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PureGold's turnaround plan - CEO Mark O'Dea

Kitco News

(Kitco News) - PureGold expects a significant improvement in production in Q3 this year.

On Thursday CEO Mark O'Dea and COO Terry Smith talked to Kitco.

The company's PureGold Mine is situated in the Red Lake District, Ontario. O'Dea is chair of Oxygen Capital, a mining house which inlcudes PureGold, Libertygold, NorthwestCopper and Discoverysilver.

PureGold (TSX-V:PGM, LSE:PUR) declared commercial production a year ago. Operations proved disappointing. In March the company listed a number of factors for the under performance.

"Mined tonnes and gold grades have, on average, been lower than expected throughout 2021 due to shortages of high-grade ore at various times," wrote the company. "High-grade ore shortages led to blending of low-grade material and stockpiles which reduced the overall feed grade to the mill. These shortages were caused by a combination of factors including development delays, insufficient scheduling flexibility, insufficient geologic information available for stopes prior to mining, equipment downtime, and strategic misalignments."

Year-to-date PureGold's stock has dropped 83% to 12 cents a share. Gold miners within the GDX are down just 19% over the same period.

PureGold's financing had to be re-negotiated. The management team was reshuffled. O'Dea assumed the CEO role in the spring, and a turnaround plan was announced.

The company updated its mineral resource estimate earlier this month.

"So far during the third quarter, both costs and revenues are trending in the right direction on a sequential quarterly basis, due to the groundwork laid in the first and second quarters. As a result, the company forecasts the mine to deliver positive site-level cash flow in the third quarter, achieving a previously stated objective," wrote the company in its most recent update. "The company is expecting a significant improvement in production in the third quarter compared to either the first quarter or the second quarter of the year as the benefits of investments made in operational improvements begin to pay off."

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