Kip Keen: We're joined on the line by Darin Labrenz, President and CEO of Pure Gold. They're just about to start a drilling program on the Madsen gold project in the Red Lake District. It's a past producing mine with major permitting still in place and a mill on care and maintenance. Welcome Darin.
Darin Labrenz: Thank you very much Kip.
KK: Basically your current drill target is going deeper on the McVeigh horizon, a small past producer, which is next to a much deeper and bigger mine (Austin, another past producer) on your Madsen property. Give me a sense of what you're targeting here.
DL: The target has really evolved over the past two years after getting into the data - really trying to understand the structural history of the Madsen project area. It evolved out of the work in the Russet South area last year. One of the things we learned was that there was obviously a lot of structural complexity in the camp. But we tried to bring that back to the mine and get a sense of what that meant for the mineralization we saw there.
KK: Right
DL: So when you look at the mine, the Austin and South Austin horizons were big producers. They produced over 36 years. They run from surface down to the 24 level (1000+ metres) and they're open to depth.
KK: About 2.3 million ounces came out of them all the way down to below 1000 metres depth.
DL: Correct.
And one of the things that always puzzled us in the footwall of the Austin, sitting in the background so to speak, is the McVeigh horizon, which geologically looks exactly the same as Austin. It's got the same style of mineralization. Similar grades. But it was only pursued down to a maximum of the five level. We were always curious why it wasn't pursued.
KK: Five level - that's about 250 metres underground.
DL: Yes - each level is about 150 feet, so down to about 250 metres.
So we started to work with the mine data. We had one of our structural geologists look through information to understand the controls of mineralization. We found that within the Austin, and this is really no surprise, there's a northeast plunge and that plunge is controled by a very prominent fold structure. So those folds plunge northeast and they control the orientation of that mineralization.
Now when we look to the McVeigh - we don't have access to underground - we started to map out the horizon from surface and we saw the same fold noses and those folds plunge south. So we had a completely opposite or opposing plunge as to what we had for the Austin horizon.
So what we suspect: The Austin and the McVeigh may be the same horizon that have been folded back on themelves and it creates the opposite or reverse plunge.
KK: So take a piece a paper, hold it in front of you - the horizon - and bend it in half and you kind of get the idea.
DL: Yes, that's the easiest way to do it. You just draw a straight line on a piece of paper, that's the horizon, fold it in half and you'll see the line points in opposite directions on each side of the page.
And so we looked at the McVeigh itself - Central and West McVeigh - and what was actually mined there and they seem to have that south plunge. It supports what we saw geologically.
KK: Let's focus on that for a minute. Red Lake gold miners were pretty good at following mineralization. So why is it they didn't chase this?
DL: Well, I don't really know. But I would speculate or postulate that as they were pursuing the Austin and South Austin, which were pretty rich, the easiest way to increase resources and reserves is to follow it to depth. And as it plunges to the north, with each level they were moving farther and farther to the north.
But if the McVeigh plunges, as we suspect, to the south it would be left behind. Effectively the mine is moving to the north and McVeigh is plunging to the south. I think it's probably partially do to that. And also the Austin and South Austin were very rich.
KK: The stopes they mined at McVeigh, how did they compare to Austin and South Austin?
DL: When you look at the Central McVeigh it appears there would be reasonable or quite reasonable grade, probably very similar to Austin. West McVeigh has a very limited history. Really just the top two levels. It will be up to us to demonstrate that the model holds true.
KK: These things pinch and swell in the Red Lake District. Hard to predict. Obviously that's your interest in following this deeper. What's your plan in drilling. Basically starting where the old miners left off?
DL: That's correct. 6000 metres. We will be testing both areas: Central McVeigh from five-level down and West McVeigh from two level down. So the majority of the holes are in the 250 metre to 550 metre depth.
KK: In this day in age, that's not too far below surface. When do you expect results to start coming out?
DL: We just started drilling so I expect to see results in the six week to, maximum, eight week range.
KK: Very interesting. I loook forward to seeing them. Thanks for joining us Darin.
DL: Cheers.
KK: Bye.
Pure Gold (PGM-V)
Marketcap: $14.5m
Cash: ~$7m
Madsen resources
928,000 ounces gold at 8.93 g/t Au, Indicated
297,000 ounces gold at 11.74, inferred
Exploration targets
Near mine targets and new zones near surface. Drilling several kilometres west of Austin mine hit up to 5m @ 15g/t Au at Russet South.
Property
45-square kilometres in the Red Lake district, Ontario.
Includes 500tpd mill, tailings, shaft on care and maintenance.
Quick history
Pure Gold acquired the Madsen project from Claude Resources, along with additional ground in the region from Sabina Gold and Silver in 2014. It raised $19m that year. In late 2015 it added to cash through the sale of some properties to Premier for $5 million.
