In a Jan. 28 research note, analyst Ryan Walker reported that Echelon Wealth Partners raised its target price on Pure Gold Mining Inc. (PGM:TSX.V; PUR:LSE) to CA$1.35 per share from CA$1 after updating gold price and forex assumptions in its model on the company. The company's shares are currently trading at around CA$0.82 per share.
Walker discussed Pure Gold's latest news, which were announcements regarding new drill results and underground development, both at its Red Lake mine in Ontario.
Drill results from infill and stepout drilling near the development and ore zones expected to provide initial mill feed in 2020 were "positive" and indicated "strong mine continuity and the potential for mining stope expansion," Walker noted. Because holes PG19-714, PG19-716, PG19-717 and PG19-722 were stepouts of 4–18 meters from existing mining shapes, they represent potential new zones of mineralization for integration into the mine plan in the near term.
As for specific assays, hole PG19-714 returned 2 meters (2m) of 6.1 grams per ton (6.1 g/t) gold, 1m at 7 g/t gold and 1.5m at 5.6 g/t gold. Hole PG19-716 demonstrated 1m of 10.6 g/t gold. Hole PG19-717 showed 2m at 8.9 g/t gold and 0.9m of 8.2 g/t gold. Hole PG19-722 intersected 1m of 13.2 g/t gold.
Other new drill results could be added to the mine plan, Ryan stated. They include those from PG19-719, which yielded 79.4 g/t gold over 1.4m and suggested the presence of a new Hanging Wall zone. PG19-735 returned 6.3m of 13.2g/t gold at just over 50m away from the current mine plan.
As for the underground development at the Red Lake mine, Pure Gold started it early, it is progressing well and is about four months ahead of the feasibility study schedule, Ryan stated. The company started acquiring and installing major infrastructure for mine operations, including new compressors and ventilation systems. About $6.1 million worth of purchased equipment is now at the property. Mine de-watering, which is in progress, already lowered the water level to about 240m below surface. Also underway is the hauling of stockpiled test mining material to surface. First gold pour is slated for Q4/20.
Walker commented, "We continue to highlight the mine's high-grade nature, potential for solid near-term, high-margin production and substantial exploration potential, all situated in a prolific Canadian mining camp (recently part of ongoing sector mergers and acquisitions activity — Evolution Mining's acquisition of the nearby Red Lake Mine)."[NLINSERT]
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Disclosures from Echelon Wealth Partners, Pure Gold Mining Inc., January 28, 2020
Echelon Wealth Partners compensates its Research Analysts from a variety of sources. The Research Department is a cost centre and is funded by the business activities of Echelon Wealth Partners including, Institutional Equity Sales and Trading, Retail Sales and Corporate and Investment Banking.
I, Ryan Walker, hereby certify that the views expressed in this report accurately reflect my personal views about the subject securities or issuers. I also certify that I have not, am not, and will not receive, directly or indirectly, compensation in exchange for expressing the specific recommendations or views in this report.
Is this an issuer related or industry related publication? Issuer.
Does the Analyst or any member of the Analyst’s household have a financial interest in the securities of the subject issuer? No
The name of any partner, director, officer, employee or agent of the Dealer Member who is an officer, director or employee of the issuer, or who serves in any advisory capacity to the issuer. No
Does Echelon Wealth Partners Inc. or the Analyst have any actual material conflicts of interest with the issuer? No
Does Echelon Wealth Partners Inc. and/or one or more entities affiliated with Echelon Wealth Partners Inc. beneficially own common shares (or any other class of common equity securities) of this issuer which constitutes more than 1% of the presently issued and outstanding shares of the issuer? No
During the last 12 months, has Echelon Wealth Partners Inc. provided financial advice to and/or, either on its own or as a syndicate member, participated in a public offering, or private placement of securities of this issuer? No
During the last 12 months, has Echelon Wealth Partners Inc. received compensation for having provided investment banking or related services to this Issuer? No
Has the Analyst had an onsite visit with the Issuer within the last 12 months? No
Has the Analyst or any Partner, Director or Officer been compensated for travel expenses incurred as a result of an onsite visit with the Issuer within the last 12 months? No
Has the Analyst received any compensation from the subject company in the past 12 months? No
Is Echelon Wealth Partners Inc. a market maker in the issuer’s securities at the date of this report? No