Pure Gold Mining Inc. [PGM-TSXV] on Wednesday April 11 said drilling continues to reinforce the current resource and expand the mineralized zones at its 100%-owned Madsen Gold Project in Red Lake, northern Ontario.
Investors reacted to the news, sending Pure Gold shares up 4.5% or $0.03 to 69 cents on active volume of 908,931.
Recent drilling, designed to test the resource in close proximity to the Madsen ramp, continues to exceed expectations with several drill holes intersecting multiple lenses of high grade gold mineralization, the company said.
“Notably, underground drilling continues to enhance and better define proposed stope shapes targeted for the first years of production,” it said.
Highlights from the recent drilling program are as follows:
- Infill drilling has been designed to test and more clearly define stope shapes in close proximity to the company’s planned test mining and bulk sample locations
- Multiple new unground drill holes have expanded the known mineralization outside the current resource, including:
- 8 g/t gold over three metres
Infill drilling has confirmed planned stope shapes and indicates the presence of higher than expected grades in these areas, including:
- 2 g/t gold over 7 metres.
The Madsen Gold Project boasts production of 2.5 million ounces between 1938 and 1976. The project benefits from existing infrastructure, including a mill and tailings facility, paved highway access, and access to power, water and experienced labour.
It is situated in the Red Lake area, an established mining district with more than 29 million ounces of high grade gold production to date.
Last year, the company achieved several key milestones at the Madsen Project, including completion of an updated mineral resource report. This resulted in an indicated resource of 1,648,000 ounces gold at 8.9 g/t gold (in 5.79 million tonnes) and an inferred resource of 178,000 ounces gold at 9.4 g/t gold (in 0.59 million tonnes) at a cut-off grade of 4 g/t gold.
The company also reopened and reconditioned the Madsen underground ramp, installing new ground support, water line, mine air heating and ventilation, power line construction and commissioning and communications infrastructure.
It also completed a Preliminary Economic Assessment (PEA) in September 2017. The PEA estimates that the project can support a mine life of 14 years with annual production in years three through nine of approximately 75,500 ounces. Peak annual production is expected to be 85,000 ounces.
The life of mine operating cash cost, plus sustaining cost is estimated at US $714/oz of gold recovered.
“Underground drilling continues to demonstrate the strength of our gold system at Madsen,” said Pure Gold President and CEO Darin Labrenz. “As with our previously released underground drill results from the Madsen ramp area, these latest results have surpassed our expectations, with multiple drill holes returning exceptional widths and grades,” he said.
“In addition to expanding and enhancing the resource, these results will be used to finalize stoping areas that will form part of our test mining program scheduled to commence in the second quarter of 2018.”
Labrenz went on say that these stope shapes are designed to provide simple ramp accessible production in the early years of operation when capital payback is most important.
The company said 33,000 metres of diamond drilling has been budgeted for early 2018 with drilling focused on expanding known resources and the discovery of new gold deposits.