West Red Lake Gold Mines Ltd. (WRLG:TSX.V; WRLGF:OTCQB; FRA:UJO) raised CA$40.65 million (CA$$40.65M) in total gross proceeds from a now closed financing in which it issued 41.29 million (41.29M) shares, reported Matthew O'Keefe, analyst at Cantor Fitzgerald, in a Sept. 24 research note. The financial services firm lowered its target price on the gold company by 18% to reflect a potentially slower ramp-up and unanticipated share dilution.
"West Red Lake Gold expects to declare commercial production by Q1/26," O'Keefe wrote.
75% Return Implied
Cantor Fitzgerald's new target price on West Red Lake Gold is CA$1.80 per share, down from CA$2.20 previously, noted O'Keefe. In comparison, at the time of the analyst's report, the junior miner was trading at about CA$1.03 per share. From this price, the return to the new target is 75%.
West Red Lake Gold is a Buy.
The company has 389.3M shares outstanding, a market cap of CA$401M and a 52-week range of CA$0.52–1.18 per share.
Details of Equity Raise
Because West Red Lake Gold ended Q2/25 with only CA$1.7M in working capital and is ramping up production at its flagship Madsen project in northwest Ontario's Red Lake Gold District, the company unsurprisingly executed a top-up financing, wrote O'Keefe.
In the two-part financing, West Red Lake Gold issued 37,526,800 common shares at CA$0.95 apiece for gross proceeds of CA$35,650,460. West Red Lake Gold will use the net proceeds from this common share issuance to continue advancing Madsen through to commercial production.
The company also issued 3,760,000 charity flowthrough shares at CA$1.33 apiece for gross proceeds of CA$5,000,800. Proceeds from the flowthrough issue will fund advancement (drilling and a prefeasibility study) of Rowan, a "key growth project that will provide the company with a near-term path to producing over 100,000 ounces of gold at Red Lake," described O'Keefe.
Financing Pros and Cons
O'Keefe presented the financing's upside and downside. Positively, the CA$35.7M straight equity component of the financing will allow the company to continue the ramp-up and its capital projects, O'Keefe wrote. To declare commercial production, West Red Lake Gold wants to show steady throughput and mill performance for at least three months and finish certain capital projects now underway.
"These items are expected to be completed in H2/25, which should allow West Red Lake Gold to declare commercial production in Q1/26," O'Keefe wrote.
Negatively, according to O'Keefe, the financing is sizeable, suggesting higher-than expected costs, and is dilutive to Cantor's valuation of WRLG.
The analyst wrote that the CA$5M flowthrough issue is more palatable as it is modest in size, was done at a premium and will allow the gold company to proceed with Rowan.
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