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Red Lake mine officially on the selling block

Court approves sales process of Pure Gold Mining Red Lake operation
Pure Gold Mine portal 2
Portal at Pure Gold's Red Lake operation (Pure Gold Mining)

The B.C. Supreme Court has approved a sales process of Pure Gold Mining’s Red Lake operation.

The application by the insolvent Vancouver company, which entered creditor protection on Halloween, to proceed with a court-supervised sales and investment solicitation process was approved by the court on Nov. 10.

On the block is the underground mine, mill and 4,600 hectares of property situated outside the northwestern Ontario community of Red Lake.

National Bank Financial is the sales agent.

To gain access to the virtual data room, interested parties can go online to the website of KSV Restructuring, the court-appointed monitor.

The court extended the stay of proceedings under CCAA (Companies’ Creditors Arrangement Act) until Jan. 23 and will allow Pure Gold to borrow interim financing from its primary lender, Sprott Private Resource Lending. The money is earmarked to maintain the mine during its temporary shutdown and to pay the remaining staff on duty while it’s on care and maintenance.

Some critical staff are being maintained at the operational and office level, under a court-approved Key Employee Retention Plan, while the company goes through the CCAA process.

The mining company suspended operations at the site of the former Madsen Mine on Oct. 24 after running out of money.