Premier Gold releases updated mineral resource estimate on Hardrock deposit

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THUNDER BAY, ON, Oct. 29, 2013 /CNW/ - PREMIER GOLD MINES LIMITED ("Premier" or "The Company") (TSX: PG) is very pleased to release a recently completed mineral resource estimate on the Hardrock gold deposit, located on the Company's 100%-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 3D block model and supported with input from the Company's geological personnel.  Table 1 provides a deposit summary of the resource at Hardrock, categorized by potential underground (U/G) and/or open-pit (O/P) economic cut-off grades (COG) where appropriate.  The Company has also scheduled a conference call and webcast for investors and analysts at 4:00 p.m. (Eastern Time)Tuesday, October 29, 2013.   Details for the call can be found at the bottom of this press release.

Highlights of the 2013 Hardrock mineral resource estimate includes:

• Indicated resources of 3.24M ounces of gold
• Inferred resources of 3.78M ounces of gold
• New estimate includes a deeper pit when compared to previous estimates
• Drilling continues to suggest the potential for additional O/P and U/G resources offering further upside

"The Hardrock deposit anchors our growing resource base and continues to deliver solid results" commented Premier President & CEO 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."

Table 1 Hardrock Deposit Mineral Resource Summary

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 CIM Standing Committee on Reserve Definitions and adopted by CIM Council on November 27, 2010.  The mineral resource estimate is classified as "indicated", or "inferred" as defined by CIM. The Company intends to file a National Instrument 43-101 ("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 1.5m each) constrained within ten lithologic wireframes and a remaining undifferentiated envelope which honour the substantial drillhole database. The U/G portion of the resource has been established using a 3.00 g/t Au COG while the O/P portion was established using a 0.50 g/t Au COG. Key assumptions of the updated mineral resource estimate are summarized in Table 2.

The Inverse Distance Squared (ID2) 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 Mr. Carl Pelletier, geo, B.Sc. and M. Karine Brousseau, P.Eng. All are Qualified Persons as defined in NI 43-101, and are independent of Premier Gold Mines Ltd. InnovExplo acknowledges that it has read this press release and there are no errors contained herein.

Table 2  Data & Key Assumptions of Hardrock Resource Estimate

The database used for this mineral resource estimate reflects fully complete drillhole assay and survey data as of August 9, 2013.  At that time, Premier had completed some 97,000 metres of diamond drilling during 2013.  It is estimated that by the end of 2013, some 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% 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% of the total M+I ounces and 94% of the total Inferred ounces contained within the Trans-Canada Property.  The maximum depth of the O/P 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 O/P portion of the estimate to 200 metres from surface.  This change has contributed to the increase in the Inferred resources in the O/P 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 U/G COG of 3.00 g/t vs 2.80 g/t in 2012, reflecting the lower gold price used
• More conservative capping strategy reduces some 29% of ounces (21% in 2012) vs uncapped equivalent
• Adjusted specific gravity (SG) at Hardrock to reflect new data
• Interpolation constrained by lithology wireframes 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 aggregate 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 US$1300 per ounce.  A more conservative capping strategy, which removes some 29% 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 dataset 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 modeling 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 3.0 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

Ongoing work at Hardrock includes:

• Continued drilling to further define and expand mineralized horizons (see new highlight results in Table 3 below)
• 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 underway
• 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 g/t Au across 9.9 m in hole MM446, 0.90 g/t Au across 147.4 m in hole MM462 and 11.44 g/t Au across 19.5 m in hole MM491 in the P-Zone horizon
• 9.38 g/t Au across 9.0 m in hole MM425, 19.61 g/t Au across 4.0 m in hole MM432 and 17.70 g/t Au across 4.3 m in hole MM465 in the Fortune Zone horizon
• 3.78 g/t Au across 11.0 m in hole MM411 and 2.50 g/t Au across 54.0 m in hole MM474 in F-Zone horizon

Results reflect data up to and including drillhole MM494. At the time of writing, drillhole MM545 was currently in progress. A full table of results is available on the Company's website, www.premiergoldmines.com.

Table 3 - Highlight Results From Ongoing Drilling at Hardrock

* - Assays presented are un-cut; true widths are estimated at approximately 60-80% of interval

Live Conference Call Information

An accompanying presentation for the call can be found on the homepage of the Company's website at www.premiergoldmines.com

Stephen McGibbon, P. Geo., 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, Ontario, for preparation and analysis utilizing both fire assay and screen metallic methods.

Premier Gold Mines Limited is one of North America's leading exploration companies with a high-quality pipeline of projects focused in proven, safe and accessible mining jurisdictions in Canada and the United States. The Company is well financed with a property portfolio that includes significant assets in world class gold mining districts such as Red Lake and Geraldton in Ontario and the Battle Mountain Trend in Nevada.

The statements made in this Press Release may contain forward-looking statements that may involve a number of risks and uncertainties.  Actual events or results could differ materially from the Company's expectations and projections.

SOURCE Premier Gold Mines Limited