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Shares Issued: 137,459,605
THUNDER BAY, ON, June 1, 2012 /CNW/ - PREMIER GOLD MINES LIMITED (PG:TSX) ("Premier Gold" or the "Company") is pleased to announce the closing of the purchase by its wholly-owned subsidiary, Premier Royalty Corporation ("Premier Royalty") from Aberdeen International Inc., of a 1% net smelter return royalty (the "Royalty") on gold produced from Village Main Reef Limited's Buffelsfontein Mine and First Uranium Corporation's Mine Waste Solutions project in the Republic of South Africa.
The purchase price for the Royalty was $20,900,000, which was satisfied by Premier Royalty paying $11,500,000 in cash (the "Cash Payment") and issuing to Aberdeen a $9,400,000 convertible debenture (the "Convertible Debenture"). In addition, Premier Royalty will issue to Aberdeen warrants ("Warrants") to purchase common shares of Premier Royalty on completion of a public offering or other going public transaction by Premier Royalty. The Cash Payment was funded by Premier Gold by way of a repayable bridge loan from its existing cash to Premier Royalty.
Abraham Drost, Chairman of Premier Royalty Corporation stated, "We are pleased to have closed the transaction with Aberdeen on the Buffelsfontein and Mine Waste Solutions gold royalty streams. This transaction is the first-closed of several acquisitions the Company is currently contemplating as value-added additions to its existing royalty portfolio in anticipation of a future go-public event. We look forward to serving Aberdeen's best interests as a valued shareholder of the Company going forward."
Further information on the terms of the Convertible Debenture and the Warrants can be found in the Company's news release dated April 25, 2012.
About Premier Gold Mines Limited and Premier Royalty Corporation
Premier Royalty Corporation is a wholly-owned subsidiary of Premier Gold Mines Limited, one of North America's leading exploration and development companies with a high-quality pipeline of projects focused in proven, safe and accessible mining jurisdictions in Canada and the United States. Premier's portfolio includes significant assets in world class gold mining districts such as Red Lake, Musselwhite and Geraldton in Ontario and the Carlin Trend in Nevada. Premier believes that consolidating existing royalties owned by Premier Gold combined with acquisition of other high quality cash flowing royalty assets into Premier Royalty can form the basis of a transaction that is value accretive to Premier shareholders.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION: This news release includes certain information that may constitute "forward-looking information" under applicable Canadian securities legislation. Forward-looking information includes, but is not limited to, statements about strategic plans, including a going public transaction involving Premier Royalty. Forward-looking information is necessarily based upon a number of estimates and 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 identified in Premier Gold'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. The Company 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.
For further information:
Ewan Downie, President & CEO
Premier Gold Mines Limited
Abraham Drost, P.Geo., Chairman
Premier Royalty Corporation