Published: April 26, 2022 |

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PureGold Mining Inc. released an operations update from the company’s PureGold Mine in Red Lake, Ontario and provided an updated corporate outlook for 2022.

REVITALIZED OPERATIONAL LEADERSHIP TEAM

Significant changes have been made to PureGold’s executive management team to date in 2022, reflecting the company’s commitment to building a culture of operational excellence. Since the beginning of 2022, new appointments include president & CEO, COO, CFO, VP mine general manager, VP finance, and VP technical services among others. This revitalized operational leadership team, who collectively bring several decades of underground operating, ramp-up and turnaround experience to PureGold, have been working together now for six weeks and in that time have kicked off several initiatives which are expected to improve ore production, increase head grades, reduce operating and sustaining capital costs, and increase cash flow throughout the 2022 calendar year.

Additionally, work in support of an updated mineral resource, mineral reserve, and life of mine plan is underway, and an updated NI 43-101 technical report is expected to be released in late Q3 or early Q4 2022. The updated life of mine plan will set out the company’s vision for developing, operating, and potentially expanding the PureGold Mine based on all available data and operating experience to date.

“The wide-ranging optimization initiatives underway at PureGold designed to improve production, boost grade, and reduce costs all share one thing in common, and that is that they are long-term solutions designed to address the fundamental, underlying issues to ensure sustainable long-term success. This asset offers tremendous upside in terms of organic growth and exploration potential, but we need to operate efficiently as a first step in order to unlock that potential,” said Terry Smith, chief operating officer of PureGold.

“In our first six weeks here, the new operational leadership team have made great progress but we have more work to do and look forward to providing further updates on our progress throughout 2022,” added Smith.

“Throughout my career I have been a part of several underground start-ups and turnarounds and in my experience, success is a product of a strong culture which starts with leadership from the top. We are building a new culture at PureGold centered around open communication, clear goals and strategy, and accountability,” said Bryan Wilson, VP mine general manager of PureGold.

“In the few weeks I’ve been on the job I can already sense we have an incredible group of people who are up to the challenge, and I look forward to showing them and everyone else what we can achieve,” added Wilson.

INCREASING ORE PRODUCTION AND REDUCING COSTS

In 2021, the milling facilities at the PureGold Mine demonstrated capability of operating consistently and reliably at and above the design capacity of 800 tpd on multiple occasions. The regulatory process to increase the permitted mill capacity to 1,000 tpd is well advanced. Despite strong mill performance, gold production at the PureGold Mine in 2021 fell short of design capacity due to challenges in maintaining access to enough high-confidence, high-grade stopes to provide high-grade ore to the mill. A persistent shortage of high-grade ore from underground resulted in less than full utilization of the mill and at various times led to blending of low-grade development material and stockpiles which also reduced the overall feed grade to the mill. Identifying and addressing the underlying causes of insufficient access to high-grade stopes has been a central focus of the company’s new operational leadership team.

Several new initiatives have been launched which are expected to improve stope access and ultimately result in increased ore throughput, improved grades, and reduced costs in 2022. 

• Faster Sill Development
PureGold’s new operational leadership team has identified faster sill development as a key opportunity to increase access to high-grade ore. To date, sill development has been done with short (2.4 meter) rounds and extensive geological grade control in an effort to maximize grades from sill development. While these measures were effective in their intended purpose, their success came at the expense of slower pace of development which constrained access to larger, higher-grade stopes and reduced overall mining flexibility. As a result, a significant proportion of the total mill feed has been comprised of lower grade sill development ore rather than higher grade stope ore which has also reduced the overall head grade to the mill. PureGold’s new operational leadership team has introduced the ‘Fast Track Sills’ initiative which will expedite access to higher grade stopes by developing sills faster by taking longer (3.6 metre) rounds and improving definition drilling and grade control procedures. Overall, the Fast Track Sills initiative is expected to increase ore throughput, improve overall head grades, improve planning and flexibility, and reduce costs.

• Definition Drilling and Grade Control
Definition drilling remains a key component in the plan to improve both ore production and grade. PureGold significantly increased its definition drilling program in Q4 2021, the positive impacts of which are beginning to influence short-term mine plans for 2022 and are expected to positively impact production beginning in the second quarter of 2022. PureGold’s new operational leadership team have implemented several improvements to the definition drilling program which are designed to improve efficiency and reduce drilling costs. To improve efficiency, infill targets are now assessed based on data quality (historic versus modern drilling), quantity (average sample spacing), mineralized width and grade as well as alteration strength. A monthly review has recently been established to compare drilling results to these variables to ensure the efficiency of the program is continually improving. Going forward, with enhanced integration between definition drilling and mine planning, drilling platforms will be established in closer proximity to production areas which will lead to further improvements in drilling efficiency with shorter holes and tighter spacing which will also reduce drilling costs. With these changes, the company expects definition drilling progress to accelerate in the coming months and to have inventory of several months of high confidence stopes developed by the second half of 2022.

• Resource and Reserve Model Reconciliation
In support of the updated life of mine plan, significant data has been gathered with respect to 2021 grade control sampling including drill core, face and muck samples as well as sludge samples from longhole probe drilling. Using the combined experience and expertise of both internal staff and several independent third-party technical experts, work is underway to compile and reconcile this data with the company’s mineral resource and mineral reserve models and with mill production. The company expects to provide more detail on the results of this work by mid-year.

• Mobile Fleet Maintenance Strategy
Improving the maintenance strategy for the mobile equipment fleet represents a significant opportunity to increase ore production rates and reduce costs for the PureGold Mine. Over the past several months poor availability has contributed at various times to reduced ore production rates. PureGold’s new operational leadership team have identified several underlying reasons including insufficient parts inventory, supply chain issues, and a lack of maintenance space for service. The company has partnered with its principal supplier, Epiroc, to rapidly assess and repair the fleet, bringing the equipment up to a good operating standard. These assessments will also help significantly reduce the overall fleet needed to support current operations, which will lead to lower operating and sustaining capital costs.  This assessment and repair phase will begin immediately and is expected to conclude in the third quarter of 2022. Going forward, the company expects this initiative will significantly reduce maintenance, sustaining capital, and operating costs while also increasing mechanical availability and production.

ENHANCING KEY INFRASTRUCTURE

• Ventilation Upgrades
Improving ventilation planning and investment have been identified as another key opportunity to improve ore production and enhance mining flexibility. Ore production and scheduling flexibility to date have been limited from time to time by ventilation constraints. Recently, operational ventilation has improved significantly due to dedicated focus. Going forward, greater integration of ventilation planning with overall mine planning is expected to increase scheduling flexibility and ultimately support sustainable increases in ore production at a lower cost.

• Compressed Air
The PureGold Mine operates several underground production drills that require compressed air. To date, the compressed air system has consisted of temporary electric and diesel compressors. The diesel units, in particular, have had very poor mechanical availability over the past several months of cold weather, which has negatively impacted longhole drilling performance which in turn has constrained ore production from underground. Three new electric air compressors have been sourced and are expected to be installed in the second quarter of 2022. These new compressors are expected to significantly improve equipment availability and utilization and ultimately, support sustainable increases in ore production at a lower cost.

• Accommodation Camp
Another key initiative is the purchase and installation of an on-site full-service camp which will enhance PureGold’s ability to attract and retain top talent and recruit from a larger pool of mining professionals, while simultaneously reducing costs of accommodation and travel and investing in the local community. The new on-site camp will be modular construction and will feature two 44-person dormitory units, a 5-unit kitchen and dining facility, and one recreation unit. An operating contract has been signed with Shared Spirits LLP, a shared venture of Wabauskang and Lac Seul First Nations and local employment opportunities are also expected. The camp is expected to be operational in Q3 2022.

About PureGold Mining
PureGold is a Canadian gold mining company, located in the very heart of Red Lake, Ontario, Canada. Its vision is pure and simple. To build a highly profitable, multi-generational growth company in the world-class gold mining district of Red Lake. With its 100 percent owned, fully constructed operating PureGold Mine, a multi-million-ounce gold endowment, and significant exploration upside, their value-maximizing strategy is to pursue operational excellence today, while investing in systematic exploration and phased expansions to fuel discovery and growth for the future.

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