Pure Gold Mining Inc. [PGM-TSXV] said Wednesday November 28 that it is pleased with the results of a test mining program which has now been completed at its 100%-owned Madsen Gold Project in Red Lake, Ontario.
Pure Gold shares advanced on the news, rising 5.45% or $0.03 to 58 cents. The 52-week range is 46 cents and 71 cents.
During the program, Pure Gold extracted 7,096 tonnes of mineralized material from three distinct stoping areas.
“Results have exceeded expectations, with tonnes, grade and mining width greater than predicted from the resource model,” the company said in a press release on Wednesday.
The former Madsen Mine is situated in the Red Lake area, an established mining district with more than 29 million ounces of high-grade gold production to date.
Madsen 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.
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 was budgeted for early 2018 with drilling focused on expanding known resources and the discovery of new gold deposits. The test mining program was scheduled to commence in the second quarter of 2018.
On Wednesday, the company said the test mining program returned an estimated 56% more gold than predicted from the resource model.
“Overall, an average grade of 10.2 g/t gold was returned from 1,555 muck samples collected during mining of the bulk sample. The average grade of 10.2 g/t gold is a capped, diluted mined grade, which comprises all muck samples from 70 rounds of freshly blasted rock, each of which averaged above cut-off of 4.0 g/t gold.
Underground drilling conducted during test mining defined a third stoping area, resulting in the mining of an estimated 400 additional ounces of gold from 1,575 tonnes grading 8.7 g/t gold.
“Our test mining program has been a rounding success, checking each of the boxes we laid out when we initiated the program earlier this year,” said Madsen President and CEO Darin Labrenz.
“From the first round blasted in the ramp, to the completion of the program in November, our team has demonstrated it can visually identify, and easily follow gold mineralization underground, providing a strong validation of our geologic model,” Labrenz said.
“With test mining now complete, delivering a strong validation of both geologic model and resource, we look forward to finalizing our definitive feasibility study as the next step to building a modern, scalable mining operation at Madsen,” he said.