The PEA highlights how the company can phase new discoveries into future mine plans, potentially adding four years of production to Madsen at below-industry average cash costs.

The new areas could produce 210,000 ounces over 3.7 years at an all-in sustaining cost of US$712 per ounce, following an initial capital spend of C$57 million (US$43.4 million). 

This add-on plan has an after-tax net present value (at a 5% discount rate) of $51 million and an internal rate of return of 39%, with a gold price of US$1,275/oz and a Canadian to US dollar exchange rate of 0.75.

"Our PEA provides us with a blueprint of how we could expand our mine life and production profile at Madsen and illustrates just how impactful and accretive new discoveries can be to the future of our district," Pure Gold president and CEO Darin Labrenz said in a statement.

The PEA sets out a plan where the three deposits would be mined after the end of the Madsen feasibility study mine plan. 

Each PEA deposit would be mined from underground. 

The Madsen FS envisions average annual production of 80,000oz per annum over a 12-year mine life with peak annual production of about 125,000ozpa. 

The mine has a reserve of 3.5 million tonnes grading 9g/t.

With an initial capital expenditure of $95 million, Madsen will yield an after-tax NPV of $247 million at a 5% discount rate and an IRR of 36%, and an AISC of $787/oz.

Pure Gold's stock is trading at C0.68c, valuing the company at $174 million. Its share price has increased 4.6% so far this year, and the PEA announcement saw it climb 1.4% in early trading.