Pure Gold mulls an accelerated 8 Zone development plan

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.

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.

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, says the company.

“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 in a news release.

He says Pure Gold has entered the third quarter in the strongest position yet.

“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.

In terms of its geometry, the 8 Zone is wide-open, up-and-down plunge, and is characterized by very high-grade gold intercepts such as 466 grams per tonne gold over 4.3 metres and 342.4 grams per tonne over 5.5 metres. Some historic assays ran into the kilograms of gold per tonne of ore.

To date, Pure Gold has drilled a hole up-plunge (above the 8 Zone) that supports continuity of the gold system between surface and the 8 Zone.

Pure Gold believes its 8 Zone is geologically similar to the famous high grade zone at the Red Lake Mine Complex, which transformed the fortunes of Goldcorp in the early 2000s.

Based on projected main ramp development rates from July onward, first access to 8 Zone ore is currently pencilled-in 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 is 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.

The PureGold mine has a 2.1 million oz indicated resource of 7.2 million tonnes grading  8.9 grams per tonnes gold, and a 500,000 oz. inferred in 1.9 million tonnes at 7.7 grams per tonne.

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 mineralization with both infill and extension drilling.