West Red Lake raising $6 million for Ontario projects
West Red Lake Gold Mines Ltd. [WRLG-TSXV] on Thursday announced a non-brokered private placement of flow-through shares that is expected to raise up to $6.0 million. Proceeds will be used to fund the exploration and advancement of the company’s properties in the Red Lake area of northwestern Ontario.
The company said it intends to issue up to 8.57 million flow-through shares at an issue price of 70 cents per flow-through share. Funds raised will be used to incur Canadian exploration expenses as defined under the Income Tax Act (Canada), and flow-through mining expenditures as defined in the Income Tax Act.
West Red Lake shares advanced on the news, rising 6.4% or $0.04 to 66 cents in light trading volume. The shares are currently trading in a 52-week range of 93 cents and 31 cents.
West Red Lake shares began trading in early January, 2023, following the completion of an amalgamation between the company and DLV Resources Ltd. Key shareholders of the company include Vancouver-based financier Frank Giustra.
West Lake Gold Mines is based on Vancouver and focused on gold exploration in the Red Lake Gold District. Its key West Red Lake project is located 15 kilometres west of the Red Lake Mine Complex, which consists of three mines and two mills operated by Evolution Mining Ltd. [EVN-ASX] (on a 69% West Red Lake and 31% Evolution basis).
The company was in the news recently when it struck a binding deal with bankrupt Pure Gold Mining Inc. and Sprott Resource Lending Corp. to acquire the Madsen gold mine and associated land in Red Lake, Ont.
West Red Lake said it would acquire the asset via the acquisition of all the issued and outstanding shares of Pure Gold, a company that recently sought protection under the Companies Creditors Arrangement Act (CCAA).
On June 21, 2023, West Red Lake announced additional drill results from its Phase 1.0 exploration program at its 100%-owned Rowan Property, which is located in the Red Lake District.
The company said high-grade mineralized vein zones encountered at the Rowan Mine target area are in line with expectations on gold grade, confirm the geological model, and help to bolster the existing high-grade (9.2 g/t gold) 827,462-ounce inferred resource at the Rowan Mine.
“With the acquisition of the Madsen Gold Project, the company said it has secured the necessary infrastructure, potentially accelerating the production timeline for Rowan, which is situated within trucking distance of the Masen Mill,’’ the company has said.
It is the company’s belief that potential synergies could exist between high-grade resources at the Rowan Mine target area and Madsen. “Early indications suggest that gold mineralization at Rowan could be amenable to gravity separation.’’ As a result, the company has launched a metallurgical study at Rowan to evaluate this potential opportunity.