VANCOUVER, British Columbia, May 11, 2020 (GLOBE NEWSWIRE) -- Pure Gold Mining Inc. (TSX-V: PGM, LSE: PUR) (“PureGold” or the “Company”) is pleased to report mine construction activities at its PureGold Red Lake Mine in Ontario are on schedule for first gold pour before the end of the year.
We continue to make significant progress towards completing construction while ensuring the health and safety of our employees and contractors during COVID-19. The first gold pour planned for Q4 2020 aligns with a robust and rising gold market, that significantly exceeds the base-case parameters and strong project economics of the mine’s 2019 feasibility study.1 We also continue to build size and scale: this month we begin drilling with the intent to convert resources to reserves and increasing resources from new high-grade discoveries at surface and at depth.2
“We are not just building an integrated mining operation. We are building a fully-funded, long-life growth company uniquely positioned in the Red Lake camp, one of the world’s largest gold-producing districts. Our opportunity is tremendous: the real potential to become Red Lake’s next senior gold producer,” says Darin Labrenz, President and CEO. “Our 47km2 property possesses a proven, large high-grade gold system, with the same rocks, structure, timing, geology, grade and endowment potential as Evolution’s Red Lake mine just 15 kilometres away. Work to date has proven we have a clear and precise understanding of the geology and district, and we have demonstrated our ability to execute on our goals. Our future cash flow will fund our aggressive gold growth plans, and there is no more important time to be building a gold mine.”
Current market conditions improve our $CDN/oz gold price by 41% from the base case. Base-case parameters for our 2019 feasibility are US$1,275 per ounce of gold and a U.S. to Canadian exchange rate of $1.33, equal to a CDN $1,700 gold price. As a Canadian gold producer, the combination of stronger gold price and declining Canadian dollar has a material positive impact. As at May 7th, 2020, with gold at CDN$2,400 per ounce, the mine would generate an additional C$679 million in revenue over the base case.1
Engineering, Procurement and Hiring
Detailed engineering in the process plant is now 95% complete, strengthening certainty for meeting production timeline. The company has increased placed equipment purchase orders of long-lead items to 80%, based on value, including key processing equipment. To date, the company has hired 60 new employees, most of whom are Red Lake residents. We are also continuing to build upon our relationships with local and First Nation contractors and service providers.
Significant new developments include near completion of mine dry construction, substantial progress towards the refurbishment of the semi-autogenous grinding (SAG) mill, opening the process plant’s roof to remove the legacy ball mill in preparation for the new ball mill installation, and starting foundation work for the batch plant that will supply backfill material for the mine.
Pre-production underground ramp development as part of the Company’s test mining program was initiated ahead of the feasibility schedule and continues to progress at an accelerated pace. We have now completed 1,000 metres of development, up from 740 metres from last reporting. This development will increase productivity by providing access to key stopes ahead of schedule, optimize the mine plan with higher grade ore and accelerate cash flow.
We continue our disciplined and highly successful growth program across our 100%-owned, 47-km2 property, located in the heart of the Red Lake Mining District. Within our strong, open +7 km gold system we have already made three new discoveries at surface, and confirmed strong potential to expand at depth, supported by high grade intercepts occurring up to 700 vertical metres below the base of the current mine plan. Subject to continued monitoring of the COVID-19 pandemic, we intend to resume our 2020 drill program in late-May with the goals of converting resources to reserves and increasing resources from new high-grade discoveries at surface and at depth. Initial drilling from new underground access will focus on the growth of mineral reserves in areas targeted for 2020 and 2021 production. We will then focus on increasing resources outside of the initial mine footprint.2
Health & Safety
Development activities at the PureGold Red Lake Mine continue to operate normally, with no significant impact to date beyond the implementation of additional education and safety measures. We have no reported incidences of COVID-19, to date. Please see March 20, 2020 release for our COVID-19 response measures.
Qualified Persons and 43-101 Disclosure
Ken Donner, P. Eng., Vice President, Operations for the Company, is the designated Qualified Person for this news release within the meaning of National Instrument 43-101 (“NI 43-101”) and has reviewed and verified that the technical information contained herein is accurate and approves of the written disclosure of same.
- For further information, see the technical report titled “Madsen Gold Project Technical Report Feasibility Study for the Madsen Deposit Red Lake, Ontario, Canada“ with an effective date of February 5, 2019, and dated July 5, 2019 (the “Feasibility Study”), for further information, available at www.puregoldmining.ca or under the Company’s Sedar profile at www.sedar.com
- It is uncertain if further exploration will result in these targets being delineated as a mineral resource. It is further cautioned that mineral resources are not mineral reserves and do not have demonstrated economic viability.
About Pure Gold Mining Inc.
The PureGold Red Lake Mine is Canada’s next gold mine. Fully funded, the project is on track to deliver near term gold production into a rising Canadian gold price environment, with first production scheduled for late 2020. The orebody is situated within a seven-kilometre-long gold system that is wide open for expansion at depth and along strike, and multiple discoveries by the Company suggest potential opportunities for near-term growth.
ON BEHALF OF THE BOARD
Darin Labrenz, President & CEO
Adam Buchanan, Manager, Investor Relations
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
All statements in this press release, other than statements of historical fact, are "forward-looking information" with respect to PureGold within the meaning of applicable securities laws, including, but not limited to statements with respect to those that address proposed timing of development plans for the PureGold Red Lake Mine (RL Mine Project), timing of expected production, expected capital costs, expected development schedule, potential for advancing the timing for higher grade ore, potential for additional resources and the focus of the Company in the coming months . Forward-looking information is often, but not always, identified by the use of words such as "seek", "anticipate", "plan", "continue", "planned", "expect", "project", "predict", "potential", "targeting", "intends", "believe", "potential", and similar expressions, or describes a "goal", or variation of such words and phrases or state that certain actions, events or results "may", "should", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking information is not a guarantee of future performance and is based upon a number of estimates and assumptions of management at the date the statements are made including, among others, assumptions about future prices of gold and other metal prices, currency exchange rates and interest rates, favourable operating conditions, political stability, obtaining governmental approvals and financing on time, obtaining renewals for existing licences and permits and obtaining required licences and permits, labour stability, stability in market conditions, availability of equipment, accuracy of any mineral resources, successful resolution of disputes and anticipated costs and expenditures. Many assumptions are based on factors and events that are not within the control of PureGold and there is no assurance they will prove to be correct.
Such forward-looking information, involves known and unknown risks, which may cause the actual results to be materially different from any future results expressed or implied by such forward-looking information, including, risks related to the interpretation of results at the RL Mine Project; changes in project parameters as plans continue to be refined; current economic conditions; future prices of commodities; possible variations in grade or recovery rates; the costs and timing of the development of new deposits; failure of equipment or processes to operate as anticipated; the failure of contracted parties to perform; the timing and success of exploration activities generally; delays in permitting; possible claims against the Company; the timing of future economic studies; labour disputes and other risks of the mining industry; delays in obtaining governmental approvals, financing or in the completion of exploration as well as those factors discussed in the Annual Information Form of the Company dated March 26, 2020 in the section entitled "Risk Factors", under PureGold’s SEDAR profile at www.sedar.com.
Although PureGold has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. PureGold disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise unless required by law.