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Press release from CNW Group

PREMIER - RED LAKE DRILLING EXTENDS WILMAR MINE HORIZON - ASSAYS INCLUDE 6.06 oz/ton Gold

Thursday, October 21, 2010

PREMIER - RED LAKE DRILLING EXTENDS WILMAR MINE HORIZON - ASSAYS INCLUDE 6.06 oz/ton Gold08:59 EDT Thursday, October 21, 2010Shares Issued: 102,333,413THUNDER BAY, ON, Oct. 21 /CNW/ - PREMIER GOLD MINES LIMITED (TSX:PG) is pleased to provide an update from its ongoing drill program at the Rahill-Bonanza Project in Red Lake. This drilling has returned high-grade gold intercepts in both the PG70 Zone as well as down-plunge of the historic Wilmar Gold Mine. These zones are located in close proximity to the Wilmar mine workings that are linked by an underground drift with Goldcorp's Cochenour Mine. The multiple zones and targets being drilled are displayed in Figure 1 and a complete table of significant assays discussed within this press release can be found in Table 1. The Rahill-Bonanza Project (PG:49%) is strategically located in the heart of the prolific Red Lake gold mining district and is being explored by joint venture partner Red Lake Gold Mines Limited ("RLGM"), an affiliate of Goldcorp Inc.Recent highlights from drilling on Premier's Red Lake joint venture projects include: << - The first hole drilled to test the down-plunge extension of the "2E" Zone at the Wilmar Gold Mine (approximately 200 metres down-plunge of the historic workings) intersected bonanza grade gold with 68.87 grams per tonne (g/t) across 3.5 metres (m) or 2.01 ounces per short ton (oz/t) across 11.5 feet (ft) including 207.43 g/t across 1.15 m (6.06 oz/t across 3.8 ft) in hole PG10082. This intercept occurs 500 metres east of the PG70 Zone and remains untested in between (See Figure 2). - New holes in the PG70 Zone have intersected visible gold with intercepts as high as 32.37 g/t across 1.0 m or 0.94 oz/t across 3.3 ft in hole PG10076. The PG70 Zone remains open in all directions (See Figure 1 below). >> Figure 1 Location of Rahill-Bonanza Project and Bruce Channel Deposit: http://files.newswire.ca/598/PREMIER_Fig.1.pdfThe Rahill-Bonanza Project is host to several deposits having historical and NI43-101 compliant mineral resources including the past-producing Wilmar Gold Mine. The Property covers approximately 4.5 kilometres of the main Red Lake "Mine Trend" between the world class Red Lake Gold Mines complex to the east, and the Cochenour (Bruce Channel) complex to the west, where an underground exploration tram designed to link the two operations is under construction. The Rahill-Bonanza Project represents the last piece of the main mine horizon in the Red Lake gold camp not 100% owned by Goldcorp."Our Red Lake exploration program continues to return excellent results in the Wilmar/PG70 Zone area. Recent discoveries throughout the belt highlight the potential of this prolific high-grade gold camp" said Stephen McGibbon, Executive Vice-President and Chief Operating Officer of Premier. "These results suggest the potential to delineate multiple gold deposits on our joint venture projects proximal to new mine infrastructure being built by Goldcorp". << Wilmar Mine Extension --------------------- >> The Wilmar Gold Mine was developed via a drift that links it with the nearby Cochenour Mine infrastructure being rehabilitated by Goldcorp. Past-production at Wilmar, over a period of four years, resulted in 203,256 tons of ore being mined at an average grade of 0.30 oz/ton Au (10.3g/t Au). The deposit remained open at depth when the mine shutdown and previous drilling performed down-dip of the mine workings by the joint venture in 2007 returned numerous significant intersections including 18.1 g/t Au over 2.0 m and 14.2g/t Au over 5.0 m.Recently completed hole PG10082 is the first drilled by the joint venture to test the down-plunge extension of the "2E Zone" and returned a strong mineralized zone with visible gold containing 68.87 g/t across 3.5 m (2.01 oz/t across 11.5 ft) including 207.43 g/t across 1.15 m (6.06 oz/t across 3.8 ft) in hole PG10082. A wedge hole has recently been completed to test this unit up-dip and to the east and assays are pending. This intersection occurs approximately 500 metres east of the PG70 Zone and is completely untested in between these two zones.Figure 2 Hole PG10082 in relation to the Wilmar Mine workings: http://files.newswire.ca/598/PREMIER_Fig.2.pdf << PG70 Zone --------- >> The PG70 Zone consists of multiple gold-bearing horizons associated primarily with favourable ultramafic rock units similar to, and nearby to, Goldcorp's Cochenour (Bruce Channel) Project that is currently being developed by RLGM (See Figure 1 above). Several new holes have intersected the PG70 Zone, further expanding the limits of the horizon that remains open in all directions. The new drilling further defines the horizon where previous holes returned multiple intersections including 124.30 g/t Au across 1.5 m (3.63 oz/ton across 4.9 feet) in hole PG10075, 23.70 g/t Au across 2.0 m (0.69 oz/ton across 6.6 feet) in hole PG10071 and 4.31 g/t Au across 25.0 m (0.13 oz/ton across 82.0 feet) including 9.53 g/t Au across 6.0 m (0.28 oz/ton across 19.7 feet) in hole PG10072B. Widely spaced drill holes have now intersected mineralization in the PG70 Zone over an area approximately 700 metres by 350 metres. << Fold (Bruce Channel Extension) Target ------------------------------------- >> The Fold Target was identified as an area that could be host to gold mineralization similar to, and along strike from, the Bruce Chanel Deposit (BCD) (see Figure 1). The first drill hole (PG10080) that tested this target intersected a similar sequence of rocks to those found at the BCD including favourable ultramafic rock units, quartz-carbonate veining, biotite alteration and multiple zones of mineralization with no significant assays. PG10080 is interpreted to be too far north to have tested the fold target which is further to the south than previously thought. A second hole (PG10085) has been completed to test this target area and assays are pending. << Table 1: Summary of Significant Assays ------------------------------------------------------------------------- UTM Coordin- Dip/ Inter- Grade Inter- Grade Hole-ID ates (m) Azimuth From To val (g/ val (oz/ Zone NAD 27 (degrees) (m) (m) (m) tonne) (ft) ton) ------------------------------------------------------------------------- PG10071* 5503391 N -67/269 736.0 738.0 2.00 23.70 6.56 0.69 PG70 503578 E ------------------------------------------------------------------------- PG10072B* 5656569 N 1125.5 1150.5 25.00 4.31 82.00 0.13 PG70 -65/267 ------------------------------------------- including 443617 E 1133.5 1139.5 6.00 9.53 19.68 0.28 ------------------------------------------------------------------------- PG10075* 5503391 N -68/169 526.0 527.5 1.50 124.30 4.92 3.63 PG70 503578 E ------------------------------------------------------------------------- PG10076 5656911 N 679.0 680.0 1.00 32.37 3.28 0.95 PG70 443196 E -76/177 ------------------------------------------- 816.0 817.0 1.00 6.06 3.28 0.18 X ------------------------------------------- 928.0 929.0 1.00 10.86 3.28 0.32 X ------------------------------------------------------------------------- PG10077 5656954 N -64/177 stuck in talc 443037 E prior to target ------------------------------------------------------------------------- PG10077A 5656954 N 500.0 501.0 1.00 6.70 3.28 0.20 X 443037 E -64/177 ------------------------------------------- 671.5 672.0 0.50 3.92 1.64 0.11 PG70 - VG ------------------------------------------------------------------------- PG10078 5656662 N -65/055 abandoned due 442449 E to deviation ------------------------------------------------------------------------- PG10079 5656662 N -65/055 abandoned due 442449 E to deviation ------------------------------------------------------------------------- PG10080 5656662 N -64/071 No significant 442449 E assays ------------------------------------------------------------------------- PG10081 5656953 N 749.0 763.0 14.00 1.07 45.92 0.03 WGZ 443042 E -73/162 ------------------------------------------- 990.0 992.0 2.00 1.38 6.56 0.04 PG70 ------------------------------------------------------------------------- PG10082 5656669 N 757.0 760.5 3.50 68.87 11.48 2.01 Wilmar 443922 E -77/330 2E ------------------------------------------- including 759.35 760.5 1.15 207.43 3.8 6.06 ------------------------------------------------------------------------- *Previously released drill holes in the PG70 Zone VG - Visible Gold *True widths are estimated to be between 40% and 70% of intersection width East Bay Project ---------------- >> The East Bay Project is the second joint venture between Premier and RLGM in the Red Lake gold camp. A portion of the East Bay Project is held 50% by Premier and 50% by RLGM. Another portion of the East Bay Project is held 35% by Premier and 65% by RLGM. During the winter drill program, gold mineralization was discovered within shear zones on the East Bay Ultramafic Trend, on the portion of the project held 35% by Premier, located between the known 'GAZ' deposit on the East Bay Property and Rubicon's F2 Zone at the Phoenix Gold Project. The discovery hole, EBJV10174, intersected a major shear zone characterized by silica flooding and disseminated pyrrhotite within biotite-amphibole altered basalts with assays of 51.04g/t Au across 0.7 m and 7.25g/t Au across 2.7m. Two recently completed step-out drill holes have intersected similar veining and mineralization 120 metres and 280 metres to the north of the discovery hole and assays are pending. Additional drilling will be considered upon receipt of assays from the new drilling. << Future Exploration ------------------ >> Future drilling is expected to focus on testing for extensions of the historically mined Wilmar Gold Mine, and delineate the PG70 Zone. Also, as announced late in 2009, Goldcorp is currently constructing a high-speed tram to connect the Red Lake Gold Mines complex and the Cochenour (Bruce Channel) Mine complex in order to develop its Cochenour Project. The construction of this tram is now underway and it is expected that a portion of this tram will pass through, or in close proximity to the joint venture project providing an excellent future exploration platform. This tram will parallel several kilometres of some of the highest potential and untested geology along the main Red Lake "Mine Trend" between the two operations. The Red Lake Gold Mine is considered to be one of the world's richest gold mines with production of more than 18 million ounces of gold and nearly 10 million ounces of mineral resources.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. Assay results are from core samples sent to Activation Laboratories, an accredited mineral analysis laboratory in Ancaster, Ontario, or to Accurassay Laboratories, an accredited mineral analysis laboratory in Thunder Bay, Ontario, for preparation and analysis utilizing both fire assay and screen metallic methods.Premier Gold Mines Limited is a well financed Canadian-based mineral exploration and development company with several projects and deposits in Northwestern Ontario, Nevada, and a joint venture in Mexico. In the Red Lake gold mining camp, two projects are operated in joint venture with Red Lake Gold Mines, an affiliate of Goldcorp Inc. The company also owns a strategic project located on the main Musselwhite Gold Mine trend, a 70% interest in the Hardrock Project, and recently announced the acquisition of Saddle Gold Inc. and now holds the Saddle Project on the prolific Carlin Trend, in Northeastern Nevada, and a royalty in Newmont's Emigrant Springs Project.The statements made in this Press Release may contain forward-looking statements that may involve a number of risks and uncertainties. Actual events or results could differ materially from the Company's expectations and projections.%SEDAR: 00024152EFor further information: Ewan Downie, President & CEO, Phone: 807-346-1390, Fax: 807-346-0100, e-mail: Info@premiergoldmines.com, Web Site: www.premiergoldmines.com