PREMIER GOLD MINES LIMITED (TSX:PG) (“Premier”) is very pleased to announce that it has signed a Letter of Intent to enter into a joint venture with NEWMONT USA LIMITED, a subsidiary of Newmont Mining Corporation (NYSE:NEM, TSX:NMC) (“Newmont”) to consolidate the Saddle and Rain projects within the Rain Sub-district of Nevada’s prolific Carlin Trend.
Highlights of the proposed joint venture include:
- Premier and Newmont will each contribute lands held along the “Rain Trend” to consolidate the prospective horizon that is host to the Rain Mine, and the Saddle and Tess gold Deposits;
- Premier will acquire a 55% operating interest by contributing one land Section, waiving its existing right of payment under the Rain and Emigrant royalties, and contributing an initial $20 million in development expenditures over two years;
- Newmont will acquire a 45% non-operating interest by contributing three land Sections, full site access to the joint venture including roads, infrastructure and power, and access to contractor/supplier relationships/discounts; and
- The Joint Venture will secure a favourable milling agreement such that ore from the project will be processed at Newmont’s milling facilities that are located within 20 miles of the Property at a pre-arranged milling rate, subject to Newmont’s processing and displacement priorities. If the joint venture is able to secure toll milling on more favourable terms, it may engage the alternative milling subject to Newmont’s right to match the alternative milling terms.
Subject to completion of due diligence by each party, the combined properties (the “Rain Project”), which can be viewed in Figure 1, will include the historic Rain Gold Mine and the Saddle and Tess gold deposits that have been subject to recent exploration drilling by both Premier and Newmont. The Rain Gold Mine was operated as both an open pit and underground operation between 1988 and 2000 with more than 950,000 ounces of gold produced. During the final year of underground production, the average grade was 10.6 grams per tonne gold (g/t Au) or 0.31 ounces per ton (oz/t). The Saddle-Tess gold deposit is located immediately along strike from the underground workings (ramp) of the Rain Gold Mine and additional open pit resources may be available from the combined project.
Highlights from drilling on the targeted horizon include:
- 0.57 oz/t Au across 48.4 ft (19.54 g/t Au across 14.75 m) including 2.35 oz/t Au across 9.5 ft (80.50 g/t Au across 2.9 m) in SA008A
- 0.26 oz/t Au across 25.0 ft (8.91 g/t Au across 7.62 m) within 0.07 oz/t Au across 292.0 ft (2.34 g/t Au across 89.0 m) in SA022
- 0.25 oz/t Au across 40.0 ft (8.42 g/t Au across 12.2 m) including 0.31 oz/t Au across 22.ft (10.70 g/t Au across 6.98 m) in SA003
- 0.41 oz/ton Au across 13.0 ft (14.12 g/t Au across 4.0m) in SA008
- 0.29 oz/ton Au across 21.2 feet (10.09 g/t Au across 6.5m) in SA013A
- 0.23 oz/ton Au across 91.0 ft (7.73 g/t Au across 27.74 m) including 0.56 opt across 19.0 ft (19.20 g/t Au across 5.79 m) in RCR-44
- 0.23 oz/ton across 30 ft and 0.73 oz/ton across 15ft (7.95 g/t Au across 9.14 m and 25.03 g/t Au across 4.57 m) in RCR-65
“The combination of projects could allow for near-term production and the potential to define a significant gold resource along the largely underexplored Rain Trend” said Paul Huet, Chief Operating Officer of Premier. “With full access to existing Newmont infrastructure in the heart of one of the world’s most prolific gold mining districts, this joint venture has the potential to significantly de-risk the Project while vaulting Premier from explorer to producer.”
Figure 1: Planview of consolidated joint venture land holdings
This joint venture will provide Premier with an expanded core land position within one of the most productive gold regions found anywhere in the world; the Carlin Trend. Advancing this Project towards underground development will be a priority including an opportunity to restart operations at Rain. The partners expect to implement a program that will include establishing underground infrastructure to complete an aggressive drill program for resource delineation and bulk sampling in advance of a potential mining project. The Saddle-Tess Deposit represents one of the most prospective undeveloped high-grade gold deposits in the Carlin Trend.
“This joint venture will elevate the profile of the Company’s US Division, consistent with a focus on aggressively building Premier’s US-based project portfolio as we develop an exciting, North American, high-grade, growth-oriented company” stated Ewan Downie, President and Chief Executive Officer of Premier. “We are also excited by the prospect of working with one of the world’s major gold producers to advance this highly prospective property package located in the heart of the Carlin Trend, a jurisdiction that supports mine development.”
In addition to the joint venture lands, Premier retains ownership of several nearby land Sections that will be subject to future exploration aimed at discovering extensions of the “Rain Trend” and/or new gold mineralization in the area.
The Company will be holding an analyst conference call today January 26, 2012 at 2:00pm eastern.
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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 ALS Laboratories, an accredited mineral analysis laboratory in Reno, Nevada, for preparation and analysis utilizing fire assay 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, and include significant assets in world class districts such as Red Lake in Ontario and the Carlin Trend in Nevada.