Premier Gold drills 0.3 m of 2,870 g/t Au at Hardrock

2009-02-17 10:37 ET - News Release

Mr. Ewan Downie reports

PREMIER-ROXMARK INTERSECTS HIGH-GRADE GOLD AT HARDROCK PROJECT - UP TO 2870 G/TON (92.27 OPT) ACROSS 0.30 METRES

Premier Gold Mines Ltd. has released initial results from drilling in the EP zone, one of several targets currently being drilled on the company's Hardrock project in Northwestern Ontario. This program is expected to consist of more than 50,000 metres of definition and exploration drilling leading to National Instrument-43-101-compliant gold resources in 2009. The Hardrock project is being operated by Premier under joint venture with Roxmark Mines Ltd.

The EP zone has been identified as a potential high-grade open-pit target in the vicinity of the historic North zone, from which 2.97 million tonnes of ore were mined at a grade of 7.54 grams per tonne (g/t) gold. Initial drilling has identified three subzones within the EP target consisting of the South Limb, North Limb and HGV horizons. Significant mineralization has been intersected in the first nine holes within all three horizons including 11.83 g/t Au across 11.4 metres in the South Limb, 2.24 g/t Au across 21 metres in the North Limb and 2,870 g/t Au across 0.3 metre within the HGV horizon.

The attached tables demonstrate the potential of the EP zone and include historic results that help to highlight the mineralization within each horizon intersected in limited previous drilling in the area. Note that true widths of the intercepts are estimated at approximately 70 per cent of the intervals provided.

HGV (high-grade vein)

High-grade, narrow vein, mineralization was identified in numerous areas of the mine which operated from 1938 to 1968. This mineralization received little attention as most mining was from low-cost bulk-tonnage, moderate-grade horizons. Drilling has intersected high-grade mineralization within the confines of the historic proposed pit area (although existing historical resources have been used as a basis for confirming target potential, there is been insufficient exploration data to define a mineral resource and it is not certain that further exploration will result in discovery of a mineral resource) at the EP zone.

South Limb

Drilling in the South Limb, south of the historic mine workings, has returned numerous broad intercepts of significant gold mineralization.

North Limb

Drilling in the North Limb, north of the historic mine workings, has returned the attached intercepts of mineralization in a third horizon within the EP zone.

           The Hardrock project is operated under a joint venture with Roxmark Mines Ltd. (Premier earning a 70-per-cent interest). The Hardrock project is host to several past-producing mines which collectively produced more than two million ounces of gold from the same deposits to relatively shallow depths of approximately 2,000 feet (600 metres) from 1938 to 1968. The mined zones remained open at depth at the time mining ceased and developed historical resources were left in place within the existing mine workings (a qualified person has not done sufficient work to verify the historical resource, the company is not treating the historical resource as a current resource and the historical resource should not be relied upon). Importantly, the Hardrock project has the potential for defining several styles of mineralization capable of hosting resources, with grades and widths similar to many of Ontario's major gold mines including: 

1. Open-pit-style mineralization with grades exceeding 1.5 g/t Au (Timmins, Hemlo);
2. Broad zones of mineralization with grades averaging over five g/t Au (Musselwhite);
3. Narrow vein zones with higher gold grades often exceeding seven g/t (Red Lake, Pickle Lake).

Initial drilling with four drills is focusing on delineating both open-pit and underground resources with the goal of defining a multimillion-ounce gold resource that can be moved quickly toward development (see references to historical resources above). The project offers development advantages with the Trans-Canada Highway, Trans-Canada pipeline, and major power lines running through the centre of the property. Significant potential exists for developing resources in several areas including:

1. Open-pit-style mineralization at the site of the original discovery where a resource containing several hundred thousand ounces of gold was partially drilled off by previous operators;
2. Several newer high-grade discoveries have been made throughout this large property package that have received little to no follow-up;
3. Resource blocks reported to remain within the mine workings;
4. The main mined zones which remain open below the 600-metre level.

The Hardrock project is located in the heart of the Beardmore-Geraldton greenstone belt, a highly prospective high-grade gold district that has seen relatively little exploration over the past several decades. The project area covers some of the most prospective geology in the region and is host to several past-producing mines and numerous exploration targets in a district that has seen historic production of more than 4.1 million ounces of gold.

PQ-North project drilling under way

Drilling recently got under way at Premier's 100-per-cent-owned PQ North property. The PQ-North project is strategically located on the PQ limb of the key iron formation that is host to Goldcorp's Musselwhite gold mine.

In a July 31, 2008, SEC filing, Goldcorp indicated that gold mineralization had been extended as far as six kilometres north along strike of the main mine facilities, with intersections on structures trending in close proximity to Premier's PQ North property. These results include a drill intercept of 15.5 g/t Au across a true width of 4.5 metres in hole 07-NSD-005. To date, the Musselwhite mine has produced more than two million ounces of gold and has reserves and resources totalling in excess of 3.3 million ounces at the end of 2007.

The PQ North property encompasses a major fold structure along strike from and within the main rock unit (northern banded iron formation) that hosts the gold-bearing ore zones at Musselwhite. Previous drilling has returned numerous significant intersections and has identified structural units similar to those at the mine. Exploration to date has included an airborne geophysical survey, which has identified major folding and several untested structures similar to those at the Musselwhite mine.

Premier previously announced that it had signed a letter of intent with the North Caribou Lake First Nation (NCLFN) that paves the way for a major exploration program on the PQ North property in Northwestern Ontario. The letter of intent forms the basis of a co-operative relationship between Premier and NCLFN that will guide the early phase of exploration on the property, as well as lead to a memorandum of understanding (MOU) in the near future.

Premier expects to drill up to 5,000 metres of NQ-sized core by early to mid-April.

Stephen McGibbon, PGeo, is the qualified person for the information contained in this press release and is a qualified person within the meaning of National Instrument 43-101. Core from Hardrock is sent to Activation Laboratories Ltd., an accredited mineral analysis laboratory in Thunder Bay, Ont., for preparation and analysis using both fire assay and screen metallic methods.

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