Neighbouring Red Lake's Goldcorp mines.

• Author: Larmour, Adelle
• Position: SPECIAL REPORT: MINING

Premier Gold Mines Limited is spending millions of dollars on its advanced exploration project in the Red Lake Mining Camp in northwestern Ontario.

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Considered to be one of the most strategic land packages of any company in the Red Lake Camp besides Goldcorp's gold mines, president and CEO Ewan Downie says they are spending a total of $10 million with their joint venture partner Goldcorp on the two-year exploration program (2007/08).

The property, known as the Rahill-Bonanza project, located along the main Red Lake mine trend between the Red Lake Gold Mines to the east, is a wholly-owned subsidiary of Goldcorp, and the Cochenour Gold Mine and Bruce Channel discovery to the west.

"We have a good portion of the main geology on the mine trend immediately west of the mine, which is likely the world's highest grade gold mine," Downie explains.

As a relatively new junior, PGM was created when Wolfden Resources Inc., a base and precious metals exploration company created by Downie in the early 1990s, vended its gold assets into the company in August 2006. By June 2007, Wolfden was bought out by Zinifex Limited, a major lead and zinc Australian-based mining company to the tune of $363 million. Downie has now assumed a full-time position as president of Zinifex Canada Limited, the Canadian subsidiary.

"We didn't feel we were getting the proper evaluation for having both advanced-staged gold and base-metal projects in one company," Downie says. "We spun out the gold assets and now Premier is trading near the share price that Wolfden was prior to the takeover."

Although Downie expected Premier to be bought out first, which was part of the reason they did the spin out, he says it continues to trade well on the market. Premier holds...