Wesdome Gold Mines Ltd (WDO · TSX)
More Gold, Less Rock
Wesdome runs two underground gold mines in Canada, where the ore it extracts is unusually rich in gold. Rather than shipping that ore elsewhere, the company crushes and processes it on site at each mine, keeping more of the revenue from the gold it produces.
Bull case for Wesdome Gold Mines Ltd
High-grade ore keeps mining costs down
Each tonne of rock holds a lot of gold, so fewer tonnes are mined per ounce.
Both mines have eight years of reserves
Reserves at both operations support mining into the early 2030s, an overlap seen for the first time.
Cash flow from mines funds growth and dividends
The mine plans fund reinvestment, a quarterly dividend and buybacks without relying on outside money.
Bear case for Wesdome Gold Mines Ltd
Average ore grade is falling at Eagle River
Lower-grade tonnes joined reserves, so more rock must be moved to produce each ounce.
Growth depends on unproven exploration targets
The headline upside rests on conceptual estimates that may never become mineable reserves.
Only two mines means no cushion
An outage or shortfall at either mine would hit a large share of total production.