Gwen Preston, VP of Communication at West Red Lake Gold Mines (TSX.V:WRLG – OTCQB:WRLGF), joins me to review the news out earlier today that announced the positive reconciliation results from the bulk sample program at its 100% owned Madsen Mine located in the Red Lake Gold District of Northwestern Ontario, Canada.
The bulk sample included material from three main resource zones at Madsen – Austin, South Austin, and McVeigh – and followed the workflow and methodology to be implemented during regular mine operations.
Highlights of the bulk sample initiative:
- The bulk sample carried an average grade of 5.72 grams per tonne (“g/t”) gold (“Au”), 0.7% above the average predicted grade of 5.68 g/t Au for six stopes across three areas.
- 14,490 tonnes of bulk sample produced 2,498 ounces of gold
- Gold recovery in the Madsen Mill averaged 95%
Gwen reviewed that this close reconciliation between predicted and actual grades and tonnages highlights the effectiveness of definition drilling and detailed stope design in informing accurate modelling of gold mineralization. The fact that the estimated grade from their stope design and actual gold recoveries align almost exactly with expectations, really validates all the geological and engineering work the West Red Lake Gold Mine teams have been doing for the last 6 months. This bulk sample has demonstrated that their strategy is sound for estimating expected grades, recoveries, and that they can unlock value by moving the Madsen Mine back into production.
Next we discussed that the current stope design has changed from a cut and fill method to a long hole stoping approach, in order to maximize the economic benefit in today’s high gold price environment. This approach differs from the Prefeasibility Study (“PFS”), which used a gold price of US$1,680 per ounce when designing stopes, and instead is now using a long-term consensus gold price of US$2,350 per oz. which allows for mining the halo of lower-grade mineralization around the higher-grade tonnes. This long hole stoping mining method will allow for mining more overall gold ounces at Madsen, potentially lowering operational costs, increasing production, and enhancing overall economics relative to the PFS mine plan.
Wrapping up we reviewed that the company will be getting paid for the 2,498 ounces of gold produced in this bulk sample work program, and so those revenues combined with the $12.5 million left undrawn in the Nebari Natural Resources Credit Fund facility will have the company cashed up to proceed towards production in the near future.
If you have any follow up questions for Gwen or the team over at West Red Lake Gold, then please email me at Shad@kereport.com.
- In full disclosure, Shad is shareholder of West Red Lake Gold Mines at the time of this recording.
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