With ore delivered and first gold production scheduled this month, commissioning activities will transition into full-scale ramp-up of the mining and milling operations over the coming quarter, the group said.
“This is a very exciting day for our shareholders, the community of Red Lake, and our entire team,” stated Darin Labrenz, president and CEO of PureGold in a statement.
“The introduction of ore to the milling facility reflects the successful culmination of our project build, and signals the commencement of the next chapter in our Company’s evolution as Canada’s newest gold mine. Just last year, we announced our intention to become a producer and we are delivering on that promise, on-track and on schedule for first gold production this month.”
READ: Pure Gold Mining says underground exploration drilling has intersected high-grade gold mineralization near the existing main ramp access
Labrenz added: “We have taken the PureGold Mine from our first drill hole to production in less than six years. Bringing a mine on-stream in 2020 is a firm testament to our incredible team, the support we have received from our First Nations partners; Wabauskang First Nation and Lac Seul First Nation, the Province of Ontario, Municipality of Red Lake, and the entire Red Lake community. We look forward to our first gold pour, making the transition to commercial production and continuing to build and expand the PureGold Mine into an iconic Canadian producer in the heart of Red Lake.”
Chief Doug Riffel of Wabauskang First Nation and Chief Clifford Bull of Lac Seul First Nation commented: “We are very pleased with the development and the ongoing progress we continue to make in our relationship with PureGold. Built on the principles of Environmental Stewardship, Resource Sharing and Mutual Respect, we look forward to a long, mutually beneficial relationship.”
As the second operating mine in Red Lake, the PureGold mine is a major contributor to the economy of the region. The mine currently employs over 200 people and the workforce is expected to average 350 individuals during the twelve-year phase one mine operation with approximately $470 million in life of mine salaries projected over that period.
With over 21,000 tonnes of broken ore available, crushing has commenced and first ore has been introduced to the grinding circuit at a rate of approximately 25 tonnes per hour (600 tonnes per day). The mills have operated for short periods at nameplate capacity of 800 tonnes per day and have done so seamlessly, with no operational issues.
Gravity concentration will recover free-milling gold, followed by pre-oxidation, leaching, carbon in pulp circuit and electrowinning, and refining to produce dore gold, with first gold expected before the end of 2020. With the grinding circuit, gravity circuit and leach / CIP circuit operating as expected, commissioning activities are now focussed on optimization of the instrumentation and controls of the mill process systems.
Focus now on ore development and mining activities
With the commencement of milling operations, underground development will now focus on ore development and mining activities. As at the start of mill operations, a broken ore inventory of approximately 21,000 tonnes is available as mill feed, and a stockpile of ore is expected to be maintained through 2021. In addition to the west portal and ramp, which provides access to the company’s current ore headings, PureGold has approved and collared a second ramp on the northeast end of the mine.
The East Portal and ramp will provide a second mining centre to develop ore headings and will provide access to ore stopes on the east end of the mine approximately 12 months earlier than planned in the feasibility mine plan. This ramp will be driven at 5 metres x 5 metres allowing for improved productivity and providing an opportunity for potential, future mine expansion. Ramp development rates to date, and the addition of the second ramp will increase productivity, provide access to additional stopes ahead of schedule, and will provide an opportunity to focus on higher-grade ore which is anticipated to result in increased cash flow in the early years of mine life.
PureGold also announced that effective as of the market close on December 18, 2020, the company will be added to the GDXJ (VanEck Vectors(R)Junior Gold Miners ETF) which is traded on the NYSE Arca, under the ticker symbol “GDXJ”.
The company remains well-funded for commissioning, ramp-up and ongoing exploration activities. With the receipt in December of $5 million from the exercise of share purchase warrants, it currently has a cash position of $58 million.
In London trading, shares in Pure Gold Mining were nearly 8% higher at 176.50p.
A “considerable achievement”
City of London-based broker Peel Hunt repeated an ‘add’ rating on the UK-traded Pure Gold Mining stock with a price target of 170p.
In a note to clients, the Peel Hunt analysts said: “Having completed funding for the mine in mid-2019, to have rebuilt the process plant and redeveloped the Madsen Red Lake mine is a considerable achievement.”
They added: “We do not think that management will rest on its laurels, rather it will press ahead with exploration works, allowing it to bring forward plant expansion plans quickly. It is also bringing on new gold production from a high-grade operation into a very high gold price environment.”
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— Adds London share price, broker comment —