Premier Gold Mines Ltd. [PG-TSX, PIRGF-OTC] on Thursday August 3 provided an exploration update, including the confirmation of high-grade extensions at the company’s Mercedes Mine in Sonora, Mexico. Premier said the ongoing 40,000-metre surface and underground drill program includes definition and expansion of the main gold-bearing horizons and testing new zones on the property.
The announcement comes after Premier recently filed a technical report that was prepared for the Mercedes Mine in compliance with NI 43-101 standards of disclosure. The technical report provided more detail about previously announces reserves and resources at the mine and said the potential exists to add up to 1.5 million additional gold equivalent ounces at the site.
Multiple targets remain untested for short-term, near-mine evaluation, and long-term generative exploration, the technical report says.
Premier Gold Mines is a gold producer and exploration and development company with multiple gold projects in a number of established mining districts. They include Ontario, Nevada and Mexico.
The Mercedes Mine is a 2,000 tonne-per-day underground gold-silver mine 250 km northeast of Hermosillo. Power supply to the mine is provided by a 65-km, 115 kilowatt power line from the town of Magdalena, Kino.
The company’s 2018 production guidance for Mercedes is 80,000 to 85,000 ounces of gold at an all-in sustaining cost of US$820 to US$870/oz. Spot gold was trading at US$1,216.15/oz on Thursday.
In its press release on Thursday, the company said underground drilling at the Rey de Oro deposit, one of several zones being brought into production this year, has confirmed the extension of a high-grade vein system that exhibits some of the best widths drilled to date, the company said. Highlights include drill hole UG-R018-006, which returned 36.65 g/t gold and 171.30 g/t silver across 21.95 metres.
“These high grade results and good widths are similar to our success at the Aida vein zone intersected earlier this year and confirms our belief that substantial potential exists to expand the mine life at Mercedes,” said Premier Executive Vice-President, Charlie Ronkos. “These initial intercepts suggest a zone with grades well in excess of the current reserve grade at Mercedes,” he said.
Additional drills are being mobilized at Rey de Oro in order to continue step-out and delineation of this vein extension.
A surface and underground drill program is underway to define the high-grade Aida target that is located to the west of the main Mercedes vein and proximal to existing mine workings. Broad zones of mineralization have returned multiple high-grade intercepts, the company said.
The 2018 drill program will also test for extensions of known vein systems, and for new target areas on the property.
The 2017 Mercedes Mineral Resources reported by Premier, excluding mineral resources which have been converted to mineral reserves, stand at 3.68 million tonnes of measured and indicated resources grading 4.32 g/t gold and 43.7 g/t silver.
This represents 511,000 ounces of gold and 5.2 million ounces of silver. The deposits are also contain approximately 1.6 million tonnes of inferred resources, grading 3.2 g/t gold and 34 g/t silver, representing 220,000 ounces of gold and 1.8 million ounces of silver.
Mineral reserves stand at 3.3 million tonnes averaging 3.94 g/t gold and 24.2 g/t silver, containing approximately 417,000 ounces of gold and 2.6 million ounces of silver in the proven and probable categories.
On Thursday, Premier shares advanced on the news, rising 3.3% or $0.08 to $2.50. The 52-week range is $4.13 and $2.40.