Red Lake gold mine developer cashes up for 2020 production

Billionaire investor Eric Sprott has taken a 10.2 per cent stake in Pure Gold Mining.

The Vancouver mine developer announced it’s raised $47.5 million at the closing of both bought-deal and non-brokered private placements, July 18.

Most of the money is earmarked for ongoing exploration and mine development at the company’s cornerstone project, the Madsen Mine, southwest of the town of Red Lake in northwestern Ontario.

Madsen, a former operating mine in the Red Lake gold camp, has a 2.6-million ounce indicated and inferred resource base with a 12-year mine life when it’s scheduled to go into commercial production in the middle of 2020.

In a statement Pure Gold president Darin Labrenz said this influx of capital gives them to flexibility to continue mine building and pursue an aggressive exploration campaign to boost their resource base.

He was also thrilled to have the founder of Sprott Capital Partners aboard as a 10 per cent shareholder. Sprott gobbled up $19.8 million of the bought-deal private placement.

“Mr. Sprott is now the second largest shareholder of Pure Gold behind AngloGold Ashanti and joins key strategic shareholders including Rob McEwen and Newmont Goldcorp, which collectively hold more than 30 per cent of the float.

“I would like to thank existing shareholders who continue to support the Company’s strategy, and welcome new shareholders, including Eric Sprott and a widened following out of the UK, who have decided to invest in the Pure Gold story at this exciting time in our development.

“With the completion of the equity transactions we have no need for additional equity as we continue to develop our project into a rising gold market.”