West Red Lake Gold Mines Successfully Restarts Production at Madsen Mine

• West Red Lake Gold Mines has successfully restarted production at the Madsen mine after 18 months of preparation, with board approval secured following a successful bulk sampling program that achieved 96% grade reconciliation across three mining areas.
• The bulk sampling program demonstrated 94% mill recovery, closely matched resource models, and proved the company can mine against old remnant stopes, significantly de-risking operational concerns from previous operators.
• With gold prices at $3,300 versus the $1,680 used to assess resource viability in the prefeasibility study, it makes sense to assess resource tonnes grading below the prefeasibility study’s longhole stoping cutoff of 4.3 g/t, potentially increasing the amount of the resource that could make sense to mine and providing substantial operating margins.
• Current 800 tonnes per day capacity can expand to 1,200 tonnes per day with minimal changes, supported by shaft renovation, 24/7 underground hauling with larger trucks, and transition from cut-and-fill to more efficient long-hole stoping methods.
• Continuous drilling program has identified new high-grade zones in South Austin area, allowing lateral expansion rather than expensive deep development, and over 90,000 metres of definition drilling has the 18-month detailed mine plan filled.

West Red Lake Gold Mines has achieved a significant milestone in restarting production at its flagship Madsen mine, marking the culmination of an 18-month strategic preparation period. President and CEO Shane Williams recently outlined the technical and operational achievements that secured board approval for the production restart, providing investors with detailed insights into the company's path forward in Canada's prolific Red Lake mining district.

Strategic Foundation & Board Approval Process

The production restart represents more than a simple operational decision. Williams established clear performance targets with the board 18 months ago, creating a comprehensive framework that included capital expenditure requirements, drilling programs, underground development objectives, and the critical bulk sampling program. 

The bulk sampling program served as the culminating validation of the company's technical work. Williams noted that 

“The program confirms that the resource and the work we've done is as expected. We took our drilling, our modeling, we actually mined in areas where we said, and we got exactly what we said we would do." 

This level of precision in resource modeling provides investors with confidence in the company's ability to predict and deliver operational performance.

Technical Performance Validation

The technical results from the bulk sampling program exceeded industry standards and provided robust validation of the company's resource models. The operation achieved 94% mill recovery, demonstrating that processing infrastructure remains fully functional and efficient. More critically, grade reconciliation reached 96% across three different mining areas.

This level of grade reconciliation is particularly significant given the geological complexity of the deposit. Williams acknowledged that the deposit has been "altered, deformed, reactivated repeatedly," suggesting structural complexity that has challenged previous operators. However, the successful bulk sampling program demonstrates that the company's geological modeling and mining approach can effectively navigate these challenges.

Deposit Characteristics & Mining Strategy

The Madsen mine encompasses three distinct areas with varying characteristics that require tailored mining approaches. South Austin emerges as the highest-grade deposit, while Austin contains the bulk of tonnage at lower grades. McVeigh, situated on a fold nose, presents more complex geology and has been partially mined by previous operators, though higher-grade material remains accessible.

The company has implemented a sophisticated geoengineering feedback loop that integrates real-time geological data with mine planning and operations. Williams described this process: 

"Every single round, you take samples, you take more samples, and they feed into your models. So there's continuous iteration of mining sampling feedback into the models back around. That constant feedback has to be refined and that gives you the final design of your actual long hole stope."

Interview with President & CEO, Shane Williams

Infrastructure Advantages & Expansion Potential

West Red Lake Gold Mines benefits from substantial existing infrastructure that provides immediate operational advantages and future expansion potential. The mill can scale from current 800 tonnes per day to 1,200 tonnes per day with minimal modifications, as previous operators successfully demonstrated this capacity. The company is renovating an existing shaft to complement the decline system, enabling increased material movement and 24/7 operations.

A significant operational improvement involves the completion of a connection drift linking the east and west portals, eliminating surface hauling limitations. Williams highlighted this advantage: 

"We are able to haul 24/7 underground with bigger trucks. We can do 42 ton trucks rather than 30 ton trucks. So you're doing more trucks 24 hours a day with bigger loads." 

This infrastructure enhancement directly impacts operational efficiency and production capacity.

Economic Advantages from Gold Price Environment

The current gold price environment provides substantial economic advantages that weren't anticipated in the original feasibility studies. Williams noted that the prefeasibility study used a gold price of $1,680 per oz, in testing the economic viability of the resource tonnes, compared to current levels around $3,300. This price differential has dramatically improved project economics by bringing far more resource tonnes into consideration in mine planning.

The previous operators, despite operational challenges, produced gold at just under $2,500 per ounce, providing substantial margin at current gold prices.

Drilling Program & Resource Expansion

The company maintains an aggressive drilling program that has filled an 18-month detailed mine plan. This drilling program operates on 6-8 meter spacings, significantly tighter than the 15-17 meter spacings used by previous operators, enabling more precise resource definition and mine planning.

Recent drilling has identified new high-grade zones, particularly in the South Austin area, where Williams reported 

"Fantastic drill results over the last three months. Lots of high grade. These are all new areas that have been found by that drilling process." 

These discoveries enable lateral expansion rather than expensive deep development, reducing capital requirements while adding high-grade material to the mine plan.

Risk Mitigation & Operational Improvements

The bulk sampling program successfully addressed several operational risks that challenged previous operators. The company proved it could mine safely adjacent to old remnant stopes, a significant technical concern that had limited previous mining flexibility. 

The transition from cut-and-fill stoping to long-hole stoping methods provides additional operational advantages. Original mine designs incorporated extensive cut-and-fill mining due to a focus on high grade material and proximity to old workings. However, geotechnical assessment revealed greater ground stability than anticipated, enabling more efficient long-hole stoping methods that improve productivity and reduce costs. And a stronger gold price environment has eased the focus on exclusively mining high grade material.

Investment Thesis for West Red Lake Gold Mines

• De-risked Production Restart: A successful bulk sampling program with 96% grade reconciliation and 94% mill recovery validates resource models and operational capabilities, providing high confidence in production targets.
• Favorable Economic Environment: With gold prices at $3,300 versus the $1,680 used to assess resource viability in the prefeasibility study, it makes sense to assess resource tonnes grading below the prefeasibility study’s longhole stoping cut off of 4.3 g/t, potentially increasing the amount of the resource that could make sense to mine and providing substantial operating margins.
• Scalable Infrastructure: Existing mill capacity can expand from 800 to 1,200 tonnes per day with minimal capital, supported by shaft renovation and 24/7 underground operations with larger hauling capacity.
• Resource Growth Potential: Continuous drilling program has filled an 18-month detailed mine plan with tonnes that have progressed through definition drilling and mine design. Definition of new high-grade zones in this process has enabled lateral expansion, reducing deep development costs.
• Operational Improvements: Transition to more efficient long-hole stoping methods, successful mining adjacent to old stopes, and implementation of sophisticated geo-engineering feedback loops address previous operational challenges.
• Experienced Management: Strong technical board with relevant mining experience provides operational oversight, while systematic 18-month preparation approach demonstrates disciplined execution capability.

The broader gold mining sector is experiencing a renaissance driven by sustained high gold prices, geopolitical uncertainty, and central bank diversification strategies. West Red Lake Gold Mines exemplifies how established mining districts with existing infrastructure can rapidly capitalize on favorable price environments. The company's experience demonstrates that higher gold prices don't merely improve margins but fundamentally transform project economics by expanding minable reserves and enabling previously uneconomic deposits to achieve profitability.

The Red Lake district's proven geology and existing infrastructure provide competitive advantages in a market where new mine development faces increasing capital costs and regulatory challenges. Williams' observation that "gold price has been our friend" reflects a broader industry trend where established operations with flexible cost structures can rapidly adapt to capitalize on price improvements. The company's ability to reduce cut-off grades from pre feasibility levels to current operational parameters illustrates how price volatility creates optionality in resource-based businesses.

"If we've done the right work and we're at a gold price of USD$3,500, that gives you a lot of margin. The secret is timing. Timing in this gold business is everything."