West Red Lake Gold Mines - Looming Production Restart Validated by Bulk Sample Results

• West Red Lake Gold Mines is on track to restart production at the Madsen gold mine in Ontario by mid-2025, with mining already underway and stockpiles ready.
• A 15,000-tonne bulk sample closely matched predicted grades and tonnage, validating the geological model and confirming operational readiness.
• Initial mining rate will begin at 600 tonnes/day, with a target of reaching 800 tonnes/day by year-end. The mill has a 1,100 tonne/day capacity.
• Elevated gold prices have allowed for more economic mine planning, expanding stope sizes and reducing cut-off constraints.
• With high-grade drilling results in South Austin and continued definition drilling, investors can expect frequent operational updates.

West Red Lake Gold Mines (TSXV: WRLG) is nearing a significant inflection point. The company’s flagship Madsen gold mine in Red Lake, Ontario, is set to re-enter production after a major turnaround effort spanning two years. Under new leadership and technical direction, the company has redefined the project’s potential by focusing on rigorous definition drilling and operational derisking.

A recent bulk sample has provided the technical validation investors had been waiting for, confirming that the company’s plan is working. This development aligns West Red Lake Gold Mines with the tailwinds of a strong gold market, positioning it to deliver meaningful near-term cash flow and long-term upside.

Validating the Plan

At the core of West Red Lake’s recent announcement is the successful completion of a 15,000-tonne bulk sample. This effort was not merely symbolic; it served as an independent check on the company’s geological model and mining methodology. According to Gwen Preston, VP of Communications:

“This bulk sample is our offering of that evidence… We produced a set of results that is about as strong a set of reconciliation results as you could ever expect from a high-grade deposit.”

Third-party observers monitored the process, comparing predicted grades and tonnage with actual outcomes. The result: near-perfect alignment between forecast and reality. This level of precision was particularly important given the mine’s prior failure under a previous operator that lacked sufficient definition drilling. West Red Lake's 90,000 meters of definition drilling since 2023 has now paid off, providing investors with a high-confidence resource model.

From Bulk Sample to Full Production

The Madsen project is not at the feasibility or permitting stage - it is actively mining:

“When we finished mining the bulk sample, we did not stop mining. We’re continuing to do that stockpiling right now… so that when we turn this mine on, we will have a month's worth of stockpile sitting beside the mill.”

Initial mining is set to begin at a rate of 600 tonnes per day, with the plan to ramp to 800 tpd in the second half of 2025. Importantly, the company’s existing mill is permitted and capable of processing up to 1,100 tonnes per day, providing future scalability without requiring new capital investment.

Engineering, Economics & Grade Control

One of the critical factors supporting this rapid path to production is the company’s updated engineering, based on higher gold prices. Unlike the pre-feasibility study that assumed a gold price of $1,680/oz, current stope designs reflect a more realistic planning price (~$2,200/oz). This allows for larger, more economically efficient stopes.

“The gold price matters. It means you can take more of the meat that's on the bone at Madsen… That’s exciting for us.” 

This change has also shifted the mining method preference toward long-hole stoping, which is more cost-efficient (approximately half the cost per tonne of cut-and-fill) and aligns with the deposit’s geometry.

Metallurgy & Recovery

The metallurgy at Madsen is another key asset. The mill previously demonstrated 95% recovery, a performance level matched during the bulk sample run. Preston confirmed that there is minimal metallurgical variability across the deposit’s zones - Austin, South Austin, and McVeigh - simplifying processing.

“We got 95% recovery out of our mill… right on line with what it had done for the prior operator.”

While the company aims to tweak processes to possibly enhance recoveries, even a small 1% gain could meaningfully improve project economics over time.

Interview with VP of Communications, Gwen Preston

Managing Risks

Operational success in high-grade deposits depends on detailed execution. West Red Lake Gold Mines has implemented a robust sampling protocol to address nugget effect risks, including a defined “five-dice” pattern for muck sampling. 

"There’s a lot of rigor that goes into how the sampling happens." 

Geotechnically, the rocks are competent, which aids in stope stability and reduces the need for extensive ground support. While some ultramafic sills present challenges, they are small and often associated with high-grade mineralization, making them worth the extra effort.

No significant issues were reported around overbreak, ore loss, or stockpile contamination, reinforcing that the operational systems in place are effective.

What the Bulk Sample Means Financially

Beyond technical validation, the bulk sample generated tangible revenue—over $8 million USD. According to Preston: 

“It’s above $8 million… that’s what we generated from this bulk sample exercise in revenue. That's good news.”

This initial cash inflow provides early working capital as the company transitions into full-scale production and indicates that Madsen is not only technically sound but economically productive.

Upcoming Catalysts

Investors can expect regular updates, including drill results every six weeks and ramp-up milestones. The company is especially focused on South Austin, where a recent high-grade intercept will be followed up with additional drilling.

“This is just the beginning for Madsen. There’s lots of really exciting things to do.”

The Investment Thesis for West Red Lake Gold Mines

• Near-Term Producer: Madsen is weeks away from production, with all infrastructure in place and operational workflows validated.
• Validated Resource Model: 90,000 meters of definition drilling and strong bulk sample reconciliation confirm geological and operational assumptions.
• Strong Gold Price Tailwinds: Elevated gold prices have unlocked more mineralization, improved economics, and allowed for more efficient stope design.
• Low Technical Risk: Competent host rocks, proven metallurgy, and successful test mining reduce execution risk.
• Scalable Infrastructure: Existing mill can support growth beyond initial 800 tpd target with limited capex.
• Cash Flow Visibility: Over $8 million generated from initial bulk sample; near-term revenues to begin ramping in 2025.
• Compelling Valuation: As a near-term, low-risk producer with expansion upside in a premier mining jurisdiction, WRLG offers an attractive risk/reward profile.

Macro Thematic Analysis

Gold prices remain buoyant, with long-term consensus estimates hovering around $2,350/oz. This macro backdrop offers a strategic advantage to West Red Lake Gold Mines as it transitions into production. Unlike peers constrained by capital needs or project delays, West Red Lake is delivering ounces into a favorable price environment.

The shift from feasibility-based stope economics ($1,680/oz) to current planning prices (~$2,200/oz) is materially reshaping mine design, enhancing margins, and unlocking more of the resource. This timing is critical. 

With inflationary pressures easing and central banks maintaining gold as a reserve hedge, the broader market outlook supports higher-for-longer pricing. WRLG’s readiness to produce within this window enhances its appeal as a leveraged play on rising gold.