Premier Gold Mines Consolidates Control of Potentially World-class Cove-McCoy Project
Premier Gold has signed a binding agreement with Newmont Mining that will see the company consolidate a 100-percent interest in the Cove-McCoy gold properties in Nevada. The deal bodes very well for Premier Gold, according to Cantor Fitzgerald analyst Rob Chang.
Yesterday was certainly exciting for those with an interest in Premier Gold Mines (TSX:PG). The company announced Tuesday that it has signed a binding agreement with Newmont Mining (NYSE:NEM) that will see Premier consolidate a 100-percent interest in the Cove-McCoy gold properties in Nevada. Premier Gold is a North America-focused exploration and development company with gold projects located in Ontario as well as in the heart of Nevada's Carlin and Battle Mountain trends. According to Tuesday's release, the Cove-McCoy mines have been quite productive in the past, turning out roughly 3.3 million ounces of gold and 110 million ounces of silver in the 20 years between 1986 and 2006. Good news Premier Gold's president and CEO, Ewan Downie, commented on the deal in Tuesday's press release, stating that the "[t]erms of the agreement support a common sense first step toward building a long-lived gold and silver-producing asset that is very attractive for our shareholders. This important acquisition secures for Premier a 100% interest in a substantial and complementary land package located in the heart of one of the world's most prolific gold districts." Analyst Rob Chang of Cantor Fitzgerald also views the deal as positive. He said, "[w]e believe the consolidation of the project and the elimination of back-in rights to Newmont gives Premier full control of a potentially world-class project." Echoing that statement, Hebba Investments (writing for Seeking Alpha) said that the transaction "should be noted by investors because it obviously removes Newmont from the picture in terms of buying out the property." Hebba also suggested that Premier may be looking to "become a mid-tier producer by developing multiple properties in parallel," also stating that the transaction is interesting in that it illustrates confidence from Premier's management in the Nevada properties. "We think investors should take this transaction as bullish news for the company," Hebba concluded.