Putting Canada’s next gold mine into production in 2025
West Red Lake Gold will restart the Madsen Gold Mine in 2025. Madsen is built and permitted and sits atop 1.7 million indicated ounces of gold in rock averaging 7.4 g/t gold. That’s the kind of strong gold grade that made Red Lake the high-grade gold capital of Canada. West Red Lake Gold’s team saw a gold bull market coming and bought Madsen (which had stumbled under a prior operator) in early 2023 because they saw a clear opportunity to use their deep mining expertise and access to capital to unlock this opportunity for their investors.
Companies putting new mines into production are creating notable new value and in turn earn notably higher valuations, giving investors strong returns. If this aligns with a strong gold bull market, the potential for returns rises significantly. Gold bull markets are infrequent but there is good reason to believe we are in the early days of a gold bull market right now. And West Red Lake Gold’s Madsen Mine is a rare new gold mine starting production in 2025 as this bull market gets underway.
The transition from developer to producer often creates a great investment opportunity, and sensibly so – companies that go from only spending money to making money deserve a higher valuation. West Red Lake Gold plans to make this transition in 2025.
There are very few new gold mines starting up in 2025. West Red Lake Gold pushed hard for two years after acquiring Madsen specifically to be able to deliver a rare new gold mine as gold kicked off a new bull market.
West Red Lake Gold Mines (TSXV: WRLG) is nearing the end of an ambitious yet measured journey to breathe new life into a past-producing gold mine in Ontario, Canada. The company acquired the Madsen Mine in 2023 with a vision to set up a compelling opportunity for investors seeking the significant valuation re-rating that often accompanies new gold production. With gold hitting records levels just as the mine is about to start operating, the vision is coming to life. It’s all been possible because of a methodical approach to bringing a historic, high-grade gold mine back online.
West Red Lake is centered in the historic Red Lake gold mining district of Ontario Canada. The district has produced over 30 million ounces of gold since the first gold rush in the 1920’s and is an important contributor to Canada’s ranking as the fifth largest gold producer globally. And the region isn’t done yet. Exploration spending is on the rise and companies like West Red Lake are close to turning on significant sources of new, high-grade production.
The eyes of the gold industry have been firmly on West Red Lake ever since the company scooped up the past producing Madsen Mine in 2023, for only $6.5 million in cash, after the previous operator spent over $350 million on permitting, 200 km of drilling, mine engineering, a brand new mill, and a new mine portal and series of underground tunnels. With the mine restart planned for mid-2025, West Red Lake is close to proving the purchase was one of the smartest buys of a distressed gold asset this decade.
Unlike the previous operator of Madsen, the West Red Lake team is taking no chances with the nugget-y but rewarding geology found in the Red Lake district. 90,000 metres of definition drilling has already been completed since October 2023, with more to come. The team is tightening drill spacing to 7 metres from 20 metres under the previous operator, dramatically increasing the reliability of the geological model
West Red Lake Gold knows that moving rock efficiently is just as vital to the success of a mine as mining the right rocks. To that, the company has completed a multitude of infrastructure projects to underpin an efficient operation, from a new 1.4-km underground highway to an on-site amp, a tailing dam lift, and a new fleet of mobile equipment.
Historically, the best performing stocks in the mining sector are the ones who have already made a construction decision and are approaching the first gold pour. West Red Lake is firmly in this category, just months from first gold.
West Red Lake still trades like an unfinanced junior developer at roughly 0.35x net asset value (NAV), when in reality the company is fully funded and on track for an imminent production restart. Even ignoring any exploration success, there could be notable stock upside potential from an NAV re-rating alone. West Red Lake offers investors a truly scarce mix of elevated upside with less of the elevated operational risk that usually comes with it.
No Data Found
No Data Found
CAUTIONARY STATEMENT AND FORWARD-LOOKING INFORMATION
The decision to continue with the advancement of the Madsen Mine restart and the Company’s operations and plans with respect thereto, as described herein (the “Madsen Mine Restart”), are based on economic models prepared by the Company in conjunction with management’s knowledge of the property and the existing estimate of indicated and inferred mineral resources on the property set out in the report entitled, “Independent NI 43-101 Technical Report and Updated Mineral Resource Estimate for the PureGold Mine, Canada”, with an effective date of July 31, 2022, as amended on April 24, 2024, a copy of which is available on SEDAR+ at www.sedarplus.ca. The Madsen Mine Restart is not based on a preliminary economic assessment, a pre-feasibility study or a feasibility study of mineral reserves demonstrating economic and technical viability. Accordingly, there is increased uncertainty and economic and technical risks of failure associated with the Madsen Mine Restart, in particular: the risk that mineral grades will be lower than expected; the risk that additional ongoing mining operations are more difficult or more expensive than expected; and the risk that production and economic variables may vary considerably, due to the absence of a detailed economic and technical analysis undertaken in accordance with National Instrument 43-101 – Standards of Disclosure for Mineral Projects.
Certain statements contained in this news release may constitute “forward-looking information” within the meaning of applicable securities laws. Forward-looking information generally can be identified by words such as “anticipate”, “expect”, “estimate”, “forecast”, “planned”, and similar expressions suggesting future outcomes or events. Forward-looking information is based on current expectations of management; however, it is subject to known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from the forward-looking information in this news release and include without limitation, statements relating to plans for the potential restart of mining operations at the Madsen Mine, the potential of the Madsen Mine; any untapped growth potential in the Madsen deposit or Rowan deposit; and the Company’s future objectives and plans. Readers are cautioned not to place undue reliance on forward-looking information.
Forward-looking information involve numerous risks and uncertainties and actual results might differ materially from results suggested in any forward-looking information. These risks and uncertainties include, among other things, market volatility; the state of the financial markets for the Company’s securities; fluctuations in commodity prices; timing and results of the cleanup and recovery at the Madsen Mine; and changes in the Company’s business plans. Forward-looking information is based on a number of key expectations and assumptions, including without limitation, that the Company will continue with its stated business objectives and its ability to raise additional capital to proceed. Although management of the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such forward-looking information. Accordingly, readers should not place undue reliance on forward-looking information. Readers are cautioned that reliance on such information may not be appropriate for other purposes. Additional information about risks and uncertainties is contained in the Company’s management’s discussion and analysis for the year ended November 30, 2023, and the Company’s annual information form for the year ended November 30, 2023, copies of which are available on SEDAR+ at www.sedarplus.ca.
The forward-looking information contained herein is expressly qualified in its entirety by this cautionary statement. Forward-looking information reflects management’s current beliefs and is based on information currently available to the Company. The forward-looking information is made as of the date of this news release and the Company assumes no obligation to update or revise such information to reflect new events or circumstances, except as may be required by applicable law.
For more information on the Company, investors should review the Company’s continuous disclosure filings that are available on SEDAR+ at www.sedarplus.ca.
