West Red Lake Gold outlines C$764M value in integrated mine study
The Madsen-Rowan plan calls for C$200 million in growth capital and forecasts higher production once Rowan starts in 2029.
Mara Quinlan
West Red Lake Gold Mines Ltd. CVEWRLG OTCMKTSWRLGF said on Wednesday its integrated Madsen-Rowan pre-feasibility study estimates an after-tax net present value of C$764 million at a 5 per cent discount rate. The Ontario gold producer's plan requires C$200 million in growth capital to develop Rowan and expand the existing Madsen mill and tailings facility.
Shares closed lower at C$0.53 on the TSX Venture Exchange at 4 p.m. EST on Nov. 3, before the study's release, according to the CVEWRLG quote.
The integrated plan averages 88,000 ounces annually over a 10-year mine life. Production would average 108,000 ounces annually from 2029 through 2034.
Rowan is scheduled to begin production in 2029, with ore trucked approximately 80 kilometres to Madsen for processing. The growth plan combines an operating mine with a satellite development, while the financing announced on Nov. 2 remains subject to closing conditions.
The study, effective Sept. 1, uses a life-of-mine average gold price of US$3,782 an ounce. Its price schedule starts at US$4,597 in 2027 before falling to US$3,568 from 2030 onward.
Those assumptions underpin the valuation, alongside a life-of-mine exchange rate averaging US$0.744 per Canadian dollar. At US$4,161 gold, the release estimates after-tax net present value would rise to C$1 billion.
Wednesday's release also lists C$773 million in sustaining capital, separate from the growth budget. Average all-in sustaining costs are estimated at US$2,457 an ounce, with cash costs of US$1,795 an ounce.
Combined mineral reserves total 4.41 million tonnes grading 6.8 grams per tonne gold. Contained reserve ounces are 85 per cent higher than in the 2025 pre-feasibility study, and the integrated plan forecasts approximately 884,000 ounces of recovered gold.
“The study also outlines the potential to generate meaningful free cash flow with relatively modest growth capital,” chief executive Shane Williams said in Wednesday's release.
West Red Lake Gold's Nov. 2 binding term sheet proposes up to US$95 million in credit. The initial tranche would provide up to US$65 million; a further US$30 million requires additional conditions and approvals.
The proposed facility would refinance existing secured debt, support Madsen development and working capital, and potentially fund Rowan. Funding still requires due diligence, definitive agreements, security and approvals, so the facility ceiling does not represent cash available for the expansion.
Read more: West Red Lake Gold signs term sheet for up to US$95M credit facility
The company says it will file the supporting technical report on SEDAR+ within 45 days of the Nov. 4 release.
The company will discuss the study at a webcast on Nov. 4 at 8 a.m. PST.
