Mr. Rolly Uloth reports

WESDOME GOLD MINES ANNOUNCES THIRD QUARTER FINANCIAL RESULTS

Wesdome Gold Mines Ltd. has provided its financial results for the third quarter of 2015. All figures in the release are stated in Canadian dollars unless otherwise noted.

Rolly Uloth, president and chief executive officer, commented: "Wesdome made significant progress during the third quarter both on current operations optimization and planning future growth at the Eagle River complex. Production costs have decreased quarter over quarter this year, while mill production has steadily increased. With the 300 zone now in production, we expect this trend to continue in the fourth quarter and into at least 2017 when the 7 zone begins production. We also enhanced our board with the addition of Charles Page, and appointed a new chief financial officer. With the balance sheet strengthened by a $5-million private placement subsequent to quarter-end, the company plans on increasing its exploration budget at the Eagle River complex in the near term."

Production

• Eagle River mill throughput increases for the fifth consecutive quarter
  • Total tonnes processed during the quarter were 88,185 tonnes or 959 tonnes per day for the quarter. This represents a 6-per-cent increase from second quarter 2015 (908 tpd). Q3 2015 throughput improved 64 per cent from Q3 2014 (583 tpd).
  • Year-to-date mill availability is at about 88 per cent, up from 74 per cent in 2014 and 66 per cent in 2013.
• Produced ounces increased 14 per cent from Q2 2015
  • Combined production of 14,284 ounces;
  • Eagle River mine produces 44,849 tonnes at a head grade of 7.7 grams per tonne Au with mill recoveries of 96.1 per cent to produce 10,637 ounces (7.4 g/t Au recovered grade);
  • Mishi mine produces 43,336 tonnes at a head grade of 3.0 g/t Au with mill recoveries of 88.2 per cent to produce 3,647 ounces (2.6 g/t Au recovered grade).
• Production at the 300 zone commences
  • Head grades for the month of September increased to 9.0 g/t Au, 23 per cent higher than the 2015 year-to-date average of 7.3 g/t Au.

                        OPERATIONAL HIGHLIGHTS

                               Three months ended        Nine months ended
                                   Sept. 30,                 Sept. 30,
                               2015         2014         2015         2014
        
Gold produced (oz)           $14,284      $12,456      $36,900      $39,776      
Gold sold (oz)                12,408       15,878       33,781       43,042      
Realized gold price ($Cdn)     1,467        1,407        1,475        1,429       
Cash cost/oz ($Cdn)              994          975          1,147        936         
Cash cost/oz ($U.S.)             760          895          911          855         
AISC/oz ($Cdn)                 1,368        1,386        1,599        1,319       
AISC/oz ($U.S.)                1,045        1,273        1,271        1,203       

Financial (1)

• Revenue of $18.2-million on gold sales of 12,408 ounces at an average sales price of $1,467 per ounce ($1,121 (U.S.));
• Mine operating profit for Q3 2015 of $5.3-million, an increase of 71 per cent compared with Q2 2015 of $3.1-million;
• Operating cash flow before working capital adjustments was $3.3-million, a 135-per-cent increase over the previous quarter's results of $1.4-million.
  • Operating cash flow before working capital adjustments and Kiena care and maintenance costs was $4.3-million, a 104-per-cent increase over the previous quarter's results of $2.1-million.
• During the quarter, the company booked a $4.9-million expense relating to the mill closure obligation at the Kiena mine (placed on care and maintenance in July, 2013), approved by the Quebec government under new legislation relating to dormant mining operations. As a result, net loss for Q3 2015 was $4.3-million or four cents per share.
  • After adjusting for this one-time item, net income would have been $600,000.
• Free cash flow for Q3 2015 was negative $600,000 or one cent per share, an improvement of $1.9-million compared with Q2 2015 of negative $2.5-million or two cents per share.
  • Free cash flow after adjusting for Kiena care and maintenance costs for Q3 2015 was $300,000 or one cent per share, an improvement of $2.2-million compared with Q2 2015 of negative $1.9-million or two cents per share.
• Production cash cost per ounce was $994 ($760 (U.S.)) per ounce, a decrease of 14 per cent compared with the previous quarter's figure of $1,161 ($945 (U.S.)) per ounce.
• All-in sustaining costs were $1,368 ($1,045 (U.S.)) per ounce, a decrease of 14 per cent over the previous quarter figure of $1,582 ($1,287 (U.S.)) per ounce.

                            FINANCIAL HIGHLIGHTS 
                           (thousands of dollars)

                                       Three months ended        Nine months ended
                                             Sept. 30,                Sept. 30,
                                        2015          2014        2015         2014        
                                                                                       
Revenue                                $18,199       $22,342     $49,843      $61,519      
Mine operating profit                    5,253         6,984       9,913       23,069      
Net loss (income)                       (4,294)        2,238      (5,811)       9,287       
Net (loss) income/share                  (0.04)         0.02       (0.05)        0.09        
Operating cash flow                      3,333         5,585       4,902       19,077      
Operating cash flow (adjusted)           4,268         6,302       6,988       20,638      
Operating cash flow/share                 0.03          0.05        0.04         0.17        
Operating cash flow (adjusted)/share      0.04          0.06        0.07         0.19        
Free cash flow                            (626)        1,156      (8,455)       6,897       
Free cash flow (adjusted)                  309         1,873      (6,369)       8,459       
Free cash flow/share                     (0.01)         0.01       (0.08)        0.06        
Free cash flow (adjusted)/share           0.00          0.02       (0.06)        0.08        

(1) The company has included non-GAAP (generally accepted accounting principles) performance measures: mine operating profit, operating cash flow per share, free cash flow, free cash flow per share, production cost per ounce and all-in sustaining costs in this press release. These are common performance measures in the mining industry which do not have any standardized meaning under IFRS (international financial reporting standards). Refer to the Q3 2015 management discussion and analysis for the reconciliation of these measures to the financial statements.

Production expansion

• During the quarter, the company announced production guidance for years 2016 to 2019, based on a $1,450 (Canadian) gold price. Guidance for these years are as follows:
  • 2016: 54,000 to 60,000 ounces;
  • 2017: 63,000 to 70,000 ounces;
  • 2018: 74,000 to 82,000 ounces;
  • 2019: 72,000 to 80,000 ounces.
• Capital projects relating to expansion include: increasing mill capacity to 1,500 tpd, and the construction of a new tailings facility.
• Over the course of 2016 and 2017, the company plans on doubling its Mishi open pit ore concurrently with the construction of expansion capital projects to approximately 20,000 ounces per year. The high strip ratio during the early life of the pit is essentially complete, which will contribute to significantly lower mining costs.
• Production for the underground Eagle River mine will increase year over year, with larger increases coming from the mine's three known high-grade zones, the 300, 811 and 7 zones.

Exploration

• Drilling 300 metres west of Mishi mine cuts to 10.4 g/t Au over 18.4 m true width at shallow depth. The 2015 drill program is providing the information required to direct and guide future production expansion opportunities.
• The Eagle River underground mine's three known high-grade zones are open up and down plunge and along strike and will be aggressively explored by the company.

Appointment of new director and CFO

In July, 2015, the company appointed Charles Page, PGeo, to the board of directors. Mr. Page is a professional geologist with over 30 years of experience in the mineral exploration and mining industry. Most recently, he was president and CEO of Queenston Mining, leading the discovery and development of the Upper Beaver deposit in the Kirkland Lake gold camp until Queenston's acquisition by Osisko Mining. He is currently a director of Osisko Gold Royalties Ltd. and Unigold Inc. Mr. Page holds a master of science degree from the University of Waterloo. In addition to this wealth of experience the company also plans to leverage his experience in the Eagle River camp as his team was credited with the discovery of the No Name Lake zone on this property.

On Sept. 16, 2015, Brian Ma, then chief financial officer of the company, tendered his resignation as CFO and was replaced by Hemdat Sawh, CPA. Mr. Sawh is a certified professional accountant, and holds an MBA degree in accounting from York University, a BSc degree in geology from Concordia University, and a graduate diploma in geology from McGill University. Mr. Sawh has over 16 years of accounting and auditing experience at Grant Thornton LLP, culminating in the position of principal with a concentration in publicly listed mining companies. Mr. Sawh served as chief financial officer for several Toronto Stock Exchange-listed mining companies with operations in Mexico, Venezuela and Burkina Faso.

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