Published: October 25, 2022 |

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PureGold Mining said it is suspending operations and placing the PureGold Mine in Ontario, Canada, on care and maintenance immediately.

The company said this step follows an evaluation of several potential alternative scenarios and has become necessary because the mine has not yet achieved consistent positive site-level cash flow, notwithstanding recent reductions in operating costs and sequential quarter-over-quarter increases in production. The suspension of operations has resulted in the company withdrawing its guidance for Q4 2022.

Pure Gold Mining said its current cash balance is approximately $2 million and net working capital deficit is approximately $13 million.

The company has previously noted that it expected at least some additional funding in 2022 to come from the exercise of warrants issued in conjunction with its May 2022 financing. The warrants are currently priced to be exercised at $0.18 per share and, given current market conditions, the company no longer expects to receive any proceeds from warrant exercises prior to their expiry on November 25-27, 2022.

To date, none of the warrants have been exercised, and the company has, so far, been unable to obtain alternative outside financing in order to continue operations, complete its ongoing pre-feasibility study (PFS) and life-of-mine plan, and continue its ongoing strategic review process.

If additional outside financing is not obtained in the short term, PureGold said it will not be able to meet its obligations as they become due, resulting in a default under its debt obligations.

The company said it continues to work collaboratively with its lender, a fund managed by Sprott Resource Lending, to evaluate several near-term funding and strategic alternatives.

This process will include evaluation of all available options, including possible sale or restructuring scenarios, in order to preserve asset value for the benefit of all stakeholders.

Source: Proactive Investors

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.

To stop by PureGold’s website, CLICK HERE

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