Speaker 1: We've raised one hundred million dollars in the last year,
and we've spent a lot of that money on the
mind site doing the projects that were needed to get
this thing ready for restart.
Speaker 2: Capex is going to.
Speaker 1: Be pretty small because our predecessor company spent three hundred
and fifty million and we've already spented a big chunk
of money in the last year. There's just not that
much money left to spend, so our capex is going
to be very small, which, by the nature of how
it's calculated, the capex is in the denominator, should mean
that the rate of return should look very nice for
this operation.
Speaker 2: The Financial Survival Network.
Speaker 3: Now more than network.
Speaker 2: The Financial Survival Network.
Speaker 3: And welcome. This is Financial Survival Network. I'm your host,
Carrie Lutz. We are sitting down for a sponsor update
with Gwen Preston, VP Investor Relations of West red Lake
Gold Mines. And Well, when I was talking to you
earlier pre call here like the amount of newsflow that
West red Lake as it's kind of the envy of
the industry here, and it's not just fluff. We're talking
consistently impressive drill results here, So I know you're the
source here or the major source of what's down the
pike here.
Speaker 2: Absolutely, yeah, we are blessed.
Speaker 1: For sure to be able to put out so much news,
But of course it's the nature of the beast.
Speaker 2: The beast being that we're pushing this asset.
Speaker 1: As quickly as we possibly can towards restart, and so
that requires so many layers of activity at the site,
and so those all generate news. Right on the drilling front,
we're really pleased on i'd say, sort of, I want
to say pleased in two ways. We're really pleased that
the market seems to be really noticing our drill results,
which often doesn't happen when it's just infill drilling. But
this is really important in fil drilling. Infil drilling always is,
i should say, but this is infield drilling to define,
you know, minable inventory, to sort of literally create our
stop book, which is like every single spot in the
mind that we are going to extract when we restart.
Speaker 2: This mine next year.
Speaker 1: For the first several years of operation, and so you've
got to do really tight space drilling and have confidence.
And the confidence piece is what really matters there, because
of course, the history of this asset means that some
people have questions about the resource, and our team has,
through all the work they've done, you know, interpreting the
geology and refining that resource model, the internal resource model
that we have, the drill hits are really consistent and
they're really phenomenal. I mean, the last set of results
that we had some from the main Austin zone included
some uber high grade stuff one hundred and six grams
per ten gold over a meter. Also some hits from
over at the McVay zone, which is like the near
surface geologically more complicated zone. Took our time before going
there to really understand where we wanted to target, and
have been getting some really strong results from there too. Also, ironically,
the same number one hundred and seven grams per time
gold over a one meter hit over at the Mcvazon, So,
I mean, we're really really pleased with how the geologic
team is able to produce these results, and with the
fact that the market is acknowledging, Wow, you guys are
churning out high gride hits consistently.
Speaker 2: Your hits are happening within the block model.
Speaker 1: That is your resource, So that's really increasing confidence in
this deposit. As we push this thing towards restart next year.
Speaker 3: And so obviously there's going to be a lot of
news coming and you're drilling consistently regularly, so the results
are going to be coming out, you know, I don't
want to say at a regular interval, but.
Speaker 2: Regularly, yeah, I mean I think we should.
Speaker 1: It's reasonable to expect infil drill results every couple weeks,
like every three weeks and.
Speaker 2: Sort of forever more.
Speaker 1: You just don't stop infol drilling at a project like this, right,
That's the nature of a high grade gold deposit. You're
always going to be hammering your resource with info holes
as you continue to create that stopbook for you know,
the months and years ahead. But there's not only going
to drill results. There's also a whole bunch of other
news in the pipeline for sure, because like you say,
as you push a mind towards restart, there's lots of
layers of work going on. So there's lots of projects
underway at the at the mind sight. No, we're doing
a tailing's damn lift which will give us ten years
of mind life at eight hundred tons per day throughput.
We're doing a connection drift to attach the two different
sides of the mine with that's that's a ten million
dollar capital project. We're building a camp, we're building a
mind dry, we're doing a lot of the we're installing
a primary crussure. We've added evaporator fans to increase our
ability to de water the mine. We're doing a lot
of we're doing the work that after a year of
really deeply assessing the amazing infrastructure that existed at this operation,
we really spend our time to assess what was fantastic
about that and what was still needed. So the capital
projects that we're doing are addressing the needs infiel drilling
for sure, and those other things that I mentioned. Those
are all about creating an efficient mind, and efficiency is
the bottom line, you know, cost wise in mining. So
we're doing all these capital projects so that when we
get to that restart decision, when we turn this thing
back on in twenty twenty five, we give ourselves really
good odds of success for Madsen to be the mind
that it has the potential to be.
Speaker 3: Wes Redlake's kind of unique in the sector because yeah,
you're exploring, but the bulk of the exploration, or a
lot of it's already been done and you're going to
be producing. So there's not a lot of I would
call choice companies in your position.
Speaker 1: Absolutely, I mean, I think you and I chatted about
this for a moment just before the call. But we
had this huge piece of news in the mining stack
in the last little while here right, Osisco Mining being
taken out for over two billion dollars. And that was
a deal to take out a near production asset, right,
a gold project that can be put into production in
this cycle. And so that sparked our attention here in
the office for sure, and I got one or two
banks to send me their lists of takeouts of M
and A activity project or company level in the gold
space for development stage assets, and in twenty I added
it up.
Speaker 2: In twenty twenty two, it.
Speaker 1: Was one point four billion dollars, in twenty twenty three
it was one point seven billion dollars, and in twenty
twenty four were already at two point four billion dollars
in takeouts of development stage assets in the gold space.
So that's I mean, it's only three years, but it's
a pretty significant trend.
Speaker 2: And it makes sense. Right, we had this.
Speaker 1: Huge bear market that stopped a lot of projects in
their tracks. So there aren't that many projects that kept
progressing and moving towards the ability to start producing mine
in this site, start producing gold in this cycle. So
how many operations are there that are going to start
producing gold in twenty twenty five? I think the list
is very very short, and so I have no idea
if another company is going to come and get interested
in buying the mats in mind, But if investors are
looking for leverage in a rising gold market, you know,
it's long been understood that new production creates new value.
I mean, new production or new output in any market,
in any industry should create new value for that company,
right and in the gold in the gold market, that
means companies that are significantly increasing their gold ounces, their
gold outs production. And we're going from zero and ideally
we are hopefully we are going to you know this
sixty thousand ounce per year. That's our general target for
production for next year. That's a big that's a big change,
and it has the potential to engender a signal again rewrite,
We'll see how the market reacts to that, but that's
certainly the thesis here, and I think the rarity of
a company putting in putting a new gold line into production.
That's what I really love about the opportunity in West
Red leg Gold right now, and.
Speaker 3: It's so rare, especially in these days with the lead
times to building minds, and then, like you said, the
state of the sector with didn't produce a lot of
companies in your position. And more importantly, if somebody does
come knocking, they already know that you're prepared to actually
bring this mind online. So your ability to leverage that
position the optionality is something I think a lot of
people don't really appreciate.
Speaker 1: Yeah, and I agree that there's a bit of a
lack of understanding of exactly what you just said.
Speaker 2: When's it going to happen? How soon is it going
to happen?
Speaker 1: And that's been part of the story. We bought this
asset only just over a year ago, and we have
made we've pushed it forward so quickly that we haven't
been able to produce an official, like compliant mind plan
that we, you know, the regulators let us put out
and talk about. It just takes a long time for
the independent you know, people to produce those studies and
they can only start after we've done a certain amount
of infield drilling and so on and so on. So
the exciting thing though, is that that study is.
Speaker 2: Now coming out.
Speaker 1: In the next few months, we will issue that pre
feasibility study that lays out in very clear detail what
this mind is going to look like, how much it's operation,
how much acchounce is going to cost to produce, and
therefore you know what the value of this asset should
be if we turn it back on next year. And
I'm optimistic that that study, shining light on the numbers,
you know, giving making solid what has been a bit nebulous,
should help the market understand the value opportunity in West
red leg old. So that's coming up in the next
few months. So it's going to be a really busy
couple of months for newsflow, and I think in what
could well be a pretty phenomenal gold market. I mean,
it's a phenomenal gold market right now, and let's see
what happens as we move through the seasonally strong fall
towards the US election. I mean, there's there's lots and
rate cups, there's lots of interesting levers that look like
they're ready to be pulled through the through the fall.
Speaker 3: So tell us the PFS is coming, I realized, you
can't tell us too much. Can you tell us something
to wet our appetites?
Speaker 1: Here?
Speaker 2: For sure?
Speaker 1: So I mean the scale of the operation that we
are designing is not dramatically different from the scale of
the operation that our predecessor put in. So you know,
pure gold targeted seventy thousand ounces per ounces of gold annually.
Speaker 2: Will probably be a little bit below that. We're taking
a more conservative.
Speaker 1: Approach to pulling or out from underground, so that, like
I said, sixty thousand ounces of the ounces of gold
annual production is certainly our goal. And I'm not going
to put numbers on this, but i will say that
we've raised one hundred million dollars in the last year,
and we've spent a lot of that money on the
mind site, doing the projects that were needed to get
this thing ready for restart. So what is it that
people look at in a PFS. They look at a
lot of things, but the big numbers that stand out
are NPV. So what's the net present value of the asset?
And then what's the IRR? What's the internal rate of return?
Well the internal and what's the capex? What's it going
to cost to put this thing into production. Well, our
capex is going to be very modest in the grand
scheme of building a gold mine, our capex is going
to be pretty small because our predecessor company spent three
hundred and fifty million, and we've already spent a big
chunk of money in the last year. There's just not
that much money left to spend. So our capex is
going to be very small, which, by the nature of
how it's calculated, the capex is in the denominator, should
mean that the rate of return should look very nice
for this operation. So that's another reason why I think
the study could attract some nice market attention, bring some
eyes to this story for the reality of this mind
that we're pushing to restart.
Speaker 3: All right, so capex, you raised one hundred million. Any
idea how much more is going to be necessary? Indicate
not much, But I assume there's always there's always things
you didn't count on.
Speaker 1: For sure, And I mean it's not so much things
we didn't count on so much as the history of
this asset has been one of under capitalization. And the
last thing that we want to do is repeat is
make the same mistake for the third.
Speaker 2: Time, and so over financing.
Speaker 1: Is our goal for accessing when we access the final
piece of capital to get this thing back into production.
We want to make sure that we have enough capital
to carry us through commissioning and into commercial production. And
we're not stressed cash because you know, not being able
to do the things that to fix the things that
are causing problems is how a mind starts to stumble, right, So,
are we going to access something in the range of
fifty million dollars over the next little while to make
sure that we can we can finish our projects and
carry us through to production very comfortably.
Speaker 2: Yep, that's the goal.
Speaker 1: So where we're working on those, we're doing our best
to do that without further dilution. And when you have
a project that is so close to production, for those
who understand what it is that we're doing, other options
all become possible. You know, there's there's other ways of
accessing capital. So we're working on that and we look
forward to, you know, near the time of that prefeasibility
study letting everyone know how we plan on accessing that
last piece of capital to get this thing to our
goal of restart in twenty twenty five.
Speaker 3: Yeah, in the second half, and hey, if you over perform,
maybe'll maybe we'll have a surprise there. Huh.
Speaker 2: I mean the two things I said.
Speaker 1: The one constant in the history of this asset has
been under capitalization. I would say perhaps over promising or
short timelines being in a rush has also been present
in the project's history. So we are also very we
do not want to repeat that. So we are saying
the second half of twenty twenty five, we're doing everything
in our power to see if we can make it
happen sooner, and if we can over deliver on our promise,
then we will happily do so.
Speaker 2: But let's get all the work done.
Speaker 1: The real thing that needs to happen to get a
Mind into production is all the work, all the planning,
all the operational readiness, all the drilling, all the engineering.
There's all the procurement, the budgeting. There's so much, and
we're working through it just as quickly as we can.
Speaker 3: Yeah, very complex operation. It's one thing you're doing the
mind yourself, so you got surprises, but then when you
take over somebody else's mess and then you have to
make sense of it, there's a lot of challenges there
as well, and it sounds like those are in the
past and we can look forward to the good times here.
So I suggest everybody go to Westredlakegold dot com sign
up for notifications, get the latest drill results and all
the latest developments, and the ticker symbols. In the US
w r LGF and of course in Canada wr lg gwent.
Always a pleasure.
Speaker 2: Thanks so much, Thanks so much for having me, Kerry.
I love it. The Financial Survival Network