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Pure Gold confident it will find more high grade gold at Madsen project in Red Lake

Published: 08:30 26 Jul 2019 EDT

miner
Pure Gold is advancing the Madsen Red Lake Gold Mine in the historic Red Lake district

To say it’s been a busy year at Pure Gold Mining Inc (CVE:PGM) (LON:PUR) is an understatement.

Over the past twelve months, the Vancouver-based company has hit bonanza gold finds, completed a feasibility study showing robust economics, listed on the London Stock Exchange, and closed over C$50 million in financing to advance its flagship Madsen project towards a production decision.

READ: Pure Gold Mining shines with closing of C$47.5 million in financing led by billionaire investor Eric Sprott

There has been a great deal of excitement over some of the financing participants. AngloGold Ashanti, the worlds’ fourth largest gold company by production, made a significant investment in the $47.5 million financing that closed last week to maintain its approximately 14% pro-rata ownership that it has held since being a co-founder of the Company in 2014.  Fresh from his Kirkland Lake Gold win, billionaire miner Eric Sprott also participated in last weeks’ financing at just under C$20million and is now a 10.2% shareholder of the Company.  Strategic shareholders comprise more than 30% of the Company’s float and also include Newmont Goldcorp and Goldcorp founder, Rob McEwen. The leaders in the gold sector are certainly showing their confidence in this project.

Madsen is itself a company-maker. With a one million ounce gold reserve grading at an exceptionally high 9 grams per ton, combined with a 2.1 million ounce indicated resource at 8.9g/t and an additional   467,000 ounces inferred at 7.7 g/t gold, Madsen ranks eleventh out of 132 development projects globally by grade.

Nestled within the highly prolific Red Lake mining camp in Ontario, the Madsen gold mine is the highest grade gold project being developed in Canada.

Earlier this year, the mining company released a positive feasibility study on Madsen that outlines a robust 12-year high grade, 800 tons per day underground mining operation with low initial capital costs of under C$95 million.

Pure Gold has the resource, the investor support and the financial backing to open Canada’s newest gold mine. So why is the company embarking on a new exploration program when it has a Tier One project nearly ready to go?

The simple answer: confidence. Pure Gold’s team led by CEO Darin Labrenz is convinced that there are more high-grade ounces to be found in the large Madsen Mineral system which includes the satellite Wedge, Fork and Russet South deposits.

Over the summer the junior company is planning to drill up to 12,000 metres focused primarily on the Wedge deposit. In addition to drilling, the program will also continue surface work to prepare another 24 targets that Pure Gold identified as high priority.

According to Pure Gold’s CEO Darin Labrenz, the idea is to continue to grow the resource and convert inferred resources into indicated.

“The exploration program will ultimately allow us to uncover just how large the mineral system is and provide the opportunity to study whether the ounces can be incorporated into a future mine plan and have an economic impact on the project,” he said in an interview with Proactive.

Recent intercepts at Wedge include 33.3 g/t gold over 8.3 metres, 21.3 g/t gold over 10.3 metres and a monster 354 g/t gold over 1 metre from three separate drill holes.

At Russet South, drill holes intersected similar grades including 76 g/t gold over 2.1 metres and 27.1 g/t gold over 5.8 metres. Meanwhile, at Fork, gold grades are also encouraging, with intercepts of 7.2 g/t gold over 3.5 metres and 104.1 g/t gold over 3 metres.

The exploration program is expected to be complete by December. The results of the exploration season will not affect the production decision for Madsen, according to the company. With 2.5 million ounces in the ground including 1 million ounces of probable reserves, Pure Gold is set to greenlight Madsen once financing is in place.

“We’ve seen a number of brownfield opportunities that have generated real value over the past few years,” said Labrenz. “Obviously, we would put our project in that category with robust economics from the feasibility plan and a real opportunity to grow organically.

“It’s going to be an exciting year.”

Contact Angela at angela@proactiveinvestors.com

Follow her on Twitter @AHarmantas

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