THUNDER BAY — Explorer-turned-producer Premier Gold Mines Ltd. reported growth efforts — with a strong focus on Nevada — in the first quarter of 2018 in its operating and financial results released May 8.
“Premier continues to be a growth-oriented company,” said Ewan Downie, president and CEO, in a conference call with investors. “We are putting a lot of the dollars we generate through mining back into the ground to ensure a long and successful future for our company.”
The company became a producer in late 2016 and has a pipeline of precious metal projects in mining jurisdictions in Canada, Mexico and the United States.
Premier leaders expect to have three advanced exploration or mine projects under development by the end of the year.
“This 2018 is truly a year where we have extensive growth programs going on within the company,” Downie said.
At the South Arturo property near Carlin, Premier plans to commence construction of the Phase 1 open pit and El Nino underground from the bottom of the Phase 2 pit in the second half of 2018. The company partners with Barrick Gold Corp. to process South Arturo’s stockpiled ore at the Barrick Nevada Goldstrike mine, and in Q1, 15,541 ounces of gold delivered to Premier exceeded guidance for the year.
South Arturo “is becoming a more and more important part of our asset base,” Downie said, explaining that positive drilling results could justify the development of a third pit.
Overall, Premier’s Q1 production was down compared to the same period last year. From South Arturo and the Mercedes mine in Mexico, the company produced a total of 30,550 ounces of gold and 59,826 ounces of silver during Q1 2018 compared to 50,979 ounces of gold and 98,382 ounces of silver during Q1 2017.
The decrease was due to the completion of mining the Phase 2 pit at South Arturo in 2017 and Mercedes’ production profile being more heavily weighted for the second quarter, said Stephen McGibbon with Premier Gold on the conference call.
At McCoy-Cove south of Battle Mountain, Premier maintains a 100 percent interest in the Cove Property and plans to invest heavily in exploration and development.
In January, Premier signed an agreement that provides Barrick with an option to earn up to a 60 percent interest in the McCoy-Cove Property that surrounds the main deposit area. Exploration on the joint venture property began in April and will include detailed geophysics, surface mapping and soil sampling prior to drill testing several prospective targets.
A preliminary economic assessment is expected to be released in mid-May, in conjunction with the company’s Investor Day on May 15. Preliminary engineering, and dewatering and baseline studies have been initiated to advance an underground exploration program planned in the second half of 2018.
Premier reported revenue of $39.2 million, operating income of $9.6 million and a net loss of $2 million, or 1 cent per share. Total capital spending was $5.3 million. The company has a cash balance of $98.4 million.
“We maintain a strong treasury despite the fact that we have not slowed down our exploration effort,” Downie said, adding that Premier has invested $6.5 million in exploration in the first quarter.