TIDMPUR
RNS Number : 5309V
Pure Gold Mining Inc.
10 August 2022
NEWS RELEASE 22-20
August 10 , 2022
PureGold Announces Updated Mineral Resource Estimate for
PureGold Mine
-- Multi-million-ounce, high-grade gold deposit reaffirmed by SRK
-- Updated Life of Mine plan remains on track for release in Q4 2022
VANCOUVER, B.C. - Pure Gold Mining Inc. (TSX-V:PGM, LSE:PUR)
("PureGold" or the "Company"), today announced an updated Mineral
Resource Estimate ("MRE"), prepared by SRK Consulting (Canada) Inc.
("SRK") in accordance with the National Instrument 43-101 Standards
of Disclosure for Mineral Projects ("NI 43-101") for its 100% owned
PureGold Mine near Red Lake, Ontario. With an effective date of
December 31, 2021, this updated MRE ("Updated MRE") replaces the
previous MRE dated February 2019 ("2019 MRE").
The Updated MRE is described in Table 1 below and includes:
-- 1.65 million ounces of gold at 7.4 grams per tonne ("g/t")
within 6.9 million tonnes in the Indicated Mineral Resource
category, and
-- 0.37 million ounces of gold at 6.3 g/t within 1.8 million
tonnes in the Inferred Mineral Resource category.
The updated MRE will form the basis of a new Pre-Feasibility
Study and updated Life of Mine plan, also being completed by SRK,
which is expected to be released in the fourth quarter of 2022.
Mark O'Dea, President & CEO of PureGold, stated: "The
thorough independent review and update led by SRK shows that the
PureGold Mine remains underpinned by a multi-million-ounce high
grade gold resource. The Updated MRE is based on a combination of
deep geological understanding, closely spaced drilling, and
first-hand observations of stope scale shapes and continuity. The
team is confident that the forthcoming updated Pre-Feasibility
Study and Life of Mine plan will demonstrate the near-term
potential of the PureGold Mine and lay the foundation for future
growth."
Table 1: Mineral Resource Statement for the PureGold Mine by
Zone, with an effective date of December 31, 2021
Classification Deposit - Zone Tonnes Gold Grade (g/t) Gold Troy Ounces
Indicated Madsen - Austin 4,147,000 6.9 914,200
------------------ ---------- ----------------- -----------------
Madsen - South
Austin 1,696,000 8.7 474,600
----------------------------------- ---------- ----------------- -----------------
Madsen - McVeigh 388,700 6.4 79,800
----------------------------------- ---------- ----------------- -----------------
Madsen - 8 Zone 152,000 18.0 87,700
----------------------------------- ---------- ----------------- -----------------
Fork 123,800 5.3 20,900
----------------------------------- ---------- ----------------- -----------------
Russet 88,700 6.9 19,700
----------------------------------- ---------- ----------------- -----------------
Wedge 313,700 5.6 56,100
----------------------------------- ---------- ----------------- -----------------
Total Indicated 6,909,900 7.4 1,653,000
----------------------------------- ---------- ----------------- -----------------
Inferred Madsen - Austin 504,800 6.5 104,900
------------------ ---------- ----------------- -----------------
Madsen - South
Austin 114,100 8.7 31,800
----------------------------------- ---------- ----------------- -----------------
Madsen - McVeigh 64,600 6.9 14,300
----------------------------------- ---------- ----------------- -----------------
Madsen - 8 Zone 38,700 14.6 18,200
----------------------------------- ---------- ----------------- -----------------
Fork 298,200 5.2 49,500
----------------------------------- ---------- ----------------- -----------------
Russet 367,800 5.8 68,800
----------------------------------- ---------- ----------------- -----------------
Wedge 431,100 5.7 78,700
----------------------------------- ---------- ----------------- -----------------
Total Inferred 1,819,300 6.3 366,200
----------------------------------- ---------- ----------------- -----------------
Mineral Resource Statement Notes
-- Mineral Resources are not Mineral Reserves and do not have
demonstrated economic viability. There is no certainty that all or
any part of the Mineral Resources will be converted into Mineral
Reserves in the future.
-- Mineral Resources are stated as undiluted tonnes and grade
above a 3.38 g/t gold cut-off grade captured within Mineable Stope
Optimizer ("MSO") shapes (see description below) and have been
adjusted to account for all mining depletion to the end of December
2021, and exclude material within a 2-metre buffer applied to the
hanging wall and footwall of mined stope voids and a 20-metre crown
pillar. All quantities are rounded to the appropriate number of
significant figures; consequently, sums may not add up due to
rounding.
For an overview long section image of the new block model for
the PureGold Mine (Figure 1), click here:
https://www.puregoldmining.ca/wp-content/uploads/2022/08/Figure-1-2022-PureGold-Mine-Resource-Block-Model-Long-Section.pdf
For an example image of the new geologic domain models for the
PureGold Mine (Figure 2), click here:
https://www.puregoldmining.ca/wp-content/uploads/2022/08/Figure-2-2022-PureGold-Mine-Resource-Domains-Rotated-Plan.pdf
Key Highlights of the Updated MRE
-- 77 new sub-domain wireframes were constructed with the
specific aim of capturing new deeper understanding of the
mineralized lenses.
-- Capping levels were carefully determined for each of the
sub-domains independently to maintain tight control over extreme
high-grade values, which are not uncommon in this deposit, but had
their range of influence substantially restricted.
-- A multi-pass estimation strategy was employed requiring
multiple assay composites from multiple drillholes to estimate
block grades. A key level of confidence was introduced by
restricting reported resources to only those tonnes captured within
a mineable stope optimization ("MSO") process. This type of tool is
becoming more commonly applied to underground resources to meet the
Reasonable Prospects for Eventual Economic Extraction ("RPEEE")
requirement in the CIM guidelines.
Summary Comparison of the Updated MRE with the 2019 MRE
The Updated MRE incorporates several updates to the methodology
and input assumptions which collectively result in an estimate that
the Company believes is more robust overall and aligns more closely
with actual mining to date. The understanding of this deposit has
been an iterative process over the past several years and has been
informed by a vast geological dataset which includes over 1,700 new
diamond drill holes and 40,000 new underground chip sample and test
hole results and is supported by 18 months of continuous mining
operations and underground development.
Indicated Mineral Resource Updated MRE 2019 MRE
Tonnes 6,909,900 7,196,000
------------ ----------
Gold Grade (g/t) 7.4 8.9
------------ ----------
Gold Troy Ounces 1,653,000 2,063,000
------------ ----------
Inferred Mineral Resource Updated MRE 2019 MRE
Tonnes 1,819,300 1,880,000
------------ ----------
Gold Grade (g/t) 6.3 7.7
------------ ----------
Gold Troy Ounces 366,200 467,000
------------ ----------
Updated Pre-Feasibility Study and Life of Mine Plan and
Transition to Austin and South Austin Zones
The Company remains on track to release a new Pre-Feasibility
Study and updated Life of Mine plan ("Updated PFS") by Q4 2022
which is also being led by SRK. The Updated PFS will incorporate
several ongoing trade-off studies and will identify the best
value-maximining path forward for the Company.
The Company is nearing the completion of mining in the McVeigh
Zone and is currently transitioning operations into the Austin and
South Austin Zones. Austin and South Austin together account for
89% of the PureGold Mine's contained gold ounces in the Indicated
Resource category (see Table 1) and are characterized by simpler
geometries (see Figure 2) and higher grades than McVeigh (see
Figure 1). The Company expects operational performance to improve
during this transition into higher grades, greater continuity and
simpler stope geometries.
Updated Mineral Resource Estimation
Grade estimation for the Madsen deposit was conducted using
Maptek's Vulcan software and employed a multi-pass estimation
strategy and block size of 5x3x5m (sub-blocked to 0.5m resolution
for volumetric reconciliation). Gold grade estimation was based on
capped 1.5m composited assay data, with capping thresholds assessed
for each of the mineralization sub-domains separately. As well,
mineralization continuity and variogram analysis was assessed for
each mineralization domain. All mineralization domain boundaries
were treated as hard boundaries during the estimation process.
Where localized grade control information (chip and test hole
samples) were available from mined production areas, a localized
search radius was used to constrain the area of influence of these
samples to a 7.5x5x7.5m search radius. All other blocks in the
mineral resource model were estimated from only diamond drill hole
assay samples.
Grade estimation for the Fork, Russet and Wedge deposits was
conducted using Seequent's Leapfrog Edge software and also employed
a multi-pass estimation strategy and block size of 5x3x5m
(sub-blocked to sub 0.5m resolution for volumetric reconciliation).
Gold grade estimation was based on capped 2m composited assay data,
with capping thresholds assessed for each mineralization domain.
All mineralization domains were treated as hard boundaries during
the estimation process. Mineral Resources were estimated solely
from diamond drill hole assays.
Classification of Resources
The Updated MRE comprises Indicated and Inferred Mineral
Resources, with no Measured Resources. Mineral Resources were
classified as Indicated Mineral Resources if they were estimated
with multiple drillholes, a minimum of 8 composites, and an average
drillhole spacing less than 25m. All other blocks were classified
as Inferred. To address the RPEEE, Mineral Resources were
constrained using a MSO tool which generated optimized stope shapes
using an assumed gold price of US$1800/ounce, a mining recovery of
95.0%, metallurgical recovery of 95.0%, and successive MSO runs at
stope heights of 3, 6, and 12 metres. Operating cost assumptions
include mining cost of $108.60/tonne ("t"), processing cost of
$73.30/t, and General & Administrative ("G&A") costs of
$54.10/t. Mineral Resources are stated as undiluted tonnes and gold
grade above a 3.38 g/t cutoff.
Geologic Model
The PureGold Mine is developed on a structurally-controlled
Archean orogenic gold system hosted in the same stratigraphic units
and sharing the same alteration zonation and deformation history as
other gold deposits in the Red Lake Mining District and also
similar to many other major Archean-aged global gold districts. The
deposit is hosted in several large zones developed along large
multi-kilometer alteration and deformation corridors which host
numerous gold occurrences and which the company believes have
substantial exploration potential. Seven corridors have been
identified through re-logging of core and mapping and the majority
of the Updated MRE is hosted in portions of two of these. New
mineralization domains modelled by SRK within these two corridors
incorporate vein geometries encountered during drilling and mining
of the deposit (Figure 2).
Updated Technical Report
The effective date of the updated Mineral Resource Estimate is
December 31, 2021. A NI 43-101 Technical Report prepared by SRK
will be filed on SEDAR within 45 days of this news release and will
be available at that time on the Company website. This is expected
to be followed by Pre-Feasibility study results, including a new
life of mine plan, and supporting technical report in the fourth
quarter of 2022.
Qualified Persons and NI 43-101 Disclosure
The Mineral Resource Estimate was prepared by Cliff Revering,
P.Eng., CPAG, BE, Principal Consultant (Geological Engineering),
SRK Consulting (Canada) Inc., an independent Qualified Person in
accordance with the requirements of National Instrument 43-101 ("NI
43-101") and Mr. Revering has approved the disclosure herein.
Christopher Lee, P.Geo., Chief Geoscientist for the Company, is
a Qualified Person within the meaning of NI 43-101 and supervised
the geologic modelling which formed the basis of the resource
estimation.
Terrence Smith, P.Eng. Chief Operating Officer for the Company,
is the designated Qualified Person for this news release within the
meaning of National Instrument 43-101 ("NI 43-101") and has
reviewed and verified that the technical information contained
herein is accurate and approves of the written disclosure of
same.
About Pure Gold Mining Inc.
PureGold is a Canadian gold mining company, located in the heart
of Red Lake, Ontario, Canada. The Company owns and operates the
PureGold Mine, which entered commercial production in 2021 after
the successful construction of an 800 tpd underground mine and
processing facilities. The PureGold Mine is centered on a
forty-seven square kilometre property with significant discovery
potential.
Additional information about the Company and its activities may
be found on the Company's website at www.puregoldmining.ca and
under the Company's profile at www.sedar.com
ON BEHALF OF THE BOARD
"Mark O'Dea"
Mark O'Dea, President & CEO
Investor inquiries:
Adrian O'Brien,
Director, IR & Communications
Tel: 604-809-6890
aobrien@puregoldmining.ca
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release.
All statements in this press release, other than statements of
historical fact, are "forward-looking information" with respect to
PureGold within the meaning of applicable securities laws,
including, but not limited to statements with respect to those that
address proposed timing of development plans for the PureGold Mine,
including the proposed updated NI 43-101 Technical Report and
timing and content of such Technical Report, including the life of
mine plan; expectations regarding the effectiveness of new
initiatives to improve stope access and result in increased
throughput, improved grades and reduced costs in 2022; achievement
of minimum targets with respect to ore production, average head
grade and reduction in monthly operating costs by the end of 2022
compared to 2021; potential for extending the mine life of the
PureGold Mine; the timing and results of the new Pre-Feasibility
Study and updated Life of Mine Plan; the potential to convert
resources to reserves; the transition of mining from the McVeigh
Zone to the South Austin and Austin Zones; and potential for
additional resources and expansion of known deposits and potential
for making new discoveries and the focus of the Company in the
coming months . Forward-looking information is often, but not
always, identified by the use of words such as "seek",
"anticipate", "plan", "progress", "confirms", "continue",
"planned", "expect", "expectations", "expand", "enhanced",
"increasing", "optimize", "project", "predict", "potential",
"supports", "targeting", "intends", "believe", "improved",
"potential", and similar expressions, or describes a "goal", or
variation , of such words and phrases or state that certain
actions, events or results "may", "should", "confirms", "could",
"would", "might" or "will" be taken, occur or be achieved.
Forward-looking information is not a guarantee of future
performance and is based upon a number of estimates and assumptions
of management at the date the statements are made including, among
others, assumptions about future prices of gold and other metal
prices, currency exchange rates and interest rates, favourable
operating conditions, political stability, obtaining governmental
approvals and financing on time, obtaining renewals for existing
licences and permits and obtaining required licences and permits,
labour stability, stability in market conditions, availability of
equipment, accuracy of any mineral resources, successful resolution
of disputes and anticipated costs and expenditures. Many
assumptions are based on factors and events that are not within the
control of PureGold and there is no assurance they will prove to be
correct.
Such forward-looking information, involves known and unknown
risks, which may cause the actual results to be materially
different from any future results expressed or implied by such
forward-looking information, including, risks related to liquidity
and the Company's ability to continue as a going concern; mine
closure and rehabilitation; failure to achieve estimates or
material increases in costs; history of net losses and negative
operating cash flow, indebtedness; interpretation of results at the
PureGold Mine complex, including reserve and resource estimates may
prove to be incorrect ; changes in project parameters as plans
continue to be refined; current economic conditions; future prices
of commodities; possible variations in grade or recovery rates; the
costs and timing of the development of new deposits; failure of
equipment or processes to operate as anticipated; the failure of
contracted parties to perform; the timing and success of
exploration and development activities generally; delays in
permitting; possible claims against the Company; the timing of
future economic studies; labour disputes and other risks of the
mining industry; delays in obtaining governmental approvals,
financing or in the completion of exploration as well as those
factors discussed in the Annual Information Form of the Company
dated March 30, 2022 in the section entitled "Risk Factors", under
PureGold's SEDAR profile at www.sedar.com .
Although PureGold has attempted to identify important factors
that could cause actual actions, events or results to differ
materially from those described in forward-looking information,
there may be other factors that cause actions, events or results
not to be as anticipated, estimated or intended. There can be no
assurance that such information will prove to be accurate as actual
results and future events could differ materially from those
anticipated in such statements. PureGold disclaims any intention or
obligation to update or revise any forward-looking information,
whether as a result of new information, future events or otherwise
unless required by law.
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