Premier to aquire Barrick's interest in Geraldton district



    Shares Issued: 69,348,742

    THUNDER BAY, Oct. 22 /CNW/ - PREMIER GOLD MINES LIMITED (TSX:PG) is very
pleased to announce that it has entered into a definitive purchase agreement
with Lac Properties Inc. ("Lac"), a wholly-owned subsidiary of BARRICK GOLD
CORPORATION (TSX, NYSE:  ABX), to acquire, among other things, Lac's interest in
all of the mining claims commonly known as the Geraldton, Ozone Creek and Eva
Summers properties located in the Geraldton district in the Province of
Ontario (collectively the "G-L Property"), together with certain equipment and
other assets related thereto (the "Purchased Assets").
    The G-L Property is host to several past-producing mines which
collectively produced more than 2.0 Million ounces of gold from the same
deposits to relatively shallow depths of approximately 2000 feet (600 metres)
from 1938-1968. The mined zones remained wide open at depth at the time mining
ceased.
    In consideration for Lac's interest in the Purchased Assets, Premier will
(i) issue to Lac 500,000 common shares of Premier, (ii) make a cash payment to
Lac of $1,000,000, (iii) deposit $1,000,000 in an environmental reclamation
trust fund in the connection with G-L Property, (iv) grant to Lac a 3.0% net
smelter return royalty (the "NSR Royalty") on production from the G-L
Property, and (v) assume certain liabilities and obligations of Lac in respect
of the Purchased Assets. The claims subject to the NSR Royalty including on
the Little Long Lac claims which are currently held under option by Premier
(This results in a reduction from the current 5% NSR payable on the Little
Long Lac claims).
    Immediately prior to the end of the mining on the G-L Property, new
development workings were built on a substantial extension of the "F-Zone" of
the G-L Property approximately 700 metres of the down-plunge from the area
mined to a depth of 800 metres (2621 foot level) Highlight results from
drilling into this area (approximately true widths) include:

    
    -   10.25g/t Au (0.30 oz/ton) over 17.1 m (56 feet)
    -   8.43g/t Au (0.25 oz/ton) over 17.1m (56 feet)
    -   6.03g/t Au (0.18 oz/ton) over 23.2m (76 feet)
    

    The mined zones remain open at depth highlighted by intersections of
13.75g/t Au over 6.4m down-dip beneath the mine workings in the "F-Zone" and
18.41g/t Au over 5.1m down-dip beneath the mine workings in the "North Zone"
of the G-L Property. In addition to the depth potential of the mined zones,
significant potential exists for developing resources in several areas
including: 1) Open pit-style mineralization at the site of the original
discovery where a resource containing several hundred thousand ounces of gold
was partially drilled off by previous operators; 2) Several newer high-grade
discoveries have been made throughout this large property package that have
received little to no follow-up; and, 3) Significant resources are reported to
remain within the mine workings.
    "This acquisition represents the culmination of a decade's worth of
effort to secure what I consider to be one of the most prospective
exploration/development projects in Canada" stated Ewan Downie, President of
Premier. "The Geraldton district is perhaps the most under-explored of the
major greenstone belts in Ontario and we intend to implement a major
exploration program immediately".
    Premier will transfer an interest in the G-L Property so that it will
form part of the existing Geraldton Project which is operated under a joint
venture between Premier (earning a 70% interest) and Roxmark Mines Limited
(TSX-V:RMK). Recent discoveries on the existing Project include open pit-style
mineralization in the Kailey Zone and high-grade veins located proximal to the
historic Little Long Lac Gold Mine. As previously released by Premier, results
to date from drilling in the recently discovered Kailey Zone include 39.64g/t
Au (1.16 oz/ton) across 2.0 metres contained within a wider zone of
mineralization which returned 5.87g/t Au across 16.0 metres, and 2.01g/t Au
across 101.0 metres.
    The Geraldton Joint Venture Project is located in the heart of the
Beardmore-Geraldton greenstone belt, a highly prospective high-grade gold
district that has seen relatively little exploration over the past several
decades. The Project area covers approximately 15 kilometres of some of the
most prospective geology in the region and is host to several past-producing
mines and numerous exploration targets in a district that has seen historic
production of more than 4.1 Million ounces of gold. Slides of the Project area
can be viewed on the Premier Gold Mines Limited website,
www.premiergoldmines.com.
    The closing of the Acquisition transaction is scheduled to close on the
fifth business day after Premier and Lac have obtained the all of the
regulatory approvals required under the Purchase Agreement (including the
approval of the Toronto Stock Exchange and the Ontario Ministry of Northern
Development and Mines), which is expected to be in December 2008.

    Other Projects - Red Lake & Santa Teresa
    ----------------------------------------
    In addition to the Geraldton District, Premier is active in several other
highly prospective gold districts. In Red Lake, drilling continues at the
Rahill-Bonanza Project, a joint venture with Red Lake Gold Mines Limited, in
addition to Premier's participation in a dewatering project that will lead to
an underground drill program in 2009. At PQ North, located adjacent to
Goldcorp's Musselwhite Gold Mine, exploration is underway with a drill program
planned for early 2009. Ongoing drilling at the Santa Teresa Project in
Mexico, a joint venture between Premier and Sutter Gold Mining Inc.
(TSX-V:SGM), has intersected numerous high-grade quartz vein zones along
strike the past-producing Princessa Gold Mine (Historical data indicates that
mined grades within the district average better than 1.00 ounce gold per ton).
    Stephen McGibbon, P. Geo., is the Qualified Person for the information
contained in this press release and is a Qualified Person within the meaning
of National Instrument 43-101. Core from Geraldton is sent to Accurassay
Laboratories, an accredited mineral analysis laboratory in Thunder Bay,
Ontario, for preparation and analysis utilizing both fire assay and screen
metallic methods.

    Premier Gold Mines Limited is a fully financed Canadian-based mineral
exploration and development company with several projects and deposits in
Northwestern Ontario and a joint venture in Mexico. In the Red Lake gold
mining camp, two of these are operated in joint venture with Red Lake Gold
Mines. A strategic project is also located on the main Musselwhite Gold Mine
trend.

    The statements made in this Press Release may contain forward-looking
statements that may involve a number of risks and uncertainties. Actual events
or results could differ materially from the Company's expectations and
projections.

    %SEDAR: 00024152E




For further information:

For further information: Ewan Downie, President & CEO, Phone: (807)
346-1390, Fax: (807) 346-0100, E-mail: info@premiergoldmines.com, Web Site:
http://www.premiergoldmines.com


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890