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VANCOUVER, B.C. – Pure Gold Mining Inc. (TSX-V: PGM, LSE: PUR) (“Pure Gold” or the “Company”) is pleased to announce that its unaudited condensed interim consolidated financial statements (“Financial Statements”) for its second quarter ended June 30, 2020 and the accompanying Management’s Discussion and Analysis are available for download on the Company’s website at www.puregoldmining.ca at under the Company’s SEDAR profile at www.sedar.com.
Financial and Operating Highlights for the quarter and to date:
During the three months ended June 30, 2020 and up to the date of this MD&A, the Company significantly advanced activities at its 100%-owned Pure Gold Red Lake Mine Project (“RL Mine Project” or the “Project”). A summary of the highlights for the three months ended June 30, 2020 and subsequent period to date are as follows:
During the quarter, the Company received the first of three significant amended permits / approvals for the RL Mine Project. The Ontario Ministry of the Environment, Conservation and Parks (MECP) has approved and issued an Amended Environmental Compliance Approval (“ECA”) for Air and Noise for the Project.
The amended ECA sets out operating conditions relating to air and noise emissions for the PureGold mining and milling operations, including all ancillary and support processes and activities, at a Production Limit of up to 1,089 tonnes of gold ore processed per day.
The company now awaits amendment of the Industrial Effluent permit (ECA Industrial Sewage Works). Initial regulatory review is complete, and the Company has applied for an expedited approval of this permit amendment.
The Company has also filed its Closure Plan amendment and is awaiting approval before posting the necessary financial assurance.
The development of the RL Mine Project is continuing at a rapid pace. Engineering is substantially complete and drawing packages have been issued for the majority of engineering components. The procurement of major equipment 95% complete, and the Company remains on track to bring first ore to the mill before year-end.
On June 17, 2020 PureGold announced that it closed a non-brokered private placement of 9,868,421 common shares of the Company that qualified as “flow-through shares” for the purposes of the Income Tax Act (Canada) (the “FT Shares”) at a price of $1.52 per FT Share, for gross proceeds to PureGold of $15,000,000. Subsequent to the private placement, Mr. Eric Sprott was the back-end buyer of all of the FT Shares, increasing his ownership position in the Company to 11.9%.
The Company commenced a 33,600 metre diamond drill program to expedite the growth of mineral resources and aggressively expand new high-grade discoveries. The program includes 28,200 metres of surface drilling targeting Wedge and other regional exploration targets to satisfy its flow through share obligations, as well as 5,400 metres of underground exploration drilling. In addition, the Company will perform a 2D seismic survey over the North Madsen / Derlak claims and over the 8-Zone.
During the quarter and subsequent to quarter end, PureGold raised approximately $13.5 million from the exercise of share purchase warrants with a strike price of $0.85 (the “Warrants”), representing 100% of the Warrants that otherwise would have expired May 24, 2020 and partial exercise of Warrants expiring July 18, 2022.
The Company remains fully funded through construction of the RL Mine.
In July 2020, PureGold announced that underground exploration drilling, initiated in June, intersected high-grade gold mineralization from both infill and step-out drill holes. Drilling has extended gold mineralization out from planned stopes, has discovered new gold zones that will be integrated into the mine plan, and has confirmed stopes scheduled for near term production.1
Drilling results highlights:
Selected Financial Data
The following selected financial data is derived from our Financial Statements and related notes thereto for the periods indicated, as prepared in accordance with International Financial Reporting Standards. Details of these results are described in the unaudited condensed interim consolidated financial statements and Management’s Discussion and Analysis for the six months ended June 30, 2020.
|For the three months ended June 30, 2020||For the three months ended June 30, 2019||For the six months ended June 30, 2020||For the six months ended June 30, 2019|
|Exploration Expenditures||$ 0.1 million||$ 2.0 million||$ 0.2 million||$ 3.6 million|
|Change in fair value of derivatives||$ 10.9 million||$ —||$ 0.4 million||$ —|
|Net Loss and Comprehensive loss for the period||$ 9.7 million||$ 4.0 million||$ 1.0 million||$ 6.9 million|
|Basic and Diluted Loss per Share||$ (0.03)||$ (0.02)||$ (0.00)||$ (0.03)|
|As at June 30,
|As at December 31, 2019|
|Total assets||$||197.3 million||$||130.6 million|
|Current liabilities||$||20.1 million||$||8.2 million|
|Non-current liabilities||$||104.9 million||$||72.8 million|
|Cash dividends declared||$||–||$||–|
Grant of Deferred Share Units
The Company has granted 100,000 Deferred Share Units to a director of the Company.
This press release should be read in conjunction with Pure Gold’s Condensed Interim Consolidated Financial Statements and Management’s Discussion and Analysis for the six months ended June 30, 2020. In addition, for further information please see Pure Gold’s Annual Information Form for the fiscal period ended December 31, 2019. These documents can be found on the Company’s website (www.puregoldmining.ca) or under the Company’s profile on SEDAR at www.sedar.com. Shareholders may receive a printed copy of the audited consolidated financial statements, free of charge, upon request.
Qualified Persons and 43-101 Disclosure
Darin Labrenz, P. Geo., President & CEO 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.
About Pure Gold Mining Inc.
The Pure Gold Red Lake Mine is Canada’s highest grade gold mine development project. 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
Adrian O’Brien, Director of Marketing & Communications
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