Red Lake Mine Ramps Up to Commercial Production With Strong Q4 Gold Sales

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1. Ownership and Share Structure Information

The information listed above was updated on the date this article was published and was compiled from information from the company and various other data providers.

West Red Lake Gold Mines Ltd. (WRLG:TSX.V; WRLGF:OTCQX; UJO:FSE) declared commercial production at its 100% owned Madsen Gold Mine in the Red Lake Mining District of Ontario, Canada, effective January 1, 2026. The declaration followed a December ramp-up that saw the mill operate at an average of 689 tonnes per day, equal to 86% of the permitted capacity of 800 tonnes per day. The company confirmed it met its internal criteria for commercial production, which included 30 consecutive days of mill throughput exceeding 65% of permitted capacity and operational stability.

In December, the Madsen operation processed 21,389 tonnes of ore with an average gold grade of 4.94 grams per tonne and a mill recovery rate of 94.6%, resulting in production of 3,215 ounces of gold. For the fourth quarter of 2025, the mine produced 7,379 ounces of gold from 49,162 tonnes of ore at an average grade of 5.06 g/t gold and 95% recovery.

The company reported it poured 7,200 ounces in Q4 2025 and sold the gold at an average price of US$4,150 per ounce, generating total sales revenue of US$30 million. For the full year 2025, West Red Lake Gold poured 20,000 ounces of gold, which were sold at an average price of US$3,650 per ounce for total sales of US$73 million. As of year-end, the company reported CA$46 million in cash and gold receivables.

President and CEO Shane Williams acknowledged the achievement in the announcement, stating, "Achieving commercial production is a major milestone for any producer, and it comes after a strong December that saw tonnage, grade, recoveries, and production all perform to plan."

Looking ahead to the first quarter of 2026, the company stated that mill feed would predominantly come from the 4447 zone in South Austin, a high-grade area defined in 2025. The material mined from this area has previously shown grades as high as 8.9 g/t gold, and the company expects average feed grades to exceed 6 g/t gold during Q1.

Gold Sector Holds Strong Through Market Swings and Geopolitical Uncertainty

Gold maintained its upward momentum into early 2026, with prices climbing 2.2% to US$4620 per ounce following recent geopolitical unrest in Venezuela, according to a January 7 report by Cecilia Jamasmie at Mining.com. This rise extended a broader rally from 2025, a year in which gold reached an all-time high of US$4,547 per ounce. The average gold price for 2025 increased 44% year-over-year to US$3,450 per ounce, driven by what the report identified as a combination of geopolitical risk, a more dovish stance from the U.S. Federal Reserve, and a weaker U.S. dollar.

In a January 8 article, John Rubino attributed early-year pullbacks in both gold and silver to index rebalancing after a strong 2025. Quoting Bloomberg, Rubino explained that "passive tracking funds are selling precious metals futures... due to last year's blistering rallies." Despite this short-term pressure, he emphasized that gold posted its best annual performance since 1979. HSBC's James Steel pointed to safe haven flows and policy uncertainty as key contributors, describing the rally as fueled by "a potent mix of safe haven and risk-off purchases, spurred in part by USD weakness, and policy uncertainty."

Richard Mills, writing on January 9 for Ahead of the Herd, echoed the view that 2025 marked a standout year for the sector. He highlighted several key demand factors, including central bank buying, increased ETF inflows, and ongoing geopolitical tensions. According to Mills, global central banks acquired 1,045 tonnes of gold in 2024, with Poland, India, and Turkey leading the purchases. He also noted that BRICS nations collectively held more than 6,000 tonnes of gold in reserves.

Mills further discussed structural challenges facing gold supply, pointing to declining production and rising demand from both monetary and industrial sources. Citing data from Visual Capitalist, he highlighted that Russia and China have each added over 1,800 tonnes to their official reserves since 2000, positioning themselves as the top accumulators.

Investor interest also remained robust. ING reported that gold-backed exchange-traded funds (ETFs) added 222 tonnes in the third quarter of 2025, approaching levels last seen at the peak of 2020. Mills referenced a Kitco summary of Goldman Sachs commentary, which noted that despite multiple all-time highs in 2025, institutional and retail participation in the U.S. remained muted — a trend analysts described as a "significant structural opportunity for continued price appreciation."

On the monetary policy front, Mills observed that the U.S. Federal Reserve implemented three rate cuts in late 2025, bringing the target range to 3.5% to 3.75%. He argued that diminishing central bank independence, combined with rising fiscal pressures, continued to support long-term demand for gold. Analysts at the CPM Group were quoted as stating that "reduced faith in the U.S. central bank's independence already is and would continue to be very supportive of gold and silver investment demand."

Experts Highlight Operational Momentum and Production Growth at Madsen

On November 6, Jeff Clark of The Gold Advisor reported on recent developments at West Red Lake Gold Mines Ltd., highlighting continued progress at the company's Madsen Mine and Rowan Project. Clark pointed to high-grade drill results and advancement toward pre-feasibility as evidence of the company's operational momentum.

He noted that Madsen's Austin Zone returned an intercept of 11.2 meters grading 26.16 grams per tonne gold, including 2.0 meters at 131.7 grams per tonne. Additional highlights included 5.5 meters at 37.87 grams per tonne and 8.0 meters at 10.55 grams per tonne. Clark described these results as expanding the inventory of "new high-grade zones for future production."

The update also addressed drilling at Rowan, where a 5,000-meter program is targeting conversion and infill in several vein systems. Clark referenced the July 2025 preliminary economic assessment, which estimated Rowan's after-tax net present value at CA$239 million with an internal rate of return of 82% at a gold price of US$3,250 per ounce. He explained that the drill campaign aimed to advance Rowan toward inclusion in a combined pre-feasibility study with Madsen expected in Q3 2026.

In his analysis, Clark stated that "the Madsen mine ramp-up is progressing well," and noted that the consistent delivery of high-grade results supports the view that Madsen could become a long-term, sustainable asset. While acknowledging that the market remained focused on upcoming operational performance, he maintained a positive stance and reiterated his recommendation to hold shares.

On November 18,  Craig Stanley, an analyst at Raymond James Ltd., reaffirmed his positive outlook on West Red Lake Gold Mines Ltd., assigning the company an "Outperform" rating with a suitability classification of A/ACC. Stanley pointed to operational improvements at the Madsen Gold Mine, highlighting that mined ore production increased 24% in October compared to September. He noted that the mine achieved daily ore outputs exceeding 1,000 tonnes on several occasions in the latter half of September, including a record day of 1,400 tonnes.

Stanley credited the production increase to operational changes implemented in mid-September, when the company began storing mined waste underground. This adjustment allowed haulage capacity to be redirected toward ore transport. He also emphasized that since August, the mill had been processing exclusively direct-mined ore, which contributed to improved feed quality.

The report highlighted that a pre-feasibility study combining the Madsen and Rowan deposits is scheduled for the third quarter of 2026, with a goal of defining a path to a joint operation producing 100,000 ounces per year. Stanley observed that the shaft had been dewatered to the 17th Level and rehabilitated to the 12th Level, as per the most recent company update.

Staffing developments were viewed positively as well. Stanley noted that the company had strengthened its leadership team by hiring Sean McCormack as Mine General Manager. McCormack previously served in the same role at the Kiena Mine in Quebec. Additionally, Hayley Halsall-Whitney, formerly General Manager at the Eagle River Mine in Ontario, had joined WRLG in January as Vice President of Operations. The company also added a Chief Engineer, Mill Manager, and Senior Operations Manager in support of the Madsen ramp-up.

West Red Lake: Building From a High-Grade Base

West Red Lake Gold's ramp-up at Madsen follows a structured development program that includes a bulk sample in mid-2025, consistent definition drilling, and infrastructure investments such as a 1.4-kilometer underground connection drift, ventilation upgrades, and the addition of new equipment. According to the company's December 2025 investor presentation, Madsen had already produced 12,800 ounces of gold in the first three quarters of the year, with reconciliation between planned and actual grades remaining strong.

The company is also preparing to bring additional zones online. The 904 Complex, a newly delineated high-grade area within the Austin zone, is expected to be a key contributor to future production. In parallel, West Red Lake Gold has advanced its shaft skipping project, with plans to begin moving 350 tonnes per day via the shaft at a fraction of trucking costs.

Beyond Madsen, the company is targeting near-mine and regional expansion opportunities. At the Fork deposit, WRLG has identified a potential high-grade core of 130,000 to 150,000 tonnes grading 8 to 9 g/t gold. This zone is located within 250 meters of the current mine infrastructure, with a 3,000-meter drill program underway. The Rowan deposit, located 80 kilometers from Madsen, is also undergoing a 5,000-meter drill campaign and has a preliminary economic assessment outlining 35,200 ounces of potential annual production over five years.

According to the pre-feasibility study dated January 2025, the Madsen Mine has a post-tax net present value (NPV) of CA$496 million at a long-term gold price of US$2,640 per ounce, with an estimated average annual free cash flow of CA$94 million over six years. The current mine plan is based on high-grade, low-tonnage stopes, and ongoing definition drilling has already expanded several zones beyond initial expectations, including a 320% increase in mine-plan ounces at the South Austin 4447 complex. 

Ownership and Share Structure¹

Institutions own about 30% of West Red Lake Gold, while management, insiders, and advisors hold around 10%.

The remaining shares are held by retail investors.

The company's market capitalization is CA$408.21 million, with a 52-week stock price range of CA$0.54-CA$1.18.