In an exploration update, Premier Gold Mines (PG-T) says it continues to intersect and expand on several horizons at its Trans-Canada gold project in northwestern Ontario, while hitting multiple high-grade intercepts.
A bulk of the ongoing drilling has targeted the project’s high-grade Fortune zone, which consists of several en-echelon, narrow-vein zones and includes extensions of the historically mined F zone, where more than 2 million oz. were recovered.
As a result of the drilling, the Fortune zone has been extended down-plunge by 500 metres to a length of 3 km, analyst Rob Chang of Versant Partners observes in a July 31 research note.
According to the company’s management the Fortune zone could potentially be expanded by at least another kilometre, Chang says.
The zone currently remains open to depth and hosts similar traits to the two expired mines – Little Long Lac and Leitch – that are located on the project. Little Long Lac had a historic production of 600,000 oz. gold grading 11.70 grams gold per tonne, while Leitch churned out 847,900 oz. gold averaging 31.50 grams.
As part of the update, Premier unveiled 15 new assays from step-out and infill drilling on several horizons. It notes it drilled 26 holes of which 9 were abandoned prior to target or drilled for geotechnical purposes.
Of the batch, standout intercepts from the Fortune zone include: 2 metres carrying 431.43 grams gold; 8.9 metres grading 21.13 grams gold; and 1 metre of 113 grams.
From the P zone, a notable intercept returned 1.5 metres of 142 grams gold, and a standout hole from the North zone cut 2.9 metres at 21.59 grams.
Along with the drilling, the junior says it’s working on an updated resource estimate to support its upcoming preliminary economic assessment (PEA).
The estimate will be done on four deposits – Hardrock, Brookbank, Key Lane and Kailey.
While the company didn’t specify when the estimate should be out, Chang expects the update in September with the PEA coming out later this year or early next year.
Premier notes the Ontario Ministry of Northern Development and Mines has accepted its Advanced Exploration Closure Plan filed for the Hardrock deposit which allows it to start prepping certain areas for planned advanced exploration activities.
However, it cautions that it can’t start dewatering until it receives two other approvals from the Ontario Ministry of Environment, including the Permit to Take Water, and the Environmental Compliance Approval.
Premier estimates that by year end it will have the remaining permit approvals in hand.
Chang has reaffirmed his buy speculative rating on the stock and target price of $11.50 per share.
During late Tuesday trading, Premier advanced 3% to $4.54 per share on above average volume.
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