PREMIER GOLD MINES LIMITED (TSX:PG) is pleased to announce that it has signed a Memorandum of Understanding (“MOU”) with Compania Minera Quasaro SA DE CV (“Quasaro”), a private, arms length company, to purchase the “La Victoria Concession” located within the Santa Teresa Concession at El Alamo, Baja California Norte, Mexico. The Concession is accessible by road, and is located approximately 100 kilometres (“km”) southeast of Ensenada and 250 km from San Diego, California, USA. Premier regards the La Victoria purchase as strategic since:
- It’s located entirely within the Santa Teresa Concession.
- It occurs along strike from the structure currently being targeted in the ongoing drill program of the Premier-Sutter Joint Venture.
- Other regional El Alamo vein structures may also trend onto La Victoria.
Terms of the MOU include a cash payment of $200,000 to Quasaro, plus 150,000 shares of Premier at closing and Quasaro will retain a 2% Net Smelter Return Royalty (“NSR”). One half of the NSR (1%) can be purchased for US$1 Million cash and Premier will retain a first right of refusal to acquire the remaining half. The purchase price paid will contribute to Premier’s earn-in obligation under the terms of the Joint Venture Agreement signed with Sutter Gold Mining Inc. (SGMI; SGM.V), and the La Victoria Concession will form part of the overall Property being explored by the Joint Venture.
Premier management was attracted to the El Alamo District initially because of a unique history of high mined grades, and the almost complete lack of modern exploration. Both the Santa Teresa and La Victoria are located within a proven gold district (some 220,000 ounces of past production) gold district where historical data indicates that mined grades within the district were in excess of 1.0 ounces per ton (opt) gold. The majority of district production occurred within 120 metres of surface, but remains open at depth.
Premier is currently conducting a 5,000 metre diamond drill program at Santa Teresa and anticipates reporting on the initial results of this work in the near future. To-date, drilling has intersected several mineralized vein intersections in multiple drill holes, and the decision has recently been made to increase the size of the current program.
Stephen McGibbon, P. Geo., Executive Vice-President and COO of Premier, is the Qualified Person for the information contained in this press release and is a Qualified Person within the meaning of National Instrument 43-101.
Premier Gold Mines Limited is a Canadian-based mineral exploration and development company with a strong treasury and has diverse property holdings that include several projects and deposits in Northwestern Ontario and a joint venture in Mexico).