West Red Lake Gold Enters Definitive Agreement For Pure Gold’s Madsen Mine
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It’s nearly official. West Red Lake Gold Mines (TSXV: WRLG) has reached a definitive agreement to acquire the Madsen Gold Project, following a binding letter agreement it entered into with Pure Gold Mining and a fund operated by Sprott Resource Lending Corp last month.
The transaction will see West Red Lake pay $6.5 million in cash, issue 28.5 million shares, and grant a 1.0% NSR on the Madsen Mine, to acquire Pure Gold Mining Inc, whom currently owns the mine. An additional $10.0 million in deferred consideration payments is also applicable.
A past-producing mine that halted operations just last year, the Madsen mine has seen over $350 million in historic investments, with the property including infrastructure such as an 800+ tonne per day mill, double ramp access, tailings management and water treatment facilities, all season access and more. The property also contains permits to restart production, and historical resources of 1.7 million indicated ounces at 7.5 g/t gold, and 0.4 million inferred ounces of gold at 6.3 g/t.
“The path forward involves defining a critical mass of high-grade reserves and resources, optimizing the project for sustainable cash flow, and executing on the vision. This includes conducting infill drilling, resource expansion, regional exploration, underground development, restart planning, engineering studies, and maintaining a strong focus on operability, community benefits, and investment in people and infrastructure,” commented West Red Lake Gold Mines CEO Tom Meredith at the time of announcement last month.
Closing of the acquisition of Pure Gold and the Madsen Mine remains subject to required regulatory approvals, and receipt of a reverse vesting order from the Supreme Court of British Columbia in the ongoing CCAA filings by Pure Gold.
The courts are currently expected to hold the hearing for the approval of the sale on May 29, 2023.
West Red Lake Gold Mines last traded at $0.69 on the TSX Venture.
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