De-risked Restart Strategy in High-Grade Gold Ontario Project - Crux Investor Interview with West Red Lake Gold Mines
Today, West Red Lake Gold's (WRLG.v WRLGF) President and CEO, Shane Williams, joined Crux Investor to discuss the company's strategic advantage in focusing on de-risking and moving the Madsen Mine, a near-term production asset, back into production in 2025: https://www.youtube.com/watch?v=P1nGcWvx6KE
Industry Landscape and Market Sentiment
- There has been a rush of gold projects in recent years, but WRLG is positioned uniquely with fewer competitors.
- Growing investor interest in gold as prices approach $2,500 per ounce.
- Investors appreciate the methodical approach WRLG is taking by studying the project before rushing back into production.
Project Acquisition and Strategy
- The project was acquired at a favorable price.
- The mine was previously operated by Pure Gold who invested $350 million into the project prior to going bankrupt.
- Despite high gold prices, the company is committed to a cautious approach rather than rushing into production.
- Frank Giustra, the major shareholder, is noted for his strategic timing in previous successful ventures.
- The Madsen Mine has 1.7 million ounces at 7.4 grams per ton, extensive underground development, and well-designed infrastructure.
Project Development Phases
- Early stages involved drilling to understand the ore body and address challenges.
- 50,000 meters of 6-meter-spaced drilling have been completed to better define the resource.
- By the end of the year, 70,000 to 80,000 meters will have been drilled.
- The drilling is not just for resource estimation but also for mine design.
Geology and Mine Planning
- The ore body is complex, requiring detailed drilling to guide mine design.
- High-grade deposits require tighter spacing in drilling to ensure accurate mine shapes for economic extraction.
- West Red Lake is prioritizing sequential, step-by-step planning to ensure they fully understand the deposit before moving forward.
Test Mining and Pre-Feasibility Study
- A test mining program will be initiated to validate the resource models.
- Results from the test mining will confirm the accuracy of previous estimates.
- A pre-feasibility study (PFS) is underway to provide economic models and assess the project’s potential.
Financial Position and Economic Planning
- The company is not under financial pressure to rush into production due to favorable acquisition costs.
- WRLG is focused on ensuring profitability by carefully managing costs, mining shapes, and sequencing to maintain operational efficiency.
- Unlike the previous operator, Pure Gold, who aimed for rapid growth, West Red Lake plans to start small and scale up conservatively.
- The mill capacity will be capped at 800 tons per day, with future growth potential considered once initial production is stabilized.
Market Expectations and Long-Term Vision
- The company’s approach is conservative to build credibility and deliver steady, sustainable results.
- There is long-term potential in the ore body, with major companies having expressed interest in the past.
- The focus remains on delivering results in the near term, with plans for expansion down the line once initial milestones are achieved.
Strategically positioned as a near-term, high-grade gold producer, WRLG's careful and methodical approach aims to ensure a successful restart of the Madsen Mill and sustainable future growth.
Posted on Behalf of West Red Lake Gold Mines Ltd.