Last Update13 Sep 25Fair value Decreased 32%
Here’s the freshest, need-to-know snapshot on West Red Lake Gold Mines (WRLG / WRLGF) and an updated take on $4,000/oz & $5,000/oz gold scenario.
What’s new & official
- Madsen restart status
- Mine restart plan kicked off in 2025: ~500 tpd for the first two months, then ramping through H2 toward the PFS rate. (West Red Lake Gold -)
- Pre-Feasibility Study (Jan 7, 2025) – base case
- Avg. production: ~67,600 oz Au/yr over a 7.2-yr mine life at 800 tpd (mill is built to ~1,089 tpd; currently permitted for 800 tpd).
- AISC: US$1,681/oz; total operating cost US$919/oz.
- Post-tax: C$315M NPV (5%), ~C$69.5M avg. annual FCF at an average gold price assumption of ~US$2,317/oz. (West Red Lake Gold -)
- Rowan project (second mine) – PEA filed Aug 19, 2025
- Concept: toll-milling underground mine.
- Avg. ~35,200 oz/yr for 5 years, US$1,408/oz AISC, C$125M post-tax NPV (5%) at US$2,500/oz; IRR ~42% (rises with higher gold). (West Red Lake Gold -)
- Latest financial/ops (Q2 2025 report)
- Revenue: C$24.3M (quarter); net income: C$4.0M (quarter).
- Cash & debt (June 30, 2025): Cash C$23.7M; Gold-linked notes ~C$44.7M; Credit facility ~C$42.5M (current + non-current). (West Red Lake Gold -)
- Funding
- US$35M Nebari credit facility closed Jan 2025; final US$12.5M draw completed May 14, 2025. (West Red Lake Gold -)
Capital structure (latest)
- Basic shares outstanding: 348,010,324 (as of June 30, 2025, per Q2 FS). Weighted-avg basic in Q2: 345.9M.
- For reference, the investor deck (Feb 25, 2025) listed 343.17M basic and ~517.0M fully diluted (options, warrants, RSUs/DSUs). (Fully-diluted count will move as instruments are exercised.) (West Red Lake Gold -)
Re-running your $4,000/oz scenario (quick ranges)
To ground it in disclosed costs, I’ll use the PFS AISC of US$1,681/oz (more conservative than the $1,200/oz you assumed). These are rough, before interest/taxes/currency effects.
- Margin per oz at $4,000: $4,000 − $1,681 = $2,319/oz.
- Case A: PFS production (~67,600 oz/yr)
- Implied FCF ≈ $156.8M/yr (67,600 × 2,319).
- 7×–10× FCF value: $1.10B–$1.57B.
- Per share (348.0M basic): ~$3.15–$4.50 (USD).
- Case B: Stretch goal (~100,000 oz/yr)
- Implied FCF ≈ $231.9M/yr.
- 7×–10× FCF value: $1.62B–$2.32B.
- Per share (348.0M basic): ~$4.67–$6.66 (USD).
Notes: • PFS production is ~67.6k oz/yr; 100k oz is not current guidance but could be approached if throughput is increased and/or Rowan contributes (PEA ~35k oz/yr) — both require permitting, capital, and execution. (West Red Lake Gold -) • WRLG reports in C$; shares trade in C$. The above per-share figures are USD approximations on basic shares; using a fully-diluted count reduces the per-share range. (West Red Lake Gold -)
- Production plan now: ~67.6k oz/yr at US$1,681/oz AISC (PFS), 800 tpd; mill built to ~1,089 tpd; ramp in 2025. (West Red Lake Gold -)
- Rowan PEA: ~35.2k oz/yr for 5 years at US$1,408/oz AISC (toll milling), post-tax NPV C$125M at US$2,500/oz. (West Red Lake Gold -)
- Shares outstanding (latest filed): 348,010,324 basic (June 30, 2025).
- Balance sheet (June 30, 2025): Cash ~C$23.7M; Nebari credit facility and gold-linked notes drawn (see above). (West Red Lake Gold -)
How about at $5,000/oz gold?
A) Madsen PFS only (~67.6k oz/yr @ $1,681 AISC)
FCF ≈ 67,600 × $3,319 = $224.36M/yr
- 10× FCF:
- Market cap ≈ $2.243B → $6.45/sh (basic) | $4.34/sh (FD)
- 15× FCF:
- Market cap ≈ $3.365B → $9.67/sh (basic) | $6.51/sh (FD)
- 20× FCF:
- Market cap ≈ $4.487B → $12.89/sh (basic) | $8.68/sh (FD)
B) Stretch case (100k oz/yr @ $1,681 AISC)
FCF ≈ 100,000 × $3,319 = $331.90M/yr
- 10× FCF:
- Market cap ≈ $3.319B → $9.54/sh (basic) | $6.42/sh (FD)
- 15× FCF:
- Market cap ≈ $4.979B → $14.31/sh (basic) | $9.63/sh (FD)
- 20× FCF:
- Market cap ≈ $6.638B → $19.07/sh (basic) | $12.84/sh (FD)
C) Madsen PFS + Rowan PEA (≈102.8k oz/yr blended)
- Madsen FCF: 67,600 × $3,319 = $224.36M
- Rowan FCF: 35,200 × $3,592 = $126.44M
- Total FCF: $350.80M/yr
- 10× FCF:
- Market cap ≈ $3.508B → $10.08/sh (basic) | $6.79/sh (FD)
- 15× FCF:
- Market cap ≈ $5.262B → $15.12/sh (basic) | $10.18/sh (FD)
- 20× FCF:
- Market cap ≈ $7.016B → $20.16/sh (basic) | $13.57/sh (FD)
Notes & sensitivities
- These are operating-margin proxies (AISC basis); actual FCF will be lower once you include corporate G&A, taxes, interest on facilities/notes, working capital, and sustaining/expansion capex nuances not captured by AISC.
- Throughput, grade, and recovery drive realized ounces; PFS/PEA averages can differ from initial ramp years.
- Share count can change (equity raises, option/warrant exercises), which will dilute per-share values.
West Red Lake Gold Mines – $4,000 Gold Scenario
Assumptions
- Production: 100,000 oz/year
- AISC: $1,200/oz
- Gold Price: $4,000/oz
- Valuation Multiple: 10× FCF
- Shares Outstanding (assumed): 100M
Step 1: Revenue Revenue = 100,000 oz × $4,000 = $400,000,000
Step 2: Costs Costs = 100,000 oz × $1,200 = $120,000,000
Step 3: Free Cash Flow (FCF) FCF = $400,000,000 – $120,000,000 = $280,000,000
Step 4: Market Cap (10× FCF) Market Cap = $280,000,000 × 10 = $2,800,000,000
Step 5: Stock Price Stock Price = $2,800,000,000 ÷ 100,000,000 = $28/share
✅ Conclusion: At $4,000/oz gold, 100k oz/year production, and $1,200/oz AISC, West Red Lake could trade around $28/share (based on 100M shares).
⚠️ With the actual 2025 share count (~343M basic / ~517M fully diluted), the per-share price would be much lower.
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Disclaimer
The user RockeTeller has a position in TSXV:WRLG. Simply Wall St has no position in any of the companies mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The author of this narrative is not affiliated with, nor authorised by Simply Wall St as a sub-authorised representative. This narrative is general in nature and explores scenarios and estimates created by the author. The narrative does not reflect the opinions of Simply Wall St, and the views expressed are the opinion of the author alone, acting on their own behalf. These scenarios are not indicative of the company's future performance and are exploratory in the ideas they cover. The fair value estimates are estimations only, and does not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that the author's analysis may not factor in the latest price-sensitive company announcements or qualitative material.
