Ontario’s Red Lake district has been recognized as one of the richest gold-producing areas of North America for many years, but that doesn’t mean just anyone can move in and strike it rich. The geology of the area requires a lot of skill and expertise in order to capitalize on the rich mineral resources found in the ground, and it takes a very special combination of experience and knowledge to make the most of the opportunities the Red Lake district presents.
Fortunately for junior exploration and development company Pure Gold Mining Inc., experience and knowledge are two things the company has in abundance. As President and CEO Darin Labrenz explains, the company was founded with a strong base of know-how specifically grounded in the Red Lake district. “One of our greatest strengths here is the depth of our senior leadership,” Labrenz says.
The company’s extensive knowledge base has helped it come a long way in a short time since its inception in early 2014. Labrenz, a geologist by background, had previously been working with a senior gold producer and spent much time in the Red Lake area performing underground and resource modeling work. He says the time he spent working there gave him an appreciation and understanding of the area, and so when he was discussing potential opportunities for new ventures a few years ago it was only natural that Labrenz and his new partners set their sights on the Red Lake district.
As the company moves ahead with its flagship the Madsen Gold Project, Pure Gold Mining is overcoming many of the typical challenges faced by juniors through its strong leadership and extensive experience. Also, the strength of the Madsen project is helping to make Pure Gold Mining look much more attractive to potential investors than many other gold projects in the works around the world.
All told, Pure Gold Mining has more than 120 years of combined experience in its senior leadership team, and more than 50 of those years have been concentrated on the Red Lake district. In addition to the many years Labrenz spent at the Red Lake Camp, Vice President of Exploration Darren O’Brien spent several years working in exploration for Placer Dome Inc. at the Red Lake Camp before joining Pure Gold Mining. Director of Geoscience Phil Smerchanski served as a technical advisor to Goldcorp’s high-grade generative exploration team in the Red Lake Camp, as well.
Labrenz says that familiarity with the district is essential for Pure Gold Mining, given the complexity of the geology in the region. Beyond the physical difficulties of mining in Red Lake, Labrenz says the company’s knowledge base and experience also have been crucial in helping the company overcome a major challenge: capital.
The biggest difficulty any mining company – especially juniors – has to contend with at the moment is access to capital. Labrenz says the current market for capital is one of the most difficult the industry has seen in recent memory. But, fortunately, it has been much easier for the company to access capital than most of its competitors because investors see its management’s experience. “It comes back again to people,” Labrenz says.
Aside from the strength of Pure Gold Mining’s leadership team, Labrenz says the company is proud of the strength of its Madsen Gold Project, which was acquired by Pure Gold Mining about two years ago. The Madsen project was the Red Lake area’s first million-ounce gold producer, and has been in operation in varying degrees since 1935.
The Madsen project is ranked as the 14th-highest-grade undeveloped deposit in the world, according to a 2013 report by Natural Resource Holdings, and the property contains two past producing mines. One of these is the Madsen Mine, which has produced more than 2.4 million ounces of gold to date. The company says the four zones within the Madsen Mine have a combined indicated resource of approximately 928,000 ounces and an inferred mineral resource of nearly 297,000 ounces.
Labrenz says the fact that the project is located within a relatively stable jurisdiction and features extensive access to critical infrastructure makes it very attractive to capital that otherwise would be wary of investing in gold projects because of their political instability or undeveloped nature.
“We have a project that ticks those boxes,” Labrenz says. “The world is looking at what makes some projects successful, and it’s being able to mitigate the risks.”
The strengths of the Madsen Gold Project and the company’s management team add up to optimism for the Pure Gold Mining. He says that as long as things continue to go the company’s way, it can expect to become a much bigger player in the Red Lake district and beyond in the near future. “We’re looking to grow our presence within Red Lake, and we’re going to do that through exploration,” Labrenz says.
[Details correct at time of writing]