West Red Lake Gold Closes On Madsen Gold Project, Appoints Tony Makuch To Board

FULL DISCLOSURE: This is sponsored content for West Red Lake Gold.

West Red Lake Gold Mines (TSXV: WRLG) is officially the new owner of the Madsen Gold Project in the Red Lake region of Ontario, following the acquisition of the outstanding shares of Pure Gold Mining Inc.

To acquire the asset, the company has issued 32.6 million common shares to a fund managed by Sprott Resource Lending Corp, and a further 8.2 million shares are to be issued to Sprott and various lien claimants upon a determination by the British Columbia Supreme Court. West Red Lake also paid $6.5 million in cash, while granting a 1% NSR on the property to Sprott.

“The Company’s acquisition of the Madsen Gold Project includes a fully permitted underground gold mine with an estimated resource of 1.65M oz in the Indicated category and a high-quality mill facility. Combined with the high-grade Rowan gold resource located west of Madsen, the Company will continue to expand and infill its mineral resources and work to de-risk and grow these assets located in one of Canada’s most iconic gold camps,” commented CEO Shane Williams.

WATCH: West Red Lake: The Madsen Gold Project

In connection with the acquisition closing, the firms $25.0 million bought deal financing has seen escrow released, while a non-brokered financing with Frank Giustra has added proceeds of an additional $600,000 to the total funds released to the company. Following the close of the financing, Giustra now holds an 11.51% stake in the company.

As part of the transaction, Sprott has elected to appoint Tony Makuch to the firms board of directors. Makuch has previously served as CEO and Director of Discovery Silver and as President, CEO and Director of Kirkland Lake Gold, among other roles within the mining industry. He was also responsible for the merger of equals between Kirkland Lake and that of Agnico Eagle Mines in 2022, resulting in a post-merger market capitalization of $22.4 billion for the resulting company.

“Tony brings a remarkable track record of achievements in gold mining, excelling as an engineer, executive, and company builder. With the recent appointments of Shane Williams and Duncan Middlemiss, West Red Lake Gold team is now fortified with three leaders in mine development and operations in the Canadian Shield. I am inspired by the team we are building,” commented Frank Giustra on the appointment.

Updated resource estimate

Separately, the company has had an independent technical report completed on the property, with the mineral resource now updated. The resource consists of an indicated 1.653 million ounces of gold at 7.4 g/t, and an inferred 366,200 ounces of gold at 6.3 g/t. The new resource reflects any gold removed by Pure Gold via mining, and contains an effective date of December 31, 2021.

Notably, the resource does not include any of the 54,122 metres of drilling conducted in 2022, however the addition of this data is not expected to have a material impact on the resource estimate presented.

The Madsen Property contains a fully-operated underground mine with two portals and ramp access to 525 metres below surface, as well as an 800 tpd processing facility. The property itself consists of 47 square kilometres of claims next door to majors such as Barrick Gold, Kinross Gold, and Evolution Mining.

West Red Lake Gold last traded at $0.65 on the TSX Venture.

FULL DISCLOSURE: West Red Lake Gold Mines is a client of Canacom Group, the parent company of The Deep Dive. Canacom Group is currently long the equity of West Red Lake Gold Mines. The author has been compensated to cover West Red Lake Gold Mines on The Deep Dive, with The Deep Dive having full editorial control. Not a recommendation to buy or sell. We may buy or sell securities in the company at any time. Always do additional research and consult a professional before purchasing a security.

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