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Gold Company Continues Advancing Val d'Or Project Toward Restart
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An iA Securities report provided an operational update on this Canadian producer.

In a Jan. 17 research note, iA Securities analyst George Topping reported that Wesdome Gold Mines Ltd.'s (WDO:TSX) "2019 production guidance is in line" and the pace at Kiena is accelerating. "Management is advancing Kiena to a low cost, short timeline restart," he wrote.

Topping reviewed the company's Q4/18 and 2018 production results. The miner produced 17,300 ounces (17.3 Koz) gold in Q4/18, which was less than Q3/18's "outstanding" 19.8 Koz. Total production for 2018 was 71.7 Koz gold.

As for grades from the underground Eagle mine, they were lower in Q4/18, at 10.6 grams per ton (10.6 g/t) versus Q3/18's 13.3 g/t. However, Topping noted, Q3/18's grades were atypical, as mining focused on the high grades in August due to mill problems. Grades, though, in 2019 should rebound.

Topping also discussed the company's production, grade and capex targets for 2019. Wesdome guided to 72–80 Koz production, which is in line with iA's projected 77 Koz. Guidance grades at the Eagle underground mine are expected to increase about 3% to between 15.5 and 16.5 g/t. This should lower the all-in sustaining cost to about US$985–1,040 per ounce.

Wesdome has budgeted to spend $26.9 million in 2019 on exploration drilling with five rigs and underground development at Kiena, whose resource should expand to 1 million ounce. That could support about 100 Koz of an annual production, ramping up to 170 Koz per year, as exploration efforts progress. Exploration at Eagle will continue as well.

The company had $27 million in cash at year-end 2018 and remains free cash flow positive from its Eagle mine.

IA Securities has a Strong Buy recommendation and a CA$6.20 per share price target on Wesdome, whose stock is currently trading at about CA$4.27 per share.


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Disclosures from iA Securities, Wesdome Mines Ltd., Research Update, January 17, 2019

Conflicts of Interest: The research analyst and or associates who prepared this report are compensated based upon (among other factors) the overall profitability of iA Securities, which may include the profitability of investment banking and related services. In the normal course of its business, iA Securities may provide financial advisory services for the issuers mentioned in this report. iA Securities may buy from or sell to customers the securities of issuers mentioned in this report on a principal basis.

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Analyst Trading: iA Securities permits analysts to own and trade in the securities and or the derivatives of the issuer under their research coverage, subject to the following restrictions. No trades can be executed in anticipation of coverage for a period of 30 days prior to the issuance of the report and 5 days after the dissemination of the report to our clients. For a change in recommendation, no trading is allowed for a period of 24 hours after the dissemination of such information to our clients. A transaction against an analyst's recommendation can only be executed for a reason unrelated to the outlook of the stock for the issuer and with the prior approval of the Director of Research and the Chief Compliance Officer.

Company Related Disclosures:
The analyst has visited the issuer's operations. No payment or reimbursement was received from the issuer for the associated travel costs.

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