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Pure Gold Mining: A Disappointing Start To Mining Madsen

Taylor Dart profile picture
Taylor Dart


  • Pure Gold Mining released its preliminary results from Q1, with a disappointing start to mining at its Madsen-Red Lake Mine.
  • While Pure Gold managed to ramp up to above 75% nameplate capacity since January with peak throughput of 897 tonnes per day, grades have been a major disappointment.
  • Challenges are not unusual for any new mine, but it's looking like this will be a sub 45,000-ounce year for Pure Gold in terms of gold production.
  • An oversold rally is possible after a 3-week correction of 36%, but I would view any rallies back to the US$1.65 level as selling opportunities.

Mining drilling machine.
Photo by Alfio Manciagli/iStock via Getty Images

The Q4 Earnings Season for the Gold Juniors Index (GDXJ) is nearly over, and several companies are getting ready to report their preliminary Q1 operating results. One of the first names to report

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Taylor Dart profile picture
"A bull market is when you check your stocks every day to see how much they went up. A bear market is when you don't bother to look anymore."- John Hammerslough You can access more in-depth research, my current portfolios, my top-12 miner rankings, GDX buy/sell signals, new positions I am entering/exiting, plus proprietary sentiment indicators updated weekly for gold miners in my newsletter below. Returns Link: https://imgur.com/a/sreY6SzSubscription LinksMonthly: https://buy.stripe.com/7sI14d4b92vFdUc15cAnnual: https://buy.stripe.com/4gw28h0YXeen7vObJP - Disclosure: I am not a financial advisor. All articles are my opinion - they are not suggestions to buy or sell any securities. Perform your own due diligence and consult a financial professional before trading or investing.

Analyst’s Disclosure: I am/we are long GLD, KL. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Disclaimer: Taylor Dart is not a Registered Investment Advisor or Financial Planner. This writing is for informational purposes only. It does not constitute an offer to sell, a solicitation to buy, or a recommendation regarding any securities transaction. The information contained in this writing should not be construed as financial or investment advice on any subject matter. Taylor Dart expressly disclaims all liability in respect to actions taken based on any or all of the information on this writing.

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Comments (10)

Disappointing results as the article outlines, with mined grades nearer 2g/t vs the planned 9g/t. However, I think 2/3 of new miners encounter problems and unless the resources are downgraded (quantity and/or grade) - as Pretium did - I'm willing to hold and review in the light of next quarters production experience.

Fortunately, I only retain a small stake at nil cost having sold the bulk last December.
Chancer profile picture
@Taylor Dart:

Thanks for article on LRTNF.

I sold this morning for a gain of 142% as I owned under US$.46.

The CEO was doing interview(s) to promote the stock which focused attention on the collapsing share price. Might have been wiser to wait for improved performance first and then promote the stock.

I did not want to wait around for the them to fix the dismal performance, which may take awhile. I prefer to sit on the sidelines. Although I would consider getting back in, they have to prove themselves to me; so may be doubtful.
SilverisREALMoney profile picture
@Chancer smart move. Take a look at Skeena (SKREF), Marathon (MGDPF), or Sabina Gold & Silver (SGSVF). I think all three will be bought out by Big Caps starved for quality reserves in TIER 1 jurisdictions.
Good article and agree that Pure Gold was a bit high on hopium in regards to its valuation. @Taylor Dart On the bright side that Detour Lake 43-101 was fantastic.
Taylor Dart profile picture

Hi Apsco,

Thank you. Couldn't agree more on DL. Article out tomorrow hopefully.
@Taylor Dart Looking forward to it.
Its disappointing but too early to panic. Give it a couple quarters for things to shake out or to establish a pattern of over-promise aka like PVG.
Thanks for reality check, good article.
Since a lot of juniors would like to have there double average mine g/t rate of 2.8. (7.8 g/t in Q4); is a a bit disappointing, but is top of first inning.
OlderThanDirtDave profile picture
Thanks for the sober but accurate article, Taylor. You quoted the share price in USD but was that intended or should those numbers be in CDN $?
Taylor Dart profile picture
Hi Dave,

No problem - happy it was of value, they should be US, thanks for double-checking. Short-term support at $0.95 - $1.00 and resistance at $1.65 in $US. I think Victoria is the better bet for single-asset Canadian projects with more takeover attractiveness (moves needle), less grade issues, and a value per reserve ounce 50% lower than Pure Gold.
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