience, 20+ years with Wesdome - Co-credited with the discovery of Louvicourt - Developed 8 new gold mines - Professional engineer with over 30 years experience in Canadian mines - Numerous senior level positions at intermediate and junior producers including Noranda, Aurizon, and North American Palladium - Over 10 years experience in the development and execution of investor relations programs for publicly traded resource companies - Most recently 5 years as Director of Investor Relations at Kirkland Lake Gold - 20 years of corporate secretarial, corporate governance and securities regulation experience with a focus on the mining sector in Canada, Europe, Russian and West Africa - Most recently Corporate Secretary at Kirkland Lake Gold TSX:WDO 32

33 Board of Directors Charles Page, P.Geo Chairman Duncan Middlemiss, P. Eng Chief Executive Officer Nadine Miller, P. Eng Barry Smith, P. Eng, MBA - Over 40 years experience in the mineral exploration and mining industry - Most recently President and CEO of Queenston Mining, leading the discovery and development of the Upper Beaver deposit in the Kirkland Lake gold camp, until its acquisition by Osisko Mining - Professional engineer with over 25 years experience in operational management, mine rehabilitation, development and gold production - Over 10 years of executive management experience - Most recently Chief Executive Officer of St Andrew Goldfields until its sale to Kirkland Lake Gold in January Over 15 years experience in geotechnical engineering and project management in the mining space - Former Business Development Manager at SNC-Lavalin s Mining and Metallurgy unit - Co-founder of Rosedale transport with CEO Rolly Uloth - Former President and CEO of Western Quebec Mines until its Merger with Wesdome in 2007 Rolly Uloth - Over 45 years of senior management experience - Co founder of Rosedale Transport, fifth largest trucking company in Ontario Bill Washington - Former Head of Global Mining and Metals at National Bank Financial Markets - Over 25 years experience in capital markets, focused exclusively on the mining sector TSX:WDO 33

34 Eagle River/Mishi Complex Central Ontario Located in Hemlo/Wawa Gold Camp Celebrating 20 years of production 1,000, g/t Au Current operations 900 1,000 tpd Mill located adjacent to Mishi open pit deposit (permitted to 1,200 tpd) Eagle River underground mine located 15 kms to south TSX:WDO 34

35 Mineral Reserves (2015 Year End) 13% increase at Eagle River net of depletion 8% increase at Mishi net of depletion Category Tonnes Grade (gau/tonne) Contained Ounces Eagle River Underground Reserves Proven 165, ,000 Probable 846, ,000 Eagle Proven + Probable 1,011, ,000 Mishi Open Pit Reserves Proven 157, ,000 Probable 1,614, ,000 Mishi Proven + Probable 1,885, ,000 Reserves and Resources as at December 31, The contents of this slide have been verified and approved by the Company s VP Exploration, George Mannard, P. Geo a Qualified Person for the purpose of National Instrument Standards of Disclosure for Mineral Projects Please refer to Company press release dated February 10, 2016 and AIF available on the Company s website and sedar.com TSX:WDO 35

36 Mineral Resources (2015 Year End) 112% increase at Eagle River Category Tonnes Grade (gau/tonne) Contained Ounces Eagle River Underground Resources Inferred 555, ,000 Mishi Open Pit Resources Indicated 3,679, ,000 Inferred 764, ,000 Mishi Underground Resources Indicated 567, ,000 Inferred 437, ,000 Total M + I Resources 330,000 Total Inferred Resources 310,000 * Mineral Resources exclusive of Mineral Reserves Reserves and Resources as at December 31, The contents of this slide have been verified and approved by the Company s VP Exploration, George Mannard, P. Geo a Qualified Person for the purpose of National Instrument Standards of Disclosure for Mineral Projects Please refer to Company press release dated February 10, 2016 and AIF available on the Company s website and sedar.com TSX:WDO 36

37 Eagle River Parallel Structure Reserve and Resource Breakdown Structure Tonnage Grade (gau/tonne) Contained Ounces Proven and Probable Reserves Percentage of P + P Reserve Ounces No , ,000 46% No , ,000 29% No , ,000 20% Other 63, ,000 5% Inferred Resources No , ,000 16% No , ,000 48% No. 7 47, ,000 7% Other 183, ,000 29% Reserves and Resources as at December 31, The contents of this slide have been verified and approved by the Company s VP Exploration, George Mannard, P. Geo a Qualified Person for the purpose of National Instrument Standards of Disclosure for Mineral Projects Please refer to Company press release dated February 10, 2016 and AIF available on the Company s website and sedar.com TSX:WDO 37

38 2015 Production: 50,470 oz. Eagle River (ER) 41, g/t Mishi (M) 9, g/t Ounces Produced ER: 7.0 g/t M: 2.0 g/t ER: 6.6 g/t M: 2.3 g/t ER: 7.4 g/t M: 2.6 g/t 300 Zone Feed ER: 8.7g/t M: 1.9 g/t Cost CAD$ / OZ Au Production Cash Costs AISC $1.30 exchange rate CAD:USD $10.1 million or $0.09/share positive operating cash flow from mine operations TSX:WDO 38

39 Kiena Complex Drill Core August 2016 TSX:WDO 39