Premier Gold shares surge after Nevada resources bump
Shares in Premier Gold Mines Ltd. (TSE:PG) surged on Tuesday after the company announced a revised mineral resource estimate for its 100%-owned McCoy-Cove project located along the Battle Mountain-Eureka trend in north-central Nevada.
By the close the Thunder Bay-based company was exchanging hands for $2.94, up 11.4% on the TSX Exchange, in higher than usual volumes of 1.8 million shares. Premier Gold is now worth $613 million.
McCoy-Cove is a Carlin type deposit, similar to some of the biggest, most productive gold mines in the world such as Barrick Gold's Goldstrike mine in the same region of Nevada. Highlights of Premier Gold's multi-year exploration and delineation drilling include:
- Total Indicated Mineral Resources of 614,000 tonnes grading 11.57 g/t Au (228,000 ounces of gold), an increase of 59% versus the 2013 resource estimate.
- Total Inferred Mineral Resources of 3,378,000 tonnes grading 12.17 g/t Au (1,322,000 ounces of gold), an increase of 374% versus the 2013 resource estimate.
- An increase in the grade of both Indicated and Inferred mineral resources of 11% and 24% respectively.
- Preliminary Economic Assessment (PEA) underway as part of a US$13.4M program in 2017.
- Exceptional exploration potential remains a hallmark of this property.
In a statement Premier Gold said due to the high-grade nature of and significant increase in the McCoy-Cove mineral resource estimate from the 2013 study, it's undertaking a Preliminary Economic Assessment at McCoy-Cove to be completed during the second half of the year.
Premier Gold expects to start an exploration decline in in the final quarter to allow for underground drilling and test mining in 2018. Premier Gold's 2017 infill and exploration program at the property will total around 17,000m and cost about $5 million.
Rob Chang, managing director and head of metals and mining at Cantor Fitzgerald Canada, sounded enthusiastic about McCoy-Cove in a research note saying that today's announcement constitutes an an impressive increase in both size and grade from the prior resource estimate that highlights the quality of the project:
We believe the market is giving little (if any) value to several assets in the Premier Gold portfolio and in its McCoy-Cove and Hasaga projects in particular, which we believe is a valuation disconnect that will be correct itself as the company solidifies its position among gold producers. We reiterate our Buy recommendation and $4.55 target price.