By the end of the first quarter, emerging gold producer Pure Gold Mining had progressed with several ramp-up initiatives, including operating the milling facility at its PureGold mine, in Ontario, at greater than 75% of nameplate capacity.
The company reports that on multiple consecutive days, the facility operated at greater than 800 t/d and registered peak daily throughput of 897 t/d.
Pure Gold says gold recoveries have been “exceptional and consistent” throughout the ramp-up period, averaging 95%, in line with expectations.
With the milling facility now fully ramped-up, the company’s focus will shift to aligning the mill throughput with the rate of ore production from underground as the mine continues to access higher-grade ore and progress toward steady state production.
In addition, during the first three months, Pure Gold entered into a binding letter agreement with its principal lending partner – Sprott Private Resource Lending II.
Following the terms of the amendment, the original credit agreement dated August 2019 will be amended to provide for an increase to the aggregate principal amount of debt of up to $20-million, with $12.5-million to be available to Pure Gold upon closing and the remainder to be available upon satisfaction of certain conditions.
The amendment will also provide for the deferral of cash interest payments until June 30.
All other key terms and conditions of the amendment are substantially the same as for the 2019 agreement.
The amendment, which remains subject to TSX-V approval, will see Pure Gold pay to Sprott an amount equal to 4% of the additional debt made available to it, payable in shares.
Pure Gold president and CEO Darin Labrenz says with the mill ramp-up effectively complete, the company can now focus its attention solely on ramping up the mine and accessing high-grade ore from multiple declines where it is making progress.
“The additional $12.5-million will ensure the PureGold mine continues its ramp-up phase with maximum financial flexibility, whilst the remaining $7.5-million can be accessed if needed to provide additional liquidity.”
He adds that the term and repayment schedule matches Pure Gold’s expected grade and production growth over the coming years as it gets into the heart of the orebody and continues to execute on its organic growth strategy.
Sprott managing partner Narinder Nagra says that as one of the largest investors dedicated to the natural resource sector, Sprott is excited to continue its partnership with Pure Gold. “We look forward to continuing to work with the management team on the PureGold mine, one of the premier gold assets in Canada.”