West Red Lake Gold Mines (TSXV:WRLG) - Resurrecting a High-Grade Gold Asset

Company Interviews

Interview with Gwen Preston, VP of Investor Relations at West Red Lake Gold Mines

Our previous interview: https://www.cruxinvestor.com/posts/west-red-lake-gold-mines-tsxvwrlg-turnaround-potential-for-undervalued-red-lake-gold-asset-4996

Recording date: 4th June 2024

West Red Lake Gold Mines (TSXV:WRLG) offers investors a unique opportunity to participate in the revival of the high-grade Madsen gold project in the renowned Red Lake district of Ontario, Canada.

The company acquired the project out of bankruptcy in 2023 after the previous owner, Pure Gold, had invested approximately $350 million. Despite the project's robust fundamentals, Pure Gold encountered significant challenges due to mismanagement, lack of operational expertise, insufficient financing, and inadequate understanding of the complex, high-grade nature of the deposit.

WRLG's management team has spent the past year meticulously analyzing the operation to identify the root causes of the previous failures and develop a comprehensive plan to address them. The company has $50 million to implement the necessary changes and advance the project towards production.

A key issue identified was the lack of detailed knowledge about the distribution of the high-grade gold mineralization, as the previous mine plan was based on widely spaced drilling. To rectify this, WRLG is undertaking an extensive infill drilling program to better define the resource on a stope-by-stope basis, ensuring a more accurate understanding of the gold distribution. The company is also optimizing its mining method to minimize dilution and improve the grade of the ore delivered to the mill.

In addition to the technical aspects, WRLG is focusing on critical infrastructure enhancements, such as connecting the east and west mine portals to streamline operations and improve ventilation. The company is also investing in essential equipment, like a primary crusher, which will be purchased outright rather than leased at an exorbitant cost, as was the case under previous ownership.

WRLGM has set a clear timeline for advancing the Madsen project, with a pre-feasibility study expected in early 2025 and production targeted for the second half of 2025. In the interim, the company will be actively implementing its improvement plans, including infill drilling, test mining, and infrastructure upgrades.

The Madsen project benefits from a favorable location in the prolific Red Lake district, known for its high-grade gold deposits, and has substantial existing infrastructure in place. With a proven management team, a strong financial position, and a well-defined plan to address past issues, WRLGM is well-positioned to unlock the potential of this high-grade gold asset.

For investors seeking exposure to the gold sector, particularly in the current macro environment characterized by economic uncertainty and inflationary pressures, WRLG presents a compelling opportunity. The company's focus on operational improvements, combined with the inherent value of the Madsen project, offers the potential for significant value creation as the project advances towards production.

View West Red Lake Gold Mines' company profile: https://cruxinvestor.com/west-red-lake-gold-mines

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