West Red Lake Gold Mines PFS expected in December Nearing Madsen Mine Restart

Distributed on behalf of West Red Lake Gold Mines‍

• ‍West Red Lake Gold Mines is focused on restarting production at the historic Madsen gold mine, located in the prolific Red Lake mining district of Ontario, Canada.
• To validate the geological understanding of the deposit and build confidence in the resource estimate, West Red Lake Gold Mines engaged 3 independent groups to review the company's data and build their own resource models. The company's new management team has spent the last 18 months working to de-risk and advance the project towards a targeted resumption of operations in late 2025.
• West Red Lake Gold Mines has been actively enhancing the project's infrastructure in preparation for the anticipated restart of production. The company recently took delivery of key equipment and plans to grow on-site workforce of 150 people to 200-250 personnel in the coming months.
• A key near-term milestone for West Red Lake Gold Mines is the completion of a pre-feasibility study (PFS), expected by early December 2024. The PFS will focus on an 800-1000 ton per day operating scenario and is intended to establish the economic foundation.
• Alongside the PFS, West Red Lake Gold Mines is conducting a test mining program to compare actual results against the expectations of the resource model. The outcomes of this program will provide a final layer of validation ahead of a formal production decision.

Madsen Mine Regeneration Nears Production

West Red Lake Gold Mines (WRLG) is nearing a major milestone in the regeneration of the historic Madsen gold mine located in the prolific Red Lake mining district of Ontario. The company has secured total commitments of C$68 million to finance the restart of its Madsen Gold Mine and has spent the last 18 months focused on de-risking the project through extensive drilling, independent validation of geological models and resources, and preparations for renewed production.

Validating the Geology & Resources

A key priority for West Red Lake Gold Mines has been to build confidence in the geological understanding of the deposit and the robustness of the resources. This was seen as critical given challenges faced by the previous operator. West Red Lake's CEO Shane Williams highlighted the extensive work completed, stating:

"We've drawn over 50,000m of underground drilling on top of the existing drilling. This is very tight space drilling to really understand the geology."

To provide additional validation, West Red Lake engaged 3 independent groups to review the data and build their own resource models. The results provided a strong endorsement of West Red Lake's internal work.

"They've come back very similar to what we're doing now. So that's given us confidence that the resource and the work we're doing is cementing together," said Williams.

Infrastructure Readied for Restart

With confidence in the resource established, West Red Lake's focus has shifted to preparations for production. Key infrastructure, including the crusher and camp, have recently arrived on site. The company now has 150 people at site with plans to ramp up to 200-250. Securing the necessary workforce has not been a major challenge to date:

"Red Lake has a very long history of mining. A lot of our people live in Red Lake and we've managed to get a lot of people from other operations in the area."

He noted that the camp will be important to accommodate workers from outside the area and avoid pressures on local housing.

Interview with President & CEO, Shane Williams

Pre-Feasibility Study & Test Mining

Two key near-term milestones for West Red Lake Gold Mines are the completion of a pre-feasibility study (PFS) and a test mining program, both of which are currently underway.

The PFS, expected in early December, is an important step to establish the base case for restarting the Madsen mine. While there are opportunities to expand throughput over time, Williams emphasized the importance of focusing the study on an 800 ton per day scenario using just the Madsen resource.

"We've done the de-risking work and wanted to get a base study out. There's lots of upside; the mill can go to 1,500 tons a day, the mill can go faster. There's other projects we can bring in - but we get all that down the road. But first, it's important for investors to see we can get Madsen back into production and it generates positive cash flow."

In parallel, a test mining program will continue into early 2025. The goal is to validate the resource model by comparing actual results to what was predicted. This will provide a final layer of confidence before ramping up to commercial production.

Targeting Late 2024 for Ramp Up

Pending successful completion of the PFS and test mining, West Red Lake is targeting a restart of production by late 2025. Williams envisions a gradual ramp up to the targeted 800 ton per day run rate by year end. While the full capital requirements will be detailed in the PFS, he noted that having much of the required infrastructure in place is a key advantage. The company is working to secure a debt facility to fund the remaining capital.

West Red Lake Gold Mines has made significant progress in de-risking and preparing the Madsen gold project for a resumption of production since acquiring it in 2021. Through extensive drilling, resource validation, and the acquisition of key infrastructure, the company has built confidence in the deposit while mitigating many of the challenges that hindered the previous operator.

The Investment Thesis for West Red Lake Gold Mines

• Significantly de-risked project: Extensive drilling (50,000m) and independent model/resource validation
• Nearologic term production: PFS expected in December 2024, targeting ramp up in H2 2025
• Exploration upside: Opportunities to expand resources and production rate over time
• Experienced management: Team with proven track record of project execution
• Attractive jurisdiction: Project located in established Red Lake mining camp

Actionable Advice for Investors

• Review results of the pre-feasibility study expected in December 2024
• Monitor progress and results of the test mining program in H1 2025
• Evaluate any updates to resources, reserves and production plans
• Consider adding exposure ahead of a potential re-rating as the project approaches production in H2 2025

With a pre-feasibility study expected shortly and test mining underway, West Red Lake Gold Mines appears well-positioned to make a development decision and begin the transition back to producer status in 2025. For investors, the coming months will provide key data points to validate the investment thesis and inform their assessment of the risk/reward balance as West Red Lake advances toward production at the historic Madsen mine.

Macro Thematic Analysis

The renewed focus on advancing the Madsen gold project comes amidst a constructive backdrop for gold. Despite recent volatility, the gold price remains well above the levels that prevailed when the mine last operated, providing a more attractive economic foundation for the restart.

More broadly, the challenges and capital cost pressures facing the gold industry have placed a premium on projects with established infrastructure in attractive jurisdictions. The fact that West Red Lake was able to secure much of the equipment and workforce needed to restart the Madsen mine highlights its advantageous position on both fronts.

As West Red Lake Gold Mine's CEO Shane Williams neatly summarized:

"It is a different market. It would be nice to talk about the upside and lots of upside. [But] we've decided to just start with a base project at the right scale. Most producers are happy at $2,550 gold. Obviously skirting up around $2,800 the other week was lovely, but these are good numbers."

As the market digests the recent rise in gold prices and evaluates the potential for further upside, interest is likely to build in projects that can be brought online relatively quickly and at modest capital intensity to capitalize on the prevailing environment. Against that backdrop, the Madsen project appears well aligned with the macro thematic focus. As West Red Lake transitions from explorer to producer, the value proposition for investors is poised for a potential re-rating, making the story one to watch closely in the junior gold space.