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Sale of Red Lake mine heads to B.C. court for approval

May 29 hearing is final steps in transferring mining asset to West Red Lake Gold Mines
(Pure Gold Mining photo)

The sale of the shuttered Pure Gold mine in Red Lake heads to a British Columbia court for final approval at month’s end.

In mid April, insolvent Pure Gold Mining entered into a $6-million cash and share purchase agreement with West Red Lake Gold Mines and a fund managed by Sprott Resource Lending. The deal closed earlier this month,

West Red Lake, a Vancouver-based junior miner operating in the northwestern Ontario gold camp, will acquire all of the issued and outstanding shares of Pure Gold.

The asset West Red Lake is acquiring is an underground mine, a processing facility and 47-square-kilometres of exploration ground near the community of Red Lake. The mine and mill are not operating and has been on care and maintenance status since October. 

The mine entered commercial production in August 2021 and ran into operational and financial difficulties in the months that followed. Pure Gold entered CCAA protection late last October. Pure Gold bought the property, once known as the Madsen Mine, in 2014.

The transaction requires an approval and reverse vesting order from the B.C, Supreme Court. The hearing is scheduled for May 29. The closing of the acquisition also requires regulatory approval by the TSX Venture Exchange. 

Earlier this month, West Red Lake closed a bought deal financing arrangement for more than $25 million in connection with the acquisition of the Pure Gold mine.