Hardrock property in Greenstone boasts over 7.5 million ounces of indicated and inferred gold
Most exploration and development companies in Northern Ontario and indeed around the world are feeling the heat of the down market. But Premier Gold Mines Ltd. of Thunder Bay is feeling it a little less than most – in fact, its future never looked rosier.
It’s likely no coincidence that its president and CEO, Ewan Downie, is a business major rather than a degreed geologist. His strategy of finding untapped resources in past producing mines – and buying them at the right price – has resulted in assets of $375 million and cash equivalents of $50 million.
Downie said that this strong position helps him today when he goes looking for investors. Premier recently finalized a private placement of flow-through shares worth over $9 million.
“Maintaining a good cash balance always helps with raising money, and also allows us in worse times to be able to advance projects,” Downie said. “One of the good things about down markets is that your money goes further because drilling costs and a lot of the other input costs for exploration drop.”
The company’s success doesn’t all come down to numbers though.
Despite a lack of formal geology education, Downie has years of bush experience prospecting, line cutting, and doing whatever was needed to stake and explore a claim, working with his father Iain. Later, he founded several successful companies, including Vytyl Exploration Services and Wolfden Resources.
It was Wolfden where Downie made a name for himself. On one fateful Tuesday in 2003 (‘Happy Tuesday,’” he calls it), Downie got an email about a major find in the West Zone, near the Arctic Ocean coast in Nunavut.
Part of that core sample, which now sits in Downie’s display case along with his other awards and milestones, is so rich in minerals that it looks, feels, and tings like metal instead of rock. He along with the rest of the exploration team won the PDAC’s Prospector of the Year Award in 2004 based on that find.
These days, through Premier, Downie is concentrating on redeveloping older finds in areas of existing infrastructure.
“It’s using that old motto that the best place to look for a new mine is in the shadow of a headframe,” said Downie, or, as has been the key to Premier’s success, below the headframe itself. “The major mining companies have often amassed huge land packages of some of the best ground in North America.”
That makes it difficult for junior companies to acquire these properties, but Downie’s reputation has helped in that respect.
“Just having the credibility so that the majors will talk to you and sell you properties is something that we’ve been quite fortunate with, and has allowed us to buy strategic projects.”
These include a pastproducing mine in Nevada, new discoveries in Red Lake near the Goldcorp mine, and at its Hardrock property in Greenstone, which has over 7.5 million ounces of indicated and inferred gold in both open pit and underground deposits. Hardrock, a past-producing mine abandoned in the 1960s, is part of the Trans-Canada Project, which spans more than 50 kilometres along the highway from Beardmore to Longlac.
“There are great exploration opportunities in the district,” Downie said. “We’ll probably start some early work in 2015, and hopefully we’ll move that into drilling in either 2015 or 2016. We hope to find the next big deposit.”
In Red Lake, Premier has joint ownership of the Rahill-Bonanza project between Goldcorp’s Campbell and Cochenour mines. A new underground tramway gave Premier the opportunity to do some early exploration at 5,400 feet below ground on Rahill-Bonanza.
Downie said they ran into ground issues that prevented them from exploring their number one target, which forced them to bump the project from “flagship” to number three in priority behind Hardrock and its McCoy-Cove property in Nevada.
“(McCoy-Cove is) what we view as a near-term development target. It’s a pastproducing mine much like Hardrock was, but rather than having to build a new open pit, our view is to restart the existing pit.”
Downie said Premier spent $18-$20 million in exploration in 2014. That number is likely to remain the same this year, though the spending will shift as projects mature.
“We are spending probably similar dollars at Hardrock in 2015 as we did in 2014, but more of it will be on development and less in exploration,” Downie said. “Company wide, our budget is pretty similar. In terms of real exploration, the main focus will be McCoy-Cove in Nevada.”
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