Pure Gold Mining Inc (CVE:PGM) (LON:PUR) (OTCMKTS:LRTNF) said the latest drilling at Wedge Zone at its flagship Madsen project in Red Lake, Ontario, has further underlined the potential of the mine currently being built there.
Ongoing drilling has doubled the strike length of the zone and significantly, extended the gold system at Madsen to a total of seven kilometres, the Vancouver-based company said in a statement.
Notable results included a 90-metre northeast step-out on the Wedge deposit, which hit near surface, high-grade gold in one hole, returning 24.4 grams per ton (g/t) gold over 1 metre.
In another hole was 11.7 g/t gold over 1 metre and 5.1 g/t of the yellow metal over seven metres in another hole.
"From day one our mandate has been discovery, delineation and resource conversion to give investors a full and current picture of the value that underpins Pure Gold and our platform for growth," Darin Labrenz, the president and CEO of Pure Gold, told investors on Tuesday.
"At a gold price of US$1,500, and without consideration of new mineral resources at Fork, Wedge or Russet South, our project has a current after-tax net present value of C$390 million and internal rate of return of 51%."
The firm's Madsen project in Ontario 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 and construction has begun, the firm has said.
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.
Labrenz said today that the Madsen Red Lake project was a 'dynamic' one and the Wedge Zone results were just "part of the picture".
"Today’s results showcase the tremendous potential of the Madsen mineral system to continue to grow, by nearly doubling the strike length of Wedge and by extending the gold structural corridor that controls the Madsen orebody to seven kilometres.
"Importantly, these results continue to support our record of discovery to mineral resource in a phased approach to bring a brand new, fully funded mine to life.”
The Wedge zone is an extension of the Madsen orebody and shares the same alteration, timing and structural controls. It was discovered in early 2018.
Initial work by Pure Gold quickly established an indicated resource in the area after just nine months' drilling of 322,000 tonnes grading 10.3 g/t gold and an inferred resource of 307,000 tonnes grading 8 g/t gold over a partially tested strike length of 620 metres.
Current drilling continues to infill within this footprint with a goal of upgrading resources from inferred to indicated, and expanding inferred resources, while step-out drilling is targeting new zones of mineralization.
Shares in London ticked up 1.37% to 37p, while in Toronto they added 1.72% to C$0.59 on the day.
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