Pure Gold Mining's precious metal footprint at Red Lake keeps growing.
The Vancouver mine developer released a preliminary economic assessment (PEA) of three satellite deposits that are part of its Madsen Gold Project.
In a Feb. 27 news release, the company said its Folk, Russet South and Wedge deposits have the potential to add $51 million in after-tax net present value and more mine life to the project.
The available high grades, the gold found near the surface, and the ability to use existing infrastructure to mine these new resources all come into play.
It's all good news for Pure Gold as it prepares to bring the newest mine in the Red Lake gold district into production in May 2020.
In mid-February, a feasibility study of its main Madsen Gold Project forecasted a 12-year mine life with an 800-tonne-per-day operation with low initial capital cost at $95 million, a fast-tracked production timeline, and some outlying resources with real potential.
The satellite deposits have the ability to add a 3.7-year mine life with total production of 210,000 ounces of gold, according to the PEA, with all-in sustaining costs of US$712 per ounce.
The indicated mineral resources for the entire property is 2,063,000 ounces at a 4.0 grams per tonne (g/t) gold cutoff.
The inferred mineral resources is 467,000 ounces at a 4.0 g/t cutoff.
“Our PEA provides us with a blueprint of how we could expand our mine life and production profile at Madsen, and illustrates just how impactful and accretive new discoveries can be to the future of our district,” said Pure Gold president-CEO Darin Labrenz in a statement.
“We have deployed a modest amount of capital in discovering and delineating these new resources and the return on our investment is exceptional. This PEA represents the first conceptual expansion scenario for the future phased growth of the Madsen Mine complex.”
Madsen is located just southwest of the town of Red Lake.
The company holds a 47-square-kilometre patented land position that was host to two former gold mines which produced 2.5 million ounces over a 36-year operating history.
