Gold Miner Restarts High-Grade Ontario Mine

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West Red Lake Gold Mines Ltd. (WRLG:TSX.V; WRLGF:OTCQB; FRA:UJO) has announced the official restart of its wholly owned Madsen Mine in the Red Lake district of Ontario. The company's board of directors approved the decision on May 21, marking a significant operational milestone that arrives slightly ahead of the previously communicated mid-2025 target.

"The restart decision is a major milestone that has been achieved by systematically derisking the technical, operating, and funding requirements of a sustainable high-grade gold operation at Madsen," said President and CEO Shane Williams in a company news release. Williams noted that the restart follows two years of work focused on unlocking the mine's potential, originally acquired in June 2023.

The restart follows the successful execution of a bulk sample program, which confirmed the company's geological model. Across 14,490 tonnes of material mined, the reconciliation of tonnage, gold grade, and gold ounces closely matched expectations. According to WRLG, the overall reconciliation across the Austin, South Austin, and McVeigh zones was 95.5% for tonnage and 96.1% for total gold recovered, with mill recovery averaging 95%.

WRLG plans to initially process 500 tonnes per day, increasing throughput in the second half of 2025. The mine's mill, which previously operated during the 2020–2022 period, is permitted for 800 tonnes per day and is being ramped up gradually.

The company is positioning Madsen as a rare example of a new gold mine entering production in 2025. According to its January 2025 prefeasibility study, the project carries a post-tax net present value (NPV) of US$496 million using a long-term gold price of US$2,640 per ounce. The mine is expected to generate US$94 million in average annual free cash flow over six years of full production, supported by a diluted head grade averaging 8.2 grams per tonne (g/t) of gold and an all-in sustaining cost (AISC) of US$1,681 per ounce.

Madsen's probable mineral reserves total 1.82 million tonnes grading 8.16 g/t for 478,000 ounces of contained gold, based on a gold price of US$1,680 per ounce. The company has also secured significant funding to support the restart, including US$35 million in debt financing and US$20 million raised through a February equity placement. As of February 26, WRLG reported having CA$31 million in cash on hand.

Gold's Role Reasserted Amid Global Uncertainty

The gold sector has remained at the forefront of investor interest in recent weeks, bolstered by heightened demand for safe-haven assets in the face of mounting geopolitical and fiscal pressures. According to a May 21 report from Kitco, gold futures extended a three-day rally, gaining approximately US$98 in value and closing at US$3,319.10 for the most active June contract. These gains were attributed to "heightened investor anxiety" over geopolitical tensions in the Middle East, particularly intelligence suggesting potential Israeli strikes on Iranian nuclear sites. Kitco emphasized that the rally was driven by geopolitical developments rather than trade policy shifts, noting that gold prices typically benefit during periods of increased global uncertainty.

Fitzgerald's Matthew O'Keefe reiterated a Buy rating and CA$2.20 target price, citing a 219% return potential from the then-price of CA$0.69.

Additional support for the sector came from macroeconomic instability in the United States. FX Empire wrote on May 22 that gold surged to US$3,345 during Asian trading hours as investors responded to fiscal concerns and a weakening US dollar.

The report cited a downgrade of the US sovereign credit rating by Moody's from Aaa to Aa1, which amplified investor demand for safe-haven assets like gold and silver. "With growing uncertainty around US fiscal policy and weakening macro indicators, safe-haven flows are likely to persist," stated a senior commodities analyst quoted by FX Empire.

The outlook was further reinforced by Bloomberg's commentary on May 23, which linked gold's strength to broader market volatility. In that morning's analysis, Bloomberg stated that "one of the biggest beneficiaries of that US tariff announcement is going to be gold," as equities turned negative ahead of the open. The report also noted that while other traditional safe havens such as the yen and Swiss franc stood to gain, gold remained a primary refuge amid a flight-to-safety dynamic.

Geared for Growth: WRLG's Operational Momentum

West Red Lake Gold's updated investor presentation outlines a systematic and capital-efficient approach to mine development and ramp-up. The company leveraged over US$350 million in historical investment prior to acquiring the Madsen Mine and has spent the last two years completing key infrastructure upgrades, including a new connection drift that allows larger truck access and improves underground haulage efficiency.

The company's test mining and bulk sample program validated both mining methods and orebody modeling, which are key to mitigating grade variability common in structurally complex gold deposits. By tightening drill spacing from 20 metres to 7 metres and emphasizing longhole stoping — a lower-cost mining technique — WRLG aims to reduce operating costs and increase resource confidence.

Additionally, the company is pursuing expansion opportunities at multiple fronts. High-priority targets accessed via new development include deeper extensions at Austin and South Austin, as well as the Fork and Rowan deposits. A 2024 till sampling program at Rowan defined two new geochemical targets, Big Bend and Apex, which remain undrilled. At Fork, WRLG has identified a 400-by-250-by-2 metre high-grade zone just 250 metres from existing infrastructure, with drilling expected in the second half of 2025.

The company is also exploring the largely underexplored Confederation rock units, which make up half of the Madsen property. Five new till-defined targets within this formation are undergoing evaluation, providing further upside to resource expansion.

While the current plan is based on 800 tonnes per day throughput, the mill at Madsen has a nameplate capacity of 1,089 per day and West Red Lake Gold is planning to apply for the necessary permit amendments in 2026. The company also noted that increasing the gold price assumption beyond US$1,680 per ounce could significantly enhance mineable tonnage and reduce per-ounce costs by enabling the use of more efficient mining methods over a broader resource base. 

Taken together, WRLG's restart of the Madsen Mine positions it as a near-term producer with strong cash flow potential, operational infrastructure in place, and a pipeline of prospective expansion targets in a historically productive gold district. 

Expert Endorsements Underscore Confidence in Madsen Restart

Following strong bulk sample results at the Madsen project, analysts reaffirmed their confidence in West Red Lake Gold Mines Ltd. On May 7, Cantor Fitzgerald's Matthew O'Keefe reiterated a Buy rating and CA$2.20 target price, citing a 219% return potential from the then-price of CA$0.69. O'Keefe stated, "The positive test results derisk the project further" and support a confident restart. He noted the 14,490-ton sample validated the company's mining methods and resource model, with average grade and mill recovery matching or exceeding expectations.

A day later, Red Cloud Securities analyst Taylor Combaluzier echoed the optimism, maintaining a Buy rating and CA$2.50 target, implying a 268% upside. He wrote that the company "is poised for success as it ramps up the mine in H2/25," pointing to a 95.5% tonnage reconciliation and 100.7% grade reconciliation. Combaluzier emphasized that the results support the reliability of the geological model and could enable cost reductions through long-hole stoping. Red Cloud projected average annual production of 67,600 ounces and an after-tax NPV of CA$315 million at US$2,317 per ounce gold.

Ownership and Share Structure

Strategic investor Sprott Resource Lending Corp. holds about 8%. Institutions hold about 30%, management, insiders, and advisors hold about 10%, and the remaining shares are held by retail investors.

The company's market cap is CA$290 million. The 52-week range for the stock is CA$0.52 to CA$1.04.