13:47:33 EDT Thu 28 Mar 2024
Enter Symbol
or Name
USA
CA



Pure Gold Mining Inc
Symbol PGM
Shares Issued 135,855,854
Close 2016-08-12 C$ 0.75
Market Cap C$ 101,891,891
Recent Sedar Documents

Pure Gold continues Madsen exploration in Q1

2016-08-12 18:20 ET - News Release

Mr. Darin Labrenz reports

PURE GOLD REPORTS FIRST QUARTER FINANCIAL RESULTS

Pure Gold Mining Inc. has released financial results and operating highlights for the three months ended June 30, 2016, as well as an update on activities at the company's 100-per-cent-owned Madsen gold project.

Financial and operating highlights through and subsequent to June 30, 2016:

  • Madsen exploration: During the quarter, the company continued with its exploration program at Madsen, testing the Austin and McVeigh horizons. Drilling for most of the quarter was accomplished using two drill rigs, with a third rig added just before quarter-end.
  • Completion of flow-through share financing: On June 8, 2016, the company closed a bought deal private placement whereby the company raised gross proceeds of $6.3-million through the issuance of 8,334,000 flow-through common shares at a price of 75 cents per flow-through common share. The funds raised are sufficient to complete the company's planned exploration activities for the balance of 2016.

Selected financial data

The selected financial data herein are derived from the company's unaudited condensed interim consolidated 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 three months ended June 30, 2016. These documents can be found on the company's website or on SEDAR.

 
                       FINANCIAL HIGHLIGHTS
                                                         Three months ended   
                                                               June 30,
                                                           2016        2015
    
Net loss and comprehensive loss for the period       $2,792,592  $1,531,393 
Basic and diluted loss per share                          $0.02       $0.01   
                                                      =========   =========

Net loss for the three months ended June 30, 2016, totalled $2.8-million compared with $1.5-million for the same period in the prior year. The most significant contributors to the loss for the periods ended June 30, 2016, and 2015, were: (i) exploration and evaluation expenditures, (ii) wages, consulting and directors fees, (iii) investor relations and communication expenditures, (iv) office and rent expenses, (v) professional fees, and (vi) non-cash share-based compensation expense. Explanations for material variances are described below.

Exploration and evaluation expenditures increased to $3.0-million for the three months ended June 30, 2016, compared with $1.1-million for the same period in the prior year. The three months ended June 30, 2016, saw a significant expansion of exploration activities at Madsen compared with the prior year. In the prior year, the company was concluding a winter drill program and reducing activity at site due to financial constraints. In fiscal 2017 to date, the company has completed both a flow-through share financing and the sale of non-core assets to Premier Gold Mines Ltd., resulting in an improved financial situation allowing the company to proceed with an aggressive exploration program at Madsen.

Wages, consulting and director fees increased to $300,000 for the three months ended June 30, 2016, from $200,000 in the comparative period, primarily due to the payment of severance costs to the company's former vice-president, exploration.

Investor relations and communication totalled $100,000 for the three months ended June 30, 2016, compared with $45,669 for the same period in the prior year. During the three months ended June 30, 2016, the company increased its marketing activities in conjunction with an increased gold price and renewed investor interest in the gold sector.

Professional fees increased to $100,000 in the three months ended June 30, 2016, from $1,789 in the comparative period, primarily due to costs related to the closing of the sale of surface rights for the Buffalo claims to Premier.

Share-based compensation expense decreased to $46,428 for the three months ended June 30, 2016, compared with $100,000 in the same period in the prior year, reflecting fewer options vesting in the first quarter of fiscal 2017 compared with the comparative period. In addition, the forfeiture of 291,668 unvested options during the quarter ended June 30, 2016, resulted in a reversal of share-based compensation expense. There were no forfeitures of options for the same period in the prior year.

For the three months ended June 30, 2016, the company included a realized gain of $700,000 within other income on the sale of 1,001,720 shares of Premier, which was considered an available-for-sale investment. This gain includes $500,000 previously classified as other comprehensive income, which was reclassified to profit and loss upon disposal of the investment.

The company currently has approximately $12.1-million in cash and short-term investments.

Exploration at Madsen

A $9.1-million exploration program is continuing at Madsen, which began in May and is expected to be completed December, 2016. It includes 30,000 metres of drilling, targeting the McVeigh and Austin horizons, as well as approximately 5,000 metres of drilling targeting exploration targets, including Russet South. The program will also entail continuing environmental monitoring, rehabilitation and tailings dam inspections, and opening and inspection of the historical McVeigh decline to allow for underground mapping and sampling of the McVeigh horizon.

The company spent a total of $3.0-million on exploration during the three months ended June 30, 2016, compared with a budget of $2.7-million. The increase from budget is a result of an acceleration of the program from its original plan, including bringing in additional drill rigs. A total of 15,126 metres were drilled during the period targeting the McVeigh and Austin horizons near the historical Madsen mine site.

Significant results obtained from drilling during the three months ended June 30, 2016, and subsequent to quarter-end from the McVeigh and Austin horizons, include (1):

  • An intersection of 10.3 grams per tonne gold over 3.2 metres in hole PG16-060, including 50.8 g/t gold over 0.6 metre;
  • An intersection of 11.0 g/t gold over 5.9 metres, 30.0 g/t gold over 1.0 metre and 10.9 g/t gold over 1.0 metre in hole PG16-071;
  • An intersection of 20.6 g/t gold over 2.0 metres in hole PG16-075;
  • An intersection of 10.9 g/t gold over 9.8 metres in hole PG16-093, including 27.0 g/t gold over 3.8 metres;
  • An intersection of 31.3 g/t gold over 3.7 metres in hole PG16-112, including 54.1 g/t gold over 2.0 metres;
  • An intersection of 14.2 g/t gold over 5.0 metres in hole PG16-122, including 28.5 g/t gold over 2.1 metres;
  • An intersection of 51.9 g/t gold over 1.0 metre in hole PG16-123;
  • An intersection of 26.6 g/t gold over 2.0 metres in hole PG16-124;
  • An intersection of 5.3 g/t gold over 8.5 metres in hole PG16-136, including 24.0 g/t gold over 1.0 metre;
  • An intersection of 21.7 g/t gold over 6.0 metres in hole PG16-148, including 61.8 g/t gold over 2.0 metres;
  • An intersection of 30.7 g/t gold over 3.1 metres in hole PG16-148.

This press release should be read in conjunction with Pure Gold's unaudited condensed interim consolidated financial statements and management's discussion and analysis for the three months ended June 30, 2016. In addition, for further information, please see Pure Gold's annual information form for the year ended March 31, 2016. These documents can be found on the company's website or under the company's profile on SEDAR. Shareholders may receive a printed copy of the audited consolidated financial statements, free of charge, upon request.

About Madsen

The Madsen mine operated for over 36 years with historical production of 2.5 million ounces at an average grade of 9.9 g/t gold. The Madsen gold project hosts a permitted mill and tailings facility, and access to power, water and labour. The Madsen gold project has an indicated resource of 928,000 ounces gold at 8.93 g/t gold (in 3.24 million tonnes) and an inferred resource of 297,000 ounces gold at 11.74 g/t gold (in 790,000 tonnes) (2). The mineral resource is based on 13,624 drill holes, evenly dispersed throughout the mineral resource. A robust geologic model based on 27 levels of geological mapping and chip sampling provides a solid understanding of the geology and continuity of mineralization.

In addition to the mineral resource, the Madsen gold project hosts a number of prospective new discoveries, including the Fork zone and Russet South targets, as well as two significant historical underground mines. Pure Gold believes the opportunity exists to advance these targets through the application of modern exploration science and a new understanding of the district.

Quality assurance/quality control and core sampling protocols

Drill core samples are submitted to ALS Minerals in Thunder Bay, Ont., for sample preparation by crushing to 70 per cent less than two millimetres, a rotary split of one kilogram and pulverization of the split to better than 85 per cent passing 75 microns. Sample pulps are shipped to the ALS assay laboratory in North Vancouver, B.C., for gold analysis with a 30-gram fire assay and AAS finish (code Au-AA23). Samples returning greater than five g/t Au are reassayed with a gravimetric finish (code GRA21). Mineralized zones with visible gold are also analyzed by a one-kilogram screen fire assay with screening to 100 microns. A duplicate 30-gram fire assay is conducted on the screen undersize with assaying of the entire oversize fraction (code Au-SCR21). Control samples (accredited standards and non-accredited blanks) were inserted on a regular basis. Results are assessed for precision on a continuing basis.

Qualified persons and NI 43-101 disclosure

Phil Smerchanski, PGeo, vice-president, exploration, for the company, is the designated qualified person for this news release within the meaning of National Instrument 43-101, and has reviewed and verified that the technical information contained herein is accurate and approves of the written disclosure of same.

Additional information about the company and its activities may be found on the company's website and under the company's profile at SEDAR.

(1) See press releases dated April 4, 2016, May 17, 2016, June 14, 2016, July 14, 2016, and Aug. 9, 2016, available on the company's website or under its SEDAR profile for further details of the results obtained from the McVeigh horizon drilling.

(2) See the National Instrument 43-101 technical report entitled "Technical report on the preliminary economic assessment for the Madsen gold project," prepared by Nordmin Engineering Ltd., dated effective April 20, 2016. Mineral resources are not mineral reserves and do not have demonstrated economic viability.

We seek Safe Harbor.

© 2024 Canjex Publishing Ltd. All rights reserved.