Madsen - Red Lake Gold Project: Overview
The Madsen Gold Project Feasibility Study outlines a high-grade underground mining operation with a production rate of 800 tonne per day (“tpd”) at modest initial capital cost and returning strong financial performance1.
The mine plan outlined in the current feasibility study is the first phase in our Madsen - Red Lake strategy to be Ontario’s next gold mine. Work to date has demonstrated that Pure Gold has a robust development plan at Madsen with outstanding potential for growth and opportunities for scalability. Along with the feasibility study a preliminary economic assessment completed on the Fork, Russet South, and Wedge deposits has demonstrated the potential to either add mine life or improve annual production throughput at Madsen with further advancement of these deposits1. The Company plans to continue exploring these zones to define further mineralization and upgrade the resource classification with the goal of determining the feasibility of adding production from these zones to the Madsen mine production profile.
High Grade Deposit
The Madsen-Red Lake orebody is an exceptional foundation on which to build a gold mining company. With Probable Mineral Reserves of 3.5 Mt at 9.0 g/t containing 1.0 million ounces of gold included in a Mineral Resource of 7,196,000 Indicated tonnes grading 8.9 g/t gold for 2,063,000 ounces of gold and 1,880,000 Inferred tonnes grading 7.7 g/t gold for 467,000 ounces of gold, the Madsen Gold Project ranks 11th out of 132 projects globally by grade, or in the 8th percentile1,2.
Location: Red Lake Gold Mining District
Over its more than 90 year history, the Red Lake Mining District in northwestern Ontario has produced more than 29 million ounces of high grade gold, making this one of the largest gold producing districts in Canada1.
Existing Infrastructure and Land Position
The 47 square kilometre patented land position is host to two significant past producing mines, the Madsen and Starratt Mines which together produced approximately 2.5 million ounces of gold. Substantial infrastructure is in place, including a mill and tailings facility, grid power and paved highway access, a 1,275 metre deep shaft and headframe, 27 levels of underground workings, a portal and ramp, and substantial permits. The existing infrastructure provides a solid foundation on which to build a modern long life mining and processing operation.
Feasibility Study: the First Phase in the Madsen - Red Lake Strategy
With the feasibility study now complete Pure Gold will continue to advance Madsen towards development. In August 2018 the Company announced that it had appointed Endeavour Financial as its financial advisor to provide advisory services with respect to debt financing for the construction and development of Madsen. This process is well advanced and discussions are underway and advancing with multiple potential financiers. Concurrent with financing the company is reviewing a production decision3.
Over the coming months, the Company will be focused on:
Continuing working with First Nations to promote a cooperative and mutually respectful relationship concerning Pure Gold’s development plan, and to finalize an agreement to govern this relationship;
Optimizing the project execution schedule, including detailed engineering, procurement and permitting;
Continuing environmental studies and documentation to support the update and filing of existing permits and filing for additional permits that may be required;
Commencing detailed engineering and design activities; and
Continuing exploration with the aim of making new discoveries and continuing growth of the resource base.
- See the National Instrument 43-101 technical report entitled “Madsen Gold Project Technical Report, Feasibility Study for the Madsen Deposit and Preliminary Economic Assessment for the Fork, Russet South and Wedge Deposits Red Lake, Ontario, Canada” with an effective date of February 5, 2019 for complete details, available on the Company’s website at www.puregoldmining.ca or Sedar profile at www.sedar.com.
- National Bank: “Gold Sector Analysis & Review”, October 2018.
- See Pure Gold Mining Inc. Management’s Discussion & Analysis For the six month’s ended September 30, 2018, pp2.
Phil Smerchanski, P. Geo, Vice President, Exploration of the Company, is a Qualified Person within the meaning of NI 43-101. Mr. Smerchanski has reviewed and verified that the technical information contained herein is accurate and approves of the written disclosure of the same.
The Madsen Project is located within the Red Lake Greenstone Belt (RLGB) of the Archean Superior Province craton of the Canadian Shield. The RLGB is approximately 50 km by 40 km and comprises 2.99 2.70 Ga deformed and metamorphosed supracrustal (volcanic and sedimentary) rocks intervening between three main granitoid batholiths. The RLGB boasts a prolific history of gold production over a 90 year history. All major deposits in the RLGB are hosted within the ca. 2.99-2.96 Ga Balmer Assemblage which includes the belt’s oldest volcanic rocks that are predominantly of submarine mafic thoeliite and ultramafic komatiite composition. Gold deposits in the RLGB are classified as orogenic gold deposits (Groves et al., 1998) and characterized by an association with crustal-scale fault structures. Gold deposition in orogenic gold deposits is typically syn-kinematic and syn- to post-peak metamorphic and is largely restricted to the brittle-ductile transition zone.
Rock units of the RLGB are multiply deformed and metamorphosed. On the Madsen Property, this complex deformation history is most readily explained through an early phase of tight upright folding (D1) and an overprinting minor folding event and associated widespread foliation development (D2). Significantly, the Madsen, Fork, Russet South, and Wedge deposits all occur within planar structures (shear zones) that developed generally axial-planar to property-scale D1 folds. These early planar mineralized structures are the main targets for further gold exploration at the Madsen Gold Project and although they have been strongly overprinted by penetrative D2 deformation and metamorphism, they can be effectively identified by a distinct series of mineral phases (alteration), vein styles (blue-grey, deformed quartz veins) and quartz porphyritic intrusions that pre-date gold mineralization and occur within the D1 shear zones.
In some ways, the Madsen deposits seem atypical in that they are strongly overprinted by deformation and metamorphism rather than being syn- to post-peak metamorphic. The age of D1 deformation and gold mineralization, however, is poorly constrained and if the overprinting deformation is unravelled from the Madsen deposits, they closely fit the orogenic gold deposit model including an association with crustal scale structures and an association with pervasive structurally-controlled carbonate alteration and quartz-carbonate.
- See the National Instrument 43-101 technical report entitled “Madsen Gold Project Technical Report, Feasibility Study for the Madsen Deposit and Preliminary Economic Assessment for the Fork, Russet South and Wedge Deposits Red Lake, Ontario, Canada” with an effective date of February 5, 2019 for complete details, available on the Company’s website at www.puregoldmining.ca or Sedar profile at www.sedar.com or Click here to download the Technical Report for the Madsen Gold Project, Red Lake, Ontario, Canada
Phil Smerchanski, P.Geo, Vice President Exploration of the Company, is a Qualified Person within the meaning of NI 43-101. Mr. Smerchanski has reviewed and verified that the technical information contained herein is accurate and approves of the written disclosure of the same.
The existing infrastructure on-site at Madsen Gold Project combined with the high-grade mineral resources contributes to a robust project.
The Madsen Gold Project was the second largest historic producer in Red Lake over a 38 year period and was rebuilt, permitted, and mined briefly in the late 1990’s.
Madsen is located approximately ten kilometres southwest of the town of Red Lake, Ontario. Located on patented claims, there is year-round access to the property via Ontario Highway 618. Numerous secondary roads transect the 4,700 hectare property providing simple access for exploration programs.
The Madsen Mine infrastructure includes:
- 550 tonne per day mill
- Tailings management facility; Existing Environmental Compliance Approval allows for operation of a 1,089 tonne per day operation
- 5 compartment,1,275 metre deep shaft and headframe
- 27 levels of underground workings, recently dewatered and rehabilitated to 16 level
- Portal and Decline: Underground exploration and delineation drilling commenced via the Madsen portal in July 2017. The portal provides ramp access to the top 150 meters of mine workings including Austin, South Austin, and McVeigh Deposits. The PEA study contemplates underground mining with access through the portal.
Madsen Gold Project is connected to roads and power and has access to an experienced workforce in the Red Lake area.
The mill consists of a single stage crushing circuit and a two stage grinding circuit, which is then followed by cyanide leaching. The leached gold is collected in a carbon-in-pulp circuit which is subsequently stripped using mild caustic and collected on stainless steel mesh cathodes by electrowinning. The product from electrowinning is refined into dore bars in an induction furnace. Ontario Hydro supplies power via overhead lines at 44KV to a step-down transformer on the Madsen property.
The mill has been kept on care and maintenance since 1999. Other infrastructure includes the headframe, hoists, vent raises, coreshack/warehouse, shop, project offices, and ancillary buildings.
(1) See the Company's National Instrument 43-101 technical report entitled "Technical Report on the Preliminary Economic Assessment for the Madsen Gold Project", prepared by Nordmin Engineering Ltd., dated effective April 20, 2016. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability.
(2) Phil Smerchanski, P.Geo, Vice President Exploration of the Company, is a Qualified Person within the meaning of NI 43-101. Mr. Smerchanski has reviewed and verified that the technical information contained herein is accurate and approves of the written disclosure of the same.
Gold was originally reported in the Red Lake area in 1897 by R.J. Gilbert of the North Western Ontario Development Company. The exploration and mining history of the Red Lake Mining district dates back to 1925, when significant gold was first discovered by prospector L.B. Howey. The gold bearing veins he discovered were developed into Red Lake's first producing mine, the Howey Mine.
Since 1925, a total of 28 mines have operated in the district producing approximately 29 million ounces of gold. Over 85 percent of this gold was produced from two mines; Goldcorp’s Red Lake Mine Complex and Pure Gold's Madsen Mine. The Madsen Mine was the first million ounce gold producer in the Red Lake district.
The history of the Madsen Mine can be sub-divided into five main periods:
- Operation between 1938 and 1976, where 2.5 million ounces of gold were produced at an average grade of 9.9 grams per tonne;
- Acquisition, exploration, underground development, permitting, and installation of the mill complex and tailings management facility by Claude Resources from 1997 to 1999;
- Brownfield exploration completed by Placer Dome under an option from Claude between 2001 and 2006. Discovery of several new zones including Fork and Treasure Box;
- Dewatering, surface and underground drilling, and maiden resource estimate completed by Claude between 2006 and 2013;
- Acquisition of the project by Pure Gold; consolidation of the properties along the Madsen Mine Trend; expansion of the Mineral Resource through focussed exploration; environmental and engineering studies, permitting, and advancement of the project towards develpment from 2014 - current .