fins out THUNDER BAY, ON, Nov. 7, 2017 /CNW/ - PREMIER GOLD MINES LIMITED (TSX:PG) ("Premier", "the Company") is pleased to announce its operating results for the third quarter ended September 30, 2017.
image: https://mma.prnewswire.com/media/599533/Premier_Gold_Mines_Limited_Premier_Reports_Third_Quarter_Results.jpg
Note: Unless otherwise stated, all amounts discussed herein are denominated in Canadian dollars.
2017 Third Quarter Consolidated Highlights
- Production of 26,677 ounces of gold and 82,856 ounces of silver
- Gold sales of 37,920 ounces at an average realized price(i) of $1,604 (US$1,282) per ounce
- Co-product cash costs(i) of US$646 per ounce of gold (ii)
- Co-product all-in sustaining costs ("AISC")(i) of US$782 per ounce of gold
- Net revenue of $62.3 million (US$47.7 million)
- Operating income of $17.0 million (US$13.0 million)
- Net income of $3.9 million (US$3.0 million)
- Quarter end cash balance of $171.8 million (US$137.6 million) plus inventory of 5,933 ounces of gold and 39,659 ounces of silver
- Cash flow from operating activities of $25.6 million (US$19.6 million) or $0.12/share (US$.09/share)
- Free cash flow(i) of $17.1 million (US$13.1 million) or $0.08/share (US$0.06/share) after an investment of $6.9 million (US$5.3 million) in exploration and pre-development programs and $8.4 million (US$6.4 million) in capital expenditures.
| (i) See "Non-IFRS Measures" section. A Cautionary note and further information regarding Non-IFRS financial metrics is included in the "Non-IFRS Measures" section of the Q3-2017 Management's Discussion and Analysis
(ii) Cash costs, all-in sustaining costs, free cash flow, EBIDTA, as well as average realized gold price per ounce are Non-IFRS metrics and discussed in the "Non-IFRS Measures" section of the Q3-2017 Management's Discussion and Analysis |
"Strong operating cash flows since establishing production just over one year ago have brought strength to our balance sheet and continue to be the sole source of funding for project development initiatives across the Company," stated Steve Filipovic, CFO of Premier. "This has allowed us to reduce short term debt while continuing to build value across our portfolio of advanced stage projects."
Consolidated Financial Highlights – For the three months ended September 30, 2017
Mining operations during the third quarter generated earnings before interest, taxes, depreciation and amortization ("EBITDA") of $20.4 million (US$15.6 million), and net income of $3.9 million (US$3.0 million) or $0.02/share (US$0.01/share). This resulted in a record quarter-end cash balance of $171.8 million (US$137.6 million). Production from South Arturo continues to surpass plan and budget, and with targeted mining initiatives at Mercedes we remain on track to meet 2017 full-year gold production guidance of 130,000-140,000 ounces.
The Company remains focused on aggressively pursuing its portfolio of advanced stage development projects. Exploration, evaluation and pre-development costs expensed during the quarter totalled $6.9 million (US$5.3 million). Despite this significant investment, the Company generated earnings per share of $0.02 during the quarter. After taking into account this investment, and the $8.4 million (US$6.4 million) in capital expenditures the Company generated free cash flow of $17.1 million (US$13.1 million) during the quarter. Strong operating results have enabled the Company to continue to build its balance sheet while adding value to its development portfolio.
| Millions CA$, except for earnings per share | Three
months
ended
September
30, 2017 | Nine
months
ended
September
30, 2017 | Millions US$ , except for earnings per share | Three
months
ended
September
30, 2017 | Nine
months
ended
September
30, 2017 |
| | | | | | |
| Net revenue | 62.3 | 222.2 | Net revenue | 47.7 | 170.1 |
| Mine operating Income | 17.0 | 74.2 | Mine operating Income | 13.0 | 56.8 |
| EBITDA (i) | 20.4 | 96.0 | EBITDA (i) | 15.6 | 73.4 |
| Net income | 3.9 | 25.2 | Net income | 3.0 | 19.3 |
| Earnings per share | 0.02 | 0.12 | Earnings per share | 0.01 | 0.09 |
| Change in cash | 15.0 | 52.1 | Change in cash | 12.0 | 41.7 |
| | | | | | |
| | Nine
months
ended
September
30, 2017 | Nine
months
ended
September
30, 2016 | | Nine
months
ended
September
30, 2017 | Nine
months
ended
September
30, 2016 |
| | | | | | |
| EBITDA (i) | 96.0 | (19.7) | EBITDA (i) | 73.4 | (14.9) |
| Cash flow from operating activities | 81.2 | (38.9) | Cash flow from operating activities | 62.2 | (29.4) |
| Cash and cash equivalents | 171.8 | 42.1 | Cash and cash equivalents | 137.6 | 32.1 |
| |
| (i) See "Non-IFRS Measures" section. A cautionary note and further information regarding Non-IFRS financial metrics is included in the "Non-IFRS Measures" section of the Q3-2017 Management's Discussion and Analysis |
Operational Highlights – For the three months ended September 30, 2017
Mercedes Mine - Sonora State, Mexico
Third quarter co-product cash costs were US$793 per ounce of gold sold and AISC were US$998 per ounce of gold. Production during the third quarter was 18,564 ounces of gold and 82,856 ounces of silver, which is slightly below budget due to the mine site team assisting the local community in suppressing forest and grass fires in the area over a two week period as well as adjustments to the mining sequence to address localized ground conditions.
To achieve future throughput and stockpile targets, the Mercedes mine team continues to develop additional mine workings including the Diluvio deposit, which will be fully operational in the fourth quarter, and the Rey De Oro deposit where access was gained late in the third quarter.
Key capitalized expenditures during the quarter included $2.4 million (US$1.9 million) in exploration, $2.8 million (US$2.2 million) in equipment and building infrastructure, and $2.2 million (US$1.8 million) in underground mine development.
The 2017 exploration program, targeting the conversion of resources to reserves and drilling near-mine resource opportunities, will continue for the remainder of 2017. The focus remains on new mineralization close to existing workings to supplement production, extensions to mineralization along strike of the main mine trend and testing new geological targets. During the third quarter up to ten underground and surface drill rigs were active on the property.
| Mercedes Operational Results | | Three months
ended
September 30,
2017 | Nine months
ended
September 30,
2017 |
| Ore milled | Tonnes | 156,402 | 501,075 |
| Gold produced | Ounces | 18,564 | 62,621 |
| Silver produced | Ounces | 82,856 | 260,902 |
| Gold sold | Ounces | 24,894 | 68,167 |
| Silver sold | Ounces | 90,545 | 261,735 |
| Average gold grade | grams/tonne | 3.88 | 4.09 |
| Average silver grade | grams/tonne | 36.50 | 38.97 |
| Average gold recovery rate | % | 95.4 | 95.3 |
| Average silver recovery rate | % | 45.2 | 41.6 |
| Average realized gold price (i,ii) | US$/ounce | 1,292 | 1,254 |
| Average realized silver price (i,ii) | US$/ounce | 16.91 | 16.98 |
| | | | |
| Co-product cash costs per ounce of gold sold (i,ii) | US$/ounce | 793 | 687 |
| Co-product all-in sustaining costs per ounce of gold sold (i,ii) | US$/ounce | 998 | 839 |
| Co-product cash costs per ounce of silver sold (i,ii) | US$/ounce | 10.35 | 9.34 |
| Co-product all-in sustaining costs per ounce of silver sold (i,ii) | US$/ounce | 13.49 | 11.49 |
| | |
| (i) | See "Non-IFRS Measures" section. A cautionary note regarding Non-IFRS metrics is included in the "Non-IFRS Measures" section of the Q3-2017 Management's Discussion and Analysis |
| (ii) | Cash costs, all-in sustaining costs as well as average realized gold price per ounce are Non-IFRS metrics and discussed in the "Non-IFRS Measures" section of the Q3-2017 Management's Discussion and Analysis |
South Arturo Mine – Carlin Trend, Nevada
The South Arturo Mine is a joint venture between Premier and Barrick Gold Corporation's wholly-owned subsidiary of Barrick Gold Exploration Inc. ("Barrick"). The mining of the Phase 2 pit continues to exceed production forecasts and has resulted in a substantial stockpile that remains to be processed.
| South Arturo Operating Results | | Three months
ended
September 30,
2017 | Nine months
ended
September 30,
2017 |
| Ore milled | Tonnes | 79,479 | 345,998 |
| Gold produced | ounces | 8,113 | 52,652 |
| Gold sold | ounces | 13,026 | 64,559 |
| Average gold grade | grams/tonne | 3.79 | 5.42 |
| Average gold recovery rate | % | 83.8 | 87.4 |
| Average realized gold price (i,ii) | US$/ounce | 1,264 | 1,249 |
| Co-product cash costs per ounce of gold sold (i,ii,iii) | US$/ounce | 363 | 295 |
| Co-product all-in sustaining costs per ounce of gold sold (i,ii,iii) | US$/ounce | 371 | 336 |
| | |
| (i) | See "Non-IFRS Measures" section. A cautionary note regarding Non-IFRS metrics is included in the "Non-IFRS Measures" section of the Q3-2017 Management's Discussion and Analysis |
| (ii) | Cash costs, all-in sustaining costs as well as average realized gold price per ounce are Non-IFRS metrics and discussed in the "Non-IFRS Measures" section of the Q3-2017 Management's Discussion and Analysis |
| (iii) | South Arturo had no silver related by-product credits |
Third quarter production, attributable to Premier, was 8,113 ounces of gold with co-product cash costs of US$363 per ounce and AISC of US$371 per ounce of gold sold.
Primary mining of the Phase 2 pit was completed early in the third quarter and ore from the related stockpile will continue to be processed at Barrick's Goldstrike facility for the balance of the year. Drilling from the Phase 2 pit into the underlying El Nino deposit identified additional mineralization proximal to the existing pit and it is expected that some additional mining will occur prior to year-end. Backfilling of the Phase 2 pit was completed in the third quarter of 2017 and drilling of the El Nino deposit from within the pit is underway. Additional activities during the quarter included ongoing evaluation of the Phase 1 and Phase 3 open pit opportunities and exploration on the Ardent Anticline and South Hinge targets.
Work continues to advance the proposed El Nino underground and Phase 1 open pit scenarios. If approved, development could begin in 2018. Drilling to complete additional metallurgical and geotechnical characterization is underway at the Phase 1 pit including bottle roll and column leach testing to assess the potential of processing run-of-mine (ROM) material from Phase 1. This work is being advanced ahead of schedule. Drilling is underway to further define the El Nino underground deposit down plunge of the current Phase 2 pit. More than 1,200 metres of core drilling and 3,000 metres of RC drilling in the Upper Zone are designed to increase confidence in the geological model and to support additional metallurgical work. More than 2,000 metres of Cubex drilling is also planned from the elevation of proposed underground portals to infill gaps in the Upper Zone, delineate potential voids, and condemn areas around the potential underground development.
In an effort to advance the Phase 3 pit project into future mine planning, drilling and metallurgical work is being performed. The program is targeting the higher-grade mineralized breccia in the main zone as well as the potential ROM material in the upper parts of the deposit. Future drilling will continue to fill significant gaps in the model and extend the breccia zone in an effort to increase contained ounces.
Exploration efforts on greenfields targets at South Arturo were accelerated during the third quarter. Three drill holes will soon be completed on the Ardent anticline, a higher priority target consisting of favourable structure and geochemistry with the potential to host Carlin-style mineralization. North-south trending faults, a favorable characteristic of Carlin deposits are present in the area and associated with pronounced soil and rock chip geochemistry. Drilling at the South Hinge target, characterized by Carlin-style mineralization located adjacent to the Phase 3 pit target, will test large gaps in previous drilling with the potential to expand the breccia target. Results from the 2017 drill program are expected to be released at year-end.
McCoy-Cove – Battle Mountain Trend, Nevada
Construction of a 2,400-metre pipeline and a 16-acre rapid infiltration basin (RIB) were completed during the quarter. In addition, primary and monitoring wells were drilled to complete a hydrologic flow test to determine expected water flows during the underground development planned for 2018. Additionally, full metallurgical studies and detailed engineering work have been initiated in advance of an updated resource estimate and a Preliminary Economic Assessment (PEA) that is expected to be completed during the fourth quarter. As part of the underground permitting process, Premier is working closely with community stakeholders as well as State and Federal agencies. A total of $2.2 million (US$1.7 million) was spent on exploration and development during the quarter.
Greenstone Gold Mines ("GGM") – Ontario, Canada
Environmental and community and aboriginal engagement activities were the primary focus during the quarter. The GGM team prepared to submit the Hardrock Project Environmental Impact Statement / Environmental Assessment (EIS/EA) to the Canadian Environmental Assessment Agency (CEAA) and the Ministry of the Environment and Climate Change (MOECC) to initiate the formal environmental review part of the permitting process. The final EIS/EA was submitted in July. Progress also continues with the optimization of the feasibility study as part of a mandate to further de-risk the project. A total of $2.4 million (US$1.9 million) was spent by Greenstone Gold during the quarter. All project expenditures will continue to be funded 100% by our joint venture partner Centerra Gold Inc. until the remaining development commitment of $121.0 million (US$96.9 million) has been spent.
2017 Guidance
On July 18, 2017 the Company increased its full-year production guidance to 130,000 to 140,000 ounces of gold and 340,000 to 365,000 ounces of silver.
Production estimates for 2017 are derived from life of mine operating plans prepared on the basis of mineral reserves associated with each property. The underlying assumptions for the estimates are presented in the table below.
| Gold Production US$
unless otherwise noted | Production
ounces | Realized Gold Price per
ounce (i) | Cash Cost per
ounce (i) | AISC per
ounce (i) |
| Guidance
Year 2017 | Guidance
Year 2017 | Guidance
Year 2017 | Guidance
Year 2017 |
| South Arturo | 45,000 - 50,000 | $1,250 | $440 - $470 | $450 - $480 |
| Mercedes | 85,000 - 90,000 | $1,250 | $680 - $710 | $810 - $840 |
| Consolidated | 130,000 - 140,000 | $1,250 | $580 - $610 | $660 - $690 |
| | | | | |
| Actual YTD (Consolidated) | 115,273 | $1,252 | $496 | $595 |
| | |
| (i) | See "Non-IFRS Measures" section. A cautionary note regarding Non-IFRS metrics is included in the "Non-IFRS Measures" section of the Q3-2017 Management's Discussion and Analysis |
Conference Call – November 8, 2017 10:00 am
Premier executives will host a conference call and webcast to discuss the above results on Wednesday, November 8, 2017 at 10:00 am EST. To access the call please follow the instructions below or visit the Company's website at www.premiergoldmines.com.
Toll Free (North America): 1-888-231-8191
International: 1-647-427-7450
Conference ID: 2083912
Webcast Link
https://event.on24.com/wcc/r/1529551/12B3E661E06B0DF86F1EB97A1D59FF2D
Conference Call Replay
A recording of the conference call and webcast replay will be available 1:00pm EST on November 8, 2017 until 11:59 pm EST on November 15, 2017.
Toll Free Replay Call (North America): 1-855-859-2056
International Replay Call: 1-416-849-0833
Passcode: 2083912
The technical information contained in this press release has been reviewed by Stephen McGibbon, P. Geo., (Executive VP Corporate and Project Development) and a Qualified Person within the meaning of National Instrument 43-101.
All undefined abbreviations used in this press release are available by following this link (click here).
Read more at https://www.stockhouse.com/news/press-releases/2017/11/07/premier-reports-third-quarter-results-with-17-1-million-in-free-cash-flow-or-0#kw4BBfwQSlOKrmeX.99 THUNDER BAY, ON, Nov. 7, 2017 /CNW/ - PREMIER GOLD MINES LIMITED (TSX:PG) ("Premier", "the Company") is pleased to announce its operating results for the third quarter ended September 30, 2017.https://www.stockhouse.com/news/press-releases/2017/11/07/premier-reports-third-quarter-results-with-17-1-million-in-free-cash-flow-or-0
image: https://mma.prnewswire.com/media/599533/Premier_Gold_Mines_Limited_Premier_Reports_Third_Quarter_Results.jpg
Note: Unless otherwise stated, all amounts discussed herein are denominated in Canadian dollars.
2017 Third Quarter Consolidated Highlights
- Production of 26,677 ounces of gold and 82,856 ounces of silver
- Gold sales of 37,920 ounces at an average realized price(i) of $1,604 (US$1,282) per ounce
- Co-product cash costs(i) of US$646 per ounce of gold (ii)
- Co-product all-in sustaining costs ("AISC")(i) of US$782 per ounce of gold
- Net revenue of $62.3 million (US$47.7 million)
- Operating income of $17.0 million (US$13.0 million)
- Net income of $3.9 million (US$3.0 million)
- Quarter end cash balance of $171.8 million (US$137.6 million) plus inventory of 5,933 ounces of gold and 39,659 ounces of silver
- Cash flow from operating activities of $25.6 million (US$19.6 million) or $0.12/share (US$.09/share)
- Free cash flow(i) of $17.1 million (US$13.1 million) or $0.08/share (US$0.06/share) after an investment of $6.9 million (US$5.3 million) in exploration and pre-development programs and $8.4 million (US$6.4 million) in capital expenditures.
| (i) See "Non-IFRS Measures" section. A Cautionary note and further information regarding Non-IFRS financial metrics is included in the "Non-IFRS Measures" section of the Q3-2017 Management's Discussion and Analysis
(ii) Cash costs, all-in sustaining costs, free cash flow, EBIDTA, as well as average realized gold price per ounce are Non-IFRS metrics and discussed in the "Non-IFRS Measures" section of the Q3-2017 Management's Discussion and Analysis |
"Strong operating cash flows since establishing production just over one year ago have brought strength to our balance sheet and continue to be the sole source of funding for project development initiatives across the Company," stated Steve Filipovic, CFO of Premier. "This has allowed us to reduce short term debt while continuing to build value across our portfolio of advanced stage projects."
Consolidated Financial Highlights – For the three months ended September 30, 2017
Mining operations during the third quarter generated earnings before interest, taxes, depreciation and amortization ("EBITDA") of $20.4 million (US$15.6 million), and net income of $3.9 million (US$3.0 million) or $0.02/share (US$0.01/share). This resulted in a record quarter-end cash balance of $171.8 million (US$137.6 million). Production from South Arturo continues to surpass plan and budget, and with targeted mining initiatives at Mercedes we remain on track to meet 2017 full-year gold production guidance of 130,000-140,000 ounces.
The Company remains focused on aggressively pursuing its portfolio of advanced stage development projects. Exploration, evaluation and pre-development costs expensed during the quarter totalled $6.9 million (US$5.3 million). Despite this significant investment, the Company generated earnings per share of $0.02 during the quarter. After taking into account this investment, and the $8.4 million (US$6.4 million) in capital expenditures the Company generated free cash flow of $17.1 million (US$13.1 million) during the quarter. Strong operating results have enabled the Company to continue to build its balance sheet while adding value to its development portfolio.
| Millions CA$, except for earnings per share | Three
months
ended
September
30, 2017 | Nine
months
ended
September
30, 2017 | Millions US$ , except for earnings per share | Three
months
ended
September
30, 2017 | Nine
months
ended
September
30, 2017 |
| | | | | | |
| Net revenue | 62.3 | 222.2 | Net revenue | 47.7 | 170.1 |
| Mine operating Income | 17.0 | 74.2 | Mine operating Income | 13.0 | 56.8 |
| EBITDA (i) | 20.4 | 96.0 | EBITDA (i) | 15.6 | 73.4 |
| Net income | 3.9 | 25.2 | Net income | 3.0 | 19.3 |
| Earnings per share | 0.02 | 0.12 | Earnings per share | 0.01 | 0.09 |
| Change in cash | 15.0 | 52.1 | Change in cash | 12.0 | 41.7 |
| | | | | | |
| | Nine
months
ended
September
30, 2017 | Nine
months
ended
September
30, 2016 | | Nine
months
ended
September
30, 2017 | Nine
months
ended
September
30, 2016 |
| | | | | | |
| EBITDA (i) | 96.0 | (19.7) | EBITDA (i) | 73.4 | (14.9) |
| Cash flow from operating activities | 81.2 | (38.9) | Cash flow from operating activities | 62.2 | (29.4) |
| Cash and cash equivalents | 171.8 | 42.1 | Cash and cash equivalents | 137.6 | 32.1 |
| |
| (i) See "Non-IFRS Measures" section. A cautionary note and further information regarding Non-IFRS financial metrics is included in the "Non-IFRS Measures" section of the Q3-2017 Management's Discussion and Analysis |
Operational Highlights – For the three months ended September 30, 2017
Mercedes Mine - Sonora State, Mexico
Third quarter co-product cash costs were US$793 per ounce of gold sold and AISC were US$998 per ounce of gold. Production during the third quarter was 18,564 ounces of gold and 82,856 ounces of silver, which is slightly below budget due to the mine site team assisting the local community in suppressing forest and grass fires in the area over a two week period as well as adjustments to the mining sequence to address localized ground conditions.
To achieve future throughput and stockpile targets, the Mercedes mine team continues to develop additional mine workings including the Diluvio deposit, which will be fully operational in the fourth quarter, and the Rey De Oro deposit where access was gained late in the third quarter.
Key capitalized expenditures during the quarter included $2.4 million (US$1.9 million) in exploration, $2.8 million (US$2.2 million) in equipment and building infrastructure, and $2.2 million (US$1.8 million) in underground mine development.
The 2017 exploration program, targeting the conversion of resources to reserves and drilling near-mine resource opportunities, will continue for the remainder of 2017. The focus remains on new mineralization close to existing workings to supplement production, extensions to mineralization along strike of the main mine trend and testing new geological targets. During the third quarter up to ten underground and surface drill rigs were active on the property.
| Mercedes Operational Results | | Three months
ended
September 30,
2017 | Nine months
ended
September 30,
2017 |
| Ore milled | Tonnes | 156,402 | 501,075 |
| Gold produced | Ounces | 18,564 | 62,621 |
| Silver produced | Ounces | 82,856 | 260,902 |
| Gold sold | Ounces | 24,894 | 68,167 |
| Silver sold | Ounces | 90,545 | 261,735 |
| Average gold grade | grams/tonne | 3.88 | 4.09 |
| Average silver grade | grams/tonne | 36.50 | 38.97 |
| Average gold recovery rate | % | 95.4 | 95.3 |
| Average silver recovery rate | % | 45.2 | 41.6 |
| Average realized gold price (i,ii) | US$/ounce | 1,292 | 1,254 |
| Average realized silver price (i,ii) | US$/ounce | 16.91 | 16.98 |
| | | | |
| Co-product cash costs per ounce of gold sold (i,ii) | US$/ounce | 793 | 687 |
| Co-product all-in sustaining costs per ounce of gold sold (i,ii) | US$/ounce | 998 | 839 |
| Co-product cash costs per ounce of silver sold (i,ii) | US$/ounce | 10.35 | 9.34 |
| Co-product all-in sustaining costs per ounce of silver sold (i,ii) | US$/ounce | 13.49 | 11.49 |
| | |
| (i) | See "Non-IFRS Measures" section. A cautionary note regarding Non-IFRS metrics is included in the "Non-IFRS Measures" section of the Q3-2017 Management's Discussion and Analysis |
| (ii) | Cash costs, all-in sustaining costs as well as average realized gold price per ounce are Non-IFRS metrics and discussed in the "Non-IFRS Measures" section of the Q3-2017 Management's Discussion and Analysis |
South Arturo Mine – Carlin Trend, Nevada
The South Arturo Mine is a joint venture between Premier and Barrick Gold Corporation's wholly-owned subsidiary of Barrick Gold Exploration Inc. ("Barrick"). The mining of the Phase 2 pit continues to exceed production forecasts and has resulted in a substantial stockpile that remains to be processed.
| South Arturo Operating Results | | Three months
ended
September 30,
2017 | Nine months
ended
September 30,
2017 |
| Ore milled | Tonnes | 79,479 | 345,998 |
| Gold produced | ounces | 8,113 | 52,652 |
| Gold sold | ounces | 13,026 | 64,559 |
| Average gold grade | grams/tonne | 3.79 | 5.42 |
| Average gold recovery rate | % | 83.8 | 87.4 |
| Average realized gold price (i,ii) | US$/ounce | 1,264 | 1,249 |
| Co-product cash costs per ounce of gold sold (i,ii,iii) | US$/ounce | 363 | 295 |
| Co-product all-in sustaining costs per ounce of gold sold (i,ii,iii) | US$/ounce | 371 | 336 |
| | |
| (i) | See "Non-IFRS Measures" section. A cautionary note regarding Non-IFRS metrics is included in the "Non-IFRS Measures" section of the Q3-2017 Management's Discussion and Analysis |
| (ii) | Cash costs, all-in sustaining costs as well as average realized gold price per ounce are Non-IFRS metrics and discussed in the "Non-IFRS Measures" section of the Q3-2017 Management's Discussion and Analysis |
| (iii) | South Arturo had no silver related by-product credits |
Third quarter production, attributable to Premier, was 8,113 ounces of gold with co-product cash costs of US$363 per ounce and AISC of US$371 per ounce of gold sold.
Primary mining of the Phase 2 pit was completed early in the third quarter and ore from the related stockpile will continue to be processed at Barrick's Goldstrike facility for the balance of the year. Drilling from the Phase 2 pit into the underlying El Nino deposit identified additional mineralization proximal to the existing pit and it is expected that some additional mining will occur prior to year-end. Backfilling of the Phase 2 pit was completed in the third quarter of 2017 and drilling of the El Nino deposit from within the pit is underway. Additional activities during the quarter included ongoing evaluation of the Phase 1 and Phase 3 open pit opportunities and exploration on the Ardent Anticline and South Hinge targets.
Work continues to advance the proposed El Nino underground and Phase 1 open pit scenarios. If approved, development could begin in 2018. Drilling to complete additional metallurgical and geotechnical characterization is underway at the Phase 1 pit including bottle roll and column leach testing to assess the potential of processing run-of-mine (ROM) material from Phase 1. This work is being advanced ahead of schedule. Drilling is underway to further define the El Nino underground deposit down plunge of the current Phase 2 pit. More than 1,200 metres of core drilling and 3,000 metres of RC drilling in the Upper Zone are designed to increase confidence in the geological model and to support additional metallurgical work. More than 2,000 metres of Cubex drilling is also planned from the elevation of proposed underground portals to infill gaps in the Upper Zone, delineate potential voids, and condemn areas around the potential underground development.
In an effort to advance the Phase 3 pit project into future mine planning, drilling and metallurgical work is being performed. The program is targeting the higher-grade mineralized breccia in the main zone as well as the potential ROM material in the upper parts of the deposit. Future drilling will continue to fill significant gaps in the model and extend the breccia zone in an effort to increase contained ounces.
Exploration efforts on greenfields targets at South Arturo were accelerated during the third quarter. Three drill holes will soon be completed on the Ardent anticline, a higher priority target consisting of favourable structure and geochemistry with the potential to host Carlin-style mineralization. North-south trending faults, a favorable characteristic of Carlin deposits are present in the area and associated with pronounced soil and rock chip geochemistry. Drilling at the South Hinge target, characterized by Carlin-style mineralization located adjacent to the Phase 3 pit target, will test large gaps in previous drilling with the potential to expand the breccia target. Results from the 2017 drill program are expected to be released at year-end.
McCoy-Cove – Battle Mountain Trend, Nevada
Construction of a 2,400-metre pipeline and a 16-acre rapid infiltration basin (RIB) were completed during the quarter. In addition, primary and monitoring wells were drilled to complete a hydrologic flow test to determine expected water flows during the underground development planned for 2018. Additionally, full metallurgical studies and detailed engineering work have been initiated in advance of an updated resource estimate and a Preliminary Economic Assessment (PEA) that is expected to be completed during the fourth quarter. As part of the underground permitting process, Premier is working closely with community stakeholders as well as State and Federal agencies. A total of $2.2 million (US$1.7 million) was spent on exploration and development during the quarter.
Greenstone Gold Mines ("GGM") – Ontario, Canada
Environmental and community and aboriginal engagement activities were the primary focus during the quarter. The GGM team prepared to submit the Hardrock Project Environmental Impact Statement / Environmental Assessment (EIS/EA) to the Canadian Environmental Assessment Agency (CEAA) and the Ministry of the Environment and Climate Change (MOECC) to initiate the formal environmental review part of the permitting process. The final EIS/EA was submitted in July. Progress also continues with the optimization of the feasibility study as part of a mandate to further de-risk the project. A total of $2.4 million (US$1.9 million) was spent by Greenstone Gold during the quarter. All project expenditures will continue to be funded 100% by our joint venture partner Centerra Gold Inc. until the remaining development commitment of $121.0 million (US$96.9 million) has been spent.
2017 Guidance
On July 18, 2017 the Company increased its full-year production guidance to 130,000 to 140,000 ounces of gold and 340,000 to 365,000 ounces of silver.
Production estimates for 2017 are derived from life of mine operating plans prepared on the basis of mineral reserves associated with each property. The underlying assumptions for the estimates are presented in the table below.
| Gold Production US$
unless otherwise noted | Production
ounces | Realized Gold Price per
ounce (i) | Cash Cost per
ounce (i) | AISC per
ounce (i) |
| Guidance
Year 2017 | Guidance
Year 2017 | Guidance
Year 2017 | Guidance
Year 2017 |
| South Arturo | 45,000 - 50,000 | $1,250 | $440 - $470 | $450 - $480 |
| Mercedes | 85,000 - 90,000 | $1,250 | $680 - $710 | $810 - $840 |
| Consolidated | 130,000 - 140,000 | $1,250 | $580 - $610 | $660 - $690 |
| | | | | |
| Actual YTD (Consolidated) | 115,273 | $1,252 | $496 | $595 |
| | |
| (i) | See "Non-IFRS Measures" section. A cautionary note regarding Non-IFRS metrics is included in the "Non-IFRS Measures" section of the Q3-2017 Management's Discussion and Analysis |
Conference Call – November 8, 2017 10:00 am
Premier executives will host a conference call and webcast to discuss the above results on Wednesday, November 8, 2017 at 10:00 am EST. To access the call please follow the instructions below or visit the Company's website at www.premiergoldmines.com.
Toll Free (North America): 1-888-231-8191
International: 1-647-427-7450
Conference ID: 2083912
Webcast Link
https://event.on24.com/wcc/r/1529551/12B3E661E06B0DF86F1EB97A1D59FF2D
Conference Call Replay
A recording of the conference call and webcast replay will be available 1:00pm EST on November 8, 2017 until 11:59 pm EST on November 15, 2017.
Toll Free Replay Call (North America): 1-855-859-2056
International Replay Call: 1-416-849-0833
Passcode: 2083912
The technical information contained in this press release has been reviewed by Stephen McGibbon, P. Geo., (Executive VP Corporate and Project Development) and a Qualified Person within the meaning of National Instrument 43-101.
All undefined abbreviations used in this press release are available by following this link (click here).
Read more at https://www.stockhouse.com/news/press-releases/2017/11/07/premier-reports-third-quarter-results-with-17-1-million-in-free-cash-flow-or-0#kw4BBfwQSlOKrmeX.99 https://www.stockhouse.com/news/press-releases/2017/11/07/premier-reports-third-quarter-results-with-17-1-million-in-free-cash-flow-or-0