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Pure Gold starts PEA on Madsen project, in Ontario’s Red Lake district

3rd March 2016

By: Henry Lazenby

Creamer Media Deputy Editor: North America

  

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TORONTO (miningweekly.com) – TSX-V-listed Pure Gold Mining has started a preliminary economic assessment (PEA) of its fully owned Madsen gold project, in Ontario’s Red Lake mining district, which had previously produced 2.5-million ounces of gold at a grade of 9.9 g/t.

The Vancouver-based explorer advised that the PEA would provide a base case assessment of near-term development opportunities leveraging existing mining infrastructure, including the permitted mill and tailings facility, to develop the existing near-surface mineral resource.

The objective of this study, to be undertaken by Sudbury-based Nordmin Engineering in collaboration with the company’s technical team, would be to increase the value of existing mine infrastructure while reducing preproduction capital costs.

“The completion of an assumed 500 t/d base-case development scenario will be a stepping stone as we target resource growth through our accelerated exploration programme. Our team has been conducting scoping-level mine design using the existing mineral resource and is investigating a development scenario using a dedicated haulage ramp,” stated president and CEO Darin Labrenz on Thursday.

The Madsen project comprised an operational head frame, a permitted mill and tailings facility and access to power, water and labour.

The project currently held an indicated resource of 928 000 oz of gold grading 8.93 g/t (in 3.24-million tonnes) and an inferred resource of 297 000 oz gold grading 11.74 g/t (in 790 000 t). The mineral resource was based on 13 624 drill holes, the majority being underground holes evenly dispersed throughout the mineral resource, and a robust geologic model based on 27 levels of geological mapping and sampling.

In addition to the mineral resource, the Madsen project hosted a number of prospective new discoveries including the Fork Zone and Russet South targets, where drilling in 2015 returned 15 g/t gold over 5 m from hole PG15-028 and 39.1 g/t gold over 2.9 m from hole PG15-0313.

Pure Gold believed the opportunity existed to advance these near-surface, high-grade exploration targets through the application of modern exploration science and a new understanding of the district.

In parallel with the PEA, Pure Gold would also conduct a two-rig, 16 000 m diamond drilling campaign, designed to test and advance new interpretations of near-surface high-grade targets, located close to the historic mine.

While historic production over a 36-year period mainly targeted the Austin horizon and was mined from surface to a depth of 1 200 m at a rate of 170 000 oz of gold per 100 vertical metres, initial results from the ongoing exploration programme designed to test the McVeigh horizon, which only saw limited historic mining to 230 m depth, had recently returned values such as 16 g/t gold over 7 m in hole PG16-0581.

These drill results supported the company’s interpretation that the McVeigh horizon hosted broad shoots of high-grade gold mineralisation, with significant expansion potential. This Phase 1 drilling programme was ongoing and expected to continue until June.

The PEA was expected to be complete by the second quarter.

Edited by Samantha Herbst
Creamer Media Deputy Editor

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