Source: Streetwise Reports 02/09/2019
An Echelon Wealth Partners report reviewed the numbers associated with the increase and its “positive” implications for the miner.
In a Feb. 5 research note, analyst Ryan Walker reported that an Echelon Wealth Partners Top Pick, Pure Gold Mining Inc. (PGM:TSX.V), released an updated resource for its Madsen project that shows a 24% increase in high-grade gold resources to 2.53 million ounces (2.53 Moz).
Walker relayed that in the update for Madsen, located in Ontario’s Red Lake camp, the company increased Indicated resources by 18% for a new total of 6.43 million tons (6.43 Mt) at a 9 grams per ton (9 g/t) grade, for 1.86 Moz.
Pure Gold also expanded Inferred resources by 58% to 467,000 ounces (467 Koz) at 7.7 g/t from the previous 296 Koz at 7.89 g/t.
The grade rose “slightly,” with the boost in overall ounces to 8.65 from 8.6 g/t, Walker noted.
“The accompanying potential increase in potentially mineable resources at Madsen suggests the potential for increased mill throughout from the 600 tons per day (600 tpd) utilized in the preliminary economic assessment (PEA),” the analyst commented.
Specifically, Walker indicated, the Madsen mill could see production surpass 100 Koz per year over about 16.5 years at a rate of 1,089 tpd, for which the facility is permitted. This output compares to the quantity outlined in the PEA, an annual average over the mine life of 66.1 Koz.
Pure Gold’s Madsen resource update also included a maiden resource estimate for the nearby Wedge deposit. Total Indicated resources there are 322,000 tons (322 Kt) at 10.3 g/t, for 107 Koz. Inferred resources are 307 Kt at 8 g/t, for 79 Koz.
Wedge could serve one or more purposes, Walker pointed out. One is to produce there via a lower-cost, open-pit mine, and the other is to serve as a satellite feed source.
During February Pure Gold intends to release a feasibility study and a PEA on Madsen. The former will only incorporate the Indicated resources at Madsen. The latter will encompass Indicated and Inferred resources from the Wedge, Fork and Russet South deposits.
Walker concluded the report by stating, “Our positive view on Pure Gold’s shares reflects Madsen’s high-grade nature, potential for solid, near-term, high-margin production and substantial exploration potential, all situated in an established and prolific Canadian mining camp.”
Echelon has a Speculative Buy rating and a CA$1.20 per share price target on Pure Gold, whose current share price is about CA$0.79.
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1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
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Source:: The Gold Report