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Premier defines more high-grade ore at Mercedes

The latest exploration results from the Rey de Oro deposit at Canadian miner Premier Gold Mines’ (TSX:PG) fully-owned Mercedes mine, in Mexico’s Sonora state, have returned high-grade gold and silver mineralisation close to the existing mine workings.
Premier defines more high-grade ore at Mercedes Premier defines more high-grade ore at Mercedes Premier defines more high-grade ore at Mercedes Premier defines more high-grade ore at Mercedes Premier defines more high-grade ore at Mercedes

Clouds gather over Premier Gold's Mercedes mine, Mexico

Underground drilling at the Rey de Oro deposit, one of several zones being brought into production this year, continues to expand high-grade mineralisation including some of the best intercept widths seen on the property. The campaign comprises step-out and delineation drilling of this recently developed horizon.

Recent highlights include hole UG-R018-013 that returned 12.64 grams per tonne (gpt) gold and 240.1gpt silver across 29.65m, for a true width of 13.5m; hole UG-R018-015 returned 0.41gptgold and 3,120gpt silver (91oz/tonne) across 1.52m, or a true width of 1.06m; and hole UG-R018-012, which returned 17gpt gold and 321gpt silver across 1.1m, for a true width of 0.8m, as well as 4.47gpt gold and 138.5gpt silver over 8.25m, for a true width of 6.1m.

Executive VP Charlie Romlos says the exploration confirms management's belief that the Rey de Oro target holds the key to expand the current mine life. "This new mineralised zone is under development and we plan to begin mining (prior to year-end) where we are achieving substantial widths. Mined grades at Rey de Oro are expected to be well above our current mine site reserve grade."

Despite the company achieving full production at the nearby Diluvio deposit, production at Mercedes is expected to be weighted to the second half of the year owing to changes in mining method, additional drilling required at the new Diluvio deposit and delays in permitting associated with a ventilation raise at Rey de Oro.

This weighed on shareholder sentiment Tuesday, causing the company's Toronto-listed stock to drop close to its 12-month low during intra-day trading. The equity lost 0.54% to C$1.83 apiece, after giving away 49% of its value in the year-to-date period. This provides the company with a current market capitalisation of about C$371.06 million.