Pure Gold Reports Third Quarter Financial Results
Press Releases
November 14, 2019
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 financial statements (“Financial Statements”) for its third quarter ended September 30, 2019 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 through and subsequent to September 30, 2019:
During the three months ended September 30, 2019 and to date, the Company completed and advanced a number of key milestones for its 100%-owned Madsen Red Lake Mine (“Madsen” or the “Project”).
- Project finance and construction decision
During the quarter, Pure Gold awarded the surface Engineering and Procurement (E/P) contract to JDS Energy & Mining (“JDS”) in partnership with Hatch Ltd. (“Hatch”) and Knight Piesold Ltd. (Knight Piesold) for its Madsen Red Lake Mine. Additionally, the Company has awarded the underground mine design engineering contract to Dumas Mine Contracting Ltd. (“Dumas”).
With the engagement of our engineering partners, the Company has commenced construction. Detailed design work on surface infrastructure, as well as underground electrical distribution, mine ventilation, mine service design and stope optimization has been initiated, as well as equipment sourcing including the purchase of mining equipment and the procurement of long lead time items has began.
- Hiring has begun, with key roles on the owner’s construction team as well as site specific staffing in human resources, safety and environmental, procurement, and mining.
- Mining equipment purchases have commenced
Pure Gold has begun to identify and purchase its mining fleet of equipment in anticipation of commencing underground development in November 2019.
- Exploration success continues
Surface drilling at Madsen during the quarter continued with ongoing drilling along the Madsen Red Lake Mine Trend adding 530 metres of mineralized strike length to the Wedge zone, expanding the deposit footprint by 85% and continuing the rapid progression of this zone.
Drilling highlights during the quarter include:
- A 90 metre northeast step-out on the Wedge deposit has intersected near surface, high grade gold in hole PG19-677, returning 24.4 g/t gold over 1.0 metre;
- A 440 metre southwest step out has intersected 12.4 g/t gold over 1.1 metres from hole PG19-657, extending the length of the Wedge zone to 1,150 metres and importantly extending seven kilometres from the northeastern extents of the Madsen deposit;
- Drilling aimed at extending and upgrading resources in the Wedge area continues to be successful, with drill highlights including:
- 11.7 g/t gold over 1.0 metre from drill hole PG19-661;
- 5.1 g/t gold over 7.0 metres from drill hole PG19-664, including 19.3 g/t gold over 1.0 metre;
In addition, the Company intersected a 10 metre wide, gold bearing zone (2.2 g/t gold over 10.4 metres) including 4.9 g/t gold over 2.1 metres in a widespread gap midway between the Company’s high grade 8 Zone at depth and near surface Russet South mineral resources, clearly establishing the prospectivity of this setting and opening up a brand new target area for discovery. The Company plans to continue to test this exciting new target in the coming months.
Outlook
Pure Gold is focused on advancing high quality assets that host the key traits of economic mines: grade, scope, size potential and access to infrastructure in mining-friendly jurisdictions. Our key asset is Madsen which comprises in excess of 4,600 hectares of primarily patented mineral claims in the prolific Red Lake gold camp of Northwestern Ontario and hosts two significant former gold producers including the Madsen Mine with previous gold production of 2.6 million ounces.
Despite challenging market conditions, in the second quarter of 2019, Pure Gold secured access to approximately $167.5 million (using 1C$ = US$.75) in funding to advance Madsen, including a US$65 million project finance facility (US$10 million received to date) and a US$25 million gold metal stream (together the “Financing”) with Sprott Resource Lending (“Sprott”) and a $47.5 million equity raise. Upon satisfactory receipt of permits and other customary conditions, the Company believes it has sufficient funds available to fund construction and development of the Project.
According to the Madsen feasibility study completed in February 2019, mine construction and development will require an estimated $95 million, including contingency and start-up and working capital. In August 2019, we commenced the selection process to engage engineers to commence detailed engineering for the construction of surface works and mill upgrades and underground ramp and stope development. A detailed project schedule with finalized costing will be derived from the detailed engineering, which is expected to be completed in November 2019. On receipt of this detailed schedule and costing the Company will initiate the construction phase of its development plan and begin underground mine development.
Over the coming months, the Company will be focused on:
-
- Finalizing the project execution schedule, including detailed engineering, procurement and cost estimation;
- Preparing to commence underground mining, focussing on ramp and level development;
- Continuing environmental studies and documentation to support the updating of existing major permits and filing for additional required minor permits;
- Continuing equipment and materials procurement;
- Continuing construction and upgrades of surface facilities, including mill upgrades, updates to the tailings facility and other surface works, in addition to preparing for commencement of underground ramp and stope development; and
- Continuing surface exploration at deposits and targets outside of the feasibility study mine plan.
- Definition drilling to support detailed design
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 financial statements and Management’s Discussion and Analysis for the quarter ended September 30, 2019. These documents can be found on the Company’s website (www.puregoldmining.ca) or on SEDAR at www.sedar.com. All dollar figures are expressed in Canadian $.
| For the three months ended September 30, 2019 | For the three months ended September 30, 2018 | For the nine months ended September 30, 2019 | For the nine months ended September 30, 2018 | |
| Total Revenue | – | – | – | – |
| Exploration Expenditures | $3,643,163 | $7,183,704 | $7,247,427 | $22,091,640 |
| Change in fair value of derivative liabilities | $3,299,400 | – | $3,299,400 | – |
| Net Loss and comprehensive loss for the period attributable to shareholders | $8,836,364 | $8,101,945 | $15,711,147 | $22,994,324 |
| Basic and Diluted Loss per Share | $0.03 | $0.03 | $0.05 | $0.10 |
| As at September 30,
2019 |
As at December 31, 2018 | |||
| Total assets | $ | 107.7 million | $ | 20.9 million |
| Current liabilities | $ | 3.5 million | $ | 1.0 million |
| Non-current liabilities | $ | 49.6 million | $ | 2.4 million |
| Cash dividends declared | $ | – | $ | – |
This press release should be read in conjunction with Pure Gold’s Condensed Interim Financial Statements and Management’s Discussion and Analysis for the quarter ended September 30, 2019. In addition, for further information please see Pure Gold’s Annual Information Form for the fiscal period ended December 31, 2018. 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
Phil Smerchanski, P. Geo., Vice President, Exploration 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.
Additional information about the Company and its activities may be found on the Company’s website at www.puregoldmining.ca and under the Company’s profile at www.sedar.com.
ON BEHALF OF THE BOARD
“Darin Labrenz”
Darin Labrenz, President & CEO
Investor inquiries:
Adam Buchanan, Manager, Investor Relations
Tel: 604-646-8000
info@puregoldmining.ca
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