The company has increased placed equipment purchase orders of long-lead items to 80%
Pure Gold Mining is pleased to report mine construction activities at its PureGold Red Lake Mine in Ontario are on schedule for first gold pour before the end of the year.
We continue to make significant progress towards completing construction while ensuring the health and safety of our employees and contractors during COVID-19. The first gold pour planned for Q4 2020 aligns with a robust and rising gold market, that significantly exceeds the base-case parameters and strong project economics of the mine’s 2019 feasibility study.1 We also continue to build size and scale: this month we begin drilling with the intent to convert resources to reserves and increasing resources from new high-grade discoveries at surface and at depth.2
“We are not just building an integrated mining operation. We are building a fully-funded, long-life growth company uniquely positioned in the Red Lake camp, one of the world’s largest gold-producing districts. Our opportunity is tremendous: the real potential to become Red Lake’s next senior gold producer,” says Darin Labrenz, President and CEO. “Our 47km2 property possesses a proven, large high-grade gold system, with the same rocks, structure, timing, geology, grade and endowment potential as Evolution’s Red Lake mine just 15 kilometres away. Work to date has proven we have a clear and precise understanding of the geology and district, and we have demonstrated our ability to execute on our goals. Our future cash flow will fund our aggressive gold growth plans, and there is no more important time to be building a gold mine.”
Current market conditions improve our $CDN/oz gold price by 41% from the base case. Base-case parameters for our 2019 feasibility are US$1,275 per ounce of gold and a U.S. to Canadian exchange rate of $1.33, equal to a CDN $1,700 gold price. As a Canadian gold producer, the combination of stronger gold price and declining Canadian dollar has a material positive impact. As at May 7th, 2020, with gold at CDN$2,400 per ounce, the mine would generate an additional C$679 million in revenue over the base case.1
Engineering, Procurement and Hiring
Detailed engineering in the process plant is now 95% complete, strengthening certainty for meeting production timeline. The company has increased placed equipment purchase orders of long-lead items to 80%, based on value, including key processing equipment. To date, the company has hired 60 new employees, most of whom are Red Lake residents. We are also continuing to build upon our relationships with local and First Nation contractors and service providers.
Significant new developments include near completion of mine dry construction, substantial progress towards the refurbishment of the semi-autogenous grinding (SAG) mill, opening the process plant’s roof to remove the legacy ball mill in preparation for the new ball mill installation, and starting foundation work for the batch plant that will supply backfill material for the mine.
Pre-production underground ramp development as part of the Company’s test mining program was initiated ahead of the feasibility schedule and continues to progress at an accelerated pace. We have now completed 1,000 metres of development, up from 740 metres from last reporting. This development will increase productivity by providing access to key stopes ahead of schedule, optimize the mine plan with higher grade ore and accelerate cash flow.
We continue our disciplined and highly successful growth program across our 100%-owned, 47-km2 property, located in the heart of the Red Lake Mining District. Within our strong, open +7 km gold system we have already made three new discoveries at surface, and confirmed strong potential to expand at depth, supported by high grade intercepts occurring up to 700 vertical metres below the base of the current mine plan. Subject to continued monitoring of the COVID-19 pandemic, we intend to resume our 2020 drill program in late-May with the goals of converting resources to reserves and increasing resources from new high-grade discoveries at surface and at depth. Initial drilling from new underground access will focus on the growth of mineral reserves in areas targeted for 2020 and 2021 production. We will then focus on increasing resources outside of the initial mine footprint.2
Health & Safety
Development activities at the PureGold Red Lake Mine continue to operate normally, with no significant impact to date beyond the implementation of additional education and safety measures. We have no reported incidences of COVID-19, to date. Please see March 20, 2020 release for our COVID-19 response measures.