TORONTO (miningweekly.com) – TSX-listed gold junior Wesdome Gold Mines is on track to achieve its full-year guidance of 55 000 oz, with half-year output slightly ahead of last year's pace.

During the second quarter ended June 30, the company produced about 13 800 oz of gold from its three operational mines, bringing output for the half-year to 28 300 oz.

"We are halfway to our annual production guidance. The combination of streamlined mining operations and focused capital investment in our milling infrastructure has put us in good shape to weather lower gold prices and improve financial performance in the second half of the year,” president Donovan Pollitt said.

At the Eagle River complex, located near Wawa, northern Ontario, the company lost about a month of milling as a result of severe regional and local flooding during the spring thaw. The mine produced 8 200 oz of gold from 23 068 t milled grading 11.1 g/t.

The nearby Mishi mine produced 1 000 oz of gold from 8 338 t milled grading 3.7 g/t. Despite the floods, recovered grades were more than double those treated last year. Surface stockpiles at the mill exceeded 100 000 t to start the second half of the year.

The Kiena mine, in Val d'Or, Quebec, produced 4 600 oz of gold from 37 045 t milled grading 3.9 g/t. However, operations wound down as the mine was placed on care and maintenance.

During the quarter, gold sales totalled 14 000 oz at an average price of C$1 460/oz, generating revenue of C$20.4-million. This brought half-year sales to 27 000 oz at an average price of C$1 549/oz, for a total of C$41.8-million in revenue.

At the end of the quarter, the Toronto-listed company’s gold inventory stood at about 10 300 oz, which was equal to about C$13.4-million at C$1 300/oz.

Wesdome said it was confident it would be able to sustain operations during this period of low gold prices, saying it had streamlined its mining operations, built large stockpiles and had strong grades in the pipeline.

“We are defensively positioned with good upside, and milling rates are expected to improve in the second half. We forecast cost reductions and improving cash flows in the second half, due to suspended mining at Kiena and the deferral of mining activities at Mishi for the remainder of the year,” the company stated.

Wesdome, in June, temporarily suspended contract mining at the Mishi openpit mine, as a considerable stockpile of ore grew at the nearby Eagle River mill.

The company said it was fast-tracking a multipronged upgrade to its Eagle River milling facility, targeting a 66% increase over current rates to 1 000 t/d to deal with the growing supply of ore from the Mishi mine.

The focus of the upgrades was to streamline dry-stack tailings handling, increase the throughput and efficiency through the filtration conversion to a carbon-in-leach process and to permit a new long-term tailings management solution.