PureGold Secures Financial Agreement with Sprott Resource Lending, Provides Mine Operations Update and Announces Management Change

  • US$6 million additional liquidity and waiver from Sprott Resource Lending
  • Operational turnaround underway; positive site-level cash flow expected by Q3 2022
  • 60,000 metres of definition drilling underpins active six-month mine plan
  • Mark O’Dea assumes the role of Interim President & CEO
  • On track to publish updated Life of Mine plan in Q4 2022

VANCOUVER, B.C. – Pure Gold Mining Inc. (TSX-V:PGM, LSE:PUR) (“PureGold” or the “Company”) is pleased to announce it has entered into an agreement (“Agreement”) with its lending partner, Sprott Private Resource Lending II (Collector), LP (“Sprott”), pursuant to which Sprott has conditionally agreed to:

  1. Provide to PureGold an additional, secured, first-priority, non-revolving credit facility (“Additional Credit Facility”) up to a maximum principal amount of US$6 million; and
  2. Waive any existing defaults under the Credit Agreement, Stream Purchase Agreement, and Production Payment Agreement (“Existing Defaults”) for a period of time ending no later than May 15, 2022 (“Waiver Period”).

Per the Agreement, PureGold has agreed to immediately pursue an equity financing for net proceeds of not less than US$5 million to be received on or before May 15, 2022 (“Equity Raise”).

The Additional Credit Facility is subject to the satisfaction of certain conditions in Sprott’s sole discretion, including: the closing of the Equity Raise by May 15, 2022; delivery to Sprott and acceptance by Sprott of a weekly budget prepared by PureGold covering the period May 15, 2022 to September 30, 2022; execution of definitive documentation; no additional events of defaults other than the Existing Defaults during the Waiver Period; and other conditions. The Additional Credit Facility matures on September 30, 2022 and accrues interest at a rate of 14% per annum.

Chris Haubrich, CFO & VP Business Development of PureGold, stated, “The Additional Credit Facility and support from our lending partner Sprott provides the Company with the liquidity and time needed to maintain the positive momentum of the operational turnaround and optimization initiatives currently underway while, in parallel, we continue working toward updating our Life of Mine plan and evaluating a wide range of strategic and potential financing alternatives.”

Operational Turnaround Plan

Following operational management changes beginning in Q4 2021, PureGold’s new operational leadership team has designed and is accelerating an operational turnaround plan for the PureGold Mine with key objectives as follows:

  1. Fast-track the operation to a state of positive site-level cash flow by Q3 2022;
  2. Ramp up throughput to nameplate capacity (800 tpd) by H2 2022 and continue to grow thereafter; and
  3. Define Life of Mine plan and deliver updated NI 43-101 Technical Report in Q4 2022.

Reduced headcount, rationalized equipment, and optimized underground development initiatives already completed are expected to lead to an approximate 30% reduction in costs in Q2 2022 compared to Q1 2022, and Q3 2022 costs are expected to fall further still. In addition, a new six-month mine plan is underway, which sees production growing steadily from April through September underpinned by 60,000 metres of definition drilling completed since November 2021. Taken together, the production and cost improvement initiatives already completed and underway are expected to see the Company transitioning to a state of positive site-level cash flow by Q3 2022, and, subject to ongoing work in support of the updated Life of Mine plan, to transition to a state of corporate free cash flow by Q1 2023 as the operation ramps up throughput beyond 800 tpd.

Leadership Transition

PureGold Director Mark O’Dea will assume the role of interim President and Chief Executive Officer effective immediately. Troy Fierro has stepped down due to personal health issues. Mr. Fierro will remain a Director of the Company.

Mark O’Dea stated, “On behalf of the Company and Board of Directors, I would like to sincerely thank Troy for his contribution over the past 4 months. He, along with the rest of management has brought focus, creativity, and discipline to the operation. Importantly, the benefits of some of the key initiatives that began several months ago are now being realized leading to reduced costs and increased revenue at our mine.  As interim CEO, I look forward to working more closely with the new team to complete the stabilization plan and get our operation on solid footing.”

Financing Strategy

Based on current cost and revenue projections, the Company anticipates it will need additional capital (in addition to the Additional Debt Facility and Equity Raise) to transition the Company to a state of positive site-level cash flow (expected in Q3 2022) and to complete the updated Life of Mine plan and NI 43-101 Technical Report (expected in Q4 2022). The Company is evaluating a range of strategic and potential financing alternatives to source this capital. There can be no assurance that the Company will be able to satisfy the conditions for the Additional Credit Facility to close or that the Company will be able to close the Equity Raise or obtain the additional financing necessary for it to meet its objectives and to comply with the Credit Agreement and the Additional Credit Facility.

Significant Cost Reductions Completed and Underway

Since February 2022, the Company has reduced its workforce by approximately 20% from 340 employees down to 275. In April 2022, the Company transitioned to a campaign milling schedule, which will see the mill operating for two out of every four weeks temporarily to save costs by aligning with near-term mine production forecasts. The mill will gradually return to a full-time schedule as mining production increases. Drilling has been scaled back to two rigs, which is sufficient to continue aggressive growth of inventory of high-confidence stopes ahead of mining. Lastly, development of the Main Ramp has been temporarily paused with resources reallocated to near-term production and development areas. The Main Ramp is currently at a depth of approximately 500 metres below surface, which is several hundred metres below near-term mining areas; as such, temporarily pausing ramp development will not constrain ore mining or definition drilling in the near-term. To date, the operating plus sustaining capital cost saving initiatives already in effect represent approximately $4 million or 30% in monthly savings for Q2 as compared to Q1 2022. In H2 2022, the Company expects to further reduce costs by another $1 million per month by realizing savings associated with the installation of the on-site camp, renegotiating key supply agreements, and further optimization of the workforce and overtime management.

New High-Confidence Six Month Mine Plan

A new six-month mine plan for the period April to September 2022 has been completed recently and is underway, which will see the PureGold Mine produce ore at an average rate of 615 tpd and average grade of 5.4 g/t Au, yielding 2,500 to 4,100 ounces of gold per month trending upward over the period. The new mine plan is based on a drilled inventory of over 140,000 tonnes of ore at a grade of 5.2 g/t Au which is the direct result of approximately 60,000 metres of definition drilling completed since November 2021. Despite ongoing definition drilling activity since November 2021, only now are the benefits of this investment beginning to be realized. This six-month plan, underpinned by this densely drilled inventory, is the most confident mine plan the Company has produced to date. More than 80% of the stopes in the plan have an average drill spacing of less than 6 metres and all stopes have an average spacing less than 10 metres. The Company expects to continue growing its inventory of high confidence material over the coming months as definition drilling continues, leading to a 12-month plan by mid-year. Further, the Company expects the efficiency of its definition drilling program to continue to improve and costs to reduce over time as results are returned and processes are correspondingly improved.

Further Optimization

In H2 2022, the PureGold Mine is expected to continue to increase throughput and ramp up toward 800 tpd and eventually 1,000 tpd while continuing to improve cost performance. Further optimization initiatives that will support these outcomes include: improving mobile equipment availability; transitioning to efficient sill mining; mining a higher proportion and greater quantity of high-grade, high-confidence stopes; improving basic mine services including ventilation, electrical, compressed air, and water management, and most importantly continuing improving overall mine planning integration.

Beyond the current six-month plan, the Company expects to transition out of the McVeigh domain and into other zones including Austin and South Austin, which are generally higher grade and less complex compared to McVeigh. This transition is expected to drive further improvements in production, costs, and profitability.

Defining the Life of Mine Plan

The Company remains on track to release an updated Mineral Resource, Mineral Reserve, and Life of Mine plan summarized in an updated NI 43-101 Technical Report by Q4 2022. Work in support of these updates is underway. The updated Life of Mine plan will set out the Company’s vision for developing, operating, and potentially expanding the PureGold Mine based on all available data and operating experience to date.

Leading up to the revised Life of Mine plan, the Company and its consultants are conducting several strategic trade-off studies including a comparison of continuing to ramp down to higher grade zones at depth (including 8 Zone) versus accelerating rehabilitation of the existing 1,275-metre-deep shaft to access the higher grade zones faster than ramp access, and be able to mine more cheaply than ramp access, albeit at an assumed higher upfront capital cost. Updates on these studies and their outcomes will be provided as information becomes available.

Qualified Persons and 43-101 Disclosure

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 very 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 historically produced 2.6 million ounces of gold and currently hosts a Mineral Reserve of 1.0 million ounces grading 9.0 g/t gold within a 2.1 million ounce Indicated resource grading 8.9 g/t gold plus another 0.5 million ounce Inferred resource grading 7.7 g/t gold. The gold resource is centered on a forty-seven square kilometre property with significant discovery potential. PureGold’s strategy is to pursue operational excellence today while investing in systematic exploration and phased expansions to fuel discovery and growth for the future.1

Additional information about the Company and its activities may be found on the Company’s website at and under the Company’s profile at

  1. For further information, see the technical report titled “Madsen Gold Project Technical Report Feasibility Study for the Madsen Deposit,  Red Lake, Ontario, Canada” with an effective date of February 5, 2019, and dated July 5, 2019 (the “Feasibility Study”), for further information please see or under the Company’s Sedar profile at



     “Mark O’Dea”        

Mark O’Dea, President & CEO

Investor inquiries:

Adrian O’Brien,

Director, IR & Communications
Tel: 604-809-6890




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 expectations regarding increasing ore throughput and timing of inventory; expectations regarding the new management team’s success in improving production and costs to the point of generating positive corporate cash flow in 2022; closing of debt financing, credit facility and equity financing announced April 22, 2022, future compliance with the Credit Facility and the Additional Credit Facility; 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; 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


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.