Pure Gold Mining Inc (CVE:PGM) (LON:PUR) told investors that first gold at its fully funded Red Lake mine in Ontario was only 'months away' as it updated on measures it was taking amid the global coronavirus (COVID-19) pandemic and also posted full-year results.
The Madsen mine is set to be Canada's next large scale producer and is on track to be completed later this year. The firm says it has adequate funding to complete construction and start producing the yellow metal.
In August last year, the firm announced a US$90 million project finance package based on a feasibility study pitched at US$1,275 per ounce and an exchange rate that translates to a Canadian dollar gold price of C$1,700 per ounce.
"Today, gold prices have rallied to a record around C$2,300/oz, which translates directly to the bottom line, resulting in the potential to add nearly C$600 million in undiscounted pre-tax free cash flow over the life of mine," noted Darin Labrenz, the mine developer's president and CEO.
Underground development has been started and is ahead of schedule, while surface work is also well underway, he added.
Labrenz did note though that coronavirus has impacted company activity.
"We are closely monitoring the rapidly changing COVID-19 pandemic situation and will adjust plans and schedules as necessary based on the safety guidelines outlined by the Provincial and Federal Governments as well as the Public Health Agency," he said.
The group has implemented measures and processes in both its Vancouver office and at Red Lake.
Existing major permit amendments and the filing of additional minor permits are on track to support the production schedule.
Pure Gold said it has around C$64.6 million in cash and an undrawn debt facility of US$55 million (around C$77 million at current exchange rates).
For the year to end December, in keeping with a firm at this stage, Pure Gold Mining posted a net loss of around C$21.8 million, versus a loss of C$21.9 million in 2018.
Madsen is the highest-grade underground development project in Canada and ranks 11th out of 132 projects globally.
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