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Pure Gold leads pack of emerging Northwestern Ontario gold producers

Oct 30, 2020

“Our mandate is pure and simple. To dream big. To colour outside the lines. To use smart science and creativity to unlock the potential of the PureGold Red Lake Mine in Red Lake, Ontario. And become Canada’s next iconic gold company.”
Someone hired a creative copywriter. The “next iconic gold company” is on track to pour their first gold bar by the end of this year and nothing, including a serious forest fire in August, or a global pandemic is standing in its way.
2020 has proven to be a watershed year for the PureGold project. The company raised $15 million through a flow-through share financing to help broaden the orebody through exploration. That caught the eye of prolific junior miner investor Eric Sprott, who bought 100% of the offering in June. Sprott’s investment didn’t stop there. His lending company, Sprott Lending Corp., also provided PureGold with a USD$65 million credit package.
And with drill numbers like these, no wonder investors are happy.

Drilling results highlights as of early October 2020 :

•46.7 g/t gold over 7.0 metres from drill hole PGU-0118; including193.5 g/t gold over 1.0 metre;
•57.0 g/t gold over 1.0 metre from drill hole PGU-0121;
•15.8 g/t gold over 2.3 metres from drill hole PGU-0117;
•7.2 g/t gold over 5.0 metres from drill holePGU-0113; including22.3 g/t gold over 1.0 metre;
•12.8 g/t gold over 10.0 metres from drill holePGU-0136; including20.1 g/t gold over 5.0 metres;
•9.3 g/t gold over 2.4 metres from drill hole PGU-0123; including16.2 g/t gold over 1.1 metres; and
•10.6 g/t gold over 2.0 metres from drill hole PGU-0124

Investors also quickly committed to more than $13 million in share warrants in mid-2020 which meant the company was fully funded as it marches toward 4th quarter production.
In August, Sprott wasn’t the only investor expressing their faith in Pure Gold’s project. Anglogold Ashanti stepped up with $5 million. “Anglogold Ashanti have once again demonstrated their strong support of PureGold as we complete construction and prepare for first gold pour at our PureGold Mine,” said Darin Labrenz, President and CEO. “This latest investment increases their shareholding in PureGold to 16%, maintaining their position as our single largest shareholder.  As one of the cornerstone investors in PureGold, Anglogold Ashanti have supported us through all phases of the development of our PureGold Mine, from discovery to near term production.  We would like to thank Anglogold Ashanti for being a key part of the PureGold story and for sharing our vision for discovery, resource growth and building a long-life growth company in the Red Lake mining district.”
In an interview with Mining Life, President and CEO Darin Labrenz said the company is on track for first production by the end of the year. “It’s certainly an exciting time for PureGold. We have a lot of work to do here in the tail-end but from a scheduling perspective, things are looking pretty solid on that front.”
“Our target is for first ore delivery to the mill by December 1st,” said Labrenz. “This is a brown field site so it comes with an existing underground and an existing development plant and all the ancillary facilities associated with that so, most of the work is replacing older equipment with newer equipment and getting ready to be back in production.”
As for their first gold bar, Labrenz says the company is hoping it will happen before Christmas, ideally by mid-December. Labrenz says the company has done well when it comes to hiring. The operational management team is in place and now the company is starting to fill out the workforce who will work under that team.
“Certainly when you look at northwestern Ontario and Red Lake in particular, there’s a lot of companies who are taking on people whose work has been retrenched over the past several years, so we’ve been able to build a team of people who live in Red Lake and some who are coming back.”
Pure Gold Mining Inc. made significant progress of construction and underground development in the first three quarters of 2020 at its Red Lake mine.
During the quarter, the company received the first of three significant amended permit 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 RL Mine Project 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.
In its quarterly report to shareholders released in August, the company stated: “The development of the RL Mine Project is continuing at a rapid pace. Engineering is substantially complete and drawing packages have been issued for many 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.”
The company continues to revise the mine plan and timing of staff hires and equipment purchases as the development unfolds. From the announcement of a construction decision in August 2019 through June 30, 2020, the company has spent a total of $57.1 million on the RL Mine Project and as of June 30, 2020, forecasted a further $84.2 million to be spent on the Project through first ore to the mill.
Construction activities continue on site, with the site population continuing to ramp up with 90 personnel at the end of July. Physical distancing measures continued on site to the greatest extent practical, while maintaining construction productivity.
Concrete installations at the water treatment facility have begun, reaching 25% complete at the end of June.
The ball mill and grinding area steel demolition was completed during the period. Drilling for and the installation of dowels for the ball mill foundation began during June.
Shipment of major components of the ball mill, the longest lead item, was expected by late August 2020. Construction of the Water Treatment Plant Access Road was completed and clearing of the 5kv and 44kV power line right-of-way was completed. Legacy tanks onsite have now been repaired and erection of the surge tank has begun.
The tailings building and internal steel erection began in June, reaching 83% on the building erection and 97% on the internal steel erection. Concrete installations continued through the period. The tailings building, surge tank and plant substation concrete installations were completed.
Underground development continued ahead of schedule for the first six months of the year with a total of 1,293 metres of main ramp, level access and waste development completed.
The company entered into a Project Agreement with respect to the RL Mine with the Waubaskang and Lac Seul First Nations. The Project Agreement establishes a long-term, mutually beneficial partnership between Pure Gold and the First Nations. In turn, both First Nations acknowledge and support Pure Gold’s rights and interests in the development and future operation of the RL Mine. The Project Agreement provides for communication, cooperation, and collaboration between the First Nations and Pure Gold, and establishes a framework for support for current and future operations of the RL Mine and defines the long-term benefits for the First Nations.
Pure Gold estimates that the total cost of the Project Agreement, over the life of mine as outlined in the feasibility study, to be approximately $14 million.

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