In an interview with Crux Investor, Shane Williams, CEO of West Red Lake Gold Mines (WRLG.v or WRLGF for US investors), shared insights into the company's near-term Madsen gold project in Ontario’s Red Lake district.
The project hosts 1.7M ounces of gold at 7.4 g/t in indicated resources and an additional 300,000 inferred ounces, supported by existing infrastructure such as a 1,200m shaft and a processing plant.
Production Strategy:
Initial production aims for 60,000–70,000 ounces annually at a rate of 800 tons per day, leveraging existing infrastructure while maintaining a measured approach to scaling up.
Geological Complexity:
Red Lake’s complex ore systems necessitate detailed drilling to identify high-grade, narrow veins, ensuring efficient mining and minimizing operational risks.
Updates Since the Interview:
New Ore Shoot Discovery: On November 21, 2024, WRLG reported the discovery of a new ore shoot at the Upper 8 Target. Drill results included:
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44.17 g/t Au over 1.3m
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20.63 g/t Au over 0.5m
The Upper 8 shoot shares geological similarities with the deeper, high-grade 8-Zone, which contains an indicated resource of 87,700 ounces at 18 g/t gold. The new zone is 30m wide and 130m along plunge, with visible gold and potential for further discoveries.
Pre-Feasibility Study (PFS): The PFS fo Madsen, in collaboration with SRK Consulting, is now expected in early 2025. It will include:
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Detailed mine plans covering the first 18–24 months.
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Operating cost insights based on underground mining experience.
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Optimized infrastructure sequencing
Workforce and Infrastructure: WRLG has enhanced worker retention by improving camp facilities in partnership with Horizon North. The new accommodations feature private restrooms and comfortable living conditions, addressing challenges posed by a tight labor market.
Exploration and Resource Growth: WRLG’s conceptual modeling suggests potential for additional high-grade zones between the Upper 8 and deeper 8-Zone, with further drilling planned in 2025.
Investment Thesis:
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High-Grade Resource: 2M ounces at 7.4 g/t in a tier-one jurisdiction.
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Restart-Ready Infrastructure: Significant cost savings due to existing facilities.
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Exploration Upside: New discoveries like the Upper 8 highlight resource expansion potential.
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Favorable Market Conditions: Robust gold prices around $2,500/oz support project economics.
WRLG’s cautious, methodical approach and recent exploration success position it well for near-term production and potential growth, making it a compelling investment in the high-grade gold sector.
Full interview here:
Posted on behalf of West Red Lake Gold Mines Ltd.