Premier Gold Mines Ltd. [PG-TSX; PIRGF-OTC] on Thursday November 21 released impressive drill results from its 100%-owned Mercedes Mine in Sonora, Mexico where the company is completing a 42,000-metre exploration and delineation core drilling program.
The update comes just 24 hours after Premier announced the signing of a long-term relationship agreement with three local First Nations in relation to the development of the company’s Hardrock gold project in northwestern Ontario, which is held through a 50% stake in the Greenstone property joint venture.
The joint venture continues to advance this project towards a construction decision.
Premier Gold is a gold producer as well as an exploration and development company with a focus on properties in Canada, the United States and Mexico. Premier is aiming to emerge as a low-cost, mid-tier gold producer via its two producing gold mines, South Arturo and Mercedes, and through future mine development opportunities at Hardrock and McCoy-Cove in Nevada.
Mercedes is a 2,000 tonnes-per-day underground gold-silver mine located in Sonora State, northern Mexico, about 250 km northeast of Hermosillo. As of December 31, 2019, proven and probable gold reserves stood at 395,000 ounces at a grade of 3.63 g/t.
The project also hosts proven and probable silver reserves of 2.72 million ounces grading 25.05 g/t.
Mercedes produced 68,719 ounces of gold and 309,165 ounces of silver in 2018.
Several exploration targets exist on the project that the company has identified to extend the mine life.
In keeping with that strategy, the 2019 drilling campaign is focused on delineating new mineral resources in the Lupita Extension area as well as confirming potentially important discoveries at the San Martin and Neo areas.
On Thursday, the company said drilling highlights from the Lupita Extension area include 8.9 metres of 9.41 g/t gold and 34.15 g/t silver, as well as 3.6 metres of 7.96 g/t gold and 31.69 g/t silver.
“Our Lupita Extension and San Martin drill program has emerged as an important contributor to the future of Mercedes,” said Premier Executive Vice-President Stephen McGibbon. “With true widths approaching three metres and grades well in excess of 2019 production grades, each new result is quickly adding to the value of this operation.”
On Thursday, Premier Gold shares eased 3.5% or $0.07 to $1.90. The shares are trading in a 52-week range of $1.39 and $2.55.
The Lupita discovery outcrop hosts a three-metre wide silicified vein of typical low-sulphidation epithermal textures and diagnostic green quartz. The Lupita Extension drill program was designed to expand the Lupita resource to the west.
After a successful Phase 1 program of 18 drill holes at a 60-metre spacing, Phase 2 was launched in May 2019 on a 30-metre grid, aiming to create indicated mineral resources by the end of this year.
The Phase 2 drill program at Lupita Extension continues to delineate high-grade areas and successfully expand the mineralization 300 metres to the west, where it remains open for expansion. Development to access the Lupita Extension is planned for the first half of 2020.
San Martin is a target located 600 metres to the west of Lupita. It was discovered with an intercept of 1.5 metres of 5.56 g/t gold in the first hole in May 2019. Two new intercepts recently drilled at San Martin continue to expand high-grade mineralization with 1.4 metres of 15.80 g/t gold and 69.00 g/t silver in drill hole L19-457D and 4.6 metres of 10.3 g/t gold and 57.65 g/t silver in drill hole L19-496D.
The company said more delineation is planned for 2020. The aim is to upgrade mineralization to an indicated mineral resource. Given a spacing of less than 60 metres of drilling at San Martin during 2019, a portion of the mineralization will warrant inclusion into mineral resources at year end.
Premier Gold recently achieved a key milestone by declaring commercial production at its El Nino Mine on the South Arturo Project in Nevada.
Premier holds a 40% interest in the South Arturo Project, which is located on the prolific Carlin Trend in Elko County, Nevada. South Arturo is a joint venture with Barrick Gold Corp. [ABX-TSX, NYSE], which owns the remaining 60%.
South Arturo produced 20,980 ounces of gold and 12,649 ounces of silver in 2018 from stockpiled material. Future production is expected to come from two additional developments underway at the property, including the Phase 1 open pit and El Nino underground mine.