Pure Gold Mining Inc (CVE:PGM) has received a repeated 'speculative buy' rating from Echelon Wealth Partners, which says the first quarter of 2019 will be 'pivotal' for the explorer, with a number of potential catalysts coming up.
The company is one of Echelon's 'top picks' going into the quarter on the back of its good performance in the fourth quarter of 2018.
The group's flagship asset is its 100% interest in the Madsen Gold project, which covers an area of around 4,718 hectares in the prolific Red Lake gold district in Ontario.
The project has previously generated 2.5Moz (million ounces) of gold and remains one of the highest-grade, undeveloped gold projects in the world.
It boasts total (measured and indicated and inferred) gold resources of 1.8 Moz (million ounces) at a grade of 8.9g/t (grams per ton).
A key near-term catalyst expected is a maiden resource estimate of the shallow Wedge deposit at the property, which will include all assay results from drilling completed prior to September last year from the Wedge, Russet South, Fork and Madsen areas, analyst Ryan Walker noted.
Significantly, this latest drilling has extended the high-grade mineralization to a vertical depth of more than 500 meters (m).
Importantly, the Wedge area lies just 3km by road from an existing mill, which highlights the area’s potential as a satellite source of feed for production, he added.
Other potential catalysts
Other potential catalysts for the first quarter of 2019 are the delivery of a definitive feasibility study (DFS) for the project, and the inclusion of the Russet, Fork and Wedge satellite deposits into a preliminary economic assessment (PEA).
Also on the cards, is a production decision from the company on the Madsen project itself.
"Our positive view on PGM shares reflects Madsen’s high-grade nature, the potential for solid near-term, high-margin production, and substantial exploration potential," said Walker.
He highlighted that the company's shares increased by a whopping 18.2% during the fourth quarter of 2018, which beat the 10.5% increase by the VanEck Vectors Junior Gold Miners ETF (NASDAQ:GDXJ).
The latter consists of a basket of smaller market capitalization peer gold producers.
Walker notes that the company's share price increase was partly attributable to a late surge in the gold price into the end of 2018.
Echelon targets $1.20 for the shares, which is a long way from where they stand today at $0.70 - up over 11% on the day.
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