High-Grade Gold Potential Shines as Upper 8 Drilling Delivers Exceptional Results

Source: Streetwise Reports 11/21/2024

West Red Lake Gold Mines Inc. (WRLG:TSX.V; WRLGF:OTCQB) has announced further positive drilling results from the Upper 8 Target at its wholly-owned Madsen Property in the Red Lake Gold District, Ontario. Read more for the latest updates, highlights, and discoveries.

West Red Lake Gold Mines Inc. (WRLG:TSX.V; WRLGF:OTCQB) has announced further positive drilling results from the Upper 8 Target at its wholly-owned Madsen Property in the Red Lake Gold District, Ontario. This follows significant intercepts reported earlier in October, which included 44.17 g/t Au (grams per tonne of gold) over 1.3 meters and 20.63 g/t Au over 0.5 meters. The latest results highlight the high-grade potential of the Upper 8 Target, with notable intervals such as 1.5 meters at 21.44 g/t Au (including 0.5 meters at 52.17 g/t Au) and 2.0 meters at 7.41 g/t Au (including 0.5 meters at 23.74 g/t Au).

The new drilling data has defined an ore shoot at Upper 8 that spans approximately 30 meters in width and extends 130 meters along plunge. Importantly, the zone remains open at depth, suggesting further growth potential. The plunge orientation of the Upper 8 ore shoot closely resembles that of the deeper 8 Zone deposit, boosting confidence in additional mineralization at greater depths.

Upper 8 Highlights from the News Release:

• Hole WRL24-017 Intersected 1.5m at 21.44 g/t Au, from 297.7m to 299.2m, Including 0.5m at 52.17 g/t Au, from 298.2m to 298.7m — this high-grade 0.5m interval is complemented by approximately 30 specks of visible gold

• Hole WRL24-021 Intersected 2m at 7.41 g/t Au, from 340.25m to 342.25m, Including 0.5m at 23.74 g/t Au, from 340.25m to 340.75m.

• WRLG has now successfully defined a new ore shoot at Upper 8 that is approximately 30m wide and 130m along plunge – this new zone of mineralization remains open at depth

• The plunge line on the Upper 8 ore shoot has been constrained to an orientation at approximately 110°/-40° (azimuth/plunge), which is very similar to the orientation of the deeper 8 Zone deposit – this increases WRLG’s confidence in the potential to grow Upper 8 down plunge with additional drilling.

President and CEO Shane Williams commented in the news release, “With the exceptional grades and visible gold we’re now encountering, this target is becoming truly reminiscent of the high-grade gold mineralization Red Lake is known for. It’s still early days, but the Upper 8 target has the potential to become the next significant discovery in the Red Lake gold camp.”

The Upper 8 Target shares geological similarities with the deeper 8 Zone, which currently contains an Indicated resource of 87,700 ounces at 18 g/t Au and an additional Inferred resource of 18,200 ounces at 14.6 g/t Au. The ongoing drilling program continues to test and expand this high-grade area, emphasizing the district’s potential for new discoveries.

West Red Lake Gold is also progressing on the Madsen Mine Pre-Feasibility Study, which is now expected in early 2025. The study will refine the mine’s development plans, operational costs, and capital requirements as the company advances toward a targeted production restart in 2025.

A Look At The Gold Market

Gold has continued to assert its position as a favored asset amidst global economic and political shifts. On November 11, Stockhead reported on the surge in gold prices, which reached over US$4,000 per ounce, driving increased exploration and development activity within the sector. The publication observed that projects with existing infrastructure or swift ramp-up potential were particularly attractive due to elevated permitting complexities and costs in recent years.

Taylor Combaluzier of Red Cloud Securities maintained a “Buy” rating with a price target of CA$2.00 per share, representing a potential 217% upside from the last closing price of CA$0.63.

Also, on November 11, Technical Analyst Clive Maund described the gold market as poised for a potential consolidation or correction following the recent election results.

Maund asserted that such corrections should be viewed as “major sector-wide buying opportunities” given the robust underlying support levels and the metal’s longer-term bullish trajectory.

In a report on November 13, Joe Vidueira from Quoth the Raven highlighted the heightened activity among central banks. He noted that they had purchased 1,037 tons of gold in 2023, marking the second-highest annual total on record. He referenced the World Gold Council’s findings that 29% of surveyed central banks planned to increase their gold reserves, signaling strong institutional confidence in the metal’s long-term value. Vidueira also noted Judy Shelton’s proposal to introduce gold-backed Treasury bonds, which she described as a step toward restoring “fiscal and monetary rectitude.”

Most recently, on November 17, Matthew Piepenburg of Gold Switzerland noted that “central banks clearly prefer real gold over U.S. paper,” emphasizing the ongoing accumulation of the metal as a strategic Tier-1 reserve by BRICS+ nations and other sovereigns. He attributed gold’s rise in 2024 to what he described as “a fiat bear market,” underscoring the increasing preference for gold as a hedge against the vulnerabilities of fiat currencies.

Red Lake’s Catalysts

According to the company’s investor presentation, West Red Lake Gold is positioned to capitalize on its high-grade assets and strategic advancements. Key catalysts include the forthcoming Pre-Feasibility Study for the Madsen Mine, which will define the mine’s scale, costs, and production timeline. This study follows substantial investments, including a US$68 million financing package comprising US$35 million in debt and US$27 million in equity, ensuring full funding for the mine’s restart.

The Upper 8 Target represents a significant growth opportunity, bolstered by its similarity to the well-established 8 Zone deposit. Definition drilling and exploration at Upper 8 and other targets on the Madsen Property align with the company’s strategy to expand high-grade resources while mitigating risk.

Additionally, operational readiness projects, such as infrastructure upgrades and test mining, are advancing. These efforts aim to optimize efficiency and safety, laying the groundwork for production in the second half of 2025.

The Madsen Property remains a cornerstone asset, with over US$350 million invested by the prior operator and an additional US$80 million invested by West Red Lake Gold to date. This investment, coupled with the district’s reputation for high-grade gold deposits, positions the company as a near-term producer in one of Canada’s most prolific gold districts.

Analysts on West Red Lake

On November 1, Taylor Combaluzier of Red Cloud Securities maintained a “Buy” rating with a price target of CA$2.00 per share, representing a potential 217% upside from the last closing price of CA$0.63. Combaluzier emphasized the company’s progress in preparing for the restart of the Madsen Mine, noting that the tailings dam project was completed “ahead of schedule and 18% below budget,” extending capacity for five years. He also highlighted the significant completion of 42,500 meters of definition drilling, which delineated over 100,000 ounces of gold mineralization. Combaluzier remarked that the Madsen Mine’s “high-grade resource base, existing infrastructure, and a relatively short timeline to production” positioned WRLG as a strong prospect for near-term cash flow. [OWNERSHIP_CHART-5614]

The day prior, on October 31, Matthew O’Keefe of Cantor Fitzgerald also reiterated a “Buy” rating for WRLG, with a target price of CA$1.40 per share, indicating a 122% upside. O’Keefe highlighted the company’s efforts to restart the Madsen Mine, particularly the tailings dam lift project, which was completed under budget and ahead of schedule, and the mill pre-commissioning progress.

He noted the completion of 2,016 meters of underground development and the company’s use of test mining programs to de-risk operations. O’Keefe concluded that WRLG’s high-grade deposits, operational readiness, and defined mine plan for the first 18 months of production provided a “strong basis for success.”

Ownership and Share Structure

Advisor Frank Giustra owns 9.4% of West Red Lake as a strategic investor and insider, according to the company’s investor presentation. Sprott Resource Lending Corp. holds 18.6%, VanEck Gold Fund holds 4.1%, and Evolution Mining Ltd. holds 1.6%. Institutional ownership totals approximately 31%, with the remaining shares held by retail investors.

The company’s market cap is CA$200.2 million. The 52-week range for the stock is CA$0.46 to CA$1.04.

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1. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of West Red Lake Gold Mines Inc.
2. James Guttman wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor/employee.
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( Companies Mentioned: WRLG:TSX.V; WRLGF:OTCQB, )

Source: https://www.streetwisereports.com/article/2024/11/21/high-grade-gold-potential-shines-as-upper-8-drilling-delivers-exceptional-results.html