NEWS RELEASE 22-22

August 16, 2022                                                                                                               

PureGold Provides Operations Update and Reports Second Quarter 2022 Financial and Operating Results

VANCOUVER, B.C. - Pure Gold Mining Inc. (TSX-V:PGM, LSE:PUR) ("PureGold" or the "Company"), today provided an operational update and outlook as well as financial results for the second quarter of 2022. PureGold owns and operates the PureGold Mine near Red Lake, Ontario.

So far during the third quarter, both costs and revenues are trending in the right direction on a sequential quarterly basis, due to the groundwork laid in the first and second quarters. As a result, the Company forecasts the Mine to deliver positive site-level cash flow in the third quarter, achieving a previously stated objective.

Moreover, a team of multidisciplinary consultants led by SRK Consulting (Canada) Inc. ("SRK") remains on track to complete an updated Life of Mine plan and a new Pre-Feasibility Study ("PFS") in Q4 2022, based on the recently announced updated Mineral Resource Estimate ("Updated MRE"). The Company is working collaboratively with SRK to ensure a smooth integration beginning in 2023 of the new Life of Mine plan into the Mine's existing planning system.

Terry Smith, PureGold Chief Operating Officer, stated: "Over the last six months we have advanced in four key areas to expedite our future success. We have a solid resource model we can use for long-term planning; a revamped short-term planning process to drive execution; a lower operating cost base to generate cash flow; and most importantly, an emerging culture of safety and performance."

"Mid-way through the third quarter, we are combining these elements into stronger gold production, most notably with a year-to-date record gold pour just last week. We hope to break that record again very soon, and that the SRK resource model will help light the way to grow production in our upcoming Pre-Feasibility Study."

The Company will host a conference call and webcast Tuesday August 16^th at 9:00am Pacific Time (12:00pm Eastern Time) to discuss the Updated MRE and operational update and outlook. Details are provided at the end of this news release.

Operations Update & Outlook

The Company is expecting a significant improvement in production in the third quarter compared to either the first quarter or the second quarter of the year as the benefits of investments made in operational improvements begin to pay off. These improvements include a relentless commitment to safety, cost rationalization, improved integration of mine planning, geology and definition drilling leading to more reliable forecasts, improved mining execution.  All of this is supported by the establishment of a high-confidence drilled inventory well ahead of active production areas.

The new SRK Resource model highlights the higher grade and less structurally complex Austin and South Austin Zones as compared to McVeigh. Both Austin and South Austin will contribute approximately 65% to overall Q3 production, as compared to approximately 30% since production began. We expect higher overall production levels as Austin and South Austin contribute still more and McVeigh contributes less.

Production Outlook

Ore throughput for the third quarter is forecast to average between 775-875 tpd at 4.0-5.0 g/t gold. Both grade and ore throughput are forecast to trend positively throughout the quarter. The end of July and beginning of August have been and continue to be, as of the date of this press release, particularly strong from both throughput and grade perspectives, leading to the previously noted record weekly gold pour last week.

Cost Update

Site-level operating plus sustaining capital costs are expected to be in the range of $9.5 - $10.5 million per month for the third quarter. Compared to the first quarter of 2021, this represents an absolute reduction in costs of approximately 25% and a cost-per-tonne reduction of approximately 50%. Our most significant cost is labour, including accommodations and travel. We expect to reduce this cost in 2023 following the installation of a workforce camp, which is currently in progress on our mine property.

In addition to the savings noted above, further cost savings are expected to be captured in the next 12 months. Key opportunity areas include replacing rentals and contractors with more permanent solutions, and completing key infrastructure upgrades including the new camp, new electric compressors, and a new mine air heater. All these projects are currently underway. The Company is targeting additional savings equating to $1 million per month (approximately 10%) by the end of 2022. Further savings opportunities are expected to be identified and incorporated into the Updated Life of Mine plan.

Pre-Feasibility Study, Life of Mine Plan and Technical Report Update

On August 10, 2022, PureGold announced an Updated MRE for the PureGold Mine which included 1.65 million ounces of gold at 7.4 g/t contained in 6.9 million tonnes in the Indicated category and 0.37 million ounces of gold at 6.3 g/t contained in 1.8 million tonnes in the Inferred category at a cutoff grade of 3.38 g/t.

Notably, the Updated MRE has already been constrained by the Reasonable Prospects for Eventual Economic Extraction test using Minable Stope Optimizer shapes. Due in part to this, the Company expects that its forthcoming PFS will show a higher conversion ratio of Indicated Resource to Probable Reserves compared with the Company's previous Life of Mine plans.

Second Quarter 2022 Operating and Financial Results

PureGold produced less gold in the second quarter of 2022 than the second quarter of 2021 due in part to significant cash-preservation measures that the Company introduced while negotiating the financing agreements announced in May 2022. These measures were successful, but their implementation led to unavoidable business interruptions. The measures included:

·    Operating the mill for only 50% of the quarter;

·    Reducing the workforce;

·    Pausing main ramp development;

·    Rationalizing the mining fleet; and

·    Demobilizing contractors and rental equipment.

Another factor affecting second quarter production was significant turnover and workforce shortages in key areas like longhole drilling, mobile mechanics, and technical staff. 

Beyond these factors, the Company completed a complete overhaul of the mine planning process.  Prior to this overhaul, execution diverged from planning, with grades significantly below plan. PureGold was mining small and/or low-grade stopes, was incorporating significant dilution into stope designs, and was overly optimistic about planned rates and productivities.

The planning process now incorporates the latest infill drilling results, deep geological review of potential mining fronts, economic analysis beyond cut-off grade, access and blasting considerations, and mine productivities based on ventilation, equipment type, and location, among other things.

A summary of the highlights for the three and six months ended June 30, 2022, and subsequent to date for the Company and its 100% owned PureGold Mine ("PureGold Mine" or the "Mine") are as follows:

Gold Production

·    Gold production for Q2 2022 was 3,509 ounces, and 8,244 ounces for H1 2022.

·    Gold sold for Q2 2022 was 3,500 ounces, and 11,375 ounces for H1 2022.

Processing

·    For Q2 2022, the PureGold Mine processed a total of 45,420 tonnes of ore, or an average of 500 tpd, at an average head grade of 2.40 grams of gold per tonne of ore ("g/t Au") and achieved an average recovery of 93.2%.

·    For H1 2022, the PureGold Mine processed a total of 96,312 tonnes of ore, or an average of 535 tpd, at an average head grade of 2.66 grams of gold per tonne of ore ("g/t Au") and achieved an average recovery of 94.2%.

·    In April 2022, we transitioned to a campaign milling schedule, which saw the mill operating for two out of every four weeks temporarily to save costs by aligning with near-term mine production forecasts. The mill returned to a full-time schedule in July 2022.

Mining

·    Mining totaled 40,551 tonnes of ore or an average of 445 tpd for Q2 2022.

·    For H1 2022, mining totaled 85,267 tonnes of ore or an average 471 tpd.

·    In support of a mining improvement plan, during Q2 2022 we enhanced mobile equipment availability; transitioned to efficient sill mining; mined a higher proportion and greater quantity of high-grade, high-confidence stopes; upgraded basic mine services including ventilation, electrical, compressed air, and water management, and most importantly continued improving overall mine planning integration.

·    We achieved an approximate 30% reduction in costs in Q2 2022 compared with Q1 2022, the result of workforce reductions, rationalized equipment and optimized underground development initiatives.

·    We continued to hold off on development of the Main Ramp during Q2, 2022 after having temporarily paused it in Q1, 2022, in order to reallocate resources to near-term production and development areas. The Main Ramp is at a depth of approximately 525 metres below surface, which is several hundred metres below near-term mining areas; as such, temporarily pausing ramp development will not constrain ore mining or definition drilling in the near-term.

Financial Results

·    Mine operating loss of $18.5 million and $41.9 million for Q2, 2022 and H1, 2022, respectively.

·    Revenue, net of refining costs, was $8.5 million and $27.0 million for Q2, 2022 and H1, 2022, respectively.

·    Net loss and comprehensive loss totaled $20.8 million and $42.2 million for Q2, 2022 and H1, 2022, respectively.

·    Basic and diluted loss per share for Q2, 2022 and H1, 2022 of $0.04 and $0.08, respectively.

·    Cash balance as of June 30, 2022 of $12.7 million

·    Current assets as of June 30, 2022 of $23.2 million

·    Current liabilities as of June 30, 2022 of $47.7 million

·    Total long term debt as of June 30, 2022 of $106.1 million

Operational and Financial Details

Additional information regarding the Company's financial results and activities underway at the Company's PureGold Mine is available in the Company's interim financial statements and management's discussion and analysis for the three and six months ended June 30, 2022.

A Technical Report prepared in accordance with NI 43-101 for the PureGold Mine will be filed on SEDAR (www.sedar.com) before September 24, 2022. Readers are encouraged to read the Technical Report in its entirety, including all qualifications, assumptions and exclusions that relate to the Mineral Resource. The Technical Report is intended to be read as a whole, and sections should not be read or relied upon out of context. Please see PureGold's press release dated August 10, 2022 for more information regarding the updated Mineral Resource Estimate.

Qualified Persons and 43-101 Disclosure

Terrence Smith, P.Eng., Chief Operating Officer for the Company, is the designated Qualified Person for this news release within the meaning of National Instrument 43-101 ("NI 43-101") and has reviewed and verified that the technical information contained herein is accurate and approves of the written disclosure of same.

EARNINGS RELEASE AND CONFERENCE CALL DETAILS

PureGold will host its first Quarterly Conference Call on Tuesday August 16^th, 2022 at 9:00am PST.

Conference Call Dial-in Details:

Title: Pure Gold Mining Inc. Q2 Operations Update and Q3 Outlook Conference Call

PARTICIPANT TELEPHONE NUMBERS

Callers should dial in 5 -10 min prior to the scheduled start time and simply ask to join our call.

Canada/USA TF: 1-800-319-4610

International Toll: +1-604-638-5340

The Conference Call will be accompanied by web-based presentation slides, which will be available online via the link provided below:

https://services.choruscall.ca/links/puregold2022q2.html

A replay of the audio call will be available via the telephone numbers below and available until August 23^rd, 2022.

CONFERENCE REPLAY

Canada/USA TF: 1-800-319-6413 

International Toll: +1-604-638-9010 

Replay Access Code: 9165 

About Pure Gold Mining Inc.

PureGold is a Canadian gold mining company, located in the heart of Red Lake, Ontario, Canada. The Company owns and operates the PureGold Mine, which entered commercial production in 2021 after the successful construction of an 800 tpd underground mine and processing facilities. The PureGold Mine is centered on a forty-seven square kilometre property with significant discovery potential.

Additional information about the Company and its activities may be found on the Company's website at www.puregoldmining.ca and under the Company's profile at www.sedar.com

ON BEHALF OF THE BOARD

     "Mark O'Dea"        

Mark O'Dea, President & CEO

Investor inquiries:

Adrian O'Brien,

Director, IR & Communications
Tel: 604-809-6890

aobrien@puregoldmining.ca

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

All statements in this press release, other than statements of historical fact, are "forward-looking information" with respect to PureGold within the meaning of applicable securities laws, including, but not limited to statements with respect to those that address proposed timing of development plans for the PureGold Mine, including the proposed updated NI 43-101 Technical Report and timing and content of such Technical Report, including the life of mine plan; expectations for the Mine to deliver positive site-level cash flow in the third quarter; expectations regarding the effectiveness of new initiatives to improve stope access and result in increased throughput, improved grades and reduced costs in 2022; achievement of minimum targets with respect to ore production, average head grade and reduction in monthly operating costs by the end of 2022 compared to 2021; potential for extending the mine life of the PureGold Mine; the timing and results of the new Pre-Feasibility Study and updated Life of Mine Plan; the potential to convert resources to reserves; the transition of mining from the McVeigh Zone to the South Austin and Austin Zones; and potential for additional resources and expansion of known deposits and potential for making new discoveries and the focus of the Company in the coming months . Forward-looking information is often, but not always, identified by the use of words such as "seek", "anticipate", "plan", "progress", "confirms", "continue", "planned", "expect", "expectations", "expand", "enhanced", "increasing", "optimize", "project", "predict", "potential", "supports", "targeting", "intends", "believe", "improved", "potential", and similar expressions, or describes a "goal", or variation , of such words and phrases or state that certain actions, events or results "may", "should", "confirms", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking information is not a guarantee of future performance and is based upon a number of estimates and assumptions of management at the date the statements are made including, among others, assumptions about future prices of gold and other metal prices, currency exchange rates and interest rates, favourable operating conditions, political stability, obtaining governmental approvals and financing on time, obtaining renewals for existing licences and permits and obtaining required licences and permits, labour stability, stability in market conditions, availability of equipment, accuracy of any mineral resources, successful resolution of disputes and anticipated costs and expenditures. Many assumptions are based on factors and events that are not within the control of PureGold and there is no assurance they will prove to be correct.

Such forward-looking information, involves known and unknown risks, which may cause the actual results to be materially different from any future results expressed or implied by such forward-looking information, including, risks related to liquidity and the Company's ability to continue as a going concern; mine closure and rehabilitation; failure to achieve estimates or material increases in costs; history of net losses and negative operating cash flow, indebtedness; interpretation of results at the PureGold Mine complex, including reserve and resource estimates may prove to be incorrect; changes in project parameters as plans continue to be refined; current economic conditions; future prices of commodities; possible variations in grade or recovery rates; the costs and timing of the development of new deposits; failure of equipment or processes to operate as anticipated; the failure of contracted parties to perform; the timing and success of exploration and development activities generally; delays in permitting; possible claims against the Company; the timing of future economic studies; labour disputes and other risks of the mining industry; delays in obtaining governmental approvals, financing or in the completion of exploration as well as those factors discussed in the Annual Information Form of the Company dated March 30, 2022 in the section entitled "Risk Factors", under PureGold's SEDAR profile at www.sedar.com.

Although PureGold has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. PureGold disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise unless required by law.