Premier Gold Mines Ltd. [PG-TSX; PIRGF-OTC] on Friday January 24 said a trying year at its Mercedes Mine in Sonora, Mexico prevented the company for achieving its production targets in 2019.
After producing 67,427 ounces of gold and 192,829 ounces of silver in 2019, which was below guidance of between 75,000 and 85,000 gold ounces, the company is currently working on initiatives to ensure increased and more reliable production for 2020 and beyond.
Premier Gold is a gold producer as well as an exploration and development company with a focus on properties in Canada, the United States and Mexico. Premier is aiming to emerge as a low-cost, mid-tier gold producer via its two producing gold mines, South Arturo and Mercedes, and through future mine development opportunities at Hardrock and McCoy-Cove in Nevada.
Mercedes is a 2,000 tonnes-per-day underground gold-silver mine located in Sonora State in northern Mexico, about 250 km northeast of Hermosillo. As of December 31, 2019, Proven and Probable gold reserves stood at 395,000 ounces at a grade of 3.63 g/t.
The project also hosts proven and probable silver reserves of 2.72 million ounces at a grade of 25.05 g/t.
In 2019, Mercedes produced 59,901 ounces of gold and 191,306 ounces of silver.
At Mercedes, excessive dilution led to lower than planned grades and therefore fewer than planned gold ounces produced during the year. However, the company said it identified several factors contributing to the lower than planned grades and is working on initiatives to ensure increased and more reliable production for 2020 and beyond.
“2019 was a trying year for our Mercedes Mine,” said Premier Gold President and CEO Ewan Downie. “However, we believe that we understand the challenges faced by the mine this past year and have a plan in place to address them,” he said.
“We believe our continued exploration successes at Mercedes and the resumption of mining at South Arturo will contribute to production for years to come and provide a platform for our company’s growth.”
Premier is completing a 42,000-metre exploration and delineation core drilling program at Mercedes. The aim is to delineate new mineral resources in the Lupita Extension area as well as confirming potentially important discoveries at the San Martin and Neo areas.
Meanwhile, the company said commercial production was declared more than three months ahead of schedule at South Arturo’s El Nino Mine. Ore tons mined during the fourth quarter were considerably above plan the company said.
South Arturo produced 7,526 ounces of gold and 1,523 ounces of silver in 2019.
On Friday, Premier Gold shares eased 0.6% or $0.01 to $1.65, and trade in a 52-week range of $1.41 and $2.55.