Mr. Ewan Downie reports
PREMIER GOLD RELEASES UPDATED MINERAL RESOURCE ESTIMATE ON HARDROCK DEPOSIT
Premier Gold Mines Ltd. has released a recently completed mineral resource
estimate on the Hardrock gold deposit, located on the company's
100-per-cent-owned Trans-Canada property within the municipality of Greenstone
in Northwestern Ontario. The undiluted and in situ estimate was
completed by InnovExplo Inc. utilizing a 3-D block model and supported
with input from the company's geological personnel. The attached table provides a
deposit summary of the resource at Hardrock, categorized by potential
underground and/or open-pit economic cut-off grades where appropriate. The company has also scheduled a conference call
and webcast for investors and analysts at 4 p.m. (Eastern Time) on Tuesday, Oct. 29, 2013. Details for the call can be found at the
bottom of this press release.
Highlights of the 2013 Hardrock mineral resource estimate include:
- Indicated resources of 3.24 million ounces of gold;
- Inferred resources of 3.78 million ounces of gold;
- New estimate includes a deeper pit when compared with previous estimates;
- Drilling continues to suggest the potential for additional open-pit and underground
resources offering further upside.
"The Hardrock deposit anchors our growing resource base and continues to
deliver solid results," commented Premier president and chief executive officer Ewan Downie.
"This updated mineral resource estimate will be the basis for the
preliminary economic assessment (PEA) of Hardrock, scheduled to be
complete in early 2014."
HARDROCK DEPOSIT MINERAL RESOURCE SUMMARY
Cut-off category Resource category Tonnes Gold grade Au ounces
(Mt) (g/t) (Moz)
Open pit Indicated (I) 50.228 1.46 2.352
Inferred 17.793 1.50 0.859
Underground Indicated (I) 5.522 5.01 0.889
Inferred 16.919 5.38 2.925
Combined Total indicated 55.750 1.87 3.241
Total inferred 34.712 3.50 3.784
The independent and qualified persons for the mineral resource estimate, as defined by National Instrument 43-101, are Carl Pelletier, BSc, PGeo, and Karine Brousseau, PEng (InnovExplo Inc.), and the effective date of the estimate is Sept. 23, 2013.
- Mineral resources are not mineral reserves and do not have demonstrated economic viability.
-
In-pit results are presented undiluted within a Whittle-optimized pit shell, designed with a 30-metre buffer around lakes.
-
Underground results are presented undiluted outside a Whittle-optimized pit shell, designed with a 30-metre buffer around lakes.
-
The estimate includes 10 gold-bearing zones and a remaining undifferentiated envelope containing isolated gold intercepts.
-
In-pit resources were compiled at 0.3-, 0.4-, 0.5-, 0.6-, 0.7-, 0.8- and 0.9-gram-per-tonne-gold cut-off grades. The official in-pit resource potential is reported at a 0.5-gram-per-tonne-gold cut-off grade.
-
Underground resources were compiled at two-, 2.5-, three-, 3.5-, four- and 4.5-gram-per-tonne-gold cut-off grades. The official underground resource potential is reported at a three-gram-per-tonne-gold cut-off grade.
-
Cut-off grades must be re-evaluated in light of prevailing market conditions (gold price, exchange rate and mining cost).
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Density (grams per cubic metre) data used are on a per-zone basis (envelope: 2.77, porphyry: 2.74, S4_1: 2.78, S4_2: 2.78, IF_N_1: 3.00, IF_N_2: 2.85, IF_N_3: 2.85, I0: 2.93, IF_HL: 2.81, IF_HU: 2.81, Tenacity: 2.77).
-
A minimum true thickness of three metres was applied, using the grade of the adjacent material when assayed or a value of zero when not assayed.
- High-grade capping (grams per tonne gold) was applied on raw assay data and established on a per-zone basis (envelope: 70, porphyry: 70, S4_1: 20, S4_2: 20, IF_N_1: 40, IF_N_2: 40, IF_N_3: 40, I0: 2.5, IF_HL: 50, IF_HU: 50, Tenacity: 70).
-
Compositing was done on drill hole sections falling within the mineralized zones (composite equals 1.5 metres).
-
Resources were evaluated from drill hole using a two-pass ID2 (inverse distance squared) interpolation method in a block model (block size is five by five by five metres).
-
The inferred category is only defined within the areas where blocks were interpolated during pass 1 or pass 2.
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The indicated category is only defined in areas where the maximum distance to drill hole composites is less than 40 metres and where the drilling density was deemed sufficient.
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Ounce (troy) is equal to metric tonnes multiplied by grade and divided by 31.10348. Calculations used metric units (metres, tonnes and grams per tonne).
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The number of metric tonnes was rounded to the nearest thousand. Any discrepancies in the totals are due to rounding effects; rounding followed the recommendations in NI 43-101.
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InnovExplo is not aware of any known environmental, permitting, legal, title-related, taxation, socio-political, marketing or other relevant issue that could materially affect the mineral resource estimate.
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Whittle parameters used are as follows: mining cost of $2.50 per tonne, milling cost of $13 per tonne, general and administrative cost of $3 per tonne, gold price of $1,140 per ounce, mining recovery of 95 per cent, mining dilution of 5 per cent, milling recovery of 90 per cent and pit slope of 50 degrees.
The mineral resource estimate used the Canadian Institute of Mining,
Metallurgy and Petroleum (CIM) Standards on Mineral Resources and
Reserves, Definitions and Guidelines prepared by the CIM standing committee
on reserve definitions and adopted by the CIM council on Nov. 27,
2010. The mineral resource estimate is classified as indicated or
inferred as defined by CIM. The company intends to file an NI 43-101-compliant technical report in respect
of the updated mineral resource estimate on SEDAR and on the company's
website within 45 days of this news release.
Additional details on mineral resource estimate
The mineral resource estimate of the Hardrock gold deposit is based on
interpolation of sample composites (approximately 1.5 metres each)
constrained within 10 lithologic wire frames and a remaining
undifferentiated envelope, which honour the substantial drill hole
database. The underground portion of the resource has been established using a
three-gram-per-tonne-gold cut-off grade while the open-pit portion was established using a 0.5-gram-per-tonne cut-off grade. Key assumptions of the updated mineral resource estimate are
summarized in the attached table.
The inverse distance squared method, which gives a fairly high
level of selectivity, was utilized in the resource estimate to ensure
that zones with internal waste remained distinct. The resource models
were validated visually by sectioning and running a parallel estimate
using inverse distance cubed (ID3). The InnovExplo staff with
responsibility for this resource estimate is Carl Pelletier, Geo,
BSc, and M. Karine Brousseau, PEng. All are qualified persons as
defined in NI 43-101, and are independent of Premier Gold Mines. InnovExplo acknowledges that it has read this press release and there
are no errors contained herein.
DATA AND KEY ASSUMPTIONS OF HARDROCK RESOURCE ESTIMATE
Data or assumption Hardrock
Date of data used Aug. 9, 2013
Number of drill holes in block model 1,428
Metres of drilling in block model 609,000
Number of raw assays 250,000
Long-term gold price $1,300
Currency exchange rate $1 (U.S.) equals
$1.03 (Canadian)
Cut-off grade -- open pit (g/t) 0.5
Cut-off grade -- underground (g/t) 3
Processing -- open pit ($/tonne) 13
Processing -- underground ($/tonne) 13
Mining -- open pit ($/tonne) 2.5
Mining -- underground ($/tonne) 70
Assumed open-pit slope angle 50 degrees
Open-pit strip ratio
(waste tonnes per resource tonne) 5.76
Specific gravity (SG) 2.74 to 3.00
Block model and interpolation software GEMS
Interpolation method ID2
Block sizes (m x m x m) 5 x 5 x 5
The database used for this mineral resource estimate reflects fully
complete drill hole assay and survey data as of Aug. 9, 2013. At that
time, Premier had completed approximately 97,000 metres of diamond drilling
during 2013. It is estimated that by the end of 2013, approximately 140,000
metres of diamond drilling will have been completed. As such, the new
estimate is considered an interim mineral resource estimate as it
includes approximately 50 per cent of the new assay data anticipated for 2013.
A final resource update will be completed following the conclusion of
this drill program, which will continue into the early part of 2014.
The Hardrock deposit represents 77 per cent of the total measured and indicated ounces, and 94 per cent of
the total inferred ounces contained within the Trans-Canada property.
The maximum depth of the open-pit portion of the mineral resource estimate,
based on an optimized Whittle pit, is 477 metres from surface. The
resource estimate completed in 2012 limited the depth of the open-pit portion of the estimate to 200 metres from surface. This change has
contributed to the increase in the inferred resources in the open-pit portion of the estimate.
Some additional changes have been made in completing the estimation in
2013 versus 2012, which Premier believes results in a strong overall
resource estimate. Some of these include:
-
Nominally higher underground cut-off grade of three grams per tonne versus 2.8 grams per tonne in 2012, reflecting the
lower gold price used;
-
More conservative capping strategy reduces approximately 29 per cent of ounces (21 per cent in
2012) versus uncapped equivalent;
-
Adjusted specific gravity (SG) at Hardrock to reflect new data;
-
Interpolation constrained by lithology wire frames developed for
litho-stratigraphic geology model;
-
More conservative approach in establishing resource categories;
-
More conservative approach to handling mineralization adjacent to voids
created from historic mining.
The total impact of these choices and adjustments has resulted in a
nominal increase in ounces estimated, despite a decrease in the long-term gold price versus 2012 to $1,300 (U.S.) per ounce. A more conservative
capping strategy, which removes approximately 29 per cent of the gold contained within
an uncapped inventory, has slightly reduced grades reported. Also, a
decision has been made to eliminate the measured category from the
resource estimate until such time as the data set is further supported
by channel and/or chip sampling, as well as detailed geological mapping,
to ensure the highest degree of continuity is established. In
Premier's opinion, this final rebalancing of ounces and categories
helps ensure the block model fully reflects the data modelling the
in situ mineralization of the Hardrock deposit.
The Hardrock gold deposit is the largest gold deposit within the
Trans-Canada property and is located three kilometres south of the town
of Geraldton in Ontario. Open-pit mineralization has been identified
where historic gold mining comes to surface, and underground
mineralization consists of both new horizons located parallel to the
historic mine and extensions of the main zones historically mined.
Diamond drilling results and update
Continuing work at Hardrock includes:
-
Continued drilling to further define and expand mineralized horizons
(see new highlight results in the attached table);
-
Geotechnical drilling has been completed so that an accurate pit slope
analysis can be completed;
-
Comprehensive metallurgical work is in progress;
-
Preliminary economic assessments for the Hardrock and Brookbank projects
are under way;
-
Baseline environmental work is in progress.
The current drill program, focused primarily on upgrading resources from
the inferred category to the indicated category, continues to define
strong mineralization in multiple zones. Current work is also aimed in
part at defining the potential for a higher-grade starter pit that
could reduce potential payback periods and improve project economics.
It is Premier's near-term goal to upgrade essentially all the resource
within the optimized Whittle pit to a minimum of an indicated
category of confidence in order to be prepared in the event that a
future decision is confirmed to conduct a feasibility study at
Hardrock.
Some key highlights from recent drilling include:
- 19.93 grams per tonne gold across 9.9 metres in hole MM446, 0.9 gram per tonne gold across 147.4 metres in
hole MM462 and 11.44 grams per tonne gold across 19.5 metres in hole MM491 in the P-zone
horizon;
- 9.38 grams per tonne gold across nine metres in hole MM425, 19.61 grams per tonne gold across four metres in
hole MM432 and 17.7 grams per tonne gold across 4.3 metres in hole MM465 in the Fortune
zone horizon;
- 3.78 grams per tonne gold across 11 metres in hole MM411 and 2.5 grams per tonne gold across 54 metres in
hole MM474 in the F-zone horizon.
Results reflect data up to and including drill hole MM494. At the time of
writing, drill hole MM545 was currently in progress. A full table of
results is available on the company's website.
HIGHLIGHT RESULTS FROM CONTINUING DRILLING AT HARDROCK
Hole ID From To Interval Grade Interval Grade
(m) (m) (m) (g/t) (feet) (oz/ton)
MM415 431.0 432.5 1.5 25.00 4.9 0.73
493.0 504.0 11.0 3.78 36.1 0.11
615.8 622.0 6.2 4.09 20.3 0.12
MM425 670.0 677.0 7.0 7.60 23.0 0.22
686.0 695.0 9.0 9.38 29.5 0.27
MM432 601.6 604.9 3.3 9.00 10.8 0.26
617.5 618.4 0.9 36.60 3.0 1.07
634.5 638.5 4.0 19.61 13.1 0.57
652.0 660.5 8.5 6.34 27.9 0.19
MM434 653.0 668.5 15.5 6.56 50.8 0.19
MM443 35.0 81.0 46.0 1.07 150.9 0.03
152.0 157.0 5.0 2.07 16.4 0.06
MM444 245.0 256.0 11.0 0.76 36.1 0.02
499.0 500.5 1.5 12.80 4.9 0.37
514.0 518.5 4.5 6.83 14.8 0.20
524.5 529.0 4.5 4.82 14.8 0.14
MM446 201.5 205.2 3.7 4.83 12.1 0.14
213.6 223.5 9.9 19.93 32.5 0.58
231.0 241.0 10.0 1.43 32.8 0.04
500.0 501.5 1.5 13.50 4.9 0.39
MM453 73.0 86.0 13.0 3.29 42.6 0.10
MM457 135.0 158.0 23.0 1.66 75.4 0.05
418.5 422.0 3.5 4.68 11.5 0.14
MM462 83.0 230.4 147.4 0.90 483.5 0.03
Including 142.0 147.0 5.0 15.20 16.4 0.44
MM463 74.0 105.0 31.0 1.10 101.7 0.03
133.0 169.6 36.6 1.06 120.0 0.03
MM465 626.7 631.0 4.3 17.70 14.1 0.52
MM474 75.0 129.0 54.0 2.50 177.1 0.07
MM488 248.6 251.1 2.5 23.92 8.2 0.70
331.5 343.1 11.6 2.91 38.0 0.09
499.7 531.5 31.8 1.24 104.3 0.04
MM491 205.0 224.5 19.5 11.44 64.0 0.33
488.5 490.0 1.5 17.70 4.9 0.52
MM492 220.0 238.0 18.0 1.04 59.0 0.03
MM494 361.5 391.5 30.0 1.99 98.4 0.06
Including 381.0 382.0 1.0 32.70 3.3 0.95
* Assays presented are uncut; true widths are estimated at
approximately 60 to 80 per cent of interval.
Live conference call information
Date: Oct. 29, 2013
Time: 4 p.m. EST
North American callers please dial: 1-888-261-6767
International callers please dial: 0080045622524
Local callers please dial: 1-416-850-2050
Participant code: 1115505 followed by a number sign
An accompanying presentation for the call can be found on the home page
of the company's website.
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. Assay results are from core
samples sent to Activation Laboratories, an accredited mineral analysis
laboratory in Ancaster, Ont., for preparation and analysis utilizing
both fire assay and screen metallic methods.
We seek Safe Harbor.
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