Premier Gold Mines Limited (TSX-PG) is pleased to announce that it has acquired a 100% interest in the Broulan Reef Project located immediately adjacent to Goldcorp Inc.’s (TSX:G, NYSE:GG) Bruce Channel deposit and Premier/Goldcorp’s Rahill-Bonanza Joint Venture.
Premier has acquired the Broulan Reef Project from Cypress Development Corp. (TSX-V:CYP) and Skyharbour Resources Ltd. (TSX-V:SYH) (the “Vendors”) in exchange for a payment to the Vendors $1.75 million in cash, the issuance of 160,000 common shares of Premier and the retention of a 0.5% net smelter royalty (NSR). The property is also subject to an existing 2.0% NSR. Under the terms of the Rahill-Bonanza Joint Venture Agreement between Premier and Goldcorp, Goldcorp has the 30 day right to acquire a 51% interest in the Broulan Reef Project by funding 51% of acquisition costs. The closing of the acquisition is subject to standard conditions, including regulatory and stock exchange approval.
Based on previous work completed by Cypress and Skyharbour, Premier management believes that this project has excellent potential to host economic gold mineralization. The property is located adjacent to the south and west of Goldcorp’s Cochenour / Bruce Channel Deposit and adjacent to the west of the Rahill Bonanza Joint Venture. The property is situated on strike with the Bruce Channel Deposit and Finn Zone, and is ideally located to test for the potential extension of the new mine horizon currently being developed by Goldcorp. Furthermore, the potential intersection of the North-South striking Bruce Channel structure with the East-West striking structural corridor of the Wilmar deposit provides an important structural intersection target similar to that at the High Grade Zone at RLGM. Figure 1 demonstrates the favourable location of the Broulan Reef Project projected to tram depth.
Figure 1 - Broulan Reef Project Location, and Potential Deposits, Projected to Tram Depth
The final drill programs completed by Cypress and Skyharbour intersected alteration, mineralization, and veining similar to that at Bruce Channel and many of the main mines in Red Lake. This drilling intersected strongly anomalous gold grades, visible gold, altered ultramafic rock units, and increased faulting that will provide excellent targets for future exploration. These results can be found on SEDAR filed under Cypress Development Corp’s December 1, 2011 News Release.
The Rahill-Bonanza Project is a joint venture located in the heart of the main Red Lake “Mine Trend” and is being explored with partner and operator Red Lake Gold Mines Limited (“RLGM”), an affiliate of Goldcorp Inc. Tram development through the Joint Venture and underground drilling continues to intersect favourable alteration, mineralization and structure as construction heads west. The tram development is expected to provide an ideal platform from which to test the Broulan Reef claims in the future.
“Over the past several years, our strong treasury has allowed Premier to capitalize on weak market conditions and acquire strategic property packages in several of North America’s most prolific gold camps” stated Ewan Downie, President and Chief Executive Officer of Premier. “The Broulan Reef claims represent an important consolidation of key lands located along the stratigraphic horizon that is host to some of the world’s major high-grade ore deposits”.
The orebodies hosted within the main Red Lake “Mine Trend”, including the prolific HGZ, are often spatially associated with a regional unconformity that trends through the southern portion of the Project area for several kilometres. Broulan Reef is situated in an important fold-closure location at tram depth that represents a potentially important area of deformation and structural complexity similar to that at the infamous High-Grade Zone at the Red Lake Gold Mines. A significant goal for the joint venture has long been to establish an underground exploration platform from which systematic diamond drilling could be undertaken to test this prospective target horizon — this underground drill program is now underway. The tram drift that is currently being excavated by RLGM to support mine development of its Cochenour Project (Bruce Channel Deposit), will serve as an invaluable exploration platform for the Joint Venture. It is located approximately 1,650 metres (5,400 feet) below surface, at an elevation where exploration for HGZ-style mineralization has been most successful in the past. Because the HGZ footprint can be very compact, drilling from surface can be expensive and difficult to intersect projected target areas due to hole deviation.
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 one of North America’s leading exploration companies with a high-quality pipeline of gold 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.