Gold Miner Achieves Canada Production Gains
Research Report

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Disclosures for Cantor Fitzgerald, West Red Lake Gold Mines Ltd., September 4, 2025

The opinions, estimates and projections contained in this report are those of Cantor Fitzgerald Canada Corporation. (“CFCC”) as of the date hereof and are subject to change without notice. Cantor makes every effort to ensure that the contents have been compiled or derived from sources believed to be reliable and that contain information and opinions that are accurate and complete; however, Cantor makes no representation or warranty, express or implied, in respect thereof, takes no responsibility for any errors and omissions which may be contained herein and accepts no liability whatsoever for any loss arising from any use of or reliance on this report or its contents. Information may be available to Cantor that is not herein. This report is provided, for informational purposes only, to institutional investor clients of Cantor Fitzgerald Canada Corporation, and does not constitute an offer or solicitation to buy or sell any securities discussed herein in any jurisdiction where such offer or solicitation would be prohibited. This report is issued and approved for distribution in Canada, CFCC., a member of the Investment Industry Regulatory Organization of Canada ("IIROC"), the Toronto Stock Exchange, the TSX Venture Exchange and the CIPF. This report is has not been reviewed or approved by Cantor Fitzgerald & Co., a member of FINRA. This report is intended for distribution in the United States only to Major Institutional Investors (as such term is defined in SEC 15a-6 and Section 15 of the Securities Exchange Act of 1934, as amended) and is not intended for the use of any person or entity that is not a major institutional investor. Major Institutional Investors receiving this report should effect transactions in securities discussed in the report through Cantor Fitzgerald & Co. Non US Broker Dealer 15a-6 disclosure: This report is being distributed by (CF Canada/CF Europe/CF Hong Kong) in the United States and is intended for distribution in the United States solely to “major U.S. institutional investors” (as such term is defined in Rule15a-6 of the U.S. Securities Exchange Act of 1934 and applicable interpretations relating thereto) and is not intended for the use of any person or entity that is not a major institutional investor. This material is intended solely for institutional investors and investors who Cantor reasonably believes are institutional investors. It is prohibited for distribution to non-institutional clients including retail clients, private clients and individual investors. Major Institutional Investors receiving this report should effect transactions in securities discussed in this report through Cantor Fitzgerald & Co. This report has been prepared in whole or in part by research analysts employed by non-US affiliates of Cantor Fitzgerald & Co that are not registered as broker-dealers in the United States. These non-US research analysts are not registered as associated persons of Cantor Fitzgerald & Co. and are not licensed or qualified as research analysts with FINRA or any other US regulatory authority and, accordingly, may not be subject (among other things) to FINRA’s restrictions regarding communications by a research analyst with a subject company, public appearances by research analysts, and trading securities held by a research analyst account

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On September 4, 2025, Cantor Fitzgerald analyst Matthew O'Keefe maintained a Buy rating on West Red Lake Gold Mines Ltd. (WRLG:TSX.V; WRLGF:OTCQB; FRA:UJO) with an unchanged target price of CA$2.20, representing 124% upside from the current share price at the time of the report of CA$0.98.

The analyst cited positive progress in mill operations, definition drilling, and mine development since the official restart in May, positioning the company to declare commercial production by the first quarter of 2026.

Recent Operational Progress and Commercial Production Timeline

West Red Lake Gold Mines Ltd. held a webcast updating investors on significant progress at its Madsen Mine located in Ontario's Red Lake Gold District. Since acquiring the mine two years ago, the company has completed over 150 kilometers of definition drilling, conducted a successful resource model reinterpretation, completed a positive pre-feasibility study, and made substantial mine upgrades, including a 4-meter tailings dam lift and construction of a 114-person camp.

Mining and milling operations officially restarted in May 2025, producing 5,350 ounces of gold through the end of June. The mill is performing at its permitted throughput rate of 650 tonnes per day with 95% gold recovery, and successful trials have been conducted at 800 tonnes per day capacity.

O'Keefe noted that to declare commercial production, "WRLG wants to demonstrate steady throughput and mill performance for at least 3 months as well as complete several capital projects to ensure cost stability and firm up confidence in its near-term mine plan so it can provide 2026 guidance." Key capital projects include the shaft refurbishment project, the Cemented Rock Fill plant, and delivery of the remaining underground equipment, all expected to be completed in the second half of 2025.

Second Quarter 2025 Financial Performance

West Red Lake Gold reported second quarter 2025 results showing gold sales of 5,260 ounces, generating revenue of CA$24.3 million with cost of sales of CA$15.7 million, resulting in gross profit of CA$8.6 million. Net income reached CA$3.5 million with operating cash flow of CA$5.9 million, demonstrating positive cash generation.

The company ended the quarter with CA$23.7 million in cash, CA$80.9 million in debt, and working capital of CA$1.7 million. O'Keefe noted that the company "was cash flow positive in Q2/2025 and should continue and build its working capital position in the months ahead."

Mine Development and Resource Base

Mine development has advanced with over 50 stopes identified primarily in McVeigh and 960-970 zones, with the second half 2025 mine plan targeting bulk ounces from the 1155 zone, 960-970 zone, and McVeigh areas. The company continues extensive definition drilling, with 2025 discrete model drilling complete and the current focus on 2026 and 2027 target areas.

Total measured, indicated, and inferred resources stand at 2,331 thousand ounces of gold equivalent, including 1,849 thousand ounces in the measured and indicated category grading 7.78 grams per tonne gold and 482 thousand ounces inferred at 6.72 grams per tonne gold.

Rowan Project Economic Assessment

In August 2025, West Red Lake Gold filed a Preliminary Economic Assessment for its 100%-owned Rowan Project. The study outlines an underground mine plan providing 8.5 grams per tonne ore to the Madsen mill for average annual production of approximately 35,200 ounces of gold over a 5-year mine life.

Based on a toll milling model with upfront capital of CA$70 million and sustaining capital of CA$103 million, the project delivers a post-tax net present value at 5% discount rate of CA$125 million and 42% internal rate of return at US$2,500 per ounce gold. At US$3,250 per ounce gold, economics improve to CA$239 million net present value and 82% internal rate of return.

The company plans to continue drilling and evaluation work in 2026, deliver a pre-feasibility study by the third quarter of 2026, obtain construction permits in 2027, and commence production by 2029.

Valuation and Investment Outlook

O'Keefe maintains his valuation methodology based on an equally weighted 0.8x net asset value and 6.0x 2026 estimated cash flow per share basis. The analyst emphasized that "the stock continues to offer good value trading at 0.4x NAV versus peers trading between 0.8x-1.0x."

With a market capitalization of CA$341.1 million and 348.0 million basic shares outstanding, West Red Lake Gold trades at an enterprise value per ounce of gold equivalent of US$124. The company's 52-week trading range spans CA$0.52 to CA$1.00, with an average weekly volume of approximately 3.0 million shares.

Strategic Positioning and Near-Term Catalysts

The company's strategic focus remains on successfully transitioning through the ramp-up phase while maintaining operational stability and cost control. Key near-term milestones include completing capital projects in the second half of 2025, demonstrating consistent operational performance, and declaring commercial production by the first quarter of 2026.

O'Keefe concluded that he remains "confident that as it successfully moves through the ramp-up phase and that the high-grade nature of the mine with its significant upside potential should ultimately drive a premium valuation." The combination of positive cash flow generation, substantial resource base, and additional development potential through the Rowan Project supports the analyst's continued positive outlook.