Premier cuts impressive numbers at Hardrock (November 22, 2010)

Drilling on the Hardrock gold project in northwestern Ontario is returning some impressive results for joint-venture partners Premier Gold Mines (PG-T) and Goldstone Resources (GRC-T).

While testing the J-zone, the largest of the past-producing mine zones, Premier hit a noteworthy 7.92 grams gold per tonne across 114.5 metres in hole 179C, starting at 616 metres downhole. Built into the intercept was 31 metres averaging 23.6 grams, which included 1.5 metres of 329 grams.

With a 70% interest, Premier Gold is the operator of the Hardrock project, which comprises a 15-km-long property package in a historic mining district. Goldstone Resources holds a 30% carried interest. The property lies only a few kilometres south of the town of Geraldton, which is serviced by the Trans-Canada Highway. The district saw some 4 million oz. mined between 1938 and 1968.

Premier says the J-zone produced more than 1.4 million oz. gold from bulk-underground methods. When the mine closed in the 1960s, a 600-metre plunge length of the zone was left un-mined. Hole 179C is the first of several holes to confirm this mineralization.

“We have ramped up our drilling due to unparallel success in multiple areas. Expansion of historically mined zones and multiple new discoveries are expected to add materially to the current gold resource at Hardrock,” said Ewan Downie, president and CEO of Premier, in a press release.

Premier reports that there are currently 11 drill rigs in operation on the property, testing the extensions of previously mined zones and exploring new target areas. Recent drilling on the western extension of the J-zone intersected significant mineralization in an untested area more than 500 metres from the historic underground workings.

Hole 170 intersected 20.5 metres averaging 18.49 grams gold, including a 0.8-metre interval of 348 grams gold, starting at 958 metres depth. This hole was drilled 200 metres west of the previously reported hole 157, which cut 24.5 metres of 3.21 grams gold, including 4.3 metres of 8.36 grams gold, beginning at 900 metres downhole.

Assay results are pending from further drilling in this area, along with results from drilling on the NN zone and SP zone target areas. According to Premier, recent drilling has cut strong mineralization in new areas on the property, including visible gold.

In March 2010, the partners announced a National Instrument 43-101 compliant resource estimate covering open-pit targets at Hardrock. Indicated resources totaled 11.6 million tonnes grading 1.82 grams gold, equivalent to 675,000 oz. gold. Inferred resources contained a further 425,000 oz. gold in 7.3 million tonnes averaging 1.81 grams.

A revised resource estimate, amenable to both open-pit and underground mining, is expected to be finalized following the completion of the 2010 drilling campaign.

Premier Gold is trading off a 52- week high of $6.74, with 102 million shares outstanding. Goldstone is trading around $1 in a 52-week range of 37¢-$1.02, with 98.2 million shares outstanding, or 106.7 million fully diluted.