Pure Gold Mining Decides to Keep Flagship Ontario Mine on Care and Maintenance

SEATTLE (Scrap Monster): Pure Gold Mining Inc. announced key financial update and an operations update with regards to its flagship PureGold mine in Ontario.

According to company press release, the company has decided to suspend its operations at the Ontario mine immediately and place it on care and maintenance. The company arrived at this decision after evaluating several potential alternative scenarios. It has become necessary since the mine has not yet achieved a consistent positive site-level cash flow.

Consequently, the company has withdrawn its earlier guidance of 9,000-12,500 ounces set for Q4 2022. It must be noted that Pure Gold Mining had surpassed its Q3 production guidance of 9,000 ounces.

Pure Gold’s current cash balance is around $2 million, with net working capital deficit is approximately $13 million. The company expressed fears that it may not be able to meet its due obligations, if it fails to obtain additional outside financing in the short term. Meantime, it is collaborating with Sprott Resource Lending Corp. to evaluate several near-term funding and strategic alternatives. 

The company had earlier announced expectations to receive at least some additional funding in 2022 from the exercise of warrants. However, under the given market conditions, it no longer expects to receive any such proceeds before their expiry on November 25-27, 2022.

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