Wesdome Earns $9.4 Million In 2008

TORONTO, ON - Wesdome Gold Mines Ltd reported results from its Canadian operations for the year ended December 31, 2008. All figures are in Canadian dollars unless otherwise specified.
The Company owns the Eagle River gold mining operation in Wawa, Ontario and the Kiena mining complex in Val d'Or, Quebec. The Eagle River mine commenced commercial production on January 1, 1996, and the Kiena mine on August 1, 2006.
Rolly Uloth, CEO comments "Steady improvement during the year was capped off by a great fourth quarter. Conditions turned in our favour with rising Canadian dollar gold prices, dropping costs and a potentially important new discovery in Val d'Or. All indications suggest Q1, 2009, will be very strong as strong grades continue and favourable conditions magnify."
In 2008, production increased from 72,085 ounces of gold to 90,004 ounces, an increase of 17,919 ounces or 25%. The price of gold sales increased from an average of $748Cdn to $933Cdn per ounce, an increase of $185Cdn or 25%. The result was an increase in bullion revenue of $25.6 million or 47% compared to 2007. Operating costs declined dramatically in 2008 from 105% of bullion revenue in 2007 to 72%. Net income rose to $9.4 million including a $6.4 million contribution from the fourth quarter alone.
External factors which affected results were multifaceted and all favourable. In September-October, the Canadian dollar declined 20% versus the US dollar opening up a positive $200 per ounce spread. Over the course of 12 months the $US gold price dropped $50 per ounce while increasing $150Cdn per ounce. Likewise, we went from severe shortages in energy, materials and skilled labour markets to the current surplus. The results of these external influences are most notable in the fourth quarter results when operating costs dropped 29% compared to the fourth quarter, 2007.
In 2008, combined operations produced 90,004 ounces of gold, exceeding the forecasted 80,000 ounces. A total of 86,100 ounces were sold at an average price of $933 per ounce and refined bullion inventory at year end grew to 10,580 ounces (2007: 6,676 ounces).
Revenue exceeded operating costs resulting in a mine operating profit of $22.9 million and cost of sales or cash cost of $666Cdn per ounce. In addition to these direct costs, other costs including royalty payments, corporate and general costs and interest costs totalled $4.3 million. Mine operating profits were about evenly split between the two mines.
Production came from above-average grade stopes that were developed in 2007. The Eagle River mine produced 49,660 ounces of gold from 118,961 tonnes at an average recovered grade of 13.0 gAu/tonne. Production came primarily from the high grade 811 zone.
The company’s address is 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: [email protected], www.wesdome.com.