Madsen Mine Update: Mill Restart and Key Operational Milestones Achieved
March 19, 2025
Vancouver, British Columbia
Madsen Mine Update: Mill Restart and Key
Operational Milestones Achieved
West Red Lake Gold Mines Ltd. (“West Red Lake Gold” or the “Company”) (TSXV:
WRLG) (OTCQB: WRLGF) is pleased to provide an update on mine restart activities at
the Madsen Mine, where the mill is now processing low -grade material ahead of
introducing Stope 1 of the bulk sample next week.
In addition, the camp is now housing workers, the pace of underground development
continues to rise, and the Connection Drift is within 84 metres (94%) of completion. There
is active development and mining in multiple areas of the mine.
“Turning on the Madsen Mill to process the bulk sample was a very exciting moment for
the entire West Red Lake Gold team, who have been working tirelessly in recent months
as we push towards production, ” said Shane Williams, President and CEO. “A smooth
restart of th is major piece of infrastructure reinforces that our level of preparation has
created translated into successful operational readiness ahead of initial production. With
gold prices trading at record levels, it is an exciting and fortuitous time to be making the
transition from developer to producer.”
Figure 1. Recently collected rock sample with visible gold from South Austin 11
Level, specifically from Heading SA_11_987_SIL.
Mill Restarted
The mill was started up on Monday March 10 th after 28 months of maintained dry
shutdown. Ahead of restart the Company ’s mill team completed extensive pre-
commissioning work, including replacing mill liners and discharge lines, cycling process
water through the system, and revitalizing the CIP and carbon circuits.
The mill encountered no operational issues on restart. For the first five days the facility
processed material from a legacy low -grade stockpile, after which feed transitioned to a
modern stockpile of low-grade material.
Next week the first batch of bulk sample material from Stope 1 will be process ed. The
stopes of the bulk sample will be processed sequentially , after which independent
authorities will complete full reconciliation calculations between expected and actual
tonnes, grade, and ounces for each stope.
Figure 2. Material moving on the conveyer into the Semi -Autogenous Grinding
(“SAG”) mill.
Figure 3. Thickener tanks at the Madsen Mill, full and operational three days after
the mill was restarted.
Figure 4. One of the six leach tanks at the Madsen Mill, full and operational three
days after the mill was restarted.
Camp Operational
The new 114- person workforce accommodations facility at the Madsen Mine is now
housing workers. All rooms in the camp are executive junior suites. On March 18 th the
Company hosted a Camp Opening Celebration, with Mr. Williams cutting the ribbon.
“We are very glad that we can hire 60% of our workforce locally, which supports Red Lake
and enables workers to live at home, ” said Hayley Halsall- Whitney, Vice President of
Operations. “This new, comfortable camp will help us attract additional quality personnel
to work at Madsen and will ease pressure on housing in the community.”
Figure 5. Shane Williams speaking ahead at the opening of the Madsen Mine camp.
Underground Development
The pace of underground development continues to increase, rising from 20 metres per
day average in January to 23.8 metres per day average in February. Being able to access
mining areas efficiently and thus create operational flexibility is essential in an
underground mine, especially when a deposit requires multiple working faces.
“Attaining a sufficient rate of development is an important requirement at Madsen and it
is achieved through focused attention and strong teamwork,” said Halsall-Whitney. “I am
very pleased to see this rate rising and expect to see this trend continue as the Madsen
team’s skills and coordination continue to improve.”
Figure 6: Average underground development per day, month by month, at the
Madsen Mine.
Connection Drift 94% Complete
Work on the Connection Drift continues to advance on schedule. Of the 1.4-km distance,
1,380 metres have been completed, leaving just 84 metres or 6% to go. As is standard
near completion of a drift, a diamond drill rig was us ed to drill from the west side and
successfully intercepted the approaching westward advance, ensuring precise alignment
between the two advancing faces.
Nebari Credit Facility: Additional US$7.5 Million Drawn
West Red Lake Gold also announces that it has drawn US$7.5 of the US$15- million
second tranche (“Tranche 2”) of its previously announced US$35 million credit facility
(the “Credit Facility”), with Nebari Natural Resources Credit Fund II LP (“Nebari”).
The Credit Facility was entered into on December 31, 2024 and announced on January
2, 2025 [see https://westredlakegold.com/west -red-lake-gold-closes-us35-million-credit-
facility-with-nebari-and-announces-drawdown-of-us15-million/ ], with the first drawdown
of US$15 million received on December 31, 2024 (“Tranche 1”). The Credit Facility also
provides for the remaining up to US$7.5 million under Tranche 2 and a third tranche of up
to US$5 million, at the election of the Company, subject to satisfaction of certain
conditions precedent.
The proceeds from Tranche 2 of the Credit Facility will be used for: 1) completing the
remaining capital costs to restart t he Madsen Mine, and 2) other corporate, exploration
and working capital expenses.
Repayment of 50% of principal outstanding via fixed straight -line amortization
commences on the 15th month following the draw-down of Tranche 1. The remaining 50%
of borrowed funds are due on the maturity date. The Credit Facility may be repaid prior
to maturity at any time subject to the additional payment of a make- whole threshold.
Interest will accrue on the advanced outstanding principal amount of the loan based on
a floating rate per annum equal to the sum of: (i) the three- month term SOFR reference
rate administered by CME Loan Party Benchmark Administration Limited (CBA) (the
“Term SOFR”), as determined on the first date of each calendar month; and (ii) 8.0%
per annum, provided that, if the Term SOFR is less than 4.0%, it shall be deemed to be
4.0%.
In addition, the Company is paying to Nebari an administration fee of US$30,000 per
annum and an arrangement fee in the amount of 1.5% of the funded amount for each
tranche, further details set out in the Loan Agreement.
No finder’s fees are payable in connection with the Credit Facility.
The maturity date of the Credit Facility will be June 30, 2028.
In connection with drawing this portion of Tranche 2, the Company issue d 2,691,934
non-transferable common share purchase warrants (the " Tranche 2 Loan Bonus
Warrants") at an exercise price of CAD$ 0.7969 (using a USD/CAD exchange rate of
1.4301) per common share, which expire on June 30, 2028, subject to a pro- rata
reduction if the funded amount is prepaid in whole or in part, the n a pro rata number of
the total Tranche 2 Loan Bonus Warrants issued in relation to Tranche 2 will have their
term reduced to the later of one year from the date of issuance of the Warrants and 30
days from the reduction, in accordance with TSXV policies. The Lender will receive cash
compensation for any pro- rata reduction.
The Tranche 2 Loan Bonus Warrants are subject to a statutory hold period of four
months and one day under applicable securities laws. The Tranche 2 Loan Bonus
Warrants represent the Canadian equivalent of 20% of the loan amount being drawn in
respect of Tranche 2 divided by a Canadian dollar amount equal to a 30% premium to
the lower of: (A) the lowest 20-day VWAP of the Company’s share price prior to: (i) the
date which the Company issues its request for the advance in respect of each Tranche;
(ii) the date of this press release; and (iii) the closing date of the advance of Tranche 2,