Pure Gold Mining Inc (TSX-V:PGM, LSE:PUR, OTC:LRTNF) has reaffirmed third quarter 2022 guidance and announced that gold production in August 2022 set a new monthly record for the PureGold Mine, driven by record ore throughput and improved grades.
The company said both the August ore throughput of 25,188 tonnes or 813 tonnes per day (tpd) and gold production of 4,595 ounces represent monthly records for the mine to date. Ore throughput of 24,052 tonnes in July was also a monthly record until being broken in August, it added.
The increase in average ore throughput in the third quarter to date of 794 tpd compared to the second quarter average of 500 tpd has been driven primarily by improved short-range planning processes, improved mining execution, and increased mill availability, it added.
These fundamental improvements are expected to continue to support strong and increasing production going forward, with the company's near-term target being to increase ore throughput towards 1,000 tpd.
READ: Pure Gold Mining continues in bid to lift output and lower costs as it posts second quarter results
Pure Gold said the head grade in August of 5.9 grams per ton (g/t) gold (Au) increased by 90% compared to July at 3.1 g/t Au. This improvement was driven by an increase in mill feed from high-grade stopes.
Recent improvements to mine planning practices have established a drilled inventory of high-grade stopes to help optimize grades and production. Additionally, the company said it expects grades to continue to increase as mining continues to transition into higher-grade Austin and South Austin Zones.
With September production forecasts largely underpinned by a robust drilled inventory, the company said it remains on track to achieve its previously stated third quarter production guidance of 775-875 tpd at 4.0-5.0 g/t Au. The company noted that it has not previously provided monthly results and does not intend to do so on a regular basis but is nevertheless providing data for July and August to support the reaffirmation of guidance for the third quarter of 2022.
Definition drilling and planning activities are currently focused on production for November and December. The company said it expects to disclose actual production for the third quarter and production guidance for the fourth quarter by early October.
Pure Gold said that the updated Life-of-Mine plan and Pre-Feasibility Study remain on track for release in Q4 2022 and it remains on track to file an updated Technical Report in respect of the updated Mineral Resource Estimate announced August 10, 2022, by September 25, 2022.
Cost Update
Pure Gold said its site-level operating plus sustaining capital costs are expected to be in the range of $9.5 million to $10.5 million per month for the third quarter. Costs at these levels are in line with costs in the second quarter of 2022 and represent an absolute reduction of approximately 25% and a cost-per-tonne reduction of approximately 50% compared to the first quarter of 2022.
Several opportunities to further reduce costs are currently underway or have been completed including replacing rentals and contractors with more permanent solutions and completing key infrastructure upgrades including the new camp, new electric compressors, and a new mine air heater, the company added.
Further opportunities have been identified and are now expected to be implemented in early 2023. This represents a slight delay from prior disclosure of implementation by the end of 2022. The estimated amounts for these further opportunities remains unchanged from prior disclosure at savings of $1 million per month (approximately 10%) compared to third quarter costs. These and other longer-term savings opportunities are expected to be identified and incorporated into the Updated Life-of-Mine plan, Pure Gold said.
The company noted that it currently has $6 million in cash, with its cash balance unchanged from the previous disclosure on August 15 and has been stable since late July.
Shares of Pure Gold were up almost 29% in afternoon trading in Toronto at nearly C$0.14.
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Pure Gold is a Canadian gold mining company, located in the very heart of Red Lake, Canada.
Contact the author at jon.hopkins@proactiveinvestors.com