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West Red Lake's Mill is Running, Cash Flow Commences with Gwen Preston · Financial Survival Network

• 0:00
  Speaker 1: NPV. Just at that twenty six hundred dollars, the twenty
• 0:03
  Speaker 1: percent upside on the gold price, just on the financial model,
• 0:07
  Speaker 1: not changing what tons you mind, but just on the
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  Speaker 1: financial model that MPV is five hundred million Canadian instead
• 0:13
  Speaker 1: of the three fifteen. And again that's not changing, that's
• 0:16
  Speaker 1: not adding the tons that we think we're going to
• 0:18
  Speaker 1: be able to add economically, that we know we're going
• 0:20
  Speaker 1: to add economically to mine. So yeah, there's there's a
• 0:24
  Speaker 1: lot of room on this for this situation to run.
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  Speaker 2: The Financial Survival Network now.
• 0:32
  Speaker 1: More than network, the Financial Survival Network.
• 0:38
  Speaker 2: Welcome. This is Financial Survival Network. I'm your host, Carrie Lutz.
• 0:43
  Speaker 2: We are getting a major and I do mean major
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  Speaker 2: sponsor update from West red Lake Gold Mines and Communications VP.
• 0:53
  Speaker 2: Gwen Preston is with us now. Gwen, the mill has restarted.
• 0:58
  Speaker 1: Correct, it has. I am on site right now, as
• 1:01
  Speaker 1: you might be able to tell from the office that
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  Speaker 1: I'm sitting in. The mill is just up the hill
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  Speaker 1: behind me here. It was so exciting to get here
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  Speaker 1: at the beginning of this week and hear those mills turning,
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  Speaker 1: and then the next day I got to go up
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  Speaker 1: and walk around and look at it all, and I
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  Speaker 1: mean there's bubbles going through the aeration tank, and there's carbon,
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  Speaker 1: there's gold gathering on the carbon screens. It's gone. It's
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  Speaker 1: really really exciting.
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  Speaker 2: It's like a big machine and it takes a long
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  Speaker 2: time to get it started, but once it starts, it
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  Speaker 2: keeps going. So before we get to anything technical stuff,
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  Speaker 2: what's happening in the community. First thing, we got to
• 1:40
  Speaker 2: talk about record high goal prices. As we speak now,
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  Speaker 2: gold is thirty thirty USD and what does that mean
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  Speaker 2: for projected seventy thousand ounces per year production?
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  Speaker 1: Yeah, so I mean it means great things, is the
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  Speaker 1: obvious answer. Technically, what can I talk about, Well, our
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  Speaker 1: prefeasibility study. You know that document has a twenty percent
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  Speaker 1: gold price upside case laid out. Twenty percent upside for
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  Speaker 1: the long term gold price in that study is only
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  Speaker 1: twenty six hundred dollars, so still four hundred dollars below
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  Speaker 1: the current gold price, and at twenty six hundred dollars,
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  Speaker 1: the free cash flow annually averages out at like ninety
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  Speaker 1: five million dollars. And of course that whole mind plan
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  Speaker 1: is based on a much lower gold price assumption. When
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  Speaker 1: they went through and decided which tons would be economic
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  Speaker 1: to mine. That was based on a sort of seventeen
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  Speaker 1: hundred dollars gold price assumption. So when you go back
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  Speaker 1: and look at what we're actually going to mine at
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  Speaker 1: a gold price environment that we're in right now, it
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  Speaker 1: really creates that The short version of a detailed story
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  Speaker 1: there is that it really enables a lot more continuity
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  Speaker 1: in the in the in the mineralization instead of having
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  Speaker 1: to work with small less of particularly high grade where
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  Speaker 1: those lenses are actually connected by some lower grade material.
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  Speaker 1: It makes a huge amount of sense in a gold
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  Speaker 1: market like this to also mine that lower grade material,
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  Speaker 1: and it means that we can use a lower cost
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  Speaker 1: mining method. So I got in the weeds a little
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  Speaker 1: bit there, but it's really important because this gold price
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  Speaker 1: environment not only does it mean that each ounce that
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  Speaker 1: we're produce is worth way more. I mean, our budget
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  Speaker 1: is based on selling gold at twenty five hundred dollars
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  Speaker 1: US and so you know we're making money from this,
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  Speaker 1: but we will make gold from this bulk sample and
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  Speaker 1: we are going to get significantly more than twenty five
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  Speaker 1: one hundred dollars per ounce from that. And then going
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  Speaker 1: forward for what this mine can be the gold price
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  Speaker 1: environment is just so exciting.
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  Speaker 2: So in other words, your cutoff grade does way way
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  Speaker 2: lower because if you can get the higher grade going
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  Speaker 2: through that lower grade, who cares at three thousand dollars gold?
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  Speaker 1: That's exactly right if you think of it as if
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  Speaker 1: we're mining six gram, eight gram, twelve gram whatever it
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  Speaker 1: is right here, and then another lens of it right here,
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  Speaker 1: and in a lower gold price environment you might do
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  Speaker 1: really selective mining and just take those two lenses. But
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  Speaker 1: in a higher gold price environment, you absolutely mind the
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  Speaker 1: whole block. And often at Madsen, the rest of that
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  Speaker 1: block also carries grade, maybe not six, eight or twelve grams,
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  Speaker 1: but it might carry one to three grams, And so
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  Speaker 1: it pays for itself because you've already done the work
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  Speaker 1: borne the cost of getting yourself over to that area,
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  Speaker 1: driving the tunnel over to that area, and then you
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  Speaker 1: get to use a lower cost mining method to take
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  Speaker 1: those tons out. So it really makes Madsin an easier mind,
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  Speaker 1: a more continuous mind when you're working when you're incremental
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  Speaker 1: cutoff grade, so the grade that you apply to the
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  Speaker 1: tons around the tons that you're already going to mine.
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  Speaker 1: When that incremental cutoff grade drops down, it really opens
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  Speaker 1: up a lot of opportunity.
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  Speaker 2: Yeah, and as we know the there could be other
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  Speaker 2: pockets of the higher grade gold that you might have
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  Speaker 2: otherwise not found going through that lower grade because you know,
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  Speaker 2: there's not real consistency of grade throughout.
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  Speaker 1: Absolutely, I mean, not only is there potential for positive
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  Speaker 1: surprises like you say, in that lower grade stuff, I
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  Speaker 1: mean the whole I've spent so much time with Jill,
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  Speaker 1: our chief geologist. Yesterday, I spent hours in her office
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  Speaker 1: just getting the latest download on everything. And you know,
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  Speaker 1: the pockets that they are just discovering, you know, here
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  Speaker 1: there outside of the resource, better in the resource. It's
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  Speaker 1: it's exciting. I mean, that's why you want, That's why
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  Speaker 1: you put the effort in to mine in Red Lake. Yeah,
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  Speaker 1: you got to do a lot of drilling because of
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  Speaker 1: this potty nature of the deposit, but of the mineralization
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  Speaker 1: in this region. But the reason you do it, the
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  Speaker 1: reason people have done it for twenty six million ounces
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  Speaker 1: of production already, is because you get those benefits, those
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  Speaker 1: surprises because the systems here are just are just really rich.
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  Speaker 2: Absolutely so. Estimates initial estimates for actual tons grade ounces
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  Speaker 2: from bulk sample is that holding close.
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  Speaker 1: To estimates, it is going very well. So, I mean
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  Speaker 1: we haven't put out a lot of information on exactly
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  Speaker 1: what we're mining and things like that. We've said that
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  Speaker 1: the bulk sample will be at least ten thousand tons,
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  Speaker 1: absolutely will be. It's going to be from six stopes
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  Speaker 1: that are in three different parts of the deposit. That's
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  Speaker 1: for sure. Each of those stope areas. When we put
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  Speaker 1: out the results, we're going to give you the tonnage
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  Speaker 1: and the grade for each of those areas. And one
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  Speaker 1: of the big things that I spent my time with
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  Speaker 1: Jill yesterday talking about is how that's going. And at
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  Speaker 1: this point we're just about to start putting the first
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  Speaker 1: stope through the mill, so in a week we internally
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  Speaker 1: will know how that reconcation reconciliation truly played out. At
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  Speaker 1: this point, what we have are the sampling of the
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  Speaker 1: samples of the mining. So you do sampling around, you
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  Speaker 1: do chip face is on the face, you do chip
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  Speaker 1: faces like as you go doing the mining, and then
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  Speaker 1: you also do muck samples. Muck is the terrible word
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  Speaker 1: that they use for the ore. They really need a
• 7:09
  Speaker 1: more positive word. But anyways, they do muck samples, Like
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  Speaker 1: if the scoop is here, there's five different spots on
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  Speaker 1: the scoop where they sample, and so that gives you
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  Speaker 1: an estimate of the grade of that stope. And those
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  Speaker 1: estimates are coming in right where we want them to
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  Speaker 1: come in. So we're really excited to be that we
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  Speaker 1: will be able to issue strong reconciliation results. And you know,
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  Speaker 1: we will find out for sure over the coming weeks
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  Speaker 1: as we process these bulk samples through the mill.
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  Speaker 2: Okay, so what's the timeline for full production? Would you say?
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  Speaker 1: Yeah, so, well, we consistent with what we've been saying,
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  Speaker 1: which is that we will ramp up through the second
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  Speaker 1: half of the year. So right near maybe just a
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  Speaker 1: bit before the middle of the year is when we
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  Speaker 1: expect to start putting consistent monialization through the mill.
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  Speaker 2: All right, so second half we have to look forward
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  Speaker 2: to it and financially enough money to see this through.
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  Speaker 1: Yes, we do. So that financing that we did, you know,
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  Speaker 1: gave us that additional financial strength, a little bit more
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  Speaker 1: just capacity to do things, to ramp up faster, to
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  Speaker 1: do the things that we need to do. And then
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  Speaker 1: I will note this bulk sample is going to produce
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  Speaker 1: not a tiny amount of gold, right, just you can
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  Speaker 1: do some very ballpark estimates if we're mining ten thousand tons,
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  Speaker 1: take some even conservative estimates of what the grade is
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  Speaker 1: going to be in the recovery and whatnot. You can
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  Speaker 1: see that we're going to produce a reasonable amount of
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  Speaker 1: gold from this bak sample and then we're going to
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  Speaker 1: immediately sell it because that's the name of the game.
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  Speaker 1: So we are going to pull in a reasonable a
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  Speaker 1: reasonable amount of money from the bulk sample as well,
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  Speaker 1: which is just additional. So yes, we are we're comfortable
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  Speaker 1: that we have what we need on that front.
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  Speaker 2: So cash flow is right around the corner.
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  Speaker 1: Yes, it is absolutely oky.
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  Speaker 2: So on some more benign or mundane issues, labor, community relations,
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  Speaker 2: you got to workforce camp set up in use and
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  Speaker 2: what's what's the feeling in the community.
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  Speaker 1: Yeah, that's actually a cool question. So we did a
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  Speaker 1: grand opening of our of our camp just the other day,
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  Speaker 1: just two days ago, did a ribbon cutting for the camp.
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  Speaker 1: This is a one hundred and fourteen person facility. You have,
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  Speaker 1: of course a full kitchen and a gym and all
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  Speaker 1: of that. You know, in the recent iterations of the
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  Speaker 1: mads and nine, the prior operator and us, and I
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  Speaker 1: think in the Cloud days as well, there was never
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  Speaker 1: a camp and so the Mind has always relied on
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  Speaker 1: local workforce, which is fantastic, but also when bringing people
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  Speaker 1: in as employees, has had to rely on housing in
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  Speaker 1: the community. And it turns out when you also have
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  Speaker 1: Ken Ross ramping up their action their action at the
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  Speaker 1: Great Bear Project and other operators around, you know, there
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  Speaker 1: isn't actually you know, it puts a lot of pressure
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  Speaker 1: on housing in a five thousand person community, which is
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  Speaker 1: what Red Lake is. So we're really excited to not
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  Speaker 1: have that pressure on the community, to have people in
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  Speaker 1: comfortable conditions, and we want to attract good workers. This
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  Speaker 1: is a good Mind. We're really optimistic that we're going
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  Speaker 1: to run a good, solid mine for many years and
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  Speaker 1: we want the right people here. And so you know,
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  Speaker 1: setting up a nice, comfortable, clean camp where everybody gets
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  Speaker 1: their own bathroom and there's good food that actually really matters.
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  Speaker 1: It helps bring good people, and good people are pave
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  Speaker 1: the way for success.
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  Speaker 2: It sounds like a good place to open up an
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  Speaker 2: Airbnb in the lake there, you know got me mine.
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  Speaker 1: I mean a couple months ago when I was trying
• 10:33
  Speaker 1: to arrange for various people to come and visit site.
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  Speaker 1: We couldn't even find hotel rooms for them. We had
• 10:38
  Speaker 1: to like kick some of our contractors out to a
• 10:40
  Speaker 1: community that's down the road so that we could steal
• 10:43
  Speaker 1: their hotel rooms so that we could have people come
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  Speaker 1: and visit. Because that's how busy it was in the
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  Speaker 1: town of.
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  Speaker 2: Red Lake, all right. So it looks like the stars
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  Speaker 2: of aligned. Gold prices near records added, near record highs.
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  Speaker 2: You got the money, the uh, the samples are conforming
• 11:01
  Speaker 2: to the estimates, and everything is full sale ahead to
• 11:07
  Speaker 2: full operation in the second half of twenty twenty five.
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  Speaker 1: Absolutely, I mean I love spending time on site like
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  Speaker 1: I have this week. I sit in on the morning
• 11:17
  Speaker 1: huddle and on maintenance meetings and all of that, and
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  Speaker 1: you just it really reinforces good reminder to me of
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  Speaker 1: something that I talk about a lot. It's like minds
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  Speaker 1: are complicated, and every layer of that machine matters. And
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  Speaker 1: so if you're having an issue with recruitment, if you're
• 11:34
  Speaker 1: having an issue sort of down the chain with maintenance,
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  Speaker 1: if you're having an issue, these things have the potential
• 11:40
  Speaker 1: to reverberate through the machine, and so it really takes
• 11:43
  Speaker 1: experienced leadership and like focus to make sure that you
• 11:48
  Speaker 1: address those to realize that those things are happening and
• 11:51
  Speaker 1: to address them. And I'd say, this whole test mining
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  Speaker 1: and ramp up process that we've gone through, you can't
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  Speaker 1: put a price on the value of that opportunity for
• 12:01
  Speaker 1: us because we've gone through that, we're currently we're still
• 12:05
  Speaker 1: going through that. We're seeing the issues that crop up,
• 12:08
  Speaker 1: and we're figuring out how to do better. And so
• 12:10
  Speaker 1: we're doing that now instead of trying to manage that
• 12:13
  Speaker 1: as we're in you know, ramp up towards commercial operations.
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  Speaker 1: So yeah, really exciting to see all the hard work
• 12:19
  Speaker 1: that's going on here.
• 12:20
  Speaker 2: Yeah. Hey, I would love to see an update of
• 12:23
  Speaker 2: the NPV to see what it is with these new
• 12:26
  Speaker 2: gold prices. Even if you don't accept the current gold
• 12:30
  Speaker 2: price but go eighty percent of it ninety percent, I'd
• 12:35
  Speaker 2: love to see what the ENDPV would be now.
• 12:38
  Speaker 1: Yeah, I mean the NPV just at that twenty six
• 12:40
  Speaker 1: hundred dollars, the twenty percent upside on the gold price,
• 12:44
  Speaker 1: just on the financial model, not changing what tons you mind,
• 12:46
  Speaker 1: but just on the financial model, that MPV is five
• 12:49
  Speaker 1: hundred million Canadian instead of the three point fifteen, and
• 12:52
  Speaker 1: again that's not changing, that's not adding the tons that
• 12:56
  Speaker 1: we think we're going to be able to add economically,
• 12:58
  Speaker 1: that we know we're going to add economically to mine.
• 13:01
  Speaker 1: So yeah, there's there's a lot of room on this
• 13:04
  Speaker 1: for this situation to run.
• 13:06
  Speaker 2: Yeah, and that's that's really fifteen percent below what the
• 13:11
  Speaker 2: current gold price is, so that's going to make a
• 13:14
  Speaker 2: big difference there. Anyways, appreciate your coming on, Glenn, and
• 13:20
  Speaker 2: make sure you all go over to Westredlake Gold dot
• 13:23
  Speaker 2: com sign up for notifications so you'll know exactly when
• 13:27
  Speaker 2: the results come in for the sample bulk tonnage ticker
• 13:31
  Speaker 2: symbols in the US w l r GF and of
• 13:35
  Speaker 2: course in Canada w r LG Glenn. We'll talk to
• 13:39
  Speaker 2: you soon and get a further update.
• 13:42
  Speaker 1: Thanks so much, Kerry, good to see you.
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  Speaker 2: The Financial Survival Network