Abitibi Metals boosts resource by 62% at B26 polymetallic deposit in Quebec
Indicated resources increased to 11.3 million tonnes from 6.9 Mt.
Pure Gold Mining (TSXV: PGM; US-OTC: LRTNF) management was fielding uncomfortable questions from concerned shareholders during a conference call Tuesday following the company’s release of what investors termed a ‘tortuous’ second-quarter operations update and financial report.
While the company cited an expected “significant improvement in production” in the third quarter, it says it remains on track to complete an updated mine plan and prefeasibility study by year-end. However, the extreme focus on near-term production does little to ease shareholder apprehension over the asset’s muddled longer-term outlook.
Pure Gold said output fell during the second quarter due in part to cash-preservation measures taken by the company while negotiating financing agreements. For the three months, the PureGold mine in Ontario’s famed Red Lake District saw a reduction in workforce, and the mill was operating at only 50% capacity. Main ramp development remained halted in favour of near-term production.
Mining totalled 40,551 tonnes of ore (an average of 445 tonnes per day) and 85,267 tonnes (an average of 471 tonnes per day) for the first half of 2022. Overall, Pure Gold produced 3,509 oz. during the period and 8,244 oz. for the first half of 2022.
While the company saw a 30% reduction in costs compared to the first quarter, it still booked an operating loss of C$18.5 million and C$41.9 million for the quarter and the half, respectively. The net and comprehensive losses totalled C$20.8 million and C$42.2 million. All figures were higher than their comparative periods in 2021.
During the analyst conference call, David Smith of the Morgan Report had some pointed questions for president and CEO Mark O’Dea, who runs the Oxygen Capital group of companies, and took over management from Troy Fierro in April.
“Mark, you may remember about a year ago, you and I had tremendous talks, and I listened to you as someone who has been able to pull off this concept successfully several times before,” he said in framing his question.
He said it contrasted with the current message. “The same goes for the share price; first, $4 was the best place to take a profit on the way down to $2, to 7¢. I’m just wondering how someone with your capability, who has done this before, to build this as one of the best 94% of projects out there, is going to put out such a torturous circumstance?” the investor wanted to know. “It’s the most torturous thing I’ve read in 25 years.”
Smith wanted to know what fundamental thing he was missing between months of little to no news flow from the company and basic things being overlooked — like drilling a stope that has low yield and paying too much for a camp. “This project has gone through several management teams, and Eric Sprott, a sharp cookie, is even involved. How can we all get so far off base on this? Am I missing something really, really fundamental and important?”
