Premier Gold Mines Completes Cove Project Acquisition
By jturbin | June 15, 2012 8:28 PM IST
Premier Gold Mines (PG.TSX) announced the closing of its acquisition of a 100% interest in the Cove Gold Project from Victoria Gold Corp. The Project is located within the Eureka-Battle Mountain Trend in Nevada, and the Company noted that the purchase will solidify its project portfolio in the United States.
The Eureka-Battle Mountain Trend hosts several multi-million ounce producing and past-producing mines. The Cove deposit was mined principally by open pit between 1988 and 2001, a period of comparatively low metal prices, producing approximately 2.6 million gold ounces and 100 million silver ounces. The target-rich 6,972 hectare property has been subject to only limited surface exploration outside of the Cove pit and Premier Gold Mines believes that the property offers potential for the discovery of additional mineralized zones and horizons. Cove is also is located in close proximity to excellent infrastructure, including paved roads and power.
* In connection with the closing of the acquisition, Premier Gold Mines paid an aggregate of $8 million, $4 million of which was paid in cash and $4 million of which was satisfied by the issuance of an aggregate of 892,857 common shares of Premier to a wholly-owned subsidiary of Victoria
* The aggregate consideration payable for the transaction is $28 million payable over a two-year term, inclusive of the closing payment
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* In the event of production from the Cove Project, Premier will pay Victoria an additional $20 million in four installments – with Premier having the option to satisfy up to one half of such amount in common shares of Premier
* A Plan of Operations for underground exploration has been submitted to the appropriate federal agency and is expected to be approved in the third quarter of 2012
Paul Huet, Chief Operating Officer of Premier Gold Mines:
“This is a very exciting time to be involved in gold, and more importantly, with Premier Gold Mines…Premier’s management team has an outstanding track record of delivering growth and value to shareholders.”
Ovais Habib, Scotia Capital:
“The acquisition is consistent with Premier’s strategy of developing high-grade gold projects in safe geopolitical environments and provides the company with additional corporate options going forward.”