The Toronto-quoted equity of Pure Gold Mining (TSXV: PGM) rose more than 7% early Tuesday trading after the company reported strong second-quarter production, underground drilling success and the potential for accelerated development of the 8 Zone.
The flagship PureGold mine in Red Lake, Ontario, averaged daily throughput at 509 tonnes per day for the June quarter and 577 tonnes per day for June.
“We are seeing consistent quarter-over-quarter improvements in all key operating metrics and, importantly, excellent grade reconciliation to our mineral reserves”
Pure gold Mining president and CEO Darin Labrenz
The average daily ramp development rate for the main and east ramps of 5.2 metres and 4.5 metres per day for the second quarter, respectively, setting a new quarterly record for the Main Ramp and a 53% increase compared to the first quarter.
The improved operating efficiencies have resulted in a 46% increase in gold production than the first quarter, with the average head grade at 7 grams per tonne gold from all stopes mined.
PureGold says in a market release the average head grade of 5.8 gram per tonne for the high-grade portion of the mill feed, which includes all stopes mined plus high-grade development ore, is a 51% increase compared with the first quarter and in line with guidance.
Strongest position yet
In parallel, underground drilling successfully confirmed stopes planned for mining in the second half of 2021 and identified new areas with potential to expand mineable inventory beyond known reserves close to existing development, the comany says.
“We are seeing consistent quarter-over-quarter improvements in all key operating metrics and, importantly, excellent grade reconciliation to our mineral reserves,” says president and CEO Darin Labrenz.
Labrenz says Pure Gold has entered the third quarter in the strongest position yet.
Pure Gold says its success to date presents an opportunity to bring forward underground drilling and development of the high-grade 8 Zone
“With two active ramps now mining ore, an additional dedicated crew to focus on main ramp development beginning in July, and nearly 30,000 tonnes of long hole stopes developed in front of us, we are entering the third quarter in our strongest position ever.”
Pure Gold says the improving access to high-grade ore in the near term, the ramp development rates achieved to date, and the faster main ramp development beginning in July present an opportunity to bring forward underground drilling and development of the high-grade 8 Zone.
Based on projected main ramp development rates from July onward, first access to 8 Zone ore is currently scheduled for July 2024, about eight months earlier than was envisioned in the 2019 feasibility study. Extensions to the high-grade 8 Zone remain open for expansion and are scheduled to commence mining in year four of operations.
Pure Gold is also assessing opportunities to start underground infill and step-out drilling of 8 Zone from the main ramp earlier than planned. The first results are now potentially possible before year-end.
Labrenz noted ongoing underground drilling programs such as Pure Gold’s were a hallmark of Red Lake deposits, responsible for the nearly 100 years of high-grade discovery and mining in the district. As of the end of the second quarter, three air-powered underground core diamond drills were active on the site and focused on delineating gold mineralisation with both infill and extension drilling.