Pure Gold Mining Inc. (TSX-V:PGM) is pleased to announce that it has entered into a binding letter of intent with Premier Gold Mines Limited to sell certain non-core claims currently owned by Pure Gold that are contiguous with Premier Gold’s Hasaga property.
“In our view, this transaction is a logical step for both companies. It will provide Pure Gold with immediate cash and share consideration without diluting shareholders equity, which will continue to allow the Company to devote funds to our highly prospective Madsen Gold Project,” stated Darin Labrenz, President and CEO of Pure Gold. “The sale also provides Pure Gold with continued exposure to the Buffalo Claims via the NSR.”
The sale of 28 mining claims adjoining Premier Gold`s Hasaga property represents approximately 10% of the area held under the Madsen Gold Project and does not include any of the infrastructure or mineral resources associated with the Madsen Mine, nor does it include any of the Company’s primary exploration targets. While the Buffalo Claims are known to host gold mineralization on the margins of the Dome Stock granodiorite, they do not host the mafic-ultramafic contact that Pure Gold has been successfully targeting for high-grade gold mineralization.
On closing it is anticipated that the Company will have approximately $7.1 million in cash and short-term investments to continue to advance its exploration and development efforts at Madsen.
Total consideration payable to Pure Gold will consist of:
The sale is expected to close on or before December 18, 2015 and is subject to certain conditions including, but not limited to, the completion of definitive documentation and receipt of all necessary approvals, including the approval of the TSX-V. All common shares of Premier Gold received in connection with the sale will be subject to a hold period in Canada of four months and one day from the date of issuance.
Macquarie Capital Markets Canada Ltd. is acting as financial advisor to Pure Gold with regard to the sale.
2016 EXPLORATION PROGRAM
Pure Gold’s exploration focus in 2016 will be to drill test and advance near-surface high-grade targets associated with the prospective mafic-ultramafic folded stratigraphy to the north and west of the historic mine workings, as well as advance evolving near-mine targets that have developed out of recent structural interpretation and modelling. The Company will also continue engineering studies to assess the existing mining and milling infrastructure, and assess potential development opportunities within the existing resource base and nearby prospects. This engineering study will be utilized in designing additional drilling for the purpose of upgrading and expanding the current mineral resource.
Pure Gold is currently preparing for a minimum 6,000 metre winter drill program, designed to test prospective near surface targets, commencing in January 2016.
Madsen hosts an operational head frame, a permitted mill and tailings facility, and access to power, water and labour. The Madsen Gold Project has an Indicated Resource of 928,000 ounces gold at 8.93 g/t Au (in 3.24 million tonnes) and an Inferred Resource of 297,000 ounces gold at 11.74 g/t Au (in 0.79 million tonnes)1 and is situated in one of the most active exploration and mining camps in North America. In addition to the mineral resource, the Madsen Gold Project hosts a number of highly prospective exploration targets including the Fork Zone and Russet South targets where drilling in 2015 returned 15.0 g/t gold over 5.0 metres from hole PG15-028 and 39.1 g/t gold over 2.9 metres from hole PG15-0312. Pure Gold believes the opportunity exists to advance these near-surface, high-grade exploration targets through the application of modern exploration science and a new understanding of the district.
(1) See the National Instrument 43-101 technical report entitled “Technical Report for the Madsen Gold Project Red Lake, Ontario, Canada,” prepared by SRK Consulting (Canada) Inc. dated effective February 18, 2014. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. (2) See news releases dated March 2, 2015 and March 16, 2015.
ABOUT PURE GOLD
Our mandate is pure and simple. To dream big. To colour outside the lines. To use smart science and creativity to unlock the next major discovery at the Madsen Gold Project in Red Lake, Ontario. And become Canada’s next iconic gold company.
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