Pure Gold Indicates Short-Term Funding Need to Avoid Debt Default and Provides Guidance for H1

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Pure gold mining (TSXV: PGM) this morning provided its outlook for 2022. Guidance for the year was included in a long-winded statement that also provided several operational updates, as well as management’s comments on the company’s performance over the of the last year.

Cut to the chase, the company expects to mine approximately 600 to 700 tonnes per day in the first half of the year at an average grade of 4.0 to 5.0 g/t gold. With an expected recovery rate of 95%, the firm plans to produce between 15,000 and 20,000 ounces of gold during the first six months of the year.

Specific guidance has yet to be provided for the second half of the year, but the company has indicated that production and ore grade should improve in the second half due to ongoing improvement initiatives. of operation. Forecasts for the second half of the year should be published by June.

The company did, however, provide a soft forecast for the year, saying it is aiming for a 50% improvement in average daily ore production, a 30% increase in average head grade and a 20% reduction in costs. monthly operating costs compared to 2021.

The company also indicated that dilution is likely underway. With current cash of $9.0 million on the books as of today, the company has indicated that it will need additional financing in the next 30 days, both to service its debt and to fund its operations. The company has specifically indicated that if it cannot find additional financing, it will not meet its obligations and, therefore, default on its debt.

Total external funding estimated at $50 million is expected to be required over the next six months. With this financing, the company expects to be able to achieve sustainable positive free cash flow to support its operations. If this funding is found, the company expects positive free cash flow to begin by the end of the year. Financing options are reportedly being assessed.

Pure Gold Mining last traded at $0.70 on the TSX Venture Exchange.


Information for this briefing was found via Sedar and the companies mentioned. The author has no security or affiliation related to this organization. Not a buy or sell recommendation. Always do additional research and consult a professional before purchasing a title. The author holds no license.

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