West Red Lake Gold: A Rare New Producer in a Bull Market Rally

• West Red Lake Gold has restarted the historic Madsen Mine after a two-year development program, producing 12,800 oz in Q1-Q3 2025 with strong model-to-actual reconciliation and 95% gold recovery.
• Gold's 57% year-to-date gain creates an optimal backdrop for new producers, with WRLG positioned among companies that have historically outperformed by 154% versus 45% for established producers during bull markets.
• The company is advancing toward commercial production with key infrastructure projects (shaft skipping, underground waste storage, ventilation upgrades) designed to support 65,000 oz/yr production.
• WRLG targets 100,000+ oz/yr by 2029 through Madsen expansion, advancing the high-grade Rowan deposit (35,200 oz/yr potential), and potential portfolio additions.
• The company raised CAD$41M in October 2025 to accelerate development, with CAD$24M cash, manageable debt structure (US$35M facility), and institutional ownership at approximately 30%.

Why Investors Should Consider West Red Lake Gold

West Red Lake Gold Mines Ltd. (TSX-V: WRLG, OTCQB: WRLGF) acquired the Madsen Mine in June 2023 for a distressed valuation when gold traded at US$1,970/oz. The company executed a disciplined two-year plan to restart operations, investing in critical infrastructure including 1.4 km of underground access (the Connection Drift), a 114-person camp, tailings dam expansion, and 19 major pieces of underground equipment.

The Madsen Mine has produced over 2 million ounces historically at an average grade of 10 g/t. Pure Gold Mining attempted a restart from 2014-2022 but failed due to operational challenges. WRLG differentiated its approach through intensive definition drilling (150,000 metres completed to date) tightening drill spacing from approximately 20 metres to 7 metres. This enabled high-resolution geological modeling critical for mining the structurally complex, high-grade but discontinuous vein system.

Located in Ontario's Red Lake district, one of Canada's premier gold camps, Madsen benefits from established infrastructure, skilled labour availability, and supportive regulatory frameworks. The district has produced over 30 million ounces of gold and hosts Evolution Mining's Red Lake operations.

Key Development: Validated Production & Strong Reconciliation

The company's bulk sample program provided critical validation before full production restart. From six stopes across three resource areas, WRLG achieved 96.1% reconciliation on contained ounces (predicted 2,771 oz vs. actual 2,664 oz) with 100.7% grade reconciliation and 95.5% tonnage reconciliation. The Madsen Mill demonstrated 95% gold recovery, confirming metallurgical assumptions.

This de-risking enabled confident ramp-up planning. Through Q1-Q3 2025, the mine produced 12,800 oz with daily ore production increasing and reconciliation remaining strong. July through September 2025 longhole stope grades averaged 4.5-5.0 g/t against model predictions of 4.5-5.0 g/t, demonstrating the effectiveness of the definition drilling program.

Will Robinson, VP Exploration and a Professional Geoscientist, noted that:

"The vein system has been altered, deformed, and reactivated repeatedly (gold is high grade and pervasive but not always continuous)."

The company's systematic approach addresses this geological complexity through detailed modeling and flexible mining methods that adapt to observed ground conditions.

Strategic Significance: Timing the Gold Bull Market

Gold's performance in 2025 (up 57% year-to-date to an all-time high of US$4,381.21/oz on October 21) creates an exceptional environment for new producers. According to Raymond James research cited in WRLG's presentation, new and growing gold miners have outperformed by 154% on average over 12 months versus 45% for GDX (established producers) and 53% for GDXJ (junior producers).

Geopolitical tensions driving safe-haven demand include U.S. sanctions on Russian oil companies and potential export controls between the U.S. and China over rare-earth elements.

For WRLG, higher gold prices have multiple benefits. The Pre-Feasibility Study used US$1,680/oz, generating a CAD$496M NPV and demonstrating robust economics. At current prices exceeding US$4,100/oz, the project's leverage to gold price increases substantially. Higher prices also enable mining lower-grade halos around high-grade cores, potentially increasing reserve tonnes while maintaining or improving unit economics.

Current Production Activities & Infrastructure Progress

The mine is advancing several projects critical to achieving operational stability and commercial production declaration. The shaft skipping project will move 350 tonnes per day (tpd) up the refurbished shaft starting in November 2025, at approximately 10% of the cost of trucking. Combined with the cemented rock fill (CRF) plant consuming 400 tpd underground, this removes 750 tpd from truck haulage requirements, significantly reducing operating costs and improving efficiency.

Underground waste rock storage began in mid-September 2025, with up to 2,000 tpd being placed directly into historic voids rather than hauled to surface. This initiative frees trucks for ore movement and reduces wear on underground infrastructure. The company is completing detailed mine plans for 2026 to enable confident production guidance once operational stability is achieved.

Rolling stock procurement is nearly complete, with final haul trucks and scoops arriving through fall 2025. The imos live data system will provide real-time operational monitoring, supporting continuous improvement initiatives. Planned ventilation and power upgrades will enable deeper mining and support higher throughput rates as the operation scales.

Madsen Growth Potential: Larger Stopes & High-Grade Discoveries

Definition drilling continues to identify opportunities for larger, more economic stopes than originally modeled. The Austin 1099/1100 complex realized a 204% increase in tonnage and 222% increase in contained ounces after definition drilling and final design. The South Austin 4447 complex showed even stronger results (212% tonnage increase and 320% ounce increase).

These expansions result from identifying continuous high-grade zones that enable longhole stoping (at approximately half the cost of cut-and-fill methods) rather than smaller, isolated zones. Shane Williams, President and CEO, stated that the company's goal is to "Mine The Right Rocks" through accurate geological modeling and appropriate mining method selection.

High-grade intercepts from ongoing definition drilling include 10.6m @ 114.26 g/t Au (including 0.7m @ 1,609.26 g/t Au) in South Austin, and 18.7m @ 48.97 g/t Au (including 2m @ 428.83 g/t Au) in the same area. These results indicate that significant high-grade potential remains to be defined and incorporated into mine plans.

The South Austin high-grade panel represents 14% of planned ounces from just 6% of overall stopes, with first production scheduled for Q4 2025. This development-intensive zone required significant access preparation in 2025 to support 2026 mining, demonstrating the company's forward-planning approach to maintaining continuous production.

Rowan Deposit: Second Production Center

Located 80 km by road from Madsen, the Rowan deposit hosts 196,747 oz indicated @ 12.78 g/t and 118,155 oz inferred @ 8.73 g/t. A Preliminary Economic Assessment outlined a toll-milling scenario generating 35,200 oz/yr for five years with CAD$70M capital expenditure (no mill or tailings facilities required), 42% IRR, and CAD$125M NPV post-tax.

WRLG is advancing Rowan through a 2,000-3,000 metre drill program focused on infilling vein 006b (the third-largest resource contributor with historic unsampled intervals), testing depth extensions where the highest-grade intercept (8.3m @ 70.80 g/t Au) sits near the current 400m depth limit, and upgrading 37% of inferred resources to indicated classification.

Engineering work will support a joint Madsen-Rowan Pre-Feasibility Study targeted for 2026. The company aims to have Rowan in construction by 2028, though recent Canadian legislation (Bill C5) aimed at streamlining permitting processes may enable acceleration. Combined Madsen-Rowan production could exceed 100,000 oz/yr, positioning WRLG among mid-tier producers.

Near-Mine Exploration: Fork, Upper 8, & Discovery Targets

The Fork deposit contains a high-grade core within a 5.2 g/t envelope. Preliminary estimates outline 130-150kt @ 8-9 g/t Au for 33-43 koz, located within 250 metres of existing mine workings and partially near surface. A 3,000-metre surface drill program will test resource upgrade potential, providing production optionality without significant capital requirements.

The Upper 8 discovery represents a shallower geological analog to the high-grade 8 Zone, approximately 750 metres up-plunge in the same ultramafic unit. Initial drilling returned 15 of 17 holes with gold, including 1.3m @ 44.17 g/t Au and 0.5m @ 20.63 g/t Au. Multiple stacked lenses may exist between Upper 8 and the deeper 8 Zone.

The North Shore target shows Madsen-style alteration and veining in drilling, with till geochemistry indicating strong Madsen-signature elements (Au-W-As-Ag-Bi) approximately 200 metres west, coincident with the hanging wall of an ultramafic unit (the classic high-grade gold setting in Red Lake). This represents the top-priority regional exploration target for potential new resource discovery.

Financial Strength & Capital Structure

West Red Lake Gold's October 2025 financing raised CAD$41M, bringing cash to CAD$24M as of June 30, 2025. The company has accessed US$35M debt, CAD$129M equity, and a US$27M gold-backed note throughout the restart process. Management cited multiple rationales for the October financing: accelerating ventilation and power projects from mid-2026 to earlier completion, creating capital buffer during the variable ramp-up period, enabling debt reduction if cash flow permits, and advancing Rowan toward pre-feasibility on schedule for 2028 construction.

The capital structure includes 392.4M shares outstanding with approximately 30% held by gold-focused institutions (APAC, Accilent, Commodity Discovery, Extract, Libra, Parkwood Samara, Primevest, Ruffer, Silverspoon, Torck, Van Eck) and 10% by management, insiders, and advisors. Trading liquidity is strong. WRLG's 90-day average daily volume significantly exceeds a composite of similar-cap peers including Ascot Resources, Integra Resources, Montage Gold, and Skeena Resources.

Multiple warrant series exist with strike prices from CAD$0.68 to CAD$1.00 and expiration dates from May 2026 to February 2028, representing potential additional capital if exercised. The gold-backed note (trading as WRLG.NT.U in USD) provides alternative financing exposure for investors.

The Investment Thesis for West Red Lake Gold

• With 12,800 oz produced through Q3 2025 and strong reconciliation, WRLG has demonstrated ability to execute its technical approach.
• Current US$4,100+/oz gold provides 2.4x coverage versus PFS assumptions, significantly enhancing project economics and enabling reserve expansion.
• The combination of Madsen expansion, Rowan development, and potential acquisitions provides clear path to mid-tier producer status by 2029.
• WRLG offers exposure to Tier-1 Red Lake jurisdiction with established infrastructure while participating in the rare new producer category outperforming in gold bull markets.
• Declaration of commercial production will trigger rerating as visibility on consistent output and cash flow generation improves.
• Near-term volatility is expected during ramp-up, but 2026-2027 should demonstrate operational leverage as infrastructure projects complete and production scales.

West Red Lake Gold represents a rare opportunity to invest in a new gold producer successfully restarting a historic mine in one of Canada's premier gold districts. The company's disciplined approach (intensive definition drilling, bulk sample validation, infrastructure investment, and systematic risk mitigation) has positioned it to capture value in an exceptional gold price environment.

The production trajectory from current ramp-up (12,800 oz in first nine months) toward 65,000 oz/yr at Madsen, expansion to 100,000+ oz/yr with Rowan, and exploration upside through Fork and discovery targets provides multiple value drivers over the next 2-3 years. With strong institutional ownership, experienced management, and clear technical plans, WRLG offers investors exposure to the high-leverage new producer segment that has historically outperformed during gold bull markets.

The current market capitalization of approximately CAD$300M appears modest relative to the CAD$496M PFS NPV (calculated at US$1,680/oz gold), particularly given that current gold prices exceed US$4,100/oz and ongoing work is identifying larger, more economic stopes than originally modele

TL;DR

‍West Red Lake Gold has successfully restarted the Madsen Mine in Ontario's prolific Red Lake district, producing 12,800 oz through Q3 2025 while ramping toward commercial production. With gold at record highs, strong bulk sample reconciliation, and a clear path to 100,000+ oz/yr through Madsen expansion and the Rowan deposit, WRLG offers investors exposure to a rare new gold producer with significant growth potential in a Tier-1 jurisdiction.

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