Red Lake Haulage Drift Crosses Onto Rahill-Bonanza Jv Property Drilling Expands High Grade Gold Including 60.01 g/t Au Across 2.6m

March 26th, 2012
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PREMIER GOLD MINES LIMITED (TSX:PG) is pleased to announce that the Cochenour-Red Lake Haulage Drift (Haulage Drift) that is being constructed to link the Red Lake Gold Mines complex to the Cochenour (Bruce Channel) complex has now crossed onto the Rahill-Bonanza Joint Venture Project. Additionally, surface drilling at the JV Project continues to expand high-grade gold mineralization in the Wilmar Mine target area. The Rahill-Bonanza Project is located in the heart of the main Red Lake “Mine Trend” and is being explored with joint venture partner Red Lake Gold Mines Limited (“RLGM”), an affiliate of Goldcorp Inc. (TSX:G, NYSE:GG).

The Rahill-Bonanza Project (PG:49% & G:51%) is strategically located between the Red Lake Gold Mines complex to the east, and the Cochenour (Bruce Channel) complex to the west. Highlights include:

  • The Haulage Drift construction has crossed on the Rahill-Bonanza JV. The Haulage Drift will intersect several kilometres of some of the highest potential and untested geology along the main Red Lake “Mine Trend”. Exploration drilling is slated to commence in the second half of 2012.
  • Recent and previous drilling has successfully extended high-grade gold mineralization within the ‘2E Zone’ structure, suggesting a distance of approximately 500 metres down-plunge of the past-producing 2E Zone mined at Wilmar. Highlight results within the 2E target to-date include:
    • 68.87 grams per tonne gold (g/t Au) across 3.5 metres (m) or 2.01 oz/t across 11.5 feet, including 207.43 g/t across 1.15 m (6.06 oz/t across 3.8 feet) in hole PG10082.
    • 46.15 g/t Au across 4.5 m (1.35 oz/t across 14.8 feet) in hole PG10090.
    • 15.12 g/t Au across 2.0 m (0.44 oz/t across 6.6 feet), and 19.8 g/t Au across 1.15 m (0.58 oz/t across 3.8 feet) in hole PG11102.
  • Drilling has intersected high-grade gold within the ‘Footwall Diorite Zone’ several hundred metres below Wilmar with a new intercept assaying 60.01 g/t Au across 2.6 m (1.75 oz/ton across 8.5 feet).
  • Drilling down-plunge of the historic ‘6E Zone’ has returned multiple gold intercepts including 89.95 g/t Au across 1.0 m (2.63 oz/ton across 3.3 feet).
  • Recent step-out drilling to the east of Wilmar workings has intersected favourable geology and sulphide mineralization. Assays are pending and wedge drilling is being completed.
The Rahill-Bonanza JV is one of Premier’s core projects, representing the only portion of the main Red Lake “Mine Trend” not 100% owned by Goldcorp. The project is immediately west of the RLGM that is considered to be one of the world’s richest gold mines with production of more than 18 million ounces of gold and nearly 10 million ounces of gold resources.

The Property covers approximately 4.5 kilometres of the main Red Lake “Mine Trend” between the world class RLGM complex to the east, and the Cochenour (Bruce Channel) complex to the west. The haulage drift is being constructed to connect the two operations and will provide a prime underground exploration platform to conduct a long-term exploration program to test this largely unexplored part of the camp.

“This represents a historic event for Premier Gold Mines” stated Ewan Downie, President of Premier. “For the balance of 2012, all underground Haulage Drift construction will be on the JV Property and will provide an excellent platform to conduct exploration drilling in this highly prospective part of the Red Lake camp for years to come. We believe that the potential for discovery is high and the Haulage Drift will unlock the true value of the property.”

In addition to the underground development, an ongoing surface drill program continues to intersect high-grade gold mineralization in multiple horizons proximal to, and below, the historic Wilmar Gold Mine. Table 1 provides a summary of new results that complement previous drilling that is aimed at identifying potential resource areas that will be more fully explored from the Wilmar Mine workings and from drill bays being constructed at approximately 400 foot intervals in the Haulage Drift. Wilmar is linked by an underground drift with the Cochenour Mine which is currently being rehabilitated by RLGM. Past-production at Wilmar, over a period of four years, resulted in 203,256 tons of ore being mined at an average grade of 0.30 oz/ton Au (10.3g/t Au). The deposit remained open at depth when the mine shut down.

Table 1: Summary of Rahill-Bonanza Drill Results:
Hole-ID UTM
Coordinates (m)
NAD 27
Dip/Azimuth
(degrees)
From
(m)
To
(m)
Interval
(m)
Grade
(g/tonne)
Interval
(ft)
Grade
(oz/ton)
Zone
PG11100 5656609 N
444118 E
-70/306 768.1 774.0 5.9 2.10 19.4 0.06 2E
1029.4 1032.0 2.6 60.01 8.5 1.75 FW Diorite
PG11101 5656609 N
444119 E
-71/323 765.5 767.7 2.2 1.16 7.2 0.03 2E
PG11102 5656609 N
444119 E
-72/327 780.0 782.0 2.0 15.12 6.6 0.44 2E
788.0 790.0 2.0 4.36 6.6 0.13 2E
843.0 846.0 3.0 6.42 9.8 0.19 X
848.0 861.0 13.0 1.31 42.6 0.04 X
920.5 921.65 1.15 19.80 3.8 0.58 2-3E
PG11102A 5656609 N
444119 E
-72/327 745.0 746.0 1.0 4.98 3.3 0.15 2-3E
761.5 762.5 1.0 5.53 3.3 0.16 2-3E
PG11103 5656609 N
444119 E
-71/337 731.5 732.0 0.5 4.09 1.6 0.12 X
PG11104 5656629 N
444203 E
-70/337 772.0 773.0 1.0 4.69 3.3 0.14 2E
800.0 803.5 3.5 6.43 11.5 0.19 2E
823.0 824.0 1.0 8.25 3.3 0.24 X
839.0 839.5 0.5 8.47 1.6 0.25 X
PG11105 5656628 N
444203 E
-77/339 950.0 951.0 1.0 89.95 3.3 2.63 2-3E
993.0 995.0 2.0 8.44 6.6 0.25 X
999.0 1001.0 2.0 2.92 6.6 0.09 X
PG11106 5656628 N
444203 E
-73/330 ABANDONED
PG11107 5656628 N
444203 E
-73/330 ABANDONED
PG11108 5656628 N
444203 E
-72/335 864.8 867.3 2.5 1.69 8.2 0.05 2-3E
892.0 893.0 1.0 6.10 3.3 0.18 2-3E
1117.2 1124.0 6.82 2.65 22.4 0.08 FW Diorite
True widths of new intercepts estimated at 40-70% of intersection width

East Bay Project

In addition to the Rahill-Bonanza Project, Premier and Goldcorp share a second joint venture project in Red Lake, the East Bay Project. Drilling at East Bay in 2010 discovered gold mineralization within shear zones on the East Bay Ultramafic Trend between the known ‘GAZ’ deposit on the East Bay Property and Rubicon’s F2 Zone at the Phoenix Gold Project. Additional drilling has been completed and assays will be released in the near future. A portion of the East Bay Project is held 50% by Premier — 50% by RLGM with the balance being held 35% by Premier and 65% by RLGM - the Footwall Zone occurs on the portion held 35% by Premier and dips towards the 50% held portion. Highlights from previous drilling include assays of 51.04 g/t Au across 0.7 m, 7.25g/t Au across 2.7m, 297.61 g/t Au across 1.0 m (8.68 oz/ton across 3.3 feet), and 14.17 g/t Au across 0.8 m . The 2011-12 program was designed to expand the horizon along strike and infill the known area to confirm continuity.

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. Assay results are from core samples are sent to Activation Laboratories, an accredited mineral analysis laboratory in Ancaster, Ontario, or to Accurassay Laboratories, an accredited mineral analysis laboratory in Thunder Bay, Ontario, for preparation and analysis utilizing both fire assay and screen metallic methods.

Premier Gold Mines Limited is one of North America’s leading exploration companies with a high-quality pipeline of projects focused in proven, safe and accessible mining jurisdictions in Canada and the United States. The Company’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.

For further information, please contact:

Ewan Downie, President & CEO
Phone: 807-346-1390
Fax: 807-346-0100
e-mail: Info@premiergoldmines.com
Web Site: www.premiergoldmines.com