Shares Issued: 201,313,187
THUNDER BAY, ON, Jan. 12, 2017 /CNW/ - PREMIER GOLD MINES
LIMITED (TSX:PG) ("Premier", "the Company") is pleased to
report its 2016 highlights along with 2017 production and cost
guidance. All dollar figures are in United States dollars unless otherwise
indicated.
2016 Fourth Quarter Highlights:
- Quarterly gold production of 81,790 ounces and silver
production of 97,991 ounces
2016 Full-Year Highlights:
- Gold production of 112,018 ounces
- Surpassed gold production guidance of 100,000-110,000
ounces
- No lost-time injuries
- Achieved commercial production at the new South Arturo Mine in
Carlin, Nevada
- Acquired the Mercedes Mine in Sonora State, Mexico
- Announced results from the Feasibility Study for the Hardrock
deposit
- Deep drilling of high-grade mineralization at McCoy-Cove in
Nevada raises project to
development status
2017 Production and Cost Guidance:
- Consolidated production of between 125,000-135,000 ounces of
gold and 325,000-350-000 ounces of silver
- Forecast cash costs of between $580-$610 per ounce of gold
- Forecast all-in sustaining costs of between $660-$690 per ounce of gold
2016 Operating Results
In 2016, Premier achieved production at two mines, South Arturo
in Nevada and Mercedes in
Mexico. Consolidated gold production was 112,018 ounces of
gold, which was above the Company's 2016 production guidance of
100,000-110,000 ounces. The increase in annual gold
production was attributable to higher grades than anticipated, and
an accelerated production profile at its South Arturo
mine.
Mine-by-mine gold production in the fourth quarter and full-year
2016 was as follows:
Mine
|
Q4 2016
Production
(ounces gold)
|
Full-year 2016
Production
(ounces gold)
|
South Arturo,
Nevada
|
59,030
|
89,258
|
Mercedes,
Mexico
|
22,760
|
22,760
|
|
|
|
Consolidated
Production
|
81,790
|
112,018
|
|
|
|
The South Arturo Mine had an exceptional year, achieving
commercial production in August, on time and under
budget. Since the start of production in August, the South
Arturo Mine produced 89,258 ounces of gold, of which 59,030 ounces
were produced in the fourth quarter.
The Mercedes Mine in Mexico has
performed well since it was acquired from Yamana Gold on
September 30, 2016. Mercedes Mine
produced 22,760 ounces of gold and 97,991 ounces of silver, meeting
the Company's production guidance for the year.
2017 Production Outlook and Cost Guidance
Consolidated gold production for 2017 is expected to increase to
between 125,000- 135,000 ounces, compared to 112,018 ounces in
2016. The higher production relates primarily to a full year
of production from the Mercedes Mine. Production in 2017 is
anticipated to be slightly weighted towards the first-half of the
year due to the production schedule from the South Arturo Phase 2
pit.
Cash costs are projected to increase in 2017 and be in the range
of $580-$610 per ounce of gold due to
lower grades being processed from South Arturo and the increased
weighting of production from the Mercedes Mine.
Consolidated all-in sustaining costs are forecasted to be
between $660-$690 per ounce of
gold.
Mine-by-mine 2017 forecasts for gold production, cash costs, all
in sustaining costs and non-sustaining capital expenditures are as
follows:
|
2016
Gold
Production
(ounces)
|
2017 Forecast
Gold Production
(ounces)
|
2017 Forecast
Cash Costs ($
per ounce Au)
|
2017 All-in
Sustaining Costs
($ per ounce Au)
|
2017 Forecast
Non-Sustaining
Capital
Expenditures
($ thousands)
|
South
Arturo
|
89,258
|
40,000-45,000
|
$440-470
|
$450-480
|
$1,868
|
Mercedes
|
22,760
|
85,000-90,000
|
$680-710
|
$810-840
|
$7,876
|
Premier
Consolidated
|
112,018
|
125,000-135,000
|
$580-610
|
$660-690
|
$9,744
|
South Arturo Mine, Nevada
The South Arturo Mine is forecast to produce between
40,000-45,000 ounces of gold in 2017 compared to 89,258 ounces in
2016. Lower production is attributable to the planned wind down of
the Phase 2 pit. Cash costs are forecast to be approximately
$440-$470 per ounce, slightly higher
than 2016 guidance as a result of lower annual throughput and lower
projected grades.
The El Nino deposit is situated immediately down-plunge of the
Phase 2 pit and will become the focus after Phase 2 production in
2017 is complete. Permits for the construction of the
potential underground El Nino mine were submitted to the Government
in 2016. Close-spaced drilling in early 2017 will be used for
future mine planning.
Non-sustaining capital costs of $1.9M and exploration of $0.5M is planned for 2017.
Mercedes Mine, Mexico
The Mercedes Mine is forecast to produce between 85,000-90,000
ounces of gold in 2017 compared to 22,760 ounces in 2016. Cash
costs are forecast to be approximately $680-$710 per ounce, matching closely with the
Company's 2016 cost guidance.
For 2017, sustaining capital at the Mercedes Mine is estimated
to be approximately $12 million
mainly for underground development, buildings, other infrastructure
and equipment. The planned expansion and mine development is
budgeted at $7.9M.
The 2017 exploration budget for Mercedes is $4.7 million, and includes some 20,000 metres of
drilling from surface and underground platforms. The Company plans
to release a revised reserve and resource estimate for Mercedes
during the first quarter.
"In 2017, we expect record production of gold and silver from
our two mines at industry-best operating costs," stated
Ewan Downie, President & CEO of
Premier. "In addition to the current mining operations, we
will continue to aggressively advance our two near-term development
opportunities, El Nino at South Arturo and the Helen and CSD Gap
deposits at McCoy-Cove".
Premier remains focused on building its mining business towards
a mid-tier producer status with its two producing gold mines, South
Arturo and Mercedes, and the ongoing mine permitting process
required to develop its Hardrock Project in Ontario (Trans-Canada JV) and McCoy-Cove in
Nevada. Advanced exploration continues in Red Lake and further work on the newly
acquired projects will determine which of these assets will
contribute to the next stage of growth and development of the
Company.
Investor Day
Premier will be hosting an Investor Day presentation at the
Toronto Board of Trade (4th floor,
rooms A/B), 1 First Canadian Place, Toronto, Ontario at 10:00am (EST) on Thursday,
January 12, 2017. The Company invites all current and
future shareholders to attend this event.
Stephen McGibbon, P. Geo., is the
Qualified Person for the information contained in this press
release and is a Qualified Person within the meaning of National
Instrument 43-101.
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.
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 strategic plans, including
future operations, future work programs, capital expenditures,
discovery and production of minerals, price of gold and currency
exchange rates, timing of geological reports 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