Speaker 1: NPV. Just at that twenty six hundred dollars, the twenty
percent upside on the gold price, just on the financial model,
not changing what tons you mind, but just on the
financial model that MPV is five hundred million Canadian instead
of the three fifteen. And again that's not changing, that's
not adding the tons that we think we're going to
be able to add economically, that we know we're going
to add economically to mine. So yeah, there's there's a
lot of room on this for this situation to run.
Speaker 2: The Financial Survival Network now.
Speaker 1: More than network, the Financial Survival Network.
Speaker 2: Welcome. This is Financial Survival Network. I'm your host, Carrie Lutz.
We are getting a major and I do mean major
sponsor update from West red Lake Gold Mines and Communications VP.
Gwen Preston is with us now. Gwen, the mill has restarted.
Speaker 1: Correct, it has. I am on site right now, as
you might be able to tell from the office that
I'm sitting in. The mill is just up the hill
behind me here. It was so exciting to get here
at the beginning of this week and hear those mills turning,
and then the next day I got to go up
and walk around and look at it all, and I
mean there's bubbles going through the aeration tank, and there's carbon,
there's gold gathering on the carbon screens. It's gone. It's
really really exciting.
Speaker 2: It's like a big machine and it takes a long
time to get it started, but once it starts, it
keeps going. So before we get to anything technical stuff,
what's happening in the community. First thing, we got to
talk about record high goal prices. As we speak now,
gold is thirty thirty USD and what does that mean
for projected seventy thousand ounces per year production?
Speaker 1: Yeah, so I mean it means great things, is the
obvious answer. Technically, what can I talk about, Well, our
prefeasibility study. You know that document has a twenty percent
gold price upside case laid out. Twenty percent upside for
the long term gold price in that study is only
twenty six hundred dollars, so still four hundred dollars below
the current gold price, and at twenty six hundred dollars,
the free cash flow annually averages out at like ninety
five million dollars. And of course that whole mind plan
is based on a much lower gold price assumption. When
they went through and decided which tons would be economic
to mine. That was based on a sort of seventeen
hundred dollars gold price assumption. So when you go back
and look at what we're actually going to mine at
a gold price environment that we're in right now, it
really creates that The short version of a detailed story
there is that it really enables a lot more continuity
in the in the in the mineralization instead of having
to work with small less of particularly high grade where
those lenses are actually connected by some lower grade material.
It makes a huge amount of sense in a gold
market like this to also mine that lower grade material,
and it means that we can use a lower cost
mining method. So I got in the weeds a little
bit there, but it's really important because this gold price
environment not only does it mean that each ounce that
we're produce is worth way more. I mean, our budget
is based on selling gold at twenty five hundred dollars
US and so you know we're making money from this,
but we will make gold from this bulk sample and
we are going to get significantly more than twenty five
one hundred dollars per ounce from that. And then going
forward for what this mine can be the gold price
environment is just so exciting.
Speaker 2: So in other words, your cutoff grade does way way
lower because if you can get the higher grade going
through that lower grade, who cares at three thousand dollars gold?
Speaker 1: That's exactly right if you think of it as if
we're mining six gram, eight gram, twelve gram whatever it
is right here, and then another lens of it right here,
and in a lower gold price environment you might do
really selective mining and just take those two lenses. But
in a higher gold price environment, you absolutely mind the
whole block. And often at Madsen, the rest of that
block also carries grade, maybe not six, eight or twelve grams,
but it might carry one to three grams, And so
it pays for itself because you've already done the work
borne the cost of getting yourself over to that area,
driving the tunnel over to that area, and then you
get to use a lower cost mining method to take
those tons out. So it really makes Madsin an easier mind,
a more continuous mind when you're working when you're incremental
cutoff grade, so the grade that you apply to the
tons around the tons that you're already going to mine.
When that incremental cutoff grade drops down, it really opens
up a lot of opportunity.
Speaker 2: Yeah, and as we know the there could be other
pockets of the higher grade gold that you might have
otherwise not found going through that lower grade because you know,
there's not real consistency of grade throughout.
Speaker 1: Absolutely, I mean, not only is there potential for positive
surprises like you say, in that lower grade stuff, I
mean the whole I've spent so much time with Jill,
our chief geologist. Yesterday, I spent hours in her office
just getting the latest download on everything. And you know,
the pockets that they are just discovering, you know, here
there outside of the resource, better in the resource. It's
it's exciting. I mean, that's why you want, That's why
you put the effort in to mine in Red Lake. Yeah,
you got to do a lot of drilling because of
this potty nature of the deposit, but of the mineralization
in this region. But the reason you do it, the
reason people have done it for twenty six million ounces
of production already, is because you get those benefits, those
surprises because the systems here are just are just really rich.
Speaker 2: Absolutely so. Estimates initial estimates for actual tons grade ounces
from bulk sample is that holding close.
Speaker 1: To estimates, it is going very well. So, I mean
we haven't put out a lot of information on exactly
what we're mining and things like that. We've said that
the bulk sample will be at least ten thousand tons,
absolutely will be. It's going to be from six stopes
that are in three different parts of the deposit. That's
for sure. Each of those stope areas. When we put
out the results, we're going to give you the tonnage
and the grade for each of those areas. And one
of the big things that I spent my time with
Jill yesterday talking about is how that's going. And at
this point we're just about to start putting the first
stope through the mill, so in a week we internally
will know how that reconcation reconciliation truly played out. At
this point, what we have are the sampling of the
samples of the mining. So you do sampling around, you
do chip face is on the face, you do chip
faces like as you go doing the mining, and then
you also do muck samples. Muck is the terrible word
that they use for the ore. They really need a
more positive word. But anyways, they do muck samples, Like
if the scoop is here, there's five different spots on
the scoop where they sample, and so that gives you
an estimate of the grade of that stope. And those
estimates are coming in right where we want them to
come in. So we're really excited to be that we
will be able to issue strong reconciliation results. And you know,
we will find out for sure over the coming weeks
as we process these bulk samples through the mill.
Speaker 2: Okay, so what's the timeline for full production? Would you say?
Speaker 1: Yeah, so, well, we consistent with what we've been saying,
which is that we will ramp up through the second
half of the year. So right near maybe just a
bit before the middle of the year is when we
expect to start putting consistent monialization through the mill.
Speaker 2: All right, so second half we have to look forward
to it and financially enough money to see this through.
Speaker 1: Yes, we do. So that financing that we did, you know,
gave us that additional financial strength, a little bit more
just capacity to do things, to ramp up faster, to
do the things that we need to do. And then
I will note this bulk sample is going to produce
not a tiny amount of gold, right, just you can
do some very ballpark estimates if we're mining ten thousand tons,
take some even conservative estimates of what the grade is
going to be in the recovery and whatnot. You can
see that we're going to produce a reasonable amount of
gold from this bak sample and then we're going to
immediately sell it because that's the name of the game.
So we are going to pull in a reasonable a
reasonable amount of money from the bulk sample as well,
which is just additional. So yes, we are we're comfortable
that we have what we need on that front.
Speaker 2: So cash flow is right around the corner.
Speaker 1: Yes, it is absolutely oky.
Speaker 2: So on some more benign or mundane issues, labor, community relations,
you got to workforce camp set up in use and
what's what's the feeling in the community.
Speaker 1: Yeah, that's actually a cool question. So we did a
grand opening of our of our camp just the other day,
just two days ago, did a ribbon cutting for the camp.
This is a one hundred and fourteen person facility. You have,
of course a full kitchen and a gym and all
of that. You know, in the recent iterations of the
mads and nine, the prior operator and us, and I
think in the Cloud days as well, there was never
a camp and so the Mind has always relied on
local workforce, which is fantastic, but also when bringing people
in as employees, has had to rely on housing in
the community. And it turns out when you also have
Ken Ross ramping up their action their action at the
Great Bear Project and other operators around, you know, there
isn't actually you know, it puts a lot of pressure
on housing in a five thousand person community, which is
what Red Lake is. So we're really excited to not
have that pressure on the community, to have people in
comfortable conditions, and we want to attract good workers. This
is a good Mind. We're really optimistic that we're going
to run a good, solid mine for many years and
we want the right people here. And so you know,
setting up a nice, comfortable, clean camp where everybody gets
their own bathroom and there's good food that actually really matters.
It helps bring good people, and good people are pave
the way for success.
Speaker 2: It sounds like a good place to open up an
Airbnb in the lake there, you know got me mine.
Speaker 1: I mean a couple months ago when I was trying
to arrange for various people to come and visit site.
We couldn't even find hotel rooms for them. We had
to like kick some of our contractors out to a
community that's down the road so that we could steal
their hotel rooms so that we could have people come
and visit. Because that's how busy it was in the
town of.
Speaker 2: Red Lake, all right. So it looks like the stars
of aligned. Gold prices near records added, near record highs.
You got the money, the uh, the samples are conforming
to the estimates, and everything is full sale ahead to
full operation in the second half of twenty twenty five.
Speaker 1: Absolutely, I mean I love spending time on site like
I have this week. I sit in on the morning
huddle and on maintenance meetings and all of that, and
you just it really reinforces good reminder to me of
something that I talk about a lot. It's like minds
are complicated, and every layer of that machine matters. And
so if you're having an issue with recruitment, if you're
having an issue sort of down the chain with maintenance,
if you're having an issue, these things have the potential
to reverberate through the machine, and so it really takes
experienced leadership and like focus to make sure that you
address those to realize that those things are happening and
to address them. And I'd say, this whole test mining
and ramp up process that we've gone through, you can't
put a price on the value of that opportunity for
us because we've gone through that, we're currently we're still
going through that. We're seeing the issues that crop up,
and we're figuring out how to do better. And so
we're doing that now instead of trying to manage that
as we're in you know, ramp up towards commercial operations.
So yeah, really exciting to see all the hard work
that's going on here.
Speaker 2: Yeah. Hey, I would love to see an update of
the NPV to see what it is with these new
gold prices. Even if you don't accept the current gold
price but go eighty percent of it ninety percent, I'd
love to see what the ENDPV would be now.
Speaker 1: Yeah, I mean the NPV just at that twenty six
hundred dollars, the twenty percent upside on the gold price,
just on the financial model, not changing what tons you mind,
but just on the financial model, that MPV is five
hundred million Canadian instead of the three point fifteen, and
again that's not changing, that's not adding the tons that
we think we're going to be able to add economically,
that we know we're going to add economically to mine.
So yeah, there's there's a lot of room on this
for this situation to run.
Speaker 2: Yeah, and that's that's really fifteen percent below what the
current gold price is, so that's going to make a
big difference there. Anyways, appreciate your coming on, Glenn, and
make sure you all go over to Westredlake Gold dot
com sign up for notifications so you'll know exactly when
the results come in for the sample bulk tonnage ticker
symbols in the US w l r GF and of
course in Canada w r LG Glenn. We'll talk to
you soon and get a further update.
Speaker 1: Thanks so much, Kerry, good to see you.
Speaker 2: The Financial Survival Network