Premier Gold Mines reports Q1 precious metal production

The South Arturo gold mine on the Carlin Trend, Elko County, Nevada, a joint venture between Premier Gold Mines and Barrick Gold. Source: Premier Gold Mines Ltd.

Share this article

Premier Gold Mines Limited [PG-TSX; PIRGF-OTC] reported production results for the first quarter of 2020 with strong production from South Arturo, Nevada, in its second full quarter of production at the El Nino underground mine. The South Arturo Mine is 60%-owned by Barrick Gold Corp. [ABX-TSX; GOLD NYSE] and 40% owned by Premier. Consolidated production was 18,317 ounces of gold and 52,832 ounces of silver.

A total of 7,489 ounces of gold was recovered from South Arturo during the quarter, including 6,730 ounces from the El Nino underground mine and 759 pre-production ounces from the Phase 1 open pit which is not currently in commercial production. The El Nino underground mine achieved targeted production levels during Q1 that, when combined with processing of ore stockpiles, resulted in the mine’s strongest quarter since declaring commercial production last fall.

The Mercedes Mine produced 11,587 ounces for the period. Production was impacted by lower than planned grades and the ramping down of production due to COVID-19.

“South Arturo had a strong quarter, well in excess of expectations,” stated Ewan Downie, CEO of Premier. “Having more than one mining operation has so far allowed us to continue to operate with reasonable success during the COVID-19 pandemic that has impacted mining activities worldwide, including the company’s Mercedes mine in Mexico.”

Mining activities at South Arturo are continuing with no significant interruption to date. The Mercedes Mine was placed into care and maintenance pursuant to a decree from the Mexican Federal Government which took effect March 30, 2020, and listed gold mining as a non-essential service. A rigorous program of sanitation, social distancing and health monitoring has been implemented in order to help protect the health and safety of those employees that remain at site.

At the South Arturo Mine, the El Nino underground mine is one of several development projects planned at the South Arturo Joint Venture operated by Barrick Gold through its subsidiary Nevada Gold Mines.  El Nino is the second mine that has been developed by the JV at South Arturo and, similar to the Phase 2 pit, has delivered solid results since initial production in late 2019.

The partners are currently assessing additional development opportunities including the Phase 1 and Phase 3 open pit projects, and the potential for an on-site heap leach peration. Developments in 2019 included a 91% positive reconciliation of heap leach material in stripping of the Phase 1 pit, and positive grade reconciliation realized in drilling at Phase 3 with results that include 112.8 metres of 7.29 g/t gold and 62.5 metres of 7.93 g/t gold.

At the Mercedes Mine, although the team has been successful in reducing mine dilution in several key mining areas, the grade of the ore mined during the quarter did not meet expectations in part due to lower grade production from the area in the Diluvio Zone mined during the period. In addition, a reduction in the mining rate commenced late in March in preparation for an expected shut down imposed by the government of Mexico, in a country wide response to COVID-19. To access the higher-grade areas of the mine as soon as possible, development work continued to focus on the Lupita Extension and Marianas, which are expected to improve performance though higher productivity, grade control and cost reduction.

The mine continues to achieve its safety and environmental performance objectives.

Exploration and resource definition drilling resumed with a focus on higher-grade gold mineralization at Lupita Extension, San Martin, Diluvio West and Marianas. Underground development was initiated at Lupita Extension, a zone that exhibits grades well in excess of current reserves. The development plan will increase the number of available working faces that can supplement future production with higher-grade material.

On March 30, 2020, the company made an offer to acquire the remaining 50% interest in its Greenstone Gold Mines Partnership from Centerra Gold Inc. [CG-TSX] for total consideration of approximately US$205 million. The offer, which represented a substantial premium to the median current analyst consensus value attributed to Centerra’s 50% interest, was rejected by Centerra on April 8, 2020. Centerra’s decision not to accept the offer confirms that Centerra recognizes the substantial value of the Hardrock Project and is inconsistent with its refusal to make a Positive Feasibility Decision in connection with the project as required under the Partnership Agreement.


Share this article

Leave a Reply

Your email address will not be published.

Don't miss the

NEWSLETTER

Exclusive editorial

Breaking News

Quality Company Coverage

Expert Writers

You have successfully subscribed to the newsletter

There was an error while trying to send your request. Please try again.

Resource World Magazine will use the information you provide on this form to be in touch with you and to provide updates and marketing.