Gunvor Refinancing of Up to US$95 Million Would Open With a 9-Month Principal Holiday

• West Red Lake Gold has signed a binding term sheet with Gunvor USA LLC for a credit facility of up to US$95 million.
• The facility is intended to refinance the company's secured debt with Nebari and add working capital for the Madsen Mine.
• Tranche 1 of up to US$65 million comes with a principal repayment holiday of 9 months.
• Gunvor would take first-lien security over the Madsen and Rowan assets and buy all gold doré, or unrefined gold bars, produced from the operation.
• Madsen produced 7,859 ounces (oz) in the third quarter of 2026, and 2026 guidance is now 27,000 to 32,000 oz.

West Red Lake Gold Mines (TSXV: WRLG | OTCQX: WRLGF) has executed a binding term sheet with Gunvor USA LLC, the relevant subsidiary of Centalion Group (CY) Ltd, for a proposed credit facility of up to US$95 million. Funds advanced are intended to refinance the company's existing secured debt facility with Nebari Natural Resources Credit Fund II LP. They would also add working capital for ongoing development at the Madsen Mine in Ontario's Red Lake district and potential funding for future development at the Rowan Project. The facility has not yet closed.

Facility Terms & Funding Conditions 

The facility would be lent to 2 wholly owned subsidiaries, West Red Lake Gold Mines (Ontario) Ltd. and Red Lake Madsen Mine Ltd., in 2 tranches. Tranche 1 is up to US$65 million. Tranche 2 is up to US$30 million and is subject to further conditions and approvals.

The term would run 5 years from the initial drawdown. Tranche 1 would carry a principal repayment holiday of 9 months from its first disbursement, after which monthly principal amortization would begin under an agreed schedule. Interest would be set at the one-month Secured Overnight Financing Rate plus a margin of 5.50%, subject to final diligence and the security package. West Red Lake Gold may repay all or part of the balance early without penalty, on at least 5 business days' written notice and payment of outstanding fees and costs. 

The company would issue a parent guarantee, and the borrowers would grant Gunvor first-lien, priority-ranking senior security on the Madsen Mine and Rowan assets. Under a commercial agreement, Gunvor would purchase 100% of the gold doré, the unrefined gold bars poured at a mine site, produced from the operation. Funding depends on satisfactory due diligence, onboarding, internal authorizations, definitive financing and commercial agreements, delivery of security, and required approvals.

Madsen, Rowan & the Hub-and-Spoke Plan 

The facility's security and its second tranche both extend to Rowan, a key component of a district-wide hub-and-spoke strategy centered on the operating Madsen Mine and mill. West Red Lake Gold controls a 47-square-kilometer land package in a district that has historically produced over 20 million ounces of gold. The Rowan Property includes 3 past-producing mines: Rowan, Mount Jamie, and Red Summit.

Rowan lies 80 kilometers by road from the Madsen Mill, and its permitting process has started. A preliminary economic assessment outlined 35,230 ounces (oz) of gold per year for 5 years, with no mill or tailings facility required at Rowan.

Vice President, Corporate Communications of West Red Lake Gold, Jaclyn Ruptash, ties Rowan's next step to a study that combines it with Madsen:

"We're in the process of also finalizing an integrated pre-feasibility study that combines the Madsen and Rowan deposits and shows that scale to approach that 100,000 oz of year profile of gold annually." 

The integrated pre-feasibility study (PFS), which will present Madsen and Rowan within a single production plan, is expected imminently. Management expects it to be a few more years before output exceeds 100,000 oz a year.

Madsen Costs & Development Spending 

Madsen enters the refinancing partway through its ramp-up. Production rose from 5,667 oz in the first quarter of 2026 to 8,576 oz in the second, and all-in sustaining cost (AISC) fell 30% to US$3,284 per ounce from US$4,678. Madsen generated positive free cash flow of C$9,664,000 in the second quarter after a C$6,140,000 shortfall in the first.

Output eased to 7,859 oz in the third quarter for 22,102 oz year to date, and September's 3,320 oz was the strongest month since the restart. Selective remnant mining, which extracts ore left behind in previously mined areas, and labor availability in specialized underground roles affected mining rates during the quarter. The mill averaged approximately 867 tonnes per day (tpd), and a secondary crusher commissioned in the quarter supports processing of up to 1,000 tpd. In light of industry-wide labor challenges and the ongoing ramp-up, West Red Lake Gold revised 2026 guidance to 27,000 to 32,000 oz from 35,000 to 45,000 oz.

Ruptash puts a share on the part of Madsen's cost base that does not move with output: 

"Canadian mines are high fixed costs in general. So, 70% of our costs are fixed." 

Development continues toward unmined ground, and the 904 Complex and Fork, a deposit 250 meters from existing Madsen infrastructure, are scheduled to enter the production profile in 2027.

Refinancing During the Ramp-Up

The facility is intended to replace Nebari on more favorable terms, including a lower cost of capital, extended maturity, and improved repayment flexibility. 

For Ruptash, the satellite deposits ease the development burden that now sits on Madsen alone:

"It's going to be execution, show the scale, and continue executing on a gold production basis, and bringing in these satellite deposits to de-risk and alleviate pressure from having just doing development work at Madsen. So, it's just really creating that optionality and flexibility for the operation."

Rowan, targeting a production profile from the first half of 2029, is the satellite the potential second tranche would help develop.

Reserves & Resources Behind the Security 

Both assets proposed as security have published estimates. Madsen holds Probable reserves of 478,000 oz at 8.16 grams per tonne (g/t) gold, effective January 2025 and estimated at a gold price of US$1,680 per ounce. Rowan's June 2026 mineral resource estimate totals 334,825 oz at 13.03 g/t in the Indicated category and 179,013 oz at 15.31 g/t in the Inferred category. 

FAQs (AI-Generated)