Pure Gold Mining Inc (CVE:PGM) (LON:PUR), the mine developer, has posted encouraging results from underground drilling at its Red Lake mine project in Ontario, which shows the potential to expand the deposit in short order.
The firm is building a mine at the site with the first gold pour on track for the fourth quarter this year.
In June this year, the company launched an extensive 30,000 metre diamond drill program in a bid to "firmly establish growth and scalability" beyond the initial first phase of the mine plan.
"Over the last several years our team has developed a tremendous understanding of the PureGold mine deposit,” Darin Labrenz, the CEO of PureGold, told investors in a statement on Tuesday.
"We have established the scale of this gold system, with fantastic continuity along a seven-kilometre trend, and we are building a mine that will be one of the highest-grade mines in the world."
Labrenz said the deposit continued to exceed the group's expectations with broad, high-grade intercepts that demonstrated opportunities for near term growth.
"New drill results demonstrate that extensions of existing stopes and possible expansions of the mine plan occur very close to existing or planned development and as such, have the potential to impact near term mine cash flow," he added.
Drilling has identified both extensions to feasibility stopes, and new mineralization that may be included into future short term mine plans, the firm said, pointing to one hole, which hit 15.8 grams per ton (g/t) gold over 2.3 metres around 15 metres.
This intercept was along strike from a planned stope providing potential for westward extension of that stope, it added. The eastern margin of the same stope was also extended by several metres, with another hole returning 46.7 g/t of the yellow metal over 7 metres.
Other highlight intercepts included 57 g/t gold over 1 metre and 22.3 g/t of gold over another 1-metre length.
Tuesday's assays come from an initial 875 metres of drilling. In addition to the ongoing underground program, two surface drills have kicked off drilling at the Wedge zone, which lies 3 kilometres from the PureGold milling facility, the firm noted.
Previous drilling in that area uncovered 33.3 g/t gold over 8.3 metres and 21.3 g/t gold over 10.3 metres.
Shares in London added 7.4% to 109p each on the day.
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