THUNDER BAY, ON, March 30, 2020 /CNW/ - PREMIER GOLD MINES LIMITED ("Premier", "the Company") (TSX:PG) (OTCPK: PIRGF) today confirms an offer to acquire the remaining 50% interest in the Greenstone Gold Mines Partnership ("GGM") has been made to Centerra Gold Inc. ("Centerra"). Total consideration of the offer is approximately US$205 Million. The acquiring party, at the option of Premier, will be another company that is an assignee of Premier's rights under the offer letter.
GGM's principal asset is the Hardrock Mine Project ("Hardrock") located on the Trans-Canada Highway near Geraldton, Ontario, Canada. Hardrock is one of the most significant large-scale, near permitted, mine development projects in North America.
The offer is comprised of a cash payment in the amount of US$175 Million, and in addition the assumption of all Centerra's obligations under the partnership agreement, including the remaining earn-in obligation of approximately US$30 Million.
Premier submitted the offer in cooperation and with the support of a company (the "assignee") that has completed its technical due diligence in relation to the 2019 mineral resource estimate and recent economic update for Hardrock. The updated mineral resource estimate and economic study was prepared by G-Mining Services ("G-Mining"); the Independent QP for Hardrock, on behalf of GGM. All work completed by G-Mining to prepare the updated estimate and economic study was in accordance with GGM budgets, approved by both partners and funded entirely by Centerra. The proposed assignee has the financial capacity to both acquire Centerra's 50% interest and advance Hardrock through construction. The assignee also intends to work with Premier to assist in securing the financial resources required for Premier to fund its 50% share of related mine construction costs.
"This offer should be viewed favourably by Centerra as we believe that it represents a substantial premium to the median of current analyst consensus valuations attributed to Centerra's 50% interest in GGM, full recovery of their total investment in GGM to date, and aligns with Centerra's stated focus of maximizing the value of its existing operating assets over new build opportunities", stated Ewan Downie, President and CEO of Premier. "The value of the offer is in excess of Premier's market capitalization, especially when you consider the Company's considerable cash position".
Hardrock is the product of more than 12 years of exploration, development and engineering work that resulted in the delivery of an initial Feasibility Study late in 2016. Since release of that initial study, GGM completed another three years of work (totaling approximately US$65 million), including additional drilling to better assess continuity and grade of the Hardrock deposit, and significant detailed engineering to further refine project design and optimize project economics. The impact of this additional three years of work in relation to project economics has been positive. During that same time, GGM obtained both Federal and Provincial EA approval, filed an updated closure plan and signed long term relationship agreements with all locally impacted First Nation communities. Given the recently updated mineral resource estimate and related economic study, the full support of all locally-impacted First Nation communities as well as the Ontario Provincial and Canadian Federal Governments, the Hardrock project is essentially "shovel ready".
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 where permitting and development initiatives are ongoing and McCoy-Cove 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 about the offer to acquire Centerra's 50% interest in the Greenstone Gold Mines partnership, Premier's ability to secure financing for its share of construction costs relating to Hardrock, 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
For further information: Ewan Downie, President & CEO, 1.888.346.1390, [email protected], www.premiergoldmines.com