Mr. Darin Labrenz reports

PURE GOLD DRILLING EXTENDS HIGH GRADE GOLD MINERALIZATION IN THE MCVEIGH HORIZON OVER 200 METRES TO THE SOUTH

Pure Gold Mining Inc. has released results from drilling at the company's 100-per-cent-owned Madsen gold project. These results are from a 77,000-metre diamond drilling program designed to expand the high-grade Austin and McVeigh gold resource, and to test gold mineralization at Russet South and other satellite targets.

Highlights from new drilling include:

• 11.9 grams per tonne gold over two metres in hole PG16-254 (McVeigh);
• 13.5 g/t gold over 4.3 metres in hole PG16-278 (McVeigh);
• Including 55.2 g/t gold over one metre;
• 26.2 g/t gold over 2.7 metres in hole PG16-279 (Austin);
• 19.3 g/t gold over one metre in hole PG16-251 (Russet South);
• 14.4 g/t gold over 1.6 metres in hole PG16-259 (Russet South).

"Drilling conducted by Pure Gold in 2016 has clearly demonstrated that significant mineralization exists well beyond what has been previously mined at Madsen, and we continue to build continuity in multiple targets, all in close proximity to the existing infrastructure," stated Darin Labrenz, president and chief executive officer of Pure Gold. "Our exploration program has resulted in a breakthrough in geologic understanding, genetically and spatially linking what were previously viewed as separate targets, and providing a clear framework for ongoing exploration targeting success. We look forward to a continued focus on resource growth in 2017 as we transition to exploration from both surface and underground."

Drilling within the McVeigh horizon has extended the strike length of mineralization southward, with drill hole PG16-278 intersecting high-grade gold mineralization approximately 200 metres south of any previous mine production from within the McVeigh horizon. Gold mineralization in the McVeigh forms repeating, south-plunging shoots and this hole, indicating another south-plunging shoot, underlines the resource expansion potential in the McVeigh. Current drilling in the McVeigh has also encountered strong alteration at a vertical depth of approximately 600 metres, characterized by strong biotite alteration, pervasive silicification, significant sulphide content and anomalous gold mineralization. Deeper drilling by previous operators anchors the south end of the McVeigh, including hole 16-9500-SW-1-A, which returned 24.3 g/t gold over 1.5 metres, occurring 1.4 kilometres south of the Madsen shaft and at a vertical depth of 750 metres. These holes, together with recent drilling at Starratt and the near-surface southern extension of McVeigh mineralization, highlight the expansion potential of the five-kilometre Starratt-Madsen corridor. Drilling at Russet South, located 1.5 kilometres west of the McVeigh horizon and associated mine infrastructure, also continues to build continuity of the near-surface mineral system which remains open in all directions.

Drill results summary

New assay results from select drill holes are outlined in the table.

                     DRILL RESULTS

Hole ID          From        To     Length      Gold
                   (m)       (m)        (m)     (g/t)
 
PG16-242        498.0     499.0        1.0       4.0
PG16-251         88.4      89.4        1.0      19.3
PG16-253        462.4     463.4        1.0       9.9
                469.6     470.6        1.0       4.6
PG16-254        261.0     263.0        2.0      11.9
PG16-257         17.6      18.1        0.5      17.2
PG16-259        106.4     108.0        1.6      14.4
PG16-260        148.0     152.0        4.0       6.3
PG16-261        280.7     282.6        1.9       3.7
PG16-262        166.5     206.1       39.6       1.4
incl.           177.3     179.3        2.0       6.3
PG16-278         97.0     101.4        4.3      13.5
incl.            99.0     100.0        1.0      55.2
PG16-279         53.0      55.7        2.7      26.2
                150.7     162.0       11.0       2.4

* Assay composites were calculated using uncut 
assays and are reported as drilled widths and 
interpreted to vary between 68 per cent to 100 per 
cent of true widths.

In 2016, Pure Gold completed approximately 78,800 metres of drilling from a total of 237 drill holes. With the 2016 drilling program now complete, drilling will resume in early January, 2017, with four rigs. Results from approximately 7,250 metres of drilling from 15 drill holes are pending.

For overview and detailed long sections highlighting the McVeigh horizon results, and a complete list of 2016 drill results to date, visit the company's website.

About Madsen

The Madsen mine operated for over 36 years with historic 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)(1). 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 current 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 historic 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.

(1) 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.

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 g 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 kg screen fire assay with screening to 100 microns. A duplicate 30 g fire assay is conducted on the screen undersize with assaying of the entire oversize fraction (code Au-SCR21). Control samples (certified standards and uncertified blanks), along with field, prep and pulp duplicates, are inserted on a regular basis.

Qualified persons and National Instrument 43-101 disclosure

Phil Smerchanski, PGeo, vice-president of 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.

We seek Safe Harbor.