Toronto-based Wesdome Gold Mines Ltd. (WDO:TSX) announced additional high-grade drill results from its 100%-owned Eagle River underground gold mine complex in Wawa, Ontario, reported Echelon analyst Ryan Walker in a December 12 research note.
The latest assays are from exploration drilling testing parallel structures in volcanic rocks west and east of the main mine diorite host rock. Highlights included 15.1 grams per tonne (g/t gold) over 6.7 meters and 93.5 g/t gold over 1.5 meters.
Analyst Sees Results as Positive But Maintains Hold Rating
According to Ryan Walker, the drilling has confirmed mineralization extends to the 900-meter level with the potential to extend to depths similar to the 1,500-meter 300E zone.
He notes the wider widths and more consistent grades could allow mining without dilution.
While viewing the results as positive, Walker keeps a Hold rating and CA$7.75 price target on Wesdome. He wants to see the demonstrated production ramp-up at the Kiena mine more in line with feasibility study plans before adjusting his valuation.
Wesdome expects to provide updated 2-year guidance in January 2024. The firm's price target implies a 5% discount on the current share price.
Drilling Aims to Expand Mine Life at Underutilized Mill
Walker believes there is exploration upside at Eagle River but views Wesdome as a "show-me" story amid execution risk and production volatility at Kiena. Sustained improved performance is needed to justify sharing the upside beyond his target.
In summary, the analyst sees the high-grade exploration results as positive but maintains a neutral rating until Wesdome demonstrates consistent production more in line with feasibility study expectations.
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ANALYST CERTIFICATION Company: Wesdome Gold Mines Ltd. | WDO:TSX I, Ryan Walker, hereby certify that the views expressed in this report accurately reflect my personal views about the subject securities or issuers. I also certify that I have not, am not, and will not receive, directly or indirectly, compensation in exchange for expressing the specific recommendations or views in this report.
