Pure Gold Mining has announced the closing of a $90m (£74m) project financing package with Sprott Resource Lending, a Canadian financier to develop an underground mine at the company’s Madsen Gold Project.
The financing is comprised of a $65m (£53m) credit facility, and a $25m (£20m) callable gold stream.
In addition to the financing, Sprott has recently purchased units in Pure Gold’s non-brokered private placement worth $5m (£4m), recently closed in July 2019.
Following the procurement of funds for the project, Pure Gold has secured its board of directors approval for the construction of the Madsen Red Lake Mine.
The Madsen Red Lake Gold Mine holds a historical production of 2.6 million ounces of gold and a current indicated resource of 2,063,000 ounces gold at 8.9 g/t gold.
Pure Gold president and CEO Darin Labrenz said: “With access to the capital provided by the Financing, the construction of the Madsen Red Lake Mine is now fully funded. We are very pleased with the financial commitments that Sprott have made towards the development of the Project.
“We have achieved our objective of securing a flexible financing package on terms that are competitive and protect the upside for our shareholders. The optionality of repayment of both the Facility and the Gold Stream in a rising gold price environment provides an opportunity to refinance once in production and generating solid cash flows from the mine.”
Pure Gold targets the first gold pour at Madsen Project by the end of 2020
The company is planning to start the development activities at the site, with approximately C$90m (£55m) in its treasury, and a recent project agreement signed with Wabauskang First Nation and Lac Seul First Nation.
Pure Gold targets to achieve the first gold pour at the site by the end of 2020.
Sprott Principal Dušan Petković said: “As one of the largest investors dedicated to the natural resource sector, Sprott is excited to partner with Pure Gold on the development of the Madsen Gold Project. Our partnership with Pure Gold is consistent with our strategy of providing innovative and flexible capital to maximize the value of exceptional projects.”
