Pure Gold Mining Inc (TSX.V:PGM) (LSE:PUR) (OTCMKTS:LRTNF) has moved closer to realising cashflow from its exciting Madsen Red Lake gold mine in Ontario and has begun construction.
In a statement on Monday, the Vancouver-based firm revealed it had now awarded the surface engineering and procurement (E/P) contract to JDS Energy & Mining (JDS), in partnership with Hatch Ltd (Hatch) and Knight Piesold Ltd (Knight Piesold).
Detailed design work for surface infrastructure has begun, as well as underground electrical distribution, mine ventilation and stope optimization. Also, equipment sourcing and the procurement of long-lead items.
"Today we hit yet another key milestone on our road to near term cash flow,” said Pure Gold president and CEO Darin Labrenz.
"Madsen began as an exploration concept in late 2014, and has evolved into a multi-million-ounce gold deposit that is now under construction as Canada`s highest grade gold development project.
"Along the way, the team has hit every milestone we set from first resource estimate, to early conceptual studies, through a comprehensive feasibility study, an agreement with our First Nation partners, and now a fully funded financing package. Today, as we commence construction, our project is perfectly timed to benefit from a rising gold market, and looks set to generate well over C$800 million in cumulative pre-tax cash flow with gold currently near C$2,000 per ounce.”
Over 4,600 hectares
Madsen spans over 4,600 hectares and houses two former mines, which generated 2.6 million ounces of gold. First gold at the project is earmarked for late 2020.
A feasibility study completed in February this year showed an 800 tonne-per-day underground mine with a life of 12 years, and put the cost of construction and development at C$95 million, including contingency and start-up, and working capital.
Also in today's statement, the firm said it has hired engineering professional Dimitry Demianyuk as project manager for the Madsen Red Lake mine. He will work with VP of operations, Ken Donner, to provide engineering management and project management focused on the optimization of project scope, budget, quality and schedule.
Shares advanced around 9% in London to 39.24p. In Toronto, the stock slipped 1.72% to C$0.57.
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