Emerging miner Pure Gold Mining (TSXV: PGM; LSE: PUR) has introduced first ore to the mill at its PureGold mine in Red Lake, Ontario. With first gold production expected later this month, the company will moving on to a full-scale ramp up of the mining and milling activities in the next quarter.
“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,” Darin Labrenz, the company’s president and CEO, said in a news release. “We have taken the PureGold mine from our first drill hole to production in less than six years.”
There are over 21,000 tonnes of broken ore available at the site and, with the ore now in the grinding circuit, crushing has started. The initial ore feed was at a rate of approximately 25 tonnes per hour (or 600 tonnes per day). The mills have operated, for limited periods, at their nameplate capacity of 800 tonnes per day without any operational problems.
The comminution step is followed by gravity concentration to recover free-milling gold and then pre-oxidation, leaching, a carbon-in-pulp circuit as well as electrowinning and refining to produce gold dore -first gold is still expected before the end of this year. The grinding, gravity and CIP circuits are operating as expected and activities are now focused on optimizing the instrumentation and controls of the mill process systems.
On the underground development front, PureGold has approved and collared a second ramp at the northeast end of the mine. The East portal and its associated ramp are expected to provide a second mining centre and provide access to stopes in the east end of the mine 12 months earlier than anticipated by the feasibility mine plan, while also improving productivity and providing an opportunity for a potential mine expansion. The second ramp is also anticipated to allow the company to access higher-grade ore to increase cash flows in the early years of mine life.
With an Amended Environmental Compliance Approval (ECA) for industrial sewage works and an amended ECA for air and noise emissions, Pure Gold is permitted for production.
The PureGold mine is the second operating mine in the Red Lake area and currently employs over 200 people, with the workforce expected to average 350 over its 12-year, first phase operations.
The company currently has $58 million in cash.
“With first ore to the mill delivered on time and on budget, the Red Lake mine is one step closer to representing one of very few operations to come online within North America over the last few years, and we note that the operation, which is located in the prolific Red Lake Mining Camp (30+ million oz. gold produced over the past ~ 85 years), represents one of the highest-grade large-scale gold projects within North America (fifth in Canada and sixth in North America),” Geordie Mark of Haywood Securities commented in a research note to clients.
“The focus now turns to commissioning activities as the company transitions into full-scale commercial gold production, which is expected to be achieved over the coming quarter. As such, our forecasts assume 2021 to reflect a full year of gold production, with an estimated output of 81,000 oz. at an AISC of US$920 per oz.”
The analyst has a price target on the company of $3.50 per share and a BUY rating. At presstime in Toronto Pure Gold was trading at $2.89 per share within a 52 week trading range of 38 cents and $3.07. The company has about 394 million common shares outstanding for a market cap of about $1.2 billion.
An earlier version of this article first appeared in the Canadian Mining Journal, part of Glacier Resource Innovation Group.