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Pure Gold Announces Construction to Proceed on Madsen Red Lake Mine

Aug 8, 2019

Pure Gold announced that a $90 million construction finance pacakge with Sprott Resouces means construction will begin immediately to bring its Madsen Red Lake Mine into production by 2020.
 
The company anticipates the first gold pour at Madsen Red Lake Mine will occur in the latter part of 2020.
 
The financing by Sprott will fully fund the costs to develop an underground mine at Pure Gold’s Madsen Gold Project .The Financing is comprised of a credit facility  for US$65 million, and a US$25 million callable gold stream. Sprott also purchased US$5  million of units in a non-brokered private placement.
 
“With access to the capital provided by the Financing, the construction of the Madsen Red Lake Mine is now fully funded,” said Darin Labrenz, President and CEO of Pure Gold.  “We are very pleased with the financial commitments that Sprott have made towards the development of the Project.  We have achieved our objective of securing a flexible financing package on terms that are competitive and protect the upside for our shareholders. The optionality of repayment of both the Facility and the Gold Stream in a rising gold price environment provides an opportunity to refinance once in production and generating solid cash flows from the mine.  Combined with the recently completed equity financing, this package secures approximately C$90 million of immediate funding enabling us to initiate construction and puts us on track for first gold pour by late 2020.”
 
The company also recently signed agreements with Wabauskang and Lac Seul First Nations.
 
The financial flexibility provided by this financing and the recent equity raise of C$47.5 million  allows Pure Gold to continue to pursue a growth strategy, with exploration drilling expected to continue through the balance of the year. 
 
Sprott also purchased US$5 million of units in Pure Gold’s recently completed non-brokered private placement which closed on July 18, 2019.  
 
Dušan Petković, Principal of Sprott, commented, “As one of the largest investors dedicated to the natural resource sector, Sprott is excited to partner with Pure Gold on the development of the Madsen Gold Project. Our partnership with Pure Gold is consistent with our strategy of providing innovative and flexible capital to maximize the value of exceptional projects. We are pleased to participate alongside our colleagues at Sprott Capital Partners and play an integral role in fully funding the construction of the Madsen Red Lake Mine.”
 
In addition to the Facility and Gold Stream, Sprott has subscribed for 11,850,000 units, as part of the Company’s recently completed non-brokered private placement, which closed on July 18, 2019, for proceeds of US$5 million, fully aligning interests with the Company.
 
As the financing has closed, Pure Gold will issue to Sprott 3,841,000 common shares. Following issuance of the shares, Sprott will own approximately 4.4% of the issued and outstanding common shares of the Company on a non-diluted basis. The issuance of the common shares to Sprott at closing and on the Completion Date is subject to approval of the TSX Venture Exchange.
 
Pure Gold in their recent news release declared that their  "mandate is pure and simple. To dream big. To colour outside the lines. To use smart science and creativity to unlock the Madsen Red Lake Gold Mine in Red Lake, Ontario and become Canada's next iconic gold company.
 
For more information visit www.puregoldmining.ca and check Pure Gold's profile at www.sedar.com.