"If the Fed follows through on its plan to lower rates thrice this year, it will cause the dollar to weaken and commodity prices to strengthen. When positive real interest rates, which favor bond investors, turn negative, it will especially affect gold and silver prices to the upside."
On expectations of interest rate cuts later this year, gold hit a record high last Thursday, of $2,200 an ounce, with the metals rally underpinned by increased geopolitical risks and central bank buying.
The combination of inflation trending down, the US dollar peaking, central bank buying and unsustainable debt has added to the precious metals rally, however, the world is facing challenges with its gold supply as the mining industry is unable to meet annual demand without recycling.
With this, the need for more gold mines is significant, creating a strong market opportunity for companies like West Red Lake Gold Mines (WRLG.v WRLGF).
West Red Lake Gold Mines & the Madsen Gold Mine
With the recent closing of a US$22,340,000 gold linked notes offering, WRLG is strongly funded to execute on its Madsen Gold Mine restart plan.
Focused on maximizing exploration dollars and building high-grade and high confidence ounces to de-risking its deposit, WRLG's Madsen Gold Mine Mine is located in the Red Lake Gold District of Ontario and is a debt free and fully permitted Mine with a $350 million 800+ tonne per day mill.
Deemed the "deal of the decade" by Jay Martin, WRLG's acquired the Madsen Gold Mine for only US$6 despite its previous valuation of over a billion dollars, about 8x the current market cap of WRLG.
Hosting a NI 43-101 Indicated resource of 1.65M oz of gold grading 7.4 g/t Gold and an inferred resource of 0.37Moz of gold grading 6.3g/t, Madsen additionally has a $273 million tax write-off, thus the first $273 million in profits will be tax free.
WRLG's current focus at the deposit is the South Austin Zone which currently contains an indicated mineral resource of 474,600 oz grading 8.7 g/t Au and an inferred resource of 31,800 oz grading 8.7 g/t Au.
Focused on understanding the underlying geology of the asset ahead of restarting the mill, WRLG is conducting additional drilling to de-risk the deposit and hit recently hit high-grade intercepts with visible gold showing including 25.12g/t Au over 5.5m, 39.46 g/t Au over 2m and 18.60 g/t Au over 4m at the zone.
On track for significant expansion, WRLG's co-founder, major shareholder and strategic investor, Frank Giustra, is a major leader for the cashed-up, high-grade and near-term gold producer.
Posted on Behalf of West Red Lake Gold Mines Ltd.