Premier Announces Closing of Gualcamayo Gold Mine Royalty Purchase by its Subsidiary Premier Royalty Corporation
THUNDER BAY, ON, November 12, 2012 /CNW/ - PREMIER GOLD MINES LIMITED (PG:TSX)
(“Premier Gold” or the “Company”) is pleased to announce the closing of
the purchase by its wholly-owned subsidiary, Premier Royalty
Corporation (“Premier Royalty”) from Golden Arrow Resources Corporation
(“Golden Arrow”), of a 1% net smelter return royalty (the “Royalty”) on
gold produced from Yamana Gold Inc.’s Gualcamayo Gold Mine in Argentina.
Premier Royalty purchased 100% of the shares of Golden Arrow’s wholly-owned subsidiary, which indirectly owns the Royalty, for cash consideration of $16,500,000 and warrants to purchase an aggregate of up to 1 million shares of Premier Royalty at an exercise price equal to 120% of the price of Premier Royalty’s shares in connection with an initial public offering or similar going public transaction. The warrants are exercisable for a period of 24 months from the closing date of the Royalty acquisition. Golden Arrow has the right, on 30 days’ prior written notice, to require Premier Royalty to purchase for cancellation all outstanding warrants for a price of $1.25 per warrant prior to their expiry.
The Gualcamayo mine is an open pit, heap leach gold mining operation with three substantial zones of gold mineralization, located in the northern San Juan province of Argentina, which hosts total proven & probable mineral reserves of 58.9 million tonnes (Mt) at 1.16 grams per tonne gold (g/t Au) amounting to approximately 2.2 million ounces and total measured & indicated mineral resources of 10.3 Mt at 1.90 g/t Au amounting to approximately 1.1 million ounces as at December 31, 2011. Gualcamayo has consistently improved its production versus guidance since 2011. According to Yamana Gold Inc.’s public disclosure, the decision was made in 2010 to develop the underground QDD Lower West deposit, located below the main open pit, which is expected to increase annual production to over 200,000 ounces per year beginning in 2014.
Abraham Drost, President & Chief Executive Officer of Premier Royalty stated, “We thank Golden Arrow and are very pleased to close on the Gualcamayo royalty transaction. This acquisition adds a high quality cash-flowing royalty on a remarkable gold mine owned and operated by Yamana. Premier Royalty’s portfolio will consist of five cash flowing royalties (Emigrant Springs - Newmont, Thunder Creek - Lake Shore Gold, Buffelsfontein - Village Main Reef, Mine Waste Solutions - AngloGold Ashanti and Gualcamayo - Yamana) and a number of promising earlier stage exploration royalties. We are also assessing other potential royalty acquisitions and corporate development opportunities and look forward to the consummation of the Bridgeport transaction and a continuing pattern of sustainable growth.”
Information in this press release describing the Gualcamayo Gold Mine relies upon public disclosure provided by Yamana Gold Inc. and has been reviewed by Mr. Stephen McGibbon, P. Geo, who is a Qualified Person within the meaning of National Instrument 43-101. For more information on the Gualcamayo Gold Mine, please refer to the “Technical Report for Gualcamayo Project, San Juan - Argentina” dated March 25, 2011 which can be found on Yamana Gold Inc.’s profile on www.sedar.com.
About Premier Gold Mines Limited and Premier Royalty Corporation
Premier Royalty Corporation is a wholly-owned subsidiary of Premier Gold Mines Limited, one of North America’s leading exploration and development companies with a high-quality pipeline of projects focused in proven, safe and accessible mining jurisdictions in Canada and the United States. Premier’s portfolio includes significant assets in world class gold mining districts such as Red Lake, Musselwhite and Geraldton in Ontario and the Carlin Trend in Nevada. Premier believes that consolidating existing royalties owned by Premier Gold combined with acquisition of other high quality cash flowing royalty assets into Premier Royalty will form the basis of a transaction that is value accretive to Premier shareholders.
FOR FURTHER INFORMATION PLEASE CONTACT:
Ewan Downie, President & CEO
Premier Gold Mines Limited
Abraham Drost, P.Geo., President & CEO
Premier Royalty Corporation
Web Site: www.premiergoldmines.com
NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION: This news release includes certain information that may constitute “forward-looking information” under applicable Canadian securities legislation. Forward-looking information includes, but is not limited to, statements about strategic plans, including a going public transaction involving Premier Royalty and acquisitions of high quality cash flowing royalty assets into Premier Royalty. Forward-looking information is necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking information, including the risks identified in Premier Gold’s annual information form under the heading “Risk Factors”. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking information. All forward-looking information contained in this press release is given as of the date hereof and is based upon the opinions and estimates of management and information available to management as at the date hereof. The Company disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law.