Mining Company Advances Premier Gold Project's Restart

Source: Streetwise Reports 02/14/2025

West Red Lake Gold Mines Ltd. (WRLG:TSX.V; WRLGF:OTCQB) is giving an update on activities to restart its 100%-owned Madsen Mine project in the Red Lake Gold District of northwestern Ontario. Read to see why one analyst thinks its gold will “drive a premium valuation.”

West Red Lake Gold Mines Ltd. (WRLG:TSX.V; WRLGF:OTCQB) is giving an update on its activities to restart its 100%-owned Madsen Mine project in the Red Lake Gold District of northwestern Ontario, including an in-progress bulk sampling program, building a Connection Drift, a scheduled restart of its mill, and final construction work at the project’s camp.

“With test mining underway, bulk sample stockpiles building on surface, and the mill set to initiate campaign processing in the coming weeks, we have achieved many key operational milestones at the mine site,” President and Chief Executive Officer Shane Williams said. “The connection drift development and test mining efforts have been very successful to date, which is a testament to our mine crews’ ability to operate safely and efficiently. I’m proud to say that the ramps, sills, and stopes we are developing at Madsen are best in class.”

Williams said things were “increasingly busy” at the site with 185 employees and 50 contractors currently on the site.

“The team is excited to get the bulk sample complete, which is expected to demonstrate that our approach to mining at Madsen works, followed by rolling into production mining and processing with an aim to start selling gold into this record price environment,” he said in a release.

Cantor Fitzgerald Analyst Matthew O’Keefe wrote in a February 13 updated research note that “overall, the company is well positioned to restart operations by mid-2025″ and kept the firm’s Buy rating on the stock.

“We remain confident that the restart of the Madsen mine will be successful and that the high-grade nature of the mine, with its significant upside potential, should ultimately drive a premium valuation. We note that our CA$1.50/share price target remains conservative based on a long-term gold price estimate of US$2,200/oz,” O’Keefe wrote.

Area Known for ‘Exceptionally High-Grade’ Gold

Gold was first discovered at the Red Lake Camp in 1897, but it took 20 years for it to be explored fully because of the area’s remoteness. Since large-scale mining began there in 1938, more than 26 million ounces (Moz) Au have been produced from underground mines there.

“The area is known for exceptionally high-grade Au, with one famous sample, the Campbell Mine Whopper, containing 431 ounces in a football-sized rock,” Ian Burron wrote for Geology for Investors.

Nearly a century later, “the last few years have seen the tide once again turn in Red Lake’s favor.”

Demonstrating Co.’s Madsen Mine Approach

West Red Lake Gold Mines’ bulk sample program includes plans to mine at least 10,000 tonnes of material from six stopes.

According to the company, bulk sampling from several areas amplifies the benefits of test mining by testing drill density and modeling techniques for different zones of the deposit, allowing crews to deploy the range of mining methods that will be used at the mine, and helping to solidify mining procedures by validating historical data.

West Red Lake Gold Mines said 3,380 tonnes of bulk sample material are on surface from two stopes. The remaining stopes will be drilled, blasted, and mucked over the coming weeks.

Cantor Fitzgerald Analyst Matthew O’Keefe wrote in a February 13 updated research note that “overall, the company is well positioned to restart operations by mid-2025″ and kept the firm’s Buy rating on the stock.

“The first stopes mined have provided valuable insights into the effectiveness of the drill and blast designs, the geological modeling techniques, and the overall development processes required,” said Vice President of Technical Services Maurice Mostert. “Initial results are showing that our drill and blast techniques and design criteria are very effective at controlling fragmentation size and dilution.”

The company said it has engaged independent third-party engineering contractors Entech Inc. and Soutex Inc. to audit the mining and processing portions of the bulk sample process, respectively.

“The bulk sample program is our first opportunity to demonstrate that our Madsen Mine approach, based on intensive definition drilling, clear confidence and financial requirements for mine engineering, and appropriate mining methods, can deliver the expected tonnes and grades to the mill,” Williams said.

Restart of Mill is Close

West Red Lake Gold Mines said it is ready to restart the mill later this month after 28 months of maintained dry shutdown. The company said it has completed multiple pre-commissioning projects and tests.

“The facility is fully staffed and ready for this first phase of mill operations,” Vice President Operations Hayley Halsall-Whitney said.

The largest of the capital projects supporting the mine’s restart is the Connection Drift, which is now 80% complete and remains on track for completion by the end of March, the company said.

The 1.4-kilometer haulage way connects the West and East portals of the mine, and when finished, will enable the company to move all material on large haul trucks through the East Portal, which is situated close to the crusher and the mill.

West Red Lake Gold Mines said its pace of underground development has increased, with average daily meterage rising 23% each month. In January, underground development averaged above 20 meters, and the pace is still continuing to rise, the company said.

As for the mine’s camp, West Red Lake Gold Mines said it has received its last outstanding construction permit and is now doing final installation work on power, water, sewer, and propane connections.

The Company expects to start housing workers in the 114-person camp in the second half of March, pending receipt of an occupancy permit.

The Catalyst: Bullish Prices Could Still Run Higher

The yellow metal has been in an uptrend for 16 months, having rallied by 63% since October 2023, according to a Reuters report by Clyde Russell. It has accelerated since Trump was re-elected, with an increase of 16% since mid-November.

It rose Thursday as Trump unveiled plans to impose reciprocal tariffs on the countries taxing U.S. imports, Anmol Choubey wrote for Reuters. [OWNERSHIP_CHART-5614]

It hit a record high of US$2,942.70 on Tuesday, and experts believe it could still go higher.

“A rush to invest in gold sent the commodity’s price to US$2,790 in October 2024, a record at the time, but after falling back a little late last year, the early months of 2025 have seen the price of gold smash through those levels,” Senior Writer Dan McEvoy said in a piece on MoneyWeek February 10. “Some experts believe that the next major milestone, US$3,000, is possible.”

Bullion has already hit its seventh record high this year. According to Choubey’s report, Phillip Streible, chief market strategist at Blue Line Futures, said gold’s 45-degree rally since December might create a self-fulfilling prophecy of further price increases, potentially leading it to raise its forecast to around US$3,250 or US$3,500.

Ownership and Share Structure

Advisor Frank Giustra owns about 9% of West Red Lake Gold Mines as a strategic investor and insider, according to the company’s investor presentation. Strategic investors, including Sprott Resource Lending Corp., hold about 28%. institutions hold about 31%, management and consultants hold about 3%, and the remaining shares are held by retail investors.

The company’s market cap is CA$247.52 million. The 52-week range for the stock is CA$0.52 to CA$1.04.

Sign up for our FREE newsletter at: www.streetwisereports.com/get-news

Important Disclosures:

1. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of West Red Lake Gold Mines Ltd.
2. Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
3. This article does not constitute investment advice and is not a solicitation for any investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company.

For additional disclosures, please click here.

( Companies Mentioned: WRLG:TSX.V; WRLGF:OTCQB, )

Source: https://www.streetwisereports.com/article/2025/02/14/mining-company-advances-premier-gold-projects-restart.html