Mr. Darin Labrenz reports
PURE GOLD COMMENCES PRELIMINARY ECONOMIC ASSESSMENT AT MADSEN
Pure Gold Mining Inc. has initiated a preliminary economic assessment of the company's 100-per-cent-owned Madsen gold project, in Ontario's Red Lake mining district. The PEA will provide a base-case assessment of near-term development opportunities utilizing existing mining infrastructure, including the permitted mill and tailings facility, to develop the existing near-surface mineral resource. The objective of this study is to maximize the value of existing mine infrastructure while minimizing preproduction capital costs. Completion of the PEA is expected in the second quarter of 2016.
"The Madsen gold project is a unique Canadian-based asset with a history of high-grade production, an in situ high-grade gold resource, mining infrastructure, and permitted milling and tailings facilities. The completion of an assumed 500-tonne-per-day base-case development scenario will be a stepping stone as we target resource growth through our accelerated exploration program," said Darin Labrenz, president and chief executive officer of Pure Gold. "Our team has been conducting scoping-level mine design using the existing mineral resource and are investigating a development scenario utilizing a dedicated haulage ramp."
Nordmin Engineering Ltd., mining services division, in Sudbury, Ont., has been contracted to work with the company's technical team on the PEA. Nordmin will report on the scoping-level capital costs, operating costs and project economics associated with the potential development of the Madsen mineral resource. The PEA will consider and make recommendations based upon:
- Estimated minable tonnes and grade based on the ramp-accessible portion
of the mineral resource;
- Detailed mine design utilizing the existing surface portal, phased
expansion of the related ramp and mechanized underground mining
- Mill production assumed to be approximately 500 tonnes per day using the
existing milling and tailings facility; and a review of throughput
- A review of milling performance and metallurgical recovery based on
existing mill records;
- A review of the company's existing permits, including the environmental
compliance approval which allows for operation of a 1,089-tonne-per-day
mill and carbon-in-pulp circuit with discharge of treated tailings
to the existing tailings facility;
- A proposed work program to continue advancing the project.
Concurrent with the PEA, Pure Gold is conducting a two-rig, 16,000-metre diamond drilling program designed to test and advance new interpretations of near-surface high-grade targets in close proximity to the historic mine. Initial results from the continuing program designed to test the McVeigh horizon, which only saw limited historic mining to 230 m depth, have recently returned values such as 16.0 grams per tonne gold over seven metres in hole PG16-058. These drill results support the company's interpretation that the McVeigh horizon hosts broad shoots of high-grade gold mineralization with significant expansion potential. This phase 1 drilling program is continuing and is expected to continue until June, 2016.
The historic Madsen mine operated for over 36 years with historic production of 2.5 million ounces grading 9.9 g/t gold. The Austin horizon was the principal source of mine feed for the Madsen mine and was mined from surface to a depth of 1,200 metres at a rate of 170,000 ounces of gold per 100 vertical metres. The Madsen gold project hosts an operational head frame, a permitted mill and tailings facility, and access to power, water and labour.
The Madsen gold project currently has an indicated resource of 928,000 ounces gold at 8.93 g/t Au (in 3.24 million tonnes) and an inferred resource of 297,000 ounces gold at 11.74 g/t Au (in 790,000 tonnes). The mineral resource is based on 13,624 drill holes, the majority being underground holes evenly dispersed throughout the mineral resource, and a robust geologic model based on 27 levels of geological mapping and sampling.
In addition to the mineral resource, the Madsen gold project hosts a number of highly prospective new discoveries. These discoveries include the Fork zone and Russet South targets where drilling in 2015 returned 15.0 g/t gold over five metres from hole PG15-028 and 39.1 g/t gold over 2.9 metres from hole PG15-031. Pure Gold believes the opportunity exists to advance these near-surface, high-grade exploration targets through the application of modern exploration science and a new understanding of the district.
Qualified persons and National Instrument 43-101 disclosure
Darren O'Brien, PGeo, vice-president, exploration, for the company, the designated qualified person for this news release within the meaning of National Instrument 43-101, has reviewed and verified that the technical information contained herein is accurate and approves of the written disclosure of same.
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