PREMIER GOLD MINES LIMITED (TSX:PG) is pleased to announce that it has signed a Letter of Intent with ROXMARK MINES LIMITED (TSX-V:RMK) to acquire an interest in a portion of Roxmark's extensive land holdings in the Geraldton Greenstone belt in Northwestern Ontario.
The "Geraldton Project" is contained within the Beardmore-Geraldton Greenstone belt, a highly prospective high-grade gold district that has seen very little exploration over the past several decades. The Project area covers approximately 10km of some of the most prospective geology in the area and is host to three past producing mines and numerous prospective exploration targets in a district that has seen past production of more than 4.1 Million ounces of gold. On the project area, the Little Long Lac Mine produced more than 600,000 ounces of gold during the period 1934-53 at an average grade of 11.66g/t Au; the Magnet Mine produced more than 150,000 ounces of gold during the period 1938-51 at an average grade of 14.40g/t Au; and the Bankfield Mine produced more than 65,000 ounces of gold during the period 1937-42 at an average grade of 9.94g/t Au. All deposits have excellent expansion potential and/or are open at depth. Little to no deep drilling has been performed in the district and much of the project area is completely untested.
Exploration, including an extensive drilling program, is expected to begin immediately. Under the terms of the Agreement, Premier holds the option to earn up to a 70% interest in the Property by making cash and share payments to Roxmark, and performing exploration on the Property pursuant to the following general terms:
- An initial 51% interest by paying to Roxmark $500,000 Cash (including $100,000 on signing), 250,000 Shares of Premier (including 100,000 on signing subject to regulatory approval), and performing $7,000,000 in exploration on the Property over a four year period (including a firm commitment of $2,500,000 in the first 12 months).
- Immediately upon completion of the initial earn-in, Premier will have the right to increase its interest to 70%, and carry Roxmark at 30%, by making an additional $250,000 Cash payment to Roxmark, delivering to Roxmark an additional 150,000 Shares of Premier, and bringing the Property to a Production decision within 5 years of the end of the initial earn-in period (4 years) five year period.
- Premier will be the operator of the Project.
The Letter of Intent is conditional on Premier completing a due diligence investigation on title to the properties comprising the Geraldton Project.
"I have long-considered the Geraldton Project area to be one of the most prospective, yet underexplored, high-grade gold districts in Canada", stated Ewan Downie, President of Premier. "The complete lack of modern exploration, particularly on the property holdings that are the subject of this Agreement, allows for the potential of making numerous significant discoveries within this extensive property package".
Roxmark holds several gold and molybdenum exploration and development projects in the historically significant Beardmore-Geraldton greenstone belt of Northwestern Ontario including a fully-permitted mill that could be used to process ore from the joint venture property.
With respect to Premier's other properties, exploration continues at the Rahill-Bonanza Joint Venture Project in Red Lake where recent drilling has intersected multiple gold horizons including a new zone discovered in the hanging wall of the Wilmar Horizon with
assay results of up to 14.2g/t Au across 5.0 meters including 59.09g/t Au across 1.0 meters. The Rahill-Bonanza Project is being operated under a 50-50 Joint Venture with Red Lake Gold Mines, an affiliate of GOLDCORP INC. (TSX:G, NYSE:GG). Additional assays from drilling are expected in the near future.
Stephen McGibbon, P. Geo., Executive Vice-President and Chief Operating Officer of Premier, 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 Canadian-based mineral exploration and development company with diverse property holdings that include several projects and deposits in Northwestern Ontario and a joint venture in Mexico. In the Red Lake gold mining camp, two of these are operated in joint venture with Goldcorp Inc. (TSX:G). A strategic project is also located on the main Musselwhite Gold Mine trend (Goldcorp-Kinross).
For further information, please contact:
Ewan Downie, President & CEO
Phone: 807-346-1390
Fax: 807-345-0284
E-mail: info@premiergoldmines.com
Web Site: http://www.premiergoldmines.com
The statements made in this Press Release may contain forward-looking statements that may involve a number of risks and uncertainties. Actual events or results could differ materially from the Company's expectations and projections.