West Red Lake Gold Completes Madsen Shaft Phase One, Eyes 2,000 tpd

A shaft that hauled ore through roughly five decades of underground operations at Madsen Mine is being rebuilt in stages, and the first phase is now complete. West Red Lake Gold Mines (TSXV: WRLG) confirmed on 13 August 2026 that Phase One of a multi-stage shaft refurbishment program at its Madsen Mine in Ontario’s Red Lake district has been finished, with Phase Two equipment on site and installation underway. The end goal is to restore the shaft’s historical hoisting capacity of approximately 2,000 tonnes per day across three phases, a progression that could materially reshape the mine’s cost structure as operations reach deeper ore. What follows covers where the program stands, what the three-phase roadmap looks like, and why shaft milestones serve as meaningful signals of operational and financial progress for investors tracking junior gold development in one of Canada’s premier underground mining districts.

Phase one confirmed: Madsen’s shaft is hoisting again

Phase One completion means the shaft can safely hoist both gold ore and waste rock to surface at approximately 200 tonnes per day. That figure is not a production target. It is the technical baseline that proves the shaft works.

The distinction matters. What WRLG confirmed yesterday is a validation milestone: five decades of historical infrastructure have been assessed, refurbished, and brought back to operational status. The shaft’s prior operational depth extended to Level 26, and Phase One drew on that existing infrastructure rather than building from scratch.

Ontario Regulation 854 for mine shaft hoisting governs the certification, operational procedures, and safety requirements that apply to conveyances used in place of ladderways at underground mining operations in the province, setting the compliance framework within which Madsen’s refurbished shaft system must operate.

Shane Williams, President and CEO, has described shaft hoisting as a complement to existing underground truck haulage rather than a replacement, providing an additional method for moving ore and waste to surface.

The multi-stage design is deliberate. Rather than front-loading capital into a single large rehabilitation effort, WRLG has staged deployment to match operational needs, deploying investment only as deeper mining activity requires greater hoisting capacity.

The three-phase roadmap from 200 tpd to 2,000 tpd

Each phase targets a specific capacity threshold and depth milestone, building on the one before it.

Phases One and Two combined are designed to reach Level 10, approximately 500 metres below surface, serving the active Austin and South Austin mining complexes. Phase Three targets deeper access toward Level 17, well within the shaft’s historical depth reach of Level 26.

The capacity escalation is steep: from 200 tpd today to a targeted 2,000 tpd within roughly two years. Each step requires hoist and skip upgrades that increase the system’s rate and reliability, with Phase Three representing the full production configuration intended to support long-term mining from deeper levels.

Why the shaft matters: the economics of vertical haulage

Shaft hoisting does not eliminate the need for trucks. Underground trucks remain essential for short-range haulage and development work, particularly near surface and in complex geometries. What the shaft does is provide a high-volume, low-cost vertical haulage path as ore sources migrate deeper and farther from ramp access.

The cost mechanism operates through three channels:

The operational case for shaft investment is anchored in the cumulative weight of underground truck haulage costs: fuel, tyre replacements, brake wear, and engine maintenance compound quickly as haul distances extend with depth, making the per-tonne economics of ramp-only operations increasingly difficult to sustain.

• Reduced fuel consumption: Ore transferred to shaft loading pockets at depth avoids long ramp hauls, cutting diesel costs per tonne moved
• Lower maintenance costs: Shorter truck cycles reduce wear on tyres, brakes, and engines, lowering per-tonne maintenance spend
• Freed truck capacity: With the shaft handling bulk vertical movement, trucks can be redeployed to development tasks rather than long-distance ore transport

WRLG’s Pre-Feasibility Study (PFS), published in January 2025, explicitly includes shaft rehabilitation costs and treats the shaft as a key lever in mine economics. That PFS outlines an after-tax NPV (at a 5% discount rate) of approximately C$315 million and average annual free cash flow of approximately C$69.5 million. Industry commentary has cited shaft haulage costs at roughly 10% of per-tonne trucking costs, though this figure has not been independently confirmed in primary disclosure and should be treated as a widely referenced industry benchmark rather than a verified company metric.

What shaft hoisting means for junior gold mine development

Underground gold mines operating at meaningful depth typically rely on shaft hoisting as their primary ore transport system. The logic is straightforward: as depth increases, ramp haulage becomes progressively more costly and time-consuming. Longer truck cycles consume more fuel, generate more wear, and tie up equipment that could otherwise support development work.

Junior developers often acquire historically mined assets with existing shaft infrastructure. The decision they face is whether to refurbish that infrastructure, accepting higher upfront capital costs in exchange for lower long-run operating expenses, or to rely solely on ramp access and absorb escalating haulage costs as mining extends downward. WRLG’s staged refurbishment model represents a middle path: matching capital outlay to operational readiness rather than committing to full rehabilitation before the mine plan requires it.

Canadian underground gold mining has seen significant structural shifts in recent years, with major producers rationalising assets and creating acquisition and development opportunities that junior operators in established districts have moved to fill.

Ontario gold project infrastructure decisions vary considerably depending on a developer’s stage, grade profile, and capital position; some operators pursue toll-milling arrangements to avoid processing capital entirely, while others, like WRLG at Madsen, commit to rehabilitating existing mine infrastructure as the lower long-run cost path.

Red Lake’s depth profile and why it favours shaft investment

Red Lake is one of Canada’s premier underground gold mining regions, characterised by high-grade deposits that extend to significant depth. That depth and grade profile makes shaft infrastructure particularly relevant; the economic case for vertical haulage strengthens as ore bodies extend further below surface.

High-grade underground gold districts worldwide tend to attract sustained exploration and development capital precisely because grade compensates for the elevated per-tonne costs of underground extraction, a dynamic visible in both Red Lake and analogous North American districts where geological endowment has supported multi-decade mine lives.

What investors should watch as phase two installation continues

With Phase One complete, two clearly dated catalysts sit ahead on the operational calendar:

1. Phase Two commissioning (targeted H2 2027): Successful completion would confirm approximately 700 tpd hoisting capacity and Level 10 access, directly serving the Austin and South Austin complexes where active mining is concentrated
2. Phase Three commissioning (targeted H2 2028): Progression to Level 17 access and up to 2,000 tpd capacity represents the point at which the mine’s cost profile could begin transitioning structurally toward the full production scenario outlined in the PFS

WRLG has not publicly quantified specific all-in sustaining cost (AISC) reductions expected from the shaft program. Investors should watch for updated cost guidance as each phase reaches completion, particularly any revisions to the PFS base case (after-tax NPV of approximately C$315 million, annual free cash flow of approximately C$69.5 million) that incorporate operational data from the refurbished shaft system.

The absence of quantified AISC targets is worth noting. Until the company provides specific cost reduction guidance tied to shaft milestones, the investment case rests on the structural logic of vertical haulage economics and the PFS framework that already incorporates shaft rehabilitation.

Junior gold developer valuation often lags operational milestones by several reporting cycles, as markets wait for production-phase evidence before re-rating assets that are still delivering on infrastructure and development targets rather than headline output figures.

Madsen’s shaft program positions WRLG for the next chapter in Red Lake

The three-phase sequence tells a clear operational story. Phase One proves the shaft works. Phase Two scales it to serve active mining complexes. Phase Three aims to reshape the mine’s cost profile at depth.

These are not aspirational additions to the mine plan. The PFS economics are built around shaft rehabilitation, making the current program a structural component of the project’s financial architecture rather than an optional upgrade.

For a junior developer operating in one of Canada’s highest-grade underground gold districts, executing on infrastructure milestones of this nature is the operational evidence that separates geological potential from production credibility. The shaft is hoisting. The next question is whether each subsequent phase delivers on schedule and on specification.

This article is for informational purposes only and should not be considered financial advice. Investors should conduct their own research and consult with financial professionals before making investment decisions. These forward-looking statements regarding Phase Two and Phase Three timelines and capacity targets are subject to change based on market developments and operational conditions.