PREMIER CLOSES GERALDTON
AQUISITION
Shares Issued: 77,565,179
PREMIER GOLD MINES LIMITED (TSX:PG) is pleased to announce that it has
closed the acquisition of mining claims commonly known as the Geraldton,
Ozone Creek and Eva Summers properties located in the Geraldton district in
the Province of Ontario (collectively the "G-L Property"), together
with certain equipment and other assets related thereto (the
"Purchased Assets").
Premier acquired the G-L Properties from Lac Properties Inc. ("Lac"),
a wholly-owned subsidiary of BARRICK GOLD CORPORATION (TSX, NYSE: ABX) by
(i) issuing to Lac 500,000 common shares of Premier, (ii) making a cash
payment to Lac of $1,000,000, (iii) depositing $1,000,000 in an
environmental reclamation trust fund in the connection with G-L Property,
(iv) granting to Lac a 3.0% net smelter return royalty (the "NSR Royalty")
on production from the G-L Property, and (v) assuming certain liabilities
and obligations of Lac in respect of the Purchased Assets. The claims
subject to the NSR Royalty including on the Little Long Lac claims which
are currently held under option by Premier (This results in a reduction
from the current 5% NSR payable on the Little Long Lac claims).
The G-L Property is host to several past-producing mines which collectively
produced more than 2.0 Million ounces of gold from the same deposits to
relatively shallow depths of approximately 2000 feet (600 metres) from
1938-1968. The mined zones remained wide open at depth at the time mining
ceased and resources were left in place within the existing mine workings. The
mined zones remain open at depth highlighted by intersections of 13.75g/t
Au over 6.4m down-dip beneath the mine workings in the "F-Zone"
deposit and 18.41g/t Au over 5.1m down-dip beneath the mine workings in the
"North Zone" deposit.
When combined with the existing Geraldton Project which is operated under a
joint venture with Roxmark Mines Limited (TSX-V:RMK), Premier (earning a
70% interest) now controls more than 15km of strike of the most prospective
geology in the belt. These properties will collectively be referred to as
the "Hardrock Project".
In 2009, Premier will conduct a major $8 Million exploration program on the
Hardrock Project with the goal of defining a multi-million ounce gold
resource that can be moved quickly towards development. The Project offers
development advantages with the Trans-Canada highway, Trans-Canada
pipeline, and major power lines running through the center of the property.
Significant potential exists for developing resources in several areas
including: 1) Open pit-style mineralization at the site of the original
discovery where a resource containing several hundred thousand ounces of
gold was partially drilled off by previous operators; 2) Several newer
high-grade discoveries have been made throughout this large property
package that have received little to no follow-up; 3) Resource blocks
reported to remain within the mine workings; and, 4) The main mined zones
which remain open below the 600m Level.
The Hardrock Project is located in the heart of the Beardmore-Geraldton
greenstone belt, a highly prospective high-grade gold district that has
seen relatively little exploration over the past several decades. The
Project area covers some of the most prospective geology in the region and
is host to several past-producing mines and numerous exploration targets in
a district that has seen historic production of more than 4.1 Million
ounces of gold.
Financial Position
Premier is in a strong financial position with finances sufficient for
several years and a 2009 exploration budget of approximately $14 Million.
"Because of our strong financial position, Premier will be one of the
mining sector's most significant explorers with active programs on three
properties" stated Ewan Downie, President of Premier. "The
Hardrock Project will be the primary focus of Premier's efforts in the
coming year as the Geraldton district is perhaps the most under-explored of
the major gold-bearing greenstone belts of Ontario. We intend to advance
this project at an accelerated pace".
Other Projects -- Red Lake & PQ-North
Premier will have active exploration programs in other highly prospective
gold districts. In Red Lake, drilling will continue to define and expand
gold mineralization at the Rahill-Bonanza Project, a joint venture with Red
Lake Gold Mines Limited, an affiliate of Goldcorp Inc. This large project
is located immediately adjacent to the prolific Red Lake Gold Mine, to the
east, and the Bruce Channel deposit, to the northwest. Ongoing drilling is
testing the primary target area on the project, with visible gold recently
identified within the Wilmar horizon. In a cash conservation measure, the
joint venture will focus its efforts by drilling from surface in lieu of a
dewatering project in 2009.
Early in 2009, Premier will initiate a major drill program on the PQ North
Project. PQ North is located adjacent to, and along strike from, Goldcorp's
Musselwhite Gold Mine. This program will test major, previously untested,
structures identified from a recently completed airborne geophysical
survey.
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 fully financed Canadian-based mineral
exploration and development company with 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 Red Lake Gold
Mines. A strategic project is also located on the main Musselwhite Gold
Mine trend.
The statements made in this Press Release may
contain forward-looking statements that may involve a number of risks and
uncertainties. Actual events or results could differ materially from the
Company's expectations and projections.
You can also view this News Release on our website at:
http://www.premiergoldmines.com/s/NewsReleases.asp?ReportID=332637
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