Good morning. Welcome to Wesdome Gold Mines C onference Call to discuss the company's financial and operating results for the three and six months ended June 30, 2025. As a reminder, this call is being recorded. Your host for today is Trish Moran, Wesdome's Vice Presiden of Investor Relations. Ms. Moran, please go ahead.
Thank you, and good morning, everyone. Before we get started, I'd like to point out that during today's call, we may make forward-looking statements as defined under Canadian securities law. I ask that you view our slide presentation for cautionary language regarding forward-looking statements and the risk factors pertaining to these statements. Please note that all figures discussed on this call are in Canadian dollars unless otherwise noted. Our press release, MD&A, and financial statements are available both on CDAR Plus and on our website, wesdome.com. With us on today's call and webcast is Anthea Bath, Wesdome's President and CEO, Guy Belleau, our Chief Operating Officer, Jono Lawrence, our Senior Vice President, Exploration, and Rajbir Gill, our Interim Chief Financial Officer, as well as Kevin Lonergan, SV P Technical Services. Following management's formal remarks, we will then open the call to questions, and now over to Anthea.
Thank you, Trish. Good morning, everyone. As we move past the halfway point of 2025, one thing is clear: Wesdome has made significant strides over the last two years. We've delivered consistent sequential improvements in both operational and financial performance, culminating in record results across several key metrics for the quarter and the first half of the year. At the consolidated level, Wesdome is effectively executing its strategy, shifting from a short-term, just-in-time approach to one that is focused on building long-term, sustainable value. That said, while our financial performance year to date has been strong, we are updating our guidance to reflect Eagle River's excellent performance and the challenges at Kiena. At Eagle River, the past 12 months have marked the start of a multi-year turnaround. While there's still much to do, we've seen vast improvements in safety, increases in production, and decreasing costs.
As demonstrated again this quarter, Eagle River continues to deliver strong results. This is due to good performance against our plans, compliance to our sequence, and improved dilution. Given performance to date, we are raising production guidance, increasing the top end to 115,000 ounces, and tightening the grade guidance to between 14 g and 15 g per ton. All-in sustaining costs per ounce are expected to improve, benefiting from ongoing cost optimization initiatives. Whilst Eagle River is trending upward, Kiena has fallen slightly behind. Kiena's challenges in the second quarter were largely a continuation of existing issues. Equipment availability challenges impacting our planned sequence, accentuated by our reliance on a single mining horizon. This dependency limits operational flexibility and heightens our risk. When you're mining just three to five stopes per month, under or overperformance in just one stope can have a significant impact.
We've consistently highlighted the importance of improving our operational flexibility, which is why, since the mid-2023 timeline, nearly every major initiative at Kiena has been aimed at unlocking operational agility. As a result, Kiena has undertaken a number of significant and important projects, many of which will be completed by the end of this year. These include the tripling of the number of active mining zones, doubling of our development meters year on year, developing an exploration ramp which allows us a second material movement access as well, which completely unlocks our material movement in the mine, freeing up shaft capacity by 50%, rehabilitating our 33-level drift allowing us access to the upper sections of the mine, adding 10- 15 neutral platforms underground, as well as increasing our ventilation by 100% at Kiena Deep in 2026. There's a lot going on at Kiena.
The breadth and the pace of these initiatives represent a very deliberate and strategic investment in Kiena's long-term value creation. The team's ability to simultaneously ramp up, de-risk, and expand operational flexibility while maintaining active mining and development is a notable achievement. This mine, at a fundamental level, is incredibly strong, and its future is taking shape. However, in hindsight, a higher risk tolerance may have been warranted, given the scope and the complexity of the work underway. As we noted in our Q2 production release in mid-July, Kiena has been pacing at or just below the lower end of guidance. While we have our mid-year forecast indicating that Kiena can still meet the lower end of its original production range, we believe it'd be prudent to revise guidance to reflect inherent risk in the plan.
We're now targeting 80,000-9 0,000 ounces in 2025, with a corresponding increase in costs. We have indicated up to 10,000 ounces from Presqu’ile, and if you take the average of the last five quarters, which is between 20,000 and 21,000 ounces, you can see we can get there. There's also obviously additional grade and development coming from Kiena Deep, which adds to this and helps us get to the numbers, which makes it very sensible. Over the past 18 months, the block model has reconciled extremely well. We remain confident in the Kiena ore body, and the team continues to prove that they can mine this extremely well, which is the most important thing personally for me.
We have a multifaceted program in place to deliver on this revised guidance, which includes an integrated action plan, short interval controls to track our performance and to quickly course-correct, and we've added more resources, which helps us increase our redundancy. As well, the lower grade ore from Presqu’ile is set to be processed in the second half of this year. As mentioned, we expect this to reduce up to 10,000 ounces from what is the first near-surface zone accessed via this new exploration ramp. Each of these critical steps is aimed at securing the second half of the year and building for the future, enabling a more efficient, predictable execution and building a solid foundation for more consistent performance.
On a consolidated basis, with the increase at Eagle River largely offsetting the shortfall at Kiena, we expect to remain around the midpoint of our original production guidance for the year, albeit at higher costs. With respect to investment, the increment of $30 million is mostly due to increasing growth capital at Kiena, which is well spent. The change reflects a redesign of the ventilation infrastructure because we have a larger ore body relative to the original design, as well as the capital to accelerate this development and to extend the footprint of this larger Presqu’ile zone to a deep level. This will establish an additional mining front, giving us much more flexibility as Presqu’ile gears up for future growth. No changes have been made to our 2026 guidance.
The second quarter was a strategically important one for Wesdome , one that showcased our discipline, our focus, and our ability to pursue the right opportunities for long-term growth. In June, we closed the acquisition of Angus Gold, a move that contributed our land position at Eagle River to 400 sq km. With the acquisition of Angus , we've inherited more than 40,000 m of drilling, plus a rich dataset of geological information. We've now consolidated a highly prospective land package around Eagle River, and we've added top-tier exploration targets that directly support our fill-the-mill strategy. During the quarter, we also amended and upsized our revolving credit facility. Financial housekeeping, as the previous one was maturing, we took advantage of this opportunity and increased the facility to $250 million U.S. dollars and locked in more favorable terms.
With over $500 million in total liquidity, we strengthened our financial position, giving us the runway to balance strategic growth with returning capital to our shareholders. Let's look ahead at what's coming down the pipe that could drive the next phase of value for Wesdome . Exploration is central to our future, and this year, we're investing up to $50 million to unlock that potential. We are on track to release an Eagle River update this month and follow up with additional results from both sites later in the fall. At Eagle River, work on the updated global resource model is advancing well. Our intensive drilling program is aimed at maximizing our resource QA/QC, with the goal of delivering a technical report that more accurately reflects the full potential and the intrinsic value of this asset. We've set a drilling cut-off date of December 31st this year.
Therefore, we'll update our mineral reserve and mineral resource estimates when we publish the results of our updated technical reports in June next year. At Kiena, the upfront technical report work is centered on cost optimization, near-surface opportunities along 33 level, and a full review of mine design and mining methods. Different approaches at each mine, but the goal's the same: to show the potential of each asset and to unlock this long-term value. There is a lot of foundational work ahead of us as we move both technical reports forward. We will keep you informed every step of the way. Now over to Guy.
Thank you, Anthea. Good morning, everyone. Listening to slide nine and review operational performance. Eagle River had another strong quarter, producing approximately 26,000 ounces in Q2, a year-over-year increase of 33%. A grade of 16.9 g per ton in Q2 was above the high end of guidance. This year's strong grade profile reflects continued high-grade contribution from the 300 and 720 Falcon zones and improved grade reconciliation in dilution controls. Importantly, performance year to date reflects disciplined execution, not opportunistic grade chasing. Sequencing remains fully aligned with our 2025 plan, and the ore body is reconciling well. The team at Eagle River has been advancing new mining fronts to strengthen flexibility and drive more predictable performance. With the inclusion of the global model, we expect to increase from three to four zones to between five and seven zones in the next two years.
In the 300 zone, development is now almost a full year ahead of production, reducing risk and supporting stronger execution. We've spoken before about the conscious improvement program at Eagle River, and I'm pleased to report that it is starting to deliver measurable results. For both the second quarter and the first half of 2025, cost of sales, cash costs, and all-in sustaining costs per ounce of gold sold each decline year- over- year. We're targeting up to $4 million in annualized savings in 2025 from several areas, including improved maintenance enabled by our new surface workshop opening in September and more integrated planning across the mine and mill. We're aligning the best practices, and it's paying off. This is just the start. We expect to deliver meaningful long-term cost reductions as we shift from contractor-led to owner-operated activities.
A near-term example is surface ore haulage, with new trucks arriving and our team ramping up this month. We're transitioning away from contractors. On the ground, we're doing the same. Since late 2024, we've been steadily bringing development work in-house. This year, over half of the development meters are being completed by Eagle River crews. We're also making targeted infrastructure investment to boost surface efficiency and strengthen long-term reliability, all aligned with the mine's risk profile. During an 18-day shutdown in May and June, we completed several major upgrades, including replacing the feed and trunnion gear on the primary ball mill, swapping out the gear set on the secondary ball mill, and completing other plant maintenance. These enhancements were done to improve mill availability and throughput and to ensure long-term reliability as we work to achieve our fill-the-mill strategy.
I am pleased to report that the mill was safely restarted on schedule and has been running steadily ever since. In July, we averaged nearly 900 tons per day, a 50% increase over the 2024 average. Mining did not stop while the mill was being upgraded. We focused our efforts on strategically building up the ore stockpile, which allows us to blend materials and maintain a more stable mill feed. Due to the length of the plant shutdown, quarterly mill throughput declined by 7% year- over- year, which is why the year-to-date numbers are directionally more accurate. Mill performance in the first half of 2025 was up 4%, thanks to the initiative to increase drill and develop inventory that are starting to deliver results. Since mid-2024, Eagle River has been undergoing a disciplined transformation, and we're now seeing those efforts deliver real results.
There is still much more work to do. However, the changes to date are laying the groundwork for improved future performance. Building on a strong first half, Eagle River is well positioned to sustain its momentum and continue delivering value in the second half. Our appreciation goes out to our Northern Ontario team. Their focus, execution, and commitment are driving a successful turnaround in positioning Eagle River for continued success. Turning now to slide ten, with delivery and execution falling below expectation at Kiena, our focus is on clear, actionable priorities to drive performance. First, we're taking definitive actions to secure strong second-half production and meet revised guidance. Second, we're rapidly advancing several critical initiatives to enhance operational flexibility and unlock future value. I'll come back to each of these important priorities shortly, but first, let's take a quick look at Q2 performance.
Kiena delivered approximately 7,200 ounces in the second quarter, bringing year-to-date production to nearly 34,000 ounces. Q2 was slightly ahead of Q1, but down 31% compared to Q2 last year. Grade averaged 10.7 g per ton, in line with Q1, but was lower than the 13.5 g per ton we achieved in Q2 2024. Q2's dip in production and grade came down to two key issues: ongoing equipment availability challenges that constrained access to several planned high-grade stopes, which have been deferred, and one high-grade stope underperformed due to limited delineation. To compensate for the shortfall, the team mined some lower grade, previously caked stopes that were stable to re-enter and recover ore. We are pursuing several key initiatives that give us confidence in our ability to deliver stronger production in the second half of the year.
First, we must maintain the mining sequence, which is a function of planning and ensuring people and machinery availability. Mining from a single front has underscored just how crucial it is to maintain the mining sequence, and success hinges on resources being reliable and available. The maintenance challenge experienced this year is multilayered, so let me break down the steps we've taken. Since the end of Q1, we've acted decisively to align our maintenance practices with Kiena's current risk profile. This means bringing more people to critical areas and building redundancy. We've optimized shift schedules to ensure full round-the-clock maintenance coverage. We're building staffing redundancy to support continuous operation. We've reopened an additional maintenance workshop underground and increased bay availability. Several new machines were purchased, which will be redeployed to Presqu’ile and other zones once their support is no longer required in Kiena Deep.
Rental equipment has also been brought in to strengthen our fleet and reduce the downtime risk. We're increasing our spare parts inventory to properly reflect Kiena's risk profile and have secured supplier partnerships to ensure timely access to major long-lead components. To top things off, we have implemented a strict set of critical controls to provide better assurance going forward. Importantly, several of the high-grade stopes deferred in Q2 are now scheduled for mining in the second half of the year. The balance will be accessed in 2026 once our initiatives to enhance operational flexibility are fully realized. Although our plan involves some risk, the steps we've taken are already showing positive results. Together with safety, strengthening production and meeting guidance is our top priority.
Turning now to slide 11, as mentioned, one of Kiena's key priorities in the coming months is to enhance operational flexibility, which will lower our risk profile. The current reality at Kiena is that we operate in a single mining horizon, providing little to no flexibility. Operational flexibility is essential to unlocking the full value of Kiena, which is why we're expanding from one to three active mining horizons. Progress at the second front with Presqu’ile zone is well underway, with ore currently being stockpiled for processing starting in Q3. Presqu’ile will be a key contributor to our fill-the-mill strategy, augmenting production from Kiena Deep. At the same time, development of the third horizon is advancing steadily. The main ramp has reached level 136, and lateral development is in progress, opening up a new production front with the high-grade Kiena Deep zone.
Both new horizons, Presqu’ile and 136, will be ready by year-end. We're also making strong progress on the exploration ramp, which will provide direct access to surface. This project is also on track for completion in 2025. The ramp development is enabling a major ventilation upgrade at Kiena Deep, serving as a return airway and leading to a planned 100% increase in ventilation capacity in the second half of 2026. Project scope has also been expanded under Presqu’ile ore body. We're now allocating additional capital to position it for long-term mining success by optimizing the ventilation system in this area to ensure long-term capacity while lowering opening costs and accelerating development and extending the footprint to a deeper level, establishing an additional mining front. Supporting infrastructure for Presqu’ile is now coming online. The surface crusher is now operational, and civil works for the first surface ventilation fan are underway.
It goes without saying that the new mining horizons, surface ramp access, and upgraded ventilation system are crucial to Kiena's future success. Once complete, they will transform Kiena into a more flexible and resilient operation. The importance of the new ramp was reinforced in July when the longer-than-planned mill shutdown highlighted the need for alternative access. Once complete, the ramp will provide a second option for transporting people and material, a key element of our broader strategy to strengthen operational redundancy and resilience. As mentioned at the outset, Kiena's focus for the second half of the year is clear. It is to strengthen production and meet revised guidance. It is also to complete the initiatives underway to improve operational flexibility. I'm confident that the exceptional team at Kiena is well positioned to deliver. Leading the effort is Jean Bastien, who joined as General Manager in June.
Jean brings deep experience and a fresh perspective to the operation. We welcome him to the new team. Now over to Jono to discuss exploration.
Thank you, Guy, and good morning, everyone. Let's start things off on slide 13, a snapshot of what's happening at Eagle River, both underground and at surface. Underground at the 6 Central Zone, drilling is doing exactly what we had hoped, confirming the continuation of downplunge mineralization at consistent thickness and grade, and highlighting potential new subparallel structures. In the 300 Fold Zone, drilling supports the continuity of higher grades downplunge on a separate subparallel structure from the 300 Zone. Over at 311 Falcon and 720, it's early days, just a few assays in, but the data so far is suggesting both ore bodies continue downplunge. The 720 also has indication that the mineralization remains open to the west. On surface, Q2 drilling focused on the upper extension of the Falcon Zone, testing the mineralization further upplunge.
We intersected great quartz staining with visible gold in multiple holes, a strong sign, and more drilling is scheduled to evaluate continuity. We also tested a parallel trend to the 6 Zone from surface, drilling seven holes across 300 m of strike. We intersected quartz staining with sulfides, and we're now awaiting assays. Since quarter end, we've kicked off new drill programs at Mishi, with Magna Concept to follow later this quarter. In total, we've got 10,000 meters of drilling planned, about 68 holes, focused on testing gaps west of the current drilling at Mishi, assessing the downplunge continuity of the Mishi deposit below the open pit, and twinning historic intercepts at both Mishi and Magna Dome. Now, a quick update on the Angus property on slide 14. Our top priority here is to complete the resource work at Dawson, which the Angus team commenced earlier this year.
By mid-July, we had drilled about 1,300 m on the main A and B zones, with another 2,000 m to go, targeting both Dawson A, B, as well as Dawson West. Our goal is to update the historic Dawson resource and define the continuity of the recent high-grade hits at Dawson West. Once the resource drilling program at Dawson is wrapped up, we'll shift focus to other high-priority targets, including the Eagle River's flow and the Cameron Lake Iron Formation. A quick note on the global model before we move to Kiena. Four underground rigs are currently tasked with infill drilling global model targets. Between now and November, approximately 40,000 m will be completed. Two other rigs are focused on delineation drilling for grade control and continued infill and exploration drilling on the Falcon 311 and six central parallel zones.
The global model drill program will support category conversion of target material and feed into next year's updated technical report. There's a lot to be excited about at Eagle River, and we are targeting a release for the full exploration update in the coming weeks. Now let's turn to Kiena on slide 15. The completion of new underground drilling platforms is opening up some exciting opportunities. In the deep part of the mine, two platforms on level 134 are now complete, and drilling is underway from the first phase. Three more platforms are on track for completion by year-end. These platforms are a game changer. They're giving us much better angles to test Kiena Deep, the footwall zone, and the downplunge extension of the B zone. They also significantly reduce drill hole lengths, meaning faster, more cost-effective exploration drilling.
As highlighted in our June news release, we remain encouraged by results at Kiena Deep, especially with compelling intercepts from both the footwall zone and the north limb of Kiena Deep A. In the B zone, historically a low-grade area, recent drilling has led to a major reinterpretation. What was thought to be a single lens is now thought to be multiple stacked lenses, all open downplunge. This matters because B zone sits right next to existing infrastructure. It is now being actively assessed as part of our broader fill-the-mill strategy. With Kiena mineralization highlighting a broad trend at grade increases at depth, the downplunge continuity of B zone presents an exciting exploration target, which we'll evaluate in the near future. Moving up to level 33, our new platform is already producing results.
As shown on slide 16, drilling southeast of the Wish zone has intersected two high-grade areas, one of which lies just northwest of the historic Shawkey Mine. This intercept is especially interesting. The mineralization style resembles and matches the original Shawkey ore body, more than 6 g per ton, suggesting a possible northwest continuation of the mineralization. This area is strategically important due to its proximity to existing development at the old Shawkey Mine. We're now drilling from further east along level 33, with holes testing the northwest extension of the Shawkey mineralization. Three holes have been completed so far. Early results are promising, and further drilling is planned. Looking ahead, we're excited to complete the extension of the level 109 exploration drift, which will allow us to resume drilling the downplunge extension of the BC zone. We're targeting a restart before the end of the year.
Beyond underground, surface exploration at Kiena is also progressing well. We currently have three barge drills active, targeting extensions of the Presqu’ile zone and exploring at Northwest, West Dome, Dugazon, and the 134 zone. Finally, we've launched our planned high-resolution drone magnetic survey across the entire Kiena property. This will give us a valuable new layer of geophysical data to help guide future exploration and uncover new targets across the land package. To wrap up, it's been a strong and productive first half, with momentum continuing to build across the portfolio. We're also pleased to welcome the Angus exploration team, bringing valuable expertise to the Angus program and contributing to our broader exploration efforts. Company-wide, our drilling programs remain tightly focused and efficient, aimed at driving resource growth, enhancing exploration flexibility, and delivering long-term value.
Our exploration teams have worked hard at building a pipeline of drill targets, surface and underground, brownfields, and greenfields. We have fertile real estate with exciting upside potential. We look forward to sharing continued progress as we advance this work through the second half of the year. Now, over to Raj, who will take you through this quarter's financial results.
Thanks, Jono, and good morning, everyone. Turning to slide 18, the second quarter set several new records across revenue, EBITDA, cash margin, net income, and free cash flow. Notably, Wesdome, generated $53 million in free cash flow this quarter, more than the entire first half of 2024. Per share metrics, like adjusted net income of $0.52 and cash flow of $0.67, showed strong sequential improvement over the first quarter, as well as Q2 2024. I would note that headline earnings were adjusted to reflect executive departure costs, as well as a consideration of receivable accrued for loyalty buybacks. Turning to slide 19, full production in the second quarter was approximately 43,000 ounces, at a cash cost of $929 per ounce, and all-in sustaining costs of $1,528 per ounce.
As an unhedged producer with most of our costs in Canadian dollars, we captured over $1,750 per ounce, or 53% ASIC margin per ounce compared to a realized book price of $3,279 per ounce. We're seeing the benefits of having multiple producing assets in the portfolio, with Eagle River's strong performance on grade partially offsetting lower production at Kiena due to equipment availability challenges. Looking at the ASIC profile for the second half, we're forecasting Q3 to be similar to Q2, while Q4 is expected to be materially lower. Even with record margins this quarter, there's clearly room for improvement. By tightening cost controls, enhancing our planning and tracking processes, and upgrading our internal reporting, we can unlock more value, empowering real-time tactical and strategic decision-making. Turning to slide 20, our balance sheet continues to strengthen with about $188 million in cash and zero debt.
With a stronger second half and fourth quarter planned, we expect our financial position to continue improving at an accelerated clip as we work hard to deliver more consistently reduced costs and capture the operating leverage inherent in the business. As a reminder, we closed the Angus acquisition on June 27th, which required a cash outlay of about $30 million. As Anthea mentioned, during the quarter, we also amended our revolving credit facility to extend its maturity to 2028, increased capacity to $250 million from $150 million previously. The debt facility also includes an accordion feature, which now stands at $50 million . With liquidity of more than CAD $500 million , Wesdome enters the second half of 2025 in its strongest financial position to date.
We're now at the point where we're building a disciplined capital allocation framework, anchored on maintaining financial flexibility while balancing the execution of our strategic objectives and delivering long-term returns for shareholders. Our first priority always remains fully funding high-potential exploration and advancing the fill-the-mill strategies of both Eagle River and Kiena. Organic growth has historically yielded the highest returns for our shareholders. In parallel, we'll maintain a rigorous approach to evaluating strategic opportunities that complement our operating strengths and support our vision of building a resilient, growing, value-driven gold producer. With that, operator, you can open the line to look for questions.
Thank you. We will now begin the question and answer session. I would like to remind everyone, in order to ask a question, please press star, then the number one on your telephone keypad. We'll pause for just a moment as callers join the queue. The first question comes from the line of Andrew Mikitchook with BMO Capital Markets. Your line is open.
Thanks for taking my question. There's quite a bit of detail on the work that you're doing at Kiena, but maybe I could just ask someone to contrast what we see at Eagle in terms of, you know, fairly well, you know, impressive preparation and reliability and, you know, a year of forward development and, you know, all kinds of metrics like that. How long, or is it possible to get to that kind of a situation at Kiena? Is that the goal, or am I misunderstanding the vision?
Now, Andrew, that's a great question, and thank you for asking the question. Yeah, I mean, I think Eagle's side has been a program that's been going for the last 18 -2 4 months to move it towards being much more flexible, and it's a wonderful strategy to keep growing Eagle and to build it out. Hopefully next year we can show you then the technical reports as well. For Kiena, the first thing was to make sure we build out our operational flexibility in the mine, which will then allow us to unlock it further. Kiena is a little bit different from Eagle in that you have a different ground situation where you can't just open up stopes across this entire operation. You have to build very carefully. The more mining fronts we open up, the more flexibility we create.
The big thing was moving from level 129 down to level 136 and then continuing that ramp down to level 142, which is what we continue to do, and then unlocking opportunities near surface as well. All of these programs are currently taking effect. You see, in terms of not having that flexibility, you see the impact of issues going wrong in the mine. In this case, we had a situation where our equipment didn't perform to the utilization levels we wanted it to be. With that, you then affect your sequence, which means you rely on the single phase, and it just slows things down. However, the one thing I want to assure you is that we have a very systematic and step-by-step process to get that unlocked through the flexibility discussion we just mentioned. Similarly, when we do things at Kiena right now, we're doing them really right.
When we do mine, we're mining really, really well, which is what I love. The next thing to do now is to make sure we get these levels open, we unlock it, and then the flexibility naturally happens. In the meantime, what we've done at Kiena is we've opened up redundancy to allow us to actually manage those little errors a little bit differently. If they do happen or we have an issue where people aren't available for a machine at the right time, we've got redundancy now built in that we can assure the utilization rates we need to keep our sequence strong. I don't know if that helps at all, Andrew.
No, it kind of makes sense. Staying with Kiena, this 10 days, 11 days, 12 days of shaft maintenance, unplanned issues, how should that impact Q3 versus, say, Q2? Should we be looking for a similar outcome that, you know, hopefully some improvements in the balance of the quarter offset those issues, or is there a risk that Q3 is weaker than Q2?
I think, okay, definitely what we had there was a planned maintenance shift that extended, right, by four or five days. I've got four days there. It does, your quarter three, your quarter three does see an improvement, definitely. Guy, do you want to comment further?
Yeah, so it was a four-day planned shutdown, and the shutdown has been extended to fix some key components around the oil. Now it's all behind us, and we're moving ahead into the quarter. We've seen some pretty impressive results recently. The team has been working very hard in fixing issues, and we've seen recently 20 g per ton in the mill. Over expectations, the team is doing a very good job over there.
Okay, last Kiena question, and I think you alluded to this earlier in the call, but just to be clear, if you're going to deliver 40% of your gold in Q4, that would require both tons and grades to come up in Q4, or is it really mostly tons? Any guidance on the split so that people can have an idea of what to expect?
I'll just try and say it again. It definitely has a bit of a grade impact from Kiena Deep, but if you think about it, it really is Presqu’ile coming in in Q4, as well as Kiena Deep's almost executing at a similar run rate than it would have done over a period. It's very achievable. We just need to make sure we keep delivering as we are at the moment.
Okay, last question because I'm monopolizing the time here. Any further explanation of what you're considering when you say return of capital to shareholders?
Yeah, I mean, we're busy working with our board on capital allocation framework at the moment, Andrew, and we'll be sharing them in the second half of the year, as we said before. At this stage, you know, yep, that's the key focus within the team. Obviously, you know, we keep focusing strongly on our organic initiatives and then remain very prudent.
Thank you very much for humoring my many questions, and I'll pass the microphone to somebody else.
Andrew.
The next question comes from the line of Wayne Lam with TD Securities . Your line is open.
Hey, thanks. Morning, guys. Maybe a follow-up question at Kiena. Have you seen any difficulties in terms of the minability of the Kiena Deep, and is that also driving, like, is that driving some of the changes to the mine design? Just wondering, going forward, what would be the targeted run rate expected from Kiena Deep on a ton-per-day basis? Would that still be something in the range of 650 tons per day, and then maybe adding in 350 from Presqu’ile to get to a 1,000 ton-per-day run rate?
Minability, and I'll make a key comment afterwards, but minability is going really well. We can definitely mine, and we mine it really, really well. That's really good relative to the parameters we'd like it to be mined. We're doing a great job. It's something we've really focused on. Run rate-wise, we're currently targeting, what, 750 tons per day from Kiena Deep at the moment, right? 750 tons. If you add Presqu’ile on top of that, you get another 350 tons or so. It's getting a little bit higher than that, Wayne. 350 tons, 400 tons, we're about to.
Okay, great, thanks. Maybe with the additional growth CapEx budget at Kiena, how much of that is related to accelerated development and the 136 level, and has completion of access to the 136 been slightly delayed?
Sorry, Wayne, can you repeat your question?
Yeah, just within the additional growth capital now budgeted at Kiena, I was just wondering how much of that is related to accelerated development of Kiena Deep and the 136 level, and whether the completion of access to 136 had been slightly delayed.
No, I mean, the completion, we weren't planning on mining 136 this year at all. That's pretty much on track, and it's per plan. The additional capital there is really actually more in Presqu’ile on the development side of Presqu’ile, and also unlocking the ventilation circuit even more. We've done some work on optimizing the ventilation circuit, which requires a bit more development too. This is largely around flexibility both at the Presqu’ile level and creating another horizon there, as well as enhancing our future flexibility in the mine going forward. It's not to do with 136. 136 is going really well. It was never planned to be mined in 2025 at all, and it will be ready to be mined in 2026.
Okay, great, thanks. Maybe just last one at Eagle River. Obviously, some significant improvements being made operationally. Just wondering if you might be able to provide a bit more detail on some of the improvements being made on the dilution front and whether you see that as sustainable. Just wondering how much of that improvement is also being driven by the new global model.
Okay, I'm going to let Guy comment.
No, thank you. Very good question. The team has worked very hard on improving drilling and blasting techniques. Since the beginning of the year, we have seen continuous improvement in the dilution, doing an exceptional job controlling better the drilling accuracy and the vibrations during blasting, translating into very, very good results, and we see it in the grade as well.
I think just to add to that, Wayne, we expect that to continue. I mean, I think if you were in Guy's headlines, not saying we're going to, at least we're planning to go beyond that. There's been a substantial difference in how they are improving on those parameters. The global model is not the reason for that. The global model has got other benefits, and I think it's quite exciting to see what's happening there. That's going to add more to mine life and more to filling up our mill. Another good thing that Guy and his team have been working on is making sure we ramp up and get the mill ready, you know, and the whole operation ready for a ramp-up phase.
Lots and lots of good work going on at Eagle River in terms of opening operational flexibility, but also preparing Eagle River for its next phase.
Okay, perfect. Thanks for taking my questions, and look forward to the improvements in the month ahead.
Thank you.
The next question comes from the line of Ralph Profiti with Stifel. Your line is open.
Thanks, operator. Good morning. Anthea, I appreciate the added color on Kiena Deep, the goal being to double ventilation infrastructure in 2026. Just wondering if you can give us a sort of a CapEx on that work order, you know, understanding that's part of a broader scope and may be included as part of the comprehensive technical review.
Okay, so from a CapEx perspective on the ventilation side, the thesis may be just make it clear. We are building ventilation. We don't need ventilation for where we're mining right now in 129. We need ventilation. We want to grow the mine and create more flexibility, right? If we want to create more redundancy, ventilation helps because we are limited on ventilation in terms of what we can add on. We can't just easily add more machines into the mine right now if we needed them at this point in time. This was always part of the plan to do this, Ralph. This is nothing new. What we're doing now is we're just enhancing that because we're realizing that this mine, you know, has got more, right? We're seeing more on level 33. We're seeing more in Presqu’ile. We're seeing more things.
You just heard Jono speak about the scale of what's in Kiena. A lot of what Wesdome's team is doing is preparing Kiena for the long term as well. When we stand back from the operation, we want to make sure that any decision we make allows us to have success not just for the next three years, but for beyond three years. Some of this investment that you might have seen, which was an increase, I think it was about $4 million or so, if I'm not mistaken. Kevin, I'm just looking at you, Anthea. It's about $4 million or so. I could have the number not exactly right, but I can get Kevin to get that number to us exactly. It was a bit more to help enhance that program. It's not something that we've learned today.
It's something that we're building to build more growth and more flexibility in Kiena.
Yes, that's helpful. Thank you. Just as a second question, I want to delve a little bit more into the equipment availability constraints. It wasn't clear whether or not this is related to fixed infrastructure or mobile equipment. Either/or, is this more related to design issues, maintenance issues, or operator issues?
Sorry, just one moment. Sorry, Ralph, I didn't hear you properly. Can you just say that again?
My apologies, yes. I wanted to get and expand a little bit more on the equipment availability constraints and whether or not this was mobile equipment or fixed infrastructure, and whether or not these are more related to design, maintenance, or operator.
Okay, great question. The mobile, it's mostly related to fleet at this stage. The reason why is because our fleet availability needs to be at an extremely high level from a utilization, well, it needs to be at a level on a utilization level, which is well planned. The problem is it's a people issue as well as an equipment issue, right? It's both sides. The risk profile of our equipment needs to be fully aligned with the risk profile in the mine. If you look at things like our spare parts strategy, we probably need it to be a bit stronger on the HAGI to make sure we had, you know, you can't wait, you don't have time to wait when you require a very tight execution program. This is not an equipment, you know, specific issue. This is a matter of a planning issue more than anything else.
The equipment's there. We've got great equipment. It's about making sure that the planning procedures and how we assure that our redundancy and our risk profile aligns better to the requirements of the mine. There is nothing inherent about this, Ralph. This is a fantastic mining operation. This is just about getting these things to fit the risk profile appropriately. That's why I say we probably should have applied a bit more risk, you know, at the beginning of the plan. What we've really focused on at Kiena is to make sure we do things systematically extremely well. If we do extract, we extract well. We need to make sure that our people strategy fits that really, really well. If you don't have a person to run a machine, you don't have a machine that can work.
If you've got a sequence that requires you to have a machine ready and the person isn't there, you can't run the machine when you need it. If you've got no flexibility, then guess what? You can't keep with your sequence. What I tell the team is, I don't care. You mine well. You keep mining this mine well because that's what we care about. You'll see those strokes will come in. They're beautiful. This is a beautiful mine. The mine reconciles really well. The things this mine has done, and I really want to say this to the Kiena team, they've done a phenomenal job of developing infrastructure to grow this operation with the future. They're drilling all over the place. They've built exploration ramps.
I mean, they keep working so well to create a future that I'm telling you we'll be so proud of because you'll see it come through. There's such great geological potential in this mine. It's scary. What we now need to do is just systematically keep delivering, get the risk profile down, which is coming down, which is really coming down. We have a second ramp coming in. It's unlocking the mine. You've got the people strategy well supported in the execution strategy. You've got more controls in. I mean, our short-term interval controls are now so tight that we're watching them, I think, shift by shift in Guy's desk. It remains, yeah, we shouldn't have had this issue. We did have it. We apologize to all of our market for that, but we'll fix this.
Thank you, Anthea. Those are very helpful answers.
The next question comes from the line of Don DeMarco with National Bank. Your line is open.
Thank you, operator, and good morning, Anthea and team. My first question's on Kiena. You'll be getting into level 136 by the end of the year. Can you give us a sense of the grades and the tonnage that you might expect to mine from this zone and how long you'll be mining it?
Okay, I can just revert to my document here. Do you have the actual long section for Kiena Deep? For 136 level, what is the grade profile?
Yeah, the grade is very much similar to what we were thinking deep in the.
129.
To 14 g a ton. I mean, I'm up in 13.6 g a ton, yeah.
If I'm not mistaken, it's about a year to two years of mining.
Yeah, we develop 136 horizon, as we say, which is four levels. It's in the 12 g- 14 g ton. Once that's developed, it sustains production from those levels up to 2028, I think late 2028. Once we develop these horizons, we've got two, two and a half years of mining in those horizons, which coincides with what Anthea said about the flexibility. Once they're developed, we tend to have consistent, sustainable mining for a long term in them.
Two years of mining in a job.
Yeah, yeah.
Okay, great. How many levels will you be mining in Kiena Deep after you're into 136?
We keep going to 142, and after 142, we get to 146, 146. I can't remember the exact.
Yeah, currently in the current reserves, you're talking about five more mines.
In terms of currently mining, will you be mining from multiple levels concurrently?
End of the year, we're going to have three that we're going to mine from.
Three.
Right now we have one.
Okay.
End of the year, we have three.
Okay, I guess this leads into my next question. I'm looking at the throughput in Q2, and it's 500-something tons per day, and you certainly got a lot of spare capacity at the mill. By way of getting into level 136+ Presqu’ile, where do you think that mill throughput might move up to over the coming quarters or after you get into these zones?
Yeah, as I just, I mean, if you look at this year, we should be getting, for the end of this year, second half, you'll see the increase line purely in the 129 level plus Presqu’ile heading to the 1,000+ level. It goes up to 1,200 tons per day plus more or less through that mill at the moment. When you get to 136, that allows you the next horizon as well. I think I mentioned earlier that even the hoist capacity has been unblocked with the work that he and his team have done. We've even got more capability to, we can hoist right upwards, I think, of 1,800, 1,700, 1,800 tons a day. We really can, we're unlocking material movement. It's then going to come down to how many levels we can get into to create the flexibility correctly because you can't, and also the design.
Kevin's team's busy working on the design to make sure we create multiple furnaces coming into a level, which is the change in design to allow us even more flexibility per level. There's a lot of work going on to unlock and to, you know, reduce risk in this mine.
Great. I think earlier at some point you talked about coming out with updated technical reports for both Kiena and Eagle. Is that still on track for sometime maybe early next year? Is that the schedule that you had expected?
We're planning on putting out the press release in June next year. We've been working with, as I mentioned, the last quarter was we needed to understand the amount of conversion or confirmation for that Jonas team needed to do to get the QA/QC correct. That was, we got those plans back and we need to do about 40,000 units, I think, of drilling to do that just to confirm. Obviously, that gets us to the end of the year and then we'll have it ready by June in our release.
Okay, that will include a mine plan that will give us an idea of the trajectory of these throughputs increasing as you get into the different zones and optimize things. Is that right?
That's correct, Don. You can add your own logic into how, you know, as we also do conversion or depletion side as well, because this is what's in the current available, you know, current available model. You can imagine what this is. We'll talk a bit more about that later, but it's going to have a marked impact.
Okay, just finally, just to wrap it all up, we will be expecting kind of a material increase in throughput at some point into 2026 or thereafter versus what we saw in Q2?
Absolutely, absolutely. Q2 was affected by challenges, not affected by, if you know, so your tonnage was low because of these challenges we spoke about.
Great. We look forward to that. Maybe just one final question. I see that you're actively sourcing different open positions and so on. How would you characterize the labor market right now? Is that a potential, any potential bottleneck on the horizon?
Labor is a major challenge, and I think every mining company probably has the same, but it is a major challenge. It's something that we probably spend, hey, Guy, how much of our time on this every day? It's a significant amount of our time to make sure we keep assuring that our people strategy is strong. Yeah, it's the single biggest challenge, I think, today for all of us.
Okay, thanks for that. Good luck with the rest of the quarter.
Thank you.
Thank you. There are no further questions at this time. This concludes this morning's call. If you have any further questions, please contact Trish Moran at trish.moran@wesdome.com. Thank you for participating today.