Shares Issued: 201,313,187
THUNDER BAY, ON, Nov. 16, 2016 /CNW/ - PREMIER GOLD MINES
LIMITED (TSX:PG) ("Premier", "the Company") wishes to augment
the Feasibility Study results for the Hardrock Project, that was
completed by Greenstone Gold Mines, with additional information
relevant to current shareholders and potential investors. As
per the Feasibility Study, the Partners (Premier and Centerra Gold
Inc.) are able to calculate independent post-tax IRR subject to
their respective tax situations. This additional information
includes:
- The impact of Premier's existing tax assets; and
- The impact of the balance of Centerra's C$185 million funding commitment
Highlights of the impact of this additional information on
project economics specific to Premier, on a 50% basis, include:
- Pre-tax IRR of 21.1%; After-tax IRR of 17.5%
- Pre-tax NPV(5%) of $607 million;
After-tax NPV(5%) of $414
million
The Feasibility Study was prepared by G Mining Services Inc.
("GMS"), in collaboration with various consulting firms including
Micon International Limited ("Micon"), Stantec Consulting Limited
("Stantec"), WSP Canada Inc. ("WSP"), Soutex Inc. ("Soutex"), TBT
Engineering Limited ("TBTE"), Amec Foster Wheeler Environment and
Infrastructure, ("Amec") and Golder Associates Ltd.
("Golder"). The Project after-tax NPV at a discount rate of
5% is estimated to be $709
million. This study assumes the company is a
standalone taxable Canadian entity and does not reflect the
potential upside value of either partner's specific circumstances
such as tax positions. The after-tax Project cash flow
results in a 4.5-year payback period from the commencement of
commercial operations with an after-tax IRR of 14.4% (after-tax and
pre-financing basis). The total after-tax cash flow over the
Project life is estimated to be $1,636
million.
"We believe it is critical that investors understand the
difference between the stated Feasibility Study results and how
those results are reflected within Premier," stated Ewan Downie, President & CEO of Premier Gold
Mines on the company's C-Suite Blog,
https://www.premiergoldmines.com/news/c-suite-blog/all. "Hardrock
is a robust deposit located in a favourable mining jurisdiction and
we are excited to be advancing this project to what we hope will be
a production decision upon receipt of permits."
A technical teach-in session for the Hardrock Project on will be
held today, Wednesday, November 16,
2016 at 5:00pm at the
Toronto Board of Trade – Ridout
Room
At this event, members of the Greenstone Gold Mines team, the
Company formed for the 50/50 partnership for the joint ownership
and development of the Trans-Canada Property, will provide a
detailed update of the Hardrock project. As well, several
senior members of the Centerra and Premier Executive team will be
in attendance to discuss the project's future.
For those that are unable to attend in person, a conference call
and webcast will also be available. You may access the call
by dialing the operator at 1-647-427-7450 or toll free at
1-888-231-8191 prior to the scheduled start time or you may listen
to the call via webcast by clicking the following link
http://event.on24.com/r.htm?e=1308017&s=1&k=781CC2E1C111E0B6BDBAB7DBA0951279.
A playback version of the call will be available for one month at
1-416-849-0833 or toll free at 1-855-859-2056 (passcode:
15469730). The webcast can also be found on Premier's
website.
Centerra Funding Commitment
As contemplated in the Partnership Agreement entered into in
March 2015, Centerra agreed to make
capital contributions to the Partnership in the aggregate amount of
$185 million, half of which is paid
on behalf of Premier. The $185
million is subject to the satisfaction of certain
feasibility study results and project advancement criteria.
Centerra has contributed approximately $47.2
million in capital contributions to the Partnership as of
November 3, 2016, a portion of which
has been used to fund the completion of the Feasibility
Study. Once Centerra has funded the full amount of
$185 million, future contributions
will be on a 50/50 basis with Premier, pursuant to approved annual
programs and budgets. The Partners expect to further review
the Feasibility Study and no development or construction decision
is made on the Project at this time.
Qualified Person & QA/QC
The Feasibility Study was completed by G Mining Services Inc.
with the assistance of several external consultants. Mineral
Reserve and Mineral Resource estimates, LOM plan, and other
scientific and technical information in this news release were
prepared in accordance with the standards of the Canadian Institute
of Mining, Metallurgy and Petroleum and National Instrument 43-101
– Standards of Disclosure for Mineral Projects ("NI 43-101") and
were prepared or supervised by Mr. Réjean Sirois, Vice-President of
Geology and Resources for G Mining Services Inc., and Mr.
Louis-Pierre Gignac, Co-President of
G Mining Services Inc., both of whom are "Qualified Person" as
defined by National Instrument 43-101 – Standards of Disclosure for
Mineral Projects ("NI 43-101"). Sample preparation,
analytical techniques, laboratories used and quality
assurance-quality control protocols used during the exploration
drilling programs on the Hardrock Project have been done consistent
with industry standards and independent certified assay labs have
been used. Available quality control data indicates that the
gold assay data used for resource estimation are reliable.
Premier Gold Mines Limited is a gold producer and
respected exploration and development company with a high-quality
pipeline of precious metal projects in proven, accessible and safe
mining jurisdictions in Canada,
the United States, and
Mexico.
Cautionary Note Regarding Forward-looking Information
Information contained in this news release and the documents
referred to herein which are not statements of historical facts,
may be "forward-looking information" for the purposes of Canadian
securities laws. Such forward looking information involves
risks, uncertainties and other factors that could cause actual
results, performance, prospects and opportunities to differ
materially from those expressed or implied by such forward looking
information. The words "expect", "target", "estimate", "may",
"will", and similar expressions identify forward-looking
information. These forward-looking statements relate to,
among other things, mineral reserve and resource estimates, grades
and recoveries, the evaluation of programs to minimize the risk
profile of the Project including the submission of the final EA/EIA
to regulators in support of mining continued consultations with
community and First Nations stakeholders and advancing discussions
relating to project financing; development plans, mining methods
and metrics including strip ratio, recovery process and the
expected performance of the HPGR, mining and production
expectations including expected cash flows, capital cost estimates
and expected LOM operating costs, the expected payback period,
receipt of government approvals and licenses including the timing
for submitting a response to the EA/EIA, time frame for
construction, financial forecasts including net present value and
internal rate of return estimates, tax and royalty rates, expected
costs relating to the relocation of certain existing
infrastructure, opportunities to improve the LOM average grade from
processing material from other Greenstone Gold Property, including
Brookbank and the Hardrock underground; and the possibility of any
benefit of historical tax positions held by Centerra or
Premier.
Forward-looking information is necessarily based upon a number
of estimates and assumptions that, while considered reasonable by
the Managing Partner, Centerra and Premier, are inherently subject
to significant political, business, economic and competitive
uncertainties and contingencies. There may be factors that
cause results, assumptions, performance, achievements, prospects or
opportunities in future periods not to be as anticipated, estimated
or intended. These factors include the following risks
relating to the Hardrock Project, Centerra and/or Premier:
(A) strategic, legal, planning and other risks, including the risks
for disagreement between the partners on how to explore, develop,
operate and finance the Project, political risk, risks relating to
aboriginal claims and consultation issues; resource nationalism
including the management of external stakeholder expectations; the
impact of changes in, or to the more aggressive enforcement of
laws, regulations and government practices; the impact of changes
to, the increased enforcement of, environmental laws and
regulations; potential defects of title to the property that are
not known as of the date hereof; the inability of the Partnership
and its partners to enforce their respective legal rights in
certain circumstances; risks related to anti-corruption
legislation; potential risks related to kidnapping or acts of
terrorism; (B) risks relating to financial matters, including the
ability of the partners to provide funding to the Partnership in
accordance with the terms of the Partnership Agreement; sensitivity
of the business to the volatility of gold prices; the
imprecision of mineral reserves and resources estimates; and the
assumptions they rely on; the accuracy of the production and cost
estimates; the ability to obtain financing for the Partnership or
by either partner; the impact of global financial conditions, the
impact of currency fluctuations, the effect of market conditions
on short-term investments, the ability of the partners
including Centerra to make payments to the Partnership depends on
the cash flow of its subsidiaries; and (C) risks related to
operational matters and geotechnical issues; the success of the
Partnership's future exploration and development activities,
including the financial and political risks inherent in carrying
out exploration activities; inherent risks associated with the use
of sodium cyanide in the mining operations; the adequacy of
insurance to mitigate operational risks; mechanical breakdowns; the
occurrence of any labour unrest or disturbance; the ability to
accurately predict decommissioning and reclamation costs, including
closure costs; the ability to attract and retain qualified
personnel; the ability to manage projects effectively and to
mitigate the potential lack of availability of contractors; budget
and timing overruns and project resources; potential delays in the
issuance of permits; potential opposition to the Hardrock Project
by local communities or civil groups related; potential material
increases in project development or operation costs due to
increases in key consumables, inflation, imposed demands for
infrastructure development or regulatory changes; the planning,
design and costing of the key project infrastructure such as power,
water and access.
There can be no assurances that forward-looking information and
statements will prove to be accurate, as many factors and future
events, both known and unknown could cause actual results,
performance or achievements to vary or differ materially, from the
results, performance or achievements that are or may be expressed
or implied by such forward-looking statements contained herein or
incorporated by reference. Accordingly, all such factors
should be considered carefully when making decisions with respect
to Centerra/Premier, and prospective investors should not place
undue reliance on forward-looking information.
Forward-looking information is as of November 16, 2016. Centerra/Premier assumes
no obligation to update or revise forward-looking information to
reflect changes in assumptions, changes in circumstances or any
other events affecting such forward looking information, except as
required by applicable law.
SOURCE Premier Gold Mines Limited