Premier announces closing of non-brokered convertible debenture private placement for $11.5 million by its subsidiary Premier Royalty Corporation

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Shares Issued:  138,352,462

THUNDER BAY, ON, July 11, 2012 /CNW/ - PREMIER GOLD MINES LIMITED (PG:TSX) ("Premier Gold" or the "Company") is pleased to announce the closing of a private placement (the "Private Placement") by its wholly-owned subsidiary, Premier Royalty Corporation ("Premier Royalty"), of an aggregate $11,500,000.00 principal amount of convertible debentures of Premier Royalty, which accrue interest at a rate of 8% per annum (the "Convertible Debentures"). The Convertible Debentures mature on May 31, 2013 unless, among other things, they are automatically converted as a result of the occurrence of a going public transaction by Premier Royalty, including the closing of the previously announced business combination transaction (the "Bridgeport Transaction") involving Premier Royalty and Bridgeport Ventures Inc. ("Bridgeport"). Upon completion of the Bridgeport Transaction the principal amount outstanding under the Convertible Debentures together with all accrued interest thereon will be converted into units of Bridgeport at a conversion price of $0.35 per unit (on a pre-consolidated basis), with each unit consisting of one common share of Bridgeport and 0.375 of a Bridgeport warrant (on a pre-consolidated basis). Each whole warrant (a "Bridgeport Warrant") will be exercisable at a price of $0.50 (each on a pre-consolidated basis) for a period commencing on the date that is six months following the completion of the Bridgeport Transaction and ending on the date that is four years following completion of the Bridgeport Transaction, subject to early expiry upon the occurrence of certain events.

The debenture also provides  that in the event of a going public transaction for Premier Royalty other than the Bridgeport Transaction prior to the maturity date of the Convertible Debentures, the whole of the principal amount outstanding under each debenture together with all accrued interest thereon will be converted into common shares of the resulting entity at a conversion price equal to 90% of the price per share that Premier Royalty or its securityholders receive on the creation, issuance and/or sale of such shares pursuant to such going public transaction, as applicable, subject to the provisions of the Convertible Debentures.

The proceeds of the Private Placement will be used for royalty acquisitions and working capital.

Abraham Drost, Chairman of Premier Royalty Corporation stated that "we are gratified with the healthy demand and relatively rapid completion of this financing into Premier Royalty Corporation out of the box and in a tough market. It speaks to the quality of our precious metal royalty asset base and a growing recognition that Premier Royalty Corporation will become a significant new player on the royalty landscape."

About Premier Gold Mines Limited and Premier Royalty Corporation

Premier Royalty Corporation is a wholly-owned subsidiary of Premier Gold Mines Limited, one of North America's leading exploration and development companies with a high-quality pipeline of projects focused in proven, safe and accessible mining jurisdictions in Canada and the United States. Premier's portfolio includes significant assets in world class gold mining districts such as Red Lake, Musselwhite and Geraldton in Ontario and the Carlin Trend in Nevada. Premier believes that consolidating existing royalties owned by Premier Gold combined with acquisition of other high quality cash flowing royalty assets into Premier Royalty can form the basis of a transaction that is value accretive to Premier shareholders.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION: This news release includes certain information that may constitute "forward-looking information" under applicable Canadian securities legislation. Forward-looking information includes, but is not limited to, statements about strategic plans, including a going public transaction involving Premier Royalty and the completion of the Bridgeport Transaction. Forward-looking information is necessarily based upon a number of estimates and 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 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. The Company 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
Premier Gold Mines Limited

Abraham Drost, P.Geo., Chairman
Premier Royalty Corporation

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e-mail: [email protected]   Web Site: www.premiergoldmines.com