Mr. Darin Labrenz reports

PURE GOLD REPORTS SECOND QUARTER FINANCIAL RESULTS AND GRANTS DEFERRED SHARE UNITS

Pure Gold Mining Inc.'s unaudited condensed interim consolidated financial statements for the second quarter ended June 30, 2020, and the accompanying management's discussion and analysis are available for download on the company's website and under the company's SEDAR profile.

Financial and operating highlights for the quarter and to date

During the three months ended June 30, 2020, and up to the date of this news release, the company significantly advanced activities at its 100-per-cent-owned Pure Gold Red Lake mine project (RL mine project). A summary of the highlights for the three months ended June 30, 2020, and subsequent period to date is as follows.

• Receipt of amended environmental compliance approval (ECA) -- air and noise.

During the quarter, the company received the first of three significant amended permits/approvals for the RL mine project. The Ontario Ministry of the Environment, Conservation and Parks (MECP) has approved and issued an amended environmental compliance approval for air and noise for the project.

The amended ECA sets out operating conditions relating to air and noise emissions for the Pure Gold mining and milling operations, including all ancillary and support processes and activities, at a production limit of up to 1,089 tonnes of gold ore processed per day.

The company now awaits amendment of the industrial effluent permit (ECA industrial sewage works). Initial regulatory review is complete, and the company has applied for an expedited approval of this permit amendment.

The company has also filed its closure plan amendment and is awaiting approval before posting the necessary financial assurance.

• Development of the RL mine project continues.

The development of the RL mine project is continuing at a rapid pace. Engineering is substantially complete, and drawing packages have been issued for the majority of engineering components. The procurement of major equipment is 95 per cent complete, and the company remains on track to bring first ore to the mill before year-end.

• Completed flow-through-share financing to allow for the continuation of exploration drilling.

On June 17, 2020, Pure Gold announced that it closed a non-brokered private placement of 9,868,421 common shares of the company that qualified as flow-through shares for the purposes of the Income Tax Act (Canada) at a price of $1.52 per FT share, for gross proceeds to Pure Gold of $15-million. Subsequent to the private placement, Eric Sprott was the back-end buyer of all of the FT shares, increasing his ownership position in the company to 11.9 per cent.

The company commenced a 33,600-metre diamond drill program to expedite the growth of mineral resources and aggressively expand new high-grade discoveries. The program includes 28,200 metres of surface drilling, targeting Wedge and other regional exploration targets to satisfy its flow-through-share obligations, as well as 5,400 metres of underground exploration drilling. In addition, the company will perform a 2-D seismic survey over the North Madsen/Derlak claims and over the 8-zone.

• Raised $13.5-million from the exercise of share purchase warrants.

During the quarter and subsequent to quarter-end, Pure Gold raised approximately $13.5-million from the exercise of share purchase warrants with a strike price of 85 cents, representing 100 per cent of the warrants that otherwise would have expired May 24, 2020, and the partial exercise of warrants expiring July 18, 2022.

The company remains fully financed through construction of the RL mine.

• Announced significant results from underground drilling.

In July, 2020, Pure Gold announced that underground exploration drilling, initiated in June, intersected high-grade gold mineralization from both infill and stepout drill holes. Drilling has extended gold mineralization out from planned stopes, has discovered new gold zones that will be integrated into the mine plan and has confirmed stopes scheduled for near-term production (1).

Drilling results highlights (1):

• 46.7 grams per tonne gold over 7.0 metres from drill hole PGU-0118, including 193.5 g/t gold over 1.0 metre;
• 57.0 g/t gold over 1.0 metre from drill hole PGU-0121;
• 15.8 g/t gold over 2.3 metres from drill hole PGU-0117;
• 7.2 g/t gold over 5.0 metres from drill hole PGU-0113, including 22.3 g/t gold over 1.0 metre;
• 12.8 g/t gold over 10.0 metres from drill hole PGU-0136, including 20.1 g/t gold over 5.0 metres;
• 9.3 g/t gold over 2.4 metres from drill hole PGU-0123, including 16.2 g/t gold over 1.1 metres;
• 10.6 g/t gold over 2.0 metres from drill hole PGU-0124.

Selected financial data

The attached selected financial data are derived from the company's 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 six months ended June 30, 2020.

                                          FINANCIAL HIGHLIGHTS

                                                              For the three months                For the six months
                                                                 ended June 30,                      ended June 30, 
                                                             2020             2019             2020             2019

Total revenue                                                   -                -                -                -
Exploration expenditures                             $0.1-million     $2.0-million     $0.2-million     $3.6-million
Change in fair value of derivatives                 $10.9-million                -     $0.4-million                -
Net loss and comprehensive loss for the period       $9.7-million     $4.0-million     $1.0-million     $6.9-million
Basic and diluted (loss) per share                         ($0.03)          ($0.02)          ($0.00)          ($0.03)

                        ADDITIONAL HIGHLIGHTS 

                           As at June 30, 2020         As at Dec. 31, 2019

Total assets                    $197.3-million              $130.6-million
Current liabilities              $20.1-million                $8.2-million
Non-current liabilities         $104.9-million               $72.8-million
Cash dividends declared                      -                           -

Grant of deferred share units

The company has granted 100,000 deferred share units to a director of the company.

This press release should be read in conjunction with Pure Gold's condensed interim consolidated financial statements and management's discussion and analysis for the six months ended June 30, 2020. In addition, for further information, please see Pure Gold's annual information form for the fiscal period ended Dec. 31, 2019. 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.

Qualified persons and National Instrument 43-101 disclosure

Darin Labrenz, PGeo, president and chief executive officer 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.

(1) See press releases dated July 7, 2020, and July 28, 2020, available at the Pure Gold website under the company's SEDAR profile for further details about these drill results.

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