A Golden Age for a Gold Explorer
When you are born into a mining family, you get to have life experiences that most other people do not. For Ewan Downie, CEO, president and director of Premier Gold Mines, it meant growing up on various mining sites with his geologist father. Downie now applies his life experiences to his company.
Premier Gold Mines is a North American-focused exploration gold mine that is on the cusp of growing into a fully-focused gold mining company. Its current portfolio of projects includes some of Canada’s and the United States’ most promising sites and projects for gold exploration and development.
“Generally the market has always conceived Premier as a company that is setting itself up to be taken over,” said Downie in an exclusive interview with Canadian BOSS Magazine. “But our recent deal [the Trans-Canada Project with joint venture partner Centerra Gold] shows that we’re more interested in remaining a player in the industry.
“We’ve done a really good job of attracting a top development team into the company. A few years ago we had an entirely exploration focused staff that ran the company.
Now we have a great balance between explorers and developers.”Two or three years ago, Premier only employed explorers, a team that had been assembled over many years to explore some of the top mining camps in North America. Downie was enthusiastic about his team, which he said is comprised of some of the “smartest people in the world in the field.” Now that the company has expanded beyond exploration, he has the opportunity to employ and learn from a new class of people at Premier.
The long-lasting relationships Premier has built with its employees and other players in the industry means the next several years of exploration, development and, eventually, production has begun a sort of “Golden Age” for the company.
The Hardrock property, located within the borders of the Trans-Canada project in Northern Ontario, had been a functioning mine up until the 1960s, and had received very little exploration focus since. Wolfden Resources Corporation, the company Downie founded, flagged the property as a promising potential future site for an open pit deposit.
Downie and his company pursued the Hardrock acquisition for a number of years, trying unsuccessfully to make the acquisition several times from 2000 to 2008 from Barrick Gold Corporation, now the world’s largest gold mining corporation, who at the time owned the Hardrock Property. Once the global recession hit in 2008, an opportunity finally presented itself to Premier.
Since the acquisition, Premier has successfully delineated a substantial gold resource at Hardrock, one that recently attracted a joint venture partner, Centerra Gold, to advance the project towards mine development. Centerra, another North American-based gold mining and exploration company, is investing nearly $300 million into the Trans-Canada Project to acquire a 50/50 stake hold.
Premier contributed all property, assets and rights it held in respect of the Trans-Canada Property to the partnership in consideration for its 50 percent interest in the partnership, and Centerra has made an initial cash contribution to the partnership in the amount of $85 million for its 50 percent limited partner interest, and will invest $185 million into direct project advancement expenditures.
“Not only did it [the joint venture] provide Premier with a large amount of cash, but it also provided Premier with some additional clout in the industry,” shared Downie. “I believe that Premier was being held back somewhat by the fact that in this market environment, a lot of people were doubting that Premier could bring the project into development given the capital required to build the mine. This project was maybe seen to be a bit over Premier’s head in the current environment.
“The joint venture really de-risked the project and brought on a well-financed partner that has good experience and has developing mines in numerous countries. Centerra has a very strong history of building and running successful mines. It helps provide additional strengths to the partnership that, in my opinion, will be key to a very strong future mining project.”
“Now that the exploration portion of the joint venture is complete, the strong multitalented exploration team believes this is one of the more substantial gold deposits discovered in the last decade in this region of the world. The joint venture between Premier and Centerra consists of recently formed joint management company—Greenstone Gold Mines— overseen by two board members from both Premier and Centerra and equally owned by the two companies. The joint partnership will move forward with a plan to start developing the site.”
MCCOY COVE PROPERTY
The McCoy Cove Property came to be part of Premier Gold Mine’s portfolio in a similar manner to the Trans-Canada project. Downie wanted to look for a key asset outside Ontario, preferring Nevada in the United States’, and North America’s most prolific gold district. Downie and his team spent a lot of late nights researching the best prospective options, and finally decided to pursue McCoy Cove.
“The more recent downturn in the market made it difficult for Victoria Gold Corp to continue to advance McCoy Cove,” said Downie. “Victoria had a lease on the property from Newmont Mining and because of market conditions it was essentially idle. We were able to acquire Victoria’s interest and, subsequent to that, we were able to negotiate Newmont out of the property to get 100 percent.”
The 100 percent ownership in the project came in September of last year. The property is a huge land package in the core of Eureka-Battle Mountain in north-central Nevada with incredible deposit opportunities, but relatively little exploration to this point. Downie shared that the next several years will see a concerted exploration and development plan that will ultimately prove the potential of McCoy Cove.
Before turning some of the company’s attention to the Hasaga property, its portfolio of assets was already stronger than many in the industry would expect for a so-called junior mining company. But the Hasaga property acquisition could be a game-changer for Premier.
At the time Downie and his team at Premier were approaching Barrick about Hardrock, they also attempted to acquire Hasaga from the major miner. Located in the Red Lake area of Nevada, Hasaga was an idle property that had not seen any major exploration activity since the 1950s.
Barrick ultimately sold the property to Goldcorp, but Premier was recently successful in negotiating to acquire a 100% ownership in the property from Goldcorp, Premier’s partner at the Rahill-Bonanza Property in Red Lake.
“Hasaga is a really interesting acquisition for us,” commented Downie. “One of our company strengths is being able to not only identify these types of property acquisition opportunities, but also having the credibility to go in and talk to the major mining companies and at the end of the day making the acquisition. I think Hasaga is going to be one of Premier’s next major exploration successes.”
Downie also shared that he and Premier view the Hasaga property much like they do McCoy Cove: it was a property sitting in the heart of a camp owned by a major mining company, idle. He explained that the last several decades have seen these majors assembling substantial land packages in areas where there is great potential, but not doing the exploration or development work necessary to prove the potential.
Hasaga and McCoy Cove will be Premier’s main investments in 2015 with around $12 to $15 million spent on the two properties, exploring and building resources. Premier’s exploration budget in 2015 exceeds the market capitization of many junior miners’, giving them an opportunity with these properties in the market downturn.
“I think we’re in a unique position to continue to grow our company in a difficult market,” Downie said.
Ewan Downie’s experiences on mining sites as a child really influenced his approach to the industry in the present.
“I’d rather be on the inside a mining camp looking out rather than on the outside looking in,” he shared. “Most of the assets in our portfolio are substantial land packages in the heart of areas typically owned by the major mining companies. It’s a good place to be.”
Premier Gold Mines has been a company that has proven it has dealt well with bad markets. Downturns in the mining industry have proven to be the best of times for Premier to acquire good assets, giving the company the chance to look at these cyclical downturn markets as an opportunity.
“We’ve assembled an impressive portfolio of significant projects, and a treasury that will carry on for years. Our goal is to take a prospective property from an idea or concept into exploration and development success, and eventually production,” Downie said.
A World of Opportunity
PREMIER is an aggressive North American-focused exploration and development company with multiple gold projects located in the heart of world-class mining districts. Canadian-based projects explore the Superior Geological Sub-Province of Ontario, one of the world's most richly-endowed mineral regions and the birthplace of several venerable Canadian gold producers. Our American-based projects are located along Nevada's Battle Mountain-Eureka Trend and Carlin Trend, two of the largest and most productive accumulations of gold deposits in North America. The PREMIER DIFFERENCE includes core projects, each with potential as "company-makers".
Our business model leads to exploration discoveries, while reducing shareholder exposure to risk, by focusing on:
• PROVEN MANAGEMENT
• WORLD-CLASS DISTRICTS
• SAFE JURISDICTIONS
• SENSIBLE PARTNERSHIPS
At Premier Gold Mines Limited, "A World of Opportunity" embodies the Purpose, Strategy and Values critical to the success of our organization and to the well-being of our employees, their families and our local communities.
It's an opportunity we wake up to everyday.