Pure Gold inches closer to production at Madsen mine
Canadian junior Pure Gold Mining (TSX-V: PGM) has reached a new milestone at its Madsen project in northwestern Ontario’s Red Lake district by publishing a preliminary economic assessment that gives the underground mine 14 years of productive life.
In addition, the Vancouver-based miner has identified specific exploration targets and potential optimization opportunities that could further enhance the economics of the project.
The PEA suggests Madsen’s economics can be further improved as there’s more gold to be found on the property.
Analyst Tara Hassan, from Raymond James, said in a note to investors Thursday that the Madsen PEA update, prepared by Nordmin Engineering, shows notable upside from her firm’s assumptions, while still presenting further opportunities for optimization.
“If Pure Gold is able to define a resource of scale at these targets, we expect the company could drive further gains as this could contribute to an even larger project,” she wrote.
Shares jumped on the news, trading 3.23% higher in Toronto to Cdn 64 cents at 11:45am ET.
The current resource base is 1.6 million ounces of gold in the indicated category and 178,000 ounces inferred.
The PEA indicates there’s more gold to be found with exploration drilling taking place above and below ground to follow gold extensions off the main resource, to find new gold zones on the property, and in calculating the resource within some satellite deposits.
Madsen, considered by the company one of the highest grade undeveloped gold deposits in the world, is host to two former gold mines, including the past-producing Madsen Mine, which generated 2.4 million ounces of gold at an average grade of 9.9 grams gold per tonne. Existing infrastructure includes a permitted 550-tonne-per-day mill and tailings facility.
Details in the press release: