A $6 million deal should lead to a restart of a major gold mine in the Red Lake area.
West Red Lake Gold Mines Ltd. has announced an agreement with Sprott Resource Lending Corp. to acquire the entirety of Pure Gold Mining’s issued and outstanding shares.
The deal hands West Red Lake the Madsen Gold Mine property, which is considered to be one of the world’s highest-grade, undeveloped gold projects.
In October of 2022, Pure Gold stopped all operations at the Madsen mine due to financial issues, with cash balances reported at $2 million but deficits estimated to be roughly $13 million.
The Madsen mine property will also come with a mill, double ramp access, significant underground mine development, a 2,75 metre shaft, management infrastructure, a water treatment facility, an all-season access road and the required permits to restart production.
“I am proud to be supporting the company that continues the work of past generations at the Madsen Mine, said investor Frank Giustra, who owns 18 per cent of WRLG shares.
“The acquisition appeals to me due to its high-grade resources, modern infrastructure, potential, and strategic location. I look forward to contributing to the company’s growth and energizing this iconic Canadian gold camp for future generations.”
The PureGold deposit is a 1.65 million-ounce resource with 1.3 million metres of drilling in a 7.5-kilometre-long corridor. It’s located next door to the Red Lake Mine Complex, which has produced over 25 million ounces of gold in its lifetime.
Red Lake is known as the high-grade gold capital of the world, as the area has produced more than 30 million ounces of gold in its history.
Elsewhere in the area, Kinross Gold is continuing testing on its 60,000-acre Dixie mine project south of Red Lake and an economic assessment is expected by 2024.