PureGold Reports First Quarter 2022 Financial and Operating Results

Vancouver, British Columbia, CANADA

VANCOUVER, British Columbia, May 17, 2022 (GLOBE NEWSWIRE) -- Pure Gold Mining Inc. (TSX-V:PGM, LSE:PUR) (“PureGold” or the “Company”), reports its first quarter 2022 summary financial and operating results. The Company’s interim financial statements and related management’s discussion and analysis for the three months ended March 31, 2022, will be available for download on SEDAR and on the Company’s website. All amounts are expressed in Canadian dollars (“$”), unless otherwise noted).

A summary of the highlights for the three months ended March 31, 2022, and subsequent to date for the Company and its 100% owned PureGold Mine Project (“PureGold Mine”) or the “Project”) are as follows:

Gold Production

  • Gold production for the quarter ended March 31, 2022 was 6,653 ounces
  • Gold sold for the quarter ended March 31, 2022 was 7,876 ounces


  • For the first quarter ended March 31, 2022, the PureGold Mine processed a total of 50,892 tonnes of ore, or an average of 570 tpd, at an average head grade of 4.27 grams of gold per tonne of ore (“g/t Au”) and achieved an average recovery of 95.2%.
  • The main operating units in the mill and process facility are performing as expected. During the quarter, the Company completed upgrades for the gravity circuit which is expected to increase gravity recovery by 10-15% and overall gold recoveries by 1-2% to 96-97% from 95%. The upgrades are also expected to reduce operating costs by reducing cyanide dosages (consumption) in leaching, carbon in carbon-in-pulp (“CIP”), and metabisulfite/copper sulfate in the detox circuit.
  • The regulatory process to increase the permitted mill capacity to 1,000 tpd is well advanced, and expected to be completed in Q4 2022.


  • For the first quarter ended March 31, 2022, a total of 44,716 tonnes of ore were mined from the PureGold Mine, or an average of 497 tpd.
  • During Q1 2022, several new initiatives were launched which are expected to improve stope access and ultimately result in increased ore throughput, improved grades, and reduced costs in 2022. These initiatives include faster sill development to expedite access to higher grade stopes by developing sills faster, by taking longer rounds and improving definition drilling and grade control procedures. Definition drilling remains a key component in the plan to improve both ore production and grade. The Company significantly increased its definition drilling program in Q4 2021, the positive impacts of which are expected to positively impact short-term mine plans and production beginning in the second quarter of 2022. Finally, in support of an updated life of mine plan, significant data has been gathered with respect to 2021 grade control sampling and work is underway to compile and reconcile this data with the Company’s Mineral Resource and Mineral Reserve models and with mill production. Together, these changes are expected to drive sustainable increases in both ore throughput and head grade, and will be implemented progressively throughout 2022.


  • During the quarter the Company closed a bought deal private placement and a non-brokered private placement raising gross proceeds of $31.2 million. Pursuant to the brokered offering, the Company issued a total 26.4 million common shares of the Company at a price of $0.53 per common share for aggregate gross proceeds of $14 million. The private placement issued a total of 32.5 million common shares to AngloGold Ashanti Limited (“AngloGold”) at a price of $0.53 per common share for aggregate gross proceeds of $17.2 million.
  • To support the operational turnaround and optimization initiatives underway at the PureGold Mine, subsequent to March 31, 2022, the Company entered into an agreement with its lending partner, Sprott Private Resource Lending II (Collector), LP (“Sprott”), whereby Sprott agreed, subject to several conditions including a minimum equity raise of US$5 million before the end of the Waiver Period, to:
    1. Provide the Company an additional, secured, first-priority, non-revolving credit facility (“Additional Credit Facility”) up to a maximum principal amount of US$6 million; and
    2. Waive any existing defaults under the Credit Agreement, Stream Purchase Agreement, and Production Payment Agreement (“Existing Defaults”) for a period of time ending May 23, 2022, refer to “Cash and Liquidity” discussion below.
  • On May 6, 2022, the Company announced a non-brokered private placement of 200,000,000 units of the Company at a price of C$0.15 per unit for aggregate proceeds of at least $30 million and up to $40 million. Each unit will consist of one common share and one common share purchase warrant. Each warrant will be transferrable and entitle the holder to acquire one common share of the Company for six months from the closing date of the offering at a price of $0.18, subject to certain adjustments. The offering is expected to close on or about May 18, 2022.

Leadership Changes

  • On January 4, 2022, Mr. Troy Fierro, Director and seasoned mining engineer, replaced Darin Labrenz as President & CEO. Mr. Chris Haubrich, Vice President Business Development, replaced Sean Tetzlaff as CFO. Ms. Ashley Kates, Corporate Controller, was promoted to Vice President Finance & Corporate Secretary.
  • On February 17, 2022, Terrence Smith was appointed to the position of Chief Operating Officer and Bryan Wilson was appointed Vice President Mine General Manager of the PureGold Mine. Phil Smerchanski was promoted to Vice President Exploration & Technical Services. Maryse Bélanger remained on PureGold’s Board of Directors.
  • On April 22, 2022, Mark O’Dea assumed the role of interim President and Chief Executive Officer. Mr. Fierro stepped down due to personal health issues. Mr. Fierro will remain a Director of the Company.

Technical Report Update

  • Work on an updated Mineral Resource Estimate for the PureGold Mine including satellite deposits Wedge, Russet South and Fork is underway. Following completion of the updated resource estimate, an updated Technical Report is expected to be completed including an updated Mineral Reserve. Expected timing for the updated Technical Report is in the fourth quarter of 2022.

Financial Results

  • Mine operating loss of $23.4 million for the three months ended March 31, 2022.
  • Revenues, net of refining costs of $18.4 million for the three months ended March 31, 2022.
  • Net loss and comprehensive loss for the three months ended March 31, 2022 totaled $21.5
  • Basic and diluted loss per share for the three months ended March 31, 2022 of $0.05
  • Cash balance as of March 31, 2022 of $6.5 million
  • Total loans and borrowings as of March 31, 2022 of $119.2 million
  • Gold Stream derivative liability as of March 31, 2022 of $43.5 million.

Operational and Financial Details 

  For the
March 31,
For the
March 31,
Ore minedTonnes 44,716   32,071  
Waste minedTonnes 89,555   112,043  
Total minedTonnes 134,271   144,114  
Ore milledTonnes 50,892   48,404  
Average head gradeGrams per tonne gold 4.27   3.08  
Recovery% 95.2   95.2  
Gold producedOunces 6,653   6,796  
Gold soldOunces 7,876   2,924  
Average Price realized$/ounce sold$1,848  $1,774  
Financial data (millions)   
Revenue$ 18.4   6.4  
Mine operating loss$ (23.4)  (15.6) 
Net loss$ (21.5)  (16.8) 


$ amounts in millions, except per share amounts For the three
ended March
31, 2022
 For the three
ended March
31, 2021
Total Revenue$18.4 $6.4 
Mine operating loss (23.4) (15.6)
Corporate administrative costs (1.1) (2.1)
Interest and financing costs (5.7) (0.0)
Gain (loss) on fair value of derivative liabilities 3.1  0.7 
Net loss and comprehensive loss for the period$(21.5)$(16.8)
Basic and diluted loss per common share$(0.05)$(0.04)

Additional information regarding the Company’s financial results and activities underway at the Company’s PureGold Mine is available in the Company’s interim financial statements and management’s discussion and analysis for the three months ended March 31, 2022.

Qualified Persons and 43-101 Disclosure

Terrence Smith, P.Eng., Chief Operating Officer for the Company, is the designated Qualified Person for this news release within the meaning of National Instrument 43-101 (“NI 43-101”) and has reviewed and verified that the technical information contained herein is accurate and approves of the written disclosure of same.

About Pure Gold Mining Inc.

PureGold is a Canadian gold mining company, located in the very heart of Red Lake, Ontario, Canada. The Company owns and operates the PureGold Mine, which entered commercial production in 2021 after the successful construction of an 800 tpd underground mine and processing facilities. Gold reserves and resources are centered on a forty-seven square kilometre property with significant discovery potential. PureGold’s strategy is to pursue operational excellence today while investing in systematic exploration and phased expansions to fuel discovery and growth for the future.1

Additional information about the Company and its activities may be found on the Company’s website at www.puregoldmining.ca and under the Company’s profile at www.sedar.com

  1. For further information, see the technical report titled “Madsen Gold Project Technical Report Feasibility Study for the Madsen Deposit,  Red Lake, Ontario, Canada” with an effective date of February 5, 2019, and dated July 5, 2019 (the “Feasibility Study”), for further information please see puregoldmining.ca or under the Company’s Sedar profile at www.sedar.com

        "Mark O’Dea"        
Mark O’Dea, President & CEO

Investor inquiries:
Adrian O’Brien,
Director, IR & Communications
Tel: 604-809-6890

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

All statements in this press release, other than statements of historical fact, are "forward-looking information" with respect to PureGold within the meaning of applicable securities laws, including, but not limited to statements with respect to those that address proposed timing of development plans for the PureGold Mine, including expectations regarding increasing ore throughput and timing of inventory; expectations regarding the new management team’s success in improving production and costs to the point of generating positive corporate cash flow in 2022; the proposed updated NI 43-101 Technical Report and timing and content of such Technical Report, including the life of mine plan; expectations regarding the effectiveness of new initiatives to improve stop access and result in increased throughput, improved grades and reduced costs in 2022; expectations regarding the success of the Fast Track Sills approach; expectation’s regarding Epiroc’s assessment and repair of the mobile equipment fleet and timing related thereto; expectations regarding ventilation planning and investment and its impact on ore production and lowering costs; timing of installation of three new electric air compressors and expectation that they will significantly improve equipment availability and utilization; construction of an on-site camp with full services and its impact on attracting top talent; achievement of minimum targets with respect to ore production, average head grade and reduction in monthly operating costs by the end of 2022 compared to 2021; potential for extending the mine life of the PureGold Mine; and potential for additional resources and expansion of known deposits and potential for making new discoveries and the focus of the Company in the coming months . Forward-looking information is often, but not always, identified by the use of words such as "seek", "anticipate", "plan", "progress", "confirms", "continue", "planned", "expect", "expectations", "expand", "enhanced", "increasing", "optimize", "project", "predict", "potential", "supports", "targeting", "intends", "believe", "improved", "potential", and similar expressions, or describes a "goal", or variation , of such words and phrases or state that certain actions, events or results "may", "should", "confirms", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking information is not a guarantee of future performance and is based upon a number of estimates and assumptions of management at the date the statements are made including, among others, assumptions about future prices of gold and other metal prices, currency exchange rates and interest rates, favourable operating conditions, political stability, obtaining governmental approvals and financing on time, obtaining renewals for existing licences and permits and obtaining required licences and permits, labour stability, stability in market conditions, availability of equipment, accuracy of any mineral resources, successful resolution of disputes and anticipated costs and expenditures. Many assumptions are based on factors and events that are not within the control of PureGold and there is no assurance they will prove to be correct.

Such forward-looking information, involves known and unknown risks, which may cause the actual results to be materially different from any future results expressed or implied by such forward-looking information, including, risks related to liquidity and the Company’s ability to continue as a going concern; mine closure and rehabilitation; failure to achieve estimates or material increases in costs; history of net losses and negative operating cash flow, indebtedness; interpretation of results at the PureGold Mine complex, including reserve and resource estimates may prove to be incorrect; changes in project parameters as plans continue to be refined; current economic conditions; future prices of commodities; possible variations in grade or recovery rates; the costs and timing of the development of new deposits; failure of equipment or processes to operate as anticipated; the failure of contracted parties to perform; the timing and success of exploration and development activities generally; delays in permitting; possible claims against the Company; the timing of future economic studies; labour disputes and other risks of the mining industry; delays in obtaining governmental approvals, financing or in the completion of exploration as well as those factors discussed in the Annual Information Form of the Company dated March 31, 2021 in the section entitled "Risk Factors", under PureGold’s SEDAR profile at www.sedar.com.

Although PureGold has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. PureGold disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise unless required by law.