Premier Gold May Opt to Spin Off Hardrock Deposit (Update1)
bloomberg.com
By Rob Delaney
March 10 (Bloomberg) -- Premier Gold Mines Ltd., owner of deposits in Canada’s Red Lake district with Goldcorp Inc., said it may spin off one of its newer properties to boost the asset’s value.
Competitors have shown interest in buying Premier’s Hardrock project in Ontario, part of a Barrick Gold Corp. subsidiary Premier bought in 2008, Chief Executive Officer Ewan Downie said. Premier may create more value by separating Hardrock from its two other projects in the province, he said.
Premier’s Rahill-Bonanza project in Ontario’s Red Lake district is 51 percent-owned by Goldcorp, the world’s second- biggest gold producer by market value. The company’s PQ North project is near Goldcorp’s Musselwhite mine and shares the same mineral formation, according to Downie.
“Having Goldcorp as a partner in Red Lake with them at 51 may be a bit of a deterrent,” Downie said in an interview in Toronto yesterday. “By the end of the year, if Hardrock continues to provide the results it has, at that point we may look at making it its own vehicle.”
The Red Lake district accounts for the largest share of Goldcorp’s output and produced an estimated 620,000 ounces of gold last year, according to the company’s Web site. In 2008, Goldcorp agreed to buy Gold Eagle Mines Ltd. for C$1.5 billion ($1.46 billion) to gain control of more resources at Red Lake.
Premier, whose shares have doubled in the past year, rose 10 cents, or 2.5 percent, to C$4.06 at 3:59 p.m. on the Toronto Stock Exchange.
To contact the reporter on this story: Rob Delaney in Toronto at robdelaney@bloomberg.net.
Last Updated: March 10, 2010 17:00 EST |
