Mr. Darin Labrenz reports

PURE GOLD PROVIDES UPDATE ON MINE CONSTRUCTION AND REPORTS FINANCIAL RESULTS FOR YEAR-ENDED DECEMBER 31, 2019

Pure Gold Mining Inc. has provided the following update on mine construction activities at its Pure Gold Red Lake mine, as well as released its year-end 2019 financial and operating results. The company has made available its audited financial statements and related management's discussion and analysis for the year ended Dec. 31, 2019, available on SEDAR and its website.

"Ensuring the health and safety of our employees, contractors and the communities in which we operate is our highest priority," said Darin Labrenz, president and chief executive officer. "The outbreak of COVID-19 has changed the way we operate, and we have implemented measures and processes in both our Vancouver office and in Red Lake to ensure the right protocols and precautionary measures are in place. We are closely monitoring the rapidly changing COVID-19 pandemic situation and will adjust plans and schedules as necessary based on the safety guidelines outlined by the provincial and federal governments, as well as the Public Health Agency."

Mr. Labrenz continued: "In August, 2019, we announced a $90-million (U.S.) project finance package and construction decision for the Pure Gold Red Lake mine. This decision was based on our robust 2019 feasibility study, which was completed at $1,275 (U.S.) per ounce of gold and an exchange rate that translates to a Canadian-dollar gold price of $1,700 per ounce. Today, gold prices have rallied to a record approximately $2,300 per oz, which translates directly to the bottom line, resulting in the potential to add nearly $600-million in undiscounted pretax free cash flow over the life of mine. Our team has rapidly come together to commence underground development safely and ahead of schedule. With surface work also well under way, we look forward to opening a brand new, high-grade gold mine in Red Lake, marking the first step on our path to become Canada's next large-scale, iconic gold producer."

The Pure Gold Red Lake mine is fully financed to production, and construction is well advanced. Over the last year, the Pure Gold team has seamlessly shifted from exploration to development and, today, is on the cusp of production with first gold pour only months away. In the process, the company has completed an updated mineral resource estimate, a definitive feasibility study, formalized a relationship with our first nation partners, executed a project finance package with enough flexibility to allow for risk-lowering capital investment decisions, and commenced both surface and underground construction. A summary of some of the key developments is highlighted herein.

Site operations team

On average, the mine is projected to employ approximately 340 employees and deliver over $467-million in direct salaries over the life of the mine. To date, the company has recruited approximately 60 individuals in key positions, including management, technical staff, supervisors and operators, and has made placements in safety, environmental and administration services with the vast majority of new staff already resident in, or committing to relocate to, the Red Lake region. Numerous contractors, including experienced first nation and local contractors, have been engaged in the development of the mine to date.

Surface infrastructure upgrades

Significant earthworks, road and utility infrastructure upgrades, the installation of new equipment, and the erection of new buildings to support mine operations have been completed at site. Major earthworks include the establishment of a new mine rock management facility, the completion of site haulage roads and the development of a new portal laydown area. New structures include an administration complex, which has been installed, energized and commissioned, as well as a new mill warehouse facility. In the process plant, mechanical/electrical audits and industrial cleaning are complete, utility services have been restored, and electrical systems have been certified. Overhead cranes have been certified for use in the near-term installation of new process equipment in the grinding circuit, gravity circuit and gold room.

Engineering and procurement

Detailed engineering is on track to support the completion of the project as scheduled for late 2020. To date, the company has placed equipment purchase orders, representing approximately 74 per cent of the long-lead items by value, including electrical equipment packages, key gold room equipment, gravity and intensive leach systems, as well as the new ball mill, to provide for planned processing rates of 800 tonnes per day.

Underground development

Preproduction underground ramp development was initiated ahead of schedule and is progressing at an accelerated pace. Since mid-December, approximately 740 metres of development have been completed. Early initiation of ramp development through the company's test mining program and, to date, a 50-per-cent improvement on development productivity from underground provide an opportunity to access key stopes ahead of schedule, optimize the mine plan and provide a larger ore stockpile in advance of mill start-up.

Mine dewatering, continuing since July, 2018, has been accelerated and is well ahead of ramp development.

Permitting

Existing major permit amendments and the filing of additional minor permits are on track to support the production schedule. The permitting process commenced in 2018 with the screening of presubmission supporting studies, following by completion of the project description in 2019. Following the submission of the project description, both federal and provincial authorities confirmed the project will not trigger a new environmental assessment. The company has completed prescreening of major applications with both first nations and Ontario ministries, and, in December, 2019, the company hosted numerous community and first nations consultation meetings on permitting and the amended mine closure plan. There remains strong support from both the local communities and first nations for the development of the project.

Definitive budget

The Pure Gold Red Lake mine is fully financed to production. Given the financial flexibility provided by the 2019 project finance package, the company has been able to capitalize on opportunities to reduce start-up and operational risk, and improve project performance and economics. For example, rather than leasing underground mining equipment for the first two years of production, the company has purchased the mining fleet, thus lowering the overall operating costs during initial development and production. This added $11.5-million to upfront capital costs relative to the feasibility study but was economically prudent.

Other key opportunities for infrastructure improvement were captured in the process plant, where taking previously assumed refurbishment risk was considered unnecessary. The company has elected to replace certain components to maximize mill availability and further minimize risks at start-up. With a new definitive budget of $124.6-million and approximately $27.4-million in capital costs already spent ($97.2-million remaining to be spent), the company has more than adequate financing to complete construction and start gold production. Specifically, it has approximately $64.6-million in cash and an undrawn debt facility of $55-million (U.S.) ($77-million at current exchange rate of $1 (U.S.) to $1.41 (Canadian)).

Financial results for year ended Dec. 31, 2019

Results of operations

The financial data in the attached results of operations table are derived from the company's annual financial statements for the fiscal year ended Dec. 31, 2019, and the nine months ended Dec. 31, 2018, and the year ended March 31, 2018.

                                          RESULTS OF OPERATIONS
 
                                                    For the year ended       For the nine       For the year 
                                                         Dec. 31, 2019       months ended     ended March 31,  
                                                                            Dec. 31, 2018               2018

Total revenue                                                       $-                 $-                 $-
Exploration and evaluation expenditures                      8,860,646         19,360,713         26,343,021
Net loss for the year attributable to shareholders          21,821,835         21,901,184         26,161,068
Total comprehensive loss for the year                       21,821,835         21,901,184         26,161,068
Basic and diluted loss per share                                 (0.07)             (0.09)             (0.13)

Financial position

The financial data in the attached financial position table are derived from the company's annual financial statements for the fiscal year ended Dec. 31, 2019, and the fiscal period ended Dec. 31, 2018.

                            FINANCIAL POSITION

                              As at Dec. 31, 2019        As at Dec. 31, 2018

Total assets                       $130.6-million              $20.9-million
Current liabilities                  $8.2-million               $1.0-million
Non-current liabilities             $72.8-million               $2.4-million
Cash dividends declared                         -                          -

For a detailed discussion of period-over-period variances, please see the company's management's discussion and analysis, available on SEDAR or the company's website.

Qualified persons and National Instrument 43-101 disclosure

Ken Donner, PEng, vice-president, operations, for the company, is 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.

About Pure Gold Mining Inc.

The Pure Gold Red Lake mine is Canada's highest-grade gold mine development project. Fully financed, 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.

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