Canadian miner Pure Gold Mining is seeking to raise C$30-million to get the TSX-V and LSE-listed company “back on track”, COO Terry Smith announced on Friday.
PureGold will raise the finance in a nonbrokered private placement of 200-million units at C$0.15 each. The company’s biggest shareholder, AngloGold Ashanti, has the right to maintain its pro-rata interest of 19.9% on a partially diluted basis.
“This financing will give the company the opportunity to get back on track to becoming a great new mining business in Canada. We have all the ingredients we need to turn around the operation, including a strong geological understanding of the asset, a newly established lower cost base and a talented team that can deliver,” said Smith.
The proceeds of the equity financing will be used to ramp up the PureGold mine, in the Red Lake district, to 800 t/d by the third quarter, reducing operating and sustaining capital costs in the second quarter by at least 30% and achieving sustaining positive site-level cash flow by the third quarter.
“We are excited to get to the third quarter when we’ll be operating a stable, cash-flowing operation, with a new technical report coming soon thereafter, outlining the bright future that the PureGold mine has,” said Smith.
PureGold also announced that Tony Makuch, the former CEO of Kirkland Lake Gold, would join the company as a consultant.
PureGold president Mark O’Dea commented that Makuch’s operational skills in high-grade underground mines, including Red Lake, would add significant bench strength to the firm’s operational team.