Mr. Darin Labrenz reports
PURE GOLD REPORTS THIRD QUARTER FINANCIAL RESULTS
Pure Gold Mining Inc. has released its unaudited condensed interim consolidated financial statements for the third quarter ended Dec. 31, 2017, and the accompanying management's discussion and analysis are available for download on the company's website and under the company's SEDAR profile.
Quarterly highlights and recent developments:
Announced a new discovery (the Wedge Target) south of the existing mine site, adding 1,100 metres of strike length to the Madsen Mine trend, with high grade gold mineralization outcropping at surface and returned from four zones (CK, DV, MJ, and 86), including 33.3 g/t gold over 8.3 metres from hole PG17-467; 21.3 g/t gold over 10.3 metres and 10.7 g/t gold over 4.2 metres returned from drill hole PG17-486, 25.2 g/t gold over 2.1 metres and 22.0 g/t gold over 2.0 metres from drill hole PG17-482 and 27.8 g/t gold over 1.4 metres and 19.4 g/t gold over 2.0 metres from drill hole PG17-4701.
Completed mineral resource estimates from two satellite deposits, Russet South and Fork, at its 100% owned Madsen Gold Project ("Madsen").
New indicated mineral resources at Russet South total 56,000 ounces (259,000 tonnes at an average grade of 6.7 g/t gold) and inferred mineral resources total 71,000 ounces (322,000 tonnes at an average grade of 6.8 g/t gold) at a 4.0 g/t cut-off2;
New indicated mineral resources at Fork total 40,000 ounces (194,000 tonnes at an average grade of 6.5 g/t gold) and inferred mineral resources total 47,000 ounces (255,000 tonnes at an average grade of 5.8 g/t gold) at a 4.0 g/t cut-off2;
The Fork and Russet South deposits have the potential to positively impact annual throughput and the production profile at Madsen.
Commenced a Definitive Feasibility Study ("DFS") on Madsen, with the objective of making a positive production decision by the end of the fourth quarter of calendar 2018. The DFS will determine the optimum mine plan, underground mining methods and mining rate, while leveraging the existing mine infrastructure at Madsen.
Closed a bought deal private placement for aggregate gross proceeds of C$19.2 million upon the issuance of an aggregate of 31,613,292 common shares of the Company. The offering consisted of three tranches. The first tranche consisted of 8,690,000 common shares of the Company that qualify as "flow-through shares" for the purposes of the Income Tax Act (Canada) ("Super FT Shares")3 and were issued at a price of C$0.725 per Super FT Share. The second tranche consisted of 8,061,125 common shares of the Company that qualify as flow-through shares ("FT Shares") and were issued at a price of C$0.64 per FT Share. The third tranche consisted of 14,862,167 common shares of the Company ("Common Shares") and were issued at a price of C$0.52 per Common Share.
Drilling from underground continued to confirm mineralization in the McVeigh and South Austin gold mineralized zones and highlights the expansion potential within the Madsen mineral resource4.
Multiple new drill holes collared from the underground mine workings expanded the known mineralization outside of the current mineral resource, including; 20.0 g/t gold over 3.8 metres from hole PGU-0044; 13.7 g/t gold over 6.8 metres from hole PGU-0033 and 9.1 g/t gold over 6.6 metres from drill hole PGU-0024 within the McVeigh and 10.5 g/t gold over 2.0 metres from PGU-0037 and 11.3 g/t gold over 2.2 metres from PGU-0035 within the South Austin;
Infill drilling confirmed near surface resources in close proximity to the Madsen ramp, with 26.4 g/t gold over 12.7 metres from drill hole PGU-0051; 19.4 g/t gold over 9.8 metres returned from drill hole PGU-0028 and 15.4 g/t gold over 4.0 metres from drill hole PGU-0042 in the McVeigh Zone.
Continued with underground infrastructure work at the Madsen Ramp and initiated development work to access a 7,200 tonne bulk sample from the Madsen deposit.
Selected Financial Data
The following selected financial data is derived from our 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 and nine months ended December 31, 2017. These documents can be found on the Company's website (www.puregoldmining.ca) or on SEDAR at www.sedar.com. All dollar figures are expressed in Canadian $.
Three months endedDecember 31Nine months endedDecember 31
2017 2016 2017 2016
Net Loss for the period $ 3,975,538 $ 6,907,596 $ 18,964,129 $ 17,027,032
Exploration and Evaluation expenditures$ 5,371,902 $ 5,570,608 $ 18,723,755 $ 15,324,095
Total Comprehensive Loss for the period$ 3,975,538 $ 6,907,596 $ 18,964,129 $ 17,477,806
Basic and diluted loss per share $ 0.02 $ 0.04 $ 0.10 $ 0.11
December 31, 2017($) March 31, 2017($)
Cash and short-term investments$ 14,879,993 $ 16,531,815
Working capital $ 12,133,682 $ 13,153,928
Total assets $ 31,674,158 $ 35,311,795
Current liabilities $ 3,413,527 $ 5,103,527
Non-current liabilities $ 2,390,517 $ 2,529,001
Shareholders' equity $ 25,870,114 $ 27,679,267
This press release should be read in conjunction with Pure Gold's Interim Financial Statements and Management's Discussion and Analysis for the three and nine months ended December 31, 2017. In addition, for further information please see Pure Gold's Annual Information Form for the year ended March 31, 2017. These documents can be found on the Company's website (www.puregoldmining.ca) or under the Company's profile on SEDAR at www.sedar.com. Shareholders may receive a printed copy of the audited consolidated financial statements, free of charge, upon request.
The Madsen Gold Project has historic production of 2.5 million ounces of gold and remains one of the highest-grade, undeveloped gold projects in the world5. With an indicated resource of 1,744,000 ounces gold at 8.7 g/t gold (in 6.2 million tonnes) and an inferred resource of 296,000 ounces gold at 7.9 g/t gold (in 1.2 million tonnes)6, Madsen benefits from existing infrastructure including a mill and tailings facility, paved highway access, and access to power, water and experienced labour. A feasibility study is underway with results expected in the fourth quarter of 2018 and the Madsen Gold Project is firmly on the path to becoming Ontario's next gold mine.
QA/QC and Core Sampling Protocols
Drill core samples are bagged and sealed and submitted to SGS in Red Lake, Ontario for sample preparation by crushing to 75% less than 2mm, a riffle split of 1kg, and pulverization of the split to better than 85% passing 75 microns. Gold analysis is completed in the SGS Red Lake lab with a 30g fire assay and AAS finish (code GE-FAA313). Samples returning >5 g/t Au are re-assayed with a gravimetric finish (code GO-FAG303). Mineralized zones with visible gold are also analyzed by a 1kg screen fire assay with screening to 106 microns (code GO-FAS51K). Two 30g fire assays are conducted on the screen undersize and combined with an assay of the entire oversize fraction. Control samples (accredited standards and non-accredited blanks) were inserted on a regular basis. Results are assessed for accuracy, precision and contamination on an ongoing basis.
Qualified Persons and 43-101 Disclosure
Phil Smerchanski, P. Geo., Vice President, Exploration for the Company, is the designated Qualified Person for this news release within the meaning of National Instrument 43-101 ("NI 43-101") and has reviewed and verified that the technical information contained herein is accurate and approves of the written disclosure of same.
ABOUT PURE GOLD
Our mandate is pure and simple. To dream big. To colour outside the lines. To use smart science and creativity to unlock the next major gold discovery at the Madsen Gold Project in Red Lake, Ontario. And become Canada's next iconic gold company.
Additional information about the Company and its activities may be found on the Company's website at www.puregoldmining.ca and under the Company's profile at
1 See press release dated January 31, 2018 for further details about these drill intercepts, available on the Company's website at www.puregoldmining.ca or under the Company's SEDAR profile at www.sedar.com.
2 See the technical report titled "Technical Report for the Madsen Gold Project - Restated Preliminary Economic Assessment and Initial Satellite Deposit Mineral Resource Estimates", available on the Company's website at www.puregoldmining.ca or the Company's SEDAR profile at www.sedar.com.
3 For Super FT shares, the Company has committed to conducting work from surface to ensure qualifying expenditures qualify for federal tax credits, whereas the commitment for FT shares was for the work to qualify as qualifying resource expenditures only.
4 See press releases dated February 13, 2018, and November 16, 2017 for further details on exploration drill results released during the quarter available on the Company's website at www.puregoldmining.ca or under the Company's SEDAR profile at www.sedar.com. .
5 Historic drill hole results and production figures and other details from the Madsen and Starratt-Olsen mines disclosed in this document were completed prior to the implementation of National Instrument 43-101. A full discussion and cautionary language can be found in the National Instrument 43-101 Technical Report entitled "Technical Report for the Madsen Gold Project - Restated Preliminary Economic Assessment and Initial Satellite Deposit Mineral Resource Estimates" with an effective date of December 14th, 2017, which can be found on Pure Gold's website at www.puregoldmining.ca or profile on SEDAR at www.sedar.com.
6 See the technical report titled "Technical Report for the Madsen Gold Project - Restated Preliminary Economic Assessment and Initial Satellite Deposit Mineral Resource Estimates", available on the Company's website at www.puregoldmining.ca or the Company's SEDAR profile at www.sedar.com.
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