Orion to Acquire Centerra Gold’s 50% Interest in the Greenstone Gold Mines Partnership
Orion to Acquire Centerra Gold’s 50% Interest in the
Greenstone Gold Mines Partnership
Thunder Bay and Toronto , Canada - December 15, 2020 – PREMIER GOLD MINES LIMITED (“Premier”) (TSX:PG)
(OTCPK: PIRGF) and CENTERRA GOLD INC. ("Centerra") (TSX: CG) are pleased to announce that an affiliate of the Orion
Mine Finance Group (“Orion”), has entered into an agreement (the “Purchase Agreement”) with Centerra and Premier
pursuant to which Orion will acquire Centerra's 50% interest in the Greenstone Gold Mines Partnership (“GGM”) for
cash consideration of US$225 million (subject to certain adjustments) plus certain contingent payment obligations of
approximately US$75 million (assuming a US$1,500 gold price), described below (the "Transaction"). Premier currently
owns the other 50% of GGM.
GGM’s principal asset is the Hardrock Mine Project (“Hardrock” or the “Project”) located on the Trans-Canada Highway
near Geraldton, Ontario, Canada and represents one of the most significant large-scale, permitted, mine development
opportunities in North America.
Consideration under the Purchase Agreement is comprised of:
• payment on closing from Orion to Centerra in the amount of approximately US$225 million (subject to certain
adjustments); and
• contingent payments due from Orion to Centerra , payable under certain circumstances, as follows (the
"Contingent Payments"):
(i) US$25 million in cash, payable within 24 months following a positive mine construction decision by GGM
with respect to the Project;
(ii) within 30 days of the Project achieving cumulative production of 250,000 ounces of refined gold, Orion shall
deliver to Centerra, at Orion's option, either: (A) 11,111 ounces of refined gold; (B) the cash equivalent value
of 11,111 ounces of refined gold, based on the 20- day average spot gold price ending on the dat e
immediately prior to the date of payment; or (C) a combination of refined gold and a cash equivalent of the
shortfall ounces of refined gold;
(iii) within 30 days of the Project achieving cumulative production of 500,000 ounces of refined gold, Orion shall
deliver to Centerra at Orion's option, either: (A) 11,111 ounces of refined gold; (B) the cash equivalent value
of 11,111 ounces of refined gold, based on the 20- day average spot gold price ending on the date
immediately prior to the date of payment; or (C) a combination of refined gold and a cash equivalent of the
shortfall ounces of refined gold; and
(iv) within 30 days of the Project achieving cumulative production of 700,000 ounces of refined gold, Orion shall
deliver to Centerra at Orion's option, either: (A) 11,111 ounces of refined gold; (B) the cash equivalent value
of 11,111 ounces of refined gold, based on the 20- day average spot gold price ending on the dat e
immediately prior to the date of payment; or (C) a combination of refined gold and a cash equivalent of the
shortfall ounces of refined gold.
Under the terms of the Purchase Agreement, Premier and Centerra, through their respective affiliates, will cause GGM
to provide a guarantee to Centerra in respect of the obligations of Orion to make the Contingent Payments, if any, and
with respect to an early termination amount payable to Centerra upon early termination of the Purchase Agreement
in certain circumstances, all of which will be secured by a fixed and floating charge and a continuing security interest
in the GGM property. Following the closing of the Transaction, Orion intends to support a positive feasibility decision
for the Hardrock project based on the feasibility study conducted in 2019.
The Transaction is subject to customary closing conditions for a transaction of this nature including the approval of the
Toronto Stock Exchange ("TSX") in respect of Premier with respect to the guarantee and the charge described above.
It is also a condition of closing of the Transaction that all parties to the previously-announced Hardrock legal actions
and related counterclaims, as well as Premier and Centerra, will provide a mutual release and consent dismissal in
respect of the action and the related counterclaims. The Transaction is expected to close in January 2021.
“This transaction paves the way for the development of Premier’s flagship asset. We look forward to working with
Orion, a long-standing supportive partner of Premier, in advancing the Hardrock Project on an expedited timeline ”,
stated Ewan Downie, President and CEO of Premier. “This new partnership will unlock the substantial value of one of
North America’s most advanced, permitted and well-located, multi-million-ounce gold projects.”
Istvan Zollei, portfolio manager at Orion, commented: “Orion looks forward to being a partner in turning the Hardrock
Project into Ontario’s next prominent mine. After years of successful exploration and development work, we believe
the Greenstone Project has the potential to grow into a large, long-lived gold mining operation with multiple deposits.”
Affiliates of Orion beneficially own or control approximately 13.9% of the outstanding common shares of Premier and,
as such, Orion is considered a “related party” and an “insider” of Premier for the purposes of applicabl e securities
laws and stock exchange rules . The agreement of Premier under the Purchase Agreement to cause GGM to provide
the above-noted guarantee, and related charge, to Centerra may be considered a “related party transaction” between
Premier, Orion and their respective affiliates for the purposes of Multilateral Instrument 61 -101 – Protection of
Minority Security Holders in Special Transactions (“MI 61 -101”). Premier is relying on exemptions from the formal
valuation and minority approval requirements otherwise mandated by MI 61-101, since at the time the “related party
transaction” was agreed to, neither the fair market value of the subject matter of, nor the fair market value of the
consideration for, the “related party transaction” , insofar as it involves interested parties, exceeds 25 per cent of
Premier’s market capitalization.
CIBC Capital Markets is acting as financial advisor to Premier with respect to the Transaction.
Premier Gold Mines Limited is a gold -producer and respected exploration and development company with a high -
quality pipeline of precious metal projects in proven, accessible, and safe mining jurisdictions in Canada, the United
States, and Mexico.
Centerra Gold Inc. is a Canadian -based gold mining company focused on operating, developing, exploring and
acquiring gold properties in North America, Asia and other markets worldwide and is one of the largest Western-based
gold producers in Central Asia. Centerra operates three mines, the Kumtor Mine in the Kyrgyz Republ ic, the Mount
Milligan Mine in British Columbia, Canada and the Öksüt Mine in Turkey. Centerra's shares trade on the TSX under the
symbol CG. Centerra is based in Toronto, Ontario, Canada.
For further information, please contact:
Ewan Downie, President & CEO
1.888.346.1390
www.premiergoldmines.com
John W. Pearson, Vice President, Investor Relations
(416) 204-1953
www.centerragold.com
This Press Release contains certain information that may constitute “forward-looking information” under applicable Canadian securities legislation. Forward-looking information includes,
but is not limited to, statements about the completion of the acquisition by Orion to acquire Centerra's 50% interest in GGM, Premier’s ability to secure financing for its share of costs
relating to Hardrock, strategic plans, including future operations, future work programs, capital expenditures, discovery and production of mineral s, price of gold and currency exchange
rates, mineral resource and mineral reserve estimates and corporate and technical objectives. Forward-looking information is necessarily based upon a number of assumptions that, while
considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual re sults and future events to differ materially from those
expressed or implied by such forward-looking information, including the risks inherent to the mining industry, adverse economic and market developments, the risks identified in Premier’s
annual information form under the heading “Risk Factors” and the risks identified in Centerra’s 2020 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. Each of Premier and Centerra disclaim 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.