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West Red Lake Gold – Q2 Ramp-Up In Operations At The Madsen Mine Demonstrated Higher Gold Production

The KE Report Jul 16, 2026

Summary

Madsen ramped up hard: Q2 mined tonnage rose 46% and mined ounces 73% quarter over quarter, with more step changes expected.

AISC (All-In Sustaining Cost — what it really costs to produce an ounce) falls as ounces rise, since 60% of costs are fixed.

Higher fuel prices barely dent Madsen's costs, because Ontario hydro power keeps underground diesel exposure small.

A repeatable mine-development-to-production cadence, roughly a year from drilling to mining, feeds Madsen from 4447, 904, Fork and Starratt-Olsen.

September's combined Madsen and Rowan pre-feasibility study targets 120,000-130,000 ounces a year, or mid-tier producer scale.

Key points on Alamos Gold

  • The host cites Alamos Gold's Island Gold complex as a precedent for remnant mining at depth, noting it began as a remnant mine and that its grade rose as the operation went deeper.

Key points on West Red Lake Gold Mines

  • Williams points to Q2 2026 as the first clear step-change in the Madsen ramp-up: mined tonnage rose 46% to 75,524 tonnes from 51,616 tonnes in Q1, mined ounces rose 73% to 10,459 ounces from 6,033 ounces, and gold production rose 51% to 8,576 ounces from 5,667 ounces, with mined grades also stepping up.
  • He argues the elevated all-in sustaining cost is a denominator problem rather than a cost problem — roughly 60% of costs are fixed, cost levels have been essentially flat for 12 months, so rising ounces should pull AISC down quarter by quarter toward guidance, with the rehabilitated shaft (targeted to hoist from the surface by around August 2026) as a second lever since trucking costs about four times shaft hoisting.
  • He describes a roughly one-year drill-to-mine 'conveyor belt' of zones: Triple-for-Seven, drilled in 2025, is being mined now; the 904 Zone, drilled this year, should see first mining in the second half of 2027; Fork, a roughly 50,000-ounce pod close to existing workings, is in early underground development contributing a couple of hundred tonnes per day; and Starratt-Olsen is being drilled this year with a possible 2028 mine plan.
  • A combined pre-feasibility study covering Madsen and Rowan is due by mid-September 2026, which he says will show roughly 60,000 ounces per year from Madsen plus 30,000–40,000 ounces per year from Rowan combining into a 120,000–130,000 ounce per year operation at 1,200–1,400 tonnes per day — mid-tier scale — with little remaining capex needed at Madsen; the mill averaged about 842 tonnes per day in Q2 and is targeted at roughly 1,000 tonnes per day in the second half of 2026.
  • He expects Madsen's grade to improve at depth as dewatering reaches Level 17 and moves into workings untouched since the 1960s and 1970s, leaving less remnant material, with Island Gold at Alamos Gold offered as the analogue for a remnant mine that got richer as it went deeper.

Shad Markowitz's takeaways

  • Top takeaway He frames the interview around the stock having lagged other producers as gold prices came down and margin compressed, asking what investors are missing in the value proposition, and he presses the higher Q4 and Q1 all-in sustaining costs as the first thing to explain.
  • He argues higher energy prices should not be applied as a blanket assumption across all miners, pointing out that an underground hydro-powered operation is far less exposed than the large diesel-fuelled open pits where fuel is a large share of cost.