Sutter Gold Mining Inc. (TSX VENTURE: SGM) and Premier Gold Mining Limited (PG: TSX) jointly announced today the signing of a Joint Venture Agreement (JVA) which formalizes the Letter of Intent (LOI) signed March 29, 2007 between the parties. The JVA formally establishes the venture between the companies to jointly explore Sutter’s Santa Teresa mineral concession located in the historic and high grade El Alamo District of Baja California Norte, Mexico. The Sutter concession is located in the heart of the gold district which was the subject of the El Alamo Gold Rush of 1888. It is located some 100 kilometers southeast of Ensenada and about 250 kilometers from San Diego, California.
The finalized venture with Premier provides the funding for immediate exploration of the project and appoints Premier as the operator. The Santa Teresa Concession compliments both Premier and Sutter business plans to explore high-grade gold properties as it:
- Is located within a proven (some 220,000 ounces of past production) gold district;
- District has historic mined grades of between 1.00 and 2.00 ounces per ton (opt);
- District was only mined within a 120 meters of the surface, but remains open at depth; and
- Has geologic characteristics similar to the prolific Mother Lode Gold District of California.
The Santa Teresa Concession (STC) is located adjacent to and on strike from the past-producing Princessa Mine (the district’s largest gold producer) whose ore body was known to extend close to the STC boundary. A 12,000 foot diamond drill program has been agreed to by the parties comprising 24 holes. We envision the potential to discover high grade gold zones, which could initially support the construction of a small to medium-sized gold mine. While this is an early stage project, initial exploration has the potential to provide very exciting results. Premier will earn an initial 50% interest in the project by:
- Making its remaining payment of 75,000 shares of Premier to SGMI.
- Completing US$1.5 million in exploration and property acquisitions within two years, including US$1 million within one year of signing the JV agreement.
- Reimbursing SGMI for all payments (~US$225,000) over a four-year period to the original vendor of the property.
In addition, Premier can secure the right to earn an additional 15% interest in the venture (for a total of 65%) by making a further cash payment of $500,000 to SGMI and conducting an additional
US$4.0 million in exploration on the property.
Steve McGibbon, COO of Premier states: “The venture is in ongoing discussions with experienced core drilling contractors in Mexico. We anticipate starting the drill program during September 2007. Both parties are extremely anxious to see what lies beneath the shallow water table in the district as, historically, miners chasing the highly enriched veins from the surface quit mining once they hit this water table.” Hal Herron, President of Sutter Gold, comments that “Premier’s experience in the Red Lake District of NW Ontario and Sutter’s experience in the Mother Lode District of California makes this venture extremely well-suited to exploring the high grade gold potential of the El Alamo District.”
Premier Gold Mines Limited is a Canadian-based mineral exploration and development company with diverse property holdings that include 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 Goldcorp Inc. (TSX:G). A strategic project is also located on the main Musselwhite Gold Mine trend (Goldcorp-Kinross). Additional information can be found on the Premier website at www.premiergoldmines.com.
About Sutter Gold
The Sutter Gold project contains a 3.2 mile segment of the Mother Lode belt from which 10 historic mines produced 2.3 million ounces of gold. The historic mines bracket a one-mile-long portion of the Mother Lode belt with no historic gold production and which contains the Lincoln and Comet zones. The Lincoln and Comet zones were blind discoveries that did not outcrop at surface and which represent the first significant new gold discoveries made along the Mother Lode belt in the last 50 years. The Sutter Gold project has been the subject of considerable modern exploration activity, most of it centering on the Lincoln and Comet zones, which are adjacent to each other and together referred to as the Lincoln project. A total of 85,085 feet of drilling have been accomplished in 190 diamond drill holes, and modern underground development consists of a 2,850-foot declined ramp with 2,400 feet of crosscuts plus five raises. The historic gold production was documented in a detailed report completed by Mark Payne, the consulting geologist to Sutter Gold and a qualified person as defined by National Instrument 43-101. Further information on US and Mexico operations is available at the Company’s website at www.suttergoldmining.com.
For additional information on Sutter Gold, please contact: Sutter Gold Mining Inc.
Suite 410 - 325 Howe St., Vancouver, BC Canada V6C 1Z7
Hal Herron, CEO, 307-856-9271 usnrg%23com|hal
For additional information on Premier Gold Mines Limited, please contact: Premier Gold Mines Limited
Address: 401-1113 Jade Court Thunder Bay, Ontario Canada P7B 6M7
Stephen McGibbon, COO
Web Site: www.premiergoldmines.com