VANCOUVER, British Columbia, Oct. 24, 2022 (GLOBE NEWSWIRE) -- 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 million1. 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.
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1 Excluding current amounts owing under the Company’s debt obligations to Sprott.