Posted on behalf of West Red Lake Gold - Crux Investor has a new piece on what China's gold VAT change has done to scrap supply, and on where that leaves producers like WRLG.v WRLGF that already own a running mill.



**The Supply Math**

* Effective November 1, 2025, China cut the input-VAT deduction on exchange-traded gold used for jewelry from 13% to 6%, while jewelry sales remained subject to 13% VAT
* Chinese recycled gold supply fell 15% year over year and 19% quarter over quarter in Q2 2026, helping pull global recycling down 6% year over year to 326 tonnes
* Q2 mine production rose 2% year over year to roughly 966 tonnes, yet total supply held near 1,269 tonnes as lower recycling and producer de-hedging removed metal from the market

The mechanism Crux draws out is simple enough: when holders exchange or hold jewelry instead of selling it, the metal never becomes net recycled supply, so the burden shifts to mines, where drilling, permitting, construction and ramp-up all take time.

Their read is that producers able to expand existing mines, mills and recovery circuits get there faster than projects needing new infrastructure.



**Where Madsen Fits**

* Commercial production at Madsen since January 1, 2026, mill running near 800 tpd with a company-stated path to 1,500 tpd for about $20M
* Q2 2026: 8,576 oz produced, roughly 49.0Mrevenue,AISCUS3,284/oz and $9.7M of free cash flow, the first positive quarter (Aug 25, 2026 Q2 results)
* Starratt-Olsen sits about 1.1 km southwest of that mill, with the first 5 of 12 holes returning 1.5m @ 16.16 g/t Au and 4.5m @ 5.16 g/t Au (Sept 10, 2026 NR), 7 holes still pending
* A late-1930s Madsen exploration drive on 16 Level, roughly 800m down, comes within 200m of the deeper Starratt target

Starratt has no defined mineral resource yet, and Crux frames it as a possible expansion of mill feed through existing infrastructure under the hub-and-spoke plan.  
 That is the whole shape of the growth case here: spokes tested against a mill that already turns, with seven assays still to come and a combined Madsen-Rowan PFS in front of them.

The Crux Investor article is below.

Crux Investor: China's VAT Change Has Pulled Recycled Gold Out of the Market, and West Red Lake Gold WRLG.v WRLGF Is Testing Starratt-Olsen as Extra Feed for a Mill That Already Runs