West Red Lake Gold Secures $35M Credit Facility to Restart Madsen Mine

By Kevin Vincent
West Red Lake Gold Mines Ltd. has completed a $35 million credit agreement with Nebari Natural Resources Credit Fund II LP, providing the company with a significant financial boost to restart operations at the Madsen Gold Mine in Red Lake, Ontario. The facility, issued in three tranches, began with an initial drawdown of $15 million on December 31, 2024.
“Closing this transaction with Nebari is a major de-risking step and gives West Red Lake access to non-dilutive capital under highly favorable repayment terms,” said CEO Shane Williams. “This funding ensures we can sustain momentum as we push to restart the Madsen project, a high-grade gold mine with world-class infrastructure, permits, and upside potential. With this credit facility in place, West Red Lake Gold is well-funded to restart the Madsen Mine in 2025.”
Richard Gaze, Managing Director of Nebari, added, “Nebari is excited to partner with West Red Lake Gold to support the restart of the Madsen project. We have high confidence in the dedication and professionalism of the West Red Lake Gold team and look forward to the successful restart of commercial gold production at Madsen.”
Terms of the Credit Facility
The $35 million credit facility will be issued in three tranches:
• Tranche 1: $15 million (drawn December 31, 2024)
• Tranche 2: $15 million
• Tranche 3: $5 million
The funds will be used for capital expenditures to restart the Madsen Mine, corporate expenses, exploration, and working capital.
Repayment of 50% of the principal will commence on a fixed amortization schedule 15 months after Tranche 1 drawdown. The remaining 50% is due at maturity, 42 months after the initial draw. Interest accrues at a floating rate tied to the three-month SOFR reference rate, with a floor of 4% plus an 8% margin.
The facility includes a one-time arrangement fee of 1.5% per tranche and an annual administration fee of $30,000.
Loan Bonus Warrants
As part of the facility, Nebari has received non-transferable Loan Bonus Warrants:
• Tranche 1: 5,867,376 warrants at a CAD$0.73 exercise price, expiring 42 months from issuance.
• Tranches 2 and 3: Warrants issued based on a 20% loan-to-equity formula at a 30% premium to the lowest 20-day VWAP prior to the draw date.
The warrants’ term is subject to pro-rata reduction if the facility is prepaid.
Security and Guarantees
The loan is secured by:
• A pledge of 100% of the shares of West Red Lake’s subsidiaries,
• A first-priority senior security interest in intercorporate debt between the company and its subsidiaries.
Madsen Gold Mine Restart Plan
With the funding secured, West Red Lake Gold will execute a detailed ramp-up schedule, including:
• Test Mining: Bulk samples from four stopes across two resource areas.
• Mill Start-Up: Scheduled for late Q1 2025, with batch processing of bulk samples to reconcile grades.
• Production Ramp-Up: Mining and milling operations to commence in Q2 2025.
About West Red Lake Gold
West Red Lake Gold Mines Ltd. is advancing its flagship Madsen Gold Mine and a 47 km² land package in the prolific Red Lake District, known for producing over 30 million ounces of high-grade gold. The company also holds the Rowan Property, including three past-producing gold mines, further solidifying its footprint in this historic mining region.
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