Pure Gold Mining Inc. [PGM-TSXV; LRTNF-OTC] on Tuesday June 6 said underground drilling continues to successfully delineate initial mining shapes that will underpin the early years of production at the its 100%-owned Madsen Gold Project in Red Lake, Ontario.
“Several mineralized structures have been intersected with exceptional results, establishing both vertical and lateral continuity of high grade gold mineralization, and locally expected to upgrade the mineral resource,” the company said in a press release.
“New ramp development is underway, providing access to these mining shapes and to test mining locations in advance of the planned extraction of a 7,200 tonne bulk sample,” the company said.
Drilling from the recently completed exploration drift targeted a wide mineralized structure within the McVeigh domain, demonstrating good continuity of higher grade gold mineralization, and the results are expected to upgrade the resource in this area.
The company said the importance of this well mineralized structure was highlighted by drill hole PGU-0109, which returned 57.1 g/t gold over 22.1 metres, including 232.4 g/t gold over 5.2 metres, and also including 1,175 g/t gold over 1.0 metres.
This result is the highest grade drill intercept reported by the company to date, and ranks in the top percentile of all assays returned historically from drilling at Madsen.
Investors reacted to the news by sending Pure Gold shares up 3.13% or $0.02 to 66 cents on active volume of 663,205. The 52-week range is 46 cents and 71 cents.
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.
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. A test mining program was scheduled to commence in the second quarter of 2018.