PREMIER GOLD MINES: Discovering and Developing Gold Deposits in the Superior Province of Canada



INTRODUCTION

Recently we had an opportunity to talk with Stephen McGibbon P.Geo., who is the Executive Vice-President and COO (Chief Operating Officer) of Premier Gold Mines Ltd.

Stephen’s background is in geology and he has been with Premier Gold Mines since 2006. Between 1983 and 2006 he worked with Goldcorp Inc., developing his skills and experience in Red Lake. From 1995 to 2006, Stephen was the Chief Geologist and Exploration Manager at the Red Lake Mine. During this time he was involved in the discovery of the High Grade Zone (HGZ), one of the most important discoveries in gold mining in the past twenty years and the highest grade gold deposit in the world. Stephen was responsible for all geological aspects during development and oversaw the first six years of production of the HGZ at the Red Lake site for Goldcorp.

PREMIER GOLD MINES LIMITED

Premier Gold Mines Limited has a very clearly-defined business model at the centre of its practice in the industry, focusing, as it says, on four key components:

  • PROVEN mining districts
  • ACCESSIBLE regions
  • HIGH GRADE deposits
  • SAFE jurisdictions

    This business model is designed to shorten the pathway between the acquisition of an interest in a project and the end result of gold production. It lowers exploration costs and minimises the risk to shareholders by concentrating on known areas of gold production with high grade and high quantity, easily accessible deposits. McGibbon states that, “We’re a company that will explore only in proven districts; districts that are either adjacent to past-producing or currently producing mines. We focus on higher grade deposits and we do that for a number of reasons.”

    This is different from some junior mining companies who may take years between the acquisition of land and production, requiring larger amounts of investment for a less certain level of production and return. Premier Gold Mines Ltd tries to place their focus at the very beginning on acquiring the right land for their ventures in proven areas of gold production.

    “Proven districts are usually very accessible. Exploration is much less expensive. Exploration can be conducted year round, so exploration programs tend to advance very quickly. And, you’re usually also able to demonstrate the value of a project much earlier on within the exploration life cycle than say, a more remote project in the far north that you may not have immediate exploration results on“, McGibbon goes on to say.

    Such a strategy is vital as part of Premier Gold Mines Ltd’s approach to managing risk and increasing the level of reward both for the company and for the shareholders.

    PREMIER GOLD MINES PROJECTS

    McGibbon’s experience in Red Lake is a vital part of Premier Gold Mine’s portfolio and recent success. Premier has three properties with ongoing projects in Canada and one in Mexico. All of its Canadian projects are in areas that are either currently producing gold or have a history of gold production in the past.


    Geologists in Core Shack at Hardrock

    Quartz Vein - PQ North

    The three Canadian projects are all based in Northwestern Ontario. The first project is the Hardrock, which is based in the Beardmore – Geraldton greenstone belt and in which Premier owns a 70% holding. The Hardrock site is a vital core holding in the portfolio of Premier, which believes we are experiencing a renaissance of mining in Canada, in the rediscovery of traditional mining locations that still contain considerable resources. In the past, this region has produced over four million ounces of gold. Premier believes that there are at least 1 million ounces of gold to be recovered from the site, with the additional potential for multiple discoveries of at least 1 million ounces each in the future.

    The second site is called PQ North, located along the same iron formation that is host to Goldcorp’s Musselwhite Gold Mine, which has mined or discovered over 5 million ounces of gold since 1997. The results of continued exploration and production at Musselwhite give strong indications that the PQ North has the potential to host similar mineralization; Grade is increasing at Musselwhite as it moves down plunge and towards the PQ-North property. Like the Hardrock Project, Premier is confidently hopeful of a multi-million ounce deposit at PQ North. Over $1,000,000 will be spent at PQ North in 2009 to demonstrate this.

    Ewan Downie looking at Wilmar Core

    Finally, there is the Rahill-Bonanza joint venture, in the Red Lake area, in which Premier Gold Mines Ltd owns a 49% holding in a partnership with a subsidiary of Goldcorp Inc., Red Lake Gold Mines. This final project is the flagship of Premier Gold Mines Ltd’s holdings, and one they consider to be the “best-positioned gold property anywhere”. They also have an interest in two other smaller properties in the area – East Bay – also a joint project with Red Lake Gold Mines, and the Lennie Property, 100% owned by Premier and in the early stages of exploration with very high prospects due to its similarities with the larger mines.

    As McGibbon notes, with regard to the future prospects of the Red Lake region, “Discoveries in the Red Lake district in the last 10 or 12 years have confirmed that it’s still a young district, even though it has been actively mined for 80 years. We believe that our joint venture property with Goldcorp is really the best positioned property in the district today.”

    Rahill-Bonanza is located to the west of Goldcorp’s high-performing Red Lake Gold Mines and to the east of Goldcorp’s’ Cochenour Project, which although not yet in production, has already yielded very impressive drilling results with the discovery of the Bruce Channel Deposit. This all serves to emphasise the importance of the Red Lake region.

    McGibbon says that, “The key for our Red Lake joint venture, at this point, isn’t so much the resources that we already, but that the location of the property may very well lead to a world class discovery that is very similar to Red Lake Gold Mines. “

    As well as its prime properties in Canada, Premier Gold Mines Ltd also has gained an interest in recent years in a property in Mexico, another significant gold mining region. The Santa Teresa Project, in the El Alamo district is located in an area that has seen considerable mining production in the past, although not in recent years. This will change, however, with Premier’s initial 50% stake, which may increase in future years to 65%. During 2009, the project will be idle but will continue in future years.

    The location and the quality of the sites that Premier Gold Mines Ltd holds in North-western Ontario are an excellent indicator of current strength as well as providing a firm foundation for future growth, and excellent indicators for current and potential investors.



    For more information: http://www.premiergoldmines.com
  •  Premier Gold Mines Limited HEAD OFFICE 401-1113 Jade Court Thunder Bay, Ontario Canada P7B 6M7 Phone: (807) 346-1390 Toll-Free: (888) 346-1390 Fax: (807) 346-0100 Email: info@premiergoldmines 
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