Existing infrastructure at the Madsen gold project near Red Lake. (Credit: Pure Gold Mining)
ONTARIO – Pure Gold Mining of Vancouver has received a positive preliminary economic assessment for the reopening of the Madsen gold mine 16 km west of Red Lake. The project carries a pre-tax net present value (5% discount) of $365 million, an internal rate of return of 54%, and a pre-production capex of $50.9 million.
The resource estimate was updated last month to include 5.8 million indicated tonnes grading 8.9 g/t gold and containing 1.65 million oz. There are also 587,000 inferred tonnes at 9.4 g/t gold and containing 178,000 oz.
The mine plan in the PEA combines conventional cut and fill and shrinkage methods. Total ore mined over the mine life will be 3.0 million tonnes at an average diluted head grade of 10.3 g/t gold. With an estimate mill recovery of 92%, a total of 911,497 oz. of gold will be recovered.
Pure Gold is looking at an all-in sustaining cost of US$714 per oz.
The PEA will be posted soon at www.PureGoldMining.ca.