West Red Lake Gold Mines Ltd. (WRLG:TSX.V; WRLGF:OTCQB; FRA:UJO) announced results of the preliminary economic assessment (PEA) of its 100%-owned Rowan gold project in the Red Lake District of northwestern Ontario, reported Taylor Combaluzier, Red Cloud Securities vice president and mining analyst, in a July 9 research note.
"We view this PEA positively as it outlined a smaller, underground operation with simple metallurgy that will serve as a secondary source of feed to the Madsen mill," Combaluzier wrote. Madsen is West Red Lake Gold's flagship gold project, also in the Red Lake District.
"We continue to believe WRLG is poised for a rerating as it ramps up production and incorporates its secondary deposits into the mine plan," Combaluzier commented.
205% Uplift Suggested
Red Cloud maintained its CA$2.50 per share target price on the Vancouver-based new gold producer, noted Combaluzier. At the time of his report, the company's share price is CA$0.82 per share.
The difference between these two prices implies a potential return for investors of 205%.
West Red Lake Gold is a Buy.
Notable Economic Results
Combaluzier presented the key PEA findings for Rowan, spanning 31 square kilometers and encompassing three past-producing gold mines: Rowan, Mount Jamie and Red Summit.
The assessment outlined an operation producing about 35,000 ounces (35 Koz) of gold per year, over a five year mine life, at an average rate of 385 tons per day, based on an average diluted head grade of 8 grams per ton (8 g/t) and gold recoveries of 97%.
As for costs, initial capex is an estimated CA$70.4 million (CA$70.M), modest per Combaluzier. Total capex is CA$176.2M. The all-in sustaining cost is US$1,336 per ounce (US$1,336/oz) of gold.
The project is expected to yield an after-tax net present value discounted at 5% of CA$125M and an internal rate of return of 41.9%, at the base case gold price of US$2,500/oz.
At a higher gold price of US$3,250/oz, the after-tax NVP5% increases to CA$239M, and the IRR nearly doubles, to 82%.
Combaluzier highlighted Rowan's leverage to current gold prices. Being within trucking distance of West Red Lake Gold's flagship project Madsen, the two operations could share processing facilities.
"Rowan could also become one of the first deposits used in a potential future hub and spoke model in the region," wrote Combaluzier.
Inferred Resource Upgradable
For the Rowan PEA, the mineral resource estimate was updated as of June 30, 2025, Combaluzier explained. The mine design outlined in the PEA includes 63% of mined tons and 72% of mined ounces from the resource's Indicated category only, containing 196.7 Koz of 12.78 g/t gold.
With additional infill drilling, the company could upgrade about 37% of the Inferred resource tonnage that then could be included in the prefeasibility study, slated for completion in Q3/26. The Inferred resource currently stands at 118.2 Koz of 8.73 g/t gold.
The Inferred and Indicated resource is 314.9 Koz of 10.88 g/t Au.
Red Cloud adjusted its discounted cash flow model to reflect Rowan's updated mineral resource estimate, noted Combaluzier.
Exploration Upside Exists
In addition, West Red Lake Gold could expand the Rowan resource even more, in any of these four ways, Combaluzier pointed out. The company could do more drilling on the two main veins at the deposit at depth, v001 and v004. It could infill and expansion drill the parallel veins next to the PEA mine. It could drill test expansion targets along strike from the Rowan vein system. It could drill test entirely new targets, such as Apex and Big Bend.
Meanwhile, the new gold producer will continue ramping up processing and production at Madsen throughout H2/25.
What to Watch For
Upcoming catalysts, the analyst relayed, include results of infill and regional drilling and Madsen mine ramp-up, both on an ongoing basis. Commercial production is expected to happen in Q4/25.
More Stock Data
Combaluzier reported that West Red Lake Gold has 343.5 million (343.5M) basic shares outstanding and 533.2M fully diluted shares outstanding.
Its market cap is CA$281.6M. Its 52-week range is CA$0.52–0.98 per share.
| Want to be the first to know about interesting Gold investment ideas? Sign up to receive the FREE Streetwise Reports' newsletter. | Subscribe |
