Wesdome Reports Record Quarterly EPS and Free Cash Flow for Q1 2026; Reaffirms 2026 Guidance

• Wesdome reported Q1 2026 financial results with record net income of $119 million (up 90% YoY) and free cash flow of $126 million (up 165% YoY).
• Revenue increased to $300 million, driven by a significantly higher average realized gold price of US$4,784 per ounce compared to US$2,882 in Q1 2025.
• Consolidated gold production was 45,303 ounces, representing a slight 1% decrease year-over-year.
• All-in Sustaining Costs (AISC) rose to US$1,707 per ounce, up 25% from the previous year's Q1 level of $1,366.
• The company reaffirmed its full-year 2026 production guidance of 180,000 - 205,000 ounces and AISC guidance of US$1,525 - US$1,700 per ounce.
• Q1 actual AISC ($1,707) exceeded the upper end of the full-year guidance range ($1,700), indicating potential cost pressure for the remainder of the year.
• The company repurchased 2.1 million shares for approximately $49 million during the quarter and received TSX approval to increase its normal course issuer bid (NCIB) by an additional 3,000,000 shares.
• Liquidity remains strong at $773 million total ($431 million cash + US$250 million credit facility).

• The earnings results are significantly better than prior year performance due to the elevated gold price environment rather than operational efficiency improvements (costs rose 25%).
• While revenue and profit growth are strong, the reaffirmation of guidance despite Q1 AISC exceeding the upper limit suggests management expects costs to moderate or gold prices to remain high to maintain margins.
• The share repurchase program demonstrates confidence in cash flow generation but reduces liquidity slightly; however, with $431 million in cash, this is not a capital raise risk.
• The news validates the company's ability to generate substantial free cash flow even as costs rise, supporting the valuation multiple expansion seen over the past year.
• However, the reliance on a gold price of US$4,784/oz (compared to historical averages in the data) creates a vulnerability if spot prices correct, given AISC is already near $1,700/oz.

• Wesdome Gold Mines Ltd. operates two primary underground gold mines: Eagle River (Ontario) and Kiena (Quebec).
• Eagle River: Focuses on high-grade underground mining with ongoing exploration to extend mine life via the "Global Model" strategy. Recent drilling has confirmed extensions in 6 Central Zone and Falcon zones.
• Kiena: Includes the main Kiena Deep operation and the developing Presqu'île zone, which received regulatory approval for production ahead of schedule in early 2026.
• The company is executing a "fill-the-mill" strategy to maximize throughput at both sites while expanding resources through aggressive drilling programs (80,000 - 90,000 metres planned for 2026).