PureGold Transitions to Operational Leadership Team and Provides Project Update

VANCOUVER, British Columbia, Jan. 04, 2022 (GLOBE NEWSWIRE) -- Pure Gold Mining Inc. (TSX-V:PGM, LSE:PUR) (“PureGold” or the “Company”), announced today proactive executive management changes which better align operational requirements with professional expertise. Mr. Troy Fierro, Director and seasoned mining engineer, has replaced Darin Labrenz as President & CEO. Mr. Chris Haubrich, Vice President Business Development, has replaced Sean Tetzlaff as CFO. Ms. Ashley Kates, Corporate Controller, has been promoted to Vice President Finance & Corporate Secretary. All changes are effective as of January 1, 2022.

Graeme Currie, Chairman, stated, “On behalf of the board of directors and all PureGold stakeholders, I thank both Darin and Sean for their dedication, commitment, and hard work dating back to the inception of the Company. Due in large part to their focused efforts, the PureGold Mine transitioned in just six years from a pre-resource stage asset through construction toward a commercial operation, which today is one of only two operating mines in the re-emergent Red Lake District. We wish both Darin and Sean the very best in all their future endeavors.”

“Today’s changes are consistent with the Company’s transition to a culture of operational excellence,” stated Troy Fierro. “As the PureGold Mine continues to evolve and grow, so too does the repertoire of skills needed in our executive leadership team to ensure ongoing success. Chris, Ashley, and I each bring our own unique combination of leadership skills and operational experience and I am excited for us to work together in our new roles. In addition to Chris and Ashley I am delighted to be working more closely with Maryse Bélanger, our MGM and my fellow Director, who has been driving operational improvements at the mine site for the past two months. Together, this revitalized leadership group is ideally suited to steer the Company through full ramp-up and execute our vision of building a multi-generational Canadian gold mining company rooted in the heart of Red Lake.”

Mr. Labrenz is also stepping down from the Board. Although Mr.Tetzlaff will no longer be in an executive role, he will continue to provide support as needed in an advisory capacity.

PureGold Mine Update

Since Maryse Bélanger assumed the role of Mine General Manager in November 2021, several operational improvement initiatives have been implemented at the Mine. These changes are expected to have a positive impact on both short-term and long-term operational performance.

“The PureGold Mine is a high-grade deposit in a strategic location with exciting exploration potential that was advanced rapidly from exploration through to commercial production at a time when few other mines were being built. It is an incredible achievement, especially during a pandemic,” commented Ms. Bélanger. “Today we have a fully built mine site with an 800 tpd mill currently achieving +95% recoveries which can operate at 125% of nameplate capacity. Despite that success, much work remains to unlock the mine’s full potential.”

“I have been immersed in all facets of the operation with the goal of getting the mine profitable in the near-term and ensuring that the culture is one that fosters operational excellence for the long-term. Given the changes underway, I am confident that we will be successful going forward. The PureGold Mine needs a leadership team with deep operational experience to guide and support the team at site, shift after shift, day after day, to be successful. We have that at PureGold now and in time, success will follow.”

Reconciliation and Planning & Scheduling Improvements

Mined grades have been reconciling well with the Mineral Reserve¹ for stopes within the Mineral Reserve envelope to date. The mill has demonstrated capability of operating consistently and reliably at and above its design capacity of 800 tpd on multiple occasions. The key challenge to date has been maintaining access to enough high-confidence, high-grade stopes to provide high-grade ore to the mill. Shortages of high-grade ore at various times have led to blending of low-grade development material and stockpiles which has reduced the overall feed grade to the mill. These shortages were caused by a combination of factors including development delays, insufficient scheduling flexibility, insufficient geologic information available for stopes prior to mining, equipment downtime, and strategic misalignments.

Significant changes to mine planning and scheduling were implemented during the fourth quarter of 2021 to address these underlying causes, with early signs of positive progress evident in December’s operating results. These changes include reorganization of information and workflow structures, resulting in enhanced accountability and reduced assay turnaround times. Additionally, definition drilling activity has been expanded, which will provide mine planners with better information in a timely manner leading to improved stope designs and enhanced scheduling flexibility. Finally, a geologic confidence-based model was implemented to standardize decision making and improve mine scheduling and planning. Together, these changes are expected to drive sustainable increases in both ore throughput and head grade, though will require more time to fully implement.

Although these changes only took effect as recently as mid-November, improved performance was already evident at year-end, and significant room for continued improvement remains. For the month of December, the PureGold Mine averaged 662 tpd of ore milled at a grade of 6.1 g/t Au with 96% recovery for 3,905 ounces of gold produced. For the last three weeks of December, the PureGold Mine averaged an estimated 760 tpd of ore milled at a grade of 6.6 g/t Au with 96% recovery for an estimated 3,232 ounces of gold produced. Both represent gold production records over those respective time periods for the Company.

Cost Reduction Initiatives

In addition to improved mining practices, various cost reduction and efficiency enhancement initiatives have been implemented. The recent focus has been on streamlining functional leadership and driving direct accountability across the organization to ensure the impacts are long-lasting.

Several senior manager roles have been eliminated, resulting in reduced site G&A costs. The Company expects to continue to explore and implement additional cost saving opportunities in 2022. A new crushing and hauling contract was awarded in November, which has reduced material handling costs by 25%. A new agreement is being negotiated with Dumas Mine Contracting, which will reduce costs, improve transparency, and ensure maximum benefit for PureGold and its partner contract miners.

Inexpensive upgrades are being made to the gravity circuit. They are expected to increase gravity recovery by 10-15% and overall gold recoveries by 1-2%. This will also reduce operating costs by reducing cyanide dosages (consumption) in leaching, carbon in carbon-in-pulp (CIP), and metabisulfite/copper sulfate in the detox circuit.

A consignment program for critical parts with various vendors has been implemented, which will keep inventory costs down and equipment availability and productivity high.

A camp has been sourced and will be installed near the mine early in Q1 2022, significantly improving PureGold’s ability to attract and retain top talent, while reducing costs of accommodation and travel. Occupancy is planned for March 2022.

As ore throughput and grade increase in conjunction with the ongoing cost reduction initiatives, the Company expects cash costs and all-in sustaining costs to trend steadily and significantly downward throughout 2022.

Outlook

As these and several other operational improvement initiatives continue to be implemented, the mine is targeting production in the range of 600-700 tonnes per day (60%-70% of mill capacity) for the first quarter of 2022 and will ramp up gradually from there as access to high-confidence, high-grade stopes increases. Average head grades are expected to initially be in the range of 5.0-7.0 g/t Au and are also expected to increase steadily as the growing drilled inventory allows for better stope scheduling and increasing stope access allows for increased ore mining rates on a sustained basis.

Of note, mining in 2021 was almost exclusively in the McVeigh Zone, which is the zone nearest to the pre-existing Main (West) Ramp, but is also the least well-defined and most geometrically irregular zone within the Mineral Reserve. McVeigh represents approximately 6% of the overall Mineral Reserves. Only three stopes from the Austin Zone, accessed via the East Ramp, were developed in 2021. Going forward, as the McVeigh Zone is depleted, the Company expects mining operational performance to benefit naturally from more continuous deposit geometry and larger, more productive stopes.

Fourth Quarter 2021 Production Summary

After reaching a low point in October, both ore production and head grade have been steadily increasing. December mine production was a record month for PureGold, and further improvements from operational improvement initiatives currently underway are expected to drive continued improvements in gold production and cost performance throughout 2022.

Full Year 2021 Production Summary

Amendments to Credit Agreement

As of December 31, 2021, the Company and its principal lending partner, Sprott Private Resource Lending II (Collector), LP (“Sprott”) have agreed to amend the restated credit agreement dated April 2021. Amended terms include a temporary reduction of the minimum cash balance, a temporary reduction of the minimum working capital position, and deferral of the completion test from December 31, 2021 to June 30, 2022.

Management Profiles

Troy Fierro – President & CEO

Mr. Troy J. Fierro is a mining engineer and seasoned mining executive who brings over 35 years of operating and leadership experience with a special focus on startups and early-stage operations. Mr. Fierro began his career in 1983 as an underground contract miner at the Homestake Gold Mine in Lead, South Dakota while completing his engineering degree. Since then, Mr. Fierro worked his way through the ranks from mine engineer to mine superintendent, MGM, and VP General Manager. Mr. Fierro subsequently held senior operational and technical leadership roles including VP Technical Services and VP Operations with Coeur d’Alene Mines. During his tenure at Coeur, Mr. Fierro was responsible for operating properties in the US and South America. He was also responsible for two underground mine startups in South America and the development of other projects in Bolivia and Alaska. As VP Operations for Metallica Resources, Mr. Fierro was responsible for the construction and startup of the Cerro San Pedro Mine in San Luis Potosi, Mexico. Metallica Resources was acquired shortly after startup by New Gold. Mr. Fierro then joined Dr. Mark O’Dea at Fronteer Gold as COO and began advancing the Long Canyon deposit in Nevada which was acquired by Newmont in 2011. During that time, Mr. Fierro joined the Board of Grayd Resources, which was advancing the La India project in Mexico. Grayd was subsequently acquired by Agnico Eagle. Mr. Fierro also provides consulting services to the industry through his firm Fierro Consulting and previously held board positions with Timberline Resources and Gold Canyon Resources before joining the board of Pure Gold Mining in 2014.

Chris Haubrich, P.Eng., M.Sc., CFA – Vice President Business Development & CFO

Chris Haubrich is a mining finance professional and registered professional mining engineer with over a decade of experience in mergers and acquisitions, corporate strategy, capital markets, operations, and engineering consulting in the mining industry. Mr. Haubrich has served as Vice President, Business Development with PureGold since January 2021, where he has been responsible for the Company’s strategy, M&A activities, commercial negotiations, and investor relations functions. Prior to joining PureGold, he served as Vice President, Investment Banking with National Bank Financial where he covered the mining industry and advised clients on a wide range of M&A and financing transactions. Mr. Haubrich started his career as an underground mining engineer with Cameco Corporation and has also worked in operational roles with Rio Tinto, Mosaic Potash, and Syncrude Canada. He holds a Bachelor of Science degree in Mining Engineering from the University of Alberta, a Master of Science degree in Mineral and Energy Economics from Colorado School of Mines and is a CFA Charterholder.

Ashley Kates, CPA, CA – Vice President Finance & Corporate Secretary

Ashley Kates is a Chartered Professional Accountant with over 15 years’ experience in accounting, finance and corporate governance, the majority of which has been spent at production and development stage mining companies. Ms. Kates joined PureGold in 2019 and manages the financial reporting, treasury, tax, and regulatory compliance of the Company. Prior to joining PureGold, she served as Corporate Controller at Atlantic Gold Corporation for five years and played a key role in the company’s successful transition from development to full production until its sale to St. Barbara Limited. Ms. Kates began her career in accounting and finance at Ernst & Young, where she spent eight years in the audit and assurance group. Ms. Kates holds a Bachelor of Commerce degree from the University of British Columbia and holds CPA and CA professional designations.

Qualified Persons and 43-101 Disclosure

Cameron Andrews, P.Eng., Superintendent, Technical Services for the Company, is the designated Qualified Person for this news release within the meaning of National Instrument 43-101 (“NI 43-101”) and has reviewed and verified that the technical information contained herein is accurate and approves of the written disclosure of same.

About Pure Gold Mining Inc.

PureGold is a Canadian gold mining company, located in the very heart of Red Lake, Ontario, Canada. Our vision is pure and simple. To build a highly profitable, multi-generational growth company in the world-class gold mining district of Red Lake. With our 100%-owned, fully constructed operating PureGold Mine, a multi-million-ounce gold endowment, and significant exploration upside, our value-maximizing strategy is to pursue operational excellence today, while investing in systematic exploration and phased expansions to fuel discovery and growth for the future.

Additional information about the Company and its activities may be found on the Company’s website at www.puregoldmining.ca and under the Company’s profile at www.sedar.com

1. For further information, see the technical report titled “Madsen Gold Project Technical Report Feasibility Study for the Madsen Deposit Red Lake, Ontario, Canada” with an effective date of February 5, 2019, and dated July 5, 2019 (the “Feasibility Study”), for further information please see www.puregoldmining.ca or under the Company’s Sedar profile at www.sedar.com
   

ON BEHALF OF THE BOARD
"Troy Fierro"                        
Troy Fierro, President & CEO

Investor inquiries:
Adrian O’Brien, Director, Marketing and Communications
Tel: 604-809-6890
aobrien@puregoldmining.ca

Non-IFRS Financial Performance Measures

The Company has included certain non-IFRS measures in this new release. Refer to the Company’s MD&A for an explanation of non-IFRS measures. The Company believes that these measures, in addition to measures prepared in accordance with International Financial Reporting Standards (“IFRS”), provide readers with an improved ability to evaluate the underlying performance of the Company and to compare it to information reported by other companies. The non-IFRS measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. These measures do not have any standardized meaning prescribed under IFRS, and therefore may not be comparable to similar measures presented by other issuers.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

All statements in this press release, other than statements of historical fact, are "forward-looking information" with respect to PureGold within the meaning of applicable securities laws, including, but not limited to statements with respect to those that address proposed timing of development plans for the PureGold Mine complex, timing of expected production, potential for advancing the amount and timing for higher grade ore, potential for additional resources and expansion of known deposits and potential for making new discoveries and the focus of the Company in the coming months . Forward-looking information is often, but not always, identified by the use of words such as "seek", "anticipate", "plan", "continue", "planned", "expect", "project", "predict", "potential", "targeting", "intends", "believe", "potential", and similar expressions, or describes a "goal", or variation of such words and phrases or state that certain actions, events or results "may", "should", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking information is not a guarantee of future performance and is based upon a number of estimates and assumptions of management at the date the statements are made including, among others, assumptions about future prices of gold and other metal prices, currency exchange rates and interest rates, favourable operating conditions, political stability, obtaining governmental approvals and financing on time, obtaining renewals for existing licences and permits and obtaining required licences and permits, labour stability, stability in market conditions, availability of equipment, accuracy of any mineral resources, successful resolution of disputes and anticipated costs and expenditures. Many assumptions are based on factors and events that are not within the control of PureGold and there is no assurance they will prove to be correct.

Such forward-looking information, involves known and unknown risks, which may cause the actual results to be materially different from any future results expressed or implied by such forward-looking information, including, risks related to the interpretation of results at the Pure Gold Red Lake Mine complex; changes in project parameters as plans continue to be refined; current economic conditions; future prices of commodities; possible variations in grade or recovery rates; the costs and timing of the development of new deposits; failure of equipment or processes to operate as anticipated; the failure of contracted parties to perform; the timing and success of exploration and development activities generally; delays in permitting; possible claims against the Company; the timing of future economic studies; labour disputes and other risks of the mining industry; delays in obtaining governmental approvals, financing or in the completion of exploration as well as those factors discussed in the Annual Information Form of the Company dated March 31, 2021 in the section entitled "Risk Factors", under PureGold’s SEDAR profile at www.sedar.com.

Although PureGold has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. PureGold disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise unless required by law.