Pure Gold Reports Third Quarter Financial Results
VANCOUVER, British Columbia, Nov. 14, 2019 (GLOBE NEWSWIRE) -- 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: | ||
| o | 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; | ||
| o | 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; | ||
| o | Drilling aimed at extending and upgrading resources in the Wedge area continues to be successful, with drill highlights including: | ||
| o | 11.7 g/t gold over 1.0 metre from drill hole PG19-661; | ||
| o | 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.
Pure Gold is a Canadian focused gold developer. The Madsen Red Lake Gold Mine has historical production of 2.6 million ounces of gold and a current indicated resource of 2,063,000 ounces gold at 8.9 g/t gold (in 7.2 million tonnes), an inferred resource of 467,000 ounces gold at 7.7 g/t gold (in 1.9 million tonnes), in both cases inclusive of mineral reserves, and benefits from existing infrastructure including a mill and tailings facility, paved highway access, and access to power, water and experienced labour. The recently released Feasibility Study for the Madsen Red Lake Gold Mine outlines an 800 tonne per day underground mining operation with a 12 year mine life, Probable Mineral Reserves of one million ounces of gold grading 9 g/t in 3.5 million tonnes, and a low initial capital, putting the Madsen Red Lake Mine firmly on the path to becoming Canada’s next iconic gold mine.
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
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 Pure Gold within the meaning of applicable securities laws, including, but not limited to statements with respect to those that address potential quantity and/or grade of minerals, potential size and expansion of a mineralized zone, proposed timing of exploration and development plans, the growth potential of the Madsen Gold Project and opportunities for scalability, planned mining methods, mineral processing and sources of power, expected annual production, potential profitability of the Madsen Gold Project at lower metal prices, expected capital costs, anticipated permitting requirements and timing thereof, expected development schedule, expected timing of the completion of the Preliminary Economic Assessment for the Russet South, Fork and Wedge deposits, potential conversion of inferred resources to measured and indicated resources, potential extension and expansion of mineral 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 Pure Gold 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 Madsen Gold 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 20, 2019 in the section entitled "Risk Factors", under Pure Gold’s SEDAR profile at www.sedar.com.
Although Pure Gold 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. Pure Gold 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.
