Pure Gold Mining (TSXV: PGM, LSE: PUR) is expecting a "significant improvement in production" in the third quarter and remains on track to complete an updated mine plan and pre-feasibility study by year-end, the company said in its 2022 second quarter results release.
Gold production fell during the second quarter 2022 due in part to cash-preservation measures taken by the company while negotiating financing agreements. For the three-month period, the PureGold mine saw a reduction in workforce, and the mill was operating at only 50% capacity. Main ramp development remained halted in favour of near-term production.
Overall, Pure Gold produced 3,509 oz. during the second quarter and 8,244 for the first half of 2022. Mining totalled 40,551 tonnes of ore (an average of 445 t/d) for the second quarter, and 85,267 tonnes (an average of 471 t/d) for first half of 2022.
While the company saw a 30% reduction in costs compared to the first quarter, it still booked an operating loss of $18.5 million and $41.9 million for the quarter and the half, respectively. Net loss and comprehensive loss totalled $20.8 million and $42.2 million. All figures were higher than their comparative periods in 2021.
“Over the last six months we have advanced in four key areas to expedite our future success. We have a solid resource model we can use for long-term planning; a revamped short-term planning process to drive execution; a lower operating cost base to generate cash flow; and most importantly, an emerging culture of safety and performance," said Terry Smith, Pure Gold's COO.
So far during the current quarter, both costs and revenues are trending in the right direction on a sequential quarterly basis, due to the groundwork laid in the previous two quarters. As a result, the company forecasts the PureGold mine to deliver positive site-level cash flow in the quarter.
Site-level operating plus sustaining capital costs are expected to be in the range of $9.5 million to $10.5 million per month for the third quarter. Compared to the first quarter of 2021, this represents an absolute reduction in costs of approximately 25% and a cost-per-tonne reduction of approximately 50%. Pure Gold is targeting further savings of $1 million per month (approximately 10%) by the end of 2022.
The company recently announced an updated resource for the PureGold mine, which included 1.65 million oz. of gold at 7.4 g/t contained in 6.9 million tonnes in the indicated category, plus 370,000 oz. of gold at 6.3 g/t contained in 1.8 million tonnes in the inferred category at a cutoff grade of 3.38 g/t.
Details of the second quarter 2022 results can be found at www.puregoldmining.ca.