(Kitco News) West Red Lake Gold Mines has reached commercial production at its Madsen Mine in Ontario’s Red Lake Gold District, marking a transition from restart mode into stable operations.
Speaking with Kitco Mining, President and CEO Shane Williams said West Red Lake is the only gold miner in Canada to reach commercial production this year, highlighting the significance of the milestone. Commercial production reflects consistency and reliability rather than simply producing gold, according to Williams. “Once you get to that stability, you’re set,” he said, “and that’s where you declare commercial production.”
The company is now ramping toward full production of roughly 60,000 to 65,000 oz of gold per year. Williams said West Red Lake took a different approach than the previous operator, focusing first on geological understanding and long-term planning. The company completed more than 180,000 meters of underground drilling, which supports the mine plan over the next five years. “That’s very high-definition drilling,” Williams said.
With production underway, Williams said the operation is beginning to generate free cash flow, allowing the company to shift its focus to the balance sheet. “The opportunity is to recapitalize the balance sheet. Fix the balance sheet,” he said, adding that West Red Lake is looking to restructure debt.
Williams also discussed how higher gold prices are reshaping the economics at Madsen, noting that the previous operator entered production when gold was trading near $1,800 per ounce, requiring about 4,000 oz of gold per month to break even. “Now, in today’s market, we only need 2000 ounces of gold a month,” he said.
Higher prices have also reduced cutoff grades, bringing more material into the mine plan. Williams said the break-even cutoff is now around one gram, with the mine cutoff near three grams. “It brings in a lot more material that you can mine,” he said, adding that zones once viewed as isolated now appear more connected.
Williams outlined a hub-and-spoke growth strategy centered on the Madsen mill, which is permitted for 800 tpd with a capacity of up to 1,200 tpd. He highlighted the Rowan project as a future source of feed, saying it hosts around 400,000 oz of gold and is located about 60 kilometers from Madsen. “That ore can be developed and trucked across to Madsen,” Williams said.
The update follows recent infill and conversion drilling at Rowan, where the company reported high-grade gold intercepts and said the program is expected to support an updated mineral resource estimate planned for Q2 2026.
A key catalyst at Madsen is the planned use of an existing shaft. Williams said the shaft could materially change the mine’s cost structure, with the cost per ton estimated at roughly one-quarter of moving material with equipment and trucking. He added that the company expects to start small, targeting 300 to 400 tpd through the shaft by the end of the first quarter, with the full shaft expected to be operating into 2027.
Looking ahead, Williams said West Red Lake is actively searching for another asset as it works to build scale, with the company's objective to grow to be “a midtier producer.” He also pointed to consolidation opportunities among smaller producers, where multiple 60,000 to 70,000 oz mines could be combined to create a larger platform.
Watch the full interview on the Kitco Mining YouTube channel to hear Shane Williams discuss West Red Lake’s production ramp-up, cost structure, and strategy for growing beyond Madsen.
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