Pure Gold Mining Inc (CVE:PGM) (LON:PUR) (OTCMKTS:LRTNF) (FRA:L11A) updated on the positive ramp-up of its mine in Red Lake in the first quarter of 2021, as it continues towards declaring commercial production at the asset in Ontario.
Gold recoveries have been exceptional since the first gold pour in December last year, the company said, while the ramp-up at the processing mill is now complete, operating, as it is, at more than 75% of nameplate capacity.
READ: Pure Gold Mining reveals high grade gold mineralization at three targets outside of current Red Lake resource area
In the statement, the gold producer also announced it had struck a deal to amend and increase its debt financing with Sprott of up to US$20 million, with US$12.5 million to be available immediately on closing.
“With the mill ramp-up effectively complete, we can now focus our attention solely on ramping up the mine and accessing high-grade ore from multiple declines, where we are making great progress,” said Darin Labrenz, CEO of PureGold.
“The additional US$12.5 million will ensure the PureGold Mine continues its ramp-up phase with maximum financial flexibility, whilst the remaining US$7.5 million can be accessed if needed to provide additional liquidity,” he noted.
“The term and repayment schedule matches our expected grade and production growth over the coming years as we get into the heart of the orebody and continue to execute on our organic growth strategy.”
The company’s focus is now shifting to aligning mill throughput with the rate of underground mining as the project moves to access higher grade ore and progress toward steady-state production.
Realized head grades for the first quarter (to end-March) were lower than anticipated due to ramp-up related issues but these are being addressed and seen as symptomatic of ramp-up, and are not expected to persist in the future.
In terms of output, Pure Gold said that in the fourth quarter to December 31, it processed 3,535 tonnes of ore at a grade of 7.8 grams per ton (g/t) to produce 860 ounces of gold at a 96.6% recovery rate.
From January 1 to March 29 this year, 47,182 tonnes of ore were processed at a grade of 2.8 g/t gold to produce 4,011 ounces at a 95% recovery rate.
Under the credit deal with Sprott, amended from the 2019 agreement, US$12.5 million will be available immediately to Pure Gold. A further amount of US$7.5 million will be available for three months from closing.
The interest rate, principal repayment schedule, 2% arrangement fee payable pro-rata on each drawdown, and fixed per ounce production-linked payment remains unchanged from the 2019 agreement, said the company.
Pure Gold said it would continue to assess both ore throughput and gold production throughout 2Q in respect of any decision to declare commercial production for the PureGold Mine. Inaugural production and cost guidance for the rest of 2021 will follow shortly thereafter, it added.
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