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Snag This Underperforming Gold Giant for a Lifetime Investment

When

markets wobble

And when doubt starts creeping in, gold stocks frequently turn into the preferred choice for safeguarding wealth over the long haul. Throughout history, gold has served as a refuge asset. It retains its worth during periods of inflation, political unrest, and changing currencies. For Canadian investors with an eye on the future, incorporating a robust gold stock might offer both stability and growth.

meaningful

One of the strongest choices at present is

Wesdome Gold Mines

(

TSX:WDO

It’s dropped from its previous peaks, but this small-cap gold mining company has all the potential for a long-term holding.

The stock

Wesdome is not a speculative explorer or a high-risk development-stage company. Instead, it operates as an established producer with two high-grade underground gold mines: Eagle River in Ontario and Kiena in Quebec. These locations are advantageous due to their presence in politically stable regions known for being supportive of mining activities.

For over three decades, the company has been operational. However, in recent years, it has begun scaling up significantly. In Q1 of 2025, they reported impressive outcomes. The revenue stood at $187.6 million, marking an increase of 86% compared to the previous year. Net income surged to $62.5 million, equivalent to $0.42 per share, rising sharply from $13.1 million, or $0.09 per share, during the corresponding period the prior year. Additionally, adjusted EBITDA climbed to $119.4 million, which represents more than tripled growth when measured against the same time frame the preceding year.

Behind this growth lies increased production volumes. In the first quarter of 2025, Wesdome mined 45,692 ounces of gold, marking a significant rise of 37% over the 33,400 ounces recorded in the same period in 2024. Both the Eagle River and Kiena operations contributed positively to these figures. Additionally, favorable gold pricing played a role; the firm managed to sell each ounce for an impressive average price of $2,882 USD.

Further development is coming your way.

Expense management stood out as a key point. The all-in sustaining costs decreased by 17% compared to the previous year, reaching $1,366 per ounce sold. This figure is significantly lower than the typical gold price, providing the firm with substantial operational flexibility. Reduced expenses coupled with increased output represent an ideal scenario for gold extraction activities. Such synergy drives the growth of free cash flow, enabling Wesdome to invest in development and discovery initiatives.

Actually, Wesdome plans to expand beyond its present mining sites. They have recently declared their intention to acquire Angus Gold, a small-scale exploration company owning assets close to Eagle River. This transaction quadruples Wesdome’s property area around Eagle River and introduces additional exploration potential. The aim for Wesdome is to prolong operational longevity at both of its current facilities, and this purchase aids in achieving that objective. It represents a prudent, minimal-risk strategy that leverages Wesdome’s core competencies.

Financially, Wesdome is in a solid position. The company ended Q1 2025 with $167.9 million in cash and no long-term debt. That gives it the flexibility to make acquisitions, invest in new projects, and weather potential downturns. Not every gold company can say that; many are carrying high debt loads, especially after years of inflation-driven cost pressure. Wesdome’s conservative balance sheet is a key reason it stands out.

Foolish takeaway

If you’re considering where to invest with a long-term view, Wesdome Gold Mines presents an attractive choice. While it might lack glamour and frequent media attention, steady and reliable companies often create substantial wealth gradually. Although gold isn’t always popular, it typically gains strength during periods of rising inflation or currency instability. Wesdome is strategically poised to excel under such circumstances. Boasting strong resources, excellent management, and a defined strategy for expansion, this appears to be an outstanding gold stock ideal for keeping as a permanent part of your portfolio.

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Fool contributor

Amy Legate-Wolfe

The Motley Fool does not hold shares in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a

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