Name of the Project
Madsen-Red Lake gold project.

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

Project Owner/s
Pure Gold Mining.

Project Description
The project has total indicated resources estimated at about 7.2-million tonnes grading 8.8 g/t gold and inferred resources estimated at about 1.88-million tonnes grading 7.7 g/t gold.

A preliminary economic assessment (PEA) on Pure Gold’s Fork, Russet South and Wedge deposits at the Madsen project has confirmed the potential to be economically viable.

The PEA envisages a mine life extension of 3.7 years, with total production of 210 000 oz of gold over the life of the mine.

Multiple scenarios, from 400 t/d to 800 t/d, were completed to evaluate and schedule the mineral resources of the PEA into a mine plan. A 400 t/d scenario considered ramping up throughput to concurrently process material from the feasibility mine plan, Fork, Russet South and Wedge. However, the PEA considers inferred resources and unless they are converted to indicated resources and until future study work is completed, any potential processing must occur after the end of the feasibility study mine plan. As such, the 800 t/d scenario was selected as the base case mine plan as it optimises the Madsen feasibility study design plant capacity. The Madsen feasibility study design was published on February 11 this year. According to the PEA, each of the deposits will be mined from underground, with separate portal and ramp systems established to access the mineral resources in the mine plan. The PEA mine plan relies on the surface and milling infrastructure described in the Madsen feasibility study.

Mining will be conducted concurrently from Russet South, Fork and Wedge to support a milling rate of 800 t/d. At Russet South, only the shallow portion of the mineral resource has been considered for the 800 t/d base case, excluding about 52 400 potential ounces from the base case plan. The PEA will use the same flowsheet developed for the Madsen feasibility study, and will accommodate additional tailings with lifts of 2 m to 4 m to the polishing pond dams. Overall metallurgical recoveries for the mine plan are expected to be 96%, based on new testwork conducted on recent drill core from the Russet South, Fork and Wedge deposits.

Potential Job Creation
None stated.

Net Present Value/Internal Rate of Return
The results of the PEA on Pure Gold’s Fork, Russet South, and Wedge deposits have demonstrated the potential to add about C$51-million to the Madsen project’s after-tax net present value. Further, as a result of high gold grades, near-surface resources and using existing infrastructure, the mining of these zones will yield an after-tax internal rate of return of 39%.

Payback is estimated at two years.

Capital Expenditure
The project requires initial capital of C$57-million, including contingency, to support the construction of the underground mines and associated infrastructure.

Planned Start /End Date
A set date for the start of the project has not been confirmed; however, the PEA expects the implementation schedule for the project will span about 12 months.

Latest Developments
None stated.

Key Contracts and Suppliers
JDS Energy and Mining Inc, including contributions from Knight Piésold, Lorax Environmental Services, Ginto Consulting and Equity Exploration Consultants (PEA).

On Budget and on Time?
Too early to state.

Contact Details for Project Information
Pure Gold Mining, tel +1 604 646 8000 or email info@puregoldmining.ca.