Highlights from underground drilling at the Rey de Oro deposit included 21.95m at 36.65g/t gold and 171.3g/t silver; and 20.5m at 8.1g/t gold and 121.32g/t silver.

The company said the results included some of the widest vein intercepts on the property, proximal to recently constructed mine workings.

"These initial intercepts suggest a zone with grades well in excess of the current reserve grade at Mercedes," executive vice president Charlie Ronkos said.

The company said additional drills were being mobilised to Rey de Oro and as part of an ongoing 40,000m surface and underground programme at Mercedes. 

Premier's total 2018 exploration/development budget of US$93 million was more than 50% funded by partners, the company said.

It produced 16,007 ounces of gold and 51,746oz of silver in the June quarter and increased its 2018 consolidated production guidance from 85,000-95,000-oz of gold to 90,000-100,000oz, due to higher than expected first half production at the South Arturo joint venture with Barrick Gold in Nevada.

Premier Gold shares hit a 52-week low last week of C$2.40 and closed up 2c on Friday to $2.50, capitalising it at $506.5 million.