West Red Lake Gold Mines restarts mill at Madsen Mine, Ontario

West Red Lake Gold Mines Ltd. [TSXV: WRLG); OTCQB: WRLGF] provided an update on mine restart activities at the Madsen Mine, northwestern Ontario, 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 this 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.”

The mill was started up on Monday March 10 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 processed. 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.

The new 114-person workforce accommodations facility at the Madsen Mine is now housing workers. All rooms in the camp are executive junior suites.

“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.”

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.”

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 used to drill from the west side and successfully intercepted the approaching westward advance, ensuring precise alignment between the two advancing faces.

West Red Lake Gold also announces that it has drawn US$7.5 million of the US$15 million second tranche (Tranche 2) of its previously announced US$35 million credit facility, with Nebari Natural Resources Credit Fund II LP.

The Credit Facility was entered into on December 31, 2024 and announced on January 2, 2025 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.

Proceeds from Tranche 2 of the Credit Facility will be used for completing the remaining capital costs to restart the Madsen Mine, and 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 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 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 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 issued 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, then 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 the lowest 20-day VWAP of the company’s share price prior to the date which the company issues its request for the advance in respect of each Tranche; the date of this press release; and the closing date of the advance of Tranche 2, and the common share price of the most recent equity raise.

Nebari is at arms-length to the company and currently owns 8,559,310 common share purchase warrants issued in connection with the Tranche 1 and Tranche 2 Loan Bonus Warrants. Nebari does not own any other securities of the Company.

West Red Lake Gold Mines is 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.

WRLG also wholly owns the 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.