PREMIER GOLD MINES LIMITED (TSX:PG) is pleased to announce that it has entered into Option and Purchase Agreements to acquire interests in three adjoining properties located in the Red Lake Mining Division, in the Province of Ontario. The combined property package will be called the Redgold Project.
The Redgold Project is strategically located 80 km east of the Red Lake Gold Mines complex, within the Birch-Uchi greenstone belt (see Figure 1 for project location). The Project covers numerous high-grade gold vein prospects that will be the focus of an exploration program that will begin immediately on the project, including diamond drilling.
The first agreement will provide Premier the Option to earn up to a 70% interest in the Bobjo Prospect from Mainstream Minerals (TSX.V:MJO). As part of the agreement, Premier will operate a due diligence drill program that will be funded by Mainstream to confirm earlier results from drilling completed prior to the acquisition. Following a successful program, Premier can earn its interest by making certain cash and share payments to Mainstream and performing exploration on the Property.
The second agreement will provide Premier the option to acquire a 100% interest in the Woco Prospect from Dollard Mines Ltd., a private company, by paying to Dollard $250,000 cash and issuing to Dollard 150,000 shares of Premier over a two year period. The Property is subject to a 2% Net Smelter Royalty payable to Dollard, plus an underlying 1% NSR. The Woco Prospect contains multiple gold-bearing quartz vein systems including the “Rich Woco Vein” where historic drilling reported numerous high-grade gold intercepts and is open for expansion.
The third agreement provides for Premier to acquire 100% of the Raingold Property, comprised of 6 Patented mining claims contiguous with the other two properties that make up the Redgold Project. Numerous vein zones have been discovered on the Property including the Raingold prospect where previous work identified a potentially economic zone over a strike length of more than 120 metres. Limited drilling also returned high-grade gold intercepts.
Figure 1: Location of Redgold project within the Uchi Sub-Province
“A renewed cycle of exploration discoveries have occurred in Red Lake since the 1990’s following the injection of long needed risk capital. We believe that similar discoveries can be made in the belt east of Red Lake where historic mineralization resides on properties which remain significantly underexplored.” said Stephen McGibbon, Exec VP and COO of Premier Gold Mines, “The Redgold Project is consistent with Premier’s business model to acquire prospective high-grade projects in proven gold districts within safe, accessible jurisdictions. We intend to aggressively explore favourable target areas on this property beginning immediately.”
The Redgold Project is Premier’s fourth strategic property within the Red Lake Mining Division, in addition to the Rahill-Bonanza, East Bay and Newman-Madsen Joint Venture Projects, all located in the heart of the prolific Red Lake district. The Rahill-Bonanza Project covers several kilometres of the main Red Lake “Mine Trend” and is strategically located between the world class Red Lake Gold Mines to the east, and the “Bruce Channel” discovery to the west, where an underground exploration tram designed to link the two operations is under construction.
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 well financed Canadian-based mineral exploration and development company with several projects and deposits in Northwestern Ontario and Nevada, and a joint venture in Mexico. In the Red Lake gold mining camp, two projects are operated in joint venture with Red Lake Gold Mines, an affiliate of Goldcorp Inc. The company also owns a strategic project located on the main Musselwhite Gold Mine trend and recently announced the acquisition of Saddle Gold Inc. and now holds the Saddle Project on the prolific Carlin Trend, in Northeastern Nevada, as well as a royalty in Newmont’s Emigrant Springs Project.