Pure Gold Mining releases feasibility on Madsen in Red Lake

Total life of mine capex including closure costs for the underground mine are expected to come in at $327 million. Madsen is one of the highest grade undeveloped gold deposits in the world.

The study forecasts a mine life of 12.2 years with a pre-production period of 13 months, and total gold production of 970,000 ounces for an average of 80,000 ounces a year.

Operating cash costs and all-in sustaining costs for the 800-tonne-per day operation over the mine life are estimated at US$607 per oz. and US$787 per oz., respectively.

Madsen’s after-tax net present value at a 5% discount rate is $247 million and after-tax internal rate of return 36%, which should result in initial capex recovered in just under three and a half years.

The mine plan in the feasibility study envisions a combination of methods from conventional cut and fill (59%), mechanized cut and fill (16%), and longhole mining (25%).

The feasibility study was based on Madsen’s indicated resource of 1.86 million ounces of gold contained within 6.43 million tonnes grading 9 grams gold and did not include mineralization from any of the project’s satellite deposits (Wedge, Fork and Russet South).

The satellite deposits outcrop within one to three kilometres of the Madsen mill will be the subject of an upcoming preliminary economic assessment.

On Feb. 5 the company updated its resource estimate for Madsen and the three satellite deposits to 2.06 million ounces contained within 7.19 million indicated tonnes at an average grade of 8.9 grams gold per tonne. Inferred resources were estimated at 467,000 ounces of gold contained within 1.88 million tonnes of 7.7 grams gold per tonne.

Madsen is one of the highest grade undeveloped gold deposits in the world.

Pure Gold’s 47-sq.-km patented land position hosts two past-producing mines, including the Madsen mine. The two mines produced about 2.5 million ounces of gold over an operating history of 36 years.

The project has power, paved highway access, a 1,275-metre-deep shaft and headframe, 27 levels of underground workings, a portal and ramp, and a mill and tailings facility. An existing environmental compliance approval allows for the operation of a 1,089-tonne-per-day mill and processing plant.

This story first appeared in The Northern Miner