Latest / Financial Survival Network / West Red Lake Getting Ready to Restart Production & Cash Flow at Madsen Mine w/CEO Shane Williamson

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West Red Lake Getting Ready to Restart Production & Cash Flow at Madsen Mine w/CEO Shane Williamson · Financial Survival Network

• 0:00
  Speaker 1: And we're probably one of the only projects coming into
• 0:03
  Speaker 1: production in Canada in particular, you know, and coming into
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  Speaker 1: production on a rising gold prize that midnext year gold
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  Speaker 1: would be three thousand and that's a perfect time now
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  Speaker 1: when you get an uplift, as you know, from moving
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  Speaker 1: from explorer to developer and then to producer, and that's
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  Speaker 1: a perfect time to get in on the story and
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  Speaker 1: follow the story as we're successful to run up the project.
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  Speaker 2: The Financial Survival Network now more than ever, the Financial
• 0:33
  Speaker 2: Survival Network. And welcome. This is Financial Survival Network.
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  Speaker 3: I'm your host, Carrie Lutz, bringing you a major update
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  Speaker 3: from our sponsor at West red Lake Gold Mines and
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  Speaker 3: CEO president Shane Williams with us now, Hane, appreciate you
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  Speaker 3: coming on now. I know it's the end of the year.
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  Speaker 3: You've got so many things going on and you're trying
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  Speaker 3: to wrap things up that your PFS is coming out.
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  Speaker 2: Can you just bring us up to date on the
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  Speaker 2: mind restart.
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  Speaker 1: Yeah. Yes, as we get towards that back end of
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  Speaker 1: the year, we're really focused on, you know, getting ready
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  Speaker 1: for that restart. There's a lot of parallel activities. We
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  Speaker 1: just had a press we're doing a kind of a
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  Speaker 1: monthly now construction update. We released another one this morning.
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  Speaker 1: People can see the level of antensity. There's parallel activities ongoing.
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  Speaker 4: So we're really coming to the peak of that.
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  Speaker 1: Restart activities now as we get in towards Christmas and
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  Speaker 1: into the new year. We've been doing obviously most of
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  Speaker 1: this year, we've done a lot of drilling out of definition.
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  Speaker 1: We went and got a lot of projects capital approach,
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  Speaker 1: and they're all really coming together now.
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  Speaker 4: Towards the back end of the year and into the
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  Speaker 4: first quarter.
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  Speaker 1: So yeah, busy and exciting times, Western Lake.
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  Speaker 3: Can you give us an approximate date here, and not
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  Speaker 3: to pin you down and I don't want you to
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  Speaker 3: be over promised and not be able to come, but
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  Speaker 3: give us an approximate date range.
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  Speaker 4: Yeah, So the plan is towards.
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  Speaker 1: The middle of next year, you know, the middle of
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  Speaker 1: next year Q one. We have finished off all our
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  Speaker 1: capital projects. We're starting some test mining, to do some
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  Speaker 1: test mining, et cetera on a bul example, and then
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  Speaker 1: once they're in place, our pfense is coming out in
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  Speaker 1: early January, you know. And so those three activities together
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  Speaker 1: set us up nicely for restart, which would be into
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  Speaker 1: middle to the back end of next year twenty twenty five.
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  Speaker 3: So you've done this before. This is nothing new for you. You're
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  Speaker 3: not learning on the job here. But every mind has
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  Speaker 3: its own particular challenges, its own things that make you
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  Speaker 3: run to pull out your hair. What are the challenges
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  Speaker 3: been here? The biggest challenges to you?
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  Speaker 1: Yeah, I've done this five times, Carrie. This is my
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  Speaker 1: fifth mind restart, so there's been a lot of a
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  Speaker 1: lot of it.
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  Speaker 4: And you're right, everyone has its own unique challenges. For me,
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  Speaker 4: we been lucky.
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  Speaker 1: A lot of it is getting understanding of your learning,
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  Speaker 1: the lessons of the of the of the previous operator.
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  Speaker 4: You know, that's key. You know a lot of that,
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  Speaker 4: a lot of that.
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  Speaker 1: It took a long time to get into the detail
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  Speaker 1: and understand what were the key boxes that they that
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  Speaker 1: need needed to be addressed for us to be successful,
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  Speaker 1: and that's taken quite a while. The majority of it
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  Speaker 1: was around that drilling understanding of the your body, getting
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  Speaker 1: that level of definition, So that's really been the technical challenge.
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  Speaker 4: Everything else was.
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  Speaker 1: Really reasonably okay. You know, they have a good mill,
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  Speaker 1: they have a good infrastructure on site, but it was
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  Speaker 1: really the understanding of your body and spending the time
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  Speaker 1: and the detailed effort to really understand that and now
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  Speaker 1: get the mining kind of going. They've been the real
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  Speaker 1: technical challenges as well in in the area on the project.
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  Speaker 2: So the devil's always in the details.
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  Speaker 4: Right, Yeah, it's always in the detail. I I compared
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  Speaker 4: it to it like an orchestrat.
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  Speaker 1: There's a lot of different moving parts and individual things
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  Speaker 1: have come together at the right time to be successful
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  Speaker 1: on a mind and.
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  Speaker 3: You've got to be watching all those players make sure
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  Speaker 3: that they're all on the same page playing the same tune, right, Yeah.
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  Speaker 4: They all have to be playing the same tune.
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  Speaker 3: Nine.
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  Speaker 1: They all have to be in sync, you know, so
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  Speaker 1: they all come together. As I said, the number of
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  Speaker 1: Capitol projects, we underground development, we've underground drilling obviously, we've
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  Speaker 1: financing raising the financing in parallel, it all really has
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  Speaker 1: to come together to that mid next year sort of
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  Speaker 1: restart process.
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  Speaker 3: And right there and in the meantime, you haven't been
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  Speaker 3: standing still. You're still doing exploration work and got a
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  Speaker 3: nice nice intersect on the Upper eight target. Yeah.
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  Speaker 1: I think that's a story that you know, we focused
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  Speaker 1: on this year around the restart to the risking et cetera.
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  Speaker 4: But I think that's a story that we're going to
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  Speaker 4: push a little bit more.
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  Speaker 1: There's huge exploration upside associated with Madson that's never.
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  Speaker 4: Really been done, and so this was one area that.
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  Speaker 1: The team focused on this uperade. As people probably aware
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  Speaker 1: of the Lower eight, it was a very high grade
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  Speaker 1: zone within Red Lake and within within the mats and
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  Speaker 1: mind and the team I found in that there are
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  Speaker 1: a number of these high grade zones throughout the mine
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  Speaker 1: and one of them is this operade zone and we've
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  Speaker 1: we've had quite a few good hits there and the
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  Speaker 1: team are continuing to drill. So I expect this to grow.
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  Speaker 1: And remember it's a high graded part of the your body,
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  Speaker 1: and so high grade makes a big difference in these minds,
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  Speaker 1: as your viewers would probably know, and so that makes
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  Speaker 1: a big difference from an announced profile and the ability
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  Speaker 1: to grow and push the project larger.
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  Speaker 3: Yeah, I know, we got some intersects twenty one plus grams,
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  Speaker 3: fifty two, twenty three and they're meaningful.
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  Speaker 4: Yeah, they're meaningful.
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  Speaker 1: You know, you get a twenty five gram sort of
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  Speaker 1: overbody and you're bringing in that material the mats and
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  Speaker 1: overall at about a seven gram you're getting an overall
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  Speaker 1: average grade of ten to eleven grams, a very high
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  Speaker 1: grade mine in Canada today.
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  Speaker 4: How to be up there on the top high grade
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  Speaker 4: mines in Canada.
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  Speaker 1: And that generates huge cash flow in the current market
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  Speaker 1: prices today. Right.
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  Speaker 3: So meantime, you mentioned you're finishing up the capital projects here.
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  Speaker 3: I think I'd never heard this term before connection drift,
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  Speaker 3: but it makes total sense. So you're kind of unifying
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  Speaker 3: the two ramps that are there now, the east and
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  Speaker 3: the west.
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  Speaker 1: So yeah, they were kind of operated as individual two
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  Speaker 1: and if you think of it like two individual mines,
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  Speaker 1: underground mines that were kind of operated individually and or
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  Speaker 1: had to be hauled all the way to surface and
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  Speaker 1: then transported across by different trucks across surface trucks. And
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  Speaker 1: so the connection of those from an underground perspective opens
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  Speaker 1: up huge possibilities. Not only does it allow efficient movement
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  Speaker 1: of ore, but it also allows exploration in that area
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  Speaker 1: between the two mines, and there's a lot of prospectivity
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  Speaker 1: between those two areas that never really had access to
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  Speaker 1: get the drills. So I know our team and our
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  Speaker 1: mind side team and geo team are very excited about
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  Speaker 1: that the ability to drill those but also from an
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  Speaker 1: efficiency point of view, it does open up a lot of.
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  Speaker 3: Opportunity, right, and so that there's where the mill is constructed,
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  Speaker 3: there appears to be a big target under the mill.
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  Speaker 4: Yeah, there is. There's a lot.
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  Speaker 1: There's a lot of targets in that area and in
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  Speaker 1: numerous different areas, and this connection drift allows access to
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  Speaker 1: some of those areas, allows that to open up those
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  Speaker 1: areas and that take those targets close to the infrastructure
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  Speaker 1: and close the surface.
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  Speaker 3: So you got your primary crusher in and that's always
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  Speaker 3: a good sign because that always happens towards the end
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  Speaker 3: of the process, right before the restart, right.
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  Speaker 1: Yeah, well it's the first part of the chain of processing.
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  Speaker 1: And so you know, we, as I said, in parallel
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  Speaker 1: with our d risking approach, focused on stage approach. And
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  Speaker 1: so the first part that was we bought that crusher.
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  Speaker 1: The previous operator had leased a crusher and they were
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  Speaker 1: running with a contractor. We went down and bought that crusher.
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  Speaker 1: And now what we're doing is we've commissioned it. We're
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  Speaker 1: getting it ready. We're getting it ready for oor or
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  Speaker 1: testing it. We're getting meaning simplayers or for our planned restart.
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  Speaker 3: So you just did a major financing, so I assume
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  Speaker 3: a lot of the money in the treasury that can
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  Speaker 3: see you through the production.
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  Speaker 4: Yeah, we did an equity raise recently.
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  Speaker 1: We've just also agreed on a prelimited time sheet with
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  Speaker 1: a group calling a BARI for a debt facility.
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  Speaker 4: So between the two.
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  Speaker 1: Of those that would give us enough of the money
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  Speaker 1: to move into pre cash flow in the project.
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  Speaker 3: So kind of, I think the market's not really perceiving
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  Speaker 3: how close you are to production, how meaningful that production.
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  Speaker 2: Is going to be.
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  Speaker 3: What do you say when you well, it's the end
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  Speaker 3: of the year, there's tax laws, selling, we know, the
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  Speaker 3: whole thing goes on. It's an annual ritual. But maybe
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  Speaker 3: it's a good time to be looking at the West
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  Speaker 3: red Lake.
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  Speaker 1: Yeah, it's a I mean, yeah, Texas setting is a
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  Speaker 1: big thing. Obviously in Canada, stocks come under pressure.
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  Speaker 4: But I agree the market really doesn't know.
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  Speaker 1: You know, we've had a number of project restarts in
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  Speaker 1: Canada recently, you know, last year and year before, but there's.
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  Speaker 4: Very few coming up this year.
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  Speaker 1: You know, because gold had been down for a number
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  Speaker 1: of years, you know, there wasn't that focus. So into
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  Speaker 1: twenty twenty five, there's very few restarts and we're probably
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  Speaker 1: one of the only projects coming into production in Canada
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  Speaker 1: in particular, you know, and coming into production on a
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  Speaker 1: rising gold price. That mid next year gold could be
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  Speaker 1: three thousand, and that's a perfect time now when you
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  Speaker 1: get an uplift as you know, from moving from explorer
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  Speaker 1: to developer and then to produce her and that's a
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  Speaker 1: perfect time to get in and the story and follow
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  Speaker 1: the story as we're successful to rump.
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  Speaker 3: Up the project and the gold prices have been cooperating.
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  Speaker 3: I mean, we hit twenty seven hundred and you know,
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  Speaker 3: now we pulled back a little bit, but it's still
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  Speaker 3: in a bull trend.
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  Speaker 1: It's still in a bull trend, and particularly for producers.
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  Speaker 1: As you know, producers a big producers now are making
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  Speaker 1: lots of free cash flow. You know, they're producing for
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  Speaker 1: aices of fifteen hundred, all is that twoenty six hundred.
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  Speaker 1: There's a lot of margins still there. So as we
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  Speaker 1: move into that production phase, there's also going to be
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  Speaker 1: a lot of marriage for ourselves at the lower end
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  Speaker 1: of the production and that will generate lots of cash
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  Speaker 1: flow for Western Lake.
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  Speaker 2: Shareholders for sure, and what annual production you have any
• 10:48
  Speaker 2: any how, your.
• 10:49
  Speaker 1: Production would be around seventy thousand ounces a year, you know,
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  Speaker 1: seventy thousand ounces a year producing aisse of around fourteen hundred.
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  Speaker 1: You know, that's a lot of marriagin in today's cold
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  Speaker 1: price environment.
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  Speaker 3: That's almost a fifty percent margin there, it's a fifty
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  Speaker 3: percent margin.
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  Speaker 1: And will you take a fifty percent margin on free
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  Speaker 1: cash flow and do to metrics, we're very undervalued for
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  Speaker 1: what potentially in six or eight months could be a
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  Speaker 1: completely different story.
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  Speaker 3: Yeah, especially ounces in the ground here that it's very
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  Speaker 3: meaningful when you're close to production, right, very meaningful.
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  Speaker 4: We've over you know, we've won.
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  Speaker 1: We we'll have over one by seven million ounces of
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  Speaker 1: reserves at high grade your seven gram sort of material.
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  Speaker 1: That's very there's not many minds a canon at that
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  Speaker 1: high grade and underground minds.
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  Speaker 2: That's for sure. Well, sure, Oshane, thank you for the update.
• 11:46
  Speaker 3: Really appreciate you taking time out from this busy time
• 11:49
  Speaker 3: of year. I suggest you go over to Westredlakegold dot
• 11:53
  Speaker 3: com sign up for notifications. Ticker symbols w l RGF
• 11:59
  Speaker 3: in the US and w r LG in Canada. Will
• 12:04
  Speaker 3: be touching base with you in the coming months. Shamee,
• 12:07
  Speaker 3: happy and healthy to you and your family.
• 12:10
  Speaker 1: Excellent, Thank you very much, carrying a look forward to
• 12:13
  Speaker 1: thank you.
• 12:21
  Speaker 2: The Financial Survival Network