TSXV:WRLG - Post Discussion
Post by
MarketMakerss on Feb 06, 2024 5:50pm
Giustra on Investing in the Domestic Resource Sector
Bolstering Canada's resource sector is vital for the country's growth amid growing geopolitical concerns impacting supply-based on its richly endowed land and position as a global leader in mining expertise.
Located amid gold's dynamic and growing landscape, West Red Lake Gold Mines (WRLG.v WRLGF) has emerged as a notable gold junior focused on advancing its two key projects in Ontario's Red Lake District, the Madsen and Rowan Mines.
Boasting a combined gold resource of 6.9M tonnes indicated at a grade of 7.4 g/t and 2.8M tonnes inferred at 9.2 g/t, both assets are historic underground operating mines with substantial discovery potential remaining, however, Madsen Gold Mine stands out with the most potential.
Despite the asset being previously valued at one billion dollars, WRLG acquired Madsen for pennies on the dollar with all the infrastructure in place as well as tailings and permitting.
The Mine is debt free, fully permitted, and has a brand-new mill which WRLG is on track to boost the capacity of the existing mill up to 1,5000 tonnes per day, a 50% increase.
During its historical operation, over $350M was spent on the project, however, as discussed by WRLG CEO Shane Williams at the Metals Investor Forum in January 2024, the mine was never set up for success based on shortcomings in the management team: https://youtu.be/nAfvI-D6Mto?si=9sjvx7uL2afmwbkF Given this, WRLG as able to acquire Madsen for $6M, providing a significant opportunity as it lacks the previous issues that contributed to Madsen's failure.
WRLG's approach over the next year is to ensure the mine will meet its significant potential by focusing on the geology and ore body.
Taking a step back to understand the geology and drill the project puts WRLG on track to delineate a massive resource as, detailed by WRLG's VP of Technical Services:
"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 realized the vein was missing, they’d continue for another two or three cuts with no gold, which ultimately made the operation sub-economic." (Source: https://finance.yahoo.com/news/v-p-technical-services-maurice-184633744.html)
The next steps at Madsen are to get in underground to develop and drill the resource, a step in which the previous operator did not spend enough time or effort.
In focusing on de-risking the ore body with a 50,000m drilling program, WRLG's end goal is to restart the mine in 2025 with a reserve of a year and a half of minable inventory.
With a strong cash position and notably mining names, including Frank Giustra, backing the project, WRLG is on track to get back into production in the near term amid improving macro drivers for gold.
Posted on Behalf of West Red Lake Gold Mines Ltd.
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