Pure Gold Mining Inc. (TSX VENTURE:PGM) ("Pure Gold" or the "Company") is pleased to announce that it has signed a Definitive Agreement to acquire a 100% interest in the 219-hectare Derlak Gold Property from Orefinders Resources Inc. ("Orefinders"). Consideration payable for the property purchase includes $0.5 million in cash and 1,290,322 common shares of the Company.
The Derlak property consists of 11 patented mining claims filling an important keyhole gap in the Madsen Gold Project claim package, and combined with existing 100% owned Madsen claims, provides exposure to a contiguous 47 square kilometre land package. Strategic rationale for the property purchase include:
- New property package covers the key structural break in the Red Lake District that hosts the past-producing Howey, Hasaga, Buffalo, Madsen, and Starratt Olsen gold mines.
- Secures the long term future of Madsen's northeast plunging Austin Horizon mineralization:
- Madsen's past production, plus current mineral resource, form a sizable high grade gold mineralized system which is open for expansion down plunge;
- Projected upper limit of the Madsen mineralization crosses the Derlak acquisition boundary at approximately 1.2 kilometre depth, and projected lower limit crosses the Derlak acquisition boundary at approximately 2.2 kilometre depth;
- Similar deposits in the camp (Goldcorp's Red Lake Mine Complex) are currently being exploited at vertical depths of up to 2.4 kilometres;
- Drill hole AD-11-01 intersected Madsen mineralization at 2.1 kilometres vertical depth and 700 metres below the mined stopes, returning 14.3 g/t gold over 2.0 metres and confirming the depth potential in this plunge direction1.
"Acquisition of the Derlak Property is consistent with Pure Gold's strategy of consolidating properties in the Madsen Gold Project that have the potential to host high-grade gold deposits," said Darin Labrenz, President and CEO of Pure Gold. "Madsen historically produced well over 2.4 million ounces to a vertical depth of 1,200 metres, where it remains open down plunge. Large Archean gold systems typically have very deep roots, and drilling by previous operators confirms the down plunge extension of the Madsen mineralized system, intersecting high grade gold at a depth of 2,100 metres. Our current phase of exploration at Madsen continues to focus along the Madsen-to-Starratt mineralized corridor, with surface and shallow underground exploration close to the existing permitted mining infrastructure. Madsen is a large gold system, and this strategic acquisition secures future large-scale exploration potential of Austin, which remains open to depth."
The closing of the transaction is expected in March 2017, and is subject to receipt of all required regulatory and third party consents and satisfaction of customary closing conditions and documentation.
For a map showing the location of the property acquisition, click link below:
For a long section showing Austin horizon relative to the property acquisition, click link below: