Pure Gold Mining has started construction of its 100% owned Madsen gold mine, which is claimed to be Canada’s highest grade development-stage gold project.
The company has awarded the surface engineering and procurement contract to JDS Energy & Mining in partnership with Hatch and Knight Piesold, while Dumas Mine Contracting secured the underground mine design engineering contract.
The project is fully funded to production, with first gold pour estimated in late 2020. The orebody is located within a 5km-long gold system in the Red Lake gold district.
The Madsen mine has historical production of 2.6 million ounces of gold and a current indicated resource of 2,063,000 ounces at 8.9 g/t gold, an inferred resource of 467,000 ounces at 7.7 g/t gold.
In July, Pure Gold intersected bonanza grade gold, including 108.5 G/t gold over 1m at Madsen Red Lake.
Pure Gold Mining president and CEO Darin Labrenz said Madsen started as an exploration concept in late 2014, and has evolved into a multi-million ounce gold deposit that is now under construction as Canada`s highest grade gold development project.
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Labrenz said: “Along the way, the team has hit every milestone we set, from first resource estimate, to early conceptual studies, through a comprehensive feasibility study, an agreement with our First Nation partners, and now a fully funded financing package.
“Today, as we commence construction, our project is perfectly timed to benefit from a rising gold market, and looks set to generate well over C$800 million in cumulative pre-tax cash flow with gold currently near C$2,000 per ounce.”
The company is continuing its exploration drilling programme designed to extend and define the extensive gold system in place at Madsen mine.
Last month, Pure Gold Mining secured a $90m project financing package with Sprott Resource Lending for the Madsen mine.
The financing includes a credit facility for $65m, and a $25m callable gold stream.