Premier Gold Mines Ltd. has divested several non-core properties in four different transactions. Eight properties and one subsidiary has been sold or is optioned for total consideration of US$2.1 million. The related properties include the Geisler Property, located in the Red Lake district of Ontario, the Faymar Property in Timmins, Ontario, and the Santa Teresa Property, located in Baja, Mexico. The company also entered into an option agreement for the sale of Goldstone Resources Ltd., the subsidiary that holds the historic Northern Empire, Leitch and Sand River Mines, as well as other exploration-staged projects in the Beardmore, Ontario, region.
As a result of these transactions, the company has also gained access to approximately US$1.23 million in cash, which was previously restricted for reclamation obligations associated with the Northern Empire Mill.
Premier said it remains focused on creating a low-cost, midtier gold producer through its two producing gold mines — South Arturo and Mercedes — as well as mine development opportunities at McCoy-Cove in Nevada and Hardrock in Ontario.
In related news, the company said it has entered into an option acquisition agreement with Americas Silver Corp. to acquire an option to purchase a 100% interest in the San Felipe Property, located 55 kilometers from the company’s Mercedes Mine in Sonora State, Mexico. Hochschild plc is the underlying owner of the San Felipe Property.
The San Felipe Property consists of several claim groups that comprise 16,265 ha with several poly-metallic zones that hosts a high-grade historic mineral resource. San Felipe is partially developed with an existing ramp and several mining related facilities already constructed on-site. There has also been 69,000 meters drilled on the property and several existing deposits are open for expansion, according to Premier.
The company plans to assess potential development options, which may include adding a parallel floatation circuit at Mercedes to increase annual output in the near-term; building a stand-alone mill at San Felipe; and bringing San Felipe into development at the end of the Mercedes mine-life and processing mineralized material at the existing complex.
An Environmental Impact Statement will be transferred to Premier upon closing. Premier will pay America’s Silver US$7 million on closing, and make additional payments of US$1.9 million upon the making of a positive construction decision and then upon achieving commercial production. Premier will also make eight quarterly payments of US$750,000 to Hochschild pursuant to the underlying option agreement. There is no royalty payable on the property.