West Red Lake Gold Mines Ltd. (TSXV:WRLG) (OTCQB:WRLGF) has taken a significant step forward by pouring its first gold bar from the Madsen Mine recovery program. This achievement marks a crucial phase in the company's efforts to restart production at its high-grade Madsen Mine located in Ontario's Red Lake District, a region renowned for its prolific gold deposits, having produced 30 million ounces of gold to date.
The Madsen Mine is fully permitted and boasts an impressive gold resource of 1.65 million ounces at 7.4 grams per tonne (g/t) across 6.9 million tonnes (Indicated), with an additional 366,000 ounces at 6.3 g/t (Inferred). The property is well-equipped with significant infrastructure, including an expandable 800 tonne per day processing mill, underground development, and a water treatment plant.
The gold recovery program, initiated in late 2023, has already yielded 415 ounces of gold worth approximately $750,000 from its initial phase. In its second phase, the company cleaned additional parts of the mill and used a gravity circuit to separate coarse gold, which was then refined onsite into a gold bar. This process confirmed the operational readiness of the Madsen mill's equipment after 18 months of inactivity.
Shane Williams, CEO of West Red Lake Gold Mines, remarked, “Seeing the refinery in action was another check mark on our list of Operational Readiness requirements. Starting or restarting a mine requires reliable operations from multiple facilities and systems. With over 100 employees at site, constant underground development and drilling, and multiple capital projects underway or in planning, we are establishing the systems that support smooth mine operations.”
In addition to the gold bar milestone, West Red Lake Gold Mines reported high-grade drill results from its 100%-owned Madsen Mine. Notable findings include 16.69 grams per tonne gold over 8.0 meters and 7.48 grams per tonne gold over 12.0 meters at the South Austin Zone. This zone currently holds an Indicated mineral resource of 474,600 ounces of gold at a grade of 8.7 g/t, with an additional Inferred resource of 31,800 ounces grading 8.7 g/t.
The drilling aims to define resources within South Austin, building a high-confidence inventory for the planned restart of production at Madsen. In May, the company also announced drill results at the North Austin Zone, including 37.33 grams per tonne gold over 2.79 meters and 5.26 grams per tonne gold over 9.0 meters. These results suggest a new high-grade gold area, extending the current Madsen resource to the northeast.
These developments come at a time when gold prices are near their recent high of $2,400 per ounce, influenced by record gold buying in China. Gwen Preston, VP Investors Relations with West Red Lake Gold, highlighted this trend, noting that Chinese consumers and retail investors are shifting their financial strategies amid economic uncertainties.
West Red Lake Gold Mines is well-positioned to meet its targeted timeline for restarting production in 2025, having recently closed a public offering that raised approximately C$33 million. This funding will support the company's ongoing development and operational readiness efforts, further solidifying its presence in the high-grade gold mining sector.
