Wesdome hits gold below Kiena mine (April 19, 2010)

VANCOUVER — Wesdome Gold Mines (WDO-T) has hit healthy gold intercepts deep below its active Kiena mine in Val d’Or, Que.

The company acquired the Kiena mine along with a large land package surrounding it in 2003 and has since been exploring the numerous historic deposits on the property.

The latest results come from drilling 300 to 400 metres below the 920-metre-deep mine shaft and following the mineralization along strike in a northwest direction for 300 metres. Mineralization is open along strike and at depth.

Reported in true widths, hole 4809 cut 3.3 metres grading 17.42 grams gold per tonne starting at 160 metres and hole 4808 hit 0.6 metre grading 13.95 grams gold starting at 160.5 metres.

Hole 4808 returned another 11.9 metres grading 2.3 grams gold starting at 533 metres, hole 4928 intersected 8.2 metres grading 12.31 grams gold starting 388 metres downhole and including 1.2 metres averaging 57.92 grams gold, and hole 4929 cut 5.5 metres carrying 20.66 grams gold.

Wesdome’s latest results follow a mid-2009 deep-drilling program it carried out under the mine workings that established a southeast-plunging corridor of mineralization with a strike length of about 200 metres. Highlights of that program include 11.6 metres grading 4.17 grams gold starting at 400 metres, 24.4 metres grading 1.68 grams gold from 440.7 metres downhole, and 0.7 metre grading 22.61 grams gold starting at 458 metres.

The company’s Kiena complex is a contiguous land package of 75 sq. km under and around Lac de Montigny. The area has both large disseminated gold deposits associated with stockworks and vein-type deposits.

Wesdome carried out the most recent drilling in the S-50 zone, which is characterized by calcite and carbonate veins and veinlets, with minor quartz. Elsewhere on the property veins are associated with quartz, pyrite and minor pyrrhotite and chalcophyrite; more generally, mineralization is associated with sheeted veins and stockworks, breccias and disseminations in diorite dykes and mafic volcanic rocks.

In 2009, Wesdome produced 35,398 oz. gold from 302,000 tonnes of ore at its Kiena mine. The average cost per oz. gold was $626 in 2009, a drop from the 2008 average of $666 per oz. The company reopened the mine in 2006.

Falconbridge (now part of Xstrata [XTA-L]) developed the Kiena mine in 1981, which produced roughly 1.56 million oz. gold between 1981 and 2002. The Kiena complex contains a total of eight past producing underground mines, which altogether produced more than 2.5 million oz. gold.

The company continues to explore other deposits in the area and recently decided to drive a tunnel to the Dubuisson zone, 3 km east of the Kiena shaft. Wesdome will extend an existing exploration drift on the 330-metre level by a kilome- tre to reach the zone. Drill access should be established in a year with direct access possible in two years.

Wesdome also owns the Eagle River gold mine in Wawa, Ont., where it produced 60,754 oz. gold last year.

In its recent annual filings, the company reported earnings of $32.2 million or 32¢ per share in 2009, compared with $9.2 million or 9¢ per share in 2008.

Wesdome’s share price was up 8¢ on the latest drill results to close at $2.11. The company has a 52-week trading range of $1.20-$2.89 and 100 million shares outstanding.