To date, 177m has been developed along the vein, presenting widths from 0.8m to 5.2m and averaging 3m of true width. The last 93m of the development returned an average grade of 4.9 grams per tonne for an average true width of 3.9m. The grade is 39% higher than the 2018 Lupita measured and indicated resource, which was 3.52g/t. Development is expected to continue for a further 100m.
"Our underground development program is confirming Lupita Extension as an important contributor to the future of Mercedes. We are now working to determine how best to bring this newest discovery to production," said EVP Stephen McGibbon.
During 2019, Premier undertook a 42,000m exploration and delineation core drilling programme at Mercedes, with a focus on delineating new mineral resources in the Lupita Extension area as well as confirming potentially important discoveries at San Martin and Neo. A delineation programme of 87 drill holes extended the known Lupita mineralisation along a strike length of 300m with the extension returning high grades and widths compared to Lupita. Drilling highlights at Lupita Extension included 8.9m grading 9.41g/t gold and 34.15g/t silver.
The Lupita discovery outcrop hosts a 3m wide silicified vein of typical low-sulphidation epithermal textures and diagnostic green quartz. The Lupita Extension drilling was designed to expand the Lupita resource to the west. Even further west is the San Martin target discovered with an intercept of 1.5m grading 5.56g/t in May 2019. More recent drilling has returned an intercept of 1.4m grading 15.80g/t gold and 69g/t silver. More delineation is planned in 2020 to upgrade mineralisation to an indicated resource.
Reporting its 2019 production results in January, president and CEO Ewan Downie said the past year was "a trying year for our Mercedes mine" due to the impacts of variable grade and dilution on production and costs, and seeing the company put additional effort into its exploration efforts.
Premier issued 2020 production guidance for Mercedes of 65,000 to 75,000oz an all-in sustaining costs of between US$1,125 to $1,275/oz.
Shares in Premier Gold Mines are trading at C$1.55, valuing the company at $329 million. Its stock has begun 2020 on a downward trend despite higher gold prices due to its production issues.
