Image source: © Bashta | Megapixl.com

Highlights

  • Driven by higher grades at the Eagle River Complex, WDO’s gold production in Q1 2024 surged by 17% compared to pcp
  • The company’s net income was CAD 10.7mn in Q1 2024 against a net loss of CAD 0.3mn in pcp
  • The company’s production guidance for the full year 2024 ranges between 160,000 and 180,000 ounces

Wesdome Gold Mines Ltd. (TSX: WDO) operates as a gold producer, focusing on various mining activities such as exploration, processing, and reclamation. The company primarily operates within Canada, with its main production hub, the Eagle River Complex in Ontario.

The company showcased strong financial performance in the first quarter of 2024, marked by notable increases in revenue and net income. Despite facing challenges, it achieved higher production and sales volumes, highlighting a significant positive aspect.

Gold production during the quarter was 17% higher compared to the prior corresponding period (pcp), mainly due to higher grades at the Eagle River Complex. Similarly, the company posted 31.6% higher revenue in Q1 2024, due to higher realised gold prices and higher ounces of gold sold. Overall, the company’s net income was CAD 10.7mn in Q1 2024 against net loss of CAD 0.3mn in pcp.

Recent business update

In Q1 2024, the company saw a 36% increase in cash margin compared to pcp, primarily driven by an 11% rise in the realised gold price in Canadian dollars and a 19% surge in ounces sold. The company maintained a robust financial position with liquidity of CAD 169.5 million, comprising CAD 48.3 million in cash and CAD 121.2 million in undrawn revolving credit facility.

Company outlook

The company sustains a positive outlook, with a combined production guidance for the full year 2024 ranging between 160,000 and 180,000 ounces. The management anticipates a production upswing in the latter half of the year and is well-aligned to meet these targets, which will enable the maximisation of free cash flow generation in the coming years.

Top 10 Shareholders

The top 10 shareholders of WDO together form ~35.52% of the total shareholding in the company. T. Rowe Price Associates, Inc. and Van Eck Associates Corporation hold maximum stake in the company at around 9.82% and around 9.72%, respectively.

Stock performance

The stock price of WDO has surged by ~14.52% and ~9.72% over the last 1 week and 1 month, respectively. Additionally, the stock is trading higher than the average of its 52-week high price of CAD 11.55 and 52-week low price of CAD 6.33.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is May 10, 2024. The reference data in this report has been partly sourced from EODHD/Others.