The latest news and a construction update on Pure Gold Mining's Canadian project are provided in an Echelon Wealth Partners report.
In a March 30 research note, Echelon Wealth Partners analyst Ryan Walker reported that Pure Gold Mining Inc. (PGM:TSX.V; PUR:LSE) remains on schedule for first gold production in late 2020 at its Red Lake project in Ontario.
"We highlight the potential for the mine to begin ramping up production amid our expectations of a stronger post-COVID-19 gold price environment," added Walker.
He relayed what recently happened with the Red Lake project and its current status in terms of development.
As for the financial aspect of Red Lake, Pure Gold updated the definitive budget for it to $124.6 million, up from $95 million in the 2019 feasibility study, relayed Walker. Also, the Vancouver-headquartered company opted for replacing versus refurbishing mill components to maximize availability and minimize startup risks, and that will cost $18.1 million.
As for progress with development at Red Lake, regarding surface work, significant upgrades of earthworks, road and utility infrastructure along with installation of new equipment are done. New mine support buildings have been built. There now are a administration complex that is fully operational and a mill warehouse.
In terms of underground progress, about 740 meters of development are finished. Ramp building, which was started ahead of schedule, is moving forward quickly. Due to that earlier start and significant recent efficiency in development, Pure Gold might be able to access the main stopes, optimize the mine plan and commence ore stockpiling earlier than anticipated.
Engineering and permitting remain on track. "Federal and provincial authorities have confirmed the project will not trigger a new environmental assessment," Walker highlighted. With respect to procurement, Pure Gold already placed an order for equipment with a long lead time, including a new ball mill, gold room and electrical equipment, and gravity and leaching systems.
Walker also noted that the mining firm finished preliminary screening of major applications with both First Nations and Ontario ministries. In December 2019, it hosted many community and First Nations meetings about permitting and the amended mine closure plan. "Pure Gold contends that there remains strong support for project development from both the local communities and First Nations," Walker wrote.
He concluded, "We continue to highlight the mine's high-grade nature, potential for solid near-term, high-margin production and substantial exploration potential, all in a prolific Canadian mining camp."
Echelon has a Speculative Buy rating and a CA$1.35 per share price target on Pure Gold, the stock of which is trading today at about CA$0.70 per share.
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Disclosures from Echelon Wealth Partners, Pure Gold Mining Inc., March 30, 2020
Echelon Wealth Partners compensates its Research Analysts from a variety of sources. The Research Department is a cost centre and is funded by the business activities of Echelon Wealth Partners including, Institutional Equity Sales and Trading, Retail Sales and Corporate and Investment Banking.
I, Ryan Walker, hereby certify that the views expressed in this report accurately reflect my personal views about the subject securities or issuers. I also certify that I have not, am not, and will not receive, directly or indirectly, compensation in exchange for expressing the specific recommendations or views in this report.
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