Premier Gold Mines acquiring Nevada Getchell gold project
Premier Gold Mines Ltd. [PG-TSX; PIRGF-OTC] announced that, together with its wholly-owned Delaware subsidiary Premier Gold Mines USA, Inc., it has entered into a definitive purchase agreement with affiliates of Waterton Global Resource Management, Inc. to acquire from Waterton all of the outstanding membership interests of Osgood Mining Company LLC.
Osgood is the owner of the Getchell Project in the Getchell gold belt near Winnemucca, Nevada. Consideration consists of US$50 million in cash and common shares, plus contingent value rights and warrants.
The Getchell Project is located at the intersection of the Getchell gold belt and the Battle Mountain-Eureka trend immediately south of Nevada Gold Mines’ Turquoise Ridge operation. Open pit mining occurred on the property between 1980 and 1999. Subsequent to that, underground test mining (the Pinson Mine) was conducted in the early 2010s. The mine has been in care and maintenance since 2015.
Upon completion of the transaction, Getchell will be 100% held by PG USA and become one of its core Nevada assets. As previously announced, the company is contemplating corporate reorganization options that may include a spin-out of PG USA to Premier’s shareholders.
Ewan Downie, President and CEO of Premier, commented: “We are very excited to add the Getchell Project to our already strong base of Nevada assets. The property has a long track record of successful gold production and we believe that the open pit and underground gold historical resources at Getchell were amongst the highest-grade in North America based on historical work completed on the property and the property will form an integral part of our US-based activities.”
Under the transaction, the consideration to Waterton will consist of US$23,000,000 in cash on closing, 13,777,098 common shares of Premier, warrants to purchase 12,756,572 common shares of Premier, with an exercise price C$3.67 per warrant, for 36 months following closing, and contingent value rights under which Waterton will be entitled to receive an additional US$5,000,000 upon a positive production decision for the Getchell Project (underground or open pit), and another US$5,000,000 upon production of the first ounce of gold (excluding ordinary testing and bulk sampling programs) following a 60 consecutive day period where gold prices have exceeded US$2,00/oz. The transaction is subject to various approvals.
Premier Gold Mines is a gold-producer and exploration and development company with projects in Canada, the US and Mexico.