TICKERS: WRLG; WRLGF; UJ0

Gold Production Jumps 51% as AISC Falls 30%

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Source: Streetwise Reports (9/3/26)

West Red Lake Gold Mines Ltd. (WRLG:TSX.V; WRLGF:OTCQX; UJ0:FSE) reported higher Q2 2026 gold production and sales at its Madsen Mine as cash costs and all-in sustaining costs declined from the first quarter.

West Red Lake Gold Mines Ltd. (WRLG:TSX.V; WRLGF:OTCQX; UJ0:FSE) reported improved second-quarter 2026 operating and financial results from the Madsen Mine in Ontario's Red Lake mining district, with gold production increasing 51% from the first quarter and all-in sustaining costs declining 30%.

Gold production reached 8,576 ounces in Q2, up from 5,667 ounces in Q1, while gold sales increased 34% to 8,260 ounces. Cash costs decreased 23% to US$2,000 per ounce sold from US$2,594 per ounce in Q1. All-in sustaining cost declined to US$3,284 per ounce sold from US$4,678, bringing Q2 AISC within the company's 2026 guidance range of US$2,800 to US$3,600 per ounce.

West Red Lake Gold generated US$9.7 million of positive free cash flow during the quarter and ended Q2 with approximately US$31.2 million in cash and cash equivalents. Non-sustaining growth capital expenditures totaled CA$6.32 million, primarily related to continued advancement of the Fork Deposit access drift and the Madsen shaft refurbishment project.

"Q2 demonstrated the progress we are making at Madsen, with higher mining rates and gold production translating into stronger financial performance," CEO Shane Williams stated in the company's August 25 press release. "Gold production increased 51%, and gold sales increased 34% over Q1, contributing to a 30% reduction in AISC to US$3,284 per ounce, within our 2026 guidance range, while Madsen generated US$9.7 million of positive free cash flow."

Higher mining rates relative to mill throughput also allowed the company to establish a surface stockpile. As of June 30, the stockpile contained approximately 10,768 tonnes of ore. Williams said on an August 26 webcast that higher mining rates, improved grades, and higher mill throughput contributed to the quarter's increased gold production.

The company's hub-and-spoke strategy includes the Rowan Project, which is within trucking distance of the Madsen mill. An updated 2026 Mineral Resource Estimate increased Rowan's Indicated gold ounces by 70% to 335,058 ounces at 13.04 g/t gold from 196,747 ounces at 12.78 g/t gold in the 2025 estimate. Inferred gold ounces increased 52% to 179,029 ounces grading 15.31 g/t gold.

Gold Market Remained Supported by Longer-Term Gains Amid Rate and Inflation Pressures

According to an August 28 report from Kitco News, gold had come under selling pressure after Federal Reserve Chair Kevin Warsh emphasized inflation risks during his Jackson Hole speech. Warsh said the Fed's preferred measure of inflation stood above its target and added, "We must be confident that underlying inflation is moving to our objective, clearly and at sufficient speed. Otherwise, we have work to do."

Kitco reported that analysts viewed Warsh's comments as suggesting a tightening bias. Jeffrey Roach, chief economist for LPL Financial, said, "The distinctly hawkish speech gave support to the dollar as the chairman appears comfortable keeping policy higher for longer." The report said markets had again begun pricing in the possibility of a rate increase as early as September.

Yahoo Personal Finance reported on August 31 that renewed military conflict in the Middle East and increased expectations for a Federal Reserve rate increase had weighed on precious metals. The report stated, "Renewed military conflict in the Middle East and growing bets that the Fed will soon raise rates are weighing on precious metal prices this morning." Yahoo also reported that gold remained up 9.3% over one month and 30.6% over one year at that time.

Trading Economics data dated September 1 showed gold at US$4,382.57 per ounce, down 1.32% for the day but up 8.12% over the preceding month and 24.04% over the year. Its market summary said, "Despite the recent decline, gold still gained about 10% in August after the US Treasury announced plans to double liquidity-support buybacks of longer-dated bonds, reviving the so-called debasement trade." Trading Economics also described gold as one of the most widely followed precious metals and said it had often been regarded as a safe-haven asset during periods of economic uncertainty, inflation, and geopolitical risk.

Third-Party Commentary Tracks Madsen Ramp-Up and Rowan Resource Expansion

Investor and newsletter writer Chen Lin took a cautious view of West Red Lake Gold's Madsen operations on May 13 following the company's revised 2026 guidance. Lin wrote that the shares had "suffered dearly after the guidance for 2026" and said he had spoken with "quite a few people very familiar with WRLG operation."

Lin described the mining environment at Madsen as challenging because "many good areas were mined out." He said the company would need "to build a decline to mine at a fresh new area, which will likely take a year or so." Lin added, "That's the wait for this mine to 'turn around'. Investors need to be patient."

Cantor Fitzgerald analysts Matthew O'Keefe and Nicholas Lobo focused on the Rowan Project in a June 9 note following an updated mineral resource estimate and the maiden mineral resource estimate for the nearby Mount Jamie deposit. They said the revised Rowan estimate reflected "the results of a highly focused 6,300 m resource conversion drill program."

The Cantor report cited a Rowan indicated resource of 334,825 ounces grading 13.03 g/t gold and an inferred resource of 179,013 ounces grading 15.31 g/t gold. West Red Lake Gold subsequently finalized the 2026 Rowan resource at 335,058 indicated ounces grading 13.04 g/t gold and 179,029 inferred ounces grading 15.31 g/t gold.

Following the update, Cantor maintained its rating and target for West Red Lake Gold. "We maintain our Buy rating and CA$2.20/share target price," O'Keefe and Lobo wrote.

O'Keefe returned to West Red Lake Gold in a July 15 report after reviewing the company's second-quarter operating update. He reiterated a Buy rating and CA$2.20 price target while pointing to a 51% quarter-over-quarter increase in gold production to 8,576 ounces, a 46% increase in mined tonnage to 75,524 tonnes, and a 73% increase in mined gold to 10,459 ounces.

He attributed the improvement to additional mining fronts, improved mine sequencing, higher mining rates, and mill optimization. Average mill throughput had increased to approximately 842 tonnes per day in the second quarter from 572 tonnes per day in the first quarter.

O'Keefe wrote that throughput was expected to reach approximately 1,000 tonnes per day during the second half of the year, which "should allow WRLG to meet its full-year production guidance of 35,000 to 45,000 oz of gold and build a modest surface stockpile buffer." He said the ramp-up was proceeding well and "should boost investor confidence."

The analyst also identified the company's August 25 financial results as an important update for costs. O'Keefe wrote that costs "should start to trend downward, given that Madsen is largely a fixed cost operation." His model used cash costs of US$1,250 per ounce, all-in sustaining costs of US$1,867 per ounce, and a long-term gold price of US$4,000 per ounce.

His CA$2.20 price target was based on an equally weighted blend of 0.6 times net asset value and 6.0 times estimated 2027 cash flow per share. O'Keefe identified continued ramp-up execution, achievement of targeted throughput, maintenance of grades, and lower per-ounce costs as factors to monitor.

In an August 28 research update, O'Keefe reiterated his Buy rating on West Red Lake Gold and maintained his CA$2.20 per share price target after incorporating the company's second-quarter financial and operating results. "We maintain our Buy rating and CA$2.20/share target price based on equally blended 0.6x NAV/6.0x 2027E CFPS (unchanged)," O'Keefe wrote. Cantor noted that Madsen produced 8,576 ounces of gold in Q2, up 51% quarter over quarter, while cash costs declined 23% to US$2,000 per ounce and AISC fell 30% to US$3,284 per ounce. The firm said West Red Lake Gold remained on track to meet its 2026 production guidance of 35,000 to 45,000 ounces and AISC guidance of US$2,800 to US$3,600 per ounce.

O'Keefe also identified several upcoming operational milestones, including increasing throughput toward 1,000 tonnes per day, advancing the access ramp to the high-grade Fork deposit, and receiving additional assay results from Starratt-Olsen and the 904 Complex. Cantor said an updated pre-feasibility study combining Madsen and Rowan was on track for the latter half of September. In discussing its unchanged valuation, the firm wrote, "We continue to value WRLG on an equally weighted 0.6x NAV/6.0x 2027E CFPS basis, driving our price target of CA$2.20 per fully diluted share (unchanged). Our Buy rating is unchanged."

Jeff Clark and Daniel Flynn of The Paydirt Prospector discussed the completion of Phase One of the Madsen shaft refurbishment on August 13, describing the work as "a useful piece of the Madsen turnaround plan." They noted that the completed phase demonstrated the ability to safely hoist gold ore and waste through the existing shaft at an initial capacity of approximately 200 tonnes per day.

Clark and Flynn described the shaft work as practical infrastructure for a larger Madsen operation. They pointed to planned capacity increases to approximately 700 tonnes per day in the second half of 2027 and approximately 2,000 tonnes per day in the second half of 2028.

The writers said an additional means of moving ore and waste to surface would become increasingly important as mining moved deeper and production increased. They also highlighted management's expectation that the refurbished shaft would improve mining efficiency, support higher production rates, and reduce operating costs and all-in sustaining costs over time.

Clark and Flynn also addressed difficulties encountered during Madsen's production ramp-up. They noted that West Red Lake Gold would miss its original 2026 production guidance of 60,000 ounces and cited first-quarter all-in sustaining costs of US$4,678 per ounce against a realized gold price of US$4,938 per ounce.

"This shaft work doesn't solve that overnight. But it's a step in the right direction," they wrote.

Clark and Flynn said the operation needed increased production, improved infrastructure, and smoother operations. They maintained a "Hold, Trim or Sell" recommendation, although their individual positions differed. Clark had sold his position and redeployed the capital elsewhere, while Flynn continued to hold his position while watching the company's optimization efforts and high-grade satellite deposits.

They also noted that West Red Lake Gold continued to target approximately 120,000 ounces of annual production over time. "That prize hasn't disappeared; it's just further away than we hoped," Clark and Flynn wrote.

Development Work Extends Across Madsen, Fork, and Rowan

West Red Lake Gold's August 2026 corporate presentation outlined several development, mining, and exploration programs extending through the second half of 2026, 2027, and 2029. The company maintained 2026 production guidance of 35,000 to 45,000 ounces, with approximately 60% weighted toward the second half of the year.

At Madsen, the company is advancing work across the 4447, 960, and 904 complexes, the Fork satellite deposit, and the eastern connection toward the Derlak complex. Mining at the 960 and 4447 complexes was scheduled for H1 and H2 2026, while the 904 Complex and Fork are expected to enter the production profile in 2027. Ongoing drilling and development are intended to support mine planning and resource expansion.

The 904 Complex is a 200-meter by 200-meter non-remnant complex within Madsen that is in development for H1 2027. Drilling is underway to define multiple high-grade, near-infrastructure lenses. Highlighted 2026 drilling included 215.46 g/t gold over 5.35 meters on April 13 and, from February 25 results, 219.73 g/t gold over 4.8 meters, 148.36 g/t gold over 3 meters, and 133.13 g/t gold over 2.5 meters.

At Fork, a 3,200-meter drill program was completed, and initial development is underway, with development expected to continue through H2 2026. The Fork is approximately 250 meters from the existing Madsen infrastructure and is expected to enter the company's 2027 production profile.

The company is also advancing the 13 Level East Drive toward Derlak. Approximately 500 meters of development is planned in 2026 to provide access to additional areas of the deposit and drill access for expansion east of the current Mineral Resource Estimate. District-scale drilling and geophysics are also advancing across the broader land package, including Fork.

Other work identified for H2 2026 includes continued shaft refurbishment and exploration at Starratt-Olsen and North Shore. The company's 2027 plans include material underground development, scaling shaft haulage capacity, further advancement of the 13 Level East Drive to open additional mining fronts, and continued resource expansion drilling.

At Rowan, the permitting process has started, and the company is evaluating the satellite deposit as part of its hub-and-spoke strategy. The project's Preliminary Economic Assessment describes a 400-tonne-per-day underground mine producing approximately 35,000 ounces annually at an average diluted grade of 8 g/t gold over five years, with initial construction targeted for 2029.

Streetwise Ownership Overview*

West Red Lake Gold Mines Ltd. (WRLG:TSX.V; WRLGF:OTCQX; UJ0:FSE)

Restructures

Date	Old Symbol	Old Shares	New Symbol	New Shares
01/31/23	DVRRF:OTCQX	1	WRLGF:OTCQX	1
01/05/23	DLV.H:TSXV	1	WRLG:TSXV	1
01/05/23	DVRRD:OTCQX	1	DVRRF:OTCQX	1
07/15/22	DLV.H:TSXV	5	DLV.H:TSXV	1
07/15/22	DVRRF:OTCQX	5	DVRRD:OTCQX	1
11/27/17	DVRRF:OTCQX	1	DVRRF:OTCQX	1

^*Share Structure as of 8/27/2026

A recent 6,300-meter Rowan drill program targeted veins 001, 004, 006b, and 013. The program was designed to support mine design, geotechnical work and metallurgical work for a planned combined pre-feasibility study. The company's roadmap identifies an updated pre-feasibility study proposed to combine Madsen and Rowan, while Rowan development and production ramp-up carry an H1 2029 target.

Ownership and Share Structure¹

Institutional investors hold approximately 30% of West Red Lake Gold's shares, with insiders and advisors holding another 10%.

The remaining 60% is held by retail investors.

The company's current market cap is ~CA$370 million, with a 52-week trading range of CA$0.59 to CA$1.49.

Frequently Asked Questions

What were West Red Lake Gold's Q2 2026 gold production results?

West Red Lake Gold Mines Ltd. produced 8,576 ounces of gold at the Madsen Mine in Q2 2026, a 51% increase from Q1. Gold sales increased 34% to 8,260 ounces during the quarter.

What were West Red Lake Gold's Q2 2026 cash costs and all-in sustaining costs?

Cash costs decreased 23% to US$2,000 per ounce sold from US$2,594 per ounce in Q1. All-in sustaining costs, or AISC, decreased 30% to US$3,284 per ounce sold from US$4,678 per ounce in Q1.

How much free cash flow did the Madsen Mine generate in Q2 2026?

West Red Lake Gold reported US$9.7 million of positive free cash flow during Q2 2026 and ended the quarter with approximately US$31.2 million in cash and cash equivalents.

What is West Red Lake Gold's 2026 production guidance for the Madsen Mine?

West Red Lake Gold's 2026 production guidance is 35,000 to 45,000 ounces of gold, with approximately 60% of production weighted toward the second half of 2026.

What is West Red Lake Gold doing to expand production at the Madsen Mine?

Development work includes the 4447, 960, and 904 complexes, the Fork satellite deposit, and the 13 Level East Drive toward Derlak. The company is also undertaking shaft refurbishment and continued resource expansion drilling.

When are the Madsen 904 Complex and Fork deposit expected to enter production?

The 904 Complex and Fork satellite deposit are expected to enter West Red Lake Gold's production profile in 2027. The 904 Complex is a 200-meter by 200-meter non-remnant complex within Madsen, while Fork is approximately 250 meters from existing Madsen infrastructure.

What is West Red Lake Gold doing at the Fork satellite gold deposit?

West Red Lake Gold completed a 3,200-meter drill program at Fork and began initial development. Development was expected to continue through the second half of 2026, with Fork expected to enter the production profile in 2027.

What is the latest Rowan Project gold resource estimate?

The 2026 Rowan Mineral Resource Estimate contained 335,058 indicated gold ounces grading 13.04 g/t gold and 179,029 inferred ounces grading 15.31 g/t gold. Indicated ounces increased 70%, and inferred ounces increased 52% compared with the 2025 estimate.

What work has West Red Lake Gold completed at the Rowan Project?

A recent 6,300-meter drill program targeted veins 001, 004, 006b, and 013. The drilling was designed to support mine design, geotechnical work, and metallurgical work for a planned combined pre-feasibility study.

When is West Red Lake Gold targeting Rowan development and production?

The company's August 2026 corporate presentation identified an H1 2029 target for Rowan development and production ramp-up. The Rowan Preliminary Economic Assessment described a 400-tonne-per-day underground mine producing approximately 35,000 ounces of gold annually over five years.

What is the outlook for gold prices in the current market?

Trading Economics data dated September 1 showed gold at US$4,382.57 per ounce. Although gold was down 1.32% for the day, it remained up 8.12% over the preceding month and 24.04% over the year. Recent reports identified inflation, Federal Reserve interest-rate expectations, and geopolitical developments among factors affecting gold prices.

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Important Disclosures:

West Red Lake Gold Mines Ltd. is a billboard sponsor of Streetwise Reports. The company pays a monthly sponsorship fee of US$3,000–US$6,000 for banner advertising and an enhanced company profile page. Streetwise Reports’ editorial content is fully independent and is not influenced by sponsorship.
James Guttman wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
This article does not constitute investment advice and is not a solicitation for any investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company.

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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.

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