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 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 University 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 priority 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 Madsen 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 election, 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.
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 disclosed 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 extends at depth and
along strike
- Underground development provides
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 19, 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.
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 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 KalotiCFO & Corporate
Secretary Tel:
(604) 609-6110
Amandip Singh, VP Corporate DevelopmentTel:
416-203-9181 Email: asingh@wrlgold.comor visit the Company’s
website at https://www.westredlakegold.com
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 this 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.
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