[Video Enhanced] West Red Lake Gold PFS Projects 255% Internal Rate of Return (IRR)
Vancouver, January 9, 2025 - Sponsored content disseminated on behalf of West Red Lake Gold. On January 7, 2025, West Red Lake Gold Mines (TSXV: WRLG) (OTCQB: WRLGF) announced the results of the long-awaited Pre-Feasibility Study (PFS) just prior the scheduled mid-2025 restart of its 100% owned Madsen Mine located in northwestern Ontario, Canada. This document is like a panoramic video taken at the starting blocks of a 5K run. It is not a photo of the runner crossing the finish line.
The PFS is based on a small fraction of the 1.7 million indicated ounces that exist at the project, of which 1.2 million currently remain outside the reserve count.
President and CEO Shane Williams has designed, built and operated mines (open pit and underground) in Greece, Turkey and Canada - for Skeena Resources, Eldorado Gold and Rio Tinto.
"I see a major opportunity here to establish a significant mining company," said President and CEO Shane Williams on June 6, 2023, in his first statement as CEO.
"We will expand and de-risk the Company's assets through comprehensive and modern techniques," added Williams.
Nineteen months later, the Madsen Mine is on the verge of re-opening. According to the conservative PFS, the mine will generate $70 million/year in free cash flow @ USD$2,200/ounce gold ($400/ounce lower than the current price).
In this January 8, 2024 video Gwen Preston, VP of Communications for WRLG breaks down the significance of the PFS. [Figures are in Canadian dollars, unless otherwise stated].
"This PFS outlines a strong economic mine," stated Preston in the video. "But we think the PFS plan is only the start of what we will eventually mine at Madsen.
"Let's talk about those strong PFS numbers. This mine will tap a reserve averaging 8.2 g/t gold to produce approximately 70,000 oz. gold a year over 6 full production years, within a 7.2-year mine life.
That production generates an average of $70 million in annual free cash flow over those 6 years, which gives the project a post-tax net present value of $315 million.
The Internal Rate of Return (IRR) is very high at 255%. That's because the IRR is essentially the amount an asset makes divided by the amount left to spend to get to that cash flow.
At Madsen, there is very little left to spend - we did the work (and spent the money) over the last 16 month when we completed 58,000 metres of definition drilling, 2,200 metres of new underground development, and a slew of capital projects.
We're excited this PFS is out, because it underlines why we did what we did: to develop a new gold mine with high returns and growth potential.
The list of growth opportunities starts with the 1.2 million indicated ounces that remain outside the reserve count. More drilling has strong potential to convert some of those ounces, as does the practical application of a higher reserve cut-off price than was used in the study, which was just US$1680 per oz."
"We have always said there are two reasons to restart the Madsen Mine," continued Preston. "The first is to take advantage of incredible infrastructure sitting atop a high-grade resource to start producing gold into this strong gold price environment. This PFS study underlines that reason".
"The second reason to restart Madsen is to see what more it can become," concluded Preston. "The best way to unlock potential in gold systems like these is to get into them, to be driving tunnels underground and drilling at all angles. Because that's how you find more of the rich gold in these vein systems and because being in operation, with shafts and ramps in place, makes deep rich gold accessible."
Average Annual Ore Production and Grade:
"West Red Lake Gold has worked intensely over the last 16 months to greatly improve our knowledge of the orebody and de-risk the project with the objective of executing a successful restart of the Madsen Mine, and this PFS is the culmination of that effort," stated Shane Williams, President and CEO in the January 7,2025 press release.
"Initial capital is low because the capital projects needed for restart are well advanced or already complete," continued Williams. "That is unusual for a 'PFS-level' project, as is having already completed 58,000 metres of definition drilling and detailed engineering to define 18 months of mineable inventory on a stope-by-stope level.
We are excited to deliver a PFS that solidifies Madsen as a rare high-grade gold mine starting production in 2025. We've built a realistic and achievable plan for this first mining opportunity at Madsen. We are confident we can deliver and that will justify returning the mine to production."
The Madsen deposits presently host an NI 43-101 Indicated resource of 1.65 million ounces of gold grading 7.4 g/t gold and an Inferred resource of 0.37 Moz of gold grading 6.3 g/t gold. [1.] [2.] [3.]
The technical information presented in this news release has been reviewed and approved by Will Robinson, P.Geo., Vice President of Exploration for West Red Lake Gold and the Qualified Person for exploration at the West Red Lake Project, as defined by NI 43-101 "Standards of Disclosure for Mineral Projects".
Contact: guy.bennett@globalstocksnews.com
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References:
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SRK Consulting. (2021). Independent NI 43-101 Technical Report and Updated Mineral Resource Estimate for the PureGold Mine, Canada (West Red Lake Gold Mines, Ed.) [Review of Independent NI 43-101 Technical Report and Updated Mineral Resource Estimate for the PureGold Mine, Canada.
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Mineral resources are estimated at a cut-off grade of 3.38 g/t Au and a gold price of US1,800/oz. Please refer to the technical report entitled "Independent NI 43-101 Technical Report and Updated Mineral Resource Estimate for the PureGold Mine, Canada", prepared by SRK Consulting (Canada) Inc., and dated June 16, 2023, and amended April 24, 2024. A full copy of the SRK report is available on the Company's website and on SEDAR+ at www.sedarplus.ca
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Mineral resources that are not mineral reserves do not have demonstrated economic viability. Please refer to the technical report entitled "Independent NI 43-101 Technical Report and Updated Mineral Resource Estimate for the PureGold Mine, Canada", prepared by SRK Consulting (Canada) Inc., and dated June 16, 2023, and amended April 24, 2024. The Madsen Resource Estimate has an effective date of December 31, 2021 and excludes depletion of mining activity during the period from January 1, 2022 to the mine closure on October 24, 2022 as it has been deemed immaterial and not relevant for the updated report. A full copy of the SRK report is available on the Company's website and on SEDAR+ at www.sedarplus.ca
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