The 55¢ financing consists of a share and half a warrant exercisable at 85¢ for three years, with the proceeds to be used for exploration and development activities. AngloGold currently owns 14.3% of Pure Gold's stock.
The company is advancing its Madsen gold project in Red Lake, Ontario, Canada, on which it completed feasibility study in February to produce 80,000 ounces a year over a 12-year mine life. Madsen, a mine that formerly produced for 36 years, will have peak annual production of about 125,000oz/y in year five from an 800 tonnes a day operation. Madsen has a probable mineral reserve of 3.5 million tonnes grading 9 grams a tonne.
Madsen has a 13-month development timeline and first gold pour slated for May 2020, with initial capital expenditure of C$95 million.
Pure Gold recently began its 2019 exploration programme at Madsen, which aims to upgrade and grow mineral resources at the Wedge, Fork and Russet South discoveries with 12,000m of drilling. A February preliminary economic assessment (PEA) showed these could potentially add $51 million of value to its Madsen project as they are high-grade, near surface resources.
Shares in Pure Gold Mining (TSXV:PGM) are trading at 56¢, valuing the company at C$145 million, Its share price has fallen 17.6% since the start of the year.