Canadian Mining Journal


GOLD: Pure Gold Mining releases feasibility for Madsen in Red Lake

ONTARIO – With significant mining, milling and tailings infrastructure already in place, pre-production capital costs for Pure Gold Mining’s Madsen project in Red Lake should not exceed $94.7 million, including a 9% contingency, a feasibility study reports.

Total life of mine capex including closure costs for the underground mine are expected to come in at $327 million.

The study forecasts a mine life of 12.2 years with a pre-production period of 13 months, and total gold production of 970,000 oz. for an average of 80,000 oz. a year.

Operating cash costs and all-in sustaining costs for the 800-tonne-per day operation over the mine life are estimated at US$607 per oz. and US$787 per oz., respectively.

Madsen’s after tax net present value at a 5% discount rate is $247 million and after tax internal rate of return 36%, which should result in initial capex recovered in just under three and a half years.

The mine plan in the feasibility study envisions a combination of methods from conventional cut and fill (59%), mechanized cut and fill (16%), and longhole mining (25%).

The feasibility study was based on Madsen’s indicated resource of 1.86 million oz. of gold contained within 6.43 million tonnes grading 9 g/t gold and did not include mineralization from any of the project’s satellite deposits (Wedge, Fork and Russet South).

The satellite deposits outcrop within one to three kilometres of the Madsen mill will be the subject of an upcoming preliminary economic assessment.

On Feb. 5 the company updated its resource estimate for Madsen and the three satellite deposits to 2.06 million oz. contained within 7.19 million indicated tonnes at an average grade of 8.9 g/t gold. Inferred resources were estimated at 467,000 oz. of gold contained within 1.88 million tonnes of 7.7 g/t gold.

Madsen is one of the highest grade undeveloped gold deposits in the world.

Pure Gold’s 47-km2 patented land position hosts two past-producing mines, including the Madsen mine. The two mines produced about 2.5 million oz. of gold over an operating history of 36 years.

The project has power, paved highway access, a 1,275-metre-deep shaft and headframe, 27 levels of underground workings, a portal and ramp, and a mill and tailings facility. An existing environmental compliance approval allows for the operation of a 1,089-t/d mill and processing plant.

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