Premier Announces Resource Estimate for Red Lake Bonanza Gold Deposit

February 6th, 2008
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PREMIER GOLD MINES LIMITED (TSX:PG) is pleased to announce the results of a NI 43-101 compliant inferred mineral resource estimate of the Bonanza Deposit, located on the Rahill-Bonanza Property, a joint venture between Premier (49%) and Red Lake Gold Mines (RLGM; 51%).

Highlights of this work show an inferred resource of 2,283,000 tonnes at an average grade of 6.98g/t Au over an average width of 3.1 meters (diluted - 2,468,000 tonnes at an average grade of 6.46g/t Au over an average width of 3.4 meters) using a 4.0g/t cut-off grade.

Results of the estimate, summarized in Table 1, reflect the following basic parameters:
  • A gold price of US$750 per ounce
  • A US$-CAD$ exchange rate at par
  • A 4.0 gram per tonne (gpt) cut-off grade
  • A depth extending from surface to 600-metres below surface
  • A minimum horizontal width of 2.0 metres
  • Specific Gravity (SG) of 2.87 based on preliminary metallurgical test work
The deposit remains untested beneath the current resource.

Table 1 Bonanza Deposit at 4.0 gpt cut-off grade; tonnes, grams and ounces rounded
ZONE TONNES GRAMS AU GRADE (GPT) OUNCES AU HOR (m) DIL_TONNES DIL_GRADE (GPT) DIL_HOR
B1 479,000 3,355,000 7.01 108,000 3.2 508,000 6.61 3.4
B10 133,000 821,000 6.17 26,000 2.9 139,000 5.89 3.0
B11 105,000 1,626,000 15.48 52,000 2.6 125,000 13.03 3.0
B9 44,000 231,000 5.25 7,000 4.7 44,000 5.25 4.7
F1 409,000 2,703,000 6.60 87,000 3.0 465,000 5.81 3.4
F2 100,000 750,000 7.53 24,000 2.8 107,000 6.98 3.0
F3 402,000 1,828,000 4.55 59,000 5.7 402,000 4.55 5.7
F5 4,500 265,000 58.67 8,000 0.6 14,000 18.48 2.0
F6 192,000 956,000 4.99 31,000 3.0 198,000 4.83 3.1
RH1 174,000 1,312,000 7.52 42,000 2.9 191,000 6.88 3.1
RH2 241,000 2,087,000 8.66 67,000 2.1 275,000 7.60 2.4
Grand Total 2,283,000 15,932,000 6.98 512,000 3.1 2,468,000 6.46 3.4

At the 4.0 gpt-cut-off, the Bonanza Deposit is made up of 11 sub-parallel, sub-vertical mineralized zones whose grade varies between 4.55 gpt and 18.48 gpt on a diluted basis, reflecting the higher grade nature of portions of the deposit. Overall, the Bonanza Deposit resource has a grade of 6.46 gpt after dilution. Dilution was introduced into the estimate in order to ensure all subzones were represented with a minimum 2.0 metre horizontal width.

A second estimate, developed at 2.0 gpt-cut-off grade, is summarized in Table 2. It was completed in order to better understand the geometry of the lower grade mineralization that may potentially be amenable to lower cost mining methods. At a 2.0 gpt cut-off, individual sub zones grade up to 12.32 gpt after dilution, which ensures a minimum 3.0 metre horizontal width with this lower grade estimate.

Table 2 Bonanza Deposit at 2.0 gpt cut-off grade; tonnes, grams and ounces rounded
ZONE TONNES GRAMS GRADE (GPT) OUNCES HOR (m) DIL_TONNES DIL_GRADE (GPT) DIL_HOR
B1 1,328,000 5,625,000 4.24 181,000 4.6 1,470,000 3.83 5.1
B10 152,000 911,000 5.98 29,000 2.5 206,000 4.42 3.4
B11 143,000 1,689,000 11.81 54,000 3.5 170,000 9.94 4.1
B4 279,000 735,000 2.63 24,000 5.6 285,000 2.58 5.7
B9 273,000 930,000 3.40 30,000 5.1 297,000 3.13 5.6
F1 1,546,000 6,105,000 3.95 196,000 5.1 1,699,000 3.59 5.6
F2 239,000 1,096,000 4.59 35,000 4.6 272,000 4.03 5.3
F3 537,000 2,210,000 4.12 71,000 7.6 552,000 4.01 7.8
F5 5,000 265,000 58.67 9,000 0.6 21,000 12.32 3.0
F6 993,000 3,102,000 3.12 100,000 7.5 1,002,000 3.10 7.6
RH1 643,000 2,705,000 4.21 87,000 4.8 710,000 3.81 5.3
RH2 520,000 2,972,000 5.72 96,000 2.9 679,000 4.38 3.8
Grand Total 6,657,000 28,344,000 4.26 911,000 4.9 7,364,000 3.85 5.4

Figure 1 B1 Sub Zone Longitudinal Section - 4.0 gpt Cut Off

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Both estimates were completed utilizing a polygonal estimation methodology. Intercepts were projected onto vertical longitudinal sections for each sub zone. Mineralized zones were contoured manually with careful regard for the geological limitations of the deposit as defined by diamond drilling. Polygons were expanded up to, but not beyond, the contoured outlines of the deposit (See Figure 1). The full report is being completed by Gerald A. Harron of G.A. Harron and Associates Inc., an independent qualified person, as defined by National Instrument 43-101.

For 2008, the Joint Venture plans to conduct, a substantial diamond drill program at the Bonanza Deposit in order to increase the confidence of the estimate to a minimum “indicated resource” designation as well as expand the resource at depth.

Wilmar Deposit

In late 2007, Premier announced that the permitting process for potentially advanced exploration had been initiated for the Cochenour-Wilmar Project. Advanced exploration may include dewatering and rehabilitation of the Cochenour-Willans Gold Mine, which would provide underground access for delineation drilling at Wilmar on the joint venture property. The Wilmar Gold Mine is accessed through the Cochenour mine workings. During the final years of operations at Cochenour, 203,256 tons were mined from the Wilmar Mine at an average grade of at least 0.30 oz/ton Au (10.3 gpt Au). The Wilmar Mine carries a resource at closure and the deposit remains open at depth. Definition drilling of the mined horizons and of mineralized zones intersected in the current drill program can be carried out from underground, in addition to potential bulk sampling. Recent drilling at Wilmar has intersected the main horizon in all holes drilled at a depth up to 600 metres below the historic workings and over a strike length of 300 metres with assays that include 49.0 gpt Au over 1.0m, 14.2 gpt Au over 5.0m and 18.1 gpt Au over 2.0m.

Level 41 Drilling

Drilling toward the Joint Venture project from RLGM’s Campbell Complex has reached a depth of 1239.6 metres and has been temporarily suspended while additional drill equipment is ordered. The primary target of this hole, collared on the 41 Level (approximately 1,875 meters or 6,150 feet below surface) is from approximately 1200-1650 metres. Drilling is expected to resume in the near future. Prior to reaching the main target area, a narrow gold-bearing zone was intersected, returning an assay of 6.80 gpt Au (0.20 oz/ton) over 1.0 metre.

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 fully financed 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 Red Lake Gold Mines. A strategic project is also located on the main Musselwhite Gold Mine trend (Goldcorp).

For further information, please contact:

Ewan Downie, President & CEO Phone: 807-346-1390 Fax: 807-345-0284
e-mail: info@premiergoldmines.com Web Site: www.premiergoldmines.com
The statements made in this Press Release may contain forward-looking statements that may involve a number of risks and uncertainties. Actual events or results could differ materially from the Company’s expectations and projections.