Midas touch investor makes his latest move in gold

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Midas Touch Investor Makes His Latest Move In Gold

Legendary Canadian investor Frank Giustra became a billionaire largely by investing in gold and gold stocks at the right time.

After a period out of the market, in 2023 Giustra formed a team to buy a distressed gold mine in Ontario’s high-grade Red Lake district.

The result: West Red Lake Gold Mines (WRLG.V; WRLGF.OTC), a company with the project, the team and the financial backing to put it on the “golden runway” for investor profits.

Frank Giustra has an indisputable knack for timing the gold market.

After a successful early career as a stockbroker for, and eventually as the chairman of, natural resources trading firm Yorkton Securities, he left the industry in 1996 to found Lionsgate films.

The gold industry would spend the late 1990s in one of the worst slumps in its history.

Then, in 2001, with gold prices trading below $300/oz., Giustra returned to the market (just before the big rally of the 2000s) by becoming the chairman of mining financier Endeavour Financial.

Companies he founded during that period included Endeavour Mining, Wheaton River Minerals and Wheaton Precious Metals. Those companies would go on to be wildly successful. 

Then, in 2007, just before the Great Recession kicked in, Giustra stepped aside again to pursue philanthropic efforts.

Billionaire investor Frank Giustra made his fortune mainly by being in the
gold market at the right times.

Now, he’s back in the mining game, having put together the financing and the team in 2023 for West Red Lake Gold Mines (WLRG.V; WLRGF.OTC).

As you’re about to see, it’s a case of great timing once again, as West Red Lake Gold Mines has taken over a distressed, but high-grade gold mine.

And it promises to be the keystone in Giustra’s next big win for shareholders — because the company has the resources, the personnel and the plan to put this mine back into profitable production, just as gold is again in a bull run.

Giustra Swoops In On A High-Grade Gold Mine

As the company’s name implies, West Red Lake’s core asset, the Madsen Mine, lies on the western end of the Red Lake gold district in northwestern Ontario.

The district is one of the highest-grade gold regions in the world, having produced more that 30 million ounces from high-grade gold zones.

Madsen was a mine that had produced two million ounces of gold in its past and had, in the past seven years, seen previous owner Pure Gold do the hard, capital-intensive work of putting the mine back into production.

At one point, just before it started to mine at Madsen, Pure Gold sported a market cap of $750 million.

But then the reality set in that its resource model for the mine was insufficient and the build-out undercapitalized. Pure Gold was forced to close the mine in October 2022 and apply for creditor protection.

Then, in early 2023, Giustra formed a group to swoop in and buy the distressed asset for less than $35 million total and just $4.6 million in cash.

A Fully Permitted Operation With
$250 Million Of In-Place Infrastructure

The team he put together included West Red Lake Gold’s President and CEO Shane Williams, an industry player with deep experience developing and putting mines into production.

Armed with capital and a clear game plan to refurbish Madsen, Williams and team have spent the past year and a half putting about $50 million toward a planned 2025 re-start.

As investors, the great news with this project is that Pure Gold has already spent $250 million on mining infrastructure at Madsen, and the mine is already fully permitted.

A prefeasibility study on the mine restart is due out within a month and West Red Lake recently announced a $48 million finance package that fully funds the restart and ramp up of the mine.

Room To Grow Resources In
The Uber-High-Grade Red Lake District

Madsen already boasts a global resource of two million ounces (1.65 million indicated and 366,200 inferred).

It also has all kinds of room for expansion, both on the underground mine site itself and elsewhere on the property.

Click image to enlarge

The Madsen Mine lies near the heart of the uber-high-grade Red Lake Gold district and has tons of exploration upside.

Red Lake systems have deep roots, with mining in some cases occurring all the way down to the 3,000-meter level so far.

Better still, the grades often improve with depth...and Madsen has only been outlined down to the 1,300-meter level.

As the company goes about prepping the underground infrastructure there for mining, it will have the opportunity to drill Madsen’s deeper targets in a cost-effective way.

Entering The Golden Runway For Investor Profits

With the prefeasibility study on the way and the money in the bank to put Madsen back in production in 2025, West Red Lake Gold Mines is entering the “golden runway” for share price performance.

That’s the period leading up to commercial production on a mine, when investor excitement about a company’s looming ability to turn high gold prices into cash flow sends a stock soaring.

It’s proven to be one of the most reliable — and profitable — investing strategies in mining stocks.

But here’s the thing: West Red Lake is still trading at the levels of a pre-development company, which means there’s still time to get on board this story before it could go on a big run.

Take Frank Giustra’s backing of this company as your signal that the timing is right to do your due diligence on West Red Lake Gold Mines.

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