Premier Gold Mines Ltd. [PG-TSX; PIRGF-OTC] on Friday May 11 filed a technical report that was prepared for its Mercedes gold-silver mine in Mexico in compliance with NI 43-101 standards of disclosure. The technical report provides more details about previously announced reserves and resources at the 100%-owned Mercedes Mine in Sonora, Mexico. It also says the potential exists to add up to 1.5 million additional equivalent ounces at the site.
The reserve and resource estimates follow an extensive drilling campaign that has effectively replaced reserves that were depleted from mining operations.
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 and 300 km south of Tuscon, Arizona. Power supply to the mine is provided by a 65-km, 115 kilowatt power line from the town of Magdalena, Kino.
Gold production in the first quarter of 2018 was 15,009 ounces of gold and 57,370 ounces of silver at an all-in-sustaining cost of US$1,096 an ounce.
Spot gold was trading at US$1,321.80 an ounce on Friday.
Premier geologists consider that there is excellent geological potential for locating between 500,000 ounces and 1.5 million ounces of additional gold equivalent ounces at the Mercedes property.
Multiple targets remain untested for short-term, near-mine evaluation, and long-term generative exploration, the technical report says.
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 at an average grade of 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.
Premier Gold was recently focused on developing underground infrastructure for definition drilling at the high-grade Marianas Zone in order to bring this area into the current mine plan.
The 2018 exploration program will focus on adding and converting mineral resources to reserves close to existing workings, supporting mine production, delineating extensions of the main mine trend and testing new geological targets.
In 2017, Premier drilled 46,000 metres at Mercedes across 349 holes to test for potential extensions of the known vein system and also new mineralized horizons.
The primary target areas included:
- The main Mercedes/Barrancas/Lagunas mine trend.
- Open pit and underground targets at Rey de Oro.
- New potential vein trends on the property beneath post-mineral cover that had not previously been tested.
On Friday, Premier Gold Mines shares rose 0.86% or $0.025 to $2.94. The 52-week range for the shares is $4.13 and $2.59.