West Red Lake Gold Mines Completes Acquisition of Madsen Gold Project and Appoints Tony Makuch to Board of Directors

VANCOUVER, British Columbia, June 19, 2023 (GLOBE NEWSWIRE) — West Red Lake Gold Mines Ltd. (“West Red Lake Gold” or the “Company”) (TSXV: WRLG) (OTCQB: WRLGF) is pleased to announce that it has completed the acquisition (the “Acquisition”) of the Madsen Gold Project through the acquisition of all of the outstanding shares of Pure Gold Mining Inc. (“PGM”). The Acquisition was completed on June 16, 2023 pursuant to the Approval and Reverse Vesting Order granted (the “Order”) in PGM’s proceedings under the Companies’ Creditors Arrangement Act. The Order approved the transactions contemplated in the Share Purchase Agreement entered into between the Company, PGM and a fund managed by Sprott Resource Lending Corp. dated May 17, 2023.

“The Company’s acquisition of the Madsen Gold Project includes a fully permitted underground gold mine with an estimated resource of 1.65M oz in the Indicated category and a high-quality mill facility. Combined with the high-grade Rowan gold resource located west of Madsen, the Company will continue to expand and infill its mineral resources and work to de-risk and grow these assets located in one of Canada’s most iconic gold camps,” said Shane Williams, President and CEO of West Red Lake Gold Mines.

TONY MAKUCH JOINS THE BOARD OF DIRECTORS

Mr. Makuch has over 35 years of mining industry experience, is the CEO and Director of Discovery Silver Corp and was previously President, CEO and Director of Kirkland Lake Gold Ltd.

During his five-year tenure as CEO of Kirkland Lake, Mr. Makuch led the transformation of the company, with annual gold production increasing from 315,000 oz to over 1,400,000 oz, the market capitalization of the company increasing from approximately C$1 billion to over C$13 billion and Kirkland’s share price increasing over 530%. These milestones were achieved through two successful acquisitions, industry-leading operational performance and significant exploration success and ultimately culminated in Kirkland’s merger with Agnico Eagle Mines Limited in 2022.

Prior to joining Kirkland, Mr. Makuch was President and CEO at Lake Shore Gold Inc., from 2008 until its acquisition by Tahoe Resources Inc. in 2016, when he became the Executive Vice-President and President of Canadian Operations. From 2006 to 2008 Mr. Makuch was Senior Vice President and Chief Operating Officer for FNX Mining Company Inc. From 1998 to 2005 he held progressively senior positions with Dynatec Corporation, including VP Operations. From 1992 to 1998, Mr. Makuch worked with Kinross Gold Corporation at several of their North American operations. At different stages of his career, he has worked in the Red Lake camp. Mr. Makuch is a Professional Engineer (P.Eng) and holds a Bachelor of Science Degree (Honours Applied Earth Sciences) from the University of Waterloo (Ontario), and both a Master of Science Degree in Engineering and a Master of Business Administration from Queen´s University (Ontario) and has obtained the Institute of Corporate Directors ICD.D designation from the University of Toronto Rotman School of Business.

“We are delighted to have Tony Makuch join the board of directors of West Red Lake Gold,” said Frank Giustra, Strategic Advisor to the Company. “Tony brings a remarkable track record of achievements in gold mining, excelling as an engineer, executive, and company builder. With the recent appointments of Shane Williams and Duncan Middlemiss, West Red Lake Gold team is now fortified with three leaders in mine development and operations in the Canadian Shield. I am inspired by the team we are building.”

TRANSACTION DETAILS

Pursuant to the Acquisition, the Company issued 32,566,174 common shares to a fund managed by Sprott Resource Lending Corp. (“Sprott”). A further 8,164,503 common shares will be issued upon determination by the British Columbia Supreme Court of priority among Sprott and various lien claimants, which is expected to occur on or about June 28, 2023. In addition, the Company paid $6.5 million in cash and has granted a 1% secured net smelter royalty on the Madsen Mine to Sprott. A further US$6,783,932 in deferred consideration is payable upon a change of control of the Company. The Company has the right to pay down any part of the deferred consideration prior to any change of control, and Sprott may, at its election, convert such portion of the deferred consideration into common shares of the Company as is necessary to maintain its percentage share interest in the Company, upon completion of any future equity, merger, acquisition or other corporate transaction. In addition, Sprott has been granted the right to nominate and appoint one director to the Board of the Company so long as Sprott or an affiliate owns 15% or more of the issued and outstanding shares of the Company. The Company is pleased to confirm that Mr. Tony Makuch has been appointed to the Board as Sprott’s nominee.

In connection with closing of the Acquisition, the 70,829,000 subscription receipts issued in connection with the Company’s bought deal financing which closed on May 9, 2023 have been converted into common shares of the Company, and the proceeds from the financing have been released from escrow to the Company. In addition, on June 16, 2023, the Company completed the previously announced non-brokered financing of 1,714,286 flow-through common shares to Mr. Frank Giustra at $0.35 per share for proceeds of $600,000 (the “Flow-Through Financing”). The common shares issued on the Flow-Through Financing are subject to a four month hold period.

In connection with the Acquisition the Company paid finders fees of $325,000 in cash and issued 2,036,534 common shares. A further 3,750,000 warrants were issued to certain parties in consideration for guarantees of the initial payments required pursuant to the acquisition. The warrants are exercisable into common shares of the Company at $0.42 per share for five years, expiring June 16, 2028. The guarantee warrants and the finder’s shares are subject to a four month hold period.

Details of the Acquisition and the Share Purchase Agreement can be found in the Company’s April 17, 2023 and May 18, 2023 news releases, which are available on SEDAR.

The Company further reports that in connection with closing the Acquisition, Frank Giustra and his related entities directly and indirectly acquired an aggregate of 7,000,000 common shares on conversion of subscription receipts. Prior to the Acquisition and the Flow-Through Financing, Mr. Giustra owned or controlled 10,110,034 common shares of the Company, representing 17.91% of the then outstanding common shares of the Company. After the Acquisition and the Flow-Through Financing, Mr. Giustra now owns and/or controls directly or indirectly, 18,824,320 common shares of the Company representing 11.51% of the outstanding common shares of the Company.

Frank Giustra and his related entities acquired these securities for investment purposes effective June 16, 2023 and as disclosed in the Early Warning Report accompanying this news release, may in the future acquire or dispose of securities of the Company, through the market, privately or otherwise, as circumstances or market conditions warrant.  

A copy of the Early Warning Report filed by Frank Giustra is available under the Company’s profile on SEDAR (www.sedar.com).

MADSEN PROPERTY HIGHLIGHTS

• Significant infrastructure in place with over $350 million invested by PureGold to date
• Fully-operating underground mine with two portals and ramp access to 525 metres (“m”) below surface
• Brand new, expandable 800 tpd processing facility achieving +95% recoveries
• Low-cost hydro grid power in place
• Existing 1,275 m shaft, headframe and hoist, last operational in 2013
• Operational, expandable tailings and rock storage facilities
• 47 km2 land package in Red Lake District next door to major operators such as Barrick, Kinross and Evolution
• Underexplored beyond historical mining areas
• Ore-grade intercepts and wide zones of mine-style alteration prove gold system extends at depth and along strike
• Underground development provides ideal drilling locations for untested highly prospective zones

UPDATED MINERAL RESOURCE ESTIMATE

The Company is also pleased to announce that it has received an independent technical report on the Madsen Property (formerly referred to as the PureGold Mine) from SRK Consulting (Canada) Inc. entitled “Independent NI 43-101 Technical Report and Updated Mineral Resource Estimate for the PureGold Mine, Canada” and dated June 19, 2023 (the “SRK Report”) which updates the resource estimate on the Madsen Property (previously classified by the Company as an historical estimate) to a current mineral resource. The Madsen Resource Estimate has an effective date of December 31, 2021.

Mineral Resource Estimate, PureGold Mine, Red Lake, Ontario, effective date December 31, 2021

The mineral resources have been adjusted to reflect the removal of all historical and recent production to the end of December 2021. The mineral resources have been classified according to CIM Best Practise Guidelines (November 2019), and are reported as undiluted tonnes at a cut-off grade of 3.38 g/t gold and gold price of US$1800/oz.

The mining activity from the effective date of the SRK Report until the closure of the PureGold Mine on October 24, 2022 has been deemed immaterial. Based on the mining records, 164,604 tonnes of ore at 3.8 g/t grade were processed, resulting in the production and sale of 20,301 ounces of gold. This production figure is not considered significant for the purpose of this report and the mining activity during the period from January 1, 2022 to the mine closure on October 24, 2022 will not have a material impact on the mineral resource estimates presented in this report.

Since the effective date of this technical report, additional diamond drilling was conducted until the mine closure on October 24, 2022. A total of 688 drill holes and 54,122 m of drilling was completed in 2022. Based on a review of the results of this drilling it has been determined that the information obtained will not have a material impact on the mineral resource estimate presented in the SRK Report.

The estimate of mineral resources may be materially affected by geology, environment, permitting, legal, title, taxation, sociopolitical, marketing or other relevant issues.

A full copy of the SRK Report is available on the Company’s website and on SEDAR.

The technical information presented in this news release has been reviewed and approved by Will Robinson, P.Geo., Vice President of Exploration for West Red Lake Gold and the Qualified Person for exploration at the West Red Lake Project, as defined by NI 43-101 “Standards of Disclosure for Mineral Projects.”

ABOUT WEST RED LAKE GOLD MINES LTD.

West Red Lake Gold Mines Ltd. is a mineral exploration company that is publicly traded and focused on advancing and developing its flagship Madsen Gold Mine and the associated 47 Km² highly prospective land package in the Red Lake district of Ontario. The highly productive Red Lake Gold District of Northwest Ontario, Canada has yielded over 30 million ounces of gold from high-grade zones and hosts some of the world’s richest gold deposits. WRLG also holds the wholly owned Rowan Property in Red Lake, with an expansive property position covering 31 Km² including three past producing gold mines – Rowan, Mount Jamie, and Red Summit.

ON BEHALF OF WEST RED LAKE GOLD MINES LTD.

“Shane Williams”

Shane Williams        
President and Chief Executive Officer

For further information, please contact:
Jasvir Kaloti
CFO & Corporate Secretary                                
Tel: (604) 609-6110

Amandip Singh, VP Corporate Development
Tel: 416-203-9181
Email: asingh@wrlgold.com
or visit the Company’s website at https://www.westredlakegold.com

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

The TSX Venture Exchange has neither approved nor disapproved the contents of this news release. Certain statements contained in this news release constitute “forward-looking statements”. When used in this document, the words “anticipated”, “expect”, “estimated”, “forecast”, “planned”, and similar expressions are intended to identify forward-looking statements or information. These statements are based on current expectations of management, however, they are subject to known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from the forward-looking statements in this news release. Readers are cautioned not to place undue reliance on these statements. West Red Lake Gold Mines Ltd. does not undertake any obligation to revise or update any forward- looking statements as a result of new information, future events or otherwise after the date hereof, except as required by securities laws.