Inside The Investment Case: West Red Lake Gold Mines

What is the investment case for West Red Lake Gold Mines today? In this episode, we begin with the company's elevator pitch before exploring the strategy behind bringing the Madsen Mine back into production. With gold prices near record highs and key operational milestones underway, the discussion focuses on the decisions, opportunities and challenges involved in transitioning from developer to producer, and what management believes could define the company's next chapter.

Guest Host: Lyndsay Malchuk, Global On-camera Reporter, Apaton

Featuring: Shane Williams, CEO, West Lake Mines

Transcript

SPEAKER_02 0:00

You're listening to the After Podcast, where mining meets capital, powered by one-to-one mining investment. Today we are coming live from our event in New York City. Please note this podcast is for information only and isn't financial advice or recommendation to invest. As always, the views you'll hear are those of the speakers.

SPEAKER_00 0:18

Welcome back to Inside the Investment Case. I'm Lindsay Melchak, your guest host, coming to you right from New York City. The mining industry loves talking about ounces, grades, and production targets, but ultimately value creation comes down to something much harder to measure: decision making. How management teams assess risk, allocate capital, and execute when the margin for error is often incredibly small. My next guest knows that reality better than most. Joining me is Shane Williams, president and CEO of West Red Lake Gold Mines. The company is advancing the historic Madsen Mine in one of Canada's most prolific gold districts. But what makes this story particularly interesting isn't simply the asset itself, it's the challenge of taking a known asset and building a business around disciplined execution. Shane, it's so great to sit with you. Thank you, thank you.

SPEAKER_01 1:07

No problem. Great to be on.

SPEAKER_00 1:08

Yeah, so let's start here. You know, if I sat down with your operating team instead of your investor relations team or instead of you, what would they tell me in the six is the single most important objective for Rest West Red Lake right now?

SPEAKER_01 1:23

So I think the key objective is really the focus on the discipline, as you said. Right. Mining projects, and I've started a number of these mining projects. There's kind of a set approach to it. Okay. But they but they have to be adapted to the deposit, the conditions, et cetera. And it requires focus and effort within the team. So I think that's sort of very important. And the team have to be aligned, very much aligned on the big goal. And that that becomes from the top and the vision of what we want to achieve. But ultimately, most people buy into that vision. I think everybody wants to do a good job, wants to defend and get the job done. But I think it comes down to that dedication to advancing and making the project. This this project has a checkered history, and I think there's kind of an underdog story. Everybody wants to prove. People love an underdog story. So people want to prove themselves. And that comes across very much with our team and focus. So there's a lot of dedication to prove the market wrong and show the success of this mine.

SPEAKER_00 2:23

Well, you're definitely on the right track because, as you said, proof is everything, right? So that brings us to something every mining executive wrestles with, and that's assumptions, really. And the market does a lot of that. When management teams evaluate a restart opportunity, there are dozens of assumptions that are built around that. How how do you how do you really navigate through that and prove yourself beyond what the assumption could be out there?

SPEAKER_01 2:49

Well, a lot of it comes down to experience. You know, when you have a we've I've done this a number of times, and also it's you've got to trust the people. You build a team and you've got to trust the people. Usually those people are at the front line of it, so they're the best people to make decisions, really. So you've got to grab that team, build a team together, and then trust and empower that team to deliver. And I found out in my career has worked very well, and that's our model we're creating in West Records.

SPEAKER_00 3:16

So great, so great. Why don't you tell us a little bit about your project, where it is?

SPEAKER_01 3:19

Yeah. So we have a project in uh Red Lake, Ontario. Red Lake is a famous district in Canada. Very, very high-grade mines. People might remember the Gold Corp story there. It's the highest grade mine in the world at the time. So it's it has a lot of history there. It has a lot. And this this asset that we picked up, the Madsen Mine, is an asset that with previous operations went into bankruptcy.

unknown 3:42

Okay.

SPEAKER_01 3:42

So it was it was in operation, it was built, it was a proper mine, it was up and running, and it went into bankruptcy through various issues. Okay. And so we at the right time managed to buy this asset for pennies on the dollar, as as Warren Buffett says. It was there's been about $500 million of between infrastructure plus tax losses, and we bought it for six million Canadian dollars.

SPEAKER_00 4:04

My God.

SPEAKER_01 4:05

Steel of a deal back then, back three years ago. And for the last three years, our team have been working diligently putting the mine back into production. And in January, last year we went into production, and in January we declared commercial production. So we're back into production and we're producing gold in a right time in the right environment.

SPEAKER_00 4:24

Of course, absolutely. That momentum right there, that's a true story of switching a narrative, that's for sure.

SPEAKER_01 4:29

Yeah, and that's kind of we had the vision at that stage of to with gold, we could see the vision where gold was going to go, and the best way to assess that is to get leverage to a rising gold price, is rising production. And both of those together get a lot of leverage in the market.

SPEAKER_00 4:45

So, what has been your biggest challenge getting it back into production then?

SPEAKER_01 4:49

I think our biggest challenge was at the time getting people aligned.

SPEAKER_00 4:54

Okay.

SPEAKER_01 4:55

And overcoming, like I said, when we tried to go and start this project and we tried to raise money, we're we're overcoming a lot of negativity. Yes. This mine has failed a couple of times.

SPEAKER_00 5:06

Okay.

SPEAKER_01 5:06

And so everybody, when I went first out trying to raise money, nobody wanted to speak to me, nobody wanted to talk about this mine. Everybody said this is a failed mine, it's not gonna work. And so we've kept going with the team and we've kept pushing through, and now we're back into production. And so that that's kind of like I said, it's people love an underdog story, so that's great. We've managed to get to that level and we've managed to push on through. And the team are very committed to growing, and also there's a lot of potential to grow over the next five to seven years in Red Lake with a lot of opportunity. So that's kind of what we've we've done as a team, and we've created this unique team, I think, in Red Lake.

SPEAKER_00 5:43

Persevere, persevere, persevere.

SPEAKER_01 5:45

Persevere, persevere.

SPEAKER_00 5:46

Tell us a little about the Ontario jurisdiction because we all know that Canada is very, very resource-rich, but sometimes we do stand in our own way. Most of the time we stand in our own way. So tell us a little about the jurisdiction there.

SPEAKER_01 5:57

Well, Ontario is unique, and there's a lot of operating mines in Ontario. And there's a lot of big operating mines in Ontario. And Ontario is very mining-friendly, and particularly now, they're starting with permitting, they're starting this one PP process, which is fast track permitting. So you have a fast track permitting now in Ontario. And also where we are in Red Lake, it they've been mining in Red Lake since the 1900s. So there's a lot of people. 50% of our people are local, their service industry local, the First Nations are on board, the people are on board. So there's a lot of headwinds um going with you on this mine.

SPEAKER_00 6:37

That's great. What would you say would be an operational variable keeping that keeps showing up in the internal risk review?

SPEAKER_01 6:46

Um, I would think we have a complex ore body. So ore bodies in in Red Lake are high grade, but they're very complex. And so understanding that complexity and doing a lot of work to understand that complexity is something we work hard at. Like every mine, every area we mine, we reconcile it back to our resource model. We do a lot of sampling with a lot of data to the gold poured all the way back. And that's a process that happens every single month. Absolutely. To try and overcome that challenge that people said there's no gold there, it isn't gonna work. And we've done a lot of work to prove that now, that it is gonna work.

SPEAKER_00 7:23

Well, it leads it definitely leads me into you know, a next question around uh capital allocation. So let's go there for a little bit. One of the hardest jobs in this business really is deciding what to do and what not to do, actually. Where are you deliberately sacrificing short-term results today in order to improve those long-term outcomes later?

SPEAKER_01 7:44

See, that's a great question. We we had um we came out recently with our quarter one results. I think the market was, I mean, for us it wasn't disappointing, but the market was a little bit disappointed. Okay. And that's a perfect opportunity in that we had decided to go into commercial production and we decided to set ourselves up better, limit production, but set ourselves up with development underground to set the balance of the year up. And we we kind of allocated, reallocated our capital to work on underground development, get areas ready for production so that and we took a little bit of hit on production, but with the opportunity that later in the mind life and later there, we're set up for expansion. So that was a perfect example of that.

SPEAKER_00 8:26

Is that sound? Yeah, but what are the catalysts now going forward so that you get to you know hit your goals and then the market also gets to go, okay, we're happy with the results now?

SPEAKER_01 8:35

Yeah, I think I think we would that we would surprise the market to the upside because of those. We have a production every quarter now, we're gonna ramp up production from what our Q1 was to Q2, Q3 to the end of the year. Our plan is to produce 40,000 ounces between 35 to 45 this year of production. But also we have um I we have a pre-feasibility coming out later in the year in September, maybe mid-September, which will really show we have a number of properties in the region. We have a mill and we have a mine, and all of those come together to see what the true vision of what we we planned on, and that has a pathway to 120,000 ounces a year. Oh my goodness. So we're in production and we have growth as well. So I think the market, when they see that, they will be very surprised about the potential.

SPEAKER_00 9:20

Do you think that you know there is something that the market just is not understanding it? Maybe, you know, the value that you have or the the quality that you have. What is the market just not understanding? Is it the narrative?

SPEAKER_01 9:33

I I think it comes back to what you said actually. I don't think the market understands how difficult it is to build mines.

unknown 9:39

Yes.

SPEAKER_01 9:40

You know, there's a lot of projects out there, there's a lot of there's kind of a disconnect I see in the market. There's there's a lot of money out there, and there's a lot of projects out there, but there's very little people who have done it before who have really done it. And I think we're our team and and most big investors will invest in the team rather than the project or whatever. And I think we've put together a very strong team that have proven that we can do it, and so that I think the market doesn't fully get that. I think as they see our results coming and they see our potential, they will come around and we will surprise to the upside. And I think the market doesn't get that. It's back to that underdog story.

SPEAKER_00 10:18

So yeah, we're all rooting for the underdog. Yeah, so we're going to sit here one year from now. What's the headline that you want to be talking about one year from now?

SPEAKER_01 10:27

So one year from now, I want to be talking about the pathway to 150,000 ounces in message.

SPEAKER_00 10:32

And what are we going to do to get there?

SPEAKER_01 10:34

So we have our uh we have a quarter by quarter ramp up now doing.

SPEAKER_00 10:38

Yeah.

SPEAKER_01 10:38

Um, and we have our raw on property that we're going to look at getting back into production over time. And then that pathway in our free pre-feasibility study will lay out the vision to this area in Red Lake and what it can become the whole package.

SPEAKER_00 10:52

So amazing. Well, that's all the time we have. However, thank you so much for just sitting down and pulling the curtain back a little bit more and definitely come back.

SPEAKER_01 10:59

No problem. Thank you very much.

SPEAKER_00 11:01

Absolutely. What stands out in this conversation is that the investment case here isn't simply about a gold price environment or a historic asset. It's about execution and discipline and the countless decisions that happen behind the scenes long before investors see those results. I've been speaking with Shane Williams, president and CEO of West Red Lake Gold Mines. The company trades on the venture under the symbol WRLG, and on the OTC QX under WRLGF. To learn more, head over to Westred Lakegold.com. I'll leave you with this thought. In a market that often rewards the next headline, should investors be paying closer attention to the companies quietly focused on getting the fundamentals right? I'm Lindsay Melchak, your guest host right here in New York. We'll see you next time.

SPEAKER_02 11:47

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