Cove makes the grade for Premier

It may have made its name on its Hardrock gold project in Ontario but Premier Gold Mines (TSX: PG; US-OTC: PIRGF) is bolstering its project pipeline in Nevada.

The company’s latest drill results from its Cove gold project in the Silver Stata show impressive grades at depth.

Four holes from the Cove South Deep and 2201 polymetallic zones produced highlight intercepts of 182.87 grams gold over 1.5 metres from a 799-metre depth, and 40.23 grams gold over 4.9 metres from a 836-metre depth.

Premier is confident that it has expanded the mineralized envelope for the project’s 2201 zone, which sits 50 km southwest of the town of Battle Mountain in Nevada’s Battle Mountain–Eureka trend.

The holes were drilled 200 metres west of the initial discovery holes for the 2201 zone, which is situated 225 metres below the historic Cove pit. This pit has already yielded production of more than  2.6 million oz. gold and 100 million oz. silver.

Newmont Mining’s (TSX: NMC; NYSE: NEM) Phoenix mine — which produces over 200,000 oz. gold per year — sits 22 km north of the project. The company is no doubt looking closely at the latest results, with Premier leasing Cove from the senior producer. Newmont has the option to become the manager and a 51% joint-venture partner up until Premier submits a positive feasibility study for a deposit containing a minimum of 500,000 oz. gold.

The site already has indicated resources of 425,000 tonnes grading 10.46 grams gold for 143,000 oz. and inferred resources of 882,000 tonnes grading 9.81 grams gold for 279,000. This tonnage comes out of the Helen deposit, which sits northwest of the Cove pit.

There should be more results from the 2201 zone, with Cove slated to grab most of this year’s exploration budget. The company says it will do more stepout and infill drilling around the 2201 zone.

While things shape up at Cove, Premier’s Hardrock project in Ontario continues to be its flagship, and the company intends to update resource numbers at the project soon.

This estimate will make use of more than 60,000 metres of additional drilling compared with the October 2013 resource estimate.

A preliminary economic assessment on Hardrock was released in January and envisioned a mine that would average 253,000 oz. gold production during its first eight years of production. The study estimated a pre-tax net present value of $519 million using a 5% discount rate and a US$1,250 per oz. gold price.