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Red Lake’s PureGold mine has stopped all operations and could be sold in the future.
The owner of the mine, Pure Gold Mining Inc. based out of Vancouver, says the company is suspending the mine’s operations and placing it on a care and maintenance status immediately, as the mine hasn’t been able to break even financially.
The company says its current cash balance sits at $2 million and its net working capital deficit sits at $13 million. They had been hoping to secure outside financing to continue operations, but plans to exercise warrants at $0.18 per share fell through earlier this year.
PureGold says they will continue to try to secure outside financing and are working with lenders, but executives will be looking at the possible sale or restructuring of the property.
In 2019, Pure Gold announced it would try to renovate and reopen the mine by the end of 2020. The company had hoped to generate $2.3 billion in revenue from their first phase of operation.
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.
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.