THUNDER BAY, ON, Feb. 18, 2020 /CNW/ - PREMIER GOLD MINES
LIMITED ("Premier", "the Company") (TSX: PG) (OTCPK: PIRGF)
announced today that its wholly-owned subsidiary, Premier Gold
Mines Hardrock Inc. ("Premier Hardrock"), has served a statement of
defence and counterclaim in response to the action commenced by
Aurico Canadian Royalty Holdings Inc. ("AuRico") in the Ontario
Superior Court of Justice on December 23,
2019.
Premier Hardrock and AuRico, a wholly-owned subsidiary of
Centerra Gold Inc., are parties to a limited partnership agreement
which provides for the exploration and development of the Hardrock
Project located in the Geraldton-Beardmore Greenstone Belt in
Ontario.
Under the limited partnership agreement, the partners are
obliged to develop the project if certain agreed criteria are met
in a feasibility study prepared under the supervision of the
managing partner, Greenstone Gold Mines GP Inc. ("GGM"), which
operates independently of the two partners.
In its action, AuRico claims that the 2019 Hardrock Project
Update, which was prepared by third party experts under the
supervision of the managing partner, and submitted to the board of
the partnership for approval, should not be considered a
"Feasibility Study" that meets agreed criteria for advancing the
Hardrock Project. The Feasibility Study indicated an internal
rate of return that exceeds the agreed feasibility criteria under
the Partnership Agreement for the development of a mine(s) in
respect of the Hardrock Project on an after-tax and pre-financing
cost basis.
In its defence and counterclaim, Premier Hardrock rejects
AuRico's contentions, and points to a series of self-interested
actions and statements by representatives of AuRico and Centerra,
that call into question the bona fides of objections raised by
AuRico to approval of the 2019 Hardrock Project Update.
In its defence, Premier Hardrock asks that AuRico's action be
dismissed. In its counterclaim, among other things, Premier
Hardrock asks the court to declare that GGM has presented the
partners with a Feasibility Study that meets agreed criteria,
requiring both partners to proceed to develop the Hardrock Project
in accordance with the 2019 Hardrock Project Update.
The parties have agreed to a timetable under which the dispute
between the parties will be tried in October, 2020. Premier
looks forward to the court's decision, and to the development of
the Hardrock Project as contemplated by the limited partnership
agreement.
Premier Hardrock has reserved its right to claim damages from
AuRico after the court has determined the merits of the underlying
disputes raised by the action and counterclaim.
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 remains focused on
creating a low cost, mid-tier gold producer through its two
producing gold mines, South Arturo and Mercedes, and through future
mine development opportunities at Hardrock in Ontario (Greenstone Gold JV) and at the
McCoy-Cove Project in Nevada.
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 relating to the results of
litigation, statements about strategic plans, including future
operations, future work programs, capital expenditures, discovery
and production of minerals, price of gold and currency exchange
rates, mineral resource and mineral reserve estimates 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