Premier Gold Mines and Sutter Gold Mining Inc (SGMI; SGM.V) have a joint venture within the Santa Teresa mineral concession, located in the historic and high grade El Alamo District of Baja California Norte, Mexico. The concession is accessible by road, located 10 kilometres west of Highway 3, some 100 kilometres southeast of Ensenada and about 250 kilometres from San Diego, California, USA.
This joint venture (JV) meshes well with Premier's NW Ontario assets as:
- It is located within a proven (some 220,000 ounces of past production) gold district.
- Historical data indicates that mined grades within the district are between 1.00 and 2.00 ounces per ton (opt).
- The majority of district production occurred within 120 metres of surface, but remains open at depth.
- It has characteristics similar to the historic Mother Lode District of California.
The Santa Teresa Concession (STC) is located adjacent to and on strike from the past-producing Princessa Mine (the district's largest gold producer), whose orebody was known to extend close to the STC boundary. Data suggests that extensions of the Princessa Mine along strike and at depth have not been tested. The El Alamo District's gold production halted at its peak owing to technological and political circumstances early in the 20th century, thus presenting a unique opportunity for exploration. The mineralization in the district is characterized by common visible gold hosted within narrow and near-vertical quartz veins associated with felsic intrusives.
Premier's senior management experience in the Red Lake District of NW Ontario coupled with Sutter's experience in the Mother Lode District of California makes this JV team extremely well-suited to exploring the El Alamo District successfully.
Premier will earn an initial 50% interest in the project by:
- Making payment of 100,000 shares of free-trading Premier stock to SGMI.
- Completing US$1.5 million in exploration and property acquisitions within two years, including US$1 million within one year of signing the JV agreement.
- Reimbursing SGMI for all payments (~US$225,000) over a four-year period to the original vendor of the property.
In addition, Premier has secured the right to earn an additional 15% interest in the JV (for a total interest of 65%) by making a further cash payment of $500,000 to SGMI and conducting an additional US$4.0 million in exploration on the property.
Due to the potential of and the success that Premier has been having on its three core projects in Ontario and Nevada, there is no exploration planned for this property in the near future.