PREMIER GOLD MINES LIMITED (TSX:PG) is pleased to announce that it has signed a Letter of Intent to secure a 100% interest in ten key patented mining claims, the Lennie Property, contained internal to Goldcorp’s Red Lake Gold Mines (RLGM) land holdings, immediately northeast of the world class Red Lake Gold Mines complex.
The Lennie Project is strategically located northeast of the Red Lake Gold Mines complex along the same geological contact that hosts the major gold mines in Red Lake. It covers the important unconformity between the ore-hosting Balmer volcanic rocks and the overlying sedimentary rocks. Folded ultramafic rocks and conjugate fault structures, similar to those at the mine, are interpreted to be located on the Lennie claims and will be the focus of an exploration program that will begin immediately on the property, including diamond drilling.
The last exploration to occur on the Lennie property was a small, shallow drill program in 1996. That program intersected faults containing mineralized quartz-carbonate veins in Balmer rocks. It is anticipated that deep drilling will begin in the spring to test these high-potential faults as well as other targets, where they are interpreted to intersect Balmer-aged ultramafic rocks in a setting similar to that which hosts Goldcorp’s High-grade Zone. That zone is considered to be one of the largest and highest grade gold deposits in the world.
For this acquisition, Premier will pay $400,000 in cash payments over three years and 160,000 shares of Premier, including $100,000 and 40,000 shares on signing. A 3.0% Net Smelter Return royalty (“NSR”) is payable to the vendor, of which one-third (1% NSR) can be purchased at any time for the sum of $1.0 Million. A finders’ fee is payable to an arm’s length party in relation to this transaction.
Rahill-Bonanza Project The Rahill-Bonanza Project is located in the heart of the prolific Red Lake district, within the core of RLGM’s land holdings. The 2009 exploration program will include a delineation drill program proximal to the workings of the Wilmar Gold Mine, and deep exploration holes to test primary targets at depth. The Wilmar Gold Mine is a near surface past-producer on the joint venture property. During the final years of operations at Cochenour, some 203,000 tons of ore was mined at a grade of 0.30 oz/ton Au (10.3 g/t). This Phase I Program will provide support for both previously announced shaft de-watering and a planned advanced-exploration program on several known deposits in the vicinity of the workings of the Cochenour-Wilmar Gold Mines. At the time of closure in 1971, significant historical resources (a qualified person has not done sufficient work to verify the historical resource, the company is not treating the historical resource as a current resource and the historical resource should not be relied upon) were reported to remain at Wilmar. According to a report completed by Wilmar Mines Limited in 1973 (authored by D.A. Hutton), the deposit had the potential to host resources (Although existing historical resources have been used as a basis for confirming target potential, there is insufficient exploration data to define a mineral resource and it is not certain that further exploration will result in discovery of a mineral resource) as follows:
- 431,000 tons @ 0.21 oz/ton (7.2 g/t) Au within the 1300-2050 level workings.
- 822,000 tons @ 0.24 oz/ton (8.2 g/t) Au — surface to the 1300-foot level.
- 5,700,000 tons @ 0.10-0.15 oz/ton (3.4-5.1 g/t) Au — Wilmar West (Granodiorite).
This Phase I drill program will test several of these areas in addition to potential down-plunge extensions.
Additional drilling will test a target which passes through favourable ultramafic rock units. This deep drilling is designed to test down-dip from Wilmar where a major zone of deformation was previously intersected. This deformation is interpreted to represent the RLGM “Mine Horizon”, where rock units similar to those at the RLGM complex and the Bruce Channel Zone were identified.
The Rahill-Bonanza Project covers several kilometres of the main Red Lake “Mine Trend” and is strategically located between the world class Red Lake Gold Mines to the east, and the “Bruce Channel” discovery to the west.
Presentations detailing the Lennie and Rahill Bonanza projects are available on the Premier Gold Mines Limited website at www.premiergoldmines.com.
Stephen McGibbon, P. Geo., 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 well financed Canadian-based mineral exploration and development company with several projects and deposits in Northwestern Ontario and a joint venture in Mexico. In the Red Lake gold mining camp, two of these are operated in joint venture with Red Lake Gold Mines. The company also owns a strategic project located on the main Musselwhite Gold Mine trend and recently signed an agreement to acquire mineral properties in Geraldton area from Barrick Gold.