Premier Gold announces sale of shares and warrants of Premier Royalty Shares Issued: 149,027,712 THUNDER BAY, ON, Jan. 29, 2013 /CNW/ - PREMIER GOLD MINES LIMITED (TSX:PG) ("Premier Gold" or the "Company") is pleased to announce that it has entered into a share purchase agreement (the "Agreement") with Sandstorm Gold Ltd. ("Sandstorm") pursuant to which Sandstorm will acquire 33,655,821 common shares (the "Common Shares") and 6,965,676 warrants (the "Warrants") of Premier Royalty Inc. ("Premier Royalty" or "NSR") from Premier Gold, representing Premier Gold's entire position in Premier Royalty. The Warrants are exercisable to acquire one common share of Premier Royalty at a price of $2.00. 5,508,176 of such Warrants expire on December 4, 2016 (subject to expiry acceleration provisions) and 1,457,500 Warrants expire on October 7, 2014. This deposition of a non-core asset further bolsters Premier Gold's already strong treasury and will allow the Company to focus its efforts on advancing its high quality project portfolio. Pursuant to the terms of the Agreement, each one Common Share and 0.207 of a Warrant (together, a "Premier Royalty Unit") will be transferred to Sandstorm at a price of $2.10 per Premier Royalty Unit, representing a total consideration of $70,677,224. The total consideration for the Premier Royalty Units will be satisfied by the issuance of 5,604,277 special warrants in the capital of Sandstorm (subject to the approval of the Toronto Stock Exchange), each being exercisable for no additional consideration into one common share of Sandstorm in accordance with the terms thereof. In connection with the transaction, Sandstorm has also provided Premier Gold with a temporary six month credit facility up to US$70 million, which will bear interest at a 0.3% premium to the interest rate that Sandstorm would be charged by its lenders if funds were drawn from its revolving debt facility. The sale of Premier Royalty Common Shares and Warrants will result in a gain of more than $35 million for Premier Gold following the creation of Premier Royalty approximately 14 months ago. The Agreement contains a top up provision whereby if Sandstorm acquires 100% of the remaining issued and outstanding securities of Premier Royalty on or before the 18 month anniversary of the execution of the Agreement (the "Subsequent Acquisition") and the average price of the securities of Premier Royalty purchased through the Subsequent Acquisition is greater than the per unit price paid by Sandstorm under the Agreement, Sandstorm must pay Premier Gold an amount that is equal to the difference between the per unit price paid under the Agreement, and the average price of the voting securities of Premier Royalty that Premier Gold would have received if Premier Gold sold the Common Shares and Warrants to Sandstorm pursuant to the Subsequent Acquisition. "Sandstorm has done an excellent job growing its group of companies and is in a better position to assist NSR in developing its portfolio. This sale will provide Premier Royalty access to greater opportunity and resources, while allowing Premier Gold Mines to crystalize a gain that started from a portfolio of royalties that was given little or no value." stated Ewan Downie, "Premier Gold Mines now finds itself in the currently uncommon position in this market environment of having the resources to not only continue its aggressive development strategy but also the financial means to capitalize on the right opportunity should it present itself." Premier Gold holds several strategic assets in safe, accessible, mining jurisdictions that include several of the premier gold assets in North America. Management is committed to building an industry-best team with substantial mineral exploration and mine development experience with the financial capability to grow its business and successfully transition from explorer to developer. In the past 12 months, Premier Gold has made several key management additions including Mr. Ebe Scherkus as Director and Chairman, Paul-Henri Girard as Senior Mining Advisor, and Claude Lemasson as Director. With cash and investments of more than $150 million, Premier Gold is in an enviable position of being able to aggressively advance its multiple projects which will include the largest budget in company history of approximately $30 million being spent in 2013 on exploration and development. Premier Gold recently provided an updated resource estimate for the Company's 100% owned Trans-Canada Project that demonstrates a substantial project with gold mineral resources in multiple deposits with 775,000 ounces in the measured category, 3.34 million ounces in the indicated category and 3.65 million ounces in the inferred category. Preliminary mine modeling concepts for the Brookbank and Hardrock deposits are being worked in advance of a planned PEA later in 2013. Premier Gold has received Environmental Compliance Approval and a Permit to Take Water from the Ontario Ministry of the Environment, important steps for the potential advancement of the Trans-Canada Project. The Trans-Canada project benefits from substantial infrastructure advantages given its location on the Trans-Canada highway with existing power lines on the project site. 2013 will also mark a year of an aggressive expansion and delineation drill program at the Cove Gold Project in Nevada where an initial resource is expected in late 2013. Permitting is also underway to allow for further resource expansion which will lead into Advanced Exploration including potential underground access to the high-grade mineralized zones currently being targeted by surface drilling. At Red Lake, underground drilling is being accelerated from the tram development currently being excavated through the Rahill-Bonanza joint venture project. Early drilling has identified favourable geology, mineralization and structures on the JV property. Stephen McGibbon, P. Geo., is the Qualified Person for the information contained in this press release and is a Qualified Person within the meaning of National Instrument 43-101. Premier Gold Mines Limited is one of North America's leading exploration and development companies with a high-quality pipeline of gold projects focused in proven, safe and accessible mining jurisdictions in Canada and the United States. The Company is fully financed with approximately $150 million in cash and investments, no debt and a portfolio of advanced-stage assets in world class gold mining districts such as Red Lake, Musselwhite and Geraldton in Ontario and the most prolific gold trends in Nevada. This Press Release contains certain information that may constitute "forward-looking information" under applicable Canadian securities legislation. Forwardlooking information includes, but is not limited to, statements about strategic plans, including future operations, future work programs, capital expenditures, discovery and production of minerals, price of gold and currency exchange rates, timing of geological reports and corporate and technical objectives. Forwardlooking information is necessarily based upon a number of assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking information, including the risks inherent to the mining industry, adverse economic and market developments and the risks identified in Premier Gold's annual information form under the heading "Risk Factors". There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking information. All forward-looking information contained in this press release is given as of the date hereof and is based upon the opinions and estimates of management and information available to management as at the date hereof. Premier Gold disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law. Ewan Downie, President & CEO Phone: 807-346-1390 Fax: 807-346-0100 e-mail:Info@premiergoldmines.com Web Site:www.premiergoldmines.com SOURCE: Premier Gold Mines Limited To view this news release in HTML formatting, please use the following URL: http://www.newswire.ca/en/releases/archive/January2013/29/c9345.html CO: Premier Gold Mines Limited ST: Ontario NI: MNG MNA -0- Jan/29/2013 14:00 GMT
Premier Gold announces sale of shares and warrants of Premier Royalty
Press spacebar to pause and continue. Press esc to stop.