Premier Gold Mines (TSX: PG) is currently evaluating asset reorganization options to maximize the value of its property portfolio, which potentially include spinning out to its shareholders the company’s US subsidiary that holds its Nevada assets, the company stated on Wednesday.
If the spin-out is completed, it is expected to be a standalone, US-based publicly listed gold company that will include the South Arturo and McCoy-Cove properties. Additional acquisition opportunities are also being assessed by the company through its US subsidiary.
“We are exploring the attractiveness of creating two companies that would benefit from streamlined property portfolios and a simplified domestic investment thesis,” Premier Gold Mines president and CEO Ewan Downie said in a press release.
Premier is in the process of completing an updated technical report for South Arturo and is drill-testing the down-dip extension of the El Nino mine
“Premier has assembled a high-quality portfolio of assets spanning exploration to mining operations and we believe the market is not fully valuing the sum of the parts. This is one option we are considering to change that,” Downie added.
A final decision has not been made, the company cautioned, and there can be no assurance that this evaluation will result in a spin-out or other similar transaction.
The South Arturo mine, located in the heart of the Carlin Trend in Nevada, is operated by joint venture partner Nevada Gold Mines, a partnership between Barrick Gold and Newmont Mining. The El Nino underground mine was brought into production in the second half of 2019, and the partners are currently assessing additional developments on the property including the Phase 1 and Phase 3 open-pit projects and a potential on-site heap leach facility.
Premier is in the process of completing an updated technical report for South Arturo and is drill-testing the down-dip extension of the El Nino mine and upper targets within and proximal to the proposed Phase 1 and Phase 3 pits.
The McCoy-Cove property is host to one of the highest-grade undeveloped gold deposits in Nevada. According to the preliminary economic assessment released in 2018, the project contains indicated mineral resources of 1,045,000 tonnes at 0.327 oz/t Au (342,000 ounces) and inferred mineral resources of 4,037,000 tonnes at 0.327 oz/t Au (1,322,000 ounces).
Premier is currently completing a hydrological modelling study and additional metallurgical work in advance of beginning construction of a ramp to complete delineation drilling, bulk sampling and a feasibility Study.
Shares of Premier Gold Mines jumped 3.2% on the TSX by 2:30 p.m. EDT Wednesday. The company currently has a market capitalization of C$692.9 million.