/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR
DISSEMINATION IN THE UNITED
STATES/
THUNDER BAY, ON, Aug. 10, 2020 /CNW/ - PREMIER GOLD MINES
LIMITED ("Premier" or the "Company") (TSX: PG)
(OTCPK: PIRGF) is pleased to announce that, together with its
wholly-owned Delaware subsidiary
Premier Gold Mines USA, Inc.
("PG USA"), it has entered
into a definitive purchase agreement with affiliates of Waterton
Global Resource Management, Inc. ("Waterton") to acquire
from Waterton all of the outstanding membership interests of Osgood
Mining Company LLC ("Osgood"). Osgood is the owner of the
Getchell Project in the Getchell gold belt near Winnemucca, Nevada ("Getchell" or the
"Getchell Project") for consideration consisting of
US$50 million in cash and common
shares, plus contingent value rights and warrants as described in
more detail below (the "Transaction").
The Getchell Project is located at the intersection of the
Getchell gold belt and the Battle
Mountain-Eureka trend
immediately south of Nevada Gold
Mines' Turquoise Ridge operation. Open pit mining occurred
on the property between 1980 and 1999. Subsequent to that,
underground test mining (the Pinson Mine) was conducted in the
early 2010s. The mine has been in care and maintenance since
2015.
Upon completion of the Transaction, Getchell will be 100% held
by PG USA and become one of its
core Nevada assets. As previously announced, the Company is
contemplating corporate reorganization options that may include a
spin–out of PG USA to Premier's
shareholders. The Company has not yet made any determination
regarding a corporate reorganization, and there can be no assurance
that it will proceed with the spin-out or any other form of
corporate reorganization.
Ewan Downie, President & CEO
of Premier, commented: "We are very excited to add the Getchell
Project to our already strong base of Nevada assets. The property
has a long track record of successful gold production and we
believe that the open pit and underground gold historical resources
at Getchell were amongst the highest-grade in North America based on historical work
completed on the property and the property will form an integral
part of our US-based activities."
Under the Transaction, the consideration to Waterton will
consist of (i) US$23,000,000 in cash
on closing, (ii) 13,777,098 common shares of Premier, (iii)
warrants to purchase 12,756,572 common shares of Premier, with an
exercise price C$3.67 per warrant,
for a period of 36 months following the closing date, and (iv)
contingent value rights pursuant to which Waterton will be entitled
to receive an additional US$5,000,000
upon the public announcement of a positive production decision
related to the Getchell Project (underground or open pit), and
another US$5,000,000 upon production
of the first ounce of gold (excluding ordinary testing and bulk
sampling programs) following a 60 consecutive day period where gold
prices have exceeded US$2,000 per
ounce. In the event that Premier determines to proceed with a
spin-out transaction of PG USA,
and such spin-out transaction is completed prior to the completion
of the Transaction, the consideration package will be modified in
accordance with the terms of the definitive agreement to provide
for Waterton's equity and contingent value exposure to continue
with PG USA.
The Transaction is subject to a number of conditions precedent,
including the receipt of certain regulatory and third-party
approvals, including the approval of the Toronto Stock Exchange,
and other conditions customary for a transaction of this nature.
The Transaction is expected to close in Q4 2020. If Premier
determines to proceed with a corporate reorganization transaction,
such transaction would be subject to additional regulatory and
third-party approvals.
Premier has also agreed to terms to purchase additional
properties adjacent to the Getchell Project.
The securities to be issued in the proposed transactions have
not been, nor will they be, registered under the United States
Securities Act of 1933, as amended (the "Securities
Act"), and may not be offered or sold in the United States unless such securities are
registered under the Securities Act or exempt from the registration
requirements of the Securities Act. This press release does not
constitute an offer to sell, nor is it a solicitation of an offer
to buy securities in the United
States, nor shall there be any sale of securities in any
state or province in which such offer, solicitation or sale would
be unlawful.
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.
Premier is currently evaluating opportunities to enhance
shareholder value through a potential reorganization of its
portfolio of mineral properties that may include a spin-out of its
Nevada-based assets into a new, stand-alone, US-domiciled, publicly
listed gold company.
Stephen McGibbon, P. Geo.,
Executive Vice-President, Corporate and Project Development at
Premier has reviewed the scientific and technical information
contained in this press release and is a Qualified Person within
the meaning of National Instrument 43 -101.
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 about the completion of the
Transaction, prospects and outlook for the Getchell Project,
reorganization options including the spin-out of its Nevada assets,
potential acquisitions of properties adjacent to the Getchell
Project, 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 regulatory and third-party
approvals required to complete the Transaction, completion of
definitive agreements relating to, and acquisition of, additional
properties adjacent to the Getchell Project, the benefits to be
derived from the acquisitions or any corporate reorganization, if
Premier determines to proceed with the spin-out, regulatory and
third-party approvals required to complete the spin-out, 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