PREMIER GOLD MINES LIMITED (TSX:PG) is pleased to provide an update from ongoing exploration activities at several of the Company’s project sites and corporate operational changes. Drilling programs are currently underway at the Rahill-Bonanza Project in Red Lake, the Hardrock Project in Northwestern Ontario, and at the Cove Gold Project in Nevada. Numerous developments on all projects continue to demonstrate the potential for future resource growth.
Significant highlights so far in 2012 include:
- Premier announced the acquisition of the Cove Gold Project in Nevada, a high-grade gold project located in the heart of the Eureka-Battle Mountain Trend. Initial drilling has expanded the Helen Gold deposit along strike with intercepts including 7.09 grams per tonne gold (g/t Au) across 24.38 metres (m) (0.21 ounces per ton (oz/t) across 80 feet) and 14.42 g/t Au across 12.19 m (0.42 oz/t across 40 feet).
- Surface and underground diamond drilling is being carried out on the Rahill-Bonanza Joint Venture in Red Lake. This exploration is testing a newly identified structure on the property and started flat holes from the tram designed to build a camp-wide geological model and to test the regional unconformity.
- The Red Lake to Cochenour haulage drift (tram) has recently excavated through a gold-bearing Basaltic Komatiite (ultramafic) rock unit, an important unit known to be associated with high-grade mineralization at the Red Lake Gold Mines complex including the High Grade Zone (HGZ).
- Final modeling of the deposits that comprise the Trans-Canada Project is underway such that a revised resource estimate can be completed in the near future. Ongoing drilling at the Fortune Zone horizon continues to expand high grade mineralization with numerous recent intercepts including 431.43 g/t Au across 2.0 metres (12.6 oz/t across 6.6 feet).
“2012 is the largest year, in terms of exploration dollars in Company history with three active exploration projects that continue to deliver significant exploration success”, stated Ewan Downie, President and CEO of Premier. “Management and operational changes continue to evolve as we quickly grow from exploration to anticipated development in the years to come.”
Cove Project Acquisition
In June of this year, Premier entered into an agreement to acquire the Cove Gold Project from Victoria Gold Corp. The Cove Project is located within the Eureka-Battle Mountain Trend that is host to a number of multi-million ounce producing and past-producing mines. The Cove deposit was mined (primarily by open pit) between 1986 and 2001, producing approximately 2.6 million ounces of gold, and 100 million ounces of silver. The target-rich 6,972 hectare property (17,252 acres) has been subject only to limited surface exploration outside of the Cove pit and Premier believes that the property offers potential for the discovery of additional mineralized zones and horizons. Importantly, the property is located in close proximity to excellent infrastructure (including paved roads and power). A Plan of Operations (PoO) for underground and surface exploration has been submitted to the appropriate federal agency and is anticipated to be approved in the fourth quarter of 2012. Once the PoO is received, the company expects to significantly increase exploration on the Project with multiple drill rigs.
The Helen Zone is a stratiform, Carlin-style, deposit that remains wide open along the trend of the favourable anticline structure that is host to the primary mineralized zones at Cove. Recent step-out drilling from the Helen Zone to the northwest and southeast towards the historic Cove pit suggests major expansion potential. Substantial thickness of high-grade mineralization including 11.75 g/t Au across 20.42 m (0.34 oz/t across 67.0 feet) in hole AX-8A, 7.09 g/t Au across 24.38 m (0.21 oz/t across 80 feet) and 9.26 g/t Au across 5.18 m (0.27 oz/t across 17 feet) in AX-12 demonstrate the robust system at Cove. More recent southeasterly drilling approximately 200 feet (60 metres) further along strike (AX-13 and AX-14 — assays pending) continues to intersect significant mineralization.
Red Lake Projects - Rahill-Bonanza Update
Surface and underground drilling is underway at the Rahill-Bonanza Joint Venture Project operated by Red Lake Gold Mines Limited (“RLGM”), a partnership between Goldcorp Inc. and Goldcorp Canada Ltd. The Rahill-Bonanza Project (PG:49%) that is strategically located in the heart of the prolific Red Lake “Mine Trend” between the Red Lake Gold Mines complex to the east, and the Cochenour (Bruce Channel) complex to the west.
Surface drilling is testing a newly identified structure intersected at depth in the tram and is also further delineating the mineralized zones proximal to the Wilmar Gold Mine. Recently, the tram has intersected several gold-bearing structures including one that has been drill tested from the tram. This favourable structure is also being drill-tested from surface along its interpreted trend. Additionally, high-grade mineralization has now been intersected to some 450 metres down-plunge of the historic Wilmar Mine workings with intercepts that include up to 68.87 g/t Au across 3.5 m (2.01 oz/t across 11.5 feet) in hole PG10082 and 46.15 g/t Au across 4.5 m (1.35 oz/t across 14.8 feet) in hole PG11092 . Results from the summer 2012 surface drill program are pending. The tram is being excavated from the 5400 foot Level of Red Lake Gold Mines and will intersect several kilometres of some of the highest potential and untested geology in the heart of the Red Lake camp. The drift has recently intersected multiple gold-bearing structures including one that has been core drill-tested (assays pending). Additionally, the underground diamond drilling program designed to build a camp-wide geological model and to test the regional unconformity to the south is now underway.
The tram drift has recently excavated through a gold-bearing Basaltic Komatiite (ultramafic) rock unit, an important unit known to be associated with high-grade mineralization at the Red Lake Gold Mines complex including the High Grade Zone (HGZ). This structure will be the target of future drilling.
The Hardrock Deposit, within the Trans-Canada Project, is host to a gold resource estimate with Measured and Indicated Resources of 2,492,000 ounces and Inferred Resources of 1,123,000 ounces. Work is underway including the modeling of numerous zones and deposits that comprise the project such that a revised resource estimate can be completed. This work is nearing completion and the revised estimate is expected in the coming weeks.
In 2012, substantial success has been recognized in the Fortune Zone. The Fortune Zone is comprised of multiple, en-echelon, narrow vein zones located in close proximity to the historic Hardrock mine workings and includes extensions of the historically mined “F-Zone” from which more than 2.0 million ounces of gold was mined. High-grade gold mineralization within the Fortune Zone horizon has now been delineated over a plunge length of some 3.5 kilometres and has characteristics similar to the high-grade past-producing Little Long Lac (600,000 ounces gold produced at a grade of 11.70 g/t) and Leitch (847,900 ounces produced at a grade of 31.50 g/t) Gold Mines that are located on the Trans-Canada Project. Recent intercepts in the Fortune Zone include 431.43 g/t Au across 2.0 m (12.60 oz/t across 6.6 feet) in hole MM307 and 21.13 g/t Au across 8.9 m (0.62 oz/t across 29.2 ft) in hole MM298. Additional results are pending.
Following the completion of the updated mineral resource estimate, work will begin on a Preliminary Economic Assessment (PEA) for Trans-Canada. The Company has retained the services of one of Canada’s leading mine developers (see operational changes below) to assist in this project. Permitting for advanced exploration activities on the project is also being completed.
As the corporation prepares for future growth, numerous changes to management and to the board of directors have been made to facilitate this growth, resulting in an industry-best Management team with the ability to effectively advance Company projects. A recent development will see Paul Huet depart Premier as he has resigned as Chief Operating Officer (COO).
Paul Huet has tendered his resignation as COO to pursue an executive opportunity with another organization. The Company wishes to thank Paul for his valued contribution over the past year and success in his new role. Paul will maintain an advisory role with Premier on an as needed basis.
In June of 2012, Ebe Scherkus joined Premier as Director and Chairman. Mr. Scherkus brings to Premier 37 years of mineral exploration and mine development experience with a successful history of corporate development. Ebe will play an important role in Premier realizing its future growth objectives as it transitions toward project development. Mr. Scherkus recently retired as President and Chief Operating Officer of Agnico-Eagle Mines Ltd. after a 27-year progressive career with the company. Additionally, Claude Lemasson joined as a Director of Premier. Claude brings to Premier more than 20 years of mining development experience in Canada and the United States. His senior mine development and operational roles with Goldcorp Inc. included roles as General Manager of Projects for Canada and the U.S. where he was responsible for the advancement of the Eleonore Project and General Manager of the Red Lake Mine. Brian Morris (Vice-President Exploration) and Warren Thompson (Exploration Manager for Nevada) have been retained to advance the corporation’s US project portfolio. Brian and Warren bring to Premier substantial exploration and development experience and have played important roles in numerous discoveries and deposit development projects.
Owing to the fact that the advancement of the Saddle Project has been put on hold such that the company can focus its efforts on Cove, the Company does not intend to fill the position of COO at this time.
Premier Royalty Corporation
In November 2011, Premier made the decision to optimize the value of its royalty portfolio by forming a royalty subsidiary with the intent of creating Canada’s next gold focused royalty company, led by Abraham Drost. Since this decision, Premier Royalty Corporation (PRC) has entered into agreements to acquired four producing royalties in addition to Premier’s Emigrant Mine and other royalties. A definitive agreement with Bridgeport Ventures Inc. will result in a business combination pursuant to which Bridgeport will acquire PRC. Upon “Closing” of this agreement, Premier Gold Mines Limited will become PRC’s largest shareholder. As the company grows, Premier will have the option to either use this position as a non-dilutive financing mechanism or then dividend this ownership to shareholders. This agreement is expected to close in the fourth quarter of 2012.
Premier Gold believes that consolidating existing royalties owned by the Company combined with the acquisition of other high quality cash flowing royalty assets will form the basis of a transaction that is value accretive to Premier Gold shareholders.
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 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 Battle Mountain and Carlin Trends in Nevada.