As the CEO of West Red Lake Gold (WRLG), my first task was
to assemble a management team to bring this asset back into production.
A typical deck of a Canadian mining company features a galaxy of mature executives in their 50s and 60s. The last wave of successful precious metal companies was run by baby boomers. Major and mid-tier mining companies have log jams of younger talent begging to be unleashed.
We set out to assemble a young, energetic, highly skilled team. To achieve this goal, we did not rely on LinkedIn, or mining recruitment agencies. One of the advantages of working with Frank Giustra’s group is that it has connections with a lot of resource companies. People were recommended to us through word of mouth.
Let’s be clear: youth + confidence + ambition ≠ expertise. Many young professionals desperately want to be leaders. They are impatient. They show up to meetings and talk like leaders, but they get quickly found out. A career in the mining industry is not a game of Snakes & Ladders. You can’t bypass any of the squares.
To function effectively as a manager for an underground mining company, you need to have spent a lot of time underground. We looked for young managers who have worked in the trenches, done the hard yards. There is no shortcut to leadership. I’m privileged to be the CEO of WRLG, but it took me 25 years to get here. I wouldn’t have been ready 20 years ago, or 10.
Experience and talent are obligatory, but an equally important quality is attitude. That’s in you or it isn’t. The desire to succeed, to improve, to learn from your mistakes and to keep going. No amount of technical skill can adequately compensate for a negative attitude.
Our motivated young team accomplished a lot in 2023. The Rowan drill program exceeded expectations. Early drill results at Madsen also featured high-grade intercepts. Institutional investors took notice. In a challenging gold market we raised CDN $46.7 million to fund our operations. During that 12 months, the WRLG share price increased about 90%.
In the near future, you will hear from some of our young management team, including Maurice Mostert – V.P. of Technical Services; Will Robinson V.P. of Exploration; Jill Christmann – Chief Geologist, Derek Teevan – VP of Community Affairs and Harpreet Dhaliwal, our new CFO.
Knowing more about them, and the vital roles they play, will give you a deeper understanding of the West Red Lake Gold project. After that, you will hear from our Executive Chairman, Tom Meredith and our Co-founder and major shareholder, Frank Giustra.
Next week in Part 2 of our messages to shareholders, you will hear from
Maurice Mostert, our V.P. of Technical Services.
Shane Williams
Chief Executive Officer of WRLG
By Maurice Mostert – V.P. of Technical Services
In collaboration with the geologists, engineers and operational staff, we work on drill plans, ventilation systems, mine-to-mill integrations, optimization, sustainability and cost estimates – everything a profitable mine needs to safely tick over.
I am now a proud Canadian. I grew up in the interior of South Africa, cut my teeth in the ultra-deep gold mines. Starting my shift at 4:30 a.m. I went three vertical kilometers down the mine shaft to drill and charge holes.
South Africa initiated some of the world’s best mining practices. It was a valuable training ground that has informed my approach to the West Red Lake Gold project.
The gold veins in the Red Lake District create an interesting challenge, in that they are almost vertical. They undulate wildly along strike, like snaking rivers. If you try to follow them without a detailed map, the veins seem to “disappear”. When the previous operators realised the vein was missing, they’d continue for another two or three cuts with no gold, which ultimately made the operation sub-economic.
With a renewed understanding of the ore-body, we now know the vein does not disappear and we can more easily pick up the elusive trail.
Those undulations might not have to be mined selectively, which would result in a reduction in mining cost per-ounce-of-gold.
Early indications are that Rowan is amenable to “ore-sorting”, which removes waste-rock before it gets to the mill. Ore-sorting has the potential to reduce the tonnage of rock being transported from the Rowan deposit to the Madsen mill, thereby increasing the grade and giving us more “bang for our buck”.
We can boost the capacity of the existing mill up to 1,500 tonnes per day – almost a 90% increase. We are lucky to have a state-of-the-art water treatment facility with excess capacity.
We are introducing a number of technical innovations. Typically, in Canada, miners blast the rock face – extending the tunnel by up to four metres, then bringing in a scissor deck. The miners stand on top of the deck, drill more holes to install support into the back wall, directly above the miner. It’s a time-consuming manual process.
West Red Lake Gold is investigating modernising this process with a technique called “jumbo bolting”. You drill and bolt using mechanical arms from the safety of an air-conditioned cab. It’s faster, more robust and with this process no human being comes within three meters of the unsupported ground.
We are also running trials on an innovative explosive that allows us to charge the holes quicker while reducing the ammonia footprint of the mine. This emulsion-type explosive is used successfully in other mining jurisdictions. It uses less explosive per ton of rock and is more environmentally friendly.
It’s another example of how we are fostering a culture to promote our people, our profits and our planet.
Next week in Part 3 of our messages to shareholders, you will hear from Will Robinson, our V.P. of Exploration.
Maurice Mostert
V.P of Technical Services
As VP of Exploration for West Red Lake Gold (WRLG), my role is to oversee the planning and implementation of the exploration programs at our property projects Madsen, Rowan and the satellite deposits. Previously, I was the Exploration Manager for Coeur Mining, evaluating new gold and silver opportunities for Coeur’s project pipeline.
As the “Qualified Person” (QP) for WRLG, I am responsible for reviewing all company press releases, certifying that they are technically and factually accurate.
When I joined WRLG in February 2023, the Rowan Gold Project had over 800,000 ounces of gold defined as an Inferred resource. We designed a 17,000-meter drill program to increase our confidence in the existing resource and extend two high-grade ore shoots (East Zone and West Zone) at depth.
The results of initial drilling were positive and the program was expanded. We completed approximately 21,000 meters of drilling at Rowan in 2023.
As the Rowan drill program was underway, the Madsen Mine about 15 kilometers away – owned by Pure Gold – fell into bankruptcy, and the mill was put on Care & Maintenance. The WRLG head office asked me to have a look at this distressed asset.
Working with Sprott Resource Lending, the lead debt holder for the Madsen Mine, we analysed all geological and operational data available on the Madsen asset, paying special attention to the “mine reconciliation reports” which compare the estimated mineable grade/tonnage, to what actually came out of the ground. Reality did not live up to expectations. Our objective was to understand why.
We discovered that the original geologic model did not capture the complexity of the Madsen deposit. This resulted in excessive dilution during mining. The geologic model had to be reinterpreted.
Our objective for drilling at Madsen in 2024 is to build a +1 year runway of high confidence ounces for the mill restart, while also taking full advantage of near-mine, high-grade resource expansion opportunities
In November and December, 2023 we reported very encouraging expansion drilling results from a new zone called North Austin, and also from South Austin.
The Madsen deposit is the meat and potatoes of our operation. We predict the ore will be in the 5-7 gram/tonne range. Our expectation is that Rowan will become a high-grade supplemental feed source for the Madsen mill, potentially delivering around 200 tonnes/day of 10 gram/tonne material.
Our team completed initial metallurgical test work at Rowan in 2023 which indicates overall gold extraction above 98% using the same flowsheet as the Madsen mill. Additional work will be required at Rowan to determine its viability as a feed source, but this is a step in the right direction.
We are determined not to repeat the mistakes of the previous operator. Madsen is a high-grade deposit, with excellent expansion potential, located in one of the most prolific and jurisdictionally supportive gold mining districts in the world.
Through exploration, drilling, development and discovery we look forward to unlocking the full value of all of our Red Lake assets in 2024.
Next week in Part 4 of our messages to shareholders, you will hear from
Jill Christmann, our Chief Geologist.
Will Robinson
West Red Lake Gold V.P. of Exploration
As the Chief Geologist for West Red Lake Gold (WRLG), I manage the team that plans and executes the drill programs at the Madsen site. Working closely with the engineering and operations teams, we are deepening our knowledge of the asset while expanding the precious metal inventory, prior to the mine restart.
Born and raised in Saskatchewan, I have spent the bulk of my career, working in underground narrow vein gold projects across Canada.
I am a former Pure Gold employee and now a proud member of the WRLG team. The decisions we made at Pure Gold were based on a flawed understanding (model) of the ore body. Pure Gold mined a near-surface zone at Madsen called McVeigh.
This area proved to be more complex and lower grade than the initial model indicated. With the geological understanding we now have and accurate models in hand, we believe it is advantageous to start production on the more continuous and high-grade domains of the mine.
2023 was a successful year for the West Red geologic team, delivering high-grade drill results from the 25,000-meter program at the Rowan Deposit 15 kilometers to the west of Madsen. This included the highest grade intercept ever drilled on the Rowan Property – 70.8 grams/tonne gold over 8.3 meters.
Meanwhile we have been focusing drill programs to test gold values in the Austin, North Austin, and South Austin Zones at Madsen.
On November 21, 2023 initial drilling at the North Austin Zone returned intercepts of 27.15 g/t gold over 10.28 meters and 22.31 g/t gold over 8.5 meters.
On December 5, 2023, we reported intercepts at the South Austin zone of 47.44 g/t gold over 3.2 meters and 21.64 g/t gold over 7 meters and 296.83 g/t gold over 1 meter.
We are very encouraged by these results. Much of the opportunity for growth within the North and South Austin extensions is an unmined area, not near old workings. We already have 1.65 million ounces of gold in the indicated category at Madsen. We are currently adding additional near-surface ounces adjacent to existing underground infrastructure.
Before restarting production, there is a lot more work to do completing infill and expansion drilling, underground development and engineering studies. My team will support this work.
The modern permitted mill is under “Care & Maintenance.” The engine is tuned, the keys are in the ignition, of course we want to drive it. But WRLG will not repeat past mistakes.
Our CEO Shane Williams has been clear: “The mill turns on when it’s ready to turn on.” My geological team at Madsen is laser focused on achieving that state of readiness.
Next week in Part 5 of our messages to shareholders, you will hear from Derek Teevan, our VP of Community Affairs.
Jill Christmann
Chief Geologist at West Red Lake Gold Mines
As VP of Community Affairs for West Red Lake Gold (WRLG), I am responsible for creating and nurturing strong relationships between WRLG and the local government, employees, residents, service providers and Indigenous partners.
I have spent the bulk of my career in this field, working with diamond and gold companies, from permitting to production.
Red Lake, Ontario has a population of 4,100. It is situated 1,400 kilometers west of Toronto, and 400 kilometers east of Winnipeg, Manitoba. Red Lake is a mining services town, and a social services hub.
The Madsen Mine and Rowan Project are in Treaty #3 and on the traditional territory of Lac Seul and Wabauskang First Nations. These are progressive communities with Project Agreements already in place with mining companies based in Red Lake.
In June, 2019 our predecessor, Pure Gold, signed a Project Agreement outlining how we work with Lac Seul and Wabauskang to maximize their participation in the mine. Right now, we are the new kids on the block. We have an obligation to prove ourselves as honest, trustworthy corporate citizens.
In many cases, stakeholders in resource projects have tense, adversarial relationships. This can slow down decision-making. This is not our situation. With multiple mines in the area, the Lac Seul and Wabauskang have founded a collaborative business and advisory entity called Shared Spirits.
Shared Spirits provides a one stop communication, environmental review and business arm. It will have a strong voice in environmental approvals and project contracts. As we move closer to production, WRLG will play a role in supporting Shared Spirits.
We intend to have a long fruitful relationship with Shared Spirits. The meetings we’ve had so far have been focused, cordial and productive.
West Red Lake Gold is also engaging with the Madsen-Red Lake community. We are setting up public information sessions with the Madsen Advisory Committee.
We have engaged with the Mayor and Council. There is great support by the local government for the opportunities that the redevelopment of the Madsen Mine will bring.
Concurrently, we are developing an underground connection between the east and west portals. This means fewer trucks will need to cross the Madsen access road, reducing noise and dust that could impact local residents.
As we continue to ramp up at Rowan and Madsen, we will implement a recruitment and training plan, to maximize employment opportunities for people in the region.
It is my role to ensure that all local stakeholders receive a meaningful benefit from our presence in the community.
Next week in Part 6 of our messages to shareholders, you will hear from Harpreet Dhaliwal, our new CFO.
Derek Teevan
VP of Community Affairs
Harpreet Dhaliwal – Chief Financial Officer (CFO) of WRLG
A lot of people think the CFO is just someone who “is good at math.” That’s not wrong (CFOs are good at math), but inside a junior resource company the duties of a CFO are more complex, more challenging and more gratifying.
Quick background: I was born and raised on Vancouver Island, in Duncan, BC (pop. 90,000). I completed my undergraduate science degree at UBC, after which I achieved the designation of Chartered Accountant.
In 2007 I left the world of public accounting and entered the resource sector, cutting my teeth at Uranium One and American Bonanza Gold, then gaining more experience at Endeavour Mining and Fiore Management. Through Fiore, I became the CFO of Leagold Mining.
Leagold had producing mines in multiple jurisdictions. I was part of the team that took Leagold from inception to the merger with Equinox Gold. Most recently I was the CFO of NexGen Energy. The mining business is important and endlessly interesting, I have never looked back.
I sometimes get asked, “Why don’t you work for a big mining conglomerate?” The short answer is: I thrive in dynamic environments with constant new challenges. At a mining major, I might be sequestered into one department with a limited sphere of duties. Working for smaller resource companies has widened my skillset and allowed me to gain deeper knowledge in all areas of the business. It’s also taken me to interesting places like Mexico, Kazakhstan and Burkina Faso.
To be an effective CFO for West Red Lake Gold, I can’t just sit in a back office pecking at an electronic calculator. In fact, that’s only about 10% of my job. For the other 90%, I have to roll up my sleeves, work closely with the exploration and operational teams, so that I understand their priorities, their objectives and what obstacles they are likely to encounter.
In a publicly traded company, financial processes and controls are important. Money must be spent responsibly. Our VP of Exploration, Will Robinson, is responsible for managing his budget. Likewise for our VP of Technical Services, Maurice Mostert. My team’s role is to create protocols to ensure the costs are well managed and stay within budget.
With multiple assets, multiple drill programs and ongoing technical work, West Red Lake Gold is moving quickly.
The entire WRLG team is focused on putting the Madsen Mine back in production. As CFO, it’s my job to make sure we operate with maximum financial efficiency.
Next, in Part 7 of our messages to shareholders, you will hear from Tom Meredith, Executive Chairman and Director of WRLG.
Harpreet Dhaliwal
Chief Financial Officer (CFO) of WRLG
As Executive Chairman of West Red Lake Gold (WRLG), it is my role to lead the board with a focus on strategy, company business and corporate governance, while ensuring that the board functions as an effective advisory resource for the CEO, Shane Williams.
In the early 1990’s I served as the V.P of Operations for Northfield Metals, initiating production at the Cheminis Gold Mine in Ontario. From 1995 to 2011, I was President & CEO Lexam VG Gold, leading the development of four gold projects in Timmins, Ontario.
Exactly how a board and management work together is not widely understood. Let me try to explain.
Our CEO, Shane Williams, sets the route and flies the plane. The board functions like a navigation system. It is our responsibility to know our current coordinates and what lies ahead. Based on the conditions, we support and advise Shane as he pilots the aircraft
Institutional Investors pay close attention to the strength of the board. They view it as a proxy for the geological, engineering and financial sophistication of the company it serves. WRLG has numerous institutional shareholders including Sprott Lending Resource, VanEck Gold Fund and Accilent Capital. Part of our role is to interact with these institutions. Although I talk to Shane Williams regularly, the board operates as a separate entity.
Our board members are experienced, successful mining professionals. Director Tony Makuch is the former CEO of Kirkland Lake Gold when annual gold production increased from 315,000 ounces to 1,400,000 ounces. Director Duncan Middlemiss is the former President & CEO of Wesdome Gold Mines and Chairman of the Ontario Mining Association. Hugh Agro, John Heslop and Susan Neale also have extensive track records in the resource sector.
West Red Lake Gold is a special project with a lot of “blue sky”. When people talk about the blue sky of resource companies, they usually mean exploration potential. We certainly have that at WRLG. But a big part of our blue sky is bringing the Madsen Mine back into production.
At one point, our predecessor Pure Gold had a valuation of over a billion dollars. We’re valued at about $170 million. Our objective is to get the Madsen Mine operating profitably.
I’ve lived through several commodity cycles. With exploding global debt and high geo-political tensions, the conditions in 2024 are positive for gold. A run to $2,500 or higher could happen quickly. If that does occur, it’s like a starting gun going off – investors race to get positioned in the junior gold space.
With gold ounces in the ground, a modern permitted mill, a world-class management team and board, I believe that West Red Lake Gold will become an important Canadian gold producer.
Next, in Part 7 of our messages to shareholders, you will hear from Tom Meredith, Executive Chairman and Director of WRLG.
Harpreet Dhaliwal
Chief Financial Officer (CFO) of WRLG
Our Madsen project is a unique acquisition. We secured a high-grade asset in Ontario, Canada, an excellent jurisdiction for gold mining. The Madsen mine has tremendous room for growth. Replacing its modern infrastructure would cost upwards of $700 million and take years. Our market cap today is under $170 million.
Leadership is crucial. Shane Williams, our CEO, shines in the mining world. He’s great at forming strong teams and cultures. Shane’s skills and energy are perfect for WRLG.
In the commodities market, timing is critical. I’m betting current macro trends will boost the value of gold. Typically, gold prices are linked to U.S. dollars. However, excessive printing of dollars is diminishing their worth alongside the weaponization of the western financial system.
A global monetary system reset appears to be in progress, with a growing list of nations exploring options beyond the U.S. dollar, indicating a shift towards dedollarization.
The U.S. is grappling with a $34 trillion federal debt. Projections suggest this could soar to $100 trillion in three decades, a daunting figure. Imagine that debt with 5% interest.</p>
Central banks set a record in 2022 by purchasing more gold than ever, a significant portion of which headed to Asia. China and India alone accounted for half of these purchases, preparing for potential shifts away from the dollar, which could raise gold prices.
There’s a noticeable disparity between the value of gold and gold mining stocks. The current investor mood is dismal, but having observed these patterns since 1978, I recognize a buyer’s market when I see one.
I believe in insider ownership. Investing personally means caring more. Writing a check makes you watch your investment closely.
I’ve had the privilege of being part of the development and growth of several significant gold producers. Goldcorp (Wheaton River) grew from US $17 million to a $21.8 billion market capitalization in a little over five years. Endeavour Mining grew from $180 million to $8 billion in under 7 years. It begins with one well executed mine acquisition, like we are proving with Madsen. It expands through smart deals and leadership.
Our vision for WRLG extends beyond Madsen. Our aim is to grow and create wealth for our shareholders, aiming not just to be acknowledged as a recognized gold company in Canada, but to eventually earn a reputation as a respected and established operator throughout the entire mining industry.
Thank you for your continued support.
Frank Giustra
Co-Founder, Major Shareholder, Strategic Advisor