PREMIER GOLD MINES LIMITED (TSX:PG) is pleased to announce that Red Lake Gold Mines, an affiliate of GOLDCORP INC. (TSX:G, NYSE:GG), has exercised its option, as permitted under the joint venture agreement, to increase its interest in the Rahill-Bonanza Joint Venture by 1% to 51% by paying Premier $440,000. By doing this Goldcorp has taken over as primary operator of the Joint Venture. Premier now holds a 49% interest in the property and will continue to participate in the ongoing, major two-year exploration program. Premier is overseeing one of the three surface drills that are currently drilling on the property.
“The proximity of the Rahill-Bonanza project to Goldcorp’s Red Lake Gold Mines complex, widely considered the world’s highest-grade gold mine, may realize many potential synergies leading to accelerated development of deposits on the joint venture property” stated Ewan Downie, President & CEO of Premier. “The decision by Goldcorp to increase its interest in the project and become the primary operator speaks to their opinion of the quality of the property and the progress made on work completed to date.”
The Rahill-Bonanza Project is strategically located along the main Red Lake “Mine Trend” between the prolific Red Lake Gold Mines complex to the east and the Cochenour Gold Mine and Bruce Channel discovery to the west. This property includes the Bonanza deposit, discovered in 2004, and the historic Wilmar Gold Mine.
The Bonanza deposit was subject to two years of exploration, with the last concerted drilling effort in the main deposit area ending in 2006. This drilling returned numerous significant intersections to depths of less than 400 meters including 13.27 g/t Au across 19.0 meters, 8.66 g/t Au across 22.0 meters, and 5.05 g/t Au across 34.95 meters. Work is underway to produce a NI43-101 resource during the first quarter of 2008 and renewed drilling in the deposit area will focus on expanding resources and providing additional information that will help advance the deposit toward potential bulk sampling.
Exploration drilling in 2007, and the current drilling is focused on testing the vicinity of the past-producing Wilmar Gold Mine. The Wilmar Gold Mine was mined as a satellite deposit to the adjacent Cochenour-Willans Gold Mine (owned by Goldcorp) and was in operation during the final several years of mining at Cochenour. This resulted in the mining of 203,256 Tons at an average grade of approximately 0.30 oz/ton Au (10.3g/t Au) with the deposit remaining open at depth when the mine shutdown. The current drill program has intersected the Wilmar horizon in all holes drilled over a depth of more than 600 meters below the historic workings and over a strike length of approximately 300 meters with assays that include 49.0g/t Au over 1.0m, 14.2g/t Au over 5.0 m and 18.1 g/t Au over 2.0 m. Mineralization remains open at depth and along strike. One drill is currently drilling a deep hole to test the horizon at a depth of approximately 2000 meters. The permitting process is being initiated in order to ensure that future, potentially advanced exploration can be conducted on a timely and uninterrupted schedule. Advanced exploration may include dewatering and rehabilitation of the Cochenour-Willans Gold Mine, which would provide underground access for delineation drilling at Wilmar on the joint venture property.
Matt Long, P. Geo., Red Lake District Project Manager of Premier, 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 Canadian-based mineral exploration and development company with diverse property holdings that include several projects and deposits in Northwestern Ontario and a joint venture in Mexico. In the Red Lake gold mining camp, two of these are operated in joint venture with Goldcorp Inc. (TSX:G). A strategic project is also located on the main Musselwhite Gold Mine trend (Goldcorp).