Pure Gold’s Mad­sen PEA es­ti­mates NPV of $365M

Pure Gold Min­ing Inc.’s Mad­sen PEA es­ti­mates the project has a pre­tax net present value of $365-mil­lion. The project will also have an in­ter­nal rate of re­turn of 54 per cent and pre­pro­duc­tion cap­i­tal ex­pen­di­tures of $51-mil­lion.

Stockwatch Daily - - FRONT PAGE - Mr. Darin Labrenz re­ports

PURE GOLD Min­ing Inc. has re­leased re­sults of a new pre­lim­i­nary eco­nomic as­sess­ment (PEA) on its 100-per-ce nt-owned Mad­sen gold project in the Red Lake min­ing district of On­tario, Canada. The PEA, based on an up­dated re­source es­ti­mate , shows a ro­bust 14-year un­der­ground min­ing op­er­a­tion with highly at­trac­tive eco­nomics at base-case metal prices.

PEA high­lights: Base-case pa­ram­e­ters as­sume a gold price of $1,275 (U.S.) per ounce and an ex­change rate (Cana­dian dol­lars to U.S. dol­lars) of 0.80.

• Pre­tax NPV5 (net present value at a 5-per-cent dis­count) and IRR (in­ter­nal rate of re­turn) of $365-mil­lion and 54 per cent, re­spec­tively, with a 2.7-year pay­back of ini­tial cap­i­tal;

• After­tax NPV5 and IRR of $258-mil­lion and 47 per cent, re­spec­tively, with a 2.8-year pay­back of ini­tial cap­i­tal;

• Mine life is of 14 years with a 12-month pre­pro­duc­tion pe­riod; • Life-of-mine (LOM) di­luted head grade of 10.3 g/t gold;

• Av­er­age an­nual gold pro­duc tion i n years three through nine of ap­prox­i­mately 75,500 ounces, with peak an­nual pro­duc­tion of ap­prox­i­mately 85,000 ounces;

• LOM di­rect op­er­at­ing cash cost is es­ti­mated at $595 (U.S.) per ounce of gold re­cov­ered;

• LOM op­er­at­ing cash cost plus sus­tain­ing cost is es­ti­mated at $714 (U.S.) per ounce of gold re­cov­ered;

• Pre­pro­duc­tion cap­i­tal cost es­ti­mated at $50.9-mil­lion which in­cludes a 15-per-cent con­tin­gency;

• LOM sus­tain­ing cap­i­tal costs es­ti­mated at $134.7-mil­lion which in­cludes a 5-per-cent con­tin­gency.

(See PGM Ta­ble 1 on page 23)

Next steps

Over the com­ing months, the com­pany will be fo­cused on:

• Com­plet­ing a de­tailed project de­vel­op­ment sched­ule which will pro­vide a crit­i­cal path to a pro­duc­tion de­ci­sion;

• Re­source def­i­ni­tion drilling from the Mad­sen ramp;

• Ex­plo­ration drilling from sur­face;

• Re­source mod­el­ling of satel­lite de­posits with a goal of re­leas­ing an up­dated min­eral re­source es­ti­mate for Mad­sen in the fourth quar­ter of 2017;

• Con­tin­u­ing en­vi­ron­men­tal base­line work.

“With a sig­nif­i­cantly ex­panded re­source, ac­cess to in­fra­struc­ture and ex­cep­tional growth po­ten­tial, Mad­sen is one of the out­stand­ing gold de­posits in Canada,” stated Darin Labrenz, pres­i­dent and chief ex­ec­u­tive of­fi­cer of Pure Gold. “The com­pleted study pro­vides a mea­sure of th­ese at­tributes, out­lin­ing a long-life high-mar­gin mine, with low ini­tial cap­i­tal re­quire ments an d a fast time­line to pro­duc­tion. In ad­di­tion, we have iden­ti­fied spe­cific ex­plo­ration tar­gets and po­ten­tial op­ti­miza­tion op­por­tu­ni­ties that could fur­ther en­hance the eco­nomics of the project. We look for­ward to rapidly ad­vanc­ing the Mad­sen gold project to be­come On­tario’s next gold mine.”

We seek Safe Har­bor.

Erika Flores con­densed this news re­lease (erikaf@stock­watch.com).

Le­nard F Bog­gio, Dougald Graeme Cur­rie, Troy John Fierro, Darin Mark Labrenz, Mark Ger­ard O’Dea, Robert Bruce Pease

(PGM) Shares: 191,606,092

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