Shares of Premier Gold lost some of their lustre after the company updatedon drilling at its 49%-interest in the Rahill-Bonanza joint venture project in Red Lake, Ontario. Drilling has intersected highgrade
gold up-dip from previous drilling in the PG70 Zone area. A new hole has discovered 124 g/t over 1.5 m. The PG70
consists of multiple gold-bearing horizons associated primarily with favourable ultramafic rock units similar to, and nearby to,
the Bruce Channel Deposit (currently being developed with a joint venture partner). A Bay Street analyst notes that while this
appears to be a very sexy drill result and helps affirm previous high-grade intersections in that zone, it is not yet confirmation of
the Bruce Channel extension. The JV drill program is testing for extensions of the PG70 zone up-dip from previously wide
spaced holes. A second drill has been added to the property and is targeting the projected north-south structure that is associated
with the main gold zones at the adjoining Cochenour (Bruce Channel) Mine complex. Initial results from the current program
include hole PG 10075, which interested 124.3 g/t Au over 1.5 m and hole PG10071, which intersected 23.7 g/t Au over 2.0 m.
However, the analyst notes that mineralization in PG70 zone has intersected a 450x250 m area. If he were to take the 2.0 m
width and 2.7 SG and 10 g/t, it would get to only 200,000 oz potential. So more work still needs to be done; however, this is still
a very nice hole, high-grade “Red Lake” style. Canaccord Genuity Precious Metals Analyst Steven Butler is bullish on the story.
His current valuation is mainly based on the optionality to a significant discovery at Red Lake, in addition to further success at advancing the Hardrock project in Geraldton, Ontario. He also continues to view the company as an ultimate consolidation
target.