Pure Gold Reports Second Quarter Financial ResultsAugust 14, 2020
And Grants Deferred Share Units
VANCOUVER, B.C. – Pure Gold Mining Inc. (TSX-V: PGM, LSE: PUR) (“Pure Gold” or the “Company”) is pleased to announce that its unaudited condensed interim consolidated financial statements (“Financial Statements”) for its second quarter ended June 30, 2020 and the accompanying Management’s Discussion and Analysis are available for download on the Company’s website at www.puregoldmining.ca at under the Company’s SEDAR profile at www.sedar.com.
Financial and Operating Highlights for the quarter and to date:
During the three months ended June 30, 2020 and up to the date of this MD&A, the Company significantly advanced activities at its 100%-owned Pure Gold Red Lake Mine Project (“RL Mine Project” or the “Project”). A summary of the highlights for the three months ended June 30, 2020 and subsequent period to date are as follows:
- Receipt of Amended Environmental Compliance Approval (“ECA”) – Air and Noise
During the quarter, the Company received the first of three significant amended permits / approvals for the RL Mine Project. The Ontario Ministry of the Environment, Conservation and Parks (MECP) has approved and issued an Amended Environmental Compliance Approval (“ECA”) for Air and Noise for the Project.
The amended ECA sets out operating conditions relating to air and noise emissions for the PureGold mining and milling operations, including all ancillary and support processes and activities, at a Production Limit of up to 1,089 tonnes of gold ore processed per day.
The company now awaits amendment of the Industrial Effluent permit (ECA Industrial Sewage Works). Initial regulatory review is complete, and the Company has applied for an expedited approval of this permit amendment.
The Company has also filed its Closure Plan amendment and is awaiting approval before posting the necessary financial assurance.
- Development of the RL Mine Project continues
The development of the RL Mine Project is continuing at a rapid pace. Engineering is substantially complete and drawing packages have been issued for the majority of engineering components. The procurement of major equipment 95% complete, and the Company remains on track to bring first ore to the mill before year-end.
- Completed flow through share financing to allow for the continuation of exploration drilling
On June 17, 2020 PureGold announced that it closed a non-brokered private placement of 9,868,421 common shares of the Company that qualified as “flow-through shares” for the purposes of the Income Tax Act (Canada) (the “FT Shares”) at a price of $1.52 per FT Share, for gross proceeds to PureGold of $15,000,000. Subsequent to the private placement, Mr. Eric Sprott was the back-end buyer of all of the FT Shares, increasing his ownership position in the Company to 11.9%.
The Company commenced a 33,600 metre diamond drill program to expedite the growth of mineral resources and aggressively expand new high-grade discoveries. The program includes 28,200 metres of surface drilling targeting Wedge and other regional exploration targets to satisfy its flow through share obligations, as well as 5,400 metres of underground exploration drilling. In addition, the Company will perform a 2D seismic survey over the North Madsen / Derlak claims and over the 8-Zone.
- Raised $13.5 million from the exercise of share purchase warrants
During the quarter and subsequent to quarter end, PureGold raised approximately $13.5 million from the exercise of share purchase warrants with a strike price of $0.85 (the “Warrants”), representing 100% of the Warrants that otherwise would have expired May 24, 2020 and partial exercise of Warrants expiring July 18, 2022.
The Company remains fully funded through construction of the RL Mine.
- Announced significant results from underground drilling
In July 2020, PureGold announced that underground exploration drilling, initiated in June, intersected high-grade gold mineralization from both infill and step-out drill holes. Drilling has extended gold mineralization out from planned stopes, has discovered new gold zones that will be integrated into the mine plan, and has confirmed stopes scheduled for near term production.1
Drilling results highlights:
- 46.7 g/t gold over 7.0 metres from drill hole PGU-0118; including 193.5 g/t gold over 1.0 metre;
- 57.0 g/t gold over 1.0 metre from drill hole PGU-0121;
- 15.8 g/t gold over 2.3 metres from drill hole PGU-0117;
- 7.2 g/t gold over 5.0 metres from drill hole PGU-0113; including 22.3 g/t gold over 1.0 metre;
- 12.8 g/t gold over 10.0 metres from drill hole PGU-0136; including 20.1 g/t gold over 5.0 metres;
- 9.3 g/t gold over 2.4 metres from drill hole PGU-0123; including 16.2 g/t gold over 1.1 metres; and
- 10.6 g/t gold over 2.0 metres from drill hole PGU-0124;
Selected Financial Data
The following selected financial data is derived from our Financial Statements and related notes thereto for the periods indicated, as prepared in accordance with International Financial Reporting Standards. Details of these results are described in the unaudited condensed interim consolidated financial statements and Management’s Discussion and Analysis for the six months ended June 30, 2020.
|For the three months ended June 30, 2020||For the three months ended June 30, 2019||For the six months ended June 30, 2020||For the six months ended June 30, 2019|
|Exploration Expenditures||$ 0.1 million||$ 2.0 million||$ 0.2 million||$ 3.6 million|
|Change in fair value of derivatives||$ 10.9 million||$ —||$ 0.4 million||$ —|
|Net Loss and Comprehensive loss for the period||$ 9.7 million||$ 4.0 million||$ 1.0 million||$ 6.9 million|
|Basic and Diluted Loss per Share||$ (0.03)||$ (0.02)||$ (0.00)||$ (0.03)|
|As at June 30,
|As at December 31, 2019|
|$||197.3 million||$||130.6 million|
|Current liabilities||$||20.1 million||$||8.2 million|
|Non-current liabilities||$||104.9 million||$||72.8 million|
|Cash dividends declared||$||–||$||–|
Grant of Deferred Share Units
The Company has granted 100,000 Deferred Share Units to a director of the Company.
This press release should be read in conjunction with Pure Gold’s Condensed Interim Consolidated Financial Statements and Management’s Discussion and Analysis for the six months ended June 30, 2020. In addition, for further information please see Pure Gold’s Annual Information Form for the fiscal period ended December 31, 2019. These documents can be found on the Company’s website (www.puregoldmining.ca) or under the Company’s profile on SEDAR at www.sedar.com. Shareholders may receive a printed copy of the audited consolidated financial statements, free of charge, upon request.
Qualified Persons and 43-101 Disclosure
Darin Labrenz, P. Geo., President & CEO 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.
The Pure Gold Red Lake Mine is Canada’s highest grade gold mine development project. Fully funded, the project is on track to deliver near term gold production into a rising Canadian gold price environment, with first production scheduled for late 2020. The orebody is situated within a seven- kilometre long gold system that is wide open for expansion at depth and along strike, and multiple discoveries by the Company suggest potential opportunities for near-term growth.
ON BEHALF OF THE BOARD
Darin Labrenz, President & CEO
Adrian O’Brien, Director of Marketing & Communications
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 Pure Gold 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 RL Mine Project, timing of expected production, expected capital costs, expected development schedule 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”, “continue”, “planned”, “expect”, “project”, “predict”, “potential”, “targeting”, “intends”, “believe”, “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”, “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 Pure Gold 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 the interpretation of results at the RL Mine Project; 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 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 26, 2020 in the section entitled “Risk Factors”, under Pure Gold’s SEDAR profile at www.sedar.com.
Although Pure Gold 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. Pure Gold 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.