Hardrock resource proves positive for Premier

After a year of aggressive drilling, Premier Gold Mines (PG-T) has come out with a solid initial resource estimate on its Hardrock gold project near Geraldton, Ont.

Indicated resources total 11.6 million tonnes grading 1.82 grams gold per tonne for 675,000 oz. gold, using a cutoff grade of 1 gram gold per tonne. Without using a cutoff, the total oz. is substantially higher at 905,000 oz. gold.

Inferred resources stand at 7.3 million tonnes grading 1.81 grams gold per tonne for 425,000 oz., cut, or 830,000 oz. uncut.

The resource estimate is based on 121,000 metres (545 holes) of drilling done between 1987 and 2009. About 86,000 metres of this drilling was done by Premier last year.

Premier hasn’t stopped though. The company has already begun a 70,000-metre drill program for this year to continue to expand and upgrade both open pit and underground style targets. Only open pit targets were included in the first resource estimate.

“In the first year of our major exploration initiative we have met our two-year target in terms of near-surface resources, reporting a significant mineral resource in the upper range of our 2009 guidance,” said Premier president and CEO, Ewan Downie in a statement.

The company is doing all of this drilling with the goal of completing a preliminary economic assessment on the project to evaluate the possibility of mining.

One of the focuses will be to further evaluate the Kailey zone, a new discovery located near the past-producing Little Long Lac mien about 3km north of Hardrock, which has not been included in the resource estimate. Premier plans to do a resource estimate on Kailey soon.

The Hardrock project area actually includes several past-producing mines which produced about 3 million oz. gold between 1938 and 1970.

The area of the resource estimate has been designated as the Hardrock Area. It includes the past producing Hardrock mine, the MacLeod-Cockshutt mine and Mosher mine where about 13.1 million tonnes grading 4.9 grams gold per tonne was mined in the past. Previously mined zones here appear to be open at depth – recent drill intercepts include 57.3 metres grading 5.3 grams gold per tonne and 24.2 metres grading 10 grams gold per tonne.

Premier shares were down 5% today or 22¢ to $3.95 apiece on a trading volume of 1.3 million shares. The company has a 52-week trading range between $1.82 and $4.29 and 92.5 million shares outstanding.