Premier - Red Lake discover new gold zones at East Bay

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THUNDER BAY, ON, May 10 /CNW/ - PREMIER GOLD MINES LIMITED (TSX:PG) is pleased to announce that drilling at the East Bay Project in the Red Lake gold mining district of Ontario has discovered a potentially significant gold bearing system. The East Bay Project is located along the East Bay Trend to the north of, and on strike from, Rubicon Minerals Phoenix Gold Project, which has garnered considerable market attention for its F2 Zone discovery.

The East Bay project is one of two joint ventures Premier holds in the heart of the prolific Red Lake gold mining district in partnership with Red Lake Gold Mines Limited ("RLGM"), an affiliate of Goldcorp Inc. A portion of the East Bay Property is held 35% by Premier while the "Rivard Block", adjacent to the new discovery, is held 50/50 with RLGM. The Rahill-Bonanza joint venture Project (Premier 49%) is located between the world class Red Lake Gold Mines complex to the east, and the Cochenour (Bruce Channel) complex to the west and will be subject to an upcoming summer drill program aimed primarily at delineating the recently discovered PG70 Zone.

During the winter of 2010, 5 holes were completed to test four targets based on the F2 Model and proximal to a major regional shear zone at the footwall of the East Bay Ultramafic Trend. Of the primary targets, where cross-cutting structures were interpreted to cut the East Bay Trend, one contained gold mineralization associated with a major mineralized shear zone. Due to ice conditions, several favourable structures remain untested. Hole EBJV10174, a single hole into the target, intersected high grade gold within a quartz vein containing visible gold as well as gold associated with a mineralized shear zone. Hole EBJV10175 tested the shear zone 500 m to the northeast and also intersected similar mineralization. Highlights from the new discovery area include:

    
    -   51.04 g/t Au across 0.7 m (1.49 oz/ton across 2.3 feet) within the
        QV Zone

    -   7.25 g/t Au across 2.8 m (0.21 oz/ton across 9.0 feet) within the
        Shear Zone
    

Table 1: Summary of 2010 East Bay Intercepts

    
    -------------------------------------------------------------------------
                 UTM        Dip/               Inter- Grade Inter- Grade
             Coordinates  Azimuth   From    To   val    (g/   val   (oz/
    Hole-ID   (m) NAD 27 (degrees)   (m)    (m)  (m)  tonne)  (ft)  ton) Zone
    -------------------------------------------------------------------------
              5667676 N            510.3  511.0  0.7  51.04   2.3  1.49   QV
    EBJV10174  450845 E  m-59/133 -------------------------------------------
                                  565.65  568.4  2.8   7.25   9.0  0.21  EBSZ
    -------------------------------------------------------------------------
              5667945 N            195.0  196.0  1.0   4.77   3.3  0.14  EBSZ
    EBJV10175  451351 E  m-66/152 -------------------------------------------
                                   200.0  202.0  2.0   3.15   6.6  0.09  EBSZ
    -------------------------------------------------------------------------
    *    True widths estimated at 80% of intersection width
    (xx)   QV = Quartz Vein, EBSZ = East Bay Shear Zone
    

The gold bearing system shares several similarities to the F2 Zone. The QV Zone is comprised of a quartz vein zone in biotite-altered porphyry containing 3% disseminated pyrrhotite and Visible Gold. The EBSZ is hosted within deformed, silicified basalt and biotite-altered porphyry on the footwall side (east) of the East Bay Serpentinite. The zone contains about 5% disseminated pyrrhotite. Figure 1 displays the location of the East Bay joint venture property. The partnership is considering a summer drill program at East Bay.

Tim Twomey, Exploration Manager for Premier, said, "The identification of significant gold mineralization associated with biotite altered porphyry on our East Bay project is similar to the primary gold zones at Rubicon's F2 deposit. What's truly exciting is that we have several kilometres of untested strike length as well as down-dip potential of this new discovery area".

    
    Figure 1
    --------
    

To view a map of the East Bay joint venture property please visit: http://files.newswire.ca/598/premierfig1.pdf

In addition to the Red Lake joint venture projects, Premier has five drills that will be active throughout the year on the Company's Hardrock Project (Premier holds a 70% interest) where approximately 70,000 metres of drilling is planned. In 2009, drilling at Hardrock successfully identified multiple open pit and underground style gold zones. Recent drilling in the NN Zone intersected an impressive 22.97 g/t Au across 24.8 metres (0.67 oz/ton across 81.3 feet). This drilling is expanding on the recently announced a NI43-101 compliant resource estimate relating to the near-surface (open pit) zones at Hardrock. Premier expects to complete a revised resource estimate for both the near-surface and underground zones following the completion of the 2010 drill program.

    
    PQ North Project
    ----------------
    

Drilling was recently completed on the Company's 100% owned PQ North Property that is strategically located on the PQ limb of the key iron formation that is host to Goldcorp's Musselwhite Gold Mine. Musselwhite produced 233,000 ounces of gold in 2009. Drilling at PQ North has discovered mineralized zones with gold grades and widths comparable to those at Musselwhite, within a near-identical geological setting. The furthest north intersection in the PQL Zone in 2010 returned 5.65 grams per tonne gold (g/t Au) across 3.0 metres (m), in PQ10032 from 687.0 m to 690.0 m. This has now outlined a continuous zone for a plunge length of 325 m that remains open down-plunge. Three holes tested the MA Zone in 2010 and returned up to 7.09 g/t Au across 1.0 m in PQ10028. Four holes investigated the East Limb of the iron formation for the first time and three of these returned anomalous results, up to 11.05 g/t Au across 1.0 m in PQ10025. The shape of this limb is now better understood and it contains excellent untested targets where the auriferous limb is intersected by vertical shear zones. These targets are expected to be tested in the next drilling phase.

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. Assay results are from core samples sent to Activation Laboratories, an accredited mineral analysis laboratory in Ancaster, Ontario, or to Accurassay Laboratories, an accredited mineral analysis laboratory in Thunder Bay, Ontario, for preparation and analysis utilizing both fire assay and screen metallic methods. Initial assays reported here are primarily from fire assay methods with an AA finish - some intercepts listed in this release will also be run with screen metallic methods.

Premier Gold Mines Limited is a well financed Canadian-based mineral exploration and development company with several projects and deposits in Northwestern Ontario and a joint venture in Mexico. In the Red Lake gold mining camp, two are operated in joint venture with Red Lake Gold Mines. The company also owns a strategic project located on the main Musselwhite Gold Mine trend and holds a 70% interest in the Hardrock Project.

The statements made in this Press Release may contain forward-looking statements that may involve a number of risks and uncertainties. Actual events or results could differ materially from the Company's expectations and projections.

%SEDAR: 00024152E

For further information: Ewan Downie, President & CEO, Phone: [phone], Fax: [phone], e-mail: [email protected], Web Site: www.premiergoldmines.com