Intercepts from Treasure Box include 1.1 metres of 9.9 g/t gold and 1.1 metres of 13.5 g/t gold. This zone, 3 km from the mill, lies along the Russet mafic-ultramafic contact that also hosts the existing 8-Zone and Russett South deposits. The latest drilling successfully tested a new structural model for this area.
Drilling at the No. 1 Vein area, east of the PureGold mine, returned 2 metres of 16.1 g/t gold and hit gold mineralization in an extension of historical workings.
“The latest results from our ongoing surface exploration program are consistent with our strategy of continuing to expand our resource base well beyond our current mineral reserves to support organic growth of the PureGold mine for many years to come,” Darin Labrenz, PureGold president and CEO, said in a release. “As we continue to systemically discover new zones and expand the areas of known high grade gold mineralization on our property, results such as these broad, high grade intervals are exciting, as they reinforce the continuity of high-grade gold mineralization across our 7-km gold corridor both laterally and at depth.”
Kevin MacKenzie of Canaccord Genuity has a C$2.25 target price on the stock with a ‘hold’ rating.
Last year, the emerging producer drilled 21,417 metres as part of its surface exploration program at the property; approximately 21,000 metres is budgeted for this year. Two surface and two underground drills are turning at the site.
Commercial production expected in Q2
Earlier this week, PureGold also provided an update on the progress of the ramp-up of the PureGold underground mine, which poured first gold at the end of December.
The performance to date has “met or exceeded” expectations in terms of development and production rates, mill performance and gold recovery. PureGold has been completing approximately one gold pour each week, with gold doré regularly shipped to the Royal Canadian Mint.
The existing mine access ramp is at a depth of 300 metres. Ore production to date has been sourced from lateral development. Initial high-grade stopes are on-line as of late February with head grades increasing since then. March grades are expected at 7 g/t gold, which is in line with the grade profile in the first-year production schedule in the 2019 feasibility.
To provide increased ore tonnage optionality and operating flexibility, PureGold has been developing a second decline on the northwest end of the mine – the East portal. The portal was collared last year and is moving forward at a rate of over 7 metres a day. Development from this access is expected to start towards the end of March and stope production is scheduled by April.
Once the two independent mining centres are operating, PureGold expects to meet or exceed the mine’s 800 t/d design capacity.
The mill throughputs averaged 600 t/d for the month of February; 800 t/d is expected in the coming weeks. Gold recoveries of 95% are in line with expectations.
PureGold expects to announce commercial production at the mine in the second quarter – initial production and cost guidance for the rest of the year would then follow.
Probable reserves at the site are at 3.5 million tonnes grading 9 g/t gold, for a total of 1 million oz.
(This article first appeared in the Canadian Mining Journal)
