Premier's management team believes that Nevada is one of the world's most favourable jurisdictions for mine development. Nevada is host to numerous multi-million ounce gold deposits and mines and several major mining companies have been built from operations in the State's prolific gold trends. The acquisition of Cove will solidify Premier's United States-based project portfolio and offers substantial upside in the existing mineral resource areas and opportunities for the discovery of new high-grade gold deposits.
The Cove project is located within the Eureka-Battle Mountain Trend that is host to a number of multi-million ounce producing and past-producing mines and represents one of the most under-explored gold projects in Nevada. Premier intends to evaluate the entire property and will include exploring favourable structural intersections, following-up on historic high-grade drill intercepts, and testing the Gold Dome Fault that was host to the historic gold Dome Mine, whose production in the 1930's maintained grades between 0.25 oz/t and 2.00 oz/t gold.
Location and Land Tenure
The Cove Gold Project is located roughly 22km south of Newmont's Phoenix Mine, in north-central Nevada, sitting within the north-central Fish Creek Mountain Range, approximately 50 km south-west of the town of Battle Mountain. The Property consists of 389 leased unpatented claims, 439 wholly-owned unpatented claims, and 7 leased patented claims for a total of 6,972 hectares (17,252 acres).
The Cove Gold Project hosts the historic Cove Gold Mine, is proximal to the historic McCoy Gold Mine, and is serviced by excellent infrastructure including paved roads to the mine site, power. Its proximity to Battle Mountain provides excellent access to services and people.
Gold was first discovered in the district in 1914. Significant production did not start until 1928 and continued to the early-1930's from the Gold Dome Mine. Gold production from the Gold Dome Mine came from shallow underground workings, with grades ranging from 8.6 g/t to 68.7 g/t Au (0.25 oz/t to 2.0 oz/t Au).
The district remained dormant until exploration activities began in the mid-1960's for copper and then later for gold. In September 1985, Tenneco Minerals Corp. decided to put the McCoy gold-skarn into production. In October 1986, Echo Bay Mines acquired Tenneco and continued in district exploration which resulted in the discovery of the Cove deposit in January 1987.
Production began from the Cove Mine in 1988 and continued until 2001 from open pit and some limited underground mining. Production totaled 2.6 million ounces of gold and 100 million ounces of silver.
Newmont took ownership of the Cove and McCoy properties in 2003 and drilled 15 vertical holes from 2004 to 2005 defining the Beta Target. The Beta Target was the predecessor to the Helen Zone.
On June 15, 2006, Victoria Gold Corp. (Victoria) entered into a "Minerals Lease and Agreement" to lease a portion of the Cove-McCoy (Cove) Mine Project from Newmont. That same year Victoria conducted a surface exploration drill program which lead to the discovery of the Helen Zone located approximately 500 metres northwest of the Cove pit. The Helen Zone is a Carlin Style stratiform deposit and is hosted mostly in the deep, poorly tested, Favret Formation limestones. In May, 2011, Roscoe Postle Associates Inc. completed an inferred mineral resource estimate of 355,200 tonnes grading 20.25 g/t Au (0.59 oz/t Au) for a total of 231,300 ounces of gold.
On April 10, 2012, Victoria accepted an offer from Premier for its interest in the Cove Project which includes claims and leased interests which Victoria sub-leased from Newmont McCoy Cove Limited, a subsidiary of Newmont Mining as well as unpatented claims wholly owned by a subsidiary of Victoria. The offer was closed June 15, 2012.
Geology and Mineralization
The Cove Project is located in the Eureka-Battle Mountain Trend that contains numerous multi-million ounce producing and past-producing mines.
Mineralization at the Cove Project is hosted in the Triassic Star Peak Group, a 1,220 m thick section of marine platform limestone with lessor conglomerate, sandstone, and dolostone (Johnston 2008). Four formations comprise the Star Peak Group. In ascending order they are: the Dixie Valley, Favret, Augusta Mountain, and Cane Spring Formations. Most of the historic production came from the Augusta Mountain Formation.
The Helen Zone is comprised of two zones; the Upper Helen Zone hosted in the middle Augusta Mountain Formation (Home Station Member) and the Lower Helen Zone in the stratigraphically deeper Favret Formation consisting of calcareous shales, limestone and silty limestone. The Helen Zone is a high-grade Carlin Style stratiform deposit characterized by strong decalcification, collapse breecias, carbonization and fine grained sooty sulfides. The Favret Formation is host to most of the gold mineralization in the Helen Zone resource and has typical characteristics similar to other host rock hosting high-grade mineralization in the Battle Mountain Eureka trend. This formation has been poorly tested in previous historic drill programs.
The major structural controls for mineralization at the Cove Mine as well as for the Helen Zone are north-south and north-east faults intersecting the north-west striking Cove Anticline. These structural intersections with the Cove Anticline historically produce the highest grades in the Cove Mine and this also holds true for the Helen Zone.
NI43-101 Compliant Mineral Resources
On November 19, 2013 the Company completed an initial mineral resource estimate based on drilling completed to-date. The estimate was completed by Mark Odell of Practical Mining LLC utilizing a 3D block model and supported with input from the Company's geological personnel. The Helen Zone does not contain any mineral reserves at this time.
Highlights of the 2013 Helen Zone mineral resource estimate includes:
- 425,000 tonnes of indicated mineral resources grading 10.46 g /t Au (0.31 oz/ton) containing 143,100 ounces of gold
- 882,000 tonnes of inferred mineral resources grading 9.81 g/t Au (0.29 oz/ton) containing 278,700 ounces of gold
Table 1 - Helen Zone Mineral Resource Estimate
|Indicated Resources||Inferred Resources|
|Cutoff Grade Au (g/t)||Tonnes (000's)||Gold (Au) Grade (g/t)||Au Ounces (000's)||Tonnes (000's)||Gold (Au) Grade (g/t)||Ounces (000's)|
* Values greater than 34.2857 g/t Au are used in the estimation but are restricted by an area of influence based on a search radius of 6.1m X 6.1m X 6.1m or 20 ft X 20 ft X 20 ft
* Compositing was done on drill hole sections falling within the mineralized zones (composite = 3.05 metres or 10 ft).
* Resources were evaluated from drill hole using a 3-pass ID3 interpolation method in a block model (block size = 3.05 x 3.05 x 3.05 metres or 10 ft X 10 ft X 10ft)
* The inferred category is only defined within the areas where blocks were interpolated during pass 3
* The indicated category is only defined within the areas where blocks were interpolated during pass 1 and 2
* Ounce (troy) = Metric Tonnes x Grade / 31.10348. Calculations used imperial units (feet, short tons and ounce troy/short tons).
* The number of metric tonnes was rounded to the nearest thousand. Any discrepancies in the totals are due to rounding effects; rounding followed the recommendations in Regulation 43-101.
* Practical Mining is not aware of any known environmental, permitting, legal, title-related, taxation, socio-political, marketing or other relevant issue that could materially affect the Mineral Resource Estimate.
* Mineral resources have been estimated at a cut-off grade of 0.17 opt or 5.83 g/t Au calculated with a US $1,300 per ounce gold price;
* Mining parameters used: Mining cost=100 US$/t, milling cost=60.0 US$/t, Haulage=30.0 US$/t G&A=10.00 US$/t, Refining and Sales costs= 5.0 US$/oz. mining recovery=100%, mining dilution=10%, milling recovery=90%
The mineral resource estimate used the Canadian Institute of Mining, Metallurgy and Petroleum (CIM), Standards on Mineral Resources and Reserves, Definitions and Guidelines prepared by CIM Standing Committee on Reserve Definitions and adopted by CIM Council on November 27, 2010. The mineral resource estimate is classified as "indicated", or "inferred" as defined by CIM. The Company intends to file a National Instrument 43-101 ("NI 43-101") compliant technical report in respect of the updated mineral resource estimate on SEDAR and on the Company's website within 45 days of this news release.
Additional Details on Mineral Resource Estimate
The mineral resource estimate of the Helen gold deposit is based on interpolation of sample composites (approximately 3m each) constrained within sixteen grade shell wireframes which honor the drillhole database. The resource has been established using a 5.83 g/t Au COG. Key assumptions of the updated mineral resource estimate are summarized in Table 2.
The Inverse Distance Cubed (ID3) method, paired with the 1.52 m sub-block size at the boundaries gives a high level of resolution in the resource estimate to ensure that zones with internal waste remained distinct. The resource models were validated visually by sectioning, and running a parallel estimate using Nearest Neighbor method (NN). The Practical Mining staff with responsibility for this resource estimate is Mr. Mark Odell, P.E. (Nevada 13708) and Mr. Karl Swanson, P.Geo (SME 4043076). All are Qualified Persons as defined in NI 43-101, and are independent of Premier Gold Mines Ltd. Mr. Odell and Mr. Swanson acknowledge that they have read this press release and the Helen Zone mineral resource estimate is accurately portrayed.
Table 2 - Data & Key Assumptions of Helen Zone Resource Estimate
|Data or Assumption||Helen Zone|
|Date of Data Used
Number of Drillholes in Block Model
Metres of Drilling in Block Model
Number of Raw Assays
Long Term Gold Price
Currency Exchange Rate
Cut-off Grade U/G (g/t)
Processing $/tonne U/G
Mining $/tonne U/G
Haulage $/tonne U/G
Refining and Sales
Specific Gravity (SG)
Block Model & Interpolation Software
Maximum Block Sizes (m x m x m)
Minimum Block Size(m x m x m))
3.05 x 3.05 x 3.05
1.52 x 1.52 x 1.52
The database used for this mineral resource estimate reflects fully complete drillhole assay and survey data as of September 30th, 2013. At that time, Premier had completed some 18,149 metres of diamond drilling during 2013. It is estimated that by the end of 2013, some 21,149 metres of diamond drilling will have been completed.
The Helen Zone deposit remains open for expansion in several directions. Current drilling is testing the north side of the Cove anticline where the Helen Zone is located, an area that has seen very little previous drilling.
A new zone of poly-metallic mineralization was discovered in Premier's first pure exploration hole completed at the Cove property. This discovery occurs approximately 400 metres north of the historic Cove (open pit) mine along the interpreted northern strike extension of the "feeder" structures at the Cove mine within the [Dixie Valley] formation, a deeper rock unit not previously tested in this area of the property. The discovery was made in an area previously condemned by shallow reverse circulation drilling for mine waste dumps.
Highlight results of poly-metallic discovery north of the historic Cove mine (CND Zone)
- 1.23 grams per tonne gold (g/t Au), 366.97 g/t silver (Ag) (10.72 oz/ton), 2.70% Zinc (Zn) and 3.28% Lead (Pb) across 4.60 metres (m)
- 4.50 g/t Au, 195.70 g/t Ag, 4.34% Zn and 0.60% Pb across 1.50 m
Further discovery of Au with strong Ag mineralization within PG-03 occurs within the same carbonate host rock as the Helen Zone and CSD (Cove South Deep) Zone and is now referred to as the "CND" (Cove North Deep) Zone due to its great distance northward. The newly discovered CND Zone is hosted in Home Station dolostone and Favret limestone and is believed to be stratabound, Carlin-type replacement with very strong potential for lateral continuity.
The PG-03 discovery is located approximately 1 km north of the recently announced "2201" discovery at Cove where drilling intersected multiple zones of poly-metallic mineralization including 6.74 g/t Au, 13.00 g/t Ag, 0.32% Zn and 0.06% Pb across 9.1 m in hole AX-46.
Cove Gold Project - 2201
Cove Project Update