Premier Gold Mines’ Royalty Expands High Quality Portfolio
Premier Gold Mines (PG.TSX) announced the closing of the purchase by Premier Royalty Corporation, its wholly-owned subsidiary, of a 1% net smelter return royalty from Golden Arrow Resources Corporation on gold produced from Yamana Gold’s Gualcamayo Gold Mine in Argentina. Premier Royalty purchased 100% of the shares of Golden Arrow’s wholly-owned subsidiary, which indirectly owns the Royalty, for cash consideration of C$16.5 million and warrants to purchase an aggregate of up to one million shares of Premier Royalty at an exercise price equal to 120% of the price of Premier Royalty’s shares in connection with a going public transaction.
Premier Gold Mines noted that the warrants are exercisable for up to 24 months from the closing date of the Royalty acquisition. Golden Arrow has the right, contingent upon 30 days’ prior written notice, to require Premier Royalty to purchase for cancellation all outstanding warrants for a price of C$1.25 per warrant prior to their expiry.
Highlights:
*The Gualcamayo mine, located in the northern San Juan province of Argentina, is an open pit, heap leach gold mining operation with three substantial zones of gold mineralization
* It hosts total proven & probable mineral reserves of 2.2 million ounces and total measured & indicated mineral resources of 1.1 million ounces as of December 31, 2011
* Gualcamayo has consistently improved its production versus guidance since 2011
* According to Yamana Gold, the decision was made in 2010 to develop the underground QDD Lower West deposit, located below the main open pit, which is expected to lift annual production to more than 200,000 ounces per year beginning in 2014
Abraham Drost, President & Chief Executive Officer of Premier Royalty:
“This acquisition adds a high quality cash-flowing royalty on a remarkable gold mine owned and operated by Yamana. Premier Royalty’s portfolio will consist of five cash flowing royalties (Emigrant Springs – Newmont, Thunder Creek – Lake Shore Gold, Buffelsfontein – Village Main Reef, Mine Waste Solutions – AngloGold Ashanti and Gualcamayo – Yamana) and a number of promising earlier stage exploration royalties.”
Ewan Downie, President and CEO of Premier Gold Mines:
“2012 is the largest year, in terms of exploration dollars in Company history with three active exploration projects that continue to deliver significant exploration success. Management and operational changes continue to evolve as we quickly grow from exploration to anticipated development in the years to come.”
2012-11-12 22:22:16
Source: http://www.goldalert.com/2012/11/premier-gold-mines-royalty-expands-high-quality-portfolio/
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