TIDMPUR
RNS Number : 8420D
Pure Gold Mining Inc.
24 October 2022
NEWS RELEASE 22-25 October 24 , 2022
PureGold Provides Financial and Operations Update
VANCOUVER, B.C. - Pure Gold Mining Inc. (TSX-V:PGM, LSE:PUR)
("PureGold" or the "Company"), announces a financial update
regarding its cash balance, working capital and discussions with
its lender. The Company also provides an operations update
regarding its PureGold Mine in Ontario.
The Company's current cash balance is approximately $2 million
and net working capital deficit is approximately $13 million[1].
PureGold has previously noted that it expected at least some
additional funding in 2022 to come from the exercise of warrants
(the "Warrants") issued in conjunction with its May 2022 financing.
The Warrants are currently priced to be exercised at $0.18 per
share and, given current market conditions, the Company no longer
expects to receive any proceeds from warrant exercises prior to
their expiry on November 25-27, 2022. To date, none of the Warrants
have been exercised, and the Company has, so far, been unable to
obtain alternative outside financing in order to continue
operations, complete its ongoing Pre-Feasibility Study ("PFS") and
Life-of-Mine plan, and continue its ongoing strategic review
process.
The Company is suspending operations and placing the PureGold
Mine on care and maintenance immediately. This step follows an
evaluation of several potential alternative scenarios and has
become necessary because the mine has not yet achieved consistent
positive site-level cash flow, notwithstanding recent reductions in
operating costs and sequential quarter over quarter increases in
production. The suspension of operations has resulted in the
Company withdrawing its guidance for Q4 2022.
If additional outside financing is not obtained in the short
term, PureGold will not be able to meet its obligations as they
become due, resulting in a default under its debt obligations. The
Company continues to work collaboratively with its lender, a fund
managed by Sprott Resource Lending Corp. ("Sprott"), to evaluate
several near-term funding and strategic alternatives. This process
will include evaluation of all available options, including
possible sale or restructuring scenarios, in order to preserve
asset value for the benefit of all stakeholders.
Additional information about the Company and its activities may
be found on the Company's website at www.puregoldmining.ca and
under the Company's profile at www.sedar.com
ON BEHALF OF THE BOARD
"Mark O'Dea"
Mark O'Dea, Interim President & CEO
Investor inquiries:
Adrian O'Brien,
Director, IR & Communications
Tel: 604-809-6890
aobrien@puregoldmining.ca
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release.
All statements in this press release, other than statements of
historical fact, are "forward-looking information" with respect to
PureGold within the meaning of applicable securities laws,
including, but not limited to statements with respect to the
planned transition of the PureGold Mine to care and maintenance,
expectations regarding timing of and ability to complete the
Pre-Feasibility Study, Life of Mine plan, and strategic review
process; expectations regarding the Company's ability to find
near-term financing; and expectations that the evaluation of
several near-term funding and strategic alternatives will result in
a favourable outcome for all stakeholders. Forward-looking
information is often, but not always, identified by the use of
words such as "seek", "anticipate", "plan", "continue", "planned",
"expect", "project", "predict", "potential", "targeting",
"intends", "believe", "potential", and similar expressions, or
describes a "goal", or variation of such words and phrases or state
that certain actions, events or results "may", "should", "could",
"would", "might" or "will" be taken, occur or be achieved.
Forward-looking information is not a guarantee of future
performance and is based upon a number of estimates and assumptions
of management at the date the statements are made including, among
others, assumptions about future prices of gold and other metal
prices, currency exchange rates and interest rates, favourable
operating conditions, political stability, obtaining governmental
approvals and financing on time, obtaining renewals for existing
licences and permits and obtaining required licences and permits,
labour stability, stability in market conditions, availability of
equipment, accuracy of any mineral resources, successful resolution
of disputes and anticipated costs and expenditures. Many
assumptions are based on factors and events that are not within the
control of PureGold and there is no assurance they will prove to be
correct.
Such forward-looking information, involves known and unknown
risks, which may cause the actual results to be materially
different from any future results expressed or implied by such
forward-looking information, including, risks related to the
interpretation of results at the Pure Gold Red Lake Mine complex ;
changes in project parameters as plans continue to be refined;
current economic conditions; future prices of commodities; possible
variations in grade or recovery rates; the costs and timing of the
development of new deposits; failure of equipment or processes to
operate as anticipated; the failure of contracted parties to
perform; the timing and success of exploration and development
activities generally; delays in permitting; possible claims against
the Company; the timing of future economic studies; labour disputes
and other risks of the mining industry; delays in obtaining
governmental approvals, financing or in the completion of
exploration as well as those factors discussed in the Annual
Information Form of the Company dated March 30, 2022 in the section
entitled "Risk Factors", under PureGold's SEDAR profile at
www.sedar.com .
Although PureGold has attempted to identify important factors
that could cause actual actions, events or results to differ
materially from those described in forward-looking information,
there may be other factors that cause actions, events or results
not to be as anticipated, estimated or intended. There can be no
assurance that such information will prove to be accurate as actual
results and future events could differ materially from those
anticipated in such statements. PureGold disclaims any intention or
obligation to update or revise any forward-looking information,
whether as a result of new information, future events or otherwise
unless required by law.
[1] Excluding current amounts owing under the Company's debt
obligations to Sprott.
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END
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