Premier Gold emerges in Nevada (April 18, 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 Premier’s 100%-owned Saddle gold deposit lies in the heart of the Carlin trend, one of the world’s most productive gold regions. 

Drill results released on March 30 from Premier’s first hole into the deposit returned 12.2 metres of 8.46 grams gold per tonne, and sent Premier’s shares up 18¢ or 2.7% to $6.91. 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 more coring rigs ahead of an anticipated approval of a “plan of operation” permit in mid-April. The deposit is not subject to any net smelter return royalty obligations.

Newmont Mining (NMC-T, NEM-N) discovered the Saddle 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 contains the Tess deposit and a portion of the Saddle deposit.

Along with Saddle, Premier holds a 1.5% production royalty in Rain and in Newmont’s Emigrant Springs gold deposit. The latter is an advanced-stage project with an undeveloped oxide gold resource that represents a portion of Newmont’s future production within its Carlin operations, and is 2.4 km east of Saddle.

Saddle forms a large portion of the Saddle/NW Tess gold deposit, which has a high-grade historic resource estimate. 

Meanwhile in Ontario, 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 remainder.

Rahill-Bonanza is west of Goldcorp’s world-class Red Lake gold mining complex and east of Goldcorp’s new high-grade 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, Ont., a town serviced by the Trans-Canada Highway, eight drills are at work. Premier owns 70% of the project, which comprises a 15-km-long property package that overlies more than 3 million oz. of past gold production in a district that has historic production in excess of 4 million oz. 

An updated resource estimate on Hardrock is due soon.

An earlier National Instrument 43-101 compliant 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 contained oz. gold, and 7.3 million tonnes averaging 1.81 grams gold for 425,000 contained oz. 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 104.95 million shares outstanding.