On May 26, Wesdome Gold Mines announced the results of its new pre-feasibility study (PFS) for the company’s Kiena Mine in Val D’Or, Quebec, stating that it will be restarting operations at the Kiena complex, starting immediately.

The mine is expected to produce approximately 84,000 ounces of gold per year, with life of mine average cash costs of $502 per ounce and an all-in sustaining cost of $894 per ounce. At a 5 per cent discount rate, the after-tax net present value is estimated at $367 million at a gold price of US$ 1,600 per ounce, and $491 million when gold is valued at US$1,900 per ounce.

The study concluded that the mine would have a 98 per cent internal rate of return with an after tax payback period of 2.7 years, and estimated life of mine capital costs coming in at $229.8 million, including allowances for indirect costs and contingency.

The mine had previously been in care and maintenance since March 2013, when Wesdome suspended operations due to low ore grades and uncertain Canadian dollar gold prices.

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Duncan Middlemiss, president and CEO commented, “We are excited to be moving ahead with the Kiena restart, less than five years following the discovery of the Kiena Deep A Zone. This transformational project continues to present compelling economics and represents a strong step toward Wesdome becoming a diversified mid-tier producer. We now expect to see initial production from Kiena as early as Q3 2021. To that end, we will maintain our previously released guidance of 15,000 – 25,000 ounces at Kiena until later in the year, when we will reassess based upon start up performance.”

Notably, the PFS shows some increase in capital and operating costs when compared to a Preliminary Economic Assessment (PEA) from June 17, 2020. The increase, per the PFS, is primarily related to upgrades allowing for increased production and mine life, including the addition of “a paste backfill plant, water treatment facility, work at the tailings management area, as well as ventilation and power upgrades.” The PFS places the indicated resource at 156,500 ounces from 643,700 tonnes graded at 7.56 grams per tonne, and the probable mineral reserve at 601,780 ounces from 1.57 million tonnes graded at 11.89 grams per tonne.

Still, Middlemiss noted that this is a dated snapshot of the potential production of the mine, since Wesdome has recently made a discovery in the Footwall Zone of the mine at 41.2 grams of gold per tonne over 51.2 metres. Middlemiss remarked that “We strongly believe in the potential of the Kiena Deep Zone becoming a much more substantial deposit.”