Includes Toll-milling and Exploration Earn-in
Options for Each at McCoy-Cove and Rye Projects
THUNDER BAY, ON, Jan. 10, 2018 /CNW/ - PREMIER GOLD MINES
LIMITED ("Premier" or "The Company") (TSX:PG) is pleased to
announce that the Company has entered into a Nevada-focused exploration and development
agreement with Barrick Gold Corporation, through several
wholly-owned subsidiaries ("Barrick"), that includes the
following:
- Barrick will have an option to earn a 60% interest in the
exploration portion of Premier's McCoy-Cove Property (the "Joint
Venture Property") by spending US$22.5
Million in exploration before June
30, 2022 (See Figure 1).
- Premier will retain 100% ownership over the Cove Deposit
portion of the McCoy-Cove Property that includes the high-grade
Helen, 2201 and CSD/CSD Gap Deposits.
- Premier will secure a one-time bulk sample processing
arrangement for the planned test-mining program at its 100%-owned
portion of the McCoy-Cove Property.
- Premier will have an option to acquire a 100% interest in
Barrick's Rye Vein Property ("Rye"), subject to a back-in right by
Barrick, by spending US$3.0 Million
in exploration before December 31,
2019. The Rye Property adjoins Premier's Goldbanks Property
option.
"Consistent with Premier's strategy to secure accretive
partnerships, this arrangement will broaden our already positive
working relationship with Barrick in Nevada and provides certainty in processing a
one-time bulk sample of underground ore from the upcoming
development and test-mining program of the Cove deposit," stated
Ewan Downie, President and CEO of
Premier on the Company's C-Suite Blog
(http://www.premiergoldmines.com/news/c-suite-blog). "The agreement
with Barrick will expand and accelerate the regional exploration at
McCoy-Cove while Premier retains full ownership of the core
deposit. Our option to earn a 100% interest in the Rye Project,
provides exposure to one of the highest potential epithermal vein
projects in a world-class mining jurisdiction."
McCoy-Cove Exploration Earn-In and Option
Under the terms of the agreement, Barrick will hold an option to
earn a 60% interest in the Joint Venture Property subject to the
following:
- A firm commitment to spend US$6.0
Million in exploration prior to June
30, 2019 with Premier as Operator at the direction of a
Steering Committee, following which Barrick will have the option to
become the Operator
- An additional required spend of US$16.5
Million in exploration on the Property prior to June 30, 2022 with Barrick as Operator
- Following completion of Barrick's 60% earn-in, funding for the
Joint Venture Property will be on a proportionate basis. Barrick
will hold a right of first refusal over the "Cove Deposit" until
the earliest of 5.5 years or one year following the completion of
the earn-in on the Joint Venture Property
- The Joint Venture Property will exclude the "Cove Deposit"
portion of the McCoy-Cove Property which will be retained solely by
Premier (see Figure 1)
Premier will retain the right to use the Joint Venture Property
for milling, tailings and other ancillary facilities related to the
retained property, subject to the priority of the Joint Venture
Property requirements once Barrick completes its Earn-in
obligation, but in each case subject to a reasonable site plan that
is mutually approved by the Joint Venture Property and Premier
Gold.
Exploration on the Joint Venture Property is expected to begin
early in 2018 and will include detailed surface mapping and
sampling followed by drilling to test several prospective
targets.
Bulk Sample Toll Milling Processing Agreement
Barrick will process, at a pre-arranged price, up to 120,000
tons of refractory ore (at a campaign or blended basis at Barrick's
option). Efforts will be made to ensure the most efficient and
economical return.
The processing agreement will provide certainty for Premier to
proceed with its planned underground development program that will
include the construction of a ramp for definition drilling and
potential test-mining prior to completing a full feasibility
study. Premier anticipates that underground development will
commence in H1-2018.
In addition, the parties will work cooperatively to conclude a
long-term processing arrangement for ore delivered to Barrick's
processing facility from production arising from the Cove Deposit
and the production from any joint venture formed pursuant to the
Earn-in and Option Agreement.
Rye Vein Property
Premier has the right to acquire a 100% interest in Barrick's
Rye Vein Property ("Rye") subject to the following terms:
- Premier will perform a minimum of US$3.0
Million in expenditures on Rye before December 31, 2019
- Barrick will retain a 1.0% Net Smelter Return Royalty ("NSR")
on Rye where there is no existing royalty
- Barrick will retain a back-in right to purchase a 51% interest
in Rye in return for a cash payment to Premier equal to three times
Premier's cumulative work expenditures within 90 days following
Premier announcing a reserve and/or resource of 2.5 million ounces
of gold or gold equivalent or greater (the "Threshold
Resource"). In the event Barrick exercises its back-in right,
Barrick's NSR shall be terminated
- In the event that Premier elects to bring the project to
production prior to meeting the Threshold Resource, Premier will
pay to Barrick lump sum cash payments as follows:
-
- Upon commencement of commercial production, US$10 per ounce for reserve ounces based on the
most current NI 43-101 report available, subject to a maximum of
US$10 Million
- Upon production of 1.0 million ounces of gold or gold
equivalent, an additional payment of US$10
Million
- Upon production of 1.5 million ounces of gold or gold
equivalent, an additional payment of US$5
Million
- Upon production of 2.0 million ounces of gold or gold
equivalent, an additional payment of US$5
Million
Rye is located in the East Range, approximately 50 kilometres
south of Winnemucca, Pershing County, Nevada. Rye is a
gold-bearing, low-sulfidation epithermal vein system with the
potential to host "bonanza-grade" gold mineralization.
Numerous low-sulfidation epithermal veins are present in the
area, including on the adjoining Goldbanks Property where Premier
currently holds an option to acquire a 50% interest from Kinross
Gold Corp. The Rye vein is the largest known vein of this type
in the district having been traced on surface over a strike length
of more than 2.5 kilometres with mapped widths of up to 30 metres
(100 feet). Previous shallow drilling having returned numerous
significant intercepts with gold grades of up to 139.2 g/t or 4.06
ounces per ton. Figure 2 represents a section displaying previous
holes drilled to test the Rye vein system and the potential at
depth. Premier expects to begin exploration at Rye in
Q1-2018.
"The Rye Vein Property augments Premier's asset portfolio with a
potentially high reward opportunity," stated Charlie Ronkos, Executive Vice-President of
Premier.
Schendel/Nevada Sunrise Properties
Premier has signed agreements to acquire properties from
Kurt Schendel and Nevada Sunrise
adjoining the Goldbanks and Rye properties. These
acquisitions complete the consolidation of the core part of a
district that hosts one of the most extensive epithermal vein
systems in North America. Both the Schendel and Nevada
Sunrise properties have been offered to Kinross to be incorporated into the Goldbanks
joint venture.
All abbreviations used in this press release are available by
following this link (click here).
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 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. Premier's team is focused
on creating a low-cost, mid-tier gold producer through its two
producing gold mines; and two advanced multi-million ounce
development projects where permitting and pre-construction
initiatives are in progress.
This Press Release contains certain information that may
constitute "forward-looking information" under applicable Canadian
securities legislation. Forward-looking information includes, but
is not limited to, statements about strategic plans, including
future operations, future work programs, capital expenditures,
discovery and production of minerals, price of gold and currency
exchange rates, timing of geological reports and corporate and
technical objectives. Forward-looking information is necessarily
based upon a number of assumptions that, while considered
reasonable, are subject to known and unknown risks, uncertainties,
and other factors which may cause the actual results and future
events to differ materially from those expressed or implied by such
forward-looking information, including the risks inherent to the
mining industry, adverse economic and market developments and the
risks identified in Premier's annual information form under the
heading "Risk Factors". There can be no assurance that such
information will prove to be accurate, as actual results and future
events could differ materially from those anticipated in such
information. Accordingly, readers should not place undue
reliance on forward-looking information. All forward-looking
information contained in this press release is given as of the date
hereof and is based upon the opinions and estimates of management
and information available to management as at the date
hereof. Premier disclaims any intention or obligation to
update or revise any forward-looking information, whether as a
result of new information, future events or otherwise, except as
required by law.
SOURCE Premier Gold Mines Limited