A District with A Storied Past

West Red Lake is centered in the historic Red Lake gold mining district of Ontario Canada. The district has produced over 30 million ounces of gold since the first gold rush in the 1920's and is an important contributor to Canada's ranking as the fifth largest gold producer globally. And the region isn't done yet. Exploration spending is on the rise and companies like West Red Lake are close to turning on significant sources of new, high-grade production.

The Deal of the Decade?

The eyes of the gold industry have been firmly on West Red Lake ever since the company scooped up the past producing Madsen Mine in 2023, for only $6.5 million in cash, after the previous operator spent over $350 million on permitting, 200 km of drilling, mine engineering, a brand new mill, and a new mine portal and series of underground tunnels. With the mine restart planned for mid-2025, West Red Lake is close to proving the purchase was one of the smartest buys of a distressed gold asset this decade.

No Geological Surprises

Unlike the previous operator of Madsen, the West Red Lake team is taking no chances with the historically challenging, but rewarding geology found in the Red Lake district. 42,500 metres of definition drilling has already been completed since October 2023, with more to come. The team is tightening drill spacing to only 6 metres from the previous operators 20 metres, dramatically increasing the reliability of the geological model critical to a profitable mine restart.

No Operational Suprises

West Red Lake is doing everything possible to maximize production visibility. Definition drilling has been focused on parts of the defined resource that offer the grade and tonnage potential and are efficient to access. This includes parts of the Austin zone, South Austin, McVeigh, and North Austin The operational team already has a mine plan for the first 18 months of operation (100,000 ounces) and expects to have at least two years of mining runway at restart. Nothing has been left to chance.

Exploration Upside

While definition drilling has been key to derisking the restart, 10,000 metres of exploration drilling is ongoing to test new targets along the geologic structure that hosts the gold at Madsen – targets like MJ, North Staratt, and north Venus – and a new near-surface target in the distinctive rock unit that hosts the super high grade but deep 8 Zone at Madsen. This Upper 8 target is already looking like a new discovery.

In the Sweet Spot for Mining Stocks

Historically, the best performing stocks in the mining sector are the ones who have already made a construction decision and are approaching first gold pour. West Red Lake is firmly in this category, less than 12 months from first gold.

Significant Stock Rerating Potential

West Red Lake still trades like an unfinanced junior developer at 0.23x net asset value (NAV), when in reality the company is fully funded and on track for an imminent production restart. Even ignoring any exploration success, there could be 150% of stock upside potential from an NAV rerating alone. West Red Lake offers investors a truly scarce mix of elevated upside without the elevated operational risk that usually comes with it.

West Red Lake Gold is a market awareness client of Capital 10X. For more information, including potential conflicts of interest please see our Content Disclaimer at the bottom of the website.