With Gwen Preston, VP of Investor Relations of West Red Lake Gold Mines Ltd.

Recording date: 26 September 2024

West Red Lake Gold Mines (TSXV:WRLG) is positioning itself as an attractive investment opportunity in the current gold market, with gold prices above $2,600 and potentially rising. The company's focus is on putting the Madsen mine in Red Lake, Ontario, into production, aiming to capitalize on what's known as the "Golden Runway" - the transition from spending money to producing gold. This strategy offers a balance of upside potential and managed risk, especially in a high gold price environment.

The Madsen mine has a rich history, having produced 2 million ounces of high-grade gold (9 grams per ton) over several decades before closing in the 1970s. After two restart attempts, including a recent one that invested $350 million in infrastructure, West Red Lake acquired the asset for just $6.5 million in cash, plus shares and a 1% NSR, in what the company's CEO calls potentially "the deal of the decade." The acquisition included a permitted mine with 1.7 million ounces of indicated resource grading 7.5 grams per ton gold.

To address the challenges faced by the previous operator, West Red Lake is implementing several key strategies. Primarily, they're conducting extensive definition drilling, tightening drill spacing from 20 meters to 6 meters throughout the minable inventory. This approach aims to better define the high-grade gold lenses within the ore body, allowing for more precise and efficient mining. The company is also engaged in a test mining program to optimize mining methods for various underground environments and potentially unlock additional resources near old stopes.

Ongoing development work includes underground tunnel construction, surface infrastructure improvements, and a significant capital project to connect two previously separate parts of the mine. These efforts are designed to create a more efficient operation and manage costs effectively when production restarts, targeted for next year.

The investment thesis for West Red Lake Gold Mines is based on the potential for stock price appreciation as the company transitions from explorer to producer. Typically, mining companies see an increase in their net asset value multiples and the market value assigned to their in-ground ounces as they move into production. This "re-rating" process is the core of the opportunity presented to investors.

Led by experienced mine engineer Shane Williams as President and CEO, and backed by Frank Giustra as the largest shareholder, West Red Lake aims to use the Madsen mine as a foundation to grow into a mid-tier Canadian producer. The long-term vision involves demonstrating success at Madsen and then acquiring additional assets to repeat the process, offering investors the chance to benefit from multiple re-rating cycles.

With a clear strategy to address past operational issues, significant infrastructure already in place, and a experienced leadership team, West Red Lake Gold Mines is positioning itself to capitalize on the current gold market environment and create value for its shareholders through the successful restart and operation of the Madsen mine.

—

Learn more: https://cruxinvestor.com/companies/we...

Sign up for Crux Investor: https://cruxinvestor.com