THUNDER BAY, ON, Dec. 27,
2019 /CNW/ - PREMIER GOLD MINES LIMITED ("Premier", "the
Company") (TSX: PG) (OTCPK: PIRGF) announced that its
wholly-owned subsidiary, Premier Gold Mines Hardrock Inc. ("Premier
Hardrock") has received a Statement of Claim (the "Claim") issued
in the Ontario Superior Court of Justice on December 23, 2019 by its Hardrock Project joint
venture partner, Aurico Canadian Royalty Holdings Inc. ("Aurico"),
a wholly-owned subsidiary of Centerra Gold Inc. (together with
Aurico, "Centerra"). The Claim seeks, among other things, a
declaration that the 2019 Hardrock Project update submitted by
Greenstone Gold Mines GP Inc. ("GGM", the managing partner) should
not be considered a "Feasibility Study", as defined in the amended
and restated partnership agreement dated March 9, 2015 (the "Partnership Agreement")
between Premier Hardrock, Aurico (as successor to Centerra Gold
Inc.) and GGM or satisfy the Feasibility Criteria (as defined in
the Partnership Agreement).
Premier believes that the allegations made in the Claim are
entirely without merit. Premier intends to take appropriate
litigation steps to defend its position and its interests in the
project.
In 2016, a comprehensive technical and economic feasibility
study was completed for the Hardrock Project. Following the
completion of that study, the GGM Board, which includes two members
of each Centerra and Premier, approved a series of budgets
including the 2019 budget that, among other things, gave GGM the
direction to independently complete a resource estimate and an
economic update on the project. Pursuant to the Partnership
Agreement, GGM called a meeting of the GGM Board upon completion of
the 2019 Hardrock Project update (the "Hardrock Project Update")
which included the updated feasibility study (the "Feasibility
Study"), prepared by an independent mining consultant retained by
GGM (the "Independent Consultant"). The Feasibility Study indicated
an internal rate of return ("IRR") that satisfied the Feasibility
Criteria under the Partnership Agreement for the development of a
mine(s) in respect of the Hardrock Project on an after-tax and
pre-financing cost basis.
The Partnership Agreement provides that the partners have agreed
that the GGM Board shall not withhold, delay or condition the
making or approval of a Positive Feasibility Decision (as defined
in the Partnership Agreement) if the feasibility study meets the
Feasibility Criteria. Under the Partnership Agreement "Feasibility
Criteria" is defined as a feasibility study that demonstrates an
IRR equal to or greater than 15% to the Partnership for development
of a mine(s) in respect of the Hardrock Project on an after-tax and
pre-financing cost basis.
In preparing the Hardrock Project Update, the Independent
Consultant gave careful consideration to the comments and views
expressed by Centerra's mining consultant, who was retained by
Centerra in October 2019 to review
Centerra's issues with the Hardrock Project Update. The Hardrock
Project Update and the comments raised by Centerra's consultant
were further reviewed by another independent mining consulting firm
on behalf of a third party. This consultant along with the
Independent Consultant continued to support the approach and
conclusions of the Independent Consultant with respect to the
Hardrock Project Update.
Significant work has been undertaken by GGM following the 2016
study to optimize the project as per the direction of the GGM
Board. Premier and its technical team have been actively engaged in
all relevant discussions with respect to the work programs and
recommendations of GGM and its consultants and have given careful
consideration to the comments and issues raised by Centerra and
their consultant. Premier and its technical team continue to
support the approach and conclusions of the Independent Consultant
with respect to the Hardrock Project Update.
Premier Gold Mines Limited is a gold-producer and
respected exploration and development company with a high-quality
pipeline of precious metal projects in proven, accessible and safe
mining jurisdictions in Canada,
the United States, and
Mexico. Premier remains focused on
creating a low cost, mid-tier gold producer through its two
producing gold mines, South Arturo and Mercedes, and through future
mine development opportunities at Hardrock in Ontario (Greenstone Gold JV) and at the
McCoy-Cove Project in Nevada.
This Press Release contains certain information that may
constitute "forward-looking information" under applicable Canadian
securities legislation. Forward-looking information includes, but
is not limited to, statements relating to the results of
litigation, statements about strategic plans, including future
operations, future work programs, capital expenditures, discovery
and production of minerals, price of gold and currency exchange
rates, mineral resource and mineral reserve estimates and corporate
and technical objectives. Forward-looking information is
necessarily based upon a number of assumptions that, while
considered reasonable, are subject to known and unknown risks,
uncertainties, and other factors which may cause the actual results
and future events to differ materially from those expressed or
implied by such forward-looking information, including the risks
inherent to the mining industry, adverse economic and market
developments and the risks identified in Premier's annual
information form under the heading "Risk Factors". There can be no
assurance that such information will prove to be accurate, as
actual results and future events could differ materially from those
anticipated in such information. Accordingly, readers should not
place undue reliance on forward-looking information. All
forward-looking information contained in this press release is
given as of the date hereof and is based upon the opinions and
estimates of management and information available to management as
at the date hereof. Premier disclaims any intention or obligation
to update or revise any forward-looking information, whether as a
result of new information, future events or otherwise, except as
required by law.
SOURCE Premier Gold Mines Limited