VANCOUVER, British Columbia, Aug. 15, 2018 (GLOBE NEWSWIRE) -- Pure Gold Mining Inc. (PGM – TSX-V) (“Pure Gold” or the “Company”) is pleased to announce that its unaudited condensed interim consolidated financial statements (“Financial Statements”) for the first quarter ended June 30, 2018 and the accompanying Management’s Discussion and Analysis are available for download on the Company’s website at www.puregoldmining.ca at under the Company’s SEDAR profile at www.sedar.com.
Quarterly highlights and recent developments:
- Commenced Test Mining at Madsen1
The Company extended the Madsen Gold Project (“Madsen”) decline by 87 metres and commenced test mining within the McVeigh zone. Mining through 13 metres of new linear development along the mineralized structure returned muck samples averaging 18.8 g/t gold and chip samples averaging 15.3 g/t gold. Results thus far have exceeded expectations in terms of grades and widths and have highlighted the clear visual nature of the mineralization.
The test mining is scheduled to complete in September 2018 with the planned extraction of approximately 7,200 tonnes of mineralized material. The results from the test mining will be used to demonstrate lateral and vertical continuity of mineralization, as a validation of the resource model, and to provide geotechnical data in support of the ongoing definitive feasibility study (“DFS”).
- Continued Strong Exploration Results2
Surface drilling at Madsen continues to establish the Wedge Deposit as an important component of the large, high grade mineral system at Madsen. Surface drilling at the Wedge Deposit has expanded strongly mineralized zones to a vertical depth of 500 metres and has established continuity of gold mineralization in several key areas. With two drill rigs active at Wedge during the first quarter the Company is on track to meet its goal of disclosing an initial mineral resource for the Wedge area in Q4 2018.
Drilling continues to expand the scale of the Wedge Deposit zones with gold mineralization intersected to a vertical depth of +500 metres and remaining open. Drilling highlights from the Wedge drilling include:
- 354.0 g/t gold over 1.0 metre from drill hole PG18-540;
- 18.3 g/t gold over 1.0 metre and,
- 19.9 g/t gold over 3.3 metres, including 53.6 g/t gold over 1.0 metre from drill hole PG18-564.
Step out drilling on the Wedge-MJ zone has successfully intersected gold mineralization over a 150 metre dip extent including:
- 17.1 g/t gold over 1.7 metres from drill hole PG18-533,
- 9.0 g/t gold over 1.7 metres from drill hole PG18-530.
Drilling has also intersected high grade gold mineralization up dip of historical workings of the Starratt mine, highlighted by 40.4 g/t gold over 1.9 metres from drill hole PG18-574.
Results from the Company’s spring drilling program also significantly expanded the size of the Russet South deposit both down dip and along strike, reinforcing the potential of Russet South to positively impact the production profile at Madsen. Drilling expanded strongly mineralized zones to a vertical depth of 330 metres and continued to establish continuity of gold mineralization in several key areas. In particular, wide space drilling continued to build continuity at depth, stepping into the sparsely tested gap between Russet South and the high grade 8 Zone resource at depth.
Multiple drill holes during the quarter have expanded the Russet South deposit 150 metres down dip from the current mineral resource extents. Drill result highlights include:
- 19.0 g/t gold over 2.0 metres from drill hole PG18-504;
- 35.9 g/t gold over 1.0 metre from drill hole PG18-537;
Step out drilling on the south end of the Russet South resource has extended near surface mineralization by 50 metres including 13.8 g/t gold over 2.0 metres from drill hole PG18-519.
- Closed Bought Deal Private Placement and Concurrent Non-Brokered Private Placement for Gross Proceeds of C$20.9 Million
On May 24, 2018, the Company closed a bought deal private placement (the “Offering”) and concurrent non-brokered private placement (the “Anglogold Private Placement” and together with the Offering, the “Transactions”).
Pursuant to the Offering, the Company issued a total of 16,130,000 units of the Company (the “Units”), at a price of C$0.62 per Unit, for gross proceeds of C$10,000,600, and 4,000,000 common shares of the Company issued on a flow-through basis (the “FT Shares”), at a price of C$0.75 per FT Share, for gross proceeds of C$3,000,000, for aggregate gross proceeds from the Offering of C$13,000,600.
Each Unit consisted of one common share of the Company (a “Unit Share”) and one-half of one common share purchase warrant (each whole common share purchase warrant, a “Warrant”). Each Warrant is transferrable and entitles the holder to acquire one common share of the Company until May 24, 2020 at a price of C$0.85.
Pursuant to the Anglogold Private Placement, Anglogold Ashanti Limited (“Anglogold”) purchased 12,800,000 Units at a price of C$0.62 per Unit for gross proceeds of C$7,936,000, on a non-brokered private placement basis, increasing its ownership percentage in the Company to 14.9% of the common shares issued and outstanding on a non-diluted basis.
The Company is fully funded to complete the ongoing DFS, finalize remaining mining and processing permits, extract the 7,200 tonne bulk sample, and undertake an additional 21,000 metres of exploration drilling focused on increasing the scale of the project beyond that contemplated in the feasibility study.
Selected Financial Data
The following selected financial data is derived from our Financial Statements and related notes thereto for the periods indicated, as prepared in accordance with International Financial Reporting Standards. All dollar figures are expressed in Canadian $.
| Three months ended|
|Net and Comprehensive Loss for the period||$7,695,440||$7,573,291|
|Exploration and evaluation expenditures||$7,288,670||$6,808,919|
|Basic and diluted loss per share||$0.03||$0.04|
|Cash and short-term investments||$19,594,237||$7,443,078|
|Working capital (current assets less current liabilities,|
excluding non-cash flow-through premium liability)
Details of these results and this press release should be read in conjunction with the Financial Statements and Management’s Discussion and Analysis for the three months ended June 30, 2018. In addition, for further information please see Pure Gold’s Annual Information Form for the year ended March 31, 2018, dated June 11, 2018. These documents can be found on the Company’s website (www.puregoldmining.ca) or under the Company’s profile on SEDAR at www.sedar.com. Shareholders may receive a printed copy of the unaudited condensed interim consolidated financial statements and Management’s Discussion and Analysis, free of charge, upon request.
Appointment of Endeavour Financial as Financial Advisor
The Company has appointed Endeavour Financial as its financial advisor to provide financial advisory services with respect to debt financing of the construction and development of Madsen. Endeavour Financial is a private independent merchant banking company focused on providing expert and unbiased financial advisory services to the global natural resources sector.
The Madsen Gold Project has historic production of 2.5 million ounces of gold3 and a current indicated resource of 1,744,000 ounces gold at 8.7 g/t gold (in 6.2 million tonnes) and an inferred resource of 296,000 ounces gold at 7.9 g/t gold (in 1.2 million tonnes), the Project benefits from existing infrastructure including a mill and tailings facility, paved highway access, and access to power, water and experienced labour4. A feasibility study is underway with results expected in the fourth quarter of 2018 and the Madsen Gold Project is firmly on the path to becoming Ontario’s next gold mine.
QA/QC and Core Sampling Protocols
Drill core samples are submitted to ALS Minerals in Thunder Bay, Ontario for sample preparation by crushing to 70% less than 2 mm, a rotary split of 1kg, and pulverization of the split to better than 85% passing 75 microns. Sample pulps are shipped to the ALS assay laboratory in North Vancouver, BC for gold analysis with a 30g fire assay and AAS finish (code Au-AA23). Samples returning >5 g/t Au are re-assayed with a gravimetric finish (code GRA21). Mineralized zones with visible gold and shoulder samples are also analyzed by a 1 kg screen fire assay with screening to 100 microns. A duplicate 30 g fire assay is conducted on the screen undersize with assaying of the entire oversize fraction (code Au-SCR21). Control samples (certified standards and uncertified blanks), along with field, prep and pulp duplicates, are inserted on a regular basis. Results are assessed for accuracy, precision, and contamination on an ongoing basis.
Qualified Persons and 43-101 Disclosure
Phil Smerchanski, P. Geo., Vice President, Exploration for the Company, is the designated Qualified Person for this news release within the meaning of National Instrument 43-101 (“NI 43-101”) and has reviewed and verified that the technical information contained herein is accurate and approves of the written disclosure of same.
ABOUT PURE GOLD
Our mandate is pure and simple. To dream big. To colour outside the lines. To use smart science and creativity to unlock the next major discovery at the Madsen Gold Project in Red Lake, Ontario. And become Canada’s next iconic gold company.
ON BEHALF OF THE BOARD
Darin Labrenz, President & CEO
All statements in this press release, other than statements of historical fact, are "forward-looking information" with respect to Pure Gold within the meaning of applicable securities laws, including, but not limited to statements with respect to those that address potential quantity and/or grade of minerals, potential size and expansion of a mineralized zone, proposed timing of exploration and development plans. Forward-looking information is All statements in this press release, other than statements of historical fact, are "forward-looking information" with respect to Pure Gold within the meaning of applicable securities laws, including, but not limited to statements with respect to those that address potential quantity and/or grade of minerals, potential size and expansion of a mineralized zone, proposed timing of exploration and development plans. Forward-looking information is often, but not always, identified by the use of words such as "seek", "anticipate", "plan", "continue", "planned", "expect", "project", "predict", "potential", "targeting", "intends", "believe", "potential", and similar expressions, or describes a "goal", or variation of such words and phrases or state that certain actions, events or results "may", "should", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking information is not a guarantee of future performance and is based upon a number of estimates and assumptions of management at the date the statements are made including, among others, assumptions about future prices of gold and other metal prices, currency exchange rates and interest rates, favourable operating conditions, political stability, obtaining governmental approvals and financing on time, obtaining renewals for existing licences and permits and obtaining required licences and permits, labour stability, stability in market conditions, availability of equipment, accuracy of any mineral resources, successful resolution of disputes and anticipated costs and expenditures. Many assumptions are based on factors and events that are not within the control of Pure Gold and there is no assurance they will prove to be correct.
Such forward-looking information, involves known and unknown risks, which may cause the actual results to be materially different from any future results expressed or implied by such forward-looking information, including, risks related to the interpretation of results at the Madsen Gold Project; changes in project parameters as plans continue to be refined; current economic conditions; future prices of commodities; possible variations in grade or recovery rates; the costs and timing of the development of new deposits; failure of equipment or processes to operate as anticipated; the failure of contracted parties to perform; the timing and success of exploration activities generally; delays in permitting; possible claims against the Company; labour disputes and other risks of the mining industry; delays in obtaining governmental approvals, financing or in the completion of exploration as well as those factors discussed in the Annual Information Form of the Company dated June 11, 2018 in the section entitled "Risk Factors", under Pure Gold’s SEDAR profile at www.sedar.com.
Although Pure Gold has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Pure Gold disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise unless required by law.
3 Historic drill hole results and production figures and other details from the Madsen and Starratt-Olsen mines disclosed in this document were completed prior to the implementation of National Instrument 43-101. A full discussion and cautionary language can be found in the Madsen Technical Report, which can be found on Pure Gold’s website at www.puregoldmining.ca or profile on SEDAR at www.sedar.com.
4 See the National Instrument 43-101 technical report entitled “Technical Report for the Madsen Gold Project - Restated Preliminary Economic Assessment and Initial Satellite Deposit Mineral Resource Estimates” with an effective date of December 14, 2017 for complete details, available on the Company’s website at www.puregoldmining.ca or SEDAR profile at www.sedar.com.
Source:Pure Gold Mining Inc