The company plans to reopen a former-producing mine in Canada next year
Thursday 23 May 2019 Author: Yoosof Farah

Fans of gold mining stocks should note that Pure Gold (PUR) has listed on London’s Main Market (21 May). The £78m company plans to reopen the Madsen Red Lake gold mine in Ontario next year. Its shareholders include large mining company AngloGold Ashanti.

Pure Gold has turned to the UK for investor support after seeing the Canadian market turn its back on smaller mining firms in favour of fast growth areas like cryptocurrency, cannabis, e-sports and blockchain.

The company believes the London stock market is underserved with mining companies owning high quality projects.

It is confident that 1m ounces of gold can be economically extracted from Madsen Red Lake at a grade of 9 grams per tonne, based on the current reserve statement, and it sees potential for significant additional ounces to be proved up.

A feasibility study says the mine will cost US$70m (C$95m) to build and will have a US$787 per ounce all-in sustaining cash cost, implying decent profit margin potential versus the current gold price of $1,272 per ounce.

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