West Red Lake Gold Mines Ltd.'s (WRLG:TSX.V; WRLGF:OTCQB; FRA:UJO) newly reported underground drill results from the lower Main Austin zone at Madsen confirmed the discovery of additional high-grade gold lenses at depth, reported Matthew O'Keefe, Cantor Fitzgerald analyst, in an Oct. 10 research note. Madsen is the company's flagship project in Ontario's Red Lake Gold District.
"WRLG continues to unlock exploration upside at Madsen," O'Keefe wrote.
80% Return Implied
Cantor Fitzgerald maintained its CA$1.80 per share target price on the Canadian producer, trading at the time of O'Keefe's report at about CA$1 per share, the analyst noted. From this price, the return to target is 80%.
West Red Lake Gold remains a Buy.
"The stock continues to offer good value, trading at 0.4x net asset value versus peers trading between 0.8x–1.1x," O'Keefe wrote.
The gold producer's market cap is CA$389.3 million. Its 52-week range is CA$0.52–1.18 per share.
Wide, High-Grade Intercepts
West Red Lake Gold's drilling of the deeper Austin zone is the first systematic underground effort of this kind since the 1950s and 1960s, O'Keefe noted and reviewed the new data.
Results from the 12 Level, about 600 meters (600m) down, in the Main Austin zone returned new wide, high-grade intercepts. Some of the highlights are:
- 7.75m of 139.45 grams per ton gold (139.45 g/t Au), including 2m of 532.25 g/t Au: hole MM25D-12-4860-004
- 8.7m of 74.7 g/t Au, including 3m of 134.58 g/t Au: hole MM25D-12-4860-005
- 7.45m of 18.31 g/t Au, including 0.5m of 254.49 g/t Au: hole MM25D-12-4860-002
Visible gold was seen in several of these newly reported holes.
What the Results Mean
O'Keefe interpreted the results. Overall, he wrote, they confirmed multiple new high-grade gold lenses, and these lenses are comparable geologically to the ones defined earlier this year in South Austin. The new intercepts are associated with quartz pyrrhotite-arsenopyrite veining and strong silicification. Also, they are along the same plunge line as South Austin, and this suggests the presence of up to 600m of continuous high-grade mineralization. Thus it may be possible for the miner to scale the high-margin mining inventory as the ramp-up continues.
Further, the results imply further upside in untapped ounces and tonnage at depth. This potential could expand West Red Lake Gold's existing Austin resource. Currently, the Indicated resource is 914,200 ounces of 6.9 g/t Au. The Inferred resource is 104,900 ounces of 6.5 g/t Au.
Looking Forward
As such, Cantor expects that the miner will keep focusing on the lower Austin zone throughout the remainder of its 2025 drilling, noted O'Keefe. He reiterated the company's goal, which is to further expand and define high-margin ounces to complement the Madsen ramp-up now underway.
"With commercial production targeted for early 2026 and recent financing strengthening the balance sheet, West Red Lake Gold remains well-positioned to deliver both near-term operational milestones and longer-term resource growth," the analyst commented.
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