WEST Red Lake GOLD Mines Completes Acquisition of Madsen GOLD Project and Appoints Tony Makuch to Board of Directors
WEST RED LAKE GOLD MINES COMPLETES ACQUISITION OF MADSEN
GOLD PROJECT AND APPOINTS TONY MAKUCH TO BOARD OF DIRECTORS
June 19, 2023
Vancouver, British Columbia – West Red Lake Gold Mines Ltd. (“West Red Lake Gold” or the
“Company”) (TSXV: WRLG ) (OTCQB: WRLGF) is pleased to announce that it has completed the
acquisition (the “ Acquisition”) of the Madsen Gold Project through the acquisition of all of the
outstanding shares of Pure Gold Mining Inc. (“PGM”). The Acquisition was completed on June 16, 2023
pursuant to the Approval and Reverse Vesting Order granted (the “Order”) in PGM’s proceedings under
the Companies’ Creditors Arrangement Act. The Order approved the transactions contemplated in the
Share Purchase Agreement entered into between the Company, PGM and a fund managed by Sprott
Resource Lending Corp. dated May 17, 2023.
“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.” said Shane Williams, President and CEO of West Red Lake
Gold Mines.
TONY MAKUCH JOINS THE BOARD OF DIRECTORS
Mr. Makuch has over 35 years of mining industry experience, is the CEO and Director of Discovery Silver
Corp and was previously President, CEO and Director of Kirkland Lake Gold Ltd.
During his five-year tenure as CEO of Kirkland Lake, Mr. Makuch led the transformation of the company,
with annual gold production increasing from 315,000 oz to over 1,400,000 oz, the market capitalization
of the company increasing from approximately C$1 billion to over C$13 billion and Kirkland's share
price increasing over 530%. These milestones were achieved through two successful acquisitions,
industry-leading operational performance and significant exploration success and ultimately
culminated in Kirkland's merger with Agnico Eagle Mines Limited in 2022.
Prior to joining Kirkland, Mr. Makuch was President and CEO at Lake Shore Gold Inc., from 2008 until
its acquisition by Tahoe Resources Inc. in 2016, when he became the Executive Vice -President and
President of Canadian Operations. From 2006 to 2008 Mr. Makuch was Senior Vice President and Chief
Operating Officer for FNX Mining Company Inc. From 1998 to 2005 he held progressively senior
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positions with Dynatec Corporation, including VP Operations. From 1992 to 1998, Mr. Makuch worked
with Kinross Gold Corporation at several of their North American operations. At different stages of his
career, he has worked in the Red Lake camp. Mr. Makuch is a Professional Engineer (P.Eng) and holds
a Bachelor of Science Degree (Honours Applied Earth Sciences) from the Univ ersity of Waterloo
(Ontario), and both a Master of Science Degree in Engineering and a Master of Business Administration
from Queen´s University (Ontario) and has obtained the Institute of Corporate Directors ICD.D
designation from the University of Toronto Rotman School of Business.
"We are delighted to have Tony Makuch join the board of directors of West Red Lake Gold." said Frank
Giustra, Strategic Advisor to the 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."
TRANSACTION DETAILS
Pursuant to the Acquisition, the Company issued 32,566,174 common shares to a fund managed by
Sprott Resource Lending Corp. (“ Sprott”). A further 8,164,503 common shares will be issued upon
determination by the British Columbia Supreme Court of priorit y among Sprott and various lien
claimants, which is expected to occur on or about June 28, 2023. In addition, the Company paid $ 6.5
million in cash and has granted a 1% secured net smelter royalty on the Mad sen Mine to Sprott . A
further US$6,783,932 in deferred consideration is payable upon a change of control of the Company.
The Company has the right to pay down any part of the deferred consideration prior to any change of
control, and Sprott may, at its e lection, convert such portion of the deferred consideration into
common shares of the Company as is necessary to maintain its percentage share interest in the
Company, upon completion of any future equity, merger, acquisition or other corporate transaction.
In addition, Sprott has been granted the right to nominate and appoint one director to the Board of
the Company so long as Sprott or an affiliate owns 15% or more of the issued and outstanding shares
of the Company. The Company is pleased to confirm that Mr. Tony Makuch has been appointed to the
Board as Sprott’s nominee.
In connection with closing of the Acquisition, the 70,829,000 subscription receipts issued in connection
with the Company’s bought deal financing which closed on May 9, 2023 have been converted into
common shares of the Company, and the proceeds from the financing have been released from escrow
to the Company. In addition, on June 16, 2023, the Company completed the previously announced
non-brokered financing of 1,714,286 flow-through common shares to Mr. Frank Giustra at $0.35 per
share for proceeds of $600,000 (the “Flow-Through Financing”). The common shares issued on the
Flow-Through Financing are subject to a four month hold period.
In connection with the Acquisition the Company paid finders fees of $ 325,000 in cash and issued
2,036,534 common shares. A further 3,750,000 warrants were issued to certain parties in
consideration for guarantees of the initial payments required pursuant to the acquisition. The warrants
are exercisable into common shares of the Company at $0.42 per share for five years, expiring June 16,
2028. The guarantee warrants and the finder’s shares are subject to a four month hold period.
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Details of the Acquisition and the Share Purchase Agreement can be found in the Company’s April 17,
2023 and May 18, 2023 news releases, which are available on SEDAR.
The Company further reports that in connection with closing the Acquisition, Frank Giustra and his
related entities directly and indirectly acquired an aggregate of 7,000,000 common shares on
conversion of subscription receipts. Prior to the Acquisition and the Flow -Through Financing , Mr.
Giustra owned or controlled 10,110,034 common shares of the Company, representing 17.91% of the
then outstanding common shares of the Company . After the Acquisition and the Flow -Through
Financing, Mr. Giustra now owns and/or controls directly or indirectly, 18,824,320 common shares of
the Company representing 11.51% of the outstanding common shares of the Company.
Frank Giustra and his related entities acquired these securities for investment purposes effective June
16, 2023 and as disclo sed in the Early Warning Report accompanying this news release, may in the
future acquire or dispose of securities of the Company, through the market, privately or otherwise, as
circumstances or market conditions warrant.
A copy of the Early Warning Report filed by Frank Giustra is available under the Company’s profile on
SEDAR (www.sedar.com).
MADSEN PROPERTY HIGHLIGHTS
• Significant infrastructure in place with over $350 million invested by PureGold to date
• Fully-operating underground mine with two portals and ramp access to 525 metres (“m”) below
surface
• Brand new, expandable 800 tpd processing facility achieving +95% recoveries
• Low-cost hydro grid power in place
• Existing 1,275 m shaft, headframe and hoist, last operational in 2013
• Operational, expandable tailings and rock storage facilities
• 47 km2 land package in Red Lake District next door to major operators such as Barrick, Kinross
and Evolution
• Underexplored beyond historical mining areas
• Ore-grade intercepts and wide zones of mine -style alteration prove gold system ex tends at
depth and along strike
• Underground development provide s ideal drilling locations for untested highly prospective
zones
UPDATED MINERAL RESOURCE ESTIMATE
The Company is also pleased to announce that it has received an independent technical report on the
Madsen Property (formerly referred to as the PureGold Mine) from SRK Consulting (Canada) Inc.
entitled “Independent NI 43 -101 Technical Report and Updated Mineral Resource Estimate for the
PureGold Mine, Canada” and dated June 1 9, 2023 (the “ SRK Report ”) which updates the resource
estimate on the Madsen Property (previously classified by the Company as an historical estimate) to a
current mineral resource. The Madsen Resource Estimate has an effective date of December 31, 2021.
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Mineral Resource Estimate, PureGold Mine, Red Lake, Ontario, effective date December 31, 2021
Classification Deposit - Zone Tonnes Gold Grade
(g/t) Gold Troy Ounces
Indicated
Madsen – Austin 4,147,000 6.9 914,200
Madsen – South
Austin 1,696,000 8.7 474,600
Madsen –
McVeigh 388,700 6.4 79,800
Madsen – 8 Zone 152,000 18.0 87,700
Fork 123,800 5.3 20,900
Russet 88,700 6.9 19,700
Wedge 313,700 5.6 56,100
Total Indicated 6,909,900 7.4 1,653,000
Inferred
Madsen – Austin 504,800 6.5 104,900
Madsen – South
Austin 114,100 8.7 31,800
Madsen –
McVeigh 64,600 6.9 14,300
Madsen – 8 Zone 38,700 14.6 18,200
Fork 298,200 5.2 49,500
Russet 367,800 5.8 68,800
Wedge 431,100 5.7 78,700
Total Inferred 1,819,300 6.3 366,200
Notes:
1) Mineral resources are not mineral reserves and do not have demonstrated economic viability.
2) Mineral resources are reported at a cut-off grade of 3.38 g/t Au
3) Mineral resources are reported using a gold price of US$1800/oz
4) Excludes depletion of mining activity during the period from January 1, 2022 to the mine closure on
October 24, 2022 as it has been deemed immaterial and not relevant for the purpose of this
report.
5) All figures have been rounded to reflect the relative accuracy of the estimate
The mineral resources have been adjusted to reflect the removal of all historical and recent production
to the end of December 2021. The mineral resources have been classified according to CIM Best
Practise Guidelines (November 2019), and are reported as undiluted tonnes at a cut -off grade of 3.38
g/t gold and gold price of US$1800/oz.
The mining activity from the effective date of the SRK Report until the closure of the PureGold Mine on
October 24, 2022 has been deemed immaterial. Based on the mining records, 164,604 tonnes of ore at
3.8 g/t grade were processed, resulting in the production and sale of 20,301 ounces of gold. This
production figure is not considered significant for the purpose of this report and the mining activity
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during the period from January 1, 2022 to the mine closure on October 24, 2022 will not have a material
impact on the mineral resource estimates presented in this report.
Since the effective date of this technical report, additional diamond drilling was conducted until the
mine closure on October 24, 2022. A total of 688 drill holes and 54,122 m of drilling was completed in
2022. Based on a review of the results of this drilling it has been determined that the information
obtained will not have a material impact on the mineral resource estimate presented in the SRK Report.
The estimate of mineral resources may be materially affected by geology, environment, permitting,
legal, title, taxation, sociopolitical, marketing or other relevant issues.
A full copy of the SRK Report is available on the Company’s website and on SEDAR.
The technical information presented in this news release has been reviewed and approved by Will
Robinson, P.Geo., Vice President of Exploration for West Red Lake Gold and the Qualified Person for
exploration at the West Red Lake Project, as defined by NI 43-101 “Standards of Disclosure for Mineral
Projects”.
ABOUT WEST RED LAKE GOLD MINES LTD.
West Red Lake Gold Mines Ltd. is a mineral exploration company that is publicly traded and focused on
advancing and developing its flagship Madsen Gold Mine and the associated 47 Km2 highly prospective
land package in the Red Lake district of Ontario. The highly productive Red Lake Gold District of
Northwest Ontario, Canada has yielded over 30 million ounces of gold from high-grade zones and hosts
some of the world's richest gold deposits. WRLG also holds the wholly owned Rowan Property in Red
Lake, with an expansive property position covering 31 Km2 including three past producing gold mines -
Rowan, Mount Jamie, and Red Summit.
ON BEHALF OF WEST RED LAKE GOLD MINES LTD.
“Shane Williams”
Shane Williams
President and Chief Executive Officer
For further information, please contact:
Jasvir Kaloti
CFO & Corporate Secretary
Tel: (604) 609-6110
Amandip Singh, VP Corporate Development
Tel: 416-203-9181
Email: [email protected]
or visit the Company’s website at https://www.westredlakegold.com
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Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of
the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
The TSX Venture Exchange has neither approved nor disapproved the contents of t his news release. Certain
statements contained in this news release constitute "forward-looking statements". When used in this document,
the words "anticipated", "expect", "estimated", "forecast", "planned", and similar expressions are intended to
identify forward-looking statements or information. These statements are based on current expectations of
management, however, they are subject to known and unknown risks, uncertainties and other factors that may
cause actual results to differ materially from the forward -looking statements in this news release. Readers are
cautioned not to place undue reliance on these statements. West Red Lake Gold Mines Ltd. does not undertake
any obligation to revise or update any forward- looking statements as a result of new information, future events
or otherwise after the date hereof, except as required by securities laws.