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Pure Gold Mining continues in bid to lift output and lower costs as it posts second quarter results

Published: 07:15 16 Aug 2022 EDT

Pure Gold Mining Inc -
"Over the last six months we have advanced in four key areas to expedite our future success," said Terry Smith, PureGold's CEO

Pure Gold Mining Inc (TSX-V:PGM, LSE:PUR, OTC:LRTNF) told investors it expects to deliver positive site-level cash flow from its Ontario mine in the third quarter this year as the company continues its bid to lift output and lower costs.

The miner updated on operations and reported results for the second quarter to June 30, 2022, a period, which saw a "complete overhaul" of its mine planning process. 

The company said it was on track to complete an updated life-of-mine plan and a new pre-feasibility study (PFS) in Q4, based on the recently announced updated resource and was working with consultant SRK to ensure a smooth integration of the new mine plan beginning in 2023.

"Over the last six months we have advanced in four key areas to expedite our future success," said Terry Smith, PureGold's CEO In a statement. "We have a solid resource model we can use for long-term planning; a revamped short-term planning process to drive execution; a lower operating cost base to generate cash flow; and most importantly, an emerging culture of safety and performance."

READ: Pure Gold Mining releases robust updated mineral resource estimate for its mine in Ontario

Smith said that midway through Q3, the firm would combine these elements into stronger gold production, while a year-to-date record gold pour was achieved only last week.

"We hope to break that record again very soon, and that the SRK resource model will help light the way to grow production in our upcoming pre-feasibility study," said the Pure Gold CEO.

In Q3, the site-level operating plus sustaining capital costs at the PureGold mine near Red Lake are expected to be in the range of between $9.5 million and $10.5 million per month, representing an absolute reduction in costs of around 25% and a cost-per-tonne reduction of around 50%.

The company is targeting additional savings equating to $1 million per month (around 10%) by the end of 2022.

Ore throughput for Q3 is forecast to average between 775-875 tonnes per day (tpd) at between 4 grams per ton (g/t) and 5 g/t gold. Both grade and ore throughput are forecast to trend positively throughout the quarter.

In terms of the second quarter results, Pure Gold posted a net loss of $20.7 million, compared to a loss of $15.8 million in the same period a year earlier, on revenue of $8.5 million, down from $15.1 million in Q2, 2021.

The company mined 74,645 tonnes in the period, down from 168,715 tonnes in Q2 last year and produced 3,509 ounces of gold (Q2 2021: 5,997 ounces).

The miner said the reduction of gold production was due, in part, to significant cash-preservation measures that the firm introduced while negotiating financing agreements announced in May this year.

The company owns and operates the PureGold asset, near Red Lake, Ontario, which started commercial production in 2021 after the successful construction of an 800 tpd underground mine and processing facilities.

The firm says the mine is centered on a 47 square kilometre property with 'significant' discovery potential.

Contact the author at giles@proactiveinvestors.com

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