Wesdome CEO retires after challenging year

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Wesdome Gold Mines Ltd. [WDO-TSX] has announced the retirement of President and CEO Duncan Middlemiss. Wesdome said he has also resigned from the company’s board of directors. Warwick Morley-Jepson, Chair of the Board, will act as interim President and CEO until the board selects a permanent successor.

In order to ensure an orderly succession, Middlemiss has agreed to remain in an advisory role to assist Morley-Jepson and the rest of the executive team on a temporary basis.

News that Middlemiss has retired came after the close of trading on January 24, 2023, when Wesdome shares closed at $6.41. The shares are currently trading in a 52-week range of $16.77 and $6.27.

Wesdome is a Canadian gold producer with two high-grade underground assets, the Eagle River mine in Ontario and the recently commissioned Kiena mine in Quebec. The company also retains meaningful exposure to the Moss Lake gold deposit in northwestern Ontario via its 27% equity position in Goldshore Resources Inc. [GSHR-TSXV, GSHRF-OTCQB, 8X00-FSE].

Wesdome reported full year 2022 production of 110,850 ounces of gold in 2022, compared to 123,843 ounces in 2021. The company is guiding investors to anticipate annual production this year of between 110,000 and 130,000 ounces.

“2022 was a challenging year for the company, with production misses at both assets,’’ said Middlemiss. “At Eagle, underperformance as primarily related to the variability of the Falcon Zone, which negatively impacted our ability to accurately forecast near-term production,’’ Middlemiss said. “The Falcon Zone mineralization has a high nugget effect and we have experienced both positive and negative reconciliations since we commenced mining in this area in the fourth quarter of 2021,” he said.

Production in the fourth quarter of 2022 was below expectations as a result of higher planned grades at the Falcon Zone slipping into the first quarter of 2023, partially due to severe snowstorms hindering the company’s ability to truck the high-grade ore to the mill.

At Kiena, the company said supply chain delays left it approximately six months behind schedule on the original commercial production date, and nine to 12 months behind on ramp development, thereby limiting mining operations to lower grade areas of the mine.

The company previously said supply chain challenges, which delayed the delivery of underground equipment in the first quarter of 2022 and negatively affected development rates, also delayed delivery of key electrical components for the completion of the paste backfill plant.

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