In an Oct. 22 research note, BMO Capital Markets analyst Andrew Mikitchook reported the main takeaways from a site visit to Premier Gold Mines Ltd.'s (PG:TSX) South Arturo joint venture project with Nevada Gold Mines.
The primary highlight, Mikitchook indicated, is that the El Niño mine at South Arturo in Nevada is now in commercial production, which began in September. Further, mine output could reach 30,000 ounces in 2019, which would surpass the previous expectation of 21,000 ounces.
Of note as well, the analyst wrote, is that "El Niño has extra capacity to mine existing reserves faster or to extend the mine plan to depth toward additional resources and new exploration intercepts." In addition, the potential exists via exploration to expand the mineralization not only at El Niño but also at Phase 3 and East Dee.
As for work in progress at the South Arturo property, noted Mikitchook, testing by five autonomous trucks at Phase 1's prestrip is scheduled to be completed by year-end 2019.
Also, the joint venture is constructing and evaluating an oxide heap leach at Phase 1 as a standalone development at South Arturo or for processing at the North Area.
Further, geological and metallurgical studies are being conducted on Phase 3 to inform the decision on whether or not to add the Phase 3 pit to the reserves and mine plan.
BMO has an Outperform rating and a CA$4.75 per share target price on Premier Gold. The stock is currently trading at around CA$1.95 per share.
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Disclosures from BMO Capital Markets, Premier Gold, October 22, 2019
IMPORTANT DISCLOSURES
Analyst's Certification
I, Andrew Mikitchook, hereby certify that the views expressed in this report accurately reflect my personal views about the subject securities or issuers. I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.
Analysts who prepared this report are compensated based upon (among other factors) the overall profitability of BMO Capital Markets and their affiliates, which includes the overall profitability of investment banking services. Compensation for research is based on effectiveness in generating new ideas and in communication of ideas to clients, performance of recommendations, accuracy of earnings estimates, and service to clients.
Disclosure 16: A research analyst has extensively viewed the material operations of Premier Gold.
Disclosure 17: Premier Gold has paid or reimbursed some or all of the research analyst's travel expenses.
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