Pure Gold Mining continues to build Canada's next iconic gold mine

Pure Gold Mining Inc (CVE:PGM) (LON:PUR) (OTCMKTS:LRTNF) is advancing Canada's highest-grade gold development stage deposit, the Madsen Red Lake mine in Ontario, to first production, which is on track to start in the fourth quarter this year.

Concurrent to mine construction, the company also has big growth plans and has a fully funded exploration drilling and resource delineation program, centered on the 7 kilometer (km) Madsen Red Lake gold system.

The area already has significant infrastructure in place at Madsen. The Red Lake mining camp in northwestern Ontario has produced nearly 30 million ounces of gold over the past 85 years, making it one of the largest and highest-grade gold-producing districts in Canada.

Madsen is the highest-grade, at 9 grams per tonne (g/t), underground development project in Canada and ranks 11th out of 132 projects globally. It is set to be developed in two phases, the first of which will generate 1 million ounces.

Last year, a feasibility study for Phase 1 pegged the pre-tax net present value (NPV) at C$353 million, with a pre-tax IRR (internal rate of return) of 43%, based on a gold price of US$1,275. That NPV moves to US$390 million and IRR at 51% based on a gold price of US$1,500 per ounce.

The first phase project is fully funded and in August 2019, the firm announced a US$90 million project finance package. The aim of the second phase is to extract high-grade ounces of gold already drilled off in the immediate area of the Phase One mine.