Premier Gold exceeds Q3 production targets
Premier Gold Mines Ltd. [PG-TSX; PIRGF-OTC] reported solid production results for Q3 2020 from the 100%-owned Mercedes mine in Mexico and its 40%-owned South Arturo Mine in Nevada.
Consolidated gold production for Q3 exceeded 19,000 ounces. A total of 12,183 ounces of gold were recovered at Mercedes, exceeding the mine’s new operating plan for the quarter. Mercedes performance was led by strong grades and reduced mining dilution.
Improved production from Mercedes was a result of implementing a modified mine plan developed during the COVID-19-related care and maintenance period in Q2. Significant progress has been made with respect to cost reduction initiatives at Mercedes during Q3 and this progress will be reflected in unit operating costs reported for Q3. The El Nino mine at South Arturo continued its trend of strong quarterly production and has now exceeded the annual production plan.
“Consolidated production in the third quarter met the high end of expectations,” stated Ewan Downie, CEO of Premier. “The modified mine plan at Mercedes, designed to increase mining efficiency and expand operating margins, has resulted in significantly enhanced cash flow.”
Mercedes Mine, Mexico
Following the pandemic-related suspension of operations during the second quarter, ore production and processing resumed in July with 12,183 ounces of gold and 49,985 ounces of silver produced in the quarter. A new simplified operating plan with a more focused mining and development strategy has enhanced productivity, reduced costs and is ensuring the mine’s ability to reliably deliver free cash flow. Significant progress has been made with respect to cost reduction initiatives at the Mercedes mine during the quarter and this progress will be reflected in unit operating costs reported for Q3.
The success of future exploration and delineation drill programs is expected to allow the production rate to eventually return to the plant’s nameplate capacity over time.
South Arturo Mine, Nevada
The El Nino underground mine at the South Arturo joint venture is operated by Barrick Gold Corp. [ABX-TSX; GOLD-NYSE] through its subsidiary, Nevada Gold Mines. El Nino delivered solid operating results since initial production in late 2019, including year to date in 2020 where, despite COVID-19-related issues, gold production exceeded its annual plan. During the third quarter, gold production from South Arturo was 7,096 ounces, from more than 650 tonnes of ore per day at the high-grade underground operation.
Expansion drill results from the El Nino underground program were announced with highlight results of 39.6 metres of 17.11 g/t gold, including 21.3 metres of 24.75 g/t gold (SER20019) and 100.6 metres of 5.73 g/t gold, including 13.7 metres of 8.52 g/t gold (SER20018). The partners are advancing additional development opportunities, including the Phase 1 and 3 open-pit projects, and are assessing the potential for an on-site heap leach facility. Surface drilling in the vicinity of these pits is underway. A prefeasibility study for South Arturo is nearing completion.