Name of the Project
Madsen gold project.

Location
The project is located in the Red Lake mining district of Ontario, Canada.

Client
Pure Gold Mining.

Project Description
An independent feasibility study on Madsen has outlined a robust 12.2-year, high-grade, 800 t/d underground mining operation, with low initial capital costs and strong financial performance. The project has probable mineral reserves of 3.1-million tonnes grading 9 g/t containing one-million ounces of gold.

Mining will be conducted from new ramp development using a combination of cut-and-fill and longhole mining methods. A new hoist house and double drum production hoist will use the existing shaft infrastructure to hoist ore and waste from the mine, commencing in Year 4 of operations. The mine is expected to produce 125 000 oz/y at peak production, with average gold production in years 3 to 7 esti­mated at 102 000 oz/y.

The existing mill and tailings management facility will be upgraded to achieve mill production of 800 t/d. Upgrades include modernisation of controls and instrumentation, installation of new pumps, two new batch gravity concentrators and the expansion of the grinding circuit through the replacement of the existing ball mill to achieve forecast productivity. Total gold production is estimated at 970 000 oz.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The project has a pretax net present value, at a 5% discount rate, of $353-million and an internal rate of return of 43%, with a payback of three years.

Value
Capital expenditure is estimated $94.7-million, including a 9% contingency.

Duration
The project is expected to take 13 months to complete, with underground mine development expected to start nine months before the first gold pour.

Latest Developments
Pure Gold plans to advance the project to development. It has appointed Endeavour Financial to provide advisory services with respect to debt financing for the construction and development of Madsen. Pure Gold expects to have all the required permits for production in place by the final quarter of 2019. Assuming that project execution starts in April, first gold will be expected by May 2020.

Key Contracts and Suppliers
JDS Energy & Mining (mineral reserve estimate, mining methods; underground geotechnical; metallurgy, recovery methods; infrastructure); Ginto Consulting (mineral resource); Lorax Environmental (water management); Knight Piésold (tailings management facility, waste-rock management); Minefill Services (mine backfill); and Equity Exploration (geology and data verification).

On Budget and on Time?
Too early to state.

Contact Details for Project Information
Pure Gold Mining, tel +1604646 8000 or email info@puregoldmining.ca.