
West Red Lake Gold Mines Ltd. (TSX-V: WRLG) (OTCQB: WRLGF) is pleased to report how learnings from the test mining and bulk sample program at its 100% owned Madsen Mine in the Red Lake Gold District of Northwestern Ontario, Canada, are translating directly into a detailed mine plan with generally larger stopes, greater mining efficiencies, and lower cost mining methods than anticipated.
The test mining and bulk sample program had two goals:
The bulk sample results (reported on May 7) achieved the first goal. Close reconciliation between expected and actual tonnes, grade, and contained ounces across six stopes in three areas of the resource validates the Company’s ability to mine at Madsen according to plan.
The Company also succeeded with the second goal. Test mining demonstrated the ability to mine up against historic stopes, which reduced barriers in stope design and unlocked some resource potential.
Test mining also highlighted the efficiency of mining larger stopes and mining clusters of proximal stopes (known as mining complexes), two notable opportunities that are developing at Madsen because mine design is both a technical and economic exercise.
The workflow that leads to detailed mine design at Madsen is as follows:
Gold mineralization at Madsen often comprises high-grade lenses surrounded by lower-grade mineralized halos. The above workflow is designed in part to define high-grade lenses of gold mineralization that can go unnoticed with wider-spaced data sets. Recent high-grade drill results from the South Austin area (see news releases from May 27, May 13, and February 26) demonstrate this potential. Definition drilling also enables accurate modeling of lower-grade halo mineralization ahead of stope design.
West Red Lake Gold is currently using the consensus long-term price of US$2,350 per ounce in mine design, compared to a gold price of US$1,680 per oz. used for the mine plan in the Madsen Mine Pre-Feasibility Study [1]. The relatively low gold price in the PFS led to a mine plan with 60% of the mining being small, high-grade stopes requiring the use of cut-and-fill mining, the more selective and higher cost of the two mining methods outlined for use at Madsen [1a]. In addition, the need to drive accesses between multiple small stopes contributed to relatively high sustaining capital needs over the mine life.
The PFS mine plan generated strong economics that supported the restart decision. However, using a higher gold price in stope design effectively lowers the cutoff grade for resource inclusion, bringing additional resource tonnes and more overall ounces into consideration for mine planning.
When lower grade tonnes prove to be economic, it can result in larger stopes encompassing one or several high-grade gold lenses with surrounding halo mineralization. It can also define new mining shapes around proximal areas of mineralization that were not previously considered. This is especially possible where definition drilling has defined or expanded high-grade lenses, which have the potential to mitigate the impact on head grade of including lower grade tonnes over the life of mine.
Figure 1: Visible gold in sill access development on 1 Level McVeigh.
Larger stopes and clusters of proximal stopes, known as mining complexes, have potential to increase a mine’s economic benefit and scale as compared to smaller, isolated stopes because they can positively impact three key economic drivers:
Figures 2 through 4 below highlight a few examples of mining complexes where the tonnage and ounce profile increased through the definition drilling, resource model updating, and economic stope design workflow.
Figure 2. Image showing South Austin 4447 stope complex (blue). This area realized a 212% increase in tonnage and 320% increase in contained ounces mainly driven by definition drilling.
Figure 3. Image showing Austin 1099/1100 stope complex (blue). This area realized a 204% increase in tonnage and 222% increase in contained ounces mainly driven by definition drilling.
Figure 4. Image showing McVeigh 1453 stope complex (blue). This area realized a 32% increase in tonnage and 18% increase in contained ounces mainly driven by definition drilling.
A more global potential benefit from mining larger stopes at Madsen is mining more of the resource. A mine plan based on a gold price of US$1,680 per oz. depletes the deposit relatively quickly, which is evident in a PFS probable reserve of only 478,000 ounces in 1.87 million tonnes grading 8.2 g/t gold mined in 7 years [1c], from a deposit with a total indicated resource of 1.65 million ounces of gold hosted in 6.9 million tonnes of rock averaging 7.4 g/t gold (the combined indicated resource for the Austin, South Austin, McVeigh, and 8 Zones) [1d]. The Madsen Mine PFS described the potential for more of the resource to be considered for mining if a higher gold price was used [1e].
A gold price environment that allows mine design to convert more of the resource into reserve suggests a longer mine life than outlined in the PFS, which is expected to have a positive impact on long-term profitability and overall project economics.
Close reconciliation between expected and actual tonnes and grade in the bulk sample suggests that the Company’s approach – appropriate definition drilling, responsive mine engineering, and disciplined, efficient mining – is creating the ability to mine at Madsen according to plan. The mine engineering and design process is a technical and economic exercise that responds to the price of gold. This will remain the Company’s practice at the Madsen Mine.
Other News
The Company has received and accepted the resignation of Jasvir Kaloti as Corporate Secretary. The management and board of directors of the Company wish to thank Ms. Kaloti for her service and wish her well in the future.
Efforts are in progress to identify a suitable Corporate Secretary candidate and Harpreet Dhaliwal, Chief Financial Officer, will hold this position in the interim.
Footnotes
The technical information presented in this news release has been reviewed and approved by Will Robinson, P.Geo., Vice President of Exploration for West Red Lake Gold and the Qualified Person for exploration at the West Red Lake Project, and by Maurice Mostert, P.Eng., Vice President of Technical Services for West Red Lake Gold and the Qualified Person for technical services at the West Red Lake Project, as defined by National Instrument 43-101 – Standards of Disclosure for Mineral Projects.
ABOUT WEST RED LAKE GOLD MINES
West Red Lake Gold Mines Ltd. is a mineral development company that is publicly traded and focused on advancing and developing its flagship Madsen Gold Mine and the associated 47 km2 highly prospective land package in the Red Lake district of Ontario. The highly productive Red Lake Gold District of Northwest Ontario, Canada has yielded over 30 million ounces of gold from high-grade zones and hosts some of the world’s richest gold deposits. WRLG also holds the wholly owned Rowan Property in Red Lake, with an expansive property position covering 31 km2 including three past producing gold mines – Rowan, Mount Jamie, and Red Summit.
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