VANCOUVER (miningweekly.com) – North America-focused gold producer Premier Gold Mines has finalised two transactions to acquire, from Goldcorp, the Goldbanks exploration project, in Nevada, in the US, and the Alto-Cristina project, in Mexico.
Premier stated Wednesday that recent exploration work at the projects had identified high-grade mineralisation, with both possibly representing significant new discoveries for the company.
"These prospective high-grade opportunities will further bolster Premier's pipeline of exciting projects. Both agreements adhere to our strategy of gaining access to projects with the potential of high-margin production and minimal upfront risk and costs. We consider these targets to be some of the most attractive that the company has identified over the past several years," stated Premier president and CEO Ewan Downie.
Premier has signed an option agreement with Kinross subsidiary Kinross USA giving Premier the right to earn a 50% stake in the Goldbanks project, located in Pershing county, about 50 km south of Winnemucca.
Premier is required to spend $20-million in exploration on the property over five years, including a firm commitment of $3.5-million during the first 18 months. Premier will be the operator of exploration programmes on the property, and Kinross may choose to become the operator after Premier has earned a 50% interest.
Goldbanks comprises 875 claims totalling about 6.5 ha, with several significant targets on the property, including the high-grade Golden Devil discovery and the Main Zone and KW openpit deposits.
Premier said the Golden Devil discovery is the primary target where drilling has already started to test a high-grade epithermal vein discovery beneath the known low-grade near-surface deposits.
Initial results are expected early next month. The discovery resulted from a new geological interpretation by Kinross in 2013, which resulted in the drilling of three deep holes that intersected gold mineralisation, including a high-grade intercept of 192 g/t gold and 10 850 g/t silver over 1.1 m, which is equal to 5.61 oz/t gold and 316.46 oz/t silver.
The geologic model at Goldbanks is interpreted to be similar to the Midas and Sleeper mines, in Nevada, which both produced gold early in their production history from ore in excess of one ounce per ton. Premier believes that the Kinross drilling intersected ‘splay’ veins near the centre of a primary ore-bearing structure. Drilling will focus on stepping out along the high-grade Golden Devil trend, as well as testing the projected location of a highly prospective basin-bounding fault zone, the company advised.
The high-grade epithermal vein targets at depth are geologically connected to the property's near-surface deposits comprising 90% oxide and 10% sulphide ores, which host an inferred mineral resource estimate of 556 700 oz of gold contained in 25.7-million tonnes grading 0.7 g/t gold.
MEXICO ACQUISITION
Premier has also acquired an option to earn a 100% interest in the Alto-Cristina project, located in Mexico's south-west Chihuahua state.
To earn the option, Premier is required to pay $1.5-millon to Goldcorp subsidiary Minas de la Alta Pimeria on the date of signing the agreement, on the 12-month anniversary date, and on completing a resource estimate on the property.
A final payment of $2.5-million is required after declaring commercial production. Goldcorp will retain a 2% net smelter returns royalty, half of which can be bought by Premier for the sum of $1.5-million for three years from the acquisition date.
Between 2013 and 2015, 60 holes were drilled at Alto-Cristina, which resulted in the two high-grade polymetallic vein discoveries of Alto and Guadalupe. Quartz veins and quartz stockwork occur within an area of about 8 km2, where individual vein zones have been traced over a distance of up to 2 km.
The epithermal to mesothermal vein mineralisation contains gold, silver and base metals similar in nature to the Tayoltita/San Dimas district (located to the south), where 3.5-million gold equivalent ounces have been produced. The drilling was completed on wide-spaced intervals, typically 100 m to 200 m, and Premier hopes that tighter drilling may define multiple high-grade shoots or lenses.
A drill has been mobilised to test the Alto/Bajo vein structure with initial results expected by year-end. Previous drilling intersected high-grade polymetallic mineralisation close to a strong soil anomaly. Two of those intersections on the discovery section comprise CRD15-53, which intersected 10.88 g/t gold, 155 g/t silver, 0.7% copper, 1.2% lead and 6.5% zinc across 2.8 m (Alto), and 1.64 g/t gold, 353 g/t silver, 2.1% copper, 1.4% lead and 1.3% zinc across 1.45 m (Bajo).
Premier remains focused on building its mining business towards a midtier producer status with two gold-producing mines, South Arturo and Mercedes, and the ongoing permitting for future mine development at Hardrock, in Ontario (Trans-Canada Joint Venture), and McCoy-Cove, in Nevada. Advanced exploration continues in Red Lake and further work on the newly acquired projects will assist to prioritise the next tier of development projects and the future growth of the company.
Premier's TSX-listed stock fell 7.44% in early afternoon trading to C$3.11 apiece, further eroding a 52-week high hit early in August of C$5.05 a share.