purchase by its subsidiary Premier Royalty Corporation

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Shares Issued: 138,352,462


THUNDER BAY, ON, July 16, 2012 /CNW/ - PREMIER GOLD MINES LIMITED (PG:TSX) ("Premier Gold" or the "Company") is pleased to announce the closing of
the purchase by its wholly-owned subsidiary, Premier Royalty
Corporation ("Premier Royalty"), of a 1% net smelter return royalty
(the "Royalty") on certain mining claims which comprise the Thunder
Creek Deposit of the Timmins West Mine and ancillary lands, operated by
Lake Shore Gold Corp. ("Lake Shore").


The purchase price for the Royalty was satisfied by an aggregate
$7,000,000 cash payment to the private vendors. In addition, Premier
Royalty (or a resulting issuer thereof) will issue to the vendors
common shares with a value of $500,000 concurrent with a subsequent
going public transaction of Premier Royalty.


The Thunder Creek Deposit commenced commercial production January 1,
2012 and contains a mineral reserve estimate, reported on April 2,
2012, of 2.67 Mt at 4.86 grams per tonne gold (g/t Au) amounting to
418,000 ounces of probable mineral reserves of gold. The estimation of
mineral reserves for the Thunder Creek Deposit was derived from the
current base of indicated mineral resources, which was included as part
of an updated mineral resource estimate released by Lake Shore on
February 15, 2012 (see press release of Lake Share entitled "Lake Shore
Gold Confirms Large-Scale Resource For Timmins West Mine"). The Thunder
Creek Deposit mineral resources are summarized as containing 2.88 Mt at
5.64 g/t Au amounting to 521,600 ounces of indicated mineral resources
of gold and 2.69Mt at 5.89g/t Au amounting to 510,000 ounces of
inferred mineral resources of gold.


Abraham Drost, Chairman of Premier Royalty stated, "The closing of the
Thunder Creek royalty purchase is a milestone in the formation of a new
royalty company. Premier Royalty Corporation is accumulating royalties
from gold production in a variety of jurisdictions worldwide and is
being increasingly recognized as an emerging player in the royalty
space".


Information in this press release describing the Timmins West Mine,
which includes the Thunder Creek Deposit, relies upon public disclosure
provided by Lake Shore Gold Corp. and has been reviewed by Mr. Stephen
McGibbon, P. Geo, who is a Qualified Person within the meaning of
National Instrument 43-101. For more information on the Thunder Creek
Deposit, please refer to the "43‐101 Technical Report, Prefeasibility
Study and Mineral Reserve Estimate For Timmins West Mine, Timmins,
Ontario, Canada" dated May 14, 2012 which can be found on Lake Shore
Gold Corp.'s profile on
development companies with a high-quality pipeline of projects focused
in proven, safe and accessible mining jurisdictions in Canada and the
United States. Premier's portfolio includes significant assets in world
class gold mining districts such as Red Lake, Musselwhite and Geraldton
in Ontario and the Carlin Trend in Nevada. Premier believes that
consolidating existing royalties owned by Premier Gold combined with
acquisition of other high quality cash flowing royalty assets into
Premier Royalty will form the basis of a transaction that is value
accretive to Premier shareholders.


CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION: This news release includes certain information that may constitute
"forward-looking information" under applicable Canadian securities
legislation. Forward-looking information includes, but is not limited
to, statements about strategic plans, including the closing of the
acquisition of the Royalty, a going public transaction involving
Premier Royalty and acquisitions of high quality cash flowing royalty
assets into Premier Royalty. Forward-looking information is necessarily
based upon a number of estimates and assumptions that, while considered
reasonable, are subject to known and unknown risks, uncertainties, and
other factors which may cause the actual results and future events to
differ materially from those expressed or implied by such
forward-looking information, including the risks identified in Premier
Gold's annual information form under the heading "Risk Factors". There
can be no assurance that such information will prove to be accurate, as
actual results and future events could differ materially from those
anticipated in such information. Accordingly, readers should not place
undue reliance on forward-looking information. All forward-looking
information contained in this press release is given as of the date
hereof and is based upon the opinions and estimates of management and
information available to management as at the date hereof. The Company
disclaims any intention or obligation to update or revise any
forward-looking information, whether as a result of new information,
future events or otherwise, except as required by law.




For further information:



Ewan Downie, President & CEO Premier Gold Mines Limited

Abraham Drost, P.Geo., Chairman Premier Royalty Corporation

Phone: 807-346-1390 Fax: 807-346-1381 e-mail: info@premiergoldmines.com Web Site: http://www.premiergoldmines.com/">www.premiergoldmines.com