The Pure Gold mining company in Red Lake is sheltered from its creditors

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Pure Gold Mine, Red Lake, Safe From Creditors

The mining industry is at the heart of the economic vitality of Red Lake, in northwestern Ontario.

A week after suspending operations in Red Lake, the mining Pure Gold is safe from its creditors.

With a net deficit of $13 million, the company is no longer able to meet its financial obligations.< /p>

It's an abrupt end for this northern Ontario mining company headquartered in Vancouver. By reopening this dormant mine in 2019, Pure Gold hoped to produce gold until 2033.

After all, the mine had settled on the same site as the old Madsen mine, which extracted a record amount of gold on this territory in the middle of the 20th century.

The Red Lake district in northern Ontario has been experiencing a gold rush for the past few years. But the terrain is notoriously difficult to mine, since the gold is not evenly distributed across the deposits.

Before suspending operations in Red Lake, Pure Gold had hundreds of employees. (Archives)

Mother Nature has played tricks on us, Pure Gold director Mark O'Dea commented in a conference call with his investors at the end of last month. ;August.

During this call, Mr. O'Dea explained that the McVeigh zone, mined since August 2021, was more expensive and complex than the rest of the deposit, and that the mining company had not chosen the right location for its first mine. /p>

Pure Gold then admitted that it did not have enough geological information before embarking on production. To remedy the problem, the company then commissioned a new estimate of its mineral resources and drastically reduced its production costs, measures which, however, were not sufficient to improve the company's fortunes.

Failed to secure the funding required to move to the next stage of its turnaround plan, Pure Gold placed its mine in watch and hold mode last week.

On Monday, she turned to the Supreme Court of British Columbia to protect herself from her creditors, and obtained a stay of ten days.

The mining company will have to return to court on November 9 to obtain an extension of its protection period.

The value of the Pure Gold shares stood at 0.02 cents when markets closed on Monday.

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