Premier Gold emerges in Nevada (March 30, 2011)

When investors think of gold plays in Nevada they typically don’t think of Premier Gold Mines (PG-T), a company best known for its gold projects in Ontario.  

But the company’s 100%-owned Saddle deposit lies in the heart of the Carlin Trend, one of the most productive gold regions in the world.

Initial drill results released today from Premier’s first hole into the deposit returned 12.2 metres of 8.46 grams gold per tonne, including 6.98 metres of 10.70 grams gold, and sent shares of the company up 18¢ or 2.7% to $6.91 per share. (Over the last year Premier has traded within a band of $3.85 per share (May 7, 2010) and $7.75 per share (Dec. 6 2010).

“The Saddle deposit is one of the highest-grade undeveloped gold deposits in the U.S. and yet remains one of the most undervalued projects in Premier’s portfolio,” Ewan Downie, Premier’s president and chief executive, said in a prepared statement.

Now Premier is bringing in additional coring rigs ahead of an anticipated approval of a “plan of operation” permit in mid-April. The deposit is not subject to any NSR royalty obligations.

Newmont Mining (NMC-T, NEM-N) discovered the Saddle gold deposit to the northwest and down plunge from its Rain gold mine, in the 1990s. Rain was previously mined by open pit and underground methods, and is host to the Tess deposit and a portion of the Saddle deposit.  

In addition to Saddle, Premier holds a 1.5% production royalty in Rain and in Newmont’s Emigrant Springs deposit. The latter is an advanced stage project with an undeveloped oxide gold reserve/resource that represents a portion of Newmont’s future production within its Carlin operations, and is just 1.5 miles (2,414 metres) east of Saddle.

Saddle forms a large portion of the Saddle/NW Tess gold deposit that is host to a high-grade historic resource estimate.

Meanwhile in Canada, Premier currently has three drills turning in Red Lake on two joint-venture projects with Goldcorp (G-T, GG-N). It holds a 49% stake in the Rahill-Bonanza project with Red Lake Gold Mines, an affiliate of Goldcorp, holding the remaining 51%.

Rahill Bonanza is immediately west of Goldcorp’s world-class Red Lake gold mining complex and east of Goldcorp’s newest high-grade deposit, the Bruce Channel deposit.

Premier also holds a 35% interest in a joint venture with Red Lake Gold Mines holding 65% of the East Bay project, on the East Bay ultramafic trend along strike and to the northeast of Rubicon Minerals’ (RMX-T, RBY-X) F2 Zone discovery at the Phoenix gold project.

At Hardrock, a few kilometres south of Geraldton, a town serviced by the Trans-Canada Highway, eight drills are at work. Premier owns 70% of the project, which consists of about a 15-km long property package that overlies more than 3 million ounces of past gold production in a district that has historic production in excess of 4 million ounces.

An updated resource estimate on Hardrock is due in the next few weeks.   An earlier National Instrument 43-101 resource estimate was released in March 2010 demonstrating indicated resources of 11.3 million tonnes grading an average of 1.82 grams gold per tonne for 675,000 ounces of contained gold, and 7.3 million tonnes grading an average of 1.81 gram gold for 425,000 ounces of contained gold in the inferred category.

In addition, two drills are busy at Premier’s 100%-owned PQ North project, along strike from Goldcorp’s Musselwhite gold mine.

Premier has about 104.95 million shares outstanding.