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Speaker 1: It is sort of a worst case scenario study from

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that perspective, but yeah, it's still generated results that we're

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going to be producing almost seventy thousand ounces of gold

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a year over the six years of full production that

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are in this study, and those ounces are going to

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generate seventy million dollars Canadian in free cash flow over

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those on.

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Speaker 2: Average over those seven years.

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Speaker 1: And the IRR, the internal rate of return on this

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thing is two hundred and fifty five percent.

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Speaker 2: The Financial Survival Network now, more than ever, the Financial

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Survival Network.

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Speaker 3: Welcome.

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Speaker 4: This is Financial Survival Network. I'm your host, Carrie Lets.

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We are getting an important sponsor update from West red

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Lake Gold's VP of Communications, Gwenn Preston. Gwent. It's great

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to have you back on the show. Hey, the big

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news you're released your preliminary feasibility study, which we're talking

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pre call should be called the worst the absolute worst

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case scenario, and in this case, the worst case scenario

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looks pretty good.

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Speaker 2: Yes, I love that capture.

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Speaker 1: I mean worst case scenario in that you use the

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you know, the independent consultants who do these mind plans

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use extreme conservatism, right, so the cutoff price that they

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used to determine which tons were economically viable to mine.

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Speaker 2: That was one thy six hundred.

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Speaker 1: And eighty dollars sixteen eighty reserve price cut off for

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determining which tons are economic to mine. I mean, that's

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one thousand dollars below the current gold price. So that's

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as a starting point, really conservative, and then you apply

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that so that squeezes down the amount of tons that

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you can mine from the amount that you have nowhere there,

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squeezes it down to just the highest grade small areas,

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and then you apply a conservative gold price to the

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financial model. You apply a twenty two hundred dollars long

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term gold price to the financial model, which.

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Speaker 2: Squeezes things down again.

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Speaker 1: So yes, it is sort of a worst case scenario

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study from that perspective, but yeah, it's still generated results

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that we're going to be producing almost seventy thousand ounces

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of gold a year over the six years of full

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production that are in this study, and those ounces are

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going to generate seventy million dollars Canadian in free cash flow.

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Speaker 2: Over those on average over those seven years.

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Speaker 1: And the IRR the internal rate of return on this

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thing is two hundred and fifty five percent, which is

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of course, a crazy number in the grand scheme of

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mining studies, where usually you're desperately trying to get about

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thirty percent.

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Speaker 2: And if that just reflects.

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Speaker 1: That we did the We bought an asset that was

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mostly built, and then we raised a hundred million dollars.

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Speaker 2: We raised and spent one hundred million dollars last.

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Speaker 1: Year, so that the denominator in the IRR, the amount

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left to spend that number is really small. That's why

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you end up with a really hot rate of return

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because we're pretty much done the spend.

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Speaker 2: We're turning this mine on very soon.

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Speaker 1: It really nice to get this study out the door

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so we can talk about production, even if it is

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a very constrained version of what we are actually going

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to do.

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Speaker 4: Yeah, and imagine if it showed the most likely scenario

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that IURR would go astronomical exponential.

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Speaker 2: I think. So, I mean we are going to mine.

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Speaker 1: We very much expect to mine higher tonnage than is

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in this on a daily basis.

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Speaker 2: Higher overall tonnage.

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Speaker 1: So we expect it to be a bigger mine on

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a daily basis that lasts longer.

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Speaker 2: The grade might be a bit lower than what's in

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this because these red lag systems have a really high

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grade core to the vein, and then they do have

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a halo, so call it.

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Speaker 1: Another meter of width a half meet on each side

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that averages three or four grams per ton. That three

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or four gram per ton halo that got excluded from

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this study because it was an economic based on that

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sixteen eighty.

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Speaker 2: US gold price. So we it'll be slightly lower grade,

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but it'll be more.

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Speaker 1: Times and you'll daily end over the life of mine,

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and that will economically work out better.

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Speaker 2: So we're going to produce the number of ounces that

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we state or more, and we.

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Speaker 3: Expect hopefully that the costs will be a bit lower

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as well, because that wider mining approach long hal stoping

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instead of the cut and fill that's really focused on

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the narrow stuff, is about half the mining costs.

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Speaker 2: So there's a lot of potential upside in all of

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these numbers.

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Speaker 4: Yeah, and then even without the upside, two hundred and

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fifty five percent IRR. You know, hedge funds in the

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New York City would kill for that kind of are

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in fact, they've been known to. But we look at

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operation date Q two that's still on track.

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Speaker 1: Yeah, So in Q two well, I guess in Q

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one in March, we're going to turn on the mill

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so that.

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Speaker 2: We can process the bulk samples.

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Speaker 1: And then so that'll process the bulk samples, which is

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really important, we'll be able to compare the tonnage and

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grade that we say we're going to deliver to the

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tonnage and grade that we actually delivered for those bulk

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samples from a few parts of the mine, and then

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we will roll into production mining. Now we want to

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we want to say that it's sort of near the

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end of Q two that we're guaranteed to be doing it.

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But that's that's absolutely the timeline that we're in.

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Speaker 4: That's pretty exciting to see project like this given up

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for dead, resurrected and made operational and profitable. Pretty good.

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Any are there any obstacles you see in the path.

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It's just a question of doing the work. Now. Is

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there anything potentially that we should be aware of?

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Speaker 1: You know, really the key obstacle was making sure that

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we had the money in place so that we could

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do the work. Like you said, the other thing is

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just getting the work done, and that was the other

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big achievement that you and I discuss pre call that's

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happened since the last time I was on the show,

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which is that we closed the deals to put the

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money in the bank so that we are funded to

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get this thing into production.

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Speaker 2: So that was we did a.

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Speaker 1: Financing in the fall, but then at the beginning of

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this year we closed a debt facility with Nabari.

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Speaker 2: That's a thirty five million US debt facility. We've pulled

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the first.

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Speaker 1: Fifteen million of that, still twenty million available on that,

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and that is the amount of money that we need

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to get this thing up and running.

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Speaker 2: So that's the real That was the biggest.

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Speaker 1: D risking step perhaps, I mean, the study is important

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because we want everyone to have a base case for

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what we're doing. But having the money in the bank

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now we can really put our heads down and just

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focus on making sure things like the mining at site

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ramps up in terms of rate and maintains accuracy. Like

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that's the kind of thing that is really essential in

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success at a high.

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Speaker 2: Grade underground goal mine.

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Speaker 1: Your miners have to mine in exactly the right places,

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and they have to do it with enough efficiency that

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you're doing the meters a day that your mind plan

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calls for. And so this test mining that we're doing

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right now. That's the stuff we're going to put through

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the mill in March. This test mining is amazing for

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that it is truly practicing before you do. So like

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the miners are practicing on mining in this the range

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of environments that's there, close to old stops.

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Speaker 2: Not close to old stops, narrower areas, wider areas.

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Speaker 1: We're practicing it so that we know exactly the right

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approach to be safe first and then accurate and efficient.

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So just ramping up that meterage and making sure that

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things are happening on site with the kind of like

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I say, accuracy, reliability and efficiency that they need to

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that's really fundamental in a new mind. So that's the

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biggest obstacle for us as a team over the next

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few months.

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Speaker 3: Right.

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Speaker 4: So it's just basically bringing all the details together and

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this will market Change's sixth success full mind restart, which

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has got to be some kind of record out there.

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Speaker 2: It probably is.

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Speaker 1: I wonder if there's anybody anybody else between builds and restarts.

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Speaker 2: He's yeah, he's absolutely done a lot. He is. He's

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at the Mind sight right now.

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Speaker 1: We were in Toronto last week marketing this prefeasibilities that

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he and he flew to the mind side and he

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sent me a picture of himself from inside. You you

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fly to red Lake from Winnipeg and it's about a

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forty five minute flight on a very very small airplane

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that's run by a company called bare Skin Airlines, And

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he sent me a picture from the inside of the plane,

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which seats about sixteen people. I think, you know, one

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person per side on each side of the aisle. He

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was the only person on the plane and it was

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minus three celsius inside the plane.

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Speaker 2: And he, despite all of that, was very excited to

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be heading.

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Speaker 1: To Red Lake because he loves being on site and

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making sure that this operational readiness is building up.

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Speaker 4: Yeah, he's very much a hands on operator, and I

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guess thank goodness for Canada's bush pilots that kind of

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make the industry work. So we're going to look for

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Q two later in Q two start to production. But

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everything is happening now. Hey, we'll see you in Vancouver

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at VRICK. Everybody go over to Westredlakegold dot com sign

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up for notifications. They're coming fast and furious, and the

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ticker symbols in the US w l R GF and

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of course in Canada wr LG Gwen. We'll see you soon.

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Thanks so much.

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Speaker 2: Nice to see you, Kerry, We'll see you next week.

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