Title: West Red Lake Gold (TSXV: WRLG) - Can they pull off the hub and spoke model?
Show: TokStocks Small Cap Podcast (host Kier Reynolds)
Guest: Jaclyn Ruptash (VP communications & investor relations, West Red Lake Gold Mines)
Date: 2026-SEP-16
URL: https://youtu.be/12gPeXj1gbQ
Length: 26:04
Note: YouTube auto-transcript pasted by Stephen; fillers (um/uh/you know/like tics) and stutters removed, wording otherwise verbatim, except obvious speech-recognition mishearings corrected: Jacquellyn Ruptach/Jacqueline -> Jaclyn Ruptash, Madson/Mads -> Madsen, ASIC/nasics/basics -> AISC, Nibari/Navari/Nari -> Nebari, steroid Olsson/Derek Olsen/Star Olsen -> Starratt-Olsen, Panto Fitzgerald -> Cantor Fitzgerald, alles -> ounces, Ebida/EVO -> EBITDA, stoopes -> stopes, Yellow Knife -> Yellowknife, Jane -> Shane, draw results -> drill results, non-renant -> non-remnant, prefee -> pre-feasibility, row at Madson -> Rowan-Madsen, "research stories" -> restart stories, "patients" -> patience, "AISC down to 30%" -> down 30% (matches the host's "fell 30%"), "airs" -> air miles. "Akin Ross" left as spoken (probably Kinross, possibly Agnico Eagle — both run Red Lake-area assets; uncertain). ">>" marks a change of speaker.
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(00:03) [music] Hi there. Welcome to another edition of Talks. I'm your host Kier Reynolds and today we're lucky enough to have Jaclyn Ruptash, VP communications and investor relations with West Red Lake Gold Mines. Trades on the TSX Venture Exchange with the ticker WRLG and also on the OTCQX with the ticker WRLGF.
(00:36) How you doing today, Jaclyn? >> Great. Thank you very much for asking. How are you? >> Awesome. Having a great day. Obviously wanted to get you on for an update. It's been a while since we've had anybody on from West Red Lake. I've had Shane and I had the previous person in your role on several times.
(00:53) You guys were kind of written off for dead with kind of a bit of a nasty Q1 in terms of AISC and stuff like that. But while we're chatting, you had a really significant turnaround in Q2 and you guys put quite a bit of detail in terms of what was going on in Q2 and why there was some improvement.
(01:11) We'll kind of unpack that. I'll let you walk us through that. But before we get into all that, maybe we could have the viewers get to know you a little bit. What's your background? >> Absolutely. So, I've been in the resource space for about 20 years now, across communications, capital markets, governance, and I grew up in Yellowknife, so I was kind of surrounded by mining and exploration from the beginning.
(01:32) So, when I moved to Vancouver, over my career, I've worked with companies in various stages, exploration through development, and of course, mine restarts. And as you know, I joined West Red Lake in April as the VP comms and IR. And at a particular interesting time, I'd say, as the company transitioned from development and into commercial production, obviously building out this now broader strategy around Madsen.
(01:56) >> And what's bringing to the company? >> I think I'm addicted to restart stories. Obviously, there's a lot of benefit from existing infrastructure and oftentimes quicker turnarounds to production, which I guess the team here definitely demonstrated in the 2 years of development that they did to get into commercial production was pretty significant.
(02:18) But I would say the team itself was very, very strong. It's built by Shane Williams, CEO, who has built mines his entire career and was able to attract a lot of very experienced individuals who have built mines or have operated mines in the past. So, I feel very fortunate to have landed here. >> And how are you approaching the role a little different than the previous person? >> As the company is moving through this transition, I think that communication shifts naturally.
(02:46) I wouldn't say I'm doing anything differently but becoming more predictable and when the market can expect certain information, like production: after the quarter, 10 to 15 days following, we'll put out our production summary for that quarter and then the financials and so on. I'm also kind of looking at our capital table. I had a very unique experience getting to know our shareholder base in the beginning over the last few months, but I'd say it's given me a different perspective
(03:16) on how we communicate now as a producing company, but also looking at striking that right balance between now attracting long-only institutions and having the right retail on board as we move forward who have the patience and understand mining as we build out this multi-asset strategy. >> Yeah, I think that's a good segue.
(03:38) Why don't you give us an elevator pitch on West Red Lake for those of my viewers that haven't caught the other videos and haven't heard of the company before? >> Yeah, we're a newly producing Canadian gold mine in the Red Lake District of Ontario, which is known for its long history of high-grade gold mining. I think historically it's produced over 20 million ounces.
(03:56) And it's home to some of the bigger companies like Akin Ross, Evolution. Equinox actually has a property right next door to Madsen. So, it's a great mining-friendly jurisdiction. And we took over the Madsen mine in 2023. And we're in the early stages of building out this multi-asset mining platform where we have the existing infrastructure, the permitted mill, the tailings, which we will use as a central hub for this multi-satellite deposit feeding into the mill and complementing the Madsen deposit, which we're mining today.
(04:33) And we refer to this as the hub and spoke strategy. So ultimately looking at consolidating the region in the longer term and building that next mid-tier producer. >> Excellent. So you're not a single-asset company even though a lot of people kind of know about Madsen, and there was a lot of messaging and a lot of focus on when you guys were going to get that restarted, and Shane had a bit of a different approach, but now you guys just actually had a news announcement out earlier today on some
(05:03) results from a different project. So, you guys are starting to get into this hub and spoke strategy. >> Yeah, absolutely. And Rowan is a big part of that. That's our secondary asset. And so, that will be integrated in the longer term. But if we could go back quickly to Q2, I would say at Madsen, we're starting to see progress in this first half of the year.
(05:29) In Q1, as you pointed out, we did prioritize more of that development work. So naturally our production was lower, which drove our all-in sustaining costs up. However, we saw the benefits of this in Q2 with production up 51%, ounces sold increased 34%, which drove the AISC down 30%, landing within our production guidance for 2026, which is about 2,800 to 3,600 US.
(05:59) So we also generated free cash flow of roughly 9.7 million in the second quarter and generated a surface stockpile, building in that operational flexibility. But what I think differentiates our asset base is we saw the grades also improve at Madsen in Q2, and the current PFS outlines approximately 480,000 ounces of probable reserves at just over 8 g per ton, positioning Madsen among one of the highest-grade operating gold mines in Canada.
(06:35) But beyond that, Madsen hosts approximately 1.6 million ounces in the indicated category at 7.4 g per ton, plus another 360,000 ounces inferred at 6.3 g per ton. And then you have Rowan, which is our secondary asset that we had talked about earlier. And this is one of the highest-grade undeveloped gold projects in Canada.
(06:56) We recently increased the indicated resource by 70% to approximately 335,000 ounces at 13 g per ton and then another 180,000 ounces inferred at 15 g per ton. So that in itself, when we talk about the hub and spoke strategy, we're building a significant profile of high-grade ounces that can potentially leverage the permitted mill and infrastructure that we already own at Madsen.
(07:27) And then of course you pointed out, we have Fork which will be coming into the production profile in 2027, and we're starting to build out that next satellite deposit at Starratt-Olsen that could potentially be integrated into that production profile in the longer term. >> So I guess if we're looking to frame this for new investors, you guys are certainly high-grade.
(07:47) I can probably say it, maybe you can't, but if you look at global gold mines, if you're looking at an open pit, they're operating at sometimes sub one gram. If you're looking at underground, you're looking at two, three grams per ton. You guys are certainly very high grade when you compare yourselves to those sorts of global averages.
(08:09) So it's a high-grade story. And then you guys are building a hub and spoke multi-asset made-in-Canada gold producer. Is that pretty much how we should frame it for investors? >> I think that's very accurate. Yes, absolutely. Madsen itself is in the top five highest-grade deposits in Canada and open at depth. This is still growing.
(08:28) We're getting into areas of the deposit now that haven't been mined before. So we're starting to find these deeper pockets of mineralization, higher-grade mineralization that will be also integrated into this production profile in 2027, and the same case could be made for Rowan where this is also open at depth.
(08:51) So we see significant upside to the growth potential in both these two deposits but also within this broader district and the potential to consolidate in and around Madsen itself. >> So how far is Rowan, as the bird flies, how far is it from Madsen? >> So we have to go around the lake. So, it's about 80 km.
(09:14) So, within trucking distance, and we'll just be taking ore from Rowan and obviously trucking it to the Madsen mill. That's the proposed plan at the moment, and we'll be putting out an updated prefeasibility study that contemplates combining Rowan and Madsen to show the impact that Rowan can have in the valuation of the company moving forward.
(09:40) >> When's that due? >> That is in the coming weeks. So toward the end of September. >> Excellent. And you guys had some drill results out, some fairly high-grade stuff you announced this morning. Maybe you could unpack that. >> Yes. Absolutely. Another high-grade deposit about a kilometer away from Madsen, which could potentially be accessed from underground infrastructure at Madsen.
(10:07) And again, another deposit at Starratt-Olsen is what we're referring to, that looks to have pockets of mineralization that can be integrated into the production profile. And so we put out this morning the first five of 12 drill holes. And I expect the remaining of those drill hole assays to come out within the coming weeks.
(10:28) >> And what's the name of that project again? >> Starratt-Olsen. >> Does that have a 43-101 resource or historic resource? >> It's a past producer. In terms of putting out a 43-101 from West Red Lake's perspective, it's obviously something we would likely contemplate, but for now, we will get the rest of the drill holes back and take a step back and see what the broader deposit looks like.
(10:52) >> And what's your slated projected annualized production at Madsen? I know you guys are in ramp up, so maybe you can dance around a little. >> So obviously we haven't put out guidance for 2027, but what I can say, for 2026 we put out guidance in April of 35,000 ounces to 45,000 ounces, and then of course we would expect that to grow for 2027 as we start integrating satellite deposits like Fork and building out the non-remnant areas of Madsen, and then of course guidance for 2027 will come out in the new year. Our
(11:29) mill is processing over that 800 tons per day. In Q2 it averaged 842 tons per day. And because it's an 800 ton per day on an annual basis and we prioritized more development in Q1, we now have the capacity for the remainder of this year to push to that thousand tons per day, which it looks like we're tracking to now.
(11:52) >> Once you're in full ramp up and it's a fully ramped up commercial production, which it sounds like you guys are pretty close to, how many tons per day will you be tracking? >> I would say nameplate is about 1,000 tons per day, and we would obviously be looking to increase that given that we want to integrate Rowan.
(12:13) So that will be reflected in the updated prefeasibility study. But ultimately next year we want to be doing 1,000 tons per day minimum consistently. And for Madsen, steady state would be that 70,000 ounces a year. So again guidance for 2027 will obviously be out in the new year, but our intention is to move as much material through the mill as possible.
(12:37) >> And we touched already on Q2, a pretty good turnaround as you indicated. Gold production rose 51% to just over 8,500 ounces. Your AISC also fell 30% to $3,284 per ounce produced. How significant is that quarter to the company? Is that something that investors should pay attention to and hope for a trend, or is that just something that you'll have to take on a quarter-by-quarter basis? >> Obviously, it's a great indication of proof of concept, right? We're showing what Madsen is capable of.
(13:09) It's building in that consistency. It's doing the work underground that's required to build in that optionality and building out the stopes. So, we're exploring, developing, and mining all at the same time, right? That's what a typical producer will do. >> Your AISC for Q2, we indicated, was just over $3,200 per ounce.
(13:32) What sort of range are you guys hoping for once you're in a fully ramped up mine for Madsen alone? Where do you think investors should find that AISC? I know you mentioned it at the beginning, but could you just reiterate that again? >> I would probably look at it toward the lower end of our guidance for 2026. So I would say comfortably between that 2,500 to 2,800 mark.
(13:53) Obviously, I'm speaking out of turn because we have not put out guidance for 2027, but getting that AISC as low as possible is ultimately the goal. However, I would highlight that a lot of these Canadian gold mines are high fixed cost mines. So, for example, 60% of the fixed costs are labor, and so that's just built into the mine itself.
(14:20) >> Why don't we talk financial position? We've talked all about ounces produced and AISCs and things like that. Why don't we talk balance sheet? You ended Q2 with 31.2 million, free cash flow and things like that. But will that be enough cash to get you guys through the year? >> Yeah, I would say we're still cash flow neutral.
(14:42) We are still investing in underground development and that'll continue for, I would say, the foreseeable future, probably over the next 12 months. But ultimately the more ounces we produce and the more gold we sell, that will generate higher cash flow. And so obviously that's where we want to be tracking.
(15:03) So it's just building off of what we accomplished in Q2 and continuing through Q3, Q4 and into next year and building that consistency. >> How about on the debt side? You guys have the Nebari credit facility. You have gold-linked notes. Any discussion around those? >> So during the first half of this year, we were able to start making principal repayments toward the Nebari loan.
(15:26) But it is important to remember that when we put these debt structures in place, it was meant as short-term, back-end loaded financing to provide capital to move through development to production. So now that we're on the other side of that, we're always looking at options to lower cost of capital and strengthen that balance sheet.
(15:45) So if debt is something, and the Nebari loan in particular is something that we're evaluating, actively evaluating. >> Okay. Working capital appears to be slightly negative at quarter end. Like I said, do you have enough cash to fund the balance of the year? Should we be watching for some sort of financing package that might drop? >> Well, we started to show what Madsen's capable of. We generated 9.
(16:07) 7 free cash flow in Q2. We're building an inventory of available mining areas to ensure we have ample runway for production in front of us. And we're starting to accumulate the surface stockpile, which provides that flexibility. But that said, the company's always looking at ways, as I alluded to before when we talked about the debt, of strengthening our balance sheet and looking at lower cost of capital.
(16:31) >> Okay. Why don't we talk share structure? It's been a little while since I got an update on that. How many shares are outstanding? >> About 413 million issued and outstanding. >> And how about warrants and options and things like that? >> Warrants are about 110 million. And actually we have 21.
(16:50) 5 million that are expiring in November that are at 68 cents. So anybody holding those warrants today are sitting in a pretty good position. >> And how about ownership? What's insider ownership or institutional ownership versus retail? >> Yeah, retail is a large part of that balance. I'd say it's about 60%. Institutional is just below 30, and I would say insiders and friendlies fill the rest.
(17:15) But we're looking right now to strike that balance between long-only institutions plus the right retail, and of course insiders are consistently building their portfolios. But Shane and I have been on the road for some time having targeted meetings and reintroducing this now as a producing company generating cash and moving through this ramp up and building that consistency.
(17:39) We have really good volume as well. I think we're averaging the last 90 days 3.5 million a day in shares traded. So we have great volume. I think we have a really good investor base, but we're starting to see new people into the story, which happens naturally when a company transitions through different phases.
(18:00) >> Do you guys have any analyst coverage? >> We do. We are covered by Raymond James, Cantor Fitzgerald, and Velocity Trade Capital. >> And I know you probably can't really talk price targets of their own, but are the price targets a healthy multiple from today's share price? >> Well, you're right.
(18:18) I can't talk about the price targets, but what I can say, it's definitely in line with how we look at West Red Lake and in line with how our peers are trading today. >> Safe to say it leaves some pretty good upside for investors if they were to look at your shares where they're trading at today. >> Well, I definitely would say that it leaves a lot of upside.
(18:45) I think today the case could be made that there's a valuation gap and there's value beyond Madsen. I think right now we're being valued as a single asset, and I don't think that Rowan is being fully reflected in our share price today. We've increased, as I said, that indicated resource by 70%. When the proposed combined PFS is published, that should give the market a better picture of how Rowan could potentially impact value. The opportunity is really about closing this valuation gap to our current peers through execution
(19:18) and ultimately moving into that different peer group altogether over time with this hub and spoke strategy. >> Yeah, I guess as you're in a ramp up, it's a little bit difficult to use typical financial ratios to value the company. As you are in ramp up, you are reinvesting. You do have drastically volatile AISCs to go on, and also ounces produced, things like that.
(19:42) So I would imagine people have to wait a little bit until you're into more consistency before they might be able to apply some of those traditional valuation metrics like price to NAV, EV per ounce, EV to EBITDA, things like that. But you believe that you're really just being valued as a single asset right now? >> Yeah, I think so.
(20:00) And pointing back to what you just said, showing that consistency, demonstrating that Madsen can produce, demonstrating that the gold is in fact there. But I think it's going to take a few more quarters, let's say, within the 6 to 9 months to get the market comfortable with Madsen. But when we start to integrate these satellite deposits, and this is something that has not been previously done,
(20:27) it's building that multi-asset jurisdiction and looking at consolidation opportunity in the region and building out this multi-asset production platform. >> Let's talk catalysts. What are a couple of key catalysts you have upcoming? >> Obviously demonstrating Q3, Q4 production and financials, but I'd say probably the biggest catalyst this year is going to be the updated PFS and again showing that impact, the value that Rowan can have to the operations.
(20:58) I would say the next major catalyst is probably completing phase two of the shaft refurbishment. Right now we're moving through that as we speak, and that will help improve cost and efficiency while we're mining from underground. >> Okay. And when you say improve efficiency, what is the shaft refurbishment really? >> Yeah.
(21:20) So for phase two, we'll be skipping roughly 700 tons per day from underground directly to the mill. And that will be complementing the trucking. We're not going to be removing that requirement. However, we'll be able to now move more tons to the surface in a more efficient way. >> Which milestones are you personally most focused on delivering between now and year end? >> I would say building on the consistency from Q2, showing Q3, Q4 and beyond, increasing mining efficiencies, getting that mill throughput to higher capacity. So, putting in that thousand
(21:56) tons per day consistently and integrating the satellite deposits, just showing what Madsen can really be and what the team has been working so hard to do. >> In terms of Rowan, obviously Rowan's not permitted like Madsen, which had some permits that you guys were able to inherit. It was already a producing mine.
(22:16) What does that process look like? Have you guys already started on some of the permitting? >> Yeah, we've definitely started on permitting for Rowan. I think that it will look different in the sense that we're not trying to get permits for surface infrastructure. It's all going to be underground and then contemplated to be trucked to Madsen.
(22:33) But the permitting processes are ongoing. Rowan will likely be in development in 2028 and then integrated into the production profile, I'd say, toward the end of 2029 conservatively. >> And why should investors consider owning shares of West Red Lake right now today? >> I think now is a very interesting time to start watching it and considering potentially a position, given that we talked about the valuation gap and closing that valuation gap through execution and building the asset profile to change to that
(23:09) multi-asset strategy. I think the PFS will enlighten the market on the broader strategy that we discussed today, but ultimately, over the longer term, I think patience will be rewarded. >> What's the single most important thing you want viewers to take away from this past Q2? >> I would say that we generated free cash flow.
(23:36) Obviously production was up 51%, gold sold up 34%, and then of course that lower AISC, down 30%; adjusted EBITDA was 22.1. So we're seeing the work that we did early on start to come into play now, and it's really building off that, but again it's going to take a couple more quarters, but those are the things that you need to watch. >> And for yourself in this role, you're in conference season. For investors that attend these,
(24:06) what are some of the conferences they might be able to see you and get some facetime? >> So, we'll be at Beaver Creek and of course Denver Gold. Following that, we're going to be doing the Nordic Summit in Stockholm in October. And following that, we will be at some of the European conferences closer to the end of November.
(24:24) So, you've got your one-to-ones and your Swiss Mining Institute. But in between, Shane and I will be doing targeted road shows, and again introducing or reintroducing the story to new groups of people across the globe. >> Sounds like you've got some air miles you're going to get over the next two or three months. >> Something like that.
(24:45) >> Any final messages? Anything that we didn't touch on? Anything that you'd like to make sure that we mention? >> I think we covered it all. I would just like to say, I appreciate everybody's support up until this point. I think that this is the team that can execute.
(25:01) Given my over 20 years' experience in the industry, you can have a great asset, but if you don't have the team, that obviously makes or breaks a company. So, I feel that we're in good hands. Shane has built an incredible team, and we'll just continue to execute and we'll continue to build in that consistency and operational flexibility and get the job done.
(25:25) >> Excellent. Well, hey Jaclyn. It was nice to catch up with you and nice to get a good update on what's going on with the company. Congrats on a phenomenal Q2. I'll be keeping my fingers and toes crossed for Q3. I look forward to seeing the pre-feasibility coming out of the contemplated combined Rowan-Madsen.
(25:43) That's going to be pretty key. And have a good conference season. >> Yeah. No, thank you so much. We'll chat soon. [music]