Premier Gold diversifies from Red Lake into Carlin Trend

In a deal worth US$36 million, Premier Gold Mines (PG-T) is buying Saddle Gold and its assets in Nevada’s Carlin Trend in Elko County.

Premier is paying US$3.1 million in cash, issuing about 5.4 million shares and taking on US$12 million of Saddle Gold’s debt, which it must repay over a seven-year period.

“It looks like good-quality resource ounces at a very good price,”  Barry Allan, a mining analyst at Mackie Research, wrote in an email to The Northern Miner.

Premier’s shares closed up 9¢ or 1.9% on the news at $4.81 per share.

“Saddle Gold represents everything we’re looking for in a U.S.-based exploration opportunity,” Ewan Downie, Premier’s president and chief executive, announced in a statement a day before the company is scheduled to hold its annual general meeting in Toronto.

Downie described the Carlin Trend as North America’s “most productive accumulation of gold deposits” and noted that Saddle Gold is right in the heart of the Rain Mine Trend.

Saddle Gold owns the mineral rights of a majority portion of the Saddle/NW Tess gold deposit and a 1.5% production royalty on Newmont Mining‘s (NMC-T, NEM-N) nearby Emigrant Springs deposit, 2.4 km to the east.

Newmont discovered the Saddle deposit in the 1990s to the northwest and down plunge of its Rain gold mine. The Rain gold mine was previously mined as an open pit and by underground methods and is host to a portion of the Saddle deposit. It also has underground infrastructure near the Saddle deposit.

Along with its royalty in PC Gold ‘s (PKL-T) Pickle Crow project in northwestern Ontario, Premier says, the company has the opportunity to “consider growing a “royalty division” with potential “multiple income streams.”

Emigrant Springs is an advanced stage project with 1.2 million oz. of undeveloped reserves, according to Premier.

Up to 80% of the Saddle deposit is on the property in which Saddle Gold has a 100% stake. The property has a historical resource of about 3.62 million tonnes at a grade of 12.69 grams gold per tonne for contained gold of about 1.5 million oz.

The company has traded in a 52-week range of $2.31-$4.94 per share and has 93 million shares outstanding.