(Kitco News) - Gold continues to command attention in 2025, trading near $2,800 per ounce. Central bank buying, inflationary pressures, and global geopolitical instability are driving demand for the precious metal. However, despite gold’s strength, junior mining equities have lagged behind, leaving many investors questioning why. Gwen Preston, Vice President of Communications for West Red Lake Gold Mines, provided insight at the Vancouver Resource Investment Conference (VRIC), outlining why her company is positioned to thrive in this environment.
Madsen Mine: A High-Grade Opportunity in Ontario’s Gold Belt
West Red Lake Gold Mines is nearing a significant milestone with the restart of the Madsen Mine in Ontario’s prolific Red Lake district. This high-grade gold project had a rocky past under its previous operator, but Preston explained how the company has addressed the operational issues to unlock its potential.
“The prior operator didn’t do enough drilling. They delivered low-grade material to the mill when they were supposed to deliver high-grade material,” she said. “The rule of thumb is that you need seven-meter spacing in Red Lake. The previous operator used 20-meter centers, and a big part of 2024 was spent tightening that up.”
West Red Lake is already mining a bulk sample from Madsen, with its first gold pour expected in March. Regular production is scheduled to begin in June. Preston emphasized the importance of these upcoming milestones:
“There’s not a lot of waiting. So the bulk sample, those results are going to be April, and then consistent production is going to be June. So like it’s three months away and then five months away. That’s when these big catalysts are coming.”
The company’s recently released mine plan projects $70 million in free cash flow annually, but Preston believes there is significant upside:
“The mine plan that we just put out last week is really conservative. The parameters they put on the decision were really conservative. The reality is that the gold price is strong, so we don’t need to be that conservative, and our zones will be bigger, our costs will be lower, our tonnage will be higher, and our production will be higher.”
Bridging the Disconnect Between Gold Prices and Junior Equities
Despite gold’s impressive price performance, junior mining equities remain undervalued—a trend Preston attributed to shifting demand dynamics in the gold market.
“The gold market has been moving because of central bank buying. It’s been central banks and individual buying in non-Western markets, in the Middle East, in China, in India. That’s what’s been moving the gold price for the last few years,” Preston said. “Those non-Western investors don’t buy gold equities. So that’s why we have this disconnect.”
"Western investors remain very just distracted or not interested. They don’t have reason to be interested," she said. "But as concerns about debt and geopolitical instability continue to rise, gold will gain more attention from Western investors.”
“I think Western investors will get more interested in gold over 2025, which has the potential to help resolve that delta, the difference between equities and the gold price,” Preston said.
Expanding Resources at Rowan and Fork
In addition to Madsen, West Red Lake Gold Mines is advancing its Rowan and Fork deposits, which hold a combined 1.1 million ounces of indicated resources. These deposits were not included in the current mine plan, representing significant growth potential for the company.
"Rowan, that’s like 50 percent higher grade, and we have one that’s right adjacent called Fork, that’s maybe 30 percent higher grade, the core of it," Preston said. "Let’s pull Rowan in, uh, in maybe 2028, after we’ve done the permitting there. Let’s pull Fork in, probably in 2027, because it’s 200 meters away."
"Our current study is conservative, but as we bring in these higher-grade resources, we expect the mine to be bigger, lower-cost, and longer-lived," she explained.With $29 million in the bank, West Red Lake Gold Mines is fully funded to execute its 2025 plans. The company’s focus on operational excellence and growth has positioned it as a compelling opportunity for investors looking to capitalize on the strong gold market.
"This is a show-me story. Mine failed two years ago. There's lots of people who aren't gonna believe that we can do it until we do it. And so, the bulk sample is our first opportunity to demonstrate that," Preston said.
"We’re not just focused on Madsen. We’re out there looking, we’re in conversations right now. We’re trying to see what sort of acquisition, merger, agglomeration, what might make sense to give our investors increasing exposure to gold over this gold market," she said.
Preston also outlined the company’s long-term vision: "We want to build a new Canadian mining company."
For more insights from Gwen Preston, watch the full interview embedded above.
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