Gold Producer Targets Breakthrough With Mine Ramp-Up in Ontario
Research Report

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Disclosures for Red Cloud, West Red Lake Gold Mines Ltd., October 8, 2025:

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West Red Lake Gold Mines Ltd. (WRLG:TSX.V; WRLGF:OTCQB; FRA:UJO), which officially resumed production in May at its fully owned Madsen mine in Red Lake, Ontario, has issued a Q3/25 update, Red Cloud Analyst Taylor Combaluzier wrote in an updated research note on October 8.

The firm views the progress positively and believe the company is making significant strides toward achieving commercial production, Combaluzier wrote.

West Red Lake is an emerging gold producer ramping up production through the second half of 2025. The company has swiftly revitalized the asset since acquiring it in 2023 and is now poised to benefit from the strong gold price environment, the analyst said.

Path to Targeted Output

Madsen processed 35,700 tonnes of ore with an average grade of 5.4 grams per tonne gold (g/t Au). The mill produced 7,055 ounces of gold at an average realized sale price of US$3,456 per ounce, generating gross proceeds of CA$33 million, according to Combaluzier. Gold production increased by 34% quarter-over-quarter.

"Madsen is on track to reach targeted output levels in early 2026," the analyst wrote. "The company is continuing to focus on mined waste development as a key de-bottlenecking effort that should help the mine’s ability to move ore tonnes. The new ability to store all waste rock underground, which has shifted trucking capacity away from waste haulage to ore haulage is expected to be good for production."

Ore Movement Plans

West Red Lake is preparing to begin moving 350 tonnes of ore per day up the shaft, although the installation of necessary components is still underway and to be installed in November, Combaluzier wrote.

During the quarter, the mill was tested for higher throughputs and processed both mined and stockpiled tonnes. Since August 2025, the mill has processed only directly mined tonnes.

Sill development contributed 25% to 30% of milled tonnage during Q3 and exceeded expectations in grade, the analyst said. The reconciliation between modeled and actual grades remained robust for stope grade reconciliation.

Additional Funding Secured

In September, WRLG closed a ~CA$41 million bought deal offering, raising 37.5 million common shares at CA$0.95 per share and 3.8 million charity FT shares at CA$1.33 per share.

Net proceeds will be used to advance the Madsen gold mine, pursue growth opportunities, and for working capital and general corporate purposes. The charity FT funds will support PFS-level work at Rowan, including infill drilling, engineering, and environmental work.

Emerging Gold Producer

After restarting operations ahead of schedule, WRLG continues to ramp up. The PFS outlined an average head grade of 8.16 g/t Au for approximately 67,600 ounces per year of production over a 7.25-year life of mine. At US$2,200 per ounce of gold, Madsen generates an after-tax NPV5% of US$315 million, an IRR of 255%, and a payback period of less than one year.

"We maintain our BUY rating and reduce our target price to C$2.30/share (was C$2.50/share)," Combaluzier wrote. "Due to the dilution incurred from the company’s recent CA$41M equity financing, we have reduced our target for West Red Lake. Our target is based on a DCF model of Madsen and Rowan to determine our post-financing NAVPS5% of CA$3.04 (was CA$3.28) upon which we apply a 0.75x multiple."

The analyst said upcoming catalysts for the company include infill and regional drilling assays (ongoing), the Madsen mine ramp-up (ongoing), and commercial production in Q4/25.