PREMIER GOLD MINES LIMITED (PG:TSX) is pleased to announce that it has signed a letter of intent with GOLDCORP INC. (G:TSX, GG:NYSE) to explore a strategic land package located in the prolific Red Lake Greenstone Belt in Northwestern Ontario. Upon execution of a definitive Joint Venture Agreement both companies will contribute mining properties held in this area and jointly fund the exploration and development of this property package. The benefits of this transaction to Premier are numerous and include:
- Participation in a much larger land position along prolific mine trend.
- Participate in the western expansion of the Bonanza Deposit.
- Participate in on-strike expansion of the North Contact Discovery.
- Potential underground access at Goldcorp’s Cochenour Gold Mine to support future exploration.
- Reduced exploration risk.
- Access to Goldcorp technical support.
The new property package, referred to as the “Rahill-Bonanza Project”, covers several kilometres of the key geological unconformity that spans from Goldcorp’s Red Lake Gold Mines to the formerly producing Cochenour Gold Mine. These mines have produced more than 18.5 Million ounces of gold, currently have more than 10 Million ounces in additional reserves and resources, and the Red Lake Mine is one of the highest grade gold mines in the world. The Rahill-Bonanza Project is host to several gold deposits and mineralized zones including the Follansbee, Bonanza and North Contact Zones, and the Wilmar and Granodiorite gold deposits. Additionally, the Project properties are host to numerous ultramafic horizons, key markers for high-grade gold in Red Lake such as Goldcorp’s High Grade Zone. A good portion of the properties have seen only limited and sporadic near-surface exploration.
“This joint venture would consolidate this key horizon and significantly increases our exposure to what might be considered the premier high-grade gold camp in the world” stated Ewan Downie, President of Premier. “Given both companies’ previous success in the Red Lake District, and the fact that we potentially hold a major portion of the on-strike extension of Goldcorp’s Red Lake Gold Mines’ stratigraphy, I expect that 2007 to be a monumental year in Premier’s development into a major force in Canadian gold exploration.”
Stephen McGibbon, Executive Vice-President and Chief Operating Officer of Premier added “successful exploration at the Red Lake Mine established Goldcorp as one of the world’s most profitable mining companies and Premier now offers significant value exposure to this prolific gold horizon.”
The letter of intent comtemplates a definitive Joint Venture Agreement under which Premier will contribute its Bonanza and Marathon-McNeely Properties, and Goldcorp will contribute its Rahill-Wilmar and Kostynuk Properties to the joint venture. Premier will fund the initial CAD$1 Million in exploration on the Property, and future exploration will be funded on a 50:50 basis. Premier will be operator during the initial period of CAD$5 Million in exploration, and Goldcorp will be operator thereafter. At any time during the first eighteen (18) months following the formation of the joint venture, Goldcorp will have the option to increase its interest in the joint venture by 1% to 51% by paying Premier CAD$440,000. The definitive Joint Venture Agreement is also to provide Goldcorp with the right to participate up to 20% in the first equity financing completed by Premier and allows access to Goldcorp’s Wilmar Mine workings through it’s Cochenour Gold Mine in the event that it is re-opened.
The parties expect to execute the definitive Joint Venture Agreement before the end of January 2007, subject to certain conditions precedent including each party’s respective satisfaction with its due diligence investigations in respect of the properties and past operations thereon and receipt of all necessary corporate approvals of its execution and delivery of the Joint Venture Agreement.
Premier and Goldcorp have begun exploration immediately, including a major diamond drilling program that will extend well into 2007 on several of the key horizons on the Property. This exploration will focus on:
- defining and expanding the Bonanza and North Contact Zone discoveries (previous drill results include 13.27g/t over 19.0m and 8.66g/t over 22.0m) and the western Bonanza extension where recent drilling by Goldcorp returned high-grade intersections;
- testing the Wilmar deposit that was mined in the 1960’s;
- the West Granodiorite deposit which has the potential to represent a significant bulk tonnage resource;
- the main regional geologic contact that hosts the Gold Eagle Property discovery (Southern Star Resources (SSR:TSX) - Exall Resources (EXL:TSX)); and
- targets related to and proximal to Goldcorp’s Red Lake Gold Mines located immediately east of the Rahill-Bonanza Project.
The Red Lake mine trend is a major east-west shear and alteration corridor. Red Lake is world renowned for high grade, with Goldcorp’s Red Lake Gold Mines being one of the highest grade gold mines in the world. All of the geological attributes that have contributed to the creation of this world class deposit also exist within the Rahill-Bonanza Project area. Mr. Stephen McGibbon, P.Geo., Executive Vice-President and Chief Operating Officer, 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.
An informational call will be held by Ewan Downie at 1:00pm EST. A question and answer period will follow. For more information, please visit www.premiergoldmines.com.
PREMIER is a Canadian-based mineral exploration and development company currently focused on exploration in the Red Lake and Musselwhite greenstone belts. Premier is debt free and has a strong treasury.