PREMIER GOLD MINES LIMITED

TECHNICAL REPORT ON THE

MERCEDES GOLD-SILVER MINE,
SONORA STATE, MEXICO

NI 43-101 Report

Qualified Persons:
Kathleen Ann Altman, Ph.D.,
P.E. Grant A. Malensek,
[Link]./[Link]. Chester M. Moore,
[Link].

April 18, 2018

RP 55 University Ave. Suite 501 I Toronto, ON, Canada M5J 2H7 I T + 1 (416) 947 0907 [Link]
A
Report Control

Form Document Technical Report on the Mercedes Gold-Silver Mine, Sonora

State, Mexico
Title

Client Name & Address Ernesto Utrilla Rico

Interim General Manager
Minera Meridian Minerales S de RL de CV
Boulevard Jose María Morelos 307, Edificio G, Local 101, Col.
Zona Militar Cuartel XV, Hermosillo, Sonora, México CP
83190 Mercedes Mine
Carretera Cucurpe – Sinoquipe KM 67, Sonora, México

Document Reference Status & FINAL

Project # 2907 Issue Version
No.
Issue Date
April 18, 2017
Lead

Author

Peer Reviewer
 Kathleen Ann Altman (Signed)
Grant A. Malensek (Signed)
Chester M. Moore (Signed)
Deborah McCombe (Signed)

Project Manager Approval Chester Moore (Signed)

Project Director Approval Deborah McCombe (Signed)

Report Distribution Name No. of Copies

Client

RPA Filing 1 (project box)

Roscoe Postle Associates Inc. 55

University Avenue, Suite 501 Toronto,
ON M5J 2H7
Canada Tel: +1 416 947
0907
Fax: +1 416 947 0395
mining@[Link]
FORWARD-LOOKING INFORMATION
This report contains forward-looking statements. All statements, other than statements of
historical fact regarding Premier Gold Mines Limited or Mercedes Mine, are forward-looking
statements. The words "believe", "expect", "anticipate", "contemplate", "target", "plan", "intend",
"project", "continue", "budget", "estimate", "potential", "may", "will", "can", "could" and similar
expressions identify forward-looking statements. In particular, this report contains forward-looking
statements with respect to cash flow forecasts, projected capital, operating and exploration
expenditure, targeted cost reductions, mine life and production rates, potential mineralization and
metal or mineral recoveries, and information pertaining to potential improvements to financial and
operating performance and mine life at the Mercedes Mine that may result from the on-going
development of the mine or other initiatives. All forward-looking statements in this report are
necessarily based on opinions and estimates made as of the date such statements are made and
are subject to important risk factors and uncertainties, many of which cannot be controlled or
predicted. Material assumptions regarding forward-looking statements are discussed in this
report, where applicable. In addition to such assumptions, the forward-looking statements are
inherently subject to significant business, economic and competitive uncertainties and
contingencies. Known and unknown factors could cause actual results to differ materially from
those projected in the forward-looking statements. Such factors include, but are not limited to:
fluctuations in the spot and forward price of commodities (including gold, copper, silver, diesel
fuel, natural gas and electricity); the speculative nature of mineral exploration and development;
changes in mineral production performance, exploitation and exploration successes; diminishing
quantities or grades of reserves; increased costs, delays, suspensions, and technical challenges
associated with the construction of capital projects; operating or technical difficulties in connection
with mining or development activities, including disruptions in the maintenance or provision of
required infrastructure and information technology systems; damage to Premier Gold Mines
Limited’s or Mercedes Mine’s reputation due to the actual or perceived occurrence of any number
of events, including negative publicity with respect to the handling of environmental matters or
dealings with community groups, whether true or not; risk of loss due to acts of war, terrorism,
sabotage and civil disturbances; uncertainty whether the Mercedes Mine will meet Premier Gold
Mines Limited 's capital allocation objectives; the impact of global liquidity and credit availability
on the timing of cash flows and the values of assets and liabilities based on projected future cash
flows; the impact of inflation; fluctuations in the currency markets; changes in interest rates;
changes in national and local government legislation, taxation, controls or regulations and/or
changes in the administration of laws, policies and practices, expropriation or nationalization of
property and political or economic developments in Mexico; failure to comply with environmental
and health and safety laws and regulations; timing of receipt of, or failure to comply with,
necessary permits and approvals; litigation; contests over title to properties or over access to
water, power and other required infrastructure; increased costs and physical risks including
extreme weather events and resource shortages, related to climate change; and availability and
increased costs associated with mining inputs and labor. In addition, there are risks and hazards
associated with the business of mineral exploration, development and mining, including
environmental hazards, industrial accidents, unusual or unexpected formations, pressures, cave-
ins, flooding and gold bullion or gold concentrate losses (and the risk of inadequate insurance, or
inability to obtain insurance, to cover these risks).

Many of these uncertainties and contingencies can affect Premier Gold Mines Limited’s
actual results and could cause actual results to differ materially from those expressed or
implied in any forward-looking statements made by, or on behalf of, Premier Gold Mines
Limited. All of the forward-looking statements made in this report are qualified by these
cautionary statements. Premier Gold Mines Limited and RPA and the Qualified Persons who
authored this report undertake no obligation to update publicly or otherwise revise any
forward‐looking statements whether as a result of new information or future events or
otherwise, except as may be required by law.
 [Link]
m

TABLE OF CONTENTS
PAGE

1 SUMMARY....................................................................................................................... 1-1
Executive Summary........................................................................................................ 1-1
Economic Analysis.......................................................................................................... 1-5
Technical Summary........................................................................................................ 1-6
2 INTRODUCTION.............................................................................................................. 2-1
3 RELIANCE ON OTHER EXPERTS...................................................................................3-1
4 PROPERTY DESCRIPTION AND LOCATION.................................................................4-1
5 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND
PHYSIOGRAPHY................................................................................................................. 5-1
6 HISTORY.......................................................................................................................... 6-1
7 GEOLOGICAL SETTING AND MINERALIZATION...........................................................7-1
Regional Geology............................................................................................................ 7-1
Property Geology............................................................................................................ 7-4
Mineralization.................................................................................................................. 7-8
8 DEPOSIT TYPES............................................................................................................. 8-1
9 EXPLORATION................................................................................................................ 9-1
Exploration Potential.......................................................................................................9-1
10 DRILLING..................................................................................................................... 10-1
11 SAMPLE PREPARATION, ANALYSES AND SECURITY.............................................11-1
Drill Sampling................................................................................................................ 11-1
Sample Preparation and Analysis.................................................................................11-4
Mine Production Sample Preparation and Analysis.......................................................11-6
Exploration Quality Assurance/Quality Control..............................................................11-8
Mine Quality Assurance/Quality Control......................................................................11-15
12 DATA VERIFICATION..................................................................................................12-1
13 MINERAL PROCESSING AND METALLURGICAL TESTING......................................13-1
Metallurgical Testing.....................................................................................................13-1
Plant Operating Data.....................................................................................................13-2
14 MINERAL RESOURCE ESTIMATE..............................................................................14-1
Summary....................................................................................................................... 14-1
Introduction................................................................................................................... 14-2
Resource Database and Validation...............................................................................14-2
Geological Interpretation and 3D Solids........................................................................14-3
Assay Statistics.............................................................................................................14-7
Composite Statistics and Grade Capping......................................................................14-7
Grade Capping..............................................................................................................14-7

Premier Gold Mines Limited – Mercedes Mine, Project # 2907

Technical Report NI 43-101 – April 18, 2018 Page i
 m
Bulk Density.................................................................................................................. 14-8
Cut-off Grade................................................................................................................ 14-9
Variography and Block Model Interpolation...................................................................14-9
Block Model Validation................................................................................................14-12
Mineral Resource Classification..................................................................................14-15
Mineral Resource Summary........................................................................................14-15
15 MINERAL RESERVE ESTIMATE.................................................................................15-1
Mineral Reserve Estimation..........................................................................................15-4
Dilution.......................................................................................................................... 15-4
Extraction...................................................................................................................... 15-5
Cut-off Grade................................................................................................................ 15-6
Classification.................................................................................................................15-9
16 MINING METHODS......................................................................................................16-1
17 RECOVERY METHODS...............................................................................................17-1
18 PROJECT INFRASTRUCTURE....................................................................................18-1
19 MARKET STUDIES AND CONTRACTS.......................................................................19-1
Markets......................................................................................................................... 19-1
Contracts....................................................................................................................... 19-1
20 ENVIRONMENTAL STUDIES, PERMITTING, AND SOCIAL OR COMMUNITY IMPACT
......................................................................................................................................... 20-1
Project Permitting.......................................................................................................... 20-1
Social or Community Requirements..............................................................................20-2
Mine Closure Requirements..........................................................................................20-3
21 CAPITAL AND OPERATING COSTS...........................................................................21-1
Capital Costs................................................................................................................. 21-1
Operating Costs............................................................................................................ 21-3
22 ECONOMIC ANALYSIS................................................................................................22-1
23 ADJACENT PROPERTIES...........................................................................................23-1
24 OTHER RELEVANT DATA AND INFORMATION.........................................................24-1
25 INTERPRETATION AND CONCLUSIONS...................................................................25-1
26 RECOMMENDATIONS.................................................................................................26-1
27 REFERENCES.............................................................................................................27-1
28 DATE AND SIGNATURE PAGE...................................................................................28-1
29 CERTIFICATE OF QUALIFIED PERSON.....................................................................29-1

Premier Gold Mines Limited – Mercedes Mine, Project # 2907

Technical Report NI 43-101 – April 18, 2018 Page ii
LIST OF TABLES
PAGE
Table 1-1 Mineral Resource Estimate Exclusive of Mineral Reserves (December 31, 2017)
........................................................................................................................................... 1-2
Table 1-2 Mineral Reserve Estimate (December 31, 2017)...............................................1-3
Table 1-3 Major Discoveries.............................................................................................1-11
Table 1-4 LOM Capital Expenditures...............................................................................1-15
Table 1-5 LOM Unit Operating Cost Estimate..................................................................1-15
Table 4-1 Mercedes Mineral Concessions.........................................................................4-4
Table 6-1 Major Discoveries...............................................................................................6-4
Table 6-2 Historic Production to December 31, 2017.........................................................6-5
Table 7-1 Principal Vein Descriptions................................................................................7-9
Table 9-1 2018 Exploration Drill Program..........................................................................9-2
Table 10-1 Mercedes Drill Summary................................................................................10-1
Table 11-1 Sterile Samples............................................................................................11-11
Table 11-2 Blank Samples.............................................................................................11-11
Table 11-3 Standard Samples........................................................................................11-12
Table 11-4 Field Duplicate Samples..............................................................................11-13
Table 11-5 Sterile Samples............................................................................................11-15
Table 11-6 Blank Samples.............................................................................................11-16
Table 11-7 Results of Gold Standards Submitted to the Mine Laboratory in 2014.........11-16
Table 11-8 Results of Silver Standards Submitted to the Mine Laboratory in 2014........11-17
Table 11-9 Results of Gold Standards Submitted to the Mine Laboratory in 2015.........11-18
Table 11-10 Results of Silver Standards Submitted to the Mine Laboratory in 2015......11-18
Table 11-11 Results of Gold Standards Submitted to the Mine Laboratory in 2016.......11-19
Table 11-12 Results of Silver Standards Submitted to the Mine Laboratory in 2016......11-19
Table 11-13 Results of Gold Standards Submitted to the Mine Laboratory in 2017.......11-20
Table 11-14 Results of Silver Standards Submitted to the Mine Laboratory in 2016......11-20
Table 13-1 Diluvio 2017 Metallurgical Test Results..........................................................13-1
Table 13-2 Lupita 2017 Metallurgical Test Results...........................................................13-2
Table 13-3 Plant Operating Data......................................................................................13-2
Table 14-1 Mineral Resource Estimate as of December 31, 2017...................................14-2
Table 14-2 Assay Statistics for Klondike Zone.................................................................14-7
Table 14-3 Summary Composite Statistics......................................................................14-8
Table 14-4 Bulk Density by Deposit.................................................................................14-8
Table 14-5 Variography Results.....................................................................................14-10
Table 14-6 Interpolation Parameters..............................................................................14-11
Table 14-7 Block Model Parameters..............................................................................14-12
Table 14-8 Model vs. Composite Summary Statistics....................................................14-13
Table 14-9 Measured Mineral Resource Estimate as of December 31, 2017.................14-16
Table 14-10 Indicated Mineral Resource Estimate as of December 31, 2017................14-16
Table 14-11 Inferred Mineral Resource Estimate as of December 31, 2017..................14-17
Table 15-1 Mineral Reserve Estimate as of December 31, 2017.....................................15-1
Table 15-2 Mineral Reserve Estimate by Mine/Area as of December 31, 2017...............15-3
Table 15-3 Estimated Underground Dilution By Vein.......................................................15-5
Table 15-4 Mining Extraction............................................................................................15-6
Table 15-5 Underground Cut-off Grade Estimate.............................................................15-7
Table 15-6 Open Pit Cut-off Grade Estimate....................................................................15-8
Table 15-7 Mineral Reserve Analysis Inputs....................................................................15-9
Table 16-1 Typical Underground Mine Opening Dimensions...........................................16-7
Table 16-2 Open Pit Evaluation Inputs.............................................................................16-9
Table 16-3 Design Criteria for Open Pit...........................................................................16-9
Table 16-4 Mineral Reserves by Mining Method............................................................16-10
Table 16-5 Summary of Ventilation Requirements per Mine Area..................................16-19
Table 16-6 Equipment Airflow Requirements.................................................................16-19
Table 16-7 Major Mobile Equipment..............................................................................16-27
Table 16-8 Mine Equipment Usage and Availability.......................................................16-28
Table 16-9 Mercedes Mine Production..........................................................................16-29
Table 16-10 2018 Life of Mine Production Plan.............................................................16-31
Table 16-11 2018 Life of Mine Production Plan - Processing.........................................16-32
Table 20-1 Key Environmental Permits............................................................................20-1
Table 21-1 2015 to 2017 Capital Expenditures................................................................21-1
Table 21-2 LOM Capital Cost Estimate............................................................................21-2
Table 21-3 2018 TSF Expansion Capital Cost Estimate..................................................21-3
Table 21-4 2016 and 2017 Operating Costs....................................................................21-4
Table 21-5 LOM Operating Cost Estimate.......................................................................21-5
Table 21-6 LOM Unit Operating Cost Estimate................................................................21-5
Table 21-7 2017 Mercedes Manpower.............................................................................21-6
Table 21-8 LOM Manpower.............................................................................................21-6

LIST OF FIGURES
PAGE
Figure 4-1 Location Map....................................................................................................4-2
Figure 4-2 Concession Boundary.......................................................................................4-3
Figure 7-1 Local Geology...................................................................................................7-2
Figure 7-1A Local Geology Legend....................................................................................7-3
Figure 7-2 Property Geology..............................................................................................7-5
Figure 9-1 Exploration Targets...........................................................................................9-3
Figure 11-1 QQ Plot – Gold Distribution for RC and Core Drill Holes – Mercedes Deposit 11-
3
Figure 11-2 QQ Plot – Gold Distribution for RC and Core Drill Holes – Klondike Deposit 11-4
Figure 11-3 Mine Laboratory Sample Preparation and Analytical Procedure...................11-7
Figure 11-4 ALS Chemex – Acme Pulp Checks 2017....................................................11-14
Figure 13-1 Budgeted Versus Actual Tonnage................................................................13-3
Figure 13-2 Gold Feed Grade and Recovery...................................................................13-3
Figure 13-3 Silver Feed Grade and Recovery..................................................................13-4
Figure 13-4 Gold Recovery as a Function of Gold Feed Grade.......................................13-5
Figure 13-5 Silver Recovery as a Function of Silver Feed Grade.....................................13-5
Figure 14-1 Geological Solid Modelling: Barrancas Zone................................................14-4
Figure 14-2 Vertical Section of Barrancas Geological Modelling......................................14-5
Figure 14-3 Vertical Section of Mercedes Geological Modelling and Drilling....................14-6
Figure 14-4 Swath Plot Gold Examples - Mercedes.......................................................14-14
Figure 16-1 Mercedes Mine Area Plan Map.....................................................................16-2
Figure 16-2 Mercedes Mine Long Section........................................................................16-3
Figure 16-3 Barrancas-Lagunas Mine Long Section........................................................16-4
Figure 16-4 Lupita–Diluvio Mine Long Section.................................................................16-5
Figure 16-5 Klondike - Rey De Oro Mine Long Section....................................................16-6
Figure 16-6 Typical Cut and Fill Mining Method...............................................................16-8
Figure 16-7 Corona de Oro Ventilation Schematic (Mercedes Mine Area).....................16-20
Figure 16-8 Barrancas-Lagunas Ventilation Schematic.................................................16-21
Figure 16-9 Lupita-Diluvio Ventilation Schematic...........................................................16-22
Figure 16-10 Klondike-Rey De Oro Ventilation Schematic.............................................16-23
Figure 16-11 2017 Mine vs. Mill Tonnes and Grade.......................................................16-30
Figure 17-1 Process Flowsheet........................................................................................17-6
Figure 18-1 Site Plan.......................................................................................................18-7
 m

1 SUMMARY
EXECUTIVE SUMMARY
Roscoe Postle Associates Inc. (RPA) was retained by Premier Gold Mines Limited (Premier)
to carry out an audit of the Mineral Reserves and Mineral Resources and to prepare an
independent Technical Report on the Mercedes Gold-Silver Mine (Mercedes or the Mine) of
Premier’s wholly-owned subsidiary Minera Meridian Minerales S. de R.L. de C.V. (MMM),
located in Sonora State, Mexico. The purpose of this independent Technical Report is to
support the disclosure of Mineral Reserves and Mineral Resources at the Mine as of
December 31, 2017. This Technical Report conforms to NI 43-101 Standards of Disclosure
for Mineral Projects. RPA visited the property on January 24 to 26, 2018.

Premier is a Canadian-based mineral exploration, development, and production company,

focused on gold deposits within the Americas. Premier has a diverse portfolio of production
and advanced-stage gold exploration properties located in Northwestern Ontario, Canada
and Nevada, USA.

In July 2016, Premier announced that it had entered into a definitive share purchase
agreement with Yamana Gold Inc. (Yamana) pursuant to which Premier agreed to acquire
Yamana’s Mercedes Mine and exploration properties located in the state of Sonora,
northwest Mexico. The purchase was completed on September 30, 2016.

Currently, the major assets and facilities associated with Mercedes are:
 Mineral Reserves and Mineral Resources in veins on the property with production
from the Mercedes, Barrancas, Lupita, Diluvio, and Rey de Oro veins. Mercedes
produced approximately 82,600 ounces of gold and 338,000 ounces of silver in 2017.

 Grinding and gravity circuit ahead of an agitated leach circuit, counter current
decantation (CCD), Merrill-Crowe recovery plant, and sulphur dioxide (SO2)-air
cyanide destruction circuit, which produces gold doré. The processing plant has a
capacity of 2,200 tpd.

 Mine and mill infrastructure including office buildings, shops, and equipment.

 A tailings storage facility (TSF) with planned expansion of capacity sufficient until 2022.

Premier Gold Mines Limited – Mercedes Mine, Project # 2907

Technical Report NI 43-101 – April 18, 2018 Page 1-1
The Mercedes Mineral Resources reported as of December 31, 2017, excluding the Mineral
Resources which have been converted to Mineral Reserves, are listed in Table 1-1.

TABLE 1-1 MINERAL RESOURCE ESTIMATE EXCLUSIVE OF

MINERAL RESERVES (DECEMBER 31, 2017)
Premier Gold Mines Limited – Mercedes Mine

Tonnes Grades Contained Metal

Classification (000) Au (g/t) Ag (g/t) Au oz (000) Ag oz (000)
Measured 1,085 5.73 60.7 199.8 2,115
Indicated 2,599 3.73 36.7 311.4 3,063
Total M+I 3,684 4.32 43.7 511.3 5,178
Inferred 1,630 4.2 34 220 1,780

Notes:
1. CIM (2014) definitions were followed for Mineral Resources.
2. Mineral Resources are estimated at a cut-off grade of 2.0 g/t gold equivalent (AuEq) for underground
resources and 0.4 g/t AuEq for open pit resources.
3. AuEq based on 1.0 g Au = 140.0 g Ag.
4. Mineral Resources are estimated using an average gold price of US$1,400 per ounce and a silver price
of $20 per ounce.
5. No minimum mining width was used.
6. Bulk density is 2.42 t/m3 for mineralization and 2.40 t/m3 for waste.
7. Mineral Resources are exclusive of Mineral Reserves.
8. Numbers may not add due to rounding.

RPA is not aware of any environmental, permitting, legal, title, taxation, socio-economic,
marketing, political, or other relevant issues that would materially affect the Mineral Resource
estimate.

The Mineral Reserves (Table 1-2) at the Mercedes operations consist of open pit and
underground Mineral Reserves. The underground Mineral Reserves are being exploited in
five separate underground mines and the ore is being processed for the recovery of gold and
silver.
 TABLE 1-2 MINERAL RESERVE ESTIMATE (DECEMBER 31, 2017)
Premier Gold Mines Limited – Mercedes Mine

Tonnes Grades Contained Metal

Classification (000) Au (g/t) Ag (g/t) Au oz (000) Ag (oz 000)
Proven Underground 241 5.10 26.1 40 202

Probable Underground 2,935 3.88 24.1 366 2,276

Probable Open Pit 114 3.11 21.3 11 78
Subtotal Probable 3,049 3.85 24.0 378 2,354
Proven & Probable 3,290 3.94 24.2 417 2,555

Notes:
1. CIM (2014) definitions were followed for Mineral Reserves.
2. Underground Mineral Reserves are estimated at a cut-off grade of 2.5 g/t Au except Diluvio which is
estimated at 2.0 g/t Au.
3. Open pit Mineral Reserves are reported at a cut-off grade of 1.5 g/t Au.
4. Mineral Reserves are estimated using an average gold price of US$1,200 per ounce and a silver
price of $17 per ounce.
5. A minimum mining width of 3.5 m was used.
6. Bulk density is 2.42 t/m3 for ore and 2.40 t/m3 for waste.
7. Numbers may not add due to rounding.

RPA is not aware of any mining, metallurgical, infrastructure, permitting, or other relevant
factors that could materially affect the Mineral Reserve estimate.

CONCLUSIONS
GEOLOGY AND MINERAL RESOURCES
 Gold-silver mineralization on the Mercedes property is hosted within epithermal low
sulphidation (adularia-sericite) veins, stockwork, and breccia zones. Over 16.5 km of
gold-silver-bearing epithermal low sulphidation veins have been identified within or
marginal to the andesite-filled basins on the property.

 The geological models employed by MMM geologists are reasonably well understood,
and are well supported by field observations in both outcrop and drill core.

 Sampling and assaying are adequately completed and have been carried out using
industry standard quality assurance/quality control (QA/QC) practices. These
practices include, but are not limited to, sampling, assaying, chain of custody of the
samples, sample storage, use of third-party laboratories, standards, blanks, and
duplicates.

 The practices and procedures used to generate the Mercedes database are
acceptable to support Mineral Resource and Mineral Reserve estimation.

 Interpretations of the geology and the three dimensional (3D) wireframes of the
estimation domains appear to be reasonable.

 With the exception of the use of a minimum thickness, the Mineral Resource
estimates have been prepared using appropriate methodology and assumptions
including:
 o Treatment of high grade assays;
o Composite length;
o Search parameters;
o Bulk density;
o Interpolation;
o Cut-off grade;
o Classification.

 The Mineral Resources conform to Canadian Institute of Mining, Metallurgy and

Petroleum (CIM) Definition Standards for Mineral Resources and Mineral Reserves
dated May 10, 2014 (CIM (2014) definitions) and comply with all disclosure
requirements for Mineral Resources set out in NI 43-101.

 MMM geologists consider that there is excellent geological potential for locating
additional resources at the Mercedes property. The proposed exploration budget for
2018 at Mercedes contains 171 drill holes totalling 39,500 m of diamond drilling at an
estimated expenditure of US$5.96 million. The plan includes drilling to expand
existing resources, to define near-mine targets, and to generate large potential
targets property wide. RPA concurs with this initiative.

MINERAL RESERVES AND MINING

 The Mineral Reserves are being estimated by Mercedes personnel in an appropriate
manner using current mining software and procedures consistent with industry
standards.

 The Mineral Reserves conform to CIM (2014) definitions and comply with all
disclosure requirements for Mineral Reserves set out in NI 43-101.

 The selected mining method of mechanized cut and fill (CAF) stoping is appropriate
for the deposits.

 Based on the current Mineral Reserves, a total of 3.3 million tonnes (Mt) grading 3.94
g/t Au and 24.2 g/t Ag will be mined over a mine life of 4.5 years (2018 to 2022).

METALLURGY AND MINERAL PROCESSING

 High recoveries for both gold and silver are achieved in the processing plant. The
staff is proactive at constantly improving the operation and the actual precious metal
recoveries are close to the estimates used for budgeting purposes. The average gold
recovery increased by over 1.0% to 95.5% from 2016 to 2017.

RECOMMENDATIONS
GEOLOGY AND MINERAL RESOURCES
 Collect more field duplicate samples with grades above the cut-off grade or
discontinue this practice.

 Replace standards CDN-ME-1204 and CDN-GS-7G to see if performance improves.

  Send three to five percent of the pulps analyzed by the mine laboratory to a second
laboratory as an accuracy check.

 Construct mineralization wireframes using a minimum mineable thickness and

incorporate any necessary dilution to allow appropriate mining dimensions and
potentially economic extraction.

 Reconcile the high yield threshold parameters with mined areas to determine if the
grades are being underestimated in restricted areas.

 Remove isolated remnants and zones remaining after the Mineral Reserve
conversion process if they are deemed not to be economically viable.

MINERAL RESERVES AND LIFE OF MINE PLAN

 Review mine operating costs and cut-off grade calculations to ensure that cut-off
grades are based on actual cost experience.

 Advance mine development planning for the Marianas and El Taraicito deposits to
extend the life of the older Mercedes and Barrancas-Lagunas mines.

 Include stockpiled ore material in future Mineral Reserve estimates.

METALLURGY AND MINERAL PROCESSING

 Continue to be proactive in improving the operations.

 Complete a detailed evaluation of available data to determine whether gold and/or

silver recovery is a function of the metal grades. If so, the correlations may be used to
provide more accurate estimates for budgeting purposes.

ECONOMIC ANALYSIS
Under NI 43-101 rules, producing issuers may exclude the information required for this
section on properties currently in production, unless the Technical Report includes a material
expansion of current production. RPA notes that Premier is a producing issuer, the Mercedes
Mine is currently in production, and a material expansion is not being planned. RPA has
performed an economic analysis of the Mercedes Mine using the estimates presented in this
report and confirms that the outcome is a positive cash flow that supports the statement of
Mineral Reserves.
TECHNICAL SUMMARY
PROPERTY DESCRIPTION AND LOCATION
The Mercedes mining operation is located in the state of Sonora, northwest Mexico, within
the Cucurpe municipality (30°19’47” N latitude and 110°29’02” W longitude). The Mine is
located 250 km northeast of Hermosillo, Sonora’s capital city, and 300 km south of Tucson,
Arizona, United States.

LAND TENURE
The Mercedes property consists of approximately 69,285 ha of mineral concessions under
lease from the government of Mexico. The area is covered by 43 mineral concessions, all of
which have been titled as Mining Concessions, according to Mexican mining law. The titles
are valid for 50 years from the date titled. All of the concessions are owned by MMM, a
wholly- owned subsidiary of Premier. All of the concessions are in good standing with mining
law obligations through semi-annual tax payments and required assessment work.

The areas of interest at Mercedes are located on private land. A surface access agreement
has been in place with the owner of the private land surrounding the Mine since 2000.

The Mercedes property is not encumbered by any royalties, since all of the claims under
contract were purchased with no future obligations.

MMM has all required permits to conduct work on the property. RPA is not aware of any
other significant factors and risks that may affect access, title, or the right or ability to perform
work on the property.

EXISTING INFRASTRUCTURE
Mercedes has all required infrastructure necessary for a mining complex including:

 Mine and mill infrastructure including office buildings, shops, and equipment.
 A TSF with plans in place for further expansion to contain tailings production to the
end of 2022.
 Local water supplies from the mines and dewatering wells.
 Electric power from the national grid by way of a 65 km 115 kV power line.
 Mine ventilation fans and ventilation systems.
  Haulage roads from the five mine areas to the plant.
 Stockpile areas.
 Maintenance facilities.
 Administrative office facilities.
 Core storage and exploration offices.
 Security gates and manned security posts at mine entries.
 Access road network connecting the mine infrastructure to public roads.

HISTORY
Exploration and development work was conducted in at least two or three distinct periods.
The Mercedes, Tucabe, Saucito, Anita, Klondike, Rey de Oro, Reina, and Ponchena veins
were the focus of exploration and development work on a limited to moderate scale during
the late 19th and early 20th century. Very little information is available on this work.

The Tucabe vein was mined around the early 1900s. A cyanide mill was constructed on the
site and the Tucabe vein was accessed through a series of tunnels and shafts, covering over
600 m of strike and a vertical range of over 150 m. The Mercedes vein was discovered in
1936. Anaconda Copper Company optioned the property in 1937 and spent two years
exploring underground. The work included sinking a 50 m shaft and excavating a series of
tunnels and internal raises for sampling and reserve estimation. Little historical data is
available for past mining activities at the Klondike Mine. Anaconda files from the 1930s
indicate that the Klondike Mine was mined around 1900, with the main stope being
approximately 120 m by 80 m in size.

In 1994, the Fomento Minero, an agency of the Mexican government conducted surface and
underground sampling of the Tucabe vein to evaluate potential for an open pit, heap leach
operation. Minera Sierra Madre evaluated the property and completed 800 m of reverse
circulation (RC) drilling to depths of 75 m in 1996. Sampling by Rio Sonora (Gerle Gold Ltd.)
of the underground workings on the Saucito zone indicated that the mineralization was very
erratic, however, several samples returned results of greater than 10 g/t Au. Rio Sonora
drilled 10 shallow holes testing the area for near surface open pit potential. The holes
returned low- grade values and, in the vicinity of the workings, drilling failed to equal the
grade from the underground sampling.
In the mid-1990s, Mogul Mining Ltd. (Mogul Mining) acquired the property and reported
assay results from several hand-dug surface trenches excavated near the main shaft area.
The only known drill program was by Minera Sortula (Campbell Chibougamau Mines Limited)
about 15 years ago. Four core holes were reportedly drilled into the old workings. Premier
does not have any of the Mogul Mining or Minera Sortula data.

The Mercedes and Klondike Mine areas were first examined by Meridian Gold Inc.’s
(Meridian) predecessor FMC Gold Company in 1993 as part of a regional exploration
program in Mexico. Meridian geologists completed surface and underground mapping and
sampling in 2000. The surface evaluation identified 11 separate target areas. Five areas had
historic mining activities and were the focus of the first phase of an RC drilling program.

RC drilling started in 2001 focusing on the Klondike and Mercedes zones. This program was
successful in discovering a narrow, vein-hosted mineralized zone at Mercedes and significant
mineralization at Klondike.

In 2002, Meridian entered into a joint venture (JV) with Fischer-Watt Corporation (Fischer-
Watt), to continue exploration at Mercedes. Fischer-Watt carried out limited metallurgical
testing and developed a preliminary design for underground development on the Mercedes
vein. The JV was terminated in the fall of 2004 and the property was returned to Meridian.

The exploration program conducted in 2005 resulted in the discovery of the bonanza grade
Corona de Oro shoot in the Mercedes vein. Drilling expanded in 2006-2007, focusing on the
Mercedes, Klondike, and Lupita veins.

The Mercedes Mine began production in 2011 and up to December 31, 2017, has produced
3.66 Mt grading 5.23 g/t Au and 60.2 g/t Ag containing approximately 612,000 ounces of gold
and 6,600,000 ounces of silver.

GEOLOGY AND MINERALIZATION

REGIONAL GEOLOGY
The geology of north-central Sonora displays a complex history of tectonic and magmatic
activity. The oldest known rocks are folded and variably metamorphosed late Jurassic
volcanic sedimentary rocks and lower Cretaceous calcareous sediments.
The sedimentary basement rocks are covered by thick and aerially extensive sequences of
upper Cretaceous felsic volcanic rocks which are in turn locally intruded and overlain by
upper Cretaceous andesite flow and intrusive units. This entire rock package was then
intruded by a series of granitic to granodioritic stocks and dykes. Continued volcanic activity
through the Oligocene produced a bi-modal suite of flows and volcaniclastic units.

The Miocene was dominated by extension, erosion, and limited volcanic activity. Thick and
regionally extensive sequences of polymictic conglomerate and arenite, which are locally
intercalated with felsic volcanic units, fill extensional basins throughout north-central Sonora.

PROPERTY GEOLOGY AND MINERALIZATION

Two northwest trending arches with exposed Jurassic marine sediments and Cretaceous
lithic and quartz-lithic tuff units dominate the local geology. The arches have been intruded
by at least three stages of dikes and small stocks, ranging in composition from andesite to
latite and rhyolite. Marginal to the northwest trending arches, andesitic volcanic flows and
flow breccias have been deposited in at least three west-northwest trending basins. Dikes of
andesite and latite crosscut the andesite flow package.

Gold-silver mineralization on the Mercedes property is hosted within epithermal low

sulphidation (adularia-sericite) veins, stockwork, and breccia zones. Over 16.5 km of veins
have been identified within or marginal to the andesite-filled basins, which constitute the
primary exploration target on the property. Major veins typically trend N30º-70ºW at 60º to
90º dips following the major regional structural pattern. Veins typically dip at greater than 60º,
but locally range as low as 25º. Post-mineral latite dikes fill some of the same northwest
trending structures that host some of the veins, locally destroying mineralization as
emplaced.

The mineralized zones display a combination of fissure vein, stockwork, and breccia
morphologies that change rapidly on strike and dip. The zones range in width from less than
one metre to composite vein/stockwork/breccia zones up to 15 m wide. In the Diluvio zone,
gold-silver bearing vein/stockwork zones locally attain thicknesses in excess of 100 m. The
length of individual veins varies from 100 m to over three kilometres. Property-wide, gold-
silver bearing veins occur over a vertical range of 700 m (600 m to 1,300 m).
Mineralogical studies identified opaque minerals, including iron oxides, pyrite, gold, electrum,
stibnite, and rare pyrargyrite, within a gangue of substantial chalcedony, quartz, and
carbonate.

Metallurgical studies have identified the presence of very small quantities of native gold,
native silver, electrum, pyrargyrite, stibnite, galena, sphalerite, and chalcopyrite in heavy
mineral concentrates. Copper minerals such as malachite and chrysocolla are most common
as fracture fillings in breccias at Klondike, although rare specks are also seen in the
Mercedes and Lupita-Diluvio veins.

EXPLORATION STATUS
Between August 1999 and December 2017, mapping and sampling was completed over an
area of approximately 235 km2. Surface mapping identified three major basins filled with
andesitic volcanic rocks and areas in which significant extensions of andesite basins may be
covered by shallow post-mineral deposits.

Geochemical sampling focused on rock chip samples from outcropping veins along with
samples from the historic mine workings. Rock samples and stream sediment samples were
collected to quantify geochemistry within the systems.

In 2007, an aggressive drilling and development program was initiated to assess the potential
of the property and bring it to a feasibility study stage. Drilling from 2009 to 2016 has focused
on district exploration outside of the Mercedes-Klondike systems, resulting in the discovery of
the Barrancas vein zone, the Diluvio zone at Lupita, and the expansion of the Rey de Oro
vein system.

The discovery history for major ore shoots on the Mercedes property is summarized in Table
1-3.
 TABLE 1-3 MAJOR DISCOVERIES
Premier Gold Mines Limited – Mercedes Mine

True
Discovery From To Interval Width Au Ag
Year Vein Ore Shoot Hole (m) (m) (m) (m) (g/t) (g/t)
2000 Klondike Klondike K003 141.77 151.68 9.91 7.53 7.13 21.0
2005 Mercedes Corona de Oro M05-031 186.00 207.00 21.00 9.00 28.44 245.0
2006 Rey de Oro Rey de Oro R06-008 0.00 19.30 19.30 17.20 5.21 16.3
2007 Mercedes Sentinela M07-107D 253.54 255.84 2.30 2.10 157.29 574.0
2008 Mercedes Breccia Hill M08-305D 218.24 221.28 3.04 2.00 19.43 11.6
2008 Mercedes Tierra De Nadie M08-230D 197.30 206.29 8.99 8.10 24.11 156.2
2009 Barrancas B. Centro M09-459D 318.82 333.42 14.60 6.05 5.82 186.2
2009 Barrancas Lagunas M09-449D 203.60 211.30 7.70 6.30 16.68 65.6
2009 Lupita Lupita L09-021D 193.51 201.15 7.64 7.01 28.15 52.0
2010 Barrancas Lagunas Norte M10-574D 198.12 204.52 6.40 4.90 9.31 121.1
2010 Lupita Diluvio L10-073D 202.08 233.52 31.44 9.00 8.40 11.9
2011 Lupita Diluvio West L11-109 421.84 430.98 9.14 7.32 7.24 48.1
2012 Barrancas Marianas M12-639D 454.77 457.81 3.04 2.20 12.69 11.5
and 476.38 477.62 1.24 0.74 74.70 4.0
Rey de Oro Rey de Oro Deep R12-066D 115.21 123.44 8.23 7.50 14.00 149.6
2014 Barrancas Gap M14-672D 190.40 200.56 10.16 7.00 19.29 209.4

As of the end of December 2017, a total of 492,415 m in 2,111 drill holes had been
completed on the property. Mineralized zones at Mercedes, Klondike, Barrancas, Lupita, and
Rey de Oro have been drilled on approximately 30 m to 60 m centres, using a combination of
diamond drilling with a small amount of RC drilling.

MINERAL RESOURCES
RPA has reviewed the Mineral Resource estimates of the various deposits at the Mercedes
Mine as reported by Premier as of December 31, 2017. This included detailed tracing of the
methodology of estimating tonnage and grade of resource and reserve blocks. With few
exceptions, RPA found that values and compilations of gold grades were accurately recorded
and calculated as provided on sections and plans.

RPA notes, however, that a minimum thickness was not applied to the mineralized solids in
the estimation of Mineral Resources. Narrow intersections were used in the block models to
maintain grade and geological continuity and to facilitate future mine planning activities.
Some of these narrow intersections will not remain economically viable when diluted out to a
minimum mining width during the Mineral Reserve estimation process and thus they would
not be included in the Mineral Reserve estimate.

The Mineral Resource estimates, exclusive of those resources used to estimate the Mineral
Reserves, are summarized in Table 1-1. The Measured plus Indicated Mineral Resources
total 3.68 Mt grading 4.32 g/t Au and 43.7 g/t Ag containing approximately 511,000 ounces of
gold and 5.2 million ounces of silver. The Inferred Mineral Resources total 1.6 Mt grading 4.2
g/t Au and 34 g/t Ag containing approximately 220,000 ounces of gold and 1.8 million ounces
of silver.

RPA performed visual and statistical checks on block grade estimates for Mercedes,
Barrancas-Lagunas, and Klondike deposits. Block grade estimates were compared with
composite grades via summary statistics and swath plots. Kriged block estimates were
compared to actual diamond drill holes in plan and section view to ensure that the estimation
honours the raw data at a local scale. In RPA’s opinion, the results of the validations are
acceptable.

RPA is not aware of any environmental, permitting, legal, title, taxation, socio-economic,
marketing, political, or other relevant issues that would materially affect the Mineral Resource
estimate.

MINERAL RESERVES
The Mineral Reserves at the Mercedes Mine are mostly underground Mineral Reserves,
which have been continuously mined since 2013. There is a small, planned open pit mine
included in the Mineral Reserves.

Mineral Reserves are estimated by the application of designed mining shapes and minimum
parameters, including a minimum width of 3.5 m, to the Mineral Resource shapes. Dilution is
included as internal dilution within the mining shape as well as external dilution that is
expected to be mined as part of the operation.

The Mineral Reserves for the Mercedes operations are shown in Table 1-2 and total 3.3 Mt
tonnes at an average grade of 3.94 g/t Au and 24.2 g/t Ag containing approximately 417,000
ounces of gold and 2.6 million ounces of silver in the Proven and Probable categories.
RPA has reviewed the work by Premier and MMM personnel related to the estimation of the
Mineral Reserves and is of the opinion that the Mineral Reserves have been estimated in an
appropriate manner.

MINING METHOD
Mercedes is a mechanized decline access underground mine with five separate underground
mine areas (Mercedes, Barrancas-Lagunas, Lupita, Diluvio, and Rey de Oro). The main
declines are driven with a nominal 15% grade and are 4.5 m wide by 4.3 m high. The main
declines are generally located approximately 60 m from the main mineralization, preferably in
the footwall.

The target production rate is approximately 2,000 tpd. Ore from underground is hauled by
truck to stockpiles near the portal. Ore from the Barrancas-Lagunas, Lupita, Diluvio, and Rey
de Oro mines is subsequently hauled to a common stockpile area near the jaw crusher.

Until 2018, there were two underground mining methods in use at Mercedes. Approximately
90% of the rock was mined by mechanized CAF stoping. Where the rock quality was better,
the ore was mined by long hole open stopes (LHOS) with cemented paste backfill. However,
for the Life of Mine (LOM) production plan reviewed under the scope of this report, MMM
reported that the mining method is wholly mechanized CAF stoping with no LHOS mining.

The open pit mine at Rey de Oro is a small open pit, which extends up a slope. The pit
contains approximately 114,000 tonnes of ore. Due to the low tonnage, the most reasonable
mining scenario appears to be contract mining with technical supervision and grade control
provided by Mercedes.

RPA is of the opinion that the selected mining methods are appropriate for the deposits.

MINERAL PROCESSING
The processing facilities at Mercedes are based on conventional milling with Merrill-Crowe
recovery of gold and silver as listed below:
 Three-stage crushing with closed circuit tertiary crushing operating at 2,000 tpd
 Mill operated in closed circuit with cyclones
 Gravity concentration
  Agitated leach
 Counter current decantation
 Merrill-Crowe zinc precipitation
 Smelting
 Cyanide detoxification of tailings
 Tailings disposal

MARKET STUDIES
The principal commodities at Mercedes are freely traded at prices that are widely known, so
prospects for sale of any production are virtually assured. RPA agrees with the Premier
selection of a gold price of US$1,200 per ounce and a silver price of US$17 for the Base
Case economic analysis.

ENVIRONMENTAL, PERMITTING, AND SOCIAL CONSIDERATIONS

The Mercedes operation is in production and operating within the environmental framework
of Premier. Premier operates under a corporate responsibility program that includes
corporate responsibility, community relations, environment, and health and safety.

Premier has a comprehensive and strong Community Program in the Community of Cucurpe,
Sonora, approximately 22 km west of the Mercedes Mine. Although the mine site is located
within a private land, previously purchased from a local rancher, different social and
economic programs have been established at the Community of Cucurpe.

Mercedes contracted Golder Associates Inc., which has developed a detailed closure plan.
The duration of the closure period is approximately seven years, based on the facilities
existing in January 2018. The post-closure care period was assumed at 23 years. The total
cost of the closure and post-closure of Mercedes was estimated at approximately US$15.2
million. The direct costs for closure and post closure were estimated at US$9.5 million and
US$565,000 (calculated using present value methods), respectively. Indirect costs include
engineering, design and construction, contingency, insurance, contractor profit, and contract
administration. The indirect costs were estimated at approximately US$5.1 million.
 CAPITAL AND OPERATING COST ESTIMATES
Mercedes is in operation and the capital cost estimate covers the ongoing operations. The
LOM sustaining capital expenditures total US$38.4 million as summarized in Table 1-4.

TABLE 1-4 LOM CAPITAL EXPENDITURES

Yamana Gold Inc. – Mercedes Mine

Summary Units 2018 2019 2020 2021 2022 Total

Building & Infrastructure US$ 000 1,205 691 0 0 0 1,896
Hardware & Software US$ 000 161 0 0 0 0 161
Machinery & Equipment US$ 000 1,428 92 62 0 0 1,582
Vehicles US$ 000 181 67 0 0 0 248
Underground Mine Development US$ 000 3,789 6,380 0 0 0 10,169
Technical Studies US$ 000 0 0 0 0 0 0
Subtotal Sustaining Capital Cost US$ 000 6,764 7,231 62 0 0 14,056
Expansionary Mine Development1 US$ 000 2,019 1,237 0 0 0 3,255
Tailings Dam Expansion US$ 000 3,486 0 0 0 0 3,486
Open Pit Pre-Stripping US$ 000 834 2,503 0 0 0 3,337
Subtotal Expansionary Capital Cost US$ 000 6,339 3,740 0 0 0 10,078
Exploration Capital Cost US$ 000 4,770 4,770 4,770 0 0 14,311
Total US$ 000 17,873 15,740 4,832 0 0 38,446

The capital plan is based upon continued development and further exploration of mine areas
as well as the construction of a new TSF. The use of a mining contractor will increase
towards the end of the mine life.

The unit operating costs for the LOM are summarized in Table 1-5. Mining costs are lower in
2020 to 2021 as the open pit mining in Rey de Oro is scheduled at that time. A mining
contractor will be employed to mine the Rey de Oro open pit material.

TABLE 1-5 LOM UNIT OPERATING COST ESTIMATE

Premier Gold Mines Limited – Mercedes Mine

Cost Activity Units 2015 2016 2017 2018 2019 2020 2021 2022
Mine Total US$/t ore mined 78 57 53 51 57 42 44 46
Open Pit US$/t ore mined - - - 29 25 -
Underground US$/t ore mined 78 57 53 51 57 44 46 46
Plant US$/t processed 23 20 22 20 22 19 26 25
G&A US$/t processed 19 13 13 14 13 13 11 15
 m

2 INTRODUCTION
Roscoe Postle Associates Inc. (RPA) was retained by Premier Gold Mines Limited (Premier)
to carry out an audit of the Mineral Reserves and Mineral Resources and to prepare an
independent Technical Report on the Mercedes Gold-Silver Mine (Mercedes or the Mine) of
Premier’s wholly-owned subsidiary Minera Meridian Minerales S. de R.L. de C.V. (MMM),
located in Sonora State, Mexico. The purpose of this independent Technical Report is to
support the disclosure of Mineral Reserves and Mineral Resources at the Mine. This
Technical Report conforms to NI 43-101 Standards of Disclosure for Mineral Projects.

Premier is a Canadian-based mineral exploration, development, and production company,

focused on gold deposits within the Americas. Premier has a diverse portfolio of production
and advanced-stage gold exploration properties located in Northwestern Ontario, Canada
and Nevada, USA.

In July 2016, Premier announced that it had entered into a definitive share purchase
agreement with Yamana Gold Inc. (Yamana) pursuant to which Premier agreed to acquire
Yamana’s Mercedes Mine and exploration properties located in the state of Sonora,
northwest Mexico. The purchase was completed on September 30, 2016.

Currently, the major assets and facilities associated with Mercedes are:
 Mineral Reserves and Mineral Resources in veins on the property with production
from Mercedes, Barrancas, Lupita, Diluvio, and Rey de Oro veins. Mercedes
produced approximately 82,600 ounces of gold and 338,000 ounces of silver in 2017.

 Grinding and gravity circuit ahead of a Counter Current Decantation (CCD) agitated
leach circuit and an INCO SO2/air cyanide destruction circuit, which produces gold
doré. The processing plant operates at a capacity of 2,200 tpd.

 Mine and mill infrastructure including office buildings, shops, and equipment.

 A tailings storage facility (TSF) with planned expansion of capacity sufficient until 2022.

RPA has previously completed NI 43-101 technical reports on the Mercedes operations,
including a NI 43-101 Technical Report dated February 2014, which was updated as of May
31, 2014, for Yamana, as well as a NI 43-101 Technical Report readdressed to Premier
dated September 6, 2016, which was updated as of April 28, 2017.

Premier Gold Mines Limited – Mercedes Mine, Project # 2907

Technical Report NI 43-101 – April 18, 2018 Page 2-1
 m

SOURCES OF INFORMATION
The Qualified Persons for this report are Chester M. Moore, P. Eng., RPA Principal
Geologist, Grant Malensek, P. Eng./[Link]., RPA Principal Engineer - Valuations, and
Kathleen Ann Altman, Ph.D., P.E., RPA Principal Metallurgist. Site visits were carried out by
Messrs. Moore and Malensek on January 24 to 26, 2018. In preparation of this report, Mr.
Moore, Mr. Malensek, and Dr. Altman reviewed technical documents and reports on
Mercedes supplied by MMM and Premier. The key technical documents reviewed by RPA
for this report are “2018 Mercedes Exploration Program”, “2018 Mercedes Life-of Mine (LOM)
Plan”, and “2017 Mercedes Operations KPI Report” plus other resource and reserve
documents and on-site technical presentations from Mercedes personnel.

Discussions were held with personnel from MMM and Premier:

 Mr. Brent Kristof, Senior Vice President Operations with Premier
 Mr. Ernesto Utrilla Ricco, Interim General Manager with MMM
 Mr. Jan Larsen Guzman, Manager Controller with MMM
 Mr. Carlos Beltran, Mercedes Mine Exploration Superintendent with MMM
 Mr. Sergio Duarte, Manager of Resources with MMM
 Mr. Cristian Ponce, Senior Superintendent of Mining with MMM
 Mr. Juan Pablo Briseno, Long Term Planner with MMM
 Mr. Jose Carlos Portoni Encinas, Metallurgist with MMM
 Mr. Benjamin Rivera, Superintendent of Security, Health and Sustainable
Development with MMM
 Mr. Armando Valencia, Manager Corporate Relations with MMM

Chester Moore is responsible for Sections 2 to 12, 14, 20, 23, 24, and 27 of the Technical
Report, and the parts of Sections 1, 25, and 26 dealing with geology, Mineral Resources, and
environment. Grant Malensek is responsible for Sections 15, 16, 18, 19, 21, and 22 and the
parts of sections 1, 25, and 26 dealing with mining, Mineral Reserves, infrastructure, and
costs. Kathleen Altman is responsible for Sections 13 and 17 and those parts of Sections 1,
25, and 26 dealing with metallurgy and mineral processing.

The documentation reviewed, and other sources of information, are listed at the end of this
report in Section 27 References.

Premier Gold Mines Limited – Mercedes Mine, Project # 2907

Technical Report NI 43-101 – April 18, 2018 Page 2-2
LIST OF ABBREVIATIONS
Units of measurement used in this report conform to the metric system. All currency in this
report is US dollars (US$) unless otherwise noted.

a annum kWh kilowatt-hour

A ampere L litre
bbl barrels lb pound
btu British thermal units L/s litres per second
°C degree Celsius m metre
C$ Canadian dollars M mega (million); molar
cal calorie m2 square metre
cfm cubic feet per minute m3 cubic metre
cm centimetre micron

cm2 square centimetre MASL metres above sea level
d day microgram
g
dia diameter m3/h cubic metres per hour
dmt dry metric tonne mi mile
dwt dead-weight ton min minute
°F degree Fahrenheit micrometre
m
ft foot mm millimetre
ft2 square foot mph miles per hour
ft3 cubic foot MVA megavolt-amperes
ft/s feet per second MW megawatt
g gram MWh megawatt-hour
G giga (billion) oz Troy ounce (31.1035g)
Gal Imperial gallon oz/st, opt ounces per short ton
g/L grams per litre ppb parts per billion
Gpm Imperial gallons per ppm parts per million
minute psia pounds per square inch absolute
g/t grams per tonne psig pounds per square inch gauge
gr/ft3 grains per cubic foot RL relative elevation
gr/m3 grains per cubic metre s second
ha hectare st short ton
hp horsepower stpa short tons per year
hr hour stpd short tons per day
Hz hertz t metric tonne
in. inch tpa metric tonnes per year
in2 square inch tpd metric tonnes per day
J joule US$ United States dollar
k kilo (thousand) USg United States gallon
kcal kilocalorie USgpm US gallons per minute
kg kilogram V volt
km kilometre W watt
km2 square kilometre wmt wet metric tonne
km/h kilometres per hour wt% weight percent
kPa kilopascal yd3 cubic yard
kVA kilovolt-amperes yr year
kW kilowatt
 m

3 RELIANCE ON OTHER EXPERTS

This report has been prepared by RPA for Premier. The information, conclusions, opinions,
and estimates contained herein are based on:
 Information available to RPA at the time of preparation of this report,
 Assumptions, conditions, and qualifications as set forth in this report, and
 Data, reports, and other information supplied by Premier and other third party
sources.

For the purpose of this report, RPA has relied on ownership information provided by Mr.
Armando Valencia, Manager Corporate Relations with MMM. Premier has relied on an
opinion of permitting and land, mineral, and water rights by Sanchez-Merorada, Velasco y
Ribe, Abogados, dated November 10, 2015 and this opinion is relied on by RPA in Section 4
and the Summary of this report. RPA has not researched property title or mineral rights for
Mercedes and expresses no opinion as to the ownership status of the property.

RPA has relied on Premier for guidance on applicable taxes, royalties, and other government
levies or interests, applicable to revenue or income from Mercedes.

Except for the purposes legislated under provincial securities laws, any use of this report by
any third party is at that party’s sole risk.

Premier Gold Mines Limited – Mercedes Mine, Project # 2907

Technical Report NI 43-101 – April 18, 2018 Page 3-
4 PROPERTY DESCRIPTION AND LOCATION
The Mine is located in the state of Sonora, northwest Mexico, within the Cucurpe
municipality. The Mine is located 250 km northeast of Hermosillo, Sonora’s capital city, and
300 km south of Tucson, Arizona (Figure 4-1).

Mercedes is located at 30o19’47” N latitude and 110o29’02” W longitude. UTM coordinates

are: NAD 27, Zone 12,549,452 m E, 3,355,473 m N.

LAND TENURE
The Mercedes property consists of approximately 69,285 ha of mineral concessions under
lease from the government of Mexico (Figure 4-2). The area is covered by 43 mineral
concessions, all of which have been titled as Mining Concessions, according to Mexican
mining law. The titles are valid for 50 years from the date titled and can be renewed for
another 50 years. All of the concessions are owned by MMM, a wholly-owned subsidiary of
Premier.

Survey control of the mining concessions is based on concrete control points called
“Mojonera.” The Mojoneras and perimeters of the claims are certified by an authorized
surveyor, Perito Minero, and validated by the Dirección de Minas.

The areas of interest at Mercedes are located on private land. A surface access agreement
has been in place with the owner of the private land surrounding the mine since 2000.
 [Link]
112˚ 108˚ m
El Centro
25
Mexicali Legend:
Yuma Gila
8 Casa Grande 10 Administrative Capitals Cities
Ejido International Boundaries
Puebla San Luis 10 SilverAdministrative
City Boundaries Highways
Lagunitas
Rio
Riito 89

10 Grande 70
Tucson Las Cruces
10
Sonoyta

Colonia Reforma
San Antonio Primary Roads El Pas o
San
La Choya Quitovac 19
Sierra Vista Minor Primary Roads Local Primary Roads
Puerto Penasco
Francisquito
Sasab Ciudad Juarez
e Nogales Faben
El Plomo
San Luisito
Heroica Nogales Santa Douglas s
Cruz Agua Prieta

N El San Juan Saric Cibuta

Cabullona
Atil Tubutama Cananea Fronteras
Coyote
Altar Cumeral
Oquitoa Imuris

Heroica Caborca
Pitiquito Magdalena De Kino Esqueda
Bacanuchi Bacoachi
Santa Ana Viejo El Tigre
Puerto
30˚ Lobos
La Union
Trincheras
Bamori Nacozari Bavispe
Viejo
La Cienega El
Tiro Arizpe Bacerac Nuevo Casas Grandes
Tuape
MERCEDES MINE
Benjamin Sinoquip
Hill e Huachinera
Querobabi
Banamichi Teonadepa
Isla Angel de Dipo Huasabas
Aconchi Tres Alamos
la Guarda
Aduana El Oasis Carbo Rayon Moctezuma
30˚
El Desemboque Bacoachi
Tasajal Altar Mazocahui Pueblo Viejo

Cabo Tepoca
Coronado
Pesqueira
ORA Los Hornos
Tepache
Chihuahua
Batuc La Rancheria

SOUr
Nes
Isla Tiburon
Hermosillo Villa Pesqueira
Santa Maria
Las Calaveras Mazatan Sahuaripa Madera
Bahia Kino

Baja Viznaga Arivechi

La Colorada
Torres Tacupeto Tarachi
Las Delicias
Rosari
o
Esperanca Tecorip
a
Soyopa
Tonichi La Iglesia Chihuahua
Bahia
Sebastian
California Tastiota
Cieneguita La
Misa Suaqui
San Nicolas

Grande Yecora Ciudad Cuauhtemoc

Vizcaino Ortiz
Ensenada Chica Rancho San Jose
Morelos
Empalme Cumuripa Las Delicias
San Carlos Nuri
Guasimas
Guaymas El Molino

Rosario
Pitahaya Hornos Santa
Ana

Baja Esperanza
Bataeosa Quiriego

California
Pueblo Yaqui
Ciudad ObregonSan
El Tobarito Bernardo
Villa Guadalupe
Sur N San Jose
Alto Jecopaco
Villa Juarez
Techobampo
Buenavista
Bascobampo

U.S.A. Huatabampo
Alamos

San Antonio
Cuahutemoc
Las Delicias
San Francisco Del Oro
Bachantahui
Yavaros
El Salado
Santa Barbara

26˚ Golfo de California Veintiuno De

State of Marzo

Agiabampo
Sonora Gulf of Mexico Sinaloa El Salto
Los Mochis 26˚

Pacific Guasave
Guamuchil

Ocean Isla San Jose

Pacific Durango
Culiacan
Ocean Navolato

Isla Santa
Margarita

Ap
ril
20
18

4-2
 m
Isla Cerralvo
F -Silver Mine
La Paz State of Sonora, Mexico
i Mazatlan
Rosario
g Location Map
0
u
50 r
e
100 Miles 4
-
0 50
100
1
Km
P
r
e
m
i
e
r
G
o
l
d
M
i
n
e
s
L
i
m
it
e
d

M
e
r
c
e
d
e
s
G
o
l
d
4-3
 531,000 E 536,000 E 541,000 E 546,000 E 551,000 E 556,000 E 561,000 566,000 E
E

Figure 4-2 N
3,388,000 N

3,
Premier Gold Mines Limited 38
8,
00
Mercedes Gold-Silver Mine 0
3,378,000 N 3,383,000 N

Sonora State, Mexico

3,
Concession Boundary 38
3,
00
0
3,
37
8,
00
0
3,373,000 N

3,
37
3,
00
0
3,368,000 N

3,
36
8,
00
0
3,363,000 N

3,
36
3,
00
0
3,358,000 N

3,
35
8,
00
0
3,353,000 N

3,
35
3,
00
0
3,348,000 N

3,
34
531,000 E 8,
536,000 E 541,000 E 546,000 E 551,000 E 556,000 E 561,000 566,000 E
00
E
0
0 2 4 6 8 10
 Kilometres

April 2018 Source: Yamana Gold Inc., 2013.

 m

MMM controls 100% of the concessions, either through staking mining claims or finalizing
Option Contracts with the buyout of the claims. All of the concessions are in good standing
with mining law obligations through semi-annual tax payments and required assessment
work. All concession taxes are paid on a semi-annual basis by MMM. Table 4-1 lists the
mining concessions.

TABLE 4-1 MERCEDES MINERAL CONCESSIONS

Premier Gold Mines Limited – Mercedes Mine

Concession Area (ha) Title Title Date Expiry Date

El Principe 18.0000 172217 Oct 27, 1983 Oct 26, 2033
La Reina 12.0369 172418 Dec 15, 1983 Dec 14, 2033
Klondike 15.5275 174794 Jun 14, 1985 Jun 13, 2035
El Rey de Oro 18.6164 175490 Jul 31, 1985 Jul 30, 2035
El Rey de Oro 2 18.4000 175511 Jul 31, 1985 Jul 30, 2035
Corona de Oro 10.0000 175671 Aug 06, 1985 Aug 05, 2035
Klondike 2 9.8487 175672 Aug 06, 1985 Aug 05, 2035
Pragedia 20.0000 186251 Mar 22, 1990 Mar 21, 2040
La Bartola 10.0000 187085 May 30, 1990 May 29, 2040
Fracc El Nuevo Tucabe 8.8492 208553 Nov 24, 1998 Nov 23, 2048
El Tucabe 38.4590 210794 Nov 26, 1999 Nov 25, 2049
El Sol 200.7300 210898 Jan 27, 2000 Jan 26, 2050
Argonauta 7.7061 212480 Oct 24, 2000 Oct 23, 2050
Argonauta 390.7005 213646 Jun 05, 2001 Jun 04, 2051
El Real de Oro Fracc I 497.3410 213718 Jun 12, 2001 Jun 11, 2051
El Real de Oro Fracc II 3.6784 213719 Jun 12, 2001 Jun 11, 2051
El Real de Oro Fracc III 4.1211 213720 Jun 12, 2001 Jun 11, 2051
El Real 1 125.8333 215243 Feb 14, 2002 Feb 13, 2052
El Real 2 487.6264 215244 Feb 14, 2002 Feb 13, 2052
El Tucabe 3 109.2250 215246 Feb 14, 2002 Feb 13, 2052
Gato 2 50.0000 215596 Mar 05, 2002 Mar 04, 2052
El Nuevo Tucabe 42.3052 216522 May 17, 2002 May 16, 2052
Gato 337.1108 221761 Mar 19, 2004 Mar 18, 2054
El Hipo Fracc I 45.8914 221763 Mar 19, 2004 Mar 18, 2054
El Hipo Fracc II 11.7569 221764 Mar 19, 2004 Mar 18, 2054
El Hipo Fracc III 31.4375 221765 Mar 19, 2004 Mar 18, 2054
San Francisco 98.9169 221919 Apr 14, 2004 Apr 13, 2054
El Hipo Fracc II 3.0941 221920 Apr 14, 2004 Apr 13, 2054
El Hipo Fracc I 123.1961 221921 Apr 14, 2004 Apr 13, 2054
Rey V 1,597.2124 224150 Apr 12, 2005 Apr 11, 2055
Tragedia 2 20.0000 226071 Nov 16, 2005 Nov 15, 2055
Argonauta 2 Fracc 1 4.9663 226859 Mar 14, 2006 Mar 13, 2056
Argonauta 2 Fracc 2 13.8788 226860 Mar 14, 2006 Mar 13, 2056
Argonauta 2 Fracc 3 141.8638 226861 Mar 14, 2006 Mar 13, 2056

Premier Gold Mines Limited – Mercedes Mine, Project # 2907

Technical Report NI 43-101 – April 18, 2018 Page 4-4
Concession Area (ha) Title Title Date Expiry Date
Argonauta 3 81.0000 226862 Mar 14, 2006 Mar 13, 2056
Argonauta 4 2,127.0216 229005 Feb 27, 2007 Feb 26, 2057
Argonauta 5 Fracc 1 56,298.1556 236193 Mar 16, 2007 Mar 15, 2057
Argonauta 8 1,173.3752 238166 Aug 09, 2011 Aug 08, 2061
Argonauta 9 F-1 338.2361 238167 Aug 09, 2011 Aug 08, 2061
Argonauta 9 F-2 66.6451 238168 Aug 09, 2011 Aug 08, 2061
Tucaba 2 1,398.6047 243253 Aug 29, 2014 Aug 28, 2064
Tucaba 99.0807 244214 Jun 30, 2015 Jun 29, 2065
Tucaba 1 3,174.2856 244258 Jul 14, 2015 Jul 13, 2065
Total 69,284.7343

The Mercedes property is not encumbered by any royalties, since all of the claims under
contract were purchased with no future obligations.

MMM has all required permits to conduct work on the property. The tailings are considered
pH neutral to alkaline and are not acid generating material. Rehabilitation of the tailings
facility and the remainder of the mining areas on site at the end of mine life are estimated to
cost approximately US$15.2 million. RPA is not aware of any other significant factors and
risks that may affect access, title, or the right or ability to perform work on the property.
 m

5 ACCESSIBILITY, CLIMATE, LOCAL

RESOURCES, INFRASTRUCTURE AND
PHYSIOGRAPHY
ACCESSIBILITY
The Mine is accessed using Highway 54 via Magdalena de Kino located approximately 180
km from both Tucson, Arizona, and Hermosillo, Mexico. From Magdalena de Kino, access is
gained to the property using Highway 15 for 67 km, passing through the village of Cucurpe,
to the Rancho Los Pinos entrance. The Mine can be reached via an improved gravel road
approximately 10 km from the ranch entrance.

CLIMATE
The climate in the Mercedes area is typical of the high Sonora desert. The maximum
recorded summer temperature is 41.6°C and the lowest recorded temperature is -15°C with
freezing temperatures common at night between December and March. Rainfall is sparse
outside of the monsoon season (variably mid-June to early October). Rain and rare snow
occasionally fall between late January and February. Average annual precipitation is 506
mm.

LOCAL RESOURCES
Magdalena de Kino is the closest commercial centre and has a population of approximately
23,000. It is a well-established community with a variety of services available, including a
small airport, lodging, fuel and groceries, limited medical care, schools, and police. Cananea,
Sonora, is a major Mexican mining centre located approximately 170 km from the site.

Hermosillo, Cananea, and Tucson are main suppliers for the mining activity within the area.

INFRASTRUCTURE
Mercedes is currently mining three deposits and has all required infrastructure necessary for
a mining complex including:
 Declines and series of ramp-connected levels
 A 2,200 tpd crushing plant and mill
 A TSF

Premier Gold Mines Limited – Mercedes Mine, Project # 2907

Technical Report NI 43-101 – April 18, 2018 Page 5-1
 m

 Associated administrative building, laboratory, shops, and warehouse

 Sufficient water supply using mine dewatering and purchased water rights
 Power supply provided by a 65 km, 115 kV power line, from the town of
Magdalena de Kino

PHYSIOGRAPHY AND VEGETATION

The Mercedes property is located in an area of moderate to rugged topography, with
numerous arroyos and canyons incised through volcanic stratigraphy. The arroyos and
canyons contain intermittent streams that ordinarily flow in response to rainfall events or for
extended periods during rainy periods. Elevation in the property area ranges from 950 MASL
to 1,400 MASL.

Vegetation is typical of the high Sonora desert, including mesquite, desert oak, grasses, and
numerous species of cacti, junipers, and cottonwood trees.

Premier Gold Mines Limited – Mercedes Mine, Project # 2907

Technical Report NI 43-101 – April 18, 2018 Page 5-2
 m

6 HISTORY
EXPLORATION AND DEVELOPMENT HISTORY
The Mercedes district has been the focus of mining activities since at least the late 1880s.
Much of the historic data, including ownership information, was lost during the Mexican
revolution of 1910. Since at least the early 1980s, concessions have been held by a number
of private individuals, who have leased the holdings to various Canadian and Australian
companies.

Exploration and development work was conducted in at least two or three distinct periods.
The Mercedes, Tucabe, Saucito, Anita, Klondike, Rey de Oro, Reina, and Ponchena veins all
were the focus of exploration and development work on a limited to moderate scale during
the late 19th and early 20th century. No data is available for these programs, with the
exception of selected reports on the Mercedes, Klondike, and Tucabe mines, which were
located in the Anaconda collection at the University of Wyoming library.

The Tucabe vein was mined in the early 1900s. A cyanide mill was constructed on the site
and the Tucabe vein was accessed through a series of tunnels and shafts, covering over 600
m of strike and a vertical range of over 150 m. No data is available on the production from
this time period.

The Mercedes vein was discovered in 1936. Anaconda Copper Company optioned the
property in 1937 and spent two years exploring underground. The work included sinking a 50
m shaft and excavating a series of tunnels and internal raises for sampling and reserve
estimation. The ore was contained in a crushed vein with an average width of 1.7 m.

In 1994, the Fomento Minero, an agency of the Mexican government, conducted surface and
underground sampling of the Tucabe vein to evaluate potential for an open pit, heap leach
operation. Minera Sierra Madre evaluated the property and completed 800 m of reverse
circulation (RC) drilling to depths of 75 m in 1996. These holes collared within 20 m of the
surface outcrop of the structure and did not encounter the vein at any appreciable depth.
None of the results from that program are available.

Premier Gold Mines Limited – Mercedes Mine, Project # 2907

Technical Report NI 43-101 – April 18, 2018 Page 6-1
 [Link]
m
Local prospectors investigated the Saucito zone, located approximately one kilometre
northwest of the Tucabe area. These workings expose highly tectonized veins that are
crosscut by east-west trending post-mineral structures. Sampling by Rio Sonora (Gerle Gold
Ltd.) of the underground workings indicated that the mineralization was very erratic, however,
several samples returned results of greater than 10 g/t Au. Rio Sonora drilled 10 shallow
holes testing the area for near surface open pit potential. The holes returned low-grade
values and, in the vicinity of the workings, drilling failed to equal the grade from the
underground sampling.

Little historical data is available for past mining activities at the Klondike Mine. A cross
section in the Anaconda file from the 1930s indicates that the Klondike Mine was mined
around 1900, with the main stope being approximately 120 m by 80 m in size. The workings
have been inaccessible since the 1930s. All the reports mention the vein continuing at depth,
however, high inflow of water stopped the mining operation.

In the mid-1990s, Mogul Mining Ltd. (Mogul Mining) acquired the property and reported
assay results from several hand-dug surface trenches excavated near the main shaft area.
Premier does not have any of the Mogul Mining data.

The only known drill program was by Minera Sortula (Campbell Chibougamau Mines Limited)
about 15 years ago. Four core holes were reportedly drilled into the old workings. Premier
does not possess any of the Minera Sortula drill data.

FMC GOLD COMPANY/MERIDIAN GOLD INC. 1993-2004

The Mercedes and Klondike Mine areas were first examined by Meridian Gold Inc.’s
(Meridian) predecessor FMC Gold Company in 1993 as part of a regional exploration
program in Mexico. No further work was recommended at the time as the restricted nature of
mineralization precluded obvious open pit development opportunities. The Mercedes District
was re-visited in 1999 as part of a program focusing on high grade low sulphidation vein
systems. Based on the excellent potential of the district, acquisition was recommended and
field work was initiated.

Meridian geologists completed surface and underground mapping and sampling by

September 2000. The surface evaluation identified 11 separate target areas. Five areas had
historic mining activities and were the focus of the first phase of an RC drilling program.

Premier Gold Mines Limited – Mercedes Mine, Project # 2907

Technical Report NI 43-101 – April 18, 2018 Page 6-2
 m
Veins or stockwork zones were encountered in all five areas by drilling. Mercedes, Klondike,
and Tucabe all had at least one drill intercept assaying greater than 10.0 g/t Au.

Premier Gold Mines Limited – Mercedes Mine, Project # 2907

Technical Report NI 43-101 – April 18, 2018 Page 6-3
Phase 2 RC drilling started in January 2001 focusing on the Klondike and Mercedes zones.
The Phase 2 program tested the target zones both down dip and along strike. This program
was successful discovering a narrow, vein-hosted mineralized zone at Mercedes and
significant mineralization at Klondike.

With gold prices dropping rapidly to less than $300 per ounce, a decision was made to joint
venture the property. In 2002, Meridian entered into a joint venture (JV) with Fischer-Watt
Corporation (Fischer-Watt), to continue exploration at Mercedes. Fischer-Watt’s focus was
the Mercedes vein zone, so the Klondike and Rey de Oro concessions were dropped from
the JV. Fischer-Watt carried out limited metallurgical testing and developed a preliminary
design for underground development on the Mercedes vein area south of Corona de Oro.
The JV was terminated in the fall of 2004 and the property was returned to Meridian.

The exploration program conducted in 2005 resulted in the discovery of the bonanza grade
Corona de Oro shoot in the Mercedes vein. Drilling expanded in 2006-2007, focusing on the
Mercedes, Klondike, and Lupita veins.

YAMANA GOLD INC. 2007-2015

In October 2007, Yamana took control over the property and subsequently carried out
surface mapping, geochemical exploration, and drilling. An aggressive drilling and
development program was completed to bring the Mine to a feasibility study stage. Drilling
from 2009 to end of 2015 focused on district exploration outside the Mercedes-Klondike
systems, resulting in the discovery of the 1) Barrancas vein zone, 2) Diluvio zone at Lupita,
and 3) expansion of the Rey de Oro vein system.

The discovery history for major ore shoots on the Mercedes property is summarized in Table
6-1.
 TABLE 6-1 MAJOR DISCOVERIES
Premier Gold Mines Limited – Mercedes Mine

True
Discovery From Interval Au Ag
Year Vein Ore Shoot (m) To (m Width
Hole (m) (m) (g/t) (g/t)

2000 Klondike Klondike K003 141.77 151.68 9.91 7.53 7.13 21.0
2005 Mercedes Corona de Oro M05-031 186.00 207.00 21.00 9.00 28.44 245.0
2006 Rey de Oro Rey de Oro R06-008 0.00 19.30 19.30 17.20 5.21 16.3
2007 Mercedes Sentinela M07-107D 253.54 255.84 2.30 2.10 157.29 574.0
2008 Mercedes Breccia Hill M08-305D 218.24 221.28 3.04 2.00 19.43 11.6
2008 Mercedes Tierra De Nadie M08-230D 197.30 206.29 8.99 8.10 24.11 156.2
2009 Barrancas B. Centro M09-459D 318.82 333.42 14.60 6.05 5.82 186.2
2009 Barrancas Lagunas M09-449D 203.60 211.30 7.70 6.30 16.68 65.6
2009 Lupita Lupita L09-021D 193.51 201.15 7.64 7.01 28.15 52.0
2010 Barrancas Lagunas Norte M10-574D 198.12 204.52 6.40 4.90 9.31 121.1
2010 Lupita Diluvio L10-073D 202.08 233.52 31.44 9.00 8.40 11.9
2011 Lupita Diluvio West L11-109 421.84 430.98 9.14 7.32 7.24 48.1
2012 Barrancas Marianas M12-639D 454.77 457.81 3.04 2.20 12.69 11.5
and 476.38 477.62 1.24 0.74 74.70 4.0
Rey de Oro Rey de Oro Deep R12-066D 115.21 123.44 8.23 7.50 14.00 149.6
2014 Barrancas Gap M14-672D 190.40 200.56 10.16 7.00 19.29 209.4

Commercial production at the Mine started in 2011.

PAST PRODUCTION
No precise production totals are available from historic mining operations. During the years
1937 to 1939, Minera Oro Chico mined the material outlined by Anaconda at Mercedes. This
probably totalled 20,000 to 30,000 ounces.

Given the scale of historic mining observed at Klondike, Rey de Oro, Tucabe or Saucito, and
the known high grades in the exploited veins, a reasonable estimate of cumulative past
district production is in the order of 150,000 tonnes and approximately 73,000 gold equivalent
(AuEq) ounces.

Production by MMM at Mercedes is listed in Table 6-2.

TABLE 6-2 HISTORIC PRODUCTION TO DECEMBER 31, 2017
Premier Gold Mines Limited – Mercedes Mine

Tonnes Gold Silver Gold Silver

Year Mined Grade Grade Ounces Ounces
(000) (g/t Au) (g/t Ag) (000) (000)
2011 19.2 4.97 61.7 3.1 38.0
2012 513.7 6.27 81.7 103.6 1,349.9
2013 641.0 6.13 76.6 126.3 1,578.1
2014 648.6 5.40 61.2 112.6 1,276.4
2015 492.1 5.06 52.2 80.1 826.4
2016 663.9 4.86 55.9 103.7 1,193.2
2017 683.5 3.93 37.6 82.6 338.3
Total 3,662.0 5.23 60.2 612.0 6,600.3
 m

7 GEOLOGICAL SETTING AND

MINERALIZATION
REGIONAL GEOLOGY
The Mercedes Mine lies in the Basin and Range physiographic province, approximately 80
km inboard from the Late Proterozoic rifted continental margin of the North American plate
and northeast of the inferred “Sonora-Mojave Mega-shear.” The area is underlain by a thick
succession of shallow-marine shelf carbonate and siliciclastic rocks ranging in age from
Jurassic to Cretaceous, which have been moderately to strongly faulted and folded, related
to thin-skinned, northeast directed thrusting during the Late Cretaceous Laramide Orogeny
(Figure 7-1).

In late Cretaceous to middle Tertiary time, the Jurassic-Cretaceous sediments were overlain
by intermediate to felsic volcanic rocks of the Sierra Madre continental volcanic arc. The
andesitic volcanics within this sequence host the quartz-adularia epithermal veins of the
Mercedes area. The most extensive intrusive rocks in the region are stocks, plutons, and
plugs of Tertiary granodiorite to diorite, which intrude the Jurassic metasedimentary
sequence. The Miocene was dominated by extension, erosion, and limited volcanic activity.
Thick and regionally extensive sequences of polymictic conglomerate and arenite, which are
locally intercalated with felsic volcanic units, fill fault-bound extensional basins throughout
north- central Sonora.

Premier Gold Mines Limited – Mercedes Mine, Project # 2907

Technical Report NI 43-101 – April 18, 2018 Page 7-1
 [Link]

110° 40’
110° 35’ 110° 30’ 110° 25’ 110° 20’
30° 30’ 535000 40 45 50 55 560000 30° 30’
TmCgp-Ar C. EL ENCANTADO TmCgp-Ar 30°
18° TmTR TmTR 34° 36°

TmTR-Vi 13° KsAr-A 32°

To
40°
58° 63° 40° ToTR-R 62°

Pr
PH −11
LA CIENEGUITA 36°
30° 10°
12°
.
SA−20 ToA A

N
33° 28°
TmTR-Vi EL ENCANTO 45° 35°
C. TOMASTIÓN
Au
KsTpaA-BvA
TmTR
o
(PLACER)
LOS NOGALES TmCgp-Ar C. EL BAMORI
28° 55° 55° C. LAS PARVAS
LA CEBOLLA 16°

20°
VETA DE AGUA 50° 15° LA PUERTA TmTR TmTR 43° 62°

p
45° 46°
ToA
.
Au Au 18°
(VT,07,OX) (PL CER) 43°
(Abandonada)
TeGd-D BUENA FORTUNA
Au,Cu 50° ToA
22° (VT,07,OX) LA PUERTA TmTR TmTR 28° 33°
54°

er
4° SILI-OXID
(San Brunito) LAS PILAS MESA EL OSO
TmCgp-Ar GUADALUPE (Abandonado)
C. LA VIRGEN
84° ToTR-R
35° 75° Au
32°
ToA ToA
EL RANCHITO TmTR-Vi LA PROVIDENCIA (VT,07,OX)
32°

ty
5° 40°
70°
14° ToA KiCz-Lu
LA DESCUBRIDORA
Cu,Au 9° TmCgp-Ar 10° PH−8 26° 25°
SA−22 TeGd-D (VT,07,CB)
Qhoal60° 40°
50°
LA PROVIDENCIA
TeGd-D
B
80° LA JUNTA
EL POTRERITO
TeGd-D 18°
58° Au
(VT,07,OX) EL TORO
SA−23
C. EL ROSARIO 65°
SA−1
0 KiCz-Lu
4° SA−19
60°
3370000

o
9°
Qhoal TeGd-D
B. EL TORO LA JOSEFINA
68° TmTR J−76
43°
65°
ToA
33
Au
(VT,07,OX) EL ROSARIO 52°
EL TORO
Cu,Au Au
TmCgp-Ar JsKiVs (PLACER)

u
C. EL DORMIDO (IR,07,CB) 8° 27°
C. LA JOSEFINA

LA ESCONDIDA
Au
42°
45°
10°
C. EL TEJANO 52°
26° R
R
70
TmR R
pTm(?)Gr-Gd
00
SA−1
(VT,07,OX) C. CAMPO LOBREGO
QptCgp 6
ToA 65°
SA−13
62° 76° 58°
24° SANTO NIÑO SA−29 SA−1 10° C. EL SAUCITO

0
8
Au 44°
TmR C. LA ESTRELLA
(VT,07,OX) 10° 14°
LA CUESTA
SA−12 81°
46° 48° 40°
41°
28° Au TmTR SA
21
42°
70° SA−1
5
60° (VT,07,OX) Qhoal LOS AZULITOS

SA−17 ToPGr LA TINAJA

Cu
(Abandonado)
48°
C. EL TENA
ToPGr 20°
30°
22°
TmTR-Vi (VT,07,CB)
56° 74° LOS BANCOS SA−14
8° SANTO DOMINGO 30°
62°
EL BATAMOTE EL PORVENIR 45° 35°
TmCgp-Ar
12°
40° 18°
Au,Ag,Pb
Au
(DS,07,NT)
BUENAVISTA
Au,Pb,Zn
65°
Au,Pb,Zn
(VT,07,OX) 14° TmCgp-Ar KsAr-A 58° 22°

20°
10°
(VT,07,OX) (VT,07,OX) TeGd-D 18° KsTpaABvA SANTA CLARA DEL COBRE
Cu CERROS
EL APACHE
8° 35° Kn,Cz
OXI Au 72° 15°
TmTR-Vi (VT,07,CB) LOS CALOSOS
80°

LA TINAJA Lopez Ol ivas, J.G. 18° (VT,07,OX)

10° 1998 C. LAS TRANCAS ARGI−OXI
Au,Ag,Pb
(VT,07,OX)
80° Calpi onella ell ipti ca DE LA SIERRA TeGd-D 6° C. CORRAL QUEMADO 53° 80° D 30°
C alpionel la alpina 65°
SA−24
BATAMOTE C alpionellopsi s si mplex Au,Pb,Zn
(VT,07,OX) 45° TmTR
50° EL APACHE 32° 65°
TmR 58° Au 34°
TmCgp-Ar 78° LA GLORIA 89° (PLACER) 8° 80°
SANTO DOMINGUITO
(Abandonado) 8° TARACHICO
Au,Ag,Pb
18°
C. LA TINAJA
KsAr-A TmTR (VT,07,OX)
MONTEVERDE
50°
Au,Ag,Pb
45° 80° C. EL CALICHE Au
75° TmB C. EL GUSANO
(IR,07,SF)

FRANCISCO B. LAS RASTRAS

62°
ZONA EL CALICHE TeGd-D
(VT,07,OX)
KsAr-A 20° KiCz-Lu
Au,Ag 35° 20° 79° 8°
LAYDAME LA VILLEGUEÑA 61° EL DURAZNO 6° 86°
(VT,07,OX) 20° Au CERRITO BOLUDO Au,Ag,Pb
REYNA DE PLATA Au ARGI−OXID
LAYDAME (VT,07,OX) Au,Ag,Pb (VT,07,OX)
C. PRIETO (VT,07,OX)
Au,Ag,Pb (VT,07,OX) 12° 61° TACAPADEPE
Au (VT,07,OX) EL DURAZNO
78°
(PLACER) OXID−SILI Au 30° 28°
CERRO PRIETO TmTR BUENASUERTE 88° (PLACER) 5° 12°
10°
48° KsTpaA−BvA 55° Au,Ag,Pb 58° 38° 10° 35°
5° 13° 57°
SA−6 (VT,07,OX) CHINOS ALTOS LOS CHINOS 35° 20°
CERRO PRIETO 35°
C. LAYDAME 65° TmR Au,Ag,Cu Au
25° TmB
ARGI-OXID
(VT,07,OX) LA ESPA OLA

65
(VT,07,OX)

65 A Au,Ag

KsTpaA-BvA
T R Tm
0 7, O ) ( V Au,Ag,Pb 65°

30° 25’
70° 65° 75° 25°

30° 25’ TmB

85° B. CERRO PRIETO OXID CABEZA BLANCA 75° (VT,07,OX) 8° 30o
75° LOS JAPONESES EL JARDÍN EL MATADERO
Au,Ag,Pb Au,Ag,Pb,Zn 80° CERRITOS EL DURAZNO (PERLITA) 22°
Au
18°
TmCgp-Ar
16°
C. AMOL
(VT,07,OX) (VT,07,OX)
SILI−OXID
C. BABIROCHON EL GUERIGO
Au,Ag 30°
(PLACER)
23°
10° 80°
S HE RERA
EL REY
Au,Ag (VT,07,OX) LA BRISCA
EL PUERT 40° 62°

TmTR-Vi TmCgp-Ar U

SAN N
70° LA MARÍA PUERTO DE ORO

Au
35° (VT,07,OX) TeGd-D Au,Ag,Pb Au g,Pb (VT,07,OX)
Au
(PLACER) 80°
65° (S ,07,FF)
LA CALERA (VT,07,OX) (VT 07,OX)
Au TmR
12°
MESA TECAPADEPE ToTR-R 14°
ARGI-OXID
(VT,07,OX) 65°
LA ESPINO B. EL ENCINITO
Au,Ag,Pb 12°

25° (VT,07,O EL SERRUCHO LA BRISCA 15° EL PILAR

80° Au 65° (PERLITA)
B. EL PUERTO (VT,07,OX) 12° ARGI−OXID 35° 22°
LA CARLEÑA
40°
40°
52°
65°
Au,Ag,Pb 5° TmB 16°
30° (VT,07,OX) 6° C. BLANCO
75° 73° 18° 26°
ESPERANZA
SA−3
40° SA−1
80° 32°
8° TmB 40°
CERROS ALTOS Au,Pb 32°
SA−4 15° 15°
EL TASAJAL SANTA LUCÍA J−6
80° (VT,07,OX)

85°
Au
(VT,07,OX)
SA−2 Au,Ag,Pb
(VT,07,OX)
12°
B. EL GUERIGO
KsTpaA-BvA ToTR-R 6 C. EL ASERRADERO
70°
SA−5
C. EL OSO NEGRO 12°
SA−8 60° C. EL TASAJAL B. LA PEÑA BLANCA
7° OSO NEGRO
SA−7
EL AGUAJITO 7° Au 76° B. EL PUERTO
Au,Ag 57° 18° (VT,07,OX) 35°
13°
15° 76°
(VT,07,OX) 35° MESA
SAN BRUNITO 56° SILI−OXID LA MURALLA ToTR-R OSO NEGRO
TmB
40° Au,Ag,Pb
(VT,07,OX)
65° 29°
40°
B. EL GUERIGUITO 5°
TmTR 12°
TeGd-DEL AGUAJITO 85° 7°
35°
12° 80°
65°
70°
26° 25° KsTpaA-BvA 15°
SAN MARTÍN
Au,Ag TmTR
LA PLOMOSA LA CALERA
LAS CENDRADITAS (VT,07,OX)
Au,Ag,Pb 18° 4°
32° (VT,07,OX)
20° LA PUERTA
14° 40°
40° TmCgp-Ar 40° 10°

Qhoal LA LUPITA
TmB
60
9°
SAHUARO CAIDO 45° Au,Ag
Au,Ag,Pb (VT,07,SF) 52° 40° SAN MARTÍN
(MA,07,OX)
40°
KsTpaABvA
60
36° GUAGUASI C. EL TARAICITO C. DE ENMEDIO
BOIDOLINO

ZONA
12° B. EL ENTERRADO
SILI−OXID 35° 15° Qhoal EL TARAICITO
8°

38°
35° ToTR-R TmCgp-Ar
51°

TeGd-D
KLONDIKE
C. TENAMASTE
BORDOS EL TARAICITO 28°
80°
23° ALISAR 26°

TÍO MIKE
Au B. MULA MUERTA QptCgp KLONDIKE J−3
TmTR 16° C. LA ATASCOSA
35°

71° (VT,07,OX)
Au,Ag 19°
Qhoal SARACACHI (VT,07,O )
OXID−SILI TENAMASTE

ZONA
45° 45° 28°
C. LA MINITA TÍO MIKE TeGr−D 75° 80° KLONDIKE
OXID−CAOL 18°
LA PONCHEÑA 71°
(Agua Fría) J−60
Au REY DE ORO 8° 80°
CERRITOS EL ZORRILLO J−61 Au,Ag
EL ZORRILLO

LAS MERCEDES
EL MEZQUITAL Au,Ag,Cu 68°
(VT,07,OX) 66° (VT,07,SF) B. POTRERO VIEJO
Au 23° LA REYN
45° (IR,07,OX)
(VT,07,OX)
J−64 KsVs Au 8°
C. LA PIRINOLA

31°
B. EL BOTE EL BO 82° ANITA
Au,Ag,Cu
(VT 07,OX) 13°
TmTR KsTpaA-BvA
20°
36°
. 55° JsKiVs TmCgp-Ar Au
(VT,07,OX) (VT,07,SF)
54°
TmB
J−4 60°
75° (Abandonada) B. DON LENCHO
58° J−58
14°
8° BRAL
74° B. LA PALMITA 89°
SA−9
10° LA PALMITA
20° 25° BORDOS EL COLUMPIO 57° B. LA MESA
EL SAUCITO 16° EL VALLE
88° 65° B. BAMORI 5° TmCgp-Ar Au,Ag
(VT,07,OX)
65°
TeGd-D 70° J−5
7
LA CUCHILLA
40° DA LA MESA

30° 20’
SANTA GUADALUPE Au Ag

30° 20’ Au,Ag,Cu

(VT,07,SF)
15°
70°
(VT,07,O

LAS MERCEDES 62°

78°
72° EL TUCABE
8°
68°
15°
ToTR-R C. EL VALLE

55
EL MAGISTRAL Au,Ag 62° Au,Ag
65° 30° 7° (VT,07,OX) (VT,07,OX)
40° Cu,Au OXID−SILI
(SW,07,CB) 49° 40°
GRABEN LOS PINOS LAS MERCEDES

55
20° EL TUCABE 75°
18° 31° 8° 80°
75° 7°
14° 40°
12°
18° 40° KsVs55°
72° TeGd-D 20°

OXID−CAOL J−2 KsTpaA-BvA C. DE ENMEDIO

SERI−OXID
TeGd-D R 83° 12° ToTR-R 80° 75°
80°
38°

80° 75°
R J−9 TmTR-Vi 6°
SILI−OXID B. LOS PINOS
38°
84° LOS PINOS
76° 50°
J−18
B. PABLO
42°
42° EL PANCHO KsTpaA-BvA 5° ToTR-R
8°
B. LA MORITA 48°
45°
Cu,Ag,Au
(MA,14,CB) 64° KsVs PICO EL CUERVO

B. EL PANCHO
60°
Qhoal 14°
10° 30° LA PALMITA C. LOS ASADORES
60° 67° J−17 14°
18° Au
46° 30°
KsTpaA-BvA 10° 39° (VT,07,OX)

B. EL ALAMO B. BOLAS AMARILLAS

11° 44°
55° R
C. BOLAS AMARILLAS KsTpaA-BvA B. SAN PEDRO

JsKiVs
C. HUEQUECHI
3350000 m. N

R
13°

QptCgp TmTR-Vi C. LOS NOVILLOS

82° J−2
2

C. BLANCO 5°
SA−1

Qhoal 1

TmCgp-Ar ToTR-R
8° 65°
JsKiVs
B. LA GORRULLA
GORRULLA 69°
12°
KsTpaA-BvA 33
62°

C. LOS TOROS LA BELLOTA

(Los Frijol s)
50
C. TAPÓN

ToTR-R
KsTpaA-BvA 00
4° 79°

0
57° 12° 25° 53°
55° 16°
20°
36°
44° B. LOS CHIRRIONES
32° CHUPISONORA B. LA PETU
8° 25° 50°
LAS YEGUAS
KsTpaA-BvA Au,Ag,Pb KsTpaA-BvA
EL BAJÍO (VT,07,SF) QptCgp 61°
73° .

13° CORRAL QUEMADO

54° B. LA PEDORRA B. LA RANA ToTR-R LA MESA
EL ALAMIT 29° 27°
47°
6° Au
(VT,07,OX)
85° TmCgp-Ar 8°
25° 27°
81°

ToTR-R B. EL CHAMBO

Property Boundary
9° 9°
TmTR-Vi
30° 15’ KsVs
9° 57° LOS JANOS
ToA 51°

30° 15’
110° 40’ 535000 m. E 4 0 45 50 55 560000
1 10 ° 110° 30’ 110° 25’ 110° 20’
35’

0 2 4 6 8 10
NOTE: Refer to Figure 7-1A for Local Geology Legend.
Kilometres

Figure 7-1

Premier Gold Mines Limited

7-2
 Mercedes Gold-Silver Mine
Sonora State, Mexico
Local Geology
Source: Geological Map
April 2018 Saracachi H12-B72-Sonora, 1999.

7-3
 [Link]
Symbols:
Quaternary

Alluvium
Structure Mineralization Mineral Deposit Style
Geological
Contact In-situ Mineralization Vein
Polymictic Conglomerate Irregular
Producing Mine
Inferred
Geological
Contact Stockwork
Tertiary
Abandoned Disseminated
Neogene Strike and Dip Massive
Polymictic Conglomerate Mine Reopening
Sandstone Foliation Mine Prospect
Origin
Basalt Pseudo Stratification Dimention Stone Epithermal
Hydrothermal
In Production
Volcanic System Placer
Rhyolite Tuff Inactive Replacement
Lava Flow Prospect
Vitrified Rhyolite Tuff
Normal Fault Plants Mineralization Type
Rhyolite Mill Carbonate
Inferred Normal Fault Oxide
Paleogene Metal Processing Phosphate
Reverse Fault Geothermal Sulphide
Rhyolite Tuff-Rhyolite Native Metal
Others
Inferred Reverse
Tailings
Andesite
Trench Topography
Fault Strike-Slip Fault
Waste Dump Population
Cretaceous
Upper Recumbent Anticline
Sampling Paved Road
Andesite-Andesite Recumbent Syncline Petrographic
Breccia Gravel Road

Recumbency Chips Trail

Volcanic Sediments
Paleontological Path
Fracture
Radiometric Railway
Sandstone-
Inferred Fracture Alteration Airport
Lowe Oxidation
r Andesite Body of Water
Measured Fracture Silicification
Pyritization
Vein Argillization
Limestone-Shale
Jurassic Granodiorite ed Vein Rhyolite
Upper I
April 2018 Dike
Volcanic Sediments
n

Igneous Rocks f
Intrusives Alteration Limits

Porphyritic Granite e

r
Granodiorite-Diorite
r
Granite- Source: Geological Map
7-3
Saracachi H12-B72-Sonora, 1999.
Kaolinization Sericitazation
Granitization

Figure 7-
1A
Premier Gold Mines Limited

Mercedes Gold-Silver Mine

Sonora State, Mexico
Local Geology Legend

7-4
 [Link]

PROPERTY GEOLOGY
The geology of the Mercedes area is dominated by two northwest trending arches, which
have exposed older marine sediments and overlying interbedded volcaniclastic sediments
and lithic to quartz crystal lithic tuff units. The arches are cut by numerous northwest trending
high angle structures. Some of these faults have been intruded by at least three stages of
dikes and small stocks, ranging in composition from andesite to latite and rhyolite. Marginal
to the northwest trending arches, andesitic flows and flow breccias (with local coeval
andesite dikes) have been deposited and preserved in at least three west-northwest
thickening basins. This andesite package, locally over 500 m thick, and the contact zone with
the underlying tuff host all known economic epithermal vein deposits in the district (Figure 7-
2).

Post-mineral plagioclase-biotite latite porphyry dikes fill some of the same northwest trending
structures that host veins in the Mercedes/Barrancas corridor, venting to the surface in flow
domes and extensive latite porphyry flows ranging from 10.0 m to +190.0 m thick. The latite
flow/dome field covers an area of at least 6 km 2 to the southwest of the Mercedes fault zone.
Dikes generally crosscut and destroy vein mineralization. Vitrophyre is locally preserved on
both latite dike and flow margins.

The latite and all older units are overlain locally by more than 200 m of post-mineral
conglomerate and volcaniclastic units of the Miocene Baucarit Formation, as well as local
intercalated ash tuff/ignimbrite, highly magnetic andesite flows, and overlying bimodal rhyolite
and basalt flows.

A total of 16.5 km of gold-silver bearing epithermal low sulphidation veins have been
identified within or marginal to the andesite-filled basins, which constitute the primary
exploration target on the property. Major veins typically trend N30º -70ºW at 60º to 90º dips
following the major regional structural pattern. Other veins trend variably from east-west to
north-south, or even northeast. Veins typically dip at greater than 60º, but locally range as
low as 25º.

The major exception in the district is the Lupita-Diluvio vein system, which is localized along
a N70ºE, 15º to 55º northwest dipping listric fault zone. In contrast to other vein areas, almost
all the stockwork, breccia, and vein hosted gold-silver mineralization is hosted within older
lithic tuff and volcaniclastic units below the andesite package.
Premier Gold Mines Limited – Mercedes Mine, Project # 2907
Technical Report NI 43-101 – April 18, 2018 Page 7-4
 [Link]
548,000 549,000 mE 550,000 mE 551,000 552,000 mE 553,000 mE 554,000 mE
3,360,000 mN mE mE
Figure 7-
2 3,
36
Premier Gold Mines Limited 0,
00
0
Mercedes Gold-Silver m
Mine Sonora State,
3,359,000 mN

Mexico Property 3,
Geology 35
9,
00
0
3,358,000 mN

m
3,
35
8,
00
0
N
3,357,000 mN

3,
35
7,
00
0
3,356,000 mN

3,
35
6,
00
0
3,355,000 mN

m
N

3,
35
5,
00
0

A SECTION A-A’ A’
Looking NW

GEOLOGY
Conglomerate; unconsolidated, unsorted rhyolite clasts Lithic Tuff Sequence:
Cgl Includes fiami-bearing ignimbrite units. Distinctive with >25% lithic clasts,
in a “dirt” matrix. Caps all older units locally. l-lt
+/- quartz grains. Bottom of sequence is marked by angular discordance.
Rhyolite Ignimbrite: Vocanoclastic Sequence:
T-Rig cgl
Fiame textured, flow-banned. Very low angled bedding.
qxlt Predominately contains “red-beds” 5-50m thick with
ss with quartz-crystalline tuffs. Includes one 15m thick
Latite Porphyry: Medium grained biotite k-feldspar porphyry, dolomite unit. Base is marked by erosional discordance.
l-Lat occuring as vertically flow-banded dikes and extrusive flows.
Sediment Sequence: Laminated mostly thin-bedded
ss siltstones, sandstones, and shale with minor conglomerate.
Andesite Sequence Undivided: Complex intercalation sh
A Predominately sub-aquous deposition. No obvious volcanic
of hornblende porphyritic and plagioclase porphyritic component. Often in low-angle fault contact with younger
l-a flows and flow breccias, with local basins filled with units throughout Mercedes map area.
l-bi heterolithic volcanic deposits. Andesite sequence cut by MINERALIZATION / STRUCTURE
hornblende-plagioclase andesite porphyry dikes (l-a) and
strongly magnetic aphanitic biotite porphyry mafic dikes (l- Vein / Mineralized Structure
bi)
Fault with Direction of Movement
Quartz Stockwork

0 250 500 750 1000

April 2018 Metres Source: Yamana Gold Inc., 2014.
7-5
 m

VEIN MINERALOGY AND PARAGENESIS

The epithermal veins on the Mercedes property display multiple stages of quartz, carbonate,
and adularia. Paragenesis is greatly complicated by hydrothermal brecciation and the
multiple stages of pre-, syn-, and post-mineral tectonic brecciation and faulting.

Quartz types cover the spectrum from clear to grey, yellow, tan, green, grey, and purple.
Textures range from chalcedonic to sugary, granular, and coarsely crystalline. Boiling (lattice
and froth) textures are locally observed in all vein zones. Greenish quartz is always
associated with gold values (ore stage) and the presence of disseminated hematite specks
and cubes after oxidized pyrite is often a key guide to bonanza gold grades in all veins.
Native gold is also found as specks within quartz or on late fracture with copper oxides
(Klondike). Earlier mineralized quartz and other quartz pulses is often highly brecciated and
cemented by multiple stages of green quartz and 15% to 80% later multiple stages of
rhodochrosite, siderite, and barren massive grey calcite. It is believed that gold and silver
were locally deposited with some rhodochrosite and siderite pulses. Adularia is present as
erratic breccia fillings and in bands within veins primarily in the Barrancas and Lupita-Diluvio
vein systems.

ALTERATION
PROPYLITIZATION
The main intrusive and extrusive igneous rock packages at Mercedes are variably
propylitized by a regional alteration event not considered to be directly related to vein
mineralization. The andesite flow and flow breccia host rocks as well as the massive latite
intrusion range from nearly fresh to strongly altered, containing variable amounts of chlorite-
calcite and local epidote.

SILICIFICATION
Silicification is the most prominent alteration associated with the Mercedes area veins,
although the distribution and intensity vary within and proximal to the different vein/structural
zones. Wide zones on silicification and stockwork veining, up to 70 m, have been noted in
the Corona de Oro, Klondike, and Rey de Oro shoots and are associated with zones of
intense fracturing within the host structure. Conversely, many of the same ore shoots contain
wide vein zones with less than 0.5 m of silicified andesite peripheral to the structure.

Premier Gold Mines Limited – Mercedes Mine, Project # 2907

Technical Report NI 43-101 – April 18, 2018 Page 7-6
POTASSIC ALTERATION
Potassic alteration, in the form of adularia, is widely disseminated in veins and adjacent host
rocks at Mercedes. The adularia is common in thin section but difficult to see in hand
samples. By contrast, the Barrancas and Diluvio vein zones contain locally abundant visible
adularia both within veins and in adjacent wall rocks.

SERICITE-CLAY ALTERATION
Argillic alteration is generally present near veins on the property, though bleached rock is
typically not a prominent feature. No detailed analyses have been completed to define clay
mineralogy or zoning within the system.

DEPTH OF OXIDATION
With the exception of isolated grains, the veins and wall rock are almost completely oxidized
to drilled depths in all areas (vertical range of 440 m at Mercedes, 280 m at Klondike, 140 m
at Rey de Oro, 300 m at Barrancas, and 450 m at Lupita). Goethite is more common in the
wall rock at Mercedes and Klondike, whereas at Rey de Oro, hematite is most abundant.
Unoxidized disseminated pyrite was observed in association with propylitic or sericite
alteration adjacent to vein zones in only a few deep holes below Corona de Oro.

MERCEDES AND BARRANCAS VEIN ALTERATION

The veins are hosted in highly variable zones of altered andesite, ranging from nearly fresh
to chlorite-calcite-quartz pyrite (Chlorite) with calcite stockwork; quartz-adularia-chlorite-pyrite
(silica 1-2); and quartz-adularia ± sericite-pyrite (QS) with quartz stockwork increasing in
intensity as the veins are approached. In some places, however, veins are encountered with
only minor chlorite ± adularia alteration directly adjacent to the vein contact. Manganese
oxides in the wall rock are generally absent or present in very small amounts, compared to
the Klondike system.

KLONDIKE VEIN ALTERATION

The alteration zone occurs as a southwest dipping shear zone with strong hematite-
manganese oxide alteration, silicification, and quartz stockwork. Little narrowing of the
alteration package has been noted at depth, even though the gold and silver values drop
significantly below the 1,000 m elevation.
REY DE ORO VEIN ALTERATION
The alteration zone occurs as a broad area of hematite oxidation and variable silicification,
which envelope zones of quartz stockwork veining. Manganese oxides are generally absent
or present in very small amounts, compared to the Klondike system. Deeper core holes show
the silica-hematite alteration zones are increasingly restricted at depth.

MINERALIZATION
A total of 16 principal low sulphidation epithermal vein/stockwork/breccia zones, have been
identified on the Mercedes property. The currently producing veins have been divided into
three sub-district areas:

 Mercedes Area (Mercedes-Barrancas).

 Klondike Area (Klondike-Rey de Oro)
 La Lupita Area (Lupita-Diluvio)

Basic data for all of the veins is summarized in Table 7-1. The majority of the veins are
hosted within the andesite package, or locally at the fault contact between andesite and the
underlying lithic tuff package. Only the Diluvio zone at Lupita and the Anita veins contain
significant economic grade mineralization hosted completely in the lower tuff package.
 TABLE 7-1 PRINCIPAL VEIN
DESCRIPTIONS
Premier Gold Mines Limited – Mercedes Mine
Length Width Elevation
Vein Host Morphology Strike (º) Dip (º) (m) (m)
(m)
Mercedes Area
80SW-
Mercedes Andesite Vein/Stwk/Bx 315
65NE 3,500 1.0-2.0 680-1,160
Saucito Andesite Vein 315 90 250 1.0-3.0 950-1,150
Derrama Andesite Vein 310 80 250 1.0-4.0 870-1,050
Paloma/EZ Zone Andesite Stwk/Vein 315 90 1,500 0.1-8.0 950-1,165
Tucabe/Saucito Andesite Vein/Stwk 340 65 SW 1,400 1.0-5.0 950-1,200
Barrancas/Lagunas Andesite Vein/Stwk 315 80-90 1,900 1.0-15.0 800-1,050
Anita/Venado Lithic Tuff Stwk 285 90 700 1.0-2.0 1,120-1,280
Sub-total 9,500

Klondike Area
Klondike Andesite Vein/Bx/Stwk 290 70 SW 800 1.0-55.0 960-1,200
Rey de Oro Andesite Stwk/Vein 320 50 SW 400 1.0-70.0 1,150-1,300
Reina Andesite Vein 320 90 150 1.0-2.0 1,100-1,200
Ponchena Andesite Vein 290 70 NE 300 1.0-2.0 1,075-1,125
Culebra Andesite Vein 270 45 N 600 1.0-2.0 1,100-1,200
Sub-total 2,250

Lupita Area
Andesite/ 1.0-
Lupita/Diluvio Vein/Stwk 275 25-60 N 1,800
Lithic Tuff 1,180-1,325
100.0
Oso Negro Andesite Vein/Stwk 0 90 500 1.0-6.0 1,150-1,350
Margarita Andesite Vein/Stwk 170 25 700 0.5-2.0 1,180-1,250
Chipotle Lithic Tuff Vein/Stwk 340 70SW 600 1.0-3.0 1,220-1,300
Sub-total 3,600

El Molina Area
Belen Andesite Vein 310 75 SW 650 2.0-5.0 950-1,100
Meche Andesite Vein 60 60-70 SW 550 1.0-3.0 950-1,100
Sub-total 1,200
Grand Total 16,550

The mineralized zones display a combination of fissure vein, stockwork, and breccia
morphologies that change rapidly on strike and dip. The zones range in width from less than
one metre to composite vein/stockwork/breccia zones up to 15 m wide. In the Diluvio zone,
gold-silver bearing vein/stockwork zones locally attain thicknesses in excess of 100 m.
Length of individual veins varies from 100 m to over two kilometres. Property-wide, Au-Ag
bearing veins occur over a vertical range greater than 600 m (680 m to 1,300 m).
Mineralogical studies identified opaque minerals, including iron oxides, pyrite, gold, electrum,
stibnite, and rare pyrargyrite, within a gangue of substantial chalcedony, quartz, and
carbonate. In addition to hematite, manganese oxides are an important component in some
mineralized zones, possibly remnant after dissolution of manganese carbonates. Due to the
depth of oxidation, sulphides are rarely observed. The few exceptions include one hole at
depth in Klondike (visible galena and sphalerite) and hole L11-133D at Diluvio, which had an
unoxidized vein interval containing widely disseminated pyrite, galena, sphalerite, and silver
sulphosalts with greater than 500 g/t Ag. Metallurgical studies have identified the presence of
very small quantities of native gold, native silver, electrum, pyrargyrite, stibnite, galena,
sphalerite, and chalcopyrite in heavy mineral concentrates. Copper minerals such as
malachite and chrysocolla are most common as fracture fillings in breccias at Klondike,
although rare specks are also seen in the Mercedes and Lupita-Diluvio veins.

MERCEDES VEIN MORPHOLOGY

The Mercedes vein is the most important and continuous vein system identified on the
property to date, with quartz-carbonate veining being traced almost continuously on strike for
nearly 3.5 km. The Mercedes fault system consists of numerous anastomosing strands within
a zone over 50 m wide. Emplaced within these faults in extensional open areas were a series
of complex, multi-stage, anastomosing vein/breccia/stockwork zones one metre to 15 m
wide. Vein mineralogy (multiple quartz and carbonate stages) and morphology change
rapidly along strike and down dip. Mineralized green-grey sugary to chalcedonic quartz is
often highly brecciated and cemented by 15% to 80% late stage grey calcite, rhodochrosite,
and/or brown- black manganese-iron carbonates.

KLONDIKE VEIN MORPHOLOGY

The Klondike vein zone trends N70ºW, dipping 65º to 80º southwest. It is approximately 800
m long, with a maximum vertical range of nearly 300 m and width ranging from 0.5 m to over
50 m.

The Klondike vein system is significantly different from that at Mercedes, in that it typically
forms as a tectonic breccia zone rather than fissure fill vein. Within the breccia zone, there
are highly variable lenses of brecciated white to green or grey quartz and abundant
manganese carbonates and calcite. Fissure filling veins over 0.5 m wide are rare, while the
overall zone
of crackle brecciation and stockwork veining with silicification and strong manganese-iron
oxides may be up to 50 m in width.

LUPITA VEIN MORPHOLOGY

The Lupita vein zone outcrops on surface for 1,800 m following a contact between the
overlying andesite package and underlying quartz-crystal lithic tuff package. In outcrop, the
vein zone ranges from one metre to five metres thick. Multi-stage quartz-carbonate ± adularia
veining locally extends continuously down dip in places more than 450 m along most of the
west half of the surface outcrop.

Most importantly, at depths of 200 m to 300 m in the Diluvio zone, an extensive zone of multi-
stage quartz-carbonate ± adularia vein breccias, stockwork, and hydrothermal breccia up to
150 m thick has been identified that is primarily hosted in the lower lithic tuff-volcaniclastic
sequence. Based on preliminary geologic interpretation, it is proposed that the
tuff/volcaniclastic sequence hosting the main portion of the Diluvio deposit is a large fault
block that was displaced down the Lupita fault structure prior to andesite deposition. Diluvio
therefore is the only mineral deposit in the district with the lower lithic tuff/volcaniclastic
sequence as the primary host.

FLUID INCLUSIONS
In 2000, J. Reynolds of Fluid Inc. made quick scans of inclusions in vein samples from the
Mercedes, Saucito/Tucabe, and Klondike veins. As expected, the samples are typical of
those from a low sulphidation system. Reynolds noted samples from the Mercedes vein
“containing quartz that formed at temperatures of 200°C although some minor quartz formed
as high as 240°C to 250°C, with evidence for minor boiling.” At Klondike, “only quartz that
formed at temperatures less than 200°C is present” in the samples submitted for analysis. At
Saucito, “vein samples contain mostly quartz that formed as hot as 260°C to 270°C, and as
low as existed when chalcedonic quartz formed (160°C).” Boiling evidence is common.
 m

8 DEPOSIT TYPES
Gold-silver mineralization on the Mercedes property is hosted within epithermal low
sulphidation (adularia-sericite) veins, stockwork, and breccia zones.

Premier Gold Mines Limited – Mercedes Mine, Project # 2907

Technical Report NI 43-101 – April 18, 2018 Page 8-
9 EXPLORATION
Exploration in the Mine area began with surface sampling in 1999. A total of 399 rock
samples and 26 stream sediment samples were collected and a 60 km 2 area was mapped.
Mapping and sampling between 2005 and 2015 was subsequently extended to cover an area
of approximately 235 km2.

Geochemical sampling focused on rock chip samples from outcropping veins along with
samples from the historic mine workings. The abundance of outcrop in the property area,
combined with limited vegetation, allow this sampling method to define general grades within
veins. A total of 3,974 surface rock samples, 129 soil samples, and 156 stream sediment
samples have been collected for geochemical analyses through 2017.

Surface mapping identified three major basins filled with andesitic volcanic rocks on the
Mercedes property. Mapping also identified areas in which significant extensions of andesite
basins may be covered by shallow post-mineral deposits. The mapping also identified over
16.5 km of low sulphidation epithermal veins in the Mine area.

Some skarn-hosted copper-silver mineralization has been recognized on the property on the
southwest side of the Klondike basin and on the internal concession controlled by Penoles,
however, this mineralization has not been a high priority exploration target.

Exploration by Premier since its acquisition of the Mine in 2016 has mostly consisted of
drilling, which is described in Section 10.

EXPLORATION POTENTIAL
Premier geologists consider that there is excellent geological potential for locating one half to
one and a half million additional AuEq ounces at the Mercedes property. Multiple targets
remain untested for short-term, near-mine evaluation, and long-term generative exploration.

Exploration in the Mercedes District has discovered four vein systems – Mercedes,
Barrancas, Klondike-Rey de Oro, and Lupita-Diluvio – containing 10 vein zones. Three of
these areas outcrop, while the Barrancas, Lagunas, and Diluvio veins were blind
discoveries. Based on
 m

the widespread distribution of gold-silver bearing epithermal veins in outcropping areas, there
is a strong geologic possibility that additional vein zones with tonnages and grades similar to
currently mined areas will be encountered as systematic exploration proceeds throughout the
concessions. District-wide studies suggest that approximately 45 km of untested structures
have potential for hosting additional low sulphidation gold-silver bearing vein systems.

The proposed exploration budget for 2018 at Mercedes contains 171 drill holes totalling
39,500 m of diamond drilling (Table 9-1) at an estimated expenditure of US$5.96 million. The
plan includes drilling to expand existing resources, to define near-mine targets, and to
generate large potential property wide (Figure 9-1). RPA concurs with this initiative.

TABLE 9-1 2018 EXPLORATION DRILL

PROGRAM
Premier Gold Mines Limited – Mercedes Mine

No of Drill Metres
Target Vein/Zone Holes
Resource Expansion
1 Marianas 100 10,000
Sub-total 100 10,000

Resource Extension
2 Diluvio 5 2,580
3 Lupita SE 2 650
Sub-total 7 3,230

Generative Potential
4 Axis 10 6,500
5 Klondike-Rey de Oro South 12 3,550
6 Bellota North 1 250
7 Chipotle 12 2,700
8 Margarita 2 600
9 Oso Negro 3 1,050
10 La 500 de Plata 3 2,400
11 San Martin Fault 2 1,000
12 Bellota Northwest 4 2,800
13 La Olvidada 5 2,270
14 La Mesa 10 3,150
Sub-total 64 26,270
Total 171 39,500

Premier Gold Mines Limited – Mercedes Mine, Project # 2907

Technical Report NI 43-101 – April 18, 2018 Page 9-2
 Legend:

9-
3

0 3 6 9 12 15
Kilometres

Figure 9-1

Premier Gold Mines Limited a

c
Mercedes Gold-Silver Mine a
State of Sonora, Mexico n.
c
Exploration Targets o
m
April 2018 Source: Premier Gold Mines ltd., 2018.
 m

10 DRILLING
Since acquisition of the Mine in 2016, Premier has completed a combined surface and
underground program totalling 73,118 m in 485 core holes, which tested for extensions of the
known vein systems in addition to exploration to discover new mineralized horizons. The
primary target areas were as follows:

 Mineralization proximal to the main Mercedes/Barrancas/Lagunas trend;

 Confirming resource/reserve potential at Diluvio;
 Defining the open pit and underground opportunity at Rey de Oro;
 Surface exploration to explore for new target areas on the property.

As of the end of December 2017, a total of 492,415 m in 2,111 drill holes had been
completed on the property (Table 10-1). Mineralized zones at Mercedes, Klondike,
Barrancas, Lupita, and Rey de Oro were drilled on approximately 30 m to 60 m centres,
using a combination of diamond drilling with a small amount of RC drilling.

TABLE 10-1 MERCEDES DRILL SUMMARY

Premier Gold Mines Limited – Mercedes Mine

Core Total Total

Year RC Holes RC Metres Holes Core Metres Holes Metres
2000-01 55 10,867.93 0 - 55 10,867.93
2002-04 0 - - 0 -
2005 9 2,257.00 6 990.15 15 3,247.15
2006 64 5,693.65 11 3,063.50 75 8,757.15
2007 0 - 161 43,362.53 161 43,362.53
2008 4 806.17 318 82,805.35 322 83,611.52
2009 0 - 98 32,855.51 98 32,855.51
2010 0 - 151 45,805.35 151 45,805.35
2011 0 - 114 43,325.41 114 43,325.41
2012 0 - 149 37,902.88 149 37,902.88
2013 0 - 61 18,655.85 61 18,655.85
2014 0 - 199 49,705.54 199 49,705.54
2015 0 - 226 41,199.73 226 41,199.73
2016 0 - 135 27,442.77 135 27,442.77
2017 0 - 350 45,675.60 350 45,675.60
Total 132 19,624.75 1,979 472,790.17 2,111 492,414.92

Premier Gold Mines Limited – Mercedes Mine, Project # 2907

Technical Report NI 43-101 – April 18, 2018 Page 10-1
Drill hole collars were marked up by survey prior to the drill set-up and again after completion
of the hole. A Reflex instrument was used to provide directional information at 50 m intervals
in each hole.

MMM has written core and RC logging procedures and the geologists collected information
on standard log forms. Information collected included lithology, vein type, hydrothermal
alteration minerals, and geotechnical information such as rock quality designation (RQD), as
well as standard header information such as collar coordinates and hole inclination. High
quality photos were taken of the washed core.

Isometric and cross-section views of the drilling associated with the Barrancas-Lagunas and
Mercedes deposits are located in Section 14 of this report.
 [Link]
m

11 SAMPLE PREPARATION, ANALYSES AND

SECURITY
DRILL SAMPLING
Layne Drilling of Hermosillo performed all the 2000-2001 RC drilling, utilizing a Drill Tech
buggy rig with a primary compressor having 350/750 psi air. The 2006 RC drilling was
completed using a portable track RC drill contracted from Diversified Drilling in Hermosillo,
Sonora. All holes were drilled utilizing a face discharge hammer or a Mission hammer with an
interchange.

SAMPLE COLLECTION - DRY RC DRILLING

The 2000-2001 RC drill samples were collected on 1.5 m intervals (50% split) until the vein
zone was approached. In and near vein zones of most holes, RC samples were collected on
0.75 m samples. This allowed better definition of vein boundaries and acquired additional
samples for assay. In the case of 0.75 m samples near vein zones, generally 75% of the
material was collected for assay.

All 2006 RC sampling was done on 1.02 m spacing, with three samples per 3.0 m drill rod.

With all dry RC sampling in 2006, 100% of the dry samples were sent through the cyclone
and collected in a Jones splitter. The sample was then split in half or quartered and bagged
for assay.

SAMPLE COLLECTION - WET RC DRILLING

In 2000-2001, wet samples were collected on 1.5 m intervals, until the vein zone was
approached. In vein zones, samples were locally collected on 0.75 m intervals. All 2006 wet
RC sampling was done on 1.02 m spacing, with three samples per 3.0 m drill rod.

With all wet RC sampling, the entire sample was funneled from the cyclone into a circulating
splitter. Pan blocks were placed on alternate openings in the splitter to cut sample size down
to approximately a quarter split. Samples were collected in bags that fit directly into the 19 L
buckets. Flocculant was added to the buckets in advance of drilling, and the agitation of
water helped to settle out fines. In high water flow areas, water was allowed to flow out of the

Premier Gold Mines Limited – Mercedes Mine, Project # 2907

Technical Report NI 43-101 – April 18, 2018 Page 11-
1
 m
bucket.

Premier Gold Mines Limited – Mercedes Mine, Project # 2907

Technical Report NI 43-101 – April 18, 2018 Page 11-
1
 m

SAMPLE COLLECTION - CORE DRILLING

Major Drilling conducted all core drilling at Mercedes with the exception of a small program in
2006 conducted by BDW International.

During 2006-2017 core drilling, all core boxes were collected at the drill rig under the
supervision of MMM geologists, and transported to the core logging facility in camp. The
basic sequence in the core facility included, in this order:
1. labelling intervals on boxes
2. washing the core
3. core photography
4. geotechnical logging
5. geologic logging
6. marking of sample intervals
7. core splitting
8. transfer of core boxes with mineralized zones to secure warehouse

Core intervals to be sampled were selected by the logging geologist, to cover all vein and
significant alteration zones. Typically, sampling was started 5.0 m before and extended 5.0 m
beyond the point of interest. Core samples were divided into lengths ranging from 30 cm to a
maximum of 1.52 m in length, based on geologic characteristics. All core was split using
manual hydraulic splitters after test sampling with diamond saws demonstrated significant
loss of earthy hematite vein-filling material known to commonly contain very small visible gold
specks.

FACTORS IMPACTING RELIABILITY OF RESULTS

Some of the RC drilling on the property was completed in a wet environment. Wet RC drilling
has been known to produce unreliable results when contamination occurs. Two RC holes at
Klondike (K004 and K006) drilled below the water table intersected wide zones of low-grade
mineralization, which were not verified by adjacent core holes. These results have been
removed from the database.

Samples from RC drilling and adjacent core drilling were compared. Above values of
approximately 3.0 g/t Au, both properties show lower gold grades from RC drilling versus
core drilling as shown in Figures 11-1 for Mercedes and 11-2 for Klondike. Due to the
limited

Premier Gold Mines Limited – Mercedes Mine, Project # 2907

Technical Report NI 43-101 – April 18, 2018 Page 11-2
amount of RC drilling in the database, this is not expected to significantly affect resource
estimation.

FIGURE 11-1 QQ PLOT – GOLD DISTRIBUTION FOR RC AND CORE

DRILL HOLES – MERCEDES DEPOSIT

Quantile-Quantile Plot of au (Au>0.2)

0.01 0.05 0.25 0.50 0.75 0.90 0.99
900.000
g Au/t

600.000

300.000

90.000
60.000

30.000

9.000
6.000

3.000

0.900
0.600

0.300 RC
Core
 FIGURE 11-2 QQ PLOT – GOLD DISTRIBUTION FOR RC AND CORE
DRILL HOLES – KLONDIKE DEPOSIT

Quantile-Quantile Plot of au (All + 0.2 g Au/t)

0.01 0.05 0.25 0.50 0.75 0.90 0.99
300.000
g Au/t

90.000
60.000

30.000

9.000
6.000

3.000

0.900
0.600

0.300 Core RC

No significant issues have been noted with core recovery that could impact reliability of
results, as the majority of the mineralized intercepts have over 80% recovery.

SAMPLE PREPARATION AND ANALYSIS

Almost all 2000 to 2017 assaying was completed at ALS laboratories (ISO 17025:2017
certified) and predecessors Bondar-Clegg and Chemex in Vancouver, British Columbia. Due
to extreme sample volumes, some sample preparation in 2011 was done by Chemex at
preparation facilities in Chihuahua, Zacatecas, and Guadalajara, Mexico. Sample preparation
is currently completed at the ALS preparation laboratory in Hermosillo, Mexico.
At the laboratory, the sample is logged in the tracking system, weighed, dried at 120°C, and
finely crushed to better than 70% passing a 2 mm screen. A split of up to 250 g is taken and
pulverized to better than 85% passing a 200 mesh screen.

Bondar-Clegg assayed for gold utilizing 30 g fire assay (FA)/Atomic Absorption (AA) finish.
Silver was determined with AA using a single acid dilution. Any gold assays over 10.0 g/t Au
were rerun with fire assay and any silver values over 50 g/t Ag were run a second time
utilizing additional dilutions. The Bondar-Clegg fire assay procedure contained the following
steps:

 A prepared sample is fused with a mixture of lead oxide, sodium carbonate, borax,
silica and other reagents as required, inquarted with 6 mg of gold-free silver and then
cupelled to yield a precious metal bead. The bead is digested in 0.5 mL dilute nitric
acid in the microwave oven. 0.5 mL concentrated hydrochloric acid is then added and
the bead is further digested in the microwave at a lower power setting. The digested
solution is cooled, diluted to a total volume of 10 mL with de-mineralized water, and
analyzed by atomic absorption spectroscopy against matrix-matched standards.

Throughout 2005-2017, gold and silver analyses were conducted using a 30 g or 50 g fire
assay, gravimetric finish method. Most 2005-2013 assaying was done using a gravimetric
method. Since 2013, gold analyses were done using a FA-AA finish, with all samples over
5.0 g/t re-analyzed by the FA-gravimetric finish method. Silver is assayed using a HF-HNO3-
HClO4 Digestion with HCl leach and AA finish. Due to high sample volume, a small
percentage of the 2007 samples were analyzed in the ALS laboratory in Guadalajara,
Mexico. The gravimetric procedure was completed as follows:

 A prepared sample is fused with a mixture of lead oxide, sodium carbonate, borax,
silica and other reagents in order to produce a lead button. The lead button containing
the precious metals is cupelled to remove the lead. The remaining gold and silver
bead is parted in dilute nitric acid, annealed and weighed as gold. Silver, if requested,
is then determined by the difference in weights.

When visible gold was noted, samples were sometimes analyzed, or re-assayed by metallic
screen methods. The screen metallic procedure was completed as follows:

 The sample pulp (1,000 g) is passed through a 100 m (Tyler 150 mesh) stainless
steel screen. Any material remaining on the screen (+) 100 m is retained and
analyzed in its entirety by FA with a gravimetric finish and reported as the Au (+)
fraction. The material passing through the screen (-) 100 m fraction is homogenized
and two sub- samples are analyzed by FA/AA (Au-AA25 and Au-AA25D). The
average of the two AA results is taken and reported as the Au (-) fraction result. All
three values are used in calculating the combined gold content of the plus and minus
fractions. The gold
 values for both the (+) 100 m and (-) 100 m fractions are reported together with the
weight of each fraction as well as the calculated total gold content of the sample.

MINE PRODUCTION SAMPLE PREPARATION AND ANALYSIS

Figure 11-3 shows the sample preparation and analysis procedure at the mine laboratory.
Channel samples from development headings and underground infill drilling are processed at
the mine laboratory.

For gold assays, samples are analyzed by FA/AA, and if the results are greater than 5.0 g/t
Au, the samples are re-analyzed by FA with a gravimetric finish, with both procedures using
a 30 g pulp sample. For silver analysis, samples were initially assayed by FA with a
gravimetric finish using 30 g pulp sample, however, since September 2015, silver analysis
has been done with a total digestion using four acids.
 [Link]

The reception area is very small, RECEPTION Sample with a maximum size of 6
about 10 m². kg. Label and the order of dispatch.

Drying of sample at a temperature

Shelf with a capacity of 90 stainless DRYING of 110°C for a period of time that
will depend on the humidity of the
steel trays of 50x30x7 cm.
sample, normally is between 4 and
6 hrs.

TM Engineering Jaw crusher. Complete crushing of sample to size

CRUSHER >85% -10# -10# Tyler >85% per particle.

Do a granulometry control
of crushed every 20
samples
Clean with compressed air in
between samples and use
waste quartz every 20 samples

DIVISION Sample division in order to obtain a

subsample of 1000 gr.

ESSA Pulverizer with a 1 Kg

nominal capacity. 250 gr Pulverizing of the sample to
-140# Tyler >95%.

Do a granulometry control
of pulverized every 20
samples
Clean with compressed air in
between samples and use silica
sand each of the samples

PACKING

Pulp over x 250

gr ANALYSIS
After 1 month they are returned to
geology.

QC Pulpa
ANALYSIS Remainin
Minera
Mercedes g

Figure 11-3
 Premier Gold Mines Limited
Mercedes Gold-Silver Mine
April 2018 Source: Yamana Gold Inc., 2013.
Sonora State, Mexico
Mine Laboratory Sample
11-7 Preparation and Analytical
Procedure
 m

EXPLORATION QUALITY ASSURANCE/QUALITY CONTROL

2000-2001 RC DRILLING
During 2000-2001 RC dry drilling, a second split was routinely collected every tenth sample
for check assaying. In zones of potential mineralization, vein samples were sometimes re-
split using the Jones splitter to obtain two identical samples for check assaying. During wet
drilling, duplicate samples were collected every tenth sample by setting a second bucket with
sample bag under the overflow pipe. Flocculant was added to buckets in the same manner
as the main sample. In a few cases, wet sample bags were allowed to sun dry, and a second
split was made using the Jones splitter to obtain duplicate samples for analysis. These were
submitted at the end of the same hole, with a different sample number. Comparison of the
original versus duplicate samples returned an excellent R2 factor of 0.96.

No standards were submitted with samples in the 2000-2001 RC drilling programs.

2005 RC AND CORE DRILLING PROGRAM

During 2005 RC dry drilling, a second split was routinely collected every tenth sample for
check assaying. In zones of potential mineralization, vein samples were sometimes re-split
using the Jones splitter to obtain two identical samples for check assaying. During wet
drilling, duplicate samples were collected every tenth sample by setting a second bucket with
sample bag under the overflow pipe. These duplicate samples were re-numbered and
submitted to Chemex for analysis, due to lack of a certified umpire laboratory in Mexico at the
time.

Two standards and a sterile blank were routinely submitted with the 2005 RC and core
samples to maintain quality control. The standards were prepared in 1995 by the laboratory
at Meridian’s Beartrack Mine in Idaho, for use in shipping exploration samples to Chemex
laboratory. These consisted of a Beartrack Mine sulphide standard averaging 4.8 g/t Au, and
a Beartrack Mine oxide standard averaging 1.7 g/t Au. Mineralized standards averaged
approximately 1.5 kg to 3.0 kg in weight.

Sterile samples were collected at Mercedes from unmineralized core or rock outcrops, and
typically weighed 3.0 kg to 5.0 kg.

Standards were typically placed in the drill sequence as the first or last sample of the drill
interval selected for assay.
Premier Gold Mines Limited – Mercedes Mine, Project # 2907
Technical Report NI 43-101 – April 18, 2018 Page 11-8
Results for the 2005 standard and sterile samples are not available, however, it is assumed
that company personnel requested re-analysis where required as a routine activity as was
done in subsequent drill programs.

Rejects from several high-grade intercepts were submitted for multiple analyses to verify gold
grades. Results from all four samples were similar, with all laboratories averaging within
10%, and only limited nugget effect noted.

2006 RC AND CORE DRILLING PROGRAM

During 2006, ALS was the primary laboratory. All samples were sent to the sample
preparation facilities in Hermosillo, Sonora and were analyzed in Vancouver, BC. The
analytical method was fire assay with a gravimetric finish on 50 g pulps. Some samples with
questionable assays were also analyzed by Metallic Screen.

Eight types of Au certified reference materials were used in order to monitor the accuracy of
the results. All were bought from CDN Resource Laboratories Ltd. (CDN Labs), of Canada,
and approximately 75% had economic values. At least one standard was inserted at random,
in every work order that was submitted to the lab.

A total of 109 standard pulps were included, 18.35% of which showed values outside the
accepted range. Re-analysis was requested when necessary.

2007 CORE DRILLING PROGRAM

The sterile material used to monitor contamination during sample preparation was a latite
rock from old core splits that had no significant gold value. A total of 115 sterile samples were
sent to the laboratory, 25 of which were above detection limit but only five were actually
above the accepted range (with values between 0.31 ppm and 1.04 ppm). This represents
4% of the total sent. In all these samples, the contamination has probably been carried over
from the high-grade samples that were prepared previously in the laboratory.

A total of 99 blank pulps were sent to monitor contamination during analysis, six of which
were above detection limit (0.05 ppm), but only one was slightly above 0.25 ppm.
Twelve standards were used to monitor the accuracy of the results. At least one standard,
ranging from low grade to high grade was inserted in each sample sequence (generally at
least every 30 samples). A total of 319 standard pulps were sent, 24.76% of which returned
values outside the accepted range. The standard with most percentage of failures was CDN-
GS-1C, the lowest grade standard in the list. Re-analysis was completed when necessary.

A total of 98 rejects (typically two mineralized samples per drill hole; with one high grade and
one low grade) were shipped to Acme Laboratories in Vancouver and run using fire assay-
gravimetric procedure, using the same preparation methods that were initially employed by
ALS. Results showed a 14% difference between the two laboratories which Yamana found
acceptable.

2008 TO 2017 CORE DRILLING PROGRAM

In these programs, a systematic QC procedure was previously implemented by Yamana and
continued by Premier which included the insertion of standards, steriles, and blanks in a
logical order, as well as the insertion of duplicates and the regular use of check pulps (every
30-40 samples) in every sample sequence. A QC failure occurs when any of the following
cases is encountered:

 A standard greater than three standard deviations (3SD) from the mean.

 Two adjacent standards which are greater than two standard deviations (2SD) from
the mean, on the same side of the mean (bias).

 A blank or sterile sample that is greater than the warning limit (i.e., five times the
detection limit for the gravimetric method). This rule is even more of a concern if an
adjacent standard also fails.

STERILE SAMPLES
Sterile material used to monitor contamination during sample preparation was a vitrophyre
rock that can be found on the property. Samples that returned values over the 0.03 g/t Au
limit are considered failures. Analytical failures for gold for the sterile samples are listed in
Table 11-1. Reviews showed that some of these sterile samples were located directly after
high grade samples, indicating minor contamination in the laboratory preparation process.
 TABLE 11-1 STERILE SAMPLES
Premier Gold Mines Limited – Mercedes Mine

Failures (Gold)
Year Steriles Inserted Number %
2009 200 6 3.0
2010 440 8 1.8
2011 173 2 1.1
2012 335 0 0
2013 123 0 0
2014/15 282 1 0.4
2016 164 1 0.6
2017 287 7 2.4

Overall, RPA considers the results of the sterile analyses acceptable in terms of control of
contamination in the analytical procedure.

BLANK SAMPLES
In order to monitor the contamination that might occur during the analytical procedure, blank
pulps were inserted in the sampling sequence, at the end of the mineralized zone, and
following the sterile and a high-grade standard. The blank pulps are certified reference
material from CDN Labs which come in paper bags of approximately 100 g each. Samples
that returned values over the 0.03 g/t Au limit are considered failures (Table 11-2).

TABLE 11-2 BLANK SAMPLES

Premier Gold Mines Limited – Mercedes Mine

Failures (Gold)
Year Blanks Inserted Number %
2008 282 1 0.4
2009 128 1 0.8
2010 377 1 0.2
2011 152 0 0
2012 291 5 0.3
2013 111 1 0.9
2014/15 445 0 0
2016 172 0 0
2017 322 0 0

Overall, RPA considers the blank results acceptable in terms of control of contamination in
the analytical procedure.
 STANDARD SAMPLES
Certified reference materials were used in order to monitor the accuracy of the results (Table
11-3). All were bought from CDN Labs and recently ranged in value from 0.7 g/t Au to 7.3 g/t
Au. CDN Labs was commissioned to make some of the standards utilizing core or coarse
rejects from Mercedes area core. At least one standard was inserted at random, in every
work order that was submitted to the laboratory.

TABLE 11-3 STANDARD SAMPLES

Premier Gold Mines Limited – Mercedes Mine

Failures (Gold)
Year Standards Inserted Number %
2008 677 81 12.0
2009 251 23 9.2
2010 450 25 5.5
2011 186 8 4.3
2012 375 8 2.1
2013 137 0 0
2014/15 625 8 1.3
2016 246 0 0
2017 384 5 1.3

Each failure of a standard was investigated and the standard and adjacent samples were
analyzed again where necessary, according to Premier protocols.

Overall, RPA considers the results of the standard samples acceptable in terms of monitoring
the accuracy of the analytical procedure.

FIELD DUPLICATES
In order to monitor the variability of the grades in the core, the systematic use of field
duplicates was implemented at the beginning of the 2008 program (Table 11-4). These
duplicates are splits of drill core that are inserted approximately every 30 samples, and are
taken randomly from outside the vein. They are treated as normal samples and are
consecutively numbered with respect to the original core split.
 TABLE 11-4 FIELD DUPLICATE SAMPLES
Premier Gold Mines Limited – Mercedes Mine

Year Field Duplicates Inserted Correlation (Gold)

2008 323 0.37
2009 222 0.99
2010 443 0.82
2011 473 0.83
2012 274 0.57
2013 89 0.90
2014/15 343 1.0
2016 163 -
2017 289 -

Due to the low concentration of samples, field duplicates can show a poor precision (most of
them below 1.0 g/t Au and 15 g/t Ag). RPA recommends that more field duplicate samples
with grades above the cut-off grade be collected or this practice be discontinued.

PULP DUPLICATES
In May 2008, a system for pulp checking was implemented at Mercedes. Every laboratory
order that is submitted to ALS includes a request for at least one sub-sample of pulp to be
sent to Acme with the purpose of checking the reproducibility of the analysis. These check
pulps are selected at random, approximately every 30 to 40 samples, by the person who
makes the sample shipment. Up to November 2008, a total of 143 check assays have been
received. The correlation between originals and checks is good at 98%.

No pulp samples were sent to a secondary laboratory for analysis in 2011 to 2013.

A total of 1,032 pulps were sent to Acme to check the reproducibility of the original assays in
2014 and 2015. Standards and blanks were added to this sample stream. Results were
excellent with a slight negative bias for high grade silver analyses in the ALS Chemex data.

A total of 610 pulps were sent to Acme to check the reproducibility of the original assays in
2016. Standards and blanks were added to this sample stream. Results were excellent with
a very slight negative bias for high grade silver analyses in the ALS Chemex data.

A total of 879 pulps were sent to Bureau Veritas Commodities Canada Ltd. (Bureau Veritas)
in Vancouver to check the reproducibility of the original assays in 2017. Standards and
blanks
were added to this sample stream. Results were excellent with a slight negative bias for high
grade silver analyses in the Bureau Veritas data. Figure 11-4 shows the results for 2017.

FIGURE 11-4 ALS CHEMEX – ACME PULP CHECKS 2017

MINE QUALITY ASSURANCE/QUALITY CONTROL
During 2013, a total of 424 gold standard samples were inserted with laboratory orders
mainly using 10 different certified reference materials with grades from 0.89 g/t Ag to 156.8
g/t Ag. A total of 87 gold assays (20.5%) were above the accepted range (>3SD) and a total
of 22 gold assays (12.3%) from the combined standards assayed between 2SD and 3SD. As
a result of the re-analyses, the percent failure greater than 3SD decreased to 8.96%.

During 2013, a total of 250 silver standard samples were inserted with laboratory orders
mainly using seven different certified reference materials with grades from 0.62 g/t Au to 30.8
g/t Au. A total of 76 silver assays (30.4%) were above the accepted range (>3SD) and a total
of 35 silver assays (14.0%) from the combined standards assayed between 2SD and 3SD.
As a result of the re-analyses, the percent failure greater than 3SD decreased to 8.40%.

2014 TO 2017 QA/QC RESULTS

STERILE SAMPLES
Sterile material used to monitor contamination during sample preparation was a vitrophyre
rock that can be found on the property. Results of the sterile sample analyses are listed in
Table 11-5.

TABLE 11-5 STERILE SAMPLES

Premier Gold Mines Limited – Mercedes Mine
Failures (Gold)
Year Steriles Inserted
Number %
2014 285 11 3.9
2015 442 13 2.9
2016 382 25 6.5
2017 386 10 2.6

Overall, RPA considers the results of the sterile analyses acceptable in terms of control of
contamination in the analytical procedure.

BLANK SAMPLES
In order to monitor the contamination that might occur during the analytical procedure, blank
pulps were inserted in the sampling sequence, at the end of the mineralized zone, and
following the sterile and a high-grade standard. The blank pulps are certified reference
material from CDN Labs which come in paper bags of approximately 100 g each. Results of
the sterile sample analyses are listed in Table 11-6.

Performance improved following the switch in analytical methods in 2015. Only one analysis
exceeded the limit out of 148 samples analyzed after the change.

TABLE 11-6 BLANK SAMPLES

Premier Gold Mines Limited – Mercedes Mine
Failures (Gold)
Year Blanks Inserted
Number %
2014 274 11 4.0
2015 457 22 4.8
2016 381 6 1.6
2017 396 11 2.8

STANDARD SAMPLES
Tables 11-7 and 11-8 show the results of the analyses of the gold and silver certified
reference materials in 2014. When a standard analysis exceeds the 3SD limit, re-analysis is
requested for the standard and two samples on each side of it in the batch.

TABLE 11-7 RESULTS OF GOLD STANDARDS SUBMITTED TO THE

MINE LABORATORY IN 2014
Premier Gold Mines Limited – Mercedes Mine

Grade Range
Standard Number Out of Out of Range
(g/t Au)
(2SD to 3SD) %
Range (>3SD) %
CDM-FCM-7 0.89 64 8 12.50 6 9.38
CND-ME-16 1.48 77 2 2.60 4 5.19
CND-ME-19 0.62 46 1 2.17 3 6.52
CDN-GS-5H 3.88 36 2 5.56 2 5.56
CDN-ME-1204 0.97 97 5 5.15 22 22.68
CDN-ME-1205 2.20 21 3 14.29 1 4.76
CDN-ME-1303 0.92 51 7 13.73 4 7.84
CDN-ME-1304 1.80 54 3 5.56 9 16.67
CDN-GS-5P 4.80 19 1 5.26 1 5.26
CDN-GS-14A 14.90 8 2 25.00 0 0.00
CDN-GS-10D 9.50 10 1 10.00 2 20.00
CDN-GS-12A 12.31 81 5 6.17 3 3.70
CDN-GS-6A 5.79 17 2 11.76 1 5.88
Total 581 42 7.23 58 9.98
RPA notes that while the error rate is still problematic, further investigation reveals that the
results show no bias, and RPA considers that the mine assays are acceptable for use in
Mineral Resource estimation.

TABLE 11-8 RESULTS OF SILVER STANDARDS SUBMITTED TO THE

MINE LABORATORY IN 2014
Premier Gold Mines Limited – Mercedes Mine

Range
Grade Out of Range Out of Range
Standard (g/t Au) Number (2SD to 3SD) % (>3SD) %
CDN-FCM-7 64.7 64 6 9.38 11 17.19
CND-ME-16 30.8 77 8 10.39 6 7.79
CND-ME-19 103.0 46 2 4.35 2 4.35
CDN-GS-5H 50.4 36 3 8.33 2 5.56
CDN-ME-1204 58.0 97 6 6.19 3 3.09
CDN-ME-1205 25.6 21 1 4.76 14 66.67
CDN-ME-1303 152.00 51 6 11.76 2 3.92
CDN-ME-1304 34.0 54 6 11.11 7 12.96
CDN-GS-5P 119.0 19 1 5.26 6 31.58
Total 465 39 14.00 53 11.40

Inaccuracies arise due to the encapsulated nature of the silver-bearing minerals and, at
times, the incomplete digestion of the samples during analysis. RPA notes that while the
error rate is still problematic, further investigation reveals that the results show no bias, and
RPA considers the mine assays to be acceptable for use in resource estimation.

Tables 11-9 and 11-10 show the results of the analyses of the gold and silver certified
reference materials in 2015.
 TABLE 11-9 RESULTS OF GOLD STANDARDS SUBMITTED TO THE
MINE LABORATORY IN 2015
Premier Gold Mines Limited – Mercedes Mine

Range
Grade Out of Range Out of Range
Standard (g/t Au) Number (2SD to 3SD) % (>3SD) %
CDM-FCM-7 0.89 43 7 16.28 8 18.60
CDN-ME-1205 2.20 74 4 5.41 7 9.46
CDN-ME-1303 0.92 47 2 4.26 3 6.38
CDN-ME-1304 1.80 91 5 5.49 14 15.38
CDN-GS-1Q 1.24 198 14 7.07 8 4.04
CDN-ME-1312 1.27 114 2 1.75 5 4.39
CDN-ME-1402 13.90 33 2 6.06 3 9.09
CDN-GS-14A 14.90 86 13 15.12 9 10.47
CDN-GS-10D 9.50 85 8 9.41 13 15.29
CDN-GS-7F 6.90 112 8 7.14 12 10.71
Total 883 65 7.36 82 9.29

RPA notes that while the error rate is still problematic, further investigation reveals that the
results show no bias, and RPA considers that the mine assays are acceptable for use in
Mineral Resource estimation.

TABLE 11-10 RESULTS OF SILVER STANDARDS SUBMITTED TO THE

MINE LABORATORY IN 2015
Premier Gold Mines Limited – Mercedes Mine

Range
Grade Out of Range Out of Range
Standard (g/t Au) Number (2SD to 3SD) % (>3SD) %
CDN-FCM-7 64.7 43 0 13.95 17 39.53
CDN-ME-1205 25.6 74 14 18.82 41 55.41
CDN-ME-1303 152.0 47 0 0.00 5 110.64
CDN-ME-1304 34.0 91 7 7.69 21 23.08
CDN-GS-1Q 40.7 198 30 15.15 85 42.93
CDN-ME-1312 22.3 114 11 9.65 16 14.04
CDN-ME-1402 131.0 33 0 0.00 2 6.06
Total 600 68 11.33 187 31.17

Inaccuracies arise due to the encapsulated nature of the silver-bearing minerals and, at
times, the incomplete digestion of the samples during analysis. RPA notes that while the
error rate remained problematic, performance improved following the switch in analytical
methods in 2015. Rates declined to 8.06% for failures between 2SD and 3SD and declined to
6.99% for failures greater than 3SD for the 186 samples analyzed. Further investigation
reveals that the
results show no bias, and RPA considers the mine assays to be acceptable for use in Mineral
Resource estimation.

Tables 11-11 and 11-12 show the results of the analyses of the gold and silver certified
reference materials in 2016.

TABLE 11-11 RESULTS OF GOLD STANDARDS SUBMITTED TO THE MINE

LABORATORY IN 2016
Premier Gold Mines Limited – Mercedes Mine

Grade Range
Standard Number
(g/t Au) Out of Out of Range
(2SD to 3SD) % (>3SD) %
Range
CDN-ME-1403 0.95 143 3 2.10 14 9.79
CDN-ME-1304 1.80 152 3 1.97 7 4.61
CDN-ME-1312 1.27 122 2 1.64 1 0.82
CDN-ME-1402 13.90 153 6 3.92 12 7.84
CDN-GS-7F 6.90 175 12 6.86 15 8.57
Total 745 26 3.49 49 6.58

RPA notes that the error rate is much improved and RPA considers that the mine gold assays
are acceptable for use in resource estimation.

TABLE 11-12 RESULTS OF SILVER STANDARDS SUBMITTED TO THE

MINE LABORATORY IN 2016
Premier Gold Mines Limited – Mercedes Mine

Range
Grade Out of Range Out of Range
Standard (g/t Au) Number (2SD to 3SD) % (>3SD) %
CDN-ME-1403 53.9 143 1 0.70 5 3.50
CDN-ME-1304 34.0 152 2 1.32 4 2.63
CDN-ME-1312 22.3 122 4 3.28 3 2.46
CDN-ME-1402 131.0 153 3 1.96 10 6.54
Total 570 10 1.75 22 3.86

Inaccuracies arise due to the encapsulated nature of the silver-bearing minerals and, at
times, the incomplete digestion of the samples during analysis. RPA notes that the error rate
has significantly improved following the switch in analytical methods in 2015 and RPA
considers that the mine silver assays to be acceptable for use in resource estimation.
Tables 11-13 and 11-14 show the results of the analyses of the gold and silver certified
reference materials in 2017.

TABLE 11-13 RESULTS OF GOLD STANDARDS SUBMITTED TO THE MINE

LABORATORY IN 2017
Premier Gold Mines Limited – Mercedes Mine

Grade Range
Standard Number Out of Out of Range
(g/t Au)
(2SD to 3SD) % (>3SD) %
Range
CDN-ME-1403 0.95 54 1 1.85 2 3.70
CDN-ME-1204 0.98 190 27 14.2 21 11.1
CDN-ME-1312 1.27 52 0 0 2 1.32
CDN-ME-1402 13.90 79 6 7.59 10 12.7
CDN-ME-1501 1.38 106 3 2.83 9 8.49
CDN-GS-3M 3.10 54 1 1.85 0 0
CDN-GS-7G 7.15 127 18 14.2 19 15.0
Total 762 56 7.35 63 8.27

RPA notes that the error rate has increased somewhat in 2017. RPA recommends that
standards CDN-ME-1204 and CDN-GS-7G be replaced to see if performance improves.

RPA considers that the mine gold assays are acceptable for use in resource estimation.

TABLE 11-14 RESULTS OF SILVER STANDARDS SUBMITTED TO THE

MINE LABORATORY IN 2016
Premier Gold Mines Limited – Mercedes Mine

Range
Grade Out of Range Out of Range
Standard (g/t Au) Number (2SD to 3SD) % (>3SD) %
CDN-ME-1403 53.9 54 0 0 1 1.85
CDN-ME-1204 58.0 190 5 2.63 3 1.58
CDN-ME-1312 22.3 152 5 3.29 3 1.97
CDN-ME-1402 131.0 79 2 2.53 4 5.06
CDN-ME-1501 34.6 106 4 3.77 5 4.72
CDN-GS-3M 95.4 54 1 1.85 0 0
Total 635 17 2.68 16 2.52

Inaccuracies arise due to the encapsulated nature of the silver-bearing minerals and, at times,
the incomplete digestion of the samples during analysis. RPA notes that the error rate has
significantly improved following the switch in analytical methods in 2015 and RPA considers
the mine silver assays to be acceptable for use in resource estimation.

FIELD DUPLICATES
For the drilling programs in 2014 and 2015, a total of 1,498 duplicate samples were analyzed
by the mine laboratory. Thompson Howarth plots showed significant variability at levels of
gold and silver grades for field duplicates. This is probably due to the presence of erratically
distributed coarse gold.

For the drilling programs in 2016, a total of 708 duplicate samples were analyzed by the mine
laboratory. Analytical and preparation duplicates taken by the lab show good precision, but
due to the presence of coarse gold, field duplicates show poor precision in almost all
concentrations for the two monitored elements.

For the drilling programs in 2017, a total of 708 duplicate samples were analyzed by the mine
laboratory. Analytical and preparation duplicates taken by the laboratory show good
precision, however, due to the presence of coarse gold, field duplicates only show fair
precision in almost all concentrations for the two monitored elements. RPA recommends that
more field duplicate samples with grades above the cut-off grade be collected or this practice
be discontinued.

PULP DUPLICATES
No pulp samples were sent to a secondary laboratory for analysis from the mine laboratory in
2014 to 2017. RPA recommends that three to five percent of the pulp analyzed by the mine
laboratory be sent to a second laboratory as an accuracy check.

SECURITY OF SAMPLES
REVERSE CIRCULATION DRILLING
A geologic determination is made at the drill rig regarding which samples were to be
assayed. This included any intervals with veining or strong silicification and included several
unmineralized samples on either side of the vein zone. Samples to be shipped were placed
in grain sacks, and the tops tied with plastic ties or duct tape. Samples are transported to the
Mercedes camp area by MMM personnel.
Samples were collected on-site approximately once per week by drivers from ALS, who
come from the Hermosillo preparation facility. Samples are prepared in Hermosillo and
shipped to Vancouver for analysis. Check samples and duplicate samples are collected daily
and stored at the Mercedes camp. Check samples are periodically shipped when sample
quantity justified it.

CORE SAMPLES
All core drilled between 2005 and 2017 was logged by MMM at the Mercedes camp.
Samples were placed in plastic bags and sealed with bag ties. Batches of samples were then
placed in grain sacks and sealed with bag ties or duct tape. Grain sacks were stored in a
locked warehouse facility on site. Samples were collected on-site approximately once per
week by drivers from ALS Chemex, who came from the Hermosillo preparation facility.

Although there have been some problems with sample preparation and analysis, MMM
personnel have monitored the results and have taken appropriate corrective measures as
deemed necessary.

In RPA’s opinion, sampling, sample preparation, analysis, and security procedures at the
Mercedes Mine meet industry standards and the resulting data are acceptable for use in
Mineral Resource estimation.

In RPA’s opinion, the QA/QC program as designed and implemented is adequate and the
assay results within the database are suitable for use in a Mineral Resource estimate.
 m

12 DATA VERIFICATION
Since October 2008, assays have been received electronically from ALS. Upon passing
QA/QC protocols, the results are downloaded directly into the Mercedes Century Systems
database. RPA reviewed reports containing control charts and detailing the results of the
assay standards and blanks for the drill core. Mercedes procedures appear to identify assay
failures when blanks and/or standards failed to pass set criteria.

Drill hole data was viewed both on screen and on paper cross sections to verify that down-
hole survey data had been entered into the database with correct coordinates.

The MS Access database and Century System database were validated through the Vulcan
internal data verification program to check for overlapping samples, negative or extreme
assay values, etc.

In 2013, part of the resource database and several drill logs were reviewed by RPA for
accuracy of assay transcription from the assay certificates. Approximately 1,400 assays from
drill holes in the database were compared to the original assay certificates, with no errors
noted. No extreme length samples or excessive assay values were found. Visual validation
of drill hole positions and comparison of in-hole survey and collar surveys with original logs
and survey documents revealed no errors. The standard validations for overlapping samples,
etc., also returned no errors.

In 2016, RPA compared approximately 6,200 of 21,600 assay certificate values from 2014
and 2015 exploration with the resource database. RPA examined the bulk of the assays
taken with the Au_ppm_FA50 and Ag_ppm_MAAASOG laboratory methods. Of the 6,200
matches, only 40 assays differed from the certificates more than 0.1 g/t Au, with only 11
assays differing more than 0.5 g/t Au, with the largest discrepancy at 0.58 g/t Au. Only two
silver assays differed from the certificates by more than 10 g/t Ag, with the largest
discrepancy at 22 g/t Ag. These discrepancies may at least in part be accounted for by re-
assays for various reasons.

In 2017, RPA compared approximately 21,800 assay certificates from the exploration and
mine laboratories with the resource database.

Premier Gold Mines Limited – Mercedes Mine, Project # 2907

Technical Report NI 43-101 – April 18, 2018 Page 12-
1
 m

Drill logs for four holes were compared to the core stored at site in 2013, three holes were
reviewed in 2016, and two holes were reviewed in 2017. It was determined that the logging
and sampling were completed to industry standards.

Based on RPA’s review of the database and primary records, plus discussions with the
personnel at the Mercedes Mine, RPA is of the opinion that the database verification
procedures for the Mercedes Mine comply with industry standards and are adequate for the
purposes of Mineral Resource estimation.

Premier Gold Mines Limited – Mercedes Mine, Project # 2907

Technical Report NI 43-101 – April 18, 2018 Page 12-
2
 m

13 MINERAL PROCESSING AND

METALLURGICAL TESTING
Metallurgical testing for the Mercedes operation was undertaken by McClelland Laboratories,
Inc. (MLI), in Sparks, Nevada, with five phases of test work from February 2007 to November
2010. The Mercedes plant had been constructed and attained commercial production as of
February 1, 2012 and was in operation at the time of the site visit. Results of the initial testing
were reported in previous Technical Reports (RPA, 2017) so they are not repeated in this
report.

METALLURGICAL TESTING
The metallurgical department at Mercedes conducts on-going test work to ensure that the
plant is performing optimally, to improve efficiency and recovery, and to reduce costs. It has
re- leached tailings from the operating plant, evaluated zinc suppliers, conducted tests on
cyanide detoxification, evaluated pre-coating and body feed for diatomaceous earth, etc.

DILUVIO
In 2017, mining commenced in a new area, Diluvio, which accounts for over 40% of the feed
to the processing plant in the LOM plan. Three samples from Diluvio were tested in July
2017. Table 13-1 summarizes the results of the Diluvio testing program.

TABLE 13-1 DILUVIO 2017 METALLURGICAL TEST RESULTS

Premier Gold Mines Limited – Mercedes Mine

Head Grade Tailings P80 NaCN Recovery

Sample pH
Au (g/t) Ag (g/t) Au (g/t) Ag (g/t) (µm) (ppm) Au (%) Ag (%)
1105-SC-1 4.35 42.87 0.24 24.72 54 1011 11.2 94.5 42.3
1105-SC-2 4.99 48.70 0.23 31.40 60 975 11.4 95.4 35.5
05-SE-01 4.22 43.44 0.20 26.56 54 614 11.4 95.3 38.9

The results for Diluvio appear to be similar to the historical operating data.

Premier Gold Mines Limited – Mercedes Mine, Project # 2907

Technical Report NI 43-101 – April 18, 2018 Page 13-
1
 [Link]
m
LUPITA
Lupita is another new area which started production in 2017. Table 13-2 summarizes the
results from the Lupita metallurgical testing that was conducted in November - December
2018.

TABLE 13-2 LUPITA 2017 METALLURGICAL TEST RESULTS

Premier Gold Mines Limited – Mercedes Mine

Head Grade Tailings NaCN Recovery

Sample pH
Au (g/t) Au (g/t) P80 (µm) (ppm) (% Au)
1060-AC 0.39 0.08 38 1000 12.0 80.5
1118-E 0.52 0.06 39.5 1000 12.2 88.7
1118-W 0.45 0.07 38 1000 12.2 85.6

Based on the limited data set, the gold recovery from Lupita appears to be lower than the
historical operating data for Mercedes.

PLANT OPERATING DATA

Now that Mercedes has been operating for six years, the plant data should provide more
reliable estimates of the plant performance than metallurgical test data. Recovery estimates
at Mercedes are currently based on recent recovery achieved in the processing plant. Table
13-3 provides a summary of the budgeted and actual operating data since 2012. The data is
plotted in Figures 13-1, 13-2, and 13-3.

TABLE 13-3 PLANT OPERATING DATA

Parameter 2012 2013 2014 2015 2016 2017

Tonnage
Actual 603,187 670,867 681,833 713,475 688,396 683,574
Budget 566,938 664,827 695,061 630,965 760,722 629,431
Au Feed Grade
Actual 6.43 6.16 5.08 3.96 4.46 3.93
Budget 6.45 6.39 5.69 5.67 3.93 4.74
Au Recovery
Actual 95.1 94.5 94.5 93.1 94.4 95.5
Budget 93.9 95.0 95.0 95.0 93.8 95.0
Ag Feed Grade
Actual 78.5 79.4 55.9 43.3 47.4 37.6
Budget 71.7 73.1 57.8 52.3 45.2 43.0
Ag Recovery
Actual 32.2 34.4 32.9 38.6 40.3 40.8
Premier Gold Mines Limited – Mercedes Mine, Project # 2907
Technical Report NI 43-101 – April 18, 2018 Page 13-2
 m
Budget 30.0 30.0 33.0 30.0 33.3 40.0

Premier Gold Mines Limited – Mercedes Mine, Project # 2907

Technical Report NI 43-101 – April 18, 2018 Page 13-3
 FIGURE 13-1 BUDGETED VERSUS ACTUAL TONNAGE

800,000

700,000
Tonnes Processed
600,000

500,000

400,000

300,000

200,000

100,000
2012 2013 2014 2015 2016 2017
0 Actual Budget

The plant appears to be capable of processing the design tonnage since the actual tonnage
exceeded the budget for 2012, 2013, 2015, and 2017. The actual number of tonnes
processed in 2016 was 9.5% less than the budget, however, the 2016 budget was more than
20% higher than the budget for 2015.

FIGURE 13-2 GOLD FEED GRADE AND RECOVERY

96.0 7.00
95.5
95.5
95.1 6.00
95.0
Feed Grade, g/t Au

94.5 94.5 5.00

94.4
Recovery, % Au

94.5

94.0 4.00

93.5 3.00
93.0
93.0
2.00
92.5
1.00
92.0
91.5 0.00
201220132014201520162017
Actual RecoveryBudgeted Recovery
Actual Feed Grade Budgeted Feed Grade
The gold feed grade was lower than the budgeted feed grade for 2013, 2014, 2015, and
2017. In 2012, the gold feed grade was very similar to the budget and in 2016, the gold feed
grade was higher than the budgeted gold feed grade by over 0.5 g/t Au. RPA notes that the
gold recovery increased by over 1.0% to 95.5% in 2017 even though the gold feed grade was
the lowest it has been since the plant started operating in 2012. Prior to 2017, the average
gold recovery was 94.5% at an average feed grade of over 5.0 g/t Au and in 2015, it was only
93.0% at a gold feed grade similar to 2017. This significant improvement in the plant
performance was due to a number of steps that were implemented to increase recovery and
reduce costs including adding oxygen to the leach circuit beginning in late 2016.

FIGURE 13-3 SILVER FEED GRADE AND RECOVERY

45.0 90.0
40.3 40.8
40.0 38.5 80.0
34.4
35.0 32.2 32.9 70.0

Feed Grade, g/t Ag

Recovery, % Ag

30.0 60.0
25.0
20.0 50.0
15.0 40.0
10.0 30.0
20.0

5.010.0
0.00.0
201220132014201520162017
Actual RecoveryBudgeted Recovery
Actual Feed Grade Budgeted Feed Grade

The actual silver feed grade has been approximately equal to or higher than the budgeted
feed grade from 2012 through 2014. From 2015 through 2017, the actual silver feed grade
was lower than the budgeted feed grade. The actual silver recovery has been consistently
higher than the budgeted recovery.

Figure 13-4 plots the gold feed grade versus the gold recovery.
 FIGURE 13-4 GOLD RECOVERY AS A FUNCTION OF GOLD FEED GRADE

96.0
2012 through 2017 y = 0.2321x + 93.348
95.5 R² = 0.0869 2017

95.0
Recovery, % Au

94.5

94.0

93.5
Prior to 2017
y = 0.5921x + 91.213
93.0R² = 0.6648

92.5
0.00 1.00 2.00 3.00 4.00 5.00 6.00 7.00
Feed Grade, g/t Au
All 2012-2016 Linear (All) Linear (2012-2016)

Prior to adding the 2017 data, there appeared to be a slight correlation between gold feed
grade and gold recovery. When the improved recovery for 2017 is added to the data set,
there is no correlation.

Figure 13-5 plots the silver recovery as a function of silver feed grade.

FIGURE 13-5 SILVER RECOVERY AS A FUNCTION OF SILVER FEED GRADE

45.0
40.0 y = -0.1552x + 44.903
35.0 R² = 0.7553
30.0
25.0
Recovery, % Ag

20.0
15.0
10.0
5.0
0.0

0.0 20.0 40.0 60.0 80.0 100.0

Feed Grade, g/t Ag
The plant data also indicates that there is an inverse correlation between silver feed grade
and silver recovery (i.e., as the silver grade increases, the silver recovery decreases), which
is not normally anticipated.

RPA recommends that Mercedes conduct more detailed evaluations to determine if it is

possible to develop recovery estimates based on the metal concentrations in the feed to the
plant, or other parameters, that may make the recovery estimates more accurate as long as
the feed grade estimates are accurate. RPA notes that the feed grade to the plant was
significantly lower than the budget in 2015 and the tonnage was significantly higher. This
indicates that additional low grade or dilution material was being mined and processed. In
2016, the relationship between tonnage and grade was reversed. That is, the tonnage was
lower than the budget but the gold feed grade was higher. This reversal indicates that
Mercedes seems to have improved control of the mining operation, so less dilution material
or waste was mined and processed resulting in reduced operating costs to produce gold.

RPA is not aware of any processing factors or deleterious elements that could have a
significant effect on potential economic extraction at Mercedes.
 m

14 MINERAL RESOURCE ESTIMATE

SUMMARY
For this report, RPA has reviewed the Mineral Resource estimates of the various deposits at
the Mercedes Mine as reported by Premier as of December 31, 2017. As part of this audit,
RPA carried out a visual and statistical review of the geological solids, drill hole databases,
composite databases, and block models for Mercedes, Barrancas-Lagunas, Klondike,
Diluvio, and Rey de Oro in order to determine confidence over the total resource. RPA also
reviewed the geological modelling and grade estimation procedures used to estimate the
Mineral Resource. Overall, RPA found that block grades agreed well with composite grades
at the local scale. RPA did observe some occasional local discrepancies in grade, however,
grade estimates did not appear to be biased from a global standpoint.

RPA notes that a minimum thickness was not applied to the mineralized solids in the
estimation of Mineral Resources. Narrow intersections were used in the block models to
maintain grade and geological continuity and to facilitate future mine planning activities. RPA
recommends however, that these narrow intersections be diluted out to a suitable minimum
mining width to determine if they remain potentially economic. If not, they should be removed
from the estimate and the wireframes/solids adjusted accordingly.

As part of this audit, RPA carried out independent validations of the Mineral Resources
based on the surface drilling, underground data (drilling and chip samples), wireframes, and
block models provided.

The 2017 Mercedes Mineral Resources reported by Premier, excluding the Mineral
Resources which have been converted to Mineral Reserves, total approximately 3.68 million
tonnes (Mt) of Measured and Indicated Mineral Resources at an average grade of 4.32 g/t Au
and 43.7 g/t Ag (Table 14-1). This represents approximately 511,000 ounces of gold and 5.2
million ounces of silver. The deposits are also reported to contain approximately 1.6 Mt of
Inferred Mineral Resources at an average grade of 4.2 g/t Au and 34 g/t Ag, which
represents approximately 220,000 ounces of gold and 1.8 million ounces of silver.

Premier Gold Mines Limited – Mercedes Mine, Project # 2907

Technical Report NI 43-101 – April 18, 2018 Page 14-
1
 m

TABLE 14-1 MINERAL RESOURCE ESTIMATE AS OF DECEMBER 31, 2017

Premier Gold Mines Limited – Mercedes Mine

Grades Contained Metal

Classification Tonnes Au (g/t) Ag (g/t) Au oz (000) Ag oz (000)
Measured 1,085 5.73 60.66 199.8 2,115
Indicated 2,599 3.73 36.65 311.4 3,063
Total M+I 3,684 4.32 43.72 511.3 5,178
Inferred 1,630 4.2 34 220 1,780

Notes:
1. CIM (2014) definitions were followed for Mineral Resources.
2. Mineral Resources are estimated at a cut-off grade of 2.0 g/t AuEq for underground resources and 0.4
g/t AuEq for open pit resources.
3. AuEq based on 1.0 g Au = 140.0 g Ag.
4. Mineral Resources are estimated using an average price of US$1,400 per ounce and a silver price of
US$20 per ounce.
5. No minimum mining width was used.
6. Bulk density is 2.42 t/m3 for mineralization and 2.40 t/m3 for waste.
7. Mineral Resources are exclusive of Mineral Reserves.
8. Mineral Resources that are not Mineral Reserves have not demonstrated economic viability.
9. Numbers may not add due to rounding.

RPA is not aware of any environmental, permitting, legal, title, taxation, socio-economic,
marketing, political, or other relevant factors that could materially affect the Mineral Resource
estimate.

INTRODUCTION
The estimation methodology by MMM staff on recently updated resource estimates included:
 Statistical analysis and variography of gold and silver values in the composite
database.

 Construction of a block model using Vulcan software.

 Grade interpolation using ordinary kriging and inverse distance methodology.

MMM staff has constructed a procedures document for quality assurance which outlines the
project’s geological modelling, block modelling, and grade estimation procedures.

RESOURCE DATABASE AND VALIDATION

The resource database is derived from Mercedes’ Century Systems database. As noted in
Section 12, RPA checked 21,800 matching assay IDs from the resource database in 2017
and found the database to be in accord with the original assay certificates. A few minor

Premier Gold Mines Limited – Mercedes Mine, Project # 2907

Technical Report NI 43-101 – April 18, 2018 Page 14-2
discrepancies are at least partially explainable by re-assay, and any input errors should not
have significant effect on the Mineral Resource estimate.

GEOLOGICAL INTERPRETATION AND 3D SOLIDS

Geological interpretation incorporated plans and sections of interpreted geology including
level plans. Geological interpretations were digitized for each level and mineralized
structures were extended five metres above and below the last level containing information.
Where mineralization or geology was discontinuous between levels, information was
extrapolated and terminated halfway between the levels. Constructed solids were checked
for crossing and inconsistencies. Orientations of solid surfaces were back-checked against
level plan or surface mapping to ensure that they agreed with mapped measurements. Main
mineralization structures were defined for each zone and then adjacent mineralized bodies
were classified as hanging wall or footwall based on their relative position to the main
structure.

Mineralization solids were truncated 10 m from the last mineralized intercept where barren
holes occurred up to 30 m away, 15 m where adjacent barren holes were 30 m to 60 m
away, and 30 m where adjacent barren holes were more than 60 m away. Polygons
encapsulating mineralization were snapped to diamond drill holes following standard
procedures for incorporating or splitting out waste – grade intervals. Geological solid models
for the Lagunas and Mercedes deposits are shown as examples in Figures 14-1 through 14-
3.
 [Link]

Barrancas Zone

Legend: Zone
Taraicit
o
Laguna
s GAP
Barrancas

Figure 14-1

Premier Gold Mines Limited

0 100
200 300 400 500
Metres
Mercedes Gold-Silver Mine
Sonora State, Mexico
Geological Solid
Modelling:
Barrancas Zone
April 2018 Source: RPA, 2018.

14-4
 Looking Northeast

1
4-
5 Legend: Zone
Taraicit
o
Laguna
s GAP
Barrancas

Figure 14-2

Premier Gold Mines Limited a

0 100
200 300 400 500 c
Mercedes Gold-Silver Mine a
Metres State of Sonora, Mexico n.
Vertical Section of Barrancas c
Geological Modelling o
m
April 2018 Source: RPA, 2018.
 Looking Northeast

1
4-
6

Legend: Premier Gold

FigureMines
14-3 Limited
Aida Main
HW1 HW2
Mercedes Gold-Silver Mine a
FW1
State of Sonora, Mexico c
0 100 200 300 400 500
Drill Hole Trace and Channel Vertical Section of Mercedes a
Samples Metres Geological Modelling and n.
Drilling c
April 2018 Source: RPA, 2018.
o
m
 m

ASSAY STATISTICS
RPA compiled statistics for raw assay data by deposit. An example sample statistics for
Klondike are shown in Table 14-2.

TABLE 14-2 ASSAY STATISTICS FOR KLONDIKE ZONE

Premier Gold Mines Limited – Mercedes Mine

Min Max Mean

Column Zone Count (g/t) (g/t) (g/t) StDev CV
au Main 3,467 0.03 782.33 9.43 23.98 2.54
au HW 71 0.12 22.30 3.94 4.34 1.10
au FW 52 0.02 24.07 5.13 5.68 1.11
au ALL 3,590 0.02 782.33 9.26 23.60 2.55

Min Max Mean

Column Zone Count (g/t) (g/t) (g/t) StDev CV
ag Main 3,467 0.00 697.47 49.73 51.60 1.04
ag HW 71 2.50 115.00 25.46 20.07 0.79
ag FW 52 0.70 213.00 30.85 33.11 1.07
ag ALL 3,590 0.00 697.47 48.98 51.10 1.04

Min Max Mean

Column Zone Count (m) (m) (m) StDev CV
length Main 3,467 0.10 2.53 0.75 0.26 0.35
length HW 71 0.37 3.05 0.96 0.38 0.40
length FW 52 0.30 1.53 0.85 0.35 0.42
length ALL 3,590 0.10 3.05 0.75 0.27 0.36

COMPOSITE STATISTICS AND GRADE CAPPING

Previous studies of sample lengths have determined that one metre was the most common
length at the various deposits at Mercedes. A composite length of one metre was selected so
that the majority of the assay intervals were not split into separate composite values. MMM
staff generated both assay-length and run-length composite files from the drill and sample
database.

GRADE CAPPING
MMM staff performed capping analysis on diamond drill hole assays for each zone by
domain, and then applied capping to run-length composite files during grade estimation.
RPA

Premier Gold Mines Limited – Mercedes Mine, Project # 2907

Technical Report NI 43-101 – April 18, 2018 Page 14-7
 recommends capping the original assays and then compositing the resultant assay database.
This method is less likely to allow inordinately high grade to be composited into adjacent low
grades which then fall below the capping limits.

Composite and capping statistics for the Klondike, Diluvio, Mercedes, and Rey de Oro
deposits examined are shown in Table 14-3.

TABLE 14-3 SUMMARY COMPOSITE STATISTICS

Premier Gold Mines Limited – Mercedes Mine

Capped Capped Capped Diff Comp Block Diff CV

Project Metal Count Min Min Max Max Mean Mean Mean (%) CV CV (%)
Klondike Ag 3,363 0.00 0.00 677.58 150.83 47.16 41.00 13.06 0.99 0.83 16.16
Klondike Au 3,363 0.00 0.00 782.33 36.70 8.63 5.99 30.59 2.46 1.09 55.69
Diluvio Ag 3,071 0.00 0.00 1,002.291 140.65 24.02 17.82 25.81 2.07 2.08 -0.48
Diluvio Au 3,071 0.00 0.00 111.215 39.47 4.42 4.05 8.37 1.72 1.47 14.53
Mercedes Ag 17,485 0.00 0.00 9,106.48 733.4 105.76 96.21 9.03 1.87 1.31 29.95
Mercedes Au 17,485 0.00 0.00 2,040.75 95.6 9.63 7.26 24.61 3.53 1.46 58.64
Rey De Oro Ag 820 0.00 0.00 2,666.98 392.8 62.22 53.38 14.21 1.84 1.20 34.78
Rey De Oro Au 820 0.00 0.00 413.00 27.7 6.54 3.78 42.20 4.02 1.04 74.58

BULK DENSITY
Due to the variable composition of the vein structures and the wallrock identified at the
Mercedes property, bulk density measurements were taken to accurately determine tonnes
based on geology. The measurements were conducted by the MMM staff and McClelland
Laboratories in Sparks, Nevada. The completed bulk densities were averaged by geology
type, and the resulting averages are listed in Table 14-4.

TABLE 14-4 BULK DENSITY BY DEPOSIT

Premier Gold Mines Limited – Mercedes Mine

Rock Mercedes (t/m3) Klondike (t/m3) Barrancas (t/m3) Lupita (t/m3)

Latite 2.25 2.25 2.25 2.25
Andesite 2.35 2.35 2.35 2.35
Stockwork 2.31 2.39 2.44 2.44
Vein 2.46 2.46 2.44 2.44

For the 2017 estimations, MMM assigned bulk density in the Mineral Resource model
according to whether the blocks occurred inside of the mineralized solids. If the block fell
within
the mineralized solid, a block density of 2.42 g/cm3 was assigned; if the block was outside
the mineralized solid, the density value assigned was 2.40 g/cm3. This density value is
slightly lower than the 2.44 g/cm3 used in the 2016 report. It should be noted that the only
exception to this methodology for this report is for Rey de Oro where a density value of 2.42
g/cm3 was used for both ore and waste.

CUT-OFF GRADE
The grade shells are snapped to drill hole intercepts that meet or exceed the cut-off value of
2.0 g/t AuEq (Rey de Oro 0.4 g/t AuEq).

The AuEq cut-off grade used in building the grade shells is based on operating costs, gold
price, silver price, and metallurgical recoveries for gold and silver. For the purposes of the
grade shell modelling to remain consistent with modelling in previous years, the AuEq factor
was set at 140 parts silver equal one (1) part gold.

VARIOGRAPHY AND BLOCK MODEL INTERPOLATION

Variogram studies were conducted for the various deposits at Mercedes. The variogram
searches were fit to the orientation of the deposits. RPA examined the variography and found
it acceptable for use in Mineral Resource estimation. A summary of variogram parameters for
Mercedes, Klondike, Rey De Oro, and Lupita-Diluvio is shown in Table 14-5.
 TABLE 14-5 VARIOGRAPHY RESULTS
Premier Gold Mines Limited – Mercedes Mine

Axes (m)
Azimuth Plunge Dip Semi-
Deposit Nugget Major Minor
(°) (°) (°) Major
Mercedes
Structure 1 Au 315 -20 -90 0.3 5 10 1.7
Structure 2 Au 315 -20 -90 0.3 65 110 20
Structure 1 Ag 315 -20 -90 0.25 11 55 9.5
Structure 2 Ag 315 -20 -90 0.25 155 155 11.5
Klondike
Structure 1 -78 30 75 0.3 3.5 10 3.7
Structure 2 -78 30 75 0.3 35 50 5
Rey de Oro
Structure 1 Au 309 -10 49 0.25 75 27 5
Structure 2 Au 309 -10 49 0.25 500 237 12.5
Structure 1 Ag 309 -10 49 0.25 50 35 20
Structure 2 Ag 309 -10 49 0.25 200 100 30
Diluvio
Structure 1 Au 46 0 -22 0.25 50.0 3.5 6.0
Structure 2 Au 46 0 -22 0.25 100 80.0 11.0
Structure 1 Ag 46 0 -22 0.25 20 20 12.5
Structure 2 Ag 46 0 -22 0.25 60 45 32

Table 14-6 lists parameters used in the grade interpolations of the block models for the
Mercedes, Klondike, and Diluvio groups of deposits.
 TABLE 14-6 INTERPOLATION PARAMETERS
Premier Gold Mines Limited – Mercedes Mine

Search Distance Samples

Estimation Estimation Major Semi-major Minor Drill Hole
Deposit Method Pass (m) (m) (m) Min Max Limit
Mercedes
Channels OK 1 6 6 3 2 8 2
2 20 20 10 6 8 2
3 30 30 15 2 8 1
Drill holes OK 1 20 20 10 2 6 1
2 45 45 20 2 4 1
3 60 60 30 1 2 1
Klondike
Channels OK 1 6 4 3 2 8 2
2 17 15 5 6 8 2
3 25 25 10 2 8 -
Drill holes OK 1 15 15 10 2 6 1
2 30 30 20 2 4 1
3 60 60 30 1 2 1
Diluvio
OK 1 15 15 10 2 8 1
OK 2 30 30 20 2 6 1
OK 3 60 60 30 1 4 1

Grade estimation of gold and silver is run in three passes with progressively greater search
dimensions. Grades for gold and silver were estimated separately using ordinary kriging
(OK). A numerical flag and the average distance to the samples used in the block estimated
are assigned to each block as the passes are run sequentially. A “shell” variable encodes
blocks inside the triangulations used to sub-block each model, where 1 is the main
mineralized structure, 2 through N are secondary structures, and 99 is country rock outside
of the mineralized structures blocked out to maximum dimensions of 10 m x 10 m x 10 m.
Grades are set to nil outside of mineralized structures. A summary of block model
parameters is shown in Table 14-7. All models have a rotated origin to represent the general
northwest to southeast trend of the vein mineralization.
 TABLE 14-7 BLOCK MODEL PARAMETERS
Premier Gold Mines Limited – Mercedes Mine

Parent SubBlock
Origin (m) Rotation (°) Model Dimensions (m) (m)
x x about y about
Zone x y z about z y z x y z XxYxZ XxYxZ
Lupita-Diluvio 551299 3359599 810 90 0 0 2000 1400 900 20x20x20 0.5x0.5x0.5
Klondike 551000 3358000 800 105 0 0 1000 600 500 10x10x10 0.5x0.5x0.5
Lagunas - Barrancas 578500 3356000 400 45 0 0 1000 2750 900 10x10x10 0.5x0.5x0.5
Mercedes 549762 3354288 400 50 0 0 600 2200 1000 10x10x10 0.5x0.5x0.5
Rey de Oro 552286 3357307 800 37 0 0 700 1000 600 10x10x10 0.5x0.5x0.5

BLOCK MODEL VALIDATION

Validation of the block models included:
 On-screen displays of plans and sections showing composite and block grades.
 A Nearest Neighbour (NN) estimate to compare resource totals.
 Drift Analysis.

RPA compared block grade estimates with composite grades via visual cross checks,
summary statistics and swath plots for the Mercedes, Barrancas-Lagunas, Klondike, Diluvio,
and Rey de Oro deposits. Kriged block estimates were compared to actual diamond drill
holes in plan and section view to ensure that the estimation honoured the raw data at a local
scale.

Table 14-8 outlines block model versus capped composite statistics for four of the deposits
examined by RPA. Block model mean grades range from 3% to 52% below capped
composite mean grades in the examined deposits. This is due to the high yield limit
thresholds imposed at the grade estimation stage, where capped composites are not used
for grade estimation (generally) outside of a 1.5 m x 1.0 m x 0.5 m threshold range. Swath
plots tend to confirm attenuated block grades in areas with high grade sample grades (Figure
14-4). RPA considers the small restriction ranges to be conservative. Premier should
reconcile the high yield threshold parameters with mined areas to determine if the grades are
being underestimated in restricted areas.
 TABLE 14-8 MODEL VS. COMPOSITE SUMMARY STATISTICS
Premier Gold Mines Limited – Mercedes Mine

Capped
Comp Block Diff
Comp Block Comp Block Comp Block Mean Mean Mean Comp Block Diff
Deposit Metal Count Count Min Min Max Max (g/t) (g/t) (%) CV CV CV (%)
Klondike Ag 3,363 700,126 0.00 0.00 677.58 150.83 41.00 27.51 -32.87 0.987 0.833 -15.6
Klondike Au 3,363 700,126 0.00 0.001 782.33 33.98 5.99 3.38 -43.45 1.51 1.096 -27.41
Rey De Oro Ag 820 732,461 0.00 0.00 266.98 354.24 53.38 31.01 -42.1 1.84 1.20 -34.8
Rey De Oro Au 820 732,461 0.00 0.00 413.00 23.89 3.78 2.11 -44.18 4.03 1.04 -74.72
Lupita-Diluvio Ag 3,071 2,571,997 0.00 0.00 1,002.29 915.16 17.82 19.04 6.08 1.69 2.08 23.07
Lupita-Diluvio Au 3,071 2,571,997 0.00 0.00 111.22 33.64 4.05 3.13 -33.62 1.01 1.47 33.63
Mercedes Ag 17,485 1,789,584 0.00 0.00 9,106.48 704.07 96.21 45.60 -52.6 1.832 1.310 -28.50
Mercedes Au 17,485 1,789,584 0.00 0.00 2,040.75 84.719 7.26 3.54 -51.27 3.527 1.463 -58.52
 [Link]

Figure 14-4

Premier Gold Mines Limited

Mercedes Gold-Silver Mine

Legend: Sonora State, Mexico
Model Samples Volume Swath Plot Au Examples -
Count Mercedes
April 2018 Source: RPA, 2018.

14-14
 m

MINERAL RESOURCE CLASSIFICATION

Definitions for resource categories used in this report are consistent with those defined by
CIM (2014) and adopted by NI 43-101. In the CIM classification, a Mineral Resource is
defined as “a concentration or occurrence of solid material of economic interest in or on the
Earth’s crust in such form, grade or quality and quantity that there are reasonable prospects
for eventual economic extraction”. Mineral Resources are classified into Measured,
Indicated, and Inferred categories.

The resource blocks are classified based on average distance of data points, a minimum
number of drill holes, and the minimum number of samples from different octants. Based on
the ranges indicated by the omnidirectional variograms and a conditional simulation run
conducted by previous owner Yamana, it was determined that Indicated Mineral Resources
could be defined out to a distance of 40 m. Mineral Resources located at distances greater
than 40 m are classified in the Inferred category.

The Mineral Resource classification criteria are as follows:

 Measured – Based on underground access and sampling.

 Indicated – First and second estimation passes with at least two separated drill holes
in the estimate with an average estimation distance less than or equal to 40 m.

 Inferred – First and second estimation passes with an average estimation distance
greater than 40 m. All third estimation pass and estimations completed with only one
drill hole.

Initial block classification is determined via running a classification script on the block models
in Vulcan software. Since there were instances where Inferred Mineral Resources were
completely surrounded by Indicated Mineral Resources, or thin edges of Inferred Mineral
Resources occurred along the grade shell bounded by low grade intercepts, an interpreted
polygon was created to convert the Inferred Mineral Resources in these instances to an
Indicated Mineral Resource. RPA concurs with this procedure.

MINERAL RESOURCE SUMMARY

Tables 14-9, 14-10, and 14-11 contain the Mineral Resources by category and deposit for the
Mercedes operations as of December 31, 2017.

Premier Gold Mines Limited – Mercedes Mine, Project # 2907

Technical Report NI 43-101 – April 18, 2018 Page 14-15
 TABLE 14-9 MEASURED MINERAL RESOURCE ESTIMATE AS OF
DECEMBER 31, 2017
Premier Gold Mines Limited – Mercedes Mine
Tonnes Grades Contained Metal
Deposit
(000)
Au (g/t) Ag (g/t) Au oz (000) Ag oz (000)
Mercedes 583.0 5.64 72.16 105.7 1,353
Barrancas 334.4 6.37 57.17 68.5 614.6
Klondike 76.4 5.69 46.17 14.0 113.4
Marianas - - - - -
Rey de Oro - - - - -
Diluvio 85.1 3.83 11.80 10.5 32.3
Lupita 5.75 6.49 13.16 1.12 2.43
Total 1,085 5.73 60.66 199.8 2,115

Notes:
1. CIM (2014) definitions were followed for Mineral Resources.
2. Mineral Resources are estimated at a cut-off grade of 2.0 g/t AuEq for underground resources and 0.4
g/t AuEq for open pit resources.
3. AuEq based on 1.0 g Au = 140.0 g Ag.
4. Mineral Resources are estimated using an average gold price of US$1,400 per ounce and a silver price
of US$20 per ounce.
5. No minimum mining width was used.
6. Bulk density is 2.42 t/m3 for mineralization and 2.40 t/m3 for waste.
7. Mineral Resources are exclusive of Mineral Reserves.
8. Numbers may not add due to rounding.

TABLE 14-10 INDICATED MINERAL RESOURCE ESTIMATE AS OF

DECEMBER 31, 2017
Premier Gold Mines Limited – Mercedes Mine

Tonnes Grades Contained Metal

Deposit
(000)
Au (g/t) Ag (g/t) Au oz (000) Ag oz (000)
Mercedes 500.9 3.95 47.59 63.7 766.5
Barrancas 533.5 3.77 53.42 64.6 916.3
Klondike 98.6 3.73 31.68 11.8 100.4
Marianas 18.7 18.1 10.46 10.9 6.3
Rey de Oro 371.6 2.98 56.28 35.5 672.3
Diluvio 732.6 3.12 19.84 73.5 467.3
Lupita 343.5 4.65 12.11 51.4 133.8
Total 2,599 3.73 36.65 311.4 3,063

Notes:
1. CIM (2014) definitions were followed for Mineral Resources.
2. Mineral Resources are estimated at a cut-off grade of 2.0 g/t AuEq for underground resources and 0.4
g/t AuEq for open pit resources.
3. AuEq based on 1.0 g Au = 140.0 g Ag.
4. Mineral Resources are estimated using an average gold price of US$1,400 per ounce and a silver price
of US$20 per ounce.
5. No minimum mining width was used.
6. Bulk density is 2.42 t/m3 for mineralization and 2.40 t/m3 for waste.
7. Mineral Resources are exclusive of Mineral Reserves.
8. Numbers may not add due to rounding.
 TABLE 14-11 INFERRED MINERAL RESOURCE ESTIMATE AS OF
DECEMBER 31, 2017
Premier Gold Mines Limited – Mercedes Mine

Tonnes Grades Contained Metal

Deposit
(000)
Au (g/t) Ag (g/t) Au oz (000) Ag oz (000)
Mercedes 218 3.55 38.56 30 270
Barrancas 140 4.71 30.67 21 206
Klondike 87 3.40 20.49 10 58
Marianas 576 4.48 27.06 83 501
Rey de Oro 177 3.54 37.83 20 215
Diluvio 375 4.28 42.46 52 512
Lupita 59 6.24 11.49 12 22
Total 1,630 4.23 33.99 222 1,783

Notes:
1. CIM (2014) definitions were followed for Mineral Resources.
2. Mineral Resources are estimated at a cut-off grade of 2.0 g/t AuEq for underground resources and 0.4
g/t AuEq for open pit resources.
3. AuEq based on 1.0 g Au = 140.0 g Ag.
4. Mineral Resources are estimated using an average gold price of US$1,400 per ounce and a silver price
of US$20 per ounce.
5. No minimum mining width was used.
6. Bulk density is 2.42 t/m3 for mineralization and 2.40 t/m3 for waste.
7. Mineral Resources that are not Mineral Reserves have not demonstrated economic viability.
8. Numbers may not add due to rounding.

RPA notes that the remaining Mineral Resources contain isolated remnants and zones
remaining after the Mineral Reserve conversion process. It is RPA’s opinion that the
remnants should be removed from the resource total if they are deemed not to be potentially
economically viable.

RPA is not aware of any environmental, permitting, legal, title, taxation, socio-economic,
marketing, political, or other relevant factors that could materially affect the Mineral Resource
estimate.
 m

15 MINERAL RESERVE ESTIMATE

Metal prices used for Mineral Reserves are based on consensus, long term forecasts from
banks, financial institutions, and other sources.

Mercedes is up to date with its permitting for the underground operations. Permits will need
to be obtained for the Rey de Oro open pit Mineral Reserves, which only represent 3% of the
ore tonnage and 3% of the gold ounces in the reserves. Mercedes does not anticipate any
difficulty in obtaining the necessary permits for the Rey de Oro open pit.

For this report, RPA has reviewed the Mineral Reserve estimates of the various deposits at
the Mercedes Mine as reported by Premier as of December 31, 2017. RPA visited the site,
met with management, and carried out a number of checks to verify the various procedures
and numerical calculations used in the Mercedes estimates.

The Mineral Reserve estimate for the Mercedes operation is summarized in Table 15-1.

TABLE 15-1 MINERAL RESERVE ESTIMATE AS OF DECEMBER 31, 2017

Premier Gold Mines Limited – Mercedes Mine

Grades Contained Metal

Tonnes Au oz Ag oz
Mineral Reserve Class (000) Au (g/t) Ag (g/t) (000) (000)
Proven Underground 241 5.10 26.1 40 202

Probable Underground 2,935 3.88 24.1 366 2,276

Probable Open Pit 114 3.11 21.3 11 78
Subtotal Probable 3,049 3.85 24.0 378 2,354
Proven & Probable 3,290 3.94 24.2 417 2,555

Notes:
1. CIM (2014) definitions were followed for Mineral Reserves.
2. Underground Mineral Reserves are estimated at a cut-off grade of 2.5 g/t Au except at Diluvio which is
estimated at 2.0 g/t Au.
3. Open pit Mineral Reserves are reported at a cut-off grade of 1.5 g/t Au.
4. Mineral Reserves are estimated using an average gold price of US$1,200 per ounce and a silver price of
US$17 per ounce.
5. A minimum mining width of 3.5 m was used.
6. Bulk density is 2.42 t/m3 for ore and 2.40 t/m3 for waste.
7. Numbers may not add due to rounding.

Premier Gold Mines Limited – Mercedes Mine, Project # 2907

Technical Report NI 43-101 – April 18, 2018 Page 15-
1
 m

RPA is not aware of any mining, metallurgical, infrastructure, permitting, or other relevant
factors that could materially affect the Mineral Reserve estimate.

Mineral Reserves are estimated for five separate mine areas at the Project (Table 15-2).
These mine areas are:
 Mercedes - comprised of Corona do Oro, Casa Blanca, Brecha Hill, and Brecha Hill
Norte zones.

 Barrancas-Lagunas - comprised of Lagunas, Barrancas Norte, and Barrancas Centro

zones.

 Lupita - comprised of the Lupita underground workings.

 Diluvio - comprised of the Diluvio underground workings.

 Rey de Oro - comprised of the Rey De Oro underground workings and open pit.

The Mercedes Mine is located adjacent to the mill site, the Barrancas Mine is located
approximately two kilometres to the northwest of the Mercedes deposit, the Rey de Oro
deposits are located approximately four kilometres northeast of the Mercedes Mine, and the
Diluvio and Lupita mines are located approximately six kilometres northeast of the Mercedes
Mine. These are straight line distances; with the rugged terrain of the Mercedes area, the
road distances are longer.

Premier Gold Mines Limited – Mercedes Mine, Project # 2907

Technical Report NI 43-101 – April 18, 2018 Page 15-
2
Pre TABLE 15-2 MINERAL RESERVE ESTIMATE BY MINE/AREA AS OF DECEMBER 31, 2017
mier Premier Gold Mines Limited – Mercedes Mine
Gold
Mine
Proven Probable Proven + Probable
s
Gold Silver Gold Silver Gold Silver Gold Silver Gold Silver Gold Silver
Limi Tonnes Grade Grade Ounces Ounces Tonnes Grade Grade Ounces Ounces Tonnes Grade Grade Ounces Ounces
ted Mine/Area (000) (g/t) (g/t) (000) (000) (000) (g/t) (g/t) (000) (000) (000) (g/t) (g/t) (000) (000)
– Corona de Oro 15 7.8 65.2 4 32 34 4.4 44.0 5 49 50 5.5 50.5 9 81
Mer Casa Blanca 9 5.4 56.6 2 17 27 3.5 67.7 3 58 36 4.0 64.8 5 75
cede Brecha Hill 9 5.0 14.4 2 4 17 3.3 29.9 2 16 27 3.9 24.4 3 21
s
Brecha Hill Norte 15 4.3 42.3 2 20 12 4.1 37.8 2 15 27 4.2 40.3 4 35
Mine
Total Mercedes 49 5.7 46.7 9 73 90 3.9 47.5 11 138 139 4.5 47.2 20 211
,
Proj
ect # Lagunas 51 8.5 39.9 14 66 38 7.3 45.4 9 55 89 8.0 42.2 23 121
2907 Barrancas Norte 0 0 0 0 0 23 4.4 84.9 3 63 23 4.4 84.9 3 63
Tec Barrancas Centro 17 4.5 44.2 2 24 158 6.2 36.7 31 186 175 6.0 37.4 34 210
hnic Total Barrancas-
al Lagunas 68 7.5 41.0 17 90 219 6.2 43.3 43 304 287 6.5 42.8 60 394
Rep
ort Total Lupita 3 5.9 9.8 1 1 340 3.7 11.3 40 123 343 3.7 11.2 41 124
NI
43- Total Diluvio 121 3.5 9.7 13 38 1,944 3.6 15.6 227 976 2,065 3.6 15.3 241 1,013
101
–
Rey de Oro UG 0 0 0 0 342 4.0 66.8 44 734 342 4.0 66.8 44 734
April
Rey de Oro OP 0 0 0 0 0 114 3.1 21.3 11 78 114 3.1 21.3 11 78
Total Rey de Oro 0 0 0 0 0 456 3.8 55.4 55 812 456 3.8 55.4 55 812

Total Reserves 241 5.1 26.1 40 202 3,049 3.9 24.0 378 2,354 3,290 3.9 24.2 417 2,555
a
Notes: c
1. CIM (2014) definitions were followed for Mineral Reserves.
2. Underground Mineral Reserves are estimated at a cut-off grade of 2.5 g/t Au except at Diluvio which is estimated at 2.0 g/t Au. a
3. Open pit Mineral Reserves are reported at a cut-off grade of 1.5 g/t Au. n.
P 4. Mineral Reserves are estimated using an average gold price of US$1,200 per ounce and a silver price of US$17 per ounce.
a 5. A minimum mining width of 3.5 m was used. c
g 6. Bulk density is 2.42 t/m3 for ore and 2.40 t/m3 for waste. o
e 7. Numbers may not add due to rounding.
m
15
 [Link]
m

MINERAL RESERVE ESTIMATION

Underground Mineral Reserves for the Mercedes operation are generally estimated by site
personnel applying mining considerations to the Mineral Resource block model. External
consultants are engaged from time to time to support the mine personnel in completing
Mineral Reserve estimates. Stope designs are prepared in Vulcan software together with the
required development for access to the stopes. The shapes are subject to a minimum mining
width of
3.5 m, although in some areas split blasting is considered in order to take an ore cut of as
little as 2.0 m. Dilution is estimated by the expansion of the mining shape to include dilution
expected to be incurred over the course of mining. External dilution was assigned a zero
grade. The diluted stopes are reviewed to ensure that the shapes are reasonable and the
stope economics are estimated to ensure that blocks have a positive economic value on a
per level basis, per mine. Those stope shapes that meet or exceed the cut-off grade are then
tabulated to form the Mineral Reserve estimate.

Open pit Mineral Reserves have been estimated for the Rey de Oro deposit (in addition to
the underground Mineral Reserves). The open pit Mineral Reserves are based upon the
application of Minemax Planner pit optimization software using applicable mining dimensions
and operating cost estimates.

DILUTION
For development in vein widths less than 3.5 m, the additional material taken to reach the
minimum mining width of 3.5 m is considered planned dilution. In addition to the planned
dilution (included in mineable envelopes), a further 0.5 m stope width of unplanned dilution
resulting from blast overbreak, mining inefficiency, and scaling is projected. This equated to
approximately 14% unplanned dilution. Where the vein width is greater than four metres, the
combination of waste excavation to expose the vein contact, plus the over break from
blasting, is considered unplanned dilution. All dilution tonnes outside of the vein are assumed
to have zero grade. Additionally, any dilution tonnes of vein material that does not meet
Measured or Indicated Mineral Resource classification was assumed to have zero grade.

In areas where the full face (3.5 m width) does not meet the cut-off grade criteria, split
blasting is considered. With split blasting the round is taken with two blasts. First the

Premier Gold Mines Limited – Mercedes Mine, Project # 2907

Technical Report NI 43-101 – April 18, 2018 Page 15-4
 m
mineralized zone is blasted and mucked, followed by a waste cut being blasted and mucked
in order to meet the

Premier Gold Mines Limited – Mercedes Mine, Project # 2907

Technical Report NI 43-101 – April 18, 2018 Page 15-5
minimum mining width of 3.5 m. This allows narrow zones to be mined with reduced dilution.
The mineralized cut for split blasting has a minimum with of two metres and any non-vein
material included in the cut is assumed at zero grade. Split blasting is only assumed in select
areas where there is a history of successfully implementing this technique. Of the total
underground Mineral Reserve, less than 3% of the ounces assume split blasting.

Table 15-3 summarizes the estimated total dilution percentages by vein for cut and fill (CAF)
mining. RPA verified these total dilution assumptions through the Mineral Reserve statement.
However, it is not possible to reconcile this year’s assumptions against last year’s
assumptions as the latter only reported unplanned dilution percentages for CAF mining.

TABLE 15-3 ESTIMATED UNDERGROUND DILUTION BY VEIN

Premier Gold Mines Limited – Mercedes Mine

Mine Area Sector CAF Total Dilution (%)

Mercedes Corona de Oro 64
Casa Blanca 86
Brecha Hill 78
Brecha Hill Norte 96
Barrancas-Lagunas Barrancas Centro 50
Barrancas Norte 74
Lagunas 59
Lupita Lupita 53
Diluvio Diluvio 40
Rey de Oro Rey de Oro 30

Backfill dilution will occur as a result of mucking from cemented paste fill floors along the full
length of CAF cuts. It is estimated that the average depth of over-digging the floor will be
approximately 0.25 m.

Open pit dilution for the Rey de Oro pit has been estimated to be 10% of the ore tonnage,
with the dilution being low grade material grading approximately 0.7 g/t Au and 12 g/t Ag.

EXTRACTION
The mining recoveries used in estimating the Mineral Reserves for Mercedes, Barrancas-
Lagunas, Lupita, Diluvio, and Rey de Oro areas are listed in Table 15-4 and are unchanged
from the prior year. Extraction is slightly higher for ore development, due to increased grade
control and selectivity. Losses in stopes can occur from poor rock quality in the ore zone,
which can create:
 inefficient drilling and blasting in stope corners or walls
 loss of ore from remote mucking stope corners and edges or abandoning stopes due
to excessive waste slough.

TABLE 15-4 MINING EXTRACTION

Premier Gold Mines Limited – Mercedes Mine

Mining Method Recovery (%)

Cut and Fill 97

CUT-OFF GRADE
Mercedes estimates the cut-off grade (COG) based upon the 2018-2020 budget costs and
using the metal prices as set by Premier. COGs are estimated on both a fully-costed basis
and an incremental basis. The underground COG calculations are shown in Table 15-5 and
do not include the silver revenue credit or waste development costs. As a check, RPA re-
calculated the COG with the silver revenue credit included and found the credit was
immaterial (<1%) in the COG calculation.
 TABLE 15-5 UNDERGROUND CUT-OFF GRADE ESTIMATE
Premier Gold Mines Limited – Mercedes Mine

Diluvio All other Mine Areas

2017 This 2017 This
Input Units Actuals Estimate Actuals Estimate
Au Price $/oz 1,237 1,200 1,237 1,200
Au Recovery % 0.96 0.95 0.96 0.95
Value/gram $/g 38.01 36.66 38.01 36.66

Less Refining Cost $/g 0.21 0.49 0.21 0.49

Net Value/gram $/g 37.80 36.17 37.80 36.17

Operating Costs
Mine $/t 45.43 31.64 44.36 52.19
Process $/t 21.75 20.61 21.75 20.61
General &
Administration (G&A) $/t 12.99 13.01 12.99 13.01
Total $/t 80.17 65.26 79.10 85.81

Cut-off Grade g/t Au 2.12 1.80 2.09 2.37

Cut-off Grade Used g/t Au 2.00 2.50

The calculated COG for the operation ranges from 1.8 g/t Au to 2.4 g/t Au. MMM selected a
standard COG of 2.5 g/t Au for all the mine areas except Diluvio, for which MMM has
selected a COG of 2.0 g/t Au. MMM’s explanation for this change is that the Diluvio mine has
the following advantages:

 Ground conditions are better, which reduces support costs.

 The mine levels are relatively large, reducing access costs.
 The drifts are larger, producing more tonnes per round and further spreading out fixed
costs

In comparing the costs and production basis used by MMM for Mineral Reserve COG
calculations with their corresponding 2017 actuals, MMM’s COG estimates are higher than
the 2017 actual costs as shown in Table 15-6 for all mines areas except Diluvio. MMM
attributes this variance mainly due to:

 The older mine areas are near depletion, thus productivity is decreasing (Mercedes
and Barrancas-Lagunas).

 Increased development costs over a short term associated with the ramp-up of new
mine areas (Lupita and Rey de Oro).
On the other hand, the Diluvio underground COG estimate is 15% lower than its 2017
realized grade. MMM attributes this lower value to considerable upfront mine development in
the last two years not being reflected in the COG value going forward.

The open pit COG calculations are shown in Table 15-6. The table also shows the unit open
pit operating costs and the incremental costs (for a tonne of rock that must be mined). MMM
chose to report open pit reserves at a 1.5 g/t Au cut-off grade for operational purposes.

TABLE 15-6 OPEN PIT CUT-OFF GRADE ESTIMATE

Premier Gold Mines Limited – Mercedes Mine

Input Units 2017 Costs This Estimate

Au price $/oz na 1,200
Au recovery % na 95
Value/gr $/g na 36.66

Less refining $/g na 0.49

Net $/gr $/g na 36.17

Operating Costs
Mine $/t na 3.00
Process $/t 21.75 19.78
G&A $/t 12.99 11.63
Total $/t na 34.41

Cut-off Grade g/t Au na 0.95

Cut-off Grade Used g/t Au na 1.50

Table 15-7 summarizes the key inputs used to evaluate the mine designs, which combined
individual Mineral Reserve blocks into mine design panels within each mine area. Each “sub-
area” was evaluated based on the amount of horizontal and vertical development required to
mine a sub-area of Mineral Reserve blocks.
 TABLE 15-7 MINERAL RESERVE ANALYSIS INPUTS
Premier Gold Mines Limited – Mercedes Mine

Evaluation Input Units Value

Average Width of Mining m 4.0
Tonnage Multiplier t/m 38.72
Bulk Density t/m3 2.42
Average Heading Area m2 16
Gold Price (Oz) $/oz 1,200
Capital Cost $/m 3,600
Operating Cost $/m 2,000
Vertical Development Cost $/m 1,820
Processing Cost $/t ore 21
G&A Cost $/t ore 13
Gold Recovery % 95

CLASSIFICATION
Measured Mineral Resources are converted to Proven Mineral Reserves, and Indicated
Mineral Resources are converted to Probable Mineral Reserves.

RPA is of the opinion that the Mineral Reserves are being estimated in an appropriate manner
using current mining software and procedures consistent with industry best practice.
 m

16 MINING METHODS
The Mercedes operation consists of five separate underground mines, all of which are in the
production planning stage; plus an open pit mine that is in the planning stage. The five
underground mine areas are:

1. the Mercedes Mine area composed of Corona de Oro (CDO), Casa Blanca, Brecha
Hill, and Brecha Hill Norte;

2. the Barrancas-Lagunas mine area composed of the Lagunas, Barrancas Centro, and
Barrancas Norte;

3. the Lupita mine area;

4. the Diluvio mine area;

5. the Rey de Oro mine area composed of both an underground operation and a very
small open pit, which is under evaluation, and requires permitting. The permitting of
this open pit is expected to be completed in mid-2018 according to MMM staff.

Production will come from the Mercedes, Barrancas-Lagunas, Lupita, Diluvio, and Rey de
Oro. Access to all of the mines is by way of declines. The Rey de Oro area is contiguous with
and immediately south of the mined-out Klondike deposit and will incorporate many of the
methods and infrastructure from this older mine area.

Figure 16-1 is a plan map of the mine areas and significant Mercedes infrastructure.
Longitudinal section and schematic views of the individual mine area layouts are shown in
Figures 16-2 to 16-5.

Premier Gold Mines Limited – Mercedes Mine, Project # 2907

Technical Report NI 43-101 – April 18, 2018 Page 16-
1
 [Link]

P. LUPITA

WORKSHOP KLONDIKE

BATCH PLANT

TAILINGS POND

PASTE PLANT
CAMP WAREHOUSE
PLANT
OFFICES

0 1 2 3 4
Legend:
Kilometres
Mine Portal
Infrastructur
Figure 16-1
e Location
Water
Highway Premier Gold Mines Limited
Gravel Road
Drainage Mercedes Gold-Silver Mine
Contour Interval @ 20m State of Sonora, Mexico
Mercedes Mine Area Plan Map
April 2018 Source: Yamana Gold Inc., 2016.

16-2
 Corona de Oro
Casa Blanca

Brecha Hill

1
6-
3

Brecha Hill Norte

Legend: 0 50 100 150 200 250

Planne Metres Figure 16-2

d Mined a
Premier Gold Mines Limited c
a
Mercedes Gold-Silver Mine n.
State of Sonora, Mexico c
Mercedes Mine o
Long Section m
April 2018 Source: Premier Gold Mines Ltd., 2016.
 Barrancas Centro
Lagunas

Barrancas Norte

16
-4

Legend:
0 50
Planne 100 150 200 Figure 16-3
d Mined Metres
a
Premier Gold Mines Limited
c
Mercedes Gold-Silver Mine a
State of Sonora, Mexico n.
Barrancas and Lagunas c
o
Mine Long Section m
April 2018 Source: Premier Gold Mines Ltd., 2017.
 Brecha Hill

Lupita

Diluvio

1
6-
5

Brecha Hill Norte

Legend:
Planne 0 50 100 150 200 Figure 16-4
d Mined Metres
Premier Gold Mines Limited a
c
Mercedes Gold-Silver Mine a
State of Sonora, Mexico n.
Lupita - Diluvio Mine Long c
Section Isometric View o
m
April 2018 Source: Premier Gold Mines Ltd., 2017.
 Rey de Oro
Klondike

1
6-
6

Legend:
0 50
Planne 100 150 200 Figure 16-5
d Mined Metres
a
Premier Gold Mines Limited
c
Mercedes Gold-Silver Mine a
State of Sonora, Mexico n.
Klondike & Rey de Oro c
Development Design o
Isometric View m
April 2018 Source: Premier Gold Mines Ltd., 2017.
 [Link]

MINE DESIGN
UNDERGROUND MINES
The underground mines are all designed as ramp access mechanized mines. The anticipated
ore production rate ranges from 1,700 tpd to 1,900 tpd (average 1,800 tpd) which is lower
than the designed 2,200 tpd capacity. Ore from underground is hauled by 16 t trucks to
stockpiles near the portals. Ore from the Barrancas-Lagunas, Lupita, Diluvio, and Rey de Oro
mines is hauled to a common stockpile area near the jaw crusher.

The mine schedule is based on a seven days in/seven day out roster for 365 days per year.
Crews work 12-hour shifts; planning is based upon the loss of three hours per shift for
breaks, safety meetings, equipment checks, and minor maintenance. The total hours worked
per year per person on this schedule is 2,190 hours. The available working time per shift
equates to an average availability of 75% of the total hours.

Table 16-1 outlines the typical underground opening dimensions found at all of the Mercedes
mines. Figure 16-6 shows the typical CAF full face mining method which continues to be
employed at all Mercedes mine areas going forward.

TABLE 16-1 TYPICAL UNDERGROUND MINE OPENING DIMENSIONS

Premier Gold Mines Limited – Mercedes Mine

Approx.
Approx. Distance to
Type Dimensions Length Ore Zone
(w x h, m) (m) (m)
Main access (ramp-to-ore) 4.5 x 4.3 60 60
Ventilation raise access 4.0 x 4.0 20 40
Escapeway/FAR access 4.0 x 4.0 17 40
Sump 4.0 x 4.0 9 48
Electrical substation 4.0 x 4.0 13 In ramp
Ore sills 3 x 4 to 4 x 4 200 n/a
CAF Access/Ramps 4x4 120/40 40

Notes:
FAR - Fresh Air Raise
CAF - Cut and Fill
w x h - width x height

Premier Gold Mines Limited – Mercedes Mine, Project # 2907

Technical Report NI 43-101 – April 18, 2018 Page 16-7
1
6-
8

Figure 16-6

Premier Gold Mines Limited a

c
Mercedes Gold-Silver a
Mine State of Sonora, n.
Mexico Typical Cut and c
Fill o
Mining Method m
April 2018 Source: Yamana Gold Inc., 2016.
 m

OPEN PIT DESIGN

The Rey de Oro open pit was designed using parameters as shown in Table 16-2. A number
of pits were designed and evaluated based on best economics. The shallow open pit slope of
45° was chosen consistent with the lack of geotechnical information available.

TABLE 16-2 OPEN PIT EVALUATION INPUTS

Premier Gold Mines Limited – Mercedes Mine

Input Units Value

Gold Price US$/oz 1,200
Silver Price US$/oz 17
Selling Cost US$/oz $15 Au, $1 Ag
Recovery Gold % 95
Mine Cost (Open Pit) US$/t 3
Process Cost US$/t 19.8
G&A Cost US$/oz 11.6
Strip Ratio W:O 8:1
o
Over All Slope Angle 45
Haul Distance km 2 to 4

The open pit design criteria for the Rey de Oro open pit are shown in Table 16-3.

TABLE 16-3 DESIGN CRITERIA FOR OPEN PIT

Premier Gold Mines Limited – Mercedes Mine

Criteria Units Value

Bench Height m 7.5
Inter Ramp Angle degree 45
Face Angle degree 75
Berm Width m 5.5
Ramp Width m 9-12
Ramp Gradient % 10-16

MINING METHODS
Until 2018, there were two underground mining methods in use at Mercedes. Approximately
90% of the rock was mined by mechanized CAF stoping. Where the rock quality was
appropriate, the ore was mined by long hole open stopes (LHOS) with cemented paste
backfill. However, for the 2018 LOM production plan reviewed under the scope of this report,
MMM staff reported that the mining method is wholly mechanized CAF stoping with no LHOS
mining.
Premier Gold Mines Limited – Mercedes Mine, Project # 2907
Technical Report NI 43-101 – April 18, 2018 Page 16-9
 The CAF method is further subdivided into two types of mining, Full Face and Split Blasting.
In areas where the full face (3.5 m width) does not meet the cut-off grade criteria, split
blasting is considered. With split blasting, the round is taken with two blasts. First the
mineralized zone is blasted and mucked, followed by a waste cut being blasted and mucked
in order to meet the minimum mining width of 3.5 m. This allows narrow zones to be mined
with reduced dilution. The mineralized cut for split blasting has a minimum width of two
metres and any non-vein material included in the cut is assumed at zero grade. Split blasting
is only assumed in select areas where there is a history of successfully implementing this
technique.

Table 16-4 summarizes the current Mineral Reserves mined by area and by mining method
which is composed of 97% CAF (94% Full Face and 3% Split Blasting) and 3% open pit
mining of the Mineral Reserve gold ounces.

TABLE 16-4 MINERAL RESERVES BY MINING METHOD

Premier Gold Mines Limited – Mercedes Mine

Gold Silver Gold Silver

Mining Tonnes Grade Grade oz oz % of % of
Method Mine Areas (000) (g/t Au) (g/t Ag) (000) (000) Tonnes Gold Oz
FF Total Mercedes 118 4.9 48.9 19 185 4 4
FF Total Barrancas-Lagunas 249 7.1 44.4 57 356 8 14
FF Total Lupita-Diluvio 2,408 3.6 14.7 281 1,137 73 67
FF Total Rey De Oro-UG 298 3.9 63.9 38 612 9 9
FF Total Full Face Method 3,073 4.0 23.2 394 2,291 93 94

SB Total Mercedes 23 2.9 40.3 2 30 1 1

SB Total Barrancas Lagunas 37 2.8 31.9 3 38 1 1
SB Total Lupita-Diluvio - - - - - - -
SB Total Rey De Oro-UG 44 4.5 85.8 7 123 1 2
Total Split Blasting
SB Method 105 3.6 56.6 12 191 3 3

UG Total UG 3,178 4.0 24.3 406 2,482 97 97

OP Total Rey De Oro-OP 114 3.11 21.3 11 78 3 3

Total Mineral Reserve

Totals 31-Dec-17 3,290 3.9 24.2 417 2,560 100 100

Notes:
FF – Full Face, Cut and Fill Stoping
SB – Split Blasting, Cut and Fill Stoping
OP – Open pit; UG - Underground
The open pit mine at Rey de Oro is a small open pit, which extends up a slope. The pit
contains approximately 114,000 tonnes of ore, which is a 25% decrease from the 2016
Mineral Reserve of 151,000 tonnes. Due to the low tonnage, the most reasonable mining
scenario appears to be contract mining with technical supervision and grade control provided
by Mercedes.

RPA is of the opinion that the selected mining methods are appropriate for the deposits.

GEOMECHANICS, GROUND SUPPORT

UNDERGROUND
Geotechnical characterization of the deposit(s) and surrounding rock mass has been carried
out using available drill hole data, laboratory testing data, geological models, underground
mapping, and experience excavating in the area for the past five years. Geotechnical models
of the Mercedes, Barrancas-Lagunas, Lupita, Diluvio, Klondike, and Rey de Oro mines were
developed based on these characterization studies. Observations of ground performance in
the underground ramp, and vein crosscuts have been used to confirm and revise the
geotechnical model where appropriate.

The ground conditions at all of the mine areas were analyzed by Golder Associates Inc.
(Golder) of Tucson, Arizona, an independent geotechnical consulting firm, and the
preliminary results indicate that the rock mass quality is poor to very poor, comparable to the
low quality areas of Mercedes, and thus the amount of conventional CAF is expected to be
approximately 89% in the area. Specific geotechnical models for all areas have been
prepared. A summary of the geotechnical reviews and methods employed at Mercedes is
described below.

Required ground support includes a combination of bolting, shotcrete, steel sets, and mesh.
The use of shotcrete arches (lattice girders) is prevalent in most areas of the mines,
especially in areas of especially weak ground and/or to advance through zones of faulted
ground. Arches and girders (steel sets) are also used as part of the standard support
recommendations. Where used, corresponding bolting and shotcrete requirements are
optimized.

For Barrancas-Lagunas, Golder recommended that in-ore development should be limited to a

maximum span of 7 m, and intersections should be designed to limit spans to 9 m. Where
benching is planned, newly exposed walls are supported in accordance with the defined wall
support requirements and total wall heights should be limited to 8 m. Further, benched
stopes are backfilled to original (4 m) heights shortly after completion.

ROCK STRENGTH
The primary host rock at Mercedes and Barrancas-Lagunas is a medium strong, moderate to
highly fractured, or faulted andesite rock mass. At Mercedes, the immediate wall rock has
generally been qualitatively estimated as strong. Zones of weak rock strength are more
prevalent in the west wall than in the east wall. The most extensive area of weak rock is in
the west wall of the upper Corona de Oro area.

In the Barrancas-Lagunas area, weak zones occur where the latite dike runs along or near
the vein contact. In other areas of the vein, weak rock is generally not continuous in the walls
over a significant area, and it appears randomly distributed along the vein. A wide range of
rock strength variability exists across the Barrancas and Lagunas areas.

The veins at Mercedes and Barrancas-Lagunas are primarily quartz with lesser proportions
of carbonates and calcite. The highest grades are found within the vein with lesser grades
found in stockwork and breccia with decreasing intensity with distance from the vein. On
average, the vein can be described as a strong to very strong, moderate to highly fractured
rock mass, however, some areas have been heavily altered to near soil-like conditions.

Stope stability analysis estimated stope dimensions at 10 m wide by 24 m high by 15 m long

for the Lupita deposit, and 15 m wide by 24 m high by 15 m long for the Diluvio deposit. Rock
strength at the Diluvio and Lupita deposits is generally fair to good.

ROCK QUALITY
MERCEDES
The estimated rock quality distribution in both the immediate east and west walls of the
Mercedes deposit indicates highly variable rock quality. Rock quality is low in both walls near
surface, above an approximate elevation of 1,150 m. There is a general increase in quality
with depth in the east wall, however, this is not as apparent in the west wall where areas of
low quality are randomly distributed throughout the vein. Fracture intensity and rock quality
appear to improve approximately 20 m outside of the vein.
Rock quality in the vein at the Mercedes deposit is variable, with the lowest quality areas
located in the upper areas of Corona de Oro and Brecha Hill. There is no apparent
correlation between rock quality and depth, as zones of weaker rock are apparent throughout
the vein.

BARRANCAS, LAGUNAS, AND GAP

Similar to the Mercedes area, the rock quality in the immediate walls in the Barrancas-
Lagunas area is also highly variable. At the Barrancas deposit, the lowest rock quality is in
the Centro vein, where the dike and a series of faults cross the veins. To the north, the rock
quality increases as the dike moves away from the vein. Waste rock at the Lagunas and Gap
(between Barrancas and Lagunas) deposits is expected to comprise approximately 40%
weak rock (average intact strength of 5 MPa) and 60% strong rock (average intact strength of
46 MPa). These respective percentages are expected to be 50% and 50% at the Barrancas
deposit.

Waste rock mass quality at all deposits is expected to be highly variable. Average quality is
expected to be very poor with a majority being highly fractured or rubblized. Q values
estimated from underground mapping suggest a range of average values between 0.3 and
1.0 is likely. Relatively “better” quality rock is reported to exist in areas of the immediate
(eastern) hanging wall of the Lagunas deposit, however, these areas are not expected to be
pervasive.

Rock within the orebodies at the Lagunas and Gap deposits is expected to comprise
approximately 30% weak rock (average intact strength of 5 MPa) and 70% strong rock
(average intact strength of 46 MPa). These respective percentages are expected to be 60%
and 40% at the Barrancas deposit.

Orebody rock mass quality at all deposits is expected to be highly variable. Average quality is
expected to be poor. Although slightly better than the quality of waste rock, the majority of
areas are expected to be similarly highly fractured or rubblized. Q values estimated from
underground mapping suggest that a range of values between 1.5 and 2.5 is likely.

LUPITA AND DILUVIO

Waste rock at the Lupita deposit is expected to comprise approximately 20% weak rock
(average intact strength of 5 MPa) and 80% of strong rock (average intact strength of 46
MPa). These respective percentages are expected to be 10% and 90% at the Diluvio deposit.
Waste rock mass quality at all deposits is expected to be relatively consistent.
Average quality is expected to be fair with a majority being moderately to highly fractured.
The orebody rock mass at the Lupita deposit is expected to consist of mostly strong (average
intact strength of 46 MPa), moderate to highly fractured rock. Orebody rock mass quality at
the Diluvio deposit is also expected to be strong, but the photograph logging results suggest
that it is less heavily fractured and more consistently fair in quality as compared to the Lupita
deposit.

The lack of identifiable spatial trends in rock mass quality within either deposit precluded the
designation of specific geotechnical domains at any scale smaller than the level of deposit
and ore zone (ore or waste).

REY DE ORO
Rey de Oro rock quality is expected to be similar to the mined-out Klondike deposit where the
lowest rock quality in the vein is near surface, above an approximate elevation of 1,100 m.
Below 1,100 m, the rock quality is generally higher, consisting of strong, moderate to highly
fractured rock.

STABILITY ANALYSIS
Base case stope sizes used in analyses were based on 20 m sub-level spacing (floor-to-
floor), resulting in 24 m wall height exposures and with 15 m stope length. For average rock
quality conditions, some flexibility was allowed for shortening or lengthening stopes in varying
rock quality.

Stability analyses were then performed using the Mathew's method to estimate average
stable stope sizes for each domain. Where the empirical approach indicated that strike
lengths should be limited to less than 10 m for the average rock quality conditions, open
stoping is not considered practical and CAF mining is used. These areas are mainly near
surface in the Corona de Oro area of the Mercedes vein, Barrancas, Lagunas, Lupita, and
Diluvio veins. In most cases, the sizes of the stopes are limited by the rib (sidewall) rock
quality.

OPEN PIT GEOTECHNICAL DESIGN CRITERIA

There has been no geotechnical work completed specifically for the Rey de Oro pit. The Rey
de Oro open pit area is composed of three separate small pits. The design of the open pit
was
based on the guidelines of the optimization run with Rev. Factor 1. As previously noted, the
following are the design criteria:
 inter-ramp angle of 45°,
 berms 3.7 m,
 bench height of 7.5 m,
 bench face angle 75°,
 ramp width 12 m,
 ramp slope 10%.

MINE INFRASTRUCTURE
MERCEDES MINE ACCESS
Primary access to the Mercedes Mine is via a portal above the central Corona zone. This
portal provides access to the main decline that was designed to accommodate ore haulage
as well as underground delineation diamond drilling. The main decline has a nominal 12%
grade and is 4.5 m wide by 4.3 m high. The main decline is located approximately 60 m from
the main mineralization.

To facilitate the loading of trucks in the main decline, a flat portion of ramp is designed every
60 m vertically. Re-muck bays are developed at main level intersections and main electrical
sub-stations are designed at each main level (every 60 m vertically).

A second portal accesses the Casa Blanca zone from surface. This excavation provides an
additional source of fresh air to the mine and a secondary egress.

BARRANCAS AND LAGUNAS MINE ACCESS

The Barrancas deposit is accessed by two separate portals (4.5 m by 4.3 m) with declines for
access. Portal elevations are 1,140 MASL at the Barrancas deposit and 1,137 MASL at the
Lagunas deposit. The Barrancas mine design parameters were modelled after the Mercedes
design.

Vertical development for the deposit includes a 2.4 m diameter return air raise (RAR) and
escapeway raise for secondary egress. A 127 mm diameter paste fill borehole, drilled from
surface, also accesses each level of the Barrancas deposit for the distribution of paste fill to
the mined stopes.

DILUVIO AND LUPITA MINE ACCESS

The Diluvio deposit is accessed by one portal (4.5 m by 4.3 m) with a decline (12% road
grade) for access. The Diluvio mine design parameters were modelled after the Mercedes
design. The Lupita deposit is accessed from the upper portions of the Diluvio ramp as well as
an extension of that ramp to the southwest.

Vertical development for the deposit includes a 2.4 m diameter RAR and escapeway raise for
secondary egress. A 127 mm diameter paste fill borehole, drilled from surface, also accesses
each level of the Diluvio deposit for the distribution of paste fill to the mined stopes.

REY DE ORO MINE ACCESS

The Rey de Oro deposit is contiguous with the older and now mined-out Klondike deposit
which lies immediately to the north. A tunnel on the 1032 level connects the Klondike and
Rey de Oro orebodies. Design patterns for opening sizes are similar to those found at the
Klondike deposit, which is described below.

The Klondike deposit is accessed by a portal at an elevation of 1,190 MASL, and a single
ramp driven at 12% grade down from surface. The Klondike portal is located on the hanging
wall side of the deposit, however; the ramp swings around the mineralized zone and is
located on the footwall side.

The 4.5 m wide by 4.3 m high decline is nominally 12% grade and accesses levels every 20
vertical metres. Each level is accessed by a 4.0 m wide by 4.0 m high crosscut driven at -2%
grade from the ramp for approximately 10 m to a sump and then driven at +2% grade
towards the ore sill access drifts. A 4.0 m by 4.0 m truck loading bay is developed at each
level-ramp intersection, opposite to the main level crosscut. The level access drift
infrastructure also includes paste line access, electrical sub-stations, escapeway accesses,
and sumps.

Vertical development for the deposit includes a 2.4 m diameter RAR and escapeway raise for
secondary egress. A 127 mm diameter paste fill borehole, drilled from surface, also accesses
each level of the Klondike deposit for the distribution of paste fill to the mined stopes.
INTERNAL RAMPS
A number of internal ramps are required between the main truck loading levels that are
located at 60 m vertical intervals. These smaller ramps are a nominal 4.0 m wide by 4.0 m
high and can be used by all mobile equipment other than the ore haulage trucks. Internal
ramps are also designed for accessing the Corona, Casa Blanca, Breccia Hill, Barrancas,
Lagunas, Lupita, and Diluvio zones. These are standard spiral declines grading at 15% and
are either
4.5 m by 4.3 m or 4.0 m by 4.0 m depending on whether truck access is required.

LEVEL DRIVES AND STOPE ACCESS

The average drift size for waste development is 4.0 m wide by 4.0 m high. The minimum ore
drift size is 3.0 m wide by 4.0 m high. The minimum mining width is 2.5 m (approximate load-
haul-dump (LHD) bucket width).

Ore sills are driven under geological control to ensure that they closely follow the economic
veins. Typically, this requires that the vein contact be exposed in the upper shoulder or back
of the sills. This requires close control and training of development crews and supervisors in
order to minimize dilution.

MINE VENTILATION
The ventilation design for the Mercedes and the mined-out Klondike deposits was modelled
using the software Ventsim Visual. The airflow requirements are based on Mexican law
which states that 0.048 m3/s of airflow per engine-kilowatt is required. On the basis of 100%
diesel equipment utilization and the assumed diesel equipment fleet, the ventilation
requirement is 203 m3/s of total airflow for the Mercedes and was 108 m3/s of total airflow for
the Klondike mine area.

Eleven (150 hp and 250 hp) surface fans with variable speed drives are required; one for
each of the four exhaust raises at Mercedes, four at Barrancas, one at Klondike, one at
Diluvio, and one at Lupita.

The Mercedes Mine area is supplied with fresh air through the Corona portal, the Casa
Blanca portal, and a fresh air raise (FAR) located on the northern edge of the Corona ramp.
The FAR is connected to the Corona ramp in two locations with ventilation bulkheads in each
of these accesses. The bulkheads allow variable openings to control the flow of fresh air
depending on
which of the four sections has the main mining activity. The FAR has a velocity restriction
placed on it past the 860 level after which it operates mainly as an escapeway for the Lower
Corona section.

The Barrancas mine area is supplied with fresh air through the Barrancas and Lagunas
portals. This mine area has three exhaust fans to expel the used air. The bulkheads allow
variable openings to control the flow of fresh air depending on which of the four sections has
the main mining activity. The FAR has a velocity restriction placed on it past the 860 level
after which it operates mainly as an escapeway for the Lower Corona section.

Fresh air at the Diluvio and Lupita deposits is also supplied through the portal. It is also
assumed that fresh air at the Rey de Oro deposit will be supplied through the portal, similar
to the design at the Klondike deposit.

Each of the Casa Blanca, Corona, and Breccia Hill sections has a dedicated escapeway,
which is connected to surface. These raises are not used as primary FARs but are designed
to have sufficient airflow to ensure that they are constantly in fresh air.

The “used” air is exhausted through raises with accesses on each level in each of the
sections. The mine is under negative pressure (a pull system), therefore ventilation
bulkheads are constructed in each of the exhaust raise accesses with variable openings to
control the flow onto the level, depending on the activity on the level. The exhaust raises in
the Casa Blanca, Corona, and Breccia Hill sections are connected to surface and the
exhaust raise in the Lower Corona section is connected to the bottom of the Breccia Hill
exhaust raise.

Auxiliary ventilation is required on each active level in all of the mine areas. Typical
ventilation ducting ranges from 91 cm (36 in.) to 107 cm (42 in.) diameter.

Summaries of the installed requirements and ventilation equipment for the Mine are shown in
Tables 16-5 and 16-6.

Figures 16-7 to 16-10 represent typical ventilation diagrams for the Corona de Oro
(Mercedes), Barrancas-Lagunas, and Diluvio mine areas.
 TABLE 16-5 SUMMARY OF VENTILATION REQUIREMENTS PER MINE AREA
Premier Gold Mines Limited – Mercedes Mine

Main Number of Number of

Raise Raise Fan Auxiliary Auxiliary Flow
Depth Diameter Power Fans Fans Requirement Emergency
Sector (m) (m) (Hp) Needed Installed (kCFM) Exit
Corona de Oro 310 2.4 250 4 4 120
Casa Blanca 315 2.4 150 3 3 80
Brecha Hill 432 2.4 250 4 4 120
Brecha Hill Norte (Intake) 422 2.4 250 2 2 60
Barrancas Centro 170 2.4 200 2 2 60
Lagunas 170 2.4 150 2 2 60
Lupita 193 2.4 150 4 2 60
Diluvio 400 3.0 200 4 3 120 YES
Rey de Oro 196 2.4 200 3 0 80 YES

TABLE 16-6 EQUIPMENT AIRFLOW REQUIREMENTS

Premier Gold Mines Limited – Mercedes Mine

Potential CFM Total Consumption

Equipment Type (m3/s) Factor
Horsepower Factor
(m3/s) (cfm)
Scoop Tram (3.5 yd) 193 0.0471 75.22 9.09 19,259
Scoop Tram (8 yd) 250 0.0471 75.22 11.78 24,947
Scoop Tram 295 0.0471 75.22 13.89 29,437
Hauling Truck 330 0.0471 75.22 15.54 32,929
Water Tank Truck 200 0.0471 75.22 9.42 19,957
Diesel Truck (Pipa) 200 0.0471 75.22 9.42 19,957
Trompo (Mixer) 330 0.0471 75.22 15.54 32,929
Alpha 140 0.0471 75.22 6.59 13,970
Backhoe 97 0.0471 75.22 4.57 9,679
Jumbo Boomer L1C 160 0.0471 75.22 7.54 15,966
Jumbo Boomer S1D 74 0.0471 75.22 3.49 7,384
Boltec Anclador MC 173 0.0471 75.22 8.15 17,263
Boltec Anclador MD 161 0.0471 75.22 7.58 16,066
Anclador 161 0.0471 75.22 7.58 16,066
Telehandler 99 0.0471 75.22 4.66 9,879
Scissor Lift 170 0.0471 75.22 8.01 16,964
Boom Truck 170 0.0471 75.22 8.01 16,964
Hanger 170 0.0471 75.22 8.01 16,964
Anfoloader 170 0.0471 75.22 8.01 16,964
Mitsubishi L200 126 0.0471 75.22 5.93 12,573
Nissan 152 0.0471 75.22 7.16 15,167
Tonelada 330 0.0471 75.22 15.54 32,929
 RAR CDO INF, 250 HP
RAR BRECHA, 250 90% speed RAR CORONA, 150 HP
HP 156,200 cfm 90%speed RAR CASA BLANCA, 150 HP
90% speed
80000 cfm 90% speed
153,000 cfm
261,130 cfm 111,892 cfm
5.2 m/s
18° C 237,177 cfm
PORTAL – 1140 masl
4.4 m/s
20° C

34,070 cfm
0.8 m/s
12° C

209,410 cfm
128,514 cfm 4.2 m/s
3 m/s 15° C
17.2° C

56,000 cfm
1.3 m/s
1 22.6° C
6- 66,200 cfm
33,000 cfm
0.9 m/s
2 1.4 m/s 22.7° C
91,213 cfm
18.4° C 1.9 m/s
15.3° C

131,479 cfm
2.9 m/s
45,000 cfm 17.5° C
1.08 m/s
19.9° C 137,300 cfm
3 m/s
22.3° C

Legend:
Main Ventilation Fan
Mine Refuge Chamber (30 Figure 16-7
people) Intake Air (Fresh Air Raise a
Required Air
(FAR)) Exhaust Air (RAR) Premier Gold Mines Limited c
Per Person 1.5 m³ / Min 52 ft m³ / Min
Ventilation Door Per Combustible 2.13 m³ / Min 75.22 ft m³ / Min
a
Secondary Vent Injection Tubing Horsepower Diesel Mercedes Gold-Silver Mine n.
42" Secondary Vent Injection
State of Sonora, Mexico c
Tubing 36" Secondary Vent Fan Corona de Oro Ventilation o
Air Flow Measurement (Capacity) Schematic (Mercedes Mine Area) m
April 2018 Source: Premier Gold Mines Ltd., 2018.
 RAR BARRANCAS 200 HP
96% speed
129,000 CFM
RAR LAGUNAS CENTRO 150 HP PT= 6.02 in wg
79% speed
94,000 CFM
PT= 3 in wg
PORTAL – 1140 masl
PORTAL – 1137 masl

117,600 cfm
2.8 m/s 105,500 cfm
17.2° C 116,200 cfm 2.2 m/s
2.2 m/s 14.4° C
17° C

103,000 cfm
2 m/s
17.2° C
81,200 cfm
1.9 m/s
1 18° C 20,700 cfm
0.4 m/s
6- 20.6° C
2
69,000 cfm
1.8 m/s 2,000 cfm
19.5° C 0.1 m/s
24.4° C

22,090 cfm
0.4 m/s
22.4° C

Legend:
Main Ventilation Fan
Mine Refuge Chamber (30 Figure 16-8
people) Intake Air (Fresh Air Raise
Required Air
(FAR)) Return Air Raise (RAR) Premier Gold Mines Limited a
Per Person 1.5 m³ / Min 52 ft m³ / Min
Ventilation Door
Per Combustible 2.13 m³ / Min 75.22 ft m³ / Min
c
Secondary Vent Injection Tubing Horsepower Diesel Mercedes Gold-Silver Mine a
42" Secondary Vent Injection State of Sonora, Mexico n.
Tubing 36" Secondary Vent Fan Barrancas - Lagunas c
Air Flow Measurement (Capacity) Ventilation Schematic o
m
April 2018 Source: Premier Gold Mines Ltd., 2018.
1
6-
2
Diluvio

Lupita

Figure 16-9

Premier Gold Mines Limited a

Legend: c
Required Air Mercedes Gold-Silver Mine a
Intake Air (Fresh Air Raise (FAR)) Per Person 1.5 m³ / Min 52 ft m³ / Min State of Sonora, Mexico n.
Per Combustible 2.13 m³ / Min 75.22 ft m³ / Min
Return Air Raise (RAR) Horsepower Diesel Lupita - Diluvio c
Secondary Fan Ventilation Schematic o
April 2018 Source: Premier Gold Mines Ltd., 2018.
m
1 Rey De Oro
6-
2

Klondike

Figure 16-10

Legend: Premier Gold Mines Limited a

c
Intake Air (Fresh Air Raise (FAR)) Required Air Mercedes Gold-Silver Mine a
Return Air Raise (RAR) Per Person 1.5 m³ / Min 52 ft m³ / Min State of Sonora, Mexico n.
Secondary Fan Per Combustible 2.13 m³ / Min 75.22 ft m³ / Min
Horsepower Diesel
Klondike - Rey De Oro c
Ventilation Sleeve Ventilation Schematic o
April 2018 Source: Premier Gold Mines Ltd., 2018.
m
 m

MINE DEWATERING
The geotechnical assessments, mining methods, production and development schedules,
and Mineral Reserve statement in this report assume that the deposits will be depressurized
in advance of mining activity.

The underground dewatering system of the Mercedes mines has been designed to handle an
average water inflow of 55 L/s including groundwater and mine activity sources (drilling,
washing, etc.).

The mine dewatering system for Mercedes was designed by Yamana and consists of a main
sump with three 300 hp sump pumps capable of pumping a 120 m head. Secondary 44 kW
pumps are located in sumps situated at 60 m vertical intervals in the main ramp system
(main level accesses for truck loading). In addition, a series of 15 kW face pumps are used at
individual development headings or mining fronts. Mine water is pumped from the secondary
sumps up to the primary sumps on the 1040 level and 960 level; and then up to a surface
cleaning pond where the water is then transferred to a surface storage pond.

The Barrancas-Lagunas mine areas each have a main sump pump with two 400 hp sump
pumps.

For Rey de Oro, the Klondike mine dewatering system consisted of a main sump with two
400 hp sump pumps.

COMPRESSED AIR
Compressed air is required underground for long hole production drilling (air-powered rigs),
drift development, handheld drilling equipment (jacklegs and stopers), and some utility
requirements. The location and size of the current compressors are as follows:

 Mercedes: 2,000 CFM, 420 hp

 Mercedes: 1,000 CFM, 215 hp
 Barrancas-Lagunas: 1,000 CFM, 215 hp
 Lupita-Diluvio: 1,000 CFM, 215 hp
 Klondike-Rey de Oro: 1,000 CFM 215 hp

Premier Gold Mines Limited – Mercedes Mine, Project # 2907

Technical Report NI 43-101 – April 18, 2018 Page 16-24
Typically, a 150 mm diameter, schedule 40 steel pipe is run from the compressor on surface
to the portal location. The pipe will then run along the main decline and into each level
access. Smaller, 50 mm steel pipes will connect from the main line into the stoping areas on
each level. Lupita uses air from Diluvio and Rey de Oro from Klondike.

ELECTRICAL
The underground electrical demands for the Mercedes Mine areas are summarized below:
 Mercedes Mine: Estimated to be 3.4 MW including the contractor equipment (capital
development). Primary installations are the Corona de Oro (1038, 960, 920, 800, and
740 levels), Brecha Hill (950 and 830 levels), and the Casa Blanca area (1000 and
860 levels).

 Barrancas-Lagunas Mines: Estimated to be 1.6 MW including the contractor

equipment (capital development). In Barrancas, the primary capacity centres are
installed on the surface and 945 level. Lagunas, has capacity centres installed on the
surface and 950 level.

 Lupita-Diluvio Mines: Estimated to be 1.4 MW including the contractor equipment

(capital development). Diluvio has two power centres installed on the surface and
1114 level.

 Rey de Oro Mines: Estimated to be 1.0 MW including the contractor equipment

(capital development). There are power centres installed on the 1138 and 1100 levels
of the mined-out Klondike deposit.

For the Mercedes Mine area, there are three main electrical sources that feed the
underground; Corona de Oro has 4,000 kVA installed, Brecha Hill has 2,000 kVA installed,
and Casa Blanca has 1,750 kVA installed. Barrancas-Lagunas has 3,500 kVA installed
capacity. Diluvio has 3,000 kVA installed, and at Rey de Oro, there is 1,500 kVA of installed
power in the nearby Klondike area. Total installed capacity is 15,750 kVA.

Portable switch skids and Mine Power Centres (MPC) are located underground to minimize
long cable runs to Mine Load Centres (MLC). Typically, this 4,160 V MPC consists of three
4,160 V, 600 A protected feeder vacuum circuit breakers, and one 300 kVA, 4,160 V to 480 V
transformer. The primary uses for the electricity are ventilation fans, dewatering pumps, and
jumbo drills.

COMMUNICATIONS
A leaky feeder communications system is installed in Mercedes, Barrancas, Lagunas,
Diluvio, Lupita, and Klondike-Rey de Oro. This system ensures communication between
the
underground workforce and surface. It is an important part of managing safe development
and extraction in the mine operation.

MINE MAINTENANCE
All mine maintenance is done in surface equipment shops located near the Mercedes portal.
Small repairs at Barrancas and Diluvio are done in a small surface area near their respective
portals.

REFUGE STATIONS AND ESCAPEWAYS

Eight portable refuge stations are in place in the Mercedes Mine, two are located in Lagunas,
one in Barrancas, two in Lupita-Diluvio, and one in Klondike-Rey de Oro. These stations
consist of 12-person to 16-person air-lock chambers with double steel doors and viewing
windows. They are situated in crosscuts developed from the main accesses or ramp and can
be moved within the mine as mining progresses. A detailed map is given to all personnel,
who report underground, which contains specific instructions for reporting to the nearest
refuge station and/or muster point during an emergency.

MINE EQUIPMENT
The major mine mobile equipment is listed in Table 16-7. The equipment is generally new
and is appropriate for the scale of operations and the mine headings.
 TABLE 16-7 MAJOR MOBILE EQUIPMENT
Premier Gold Mines Limited – Mercedes Mine

Equipment Type Manufacturer Model Size No. of Units

3
Scooptram Atlas Copco/Epiroc ST1030 6 yd 4
Scooptram Atlas Copco/Epiroc ST7 3.5 yd3 3
Scooptram Sandvik LH307 3.5 yd3 2
Truck Kenworth 16 tonnes 10
Mixer Truck Kenworth 8 m3 5
Water Tanker Kenworth 2
Tractor Backhoe Case 3
Bolter Atlas Copco/Epiroc Boltec MC, MD 1.5 to 3.5 m 3
Bolter Sandvik DS311 3
Crane Terex RT 555 50 tonnes 1
Telehandler Caterpillar TL 943 2
Scissor Lift Getman 3
Boom Truck Getman 1
Anfo Loader 3
Jumbo Atlas Copco/Epiroc L1C 2
Jumbo Atlas Copco/Epiroc S1D 2
Jumbo Sandvik DD311 2
Compressor Atlas Copco/Epiroc GA 160 4
Generator Cummins 2,000 kW 1
Generator Caterpillar 500 kW 1
Long Hole Drill Boart/Longyear StopeMate 1
Core Drilling Rig Atlas Copco/Epiroc Diamec U4 PHC 1

Statistics for the availability, utilization, overall efficiency, and equipment productivity are
shown in Table 16-8.
 TABLE 16-8 MINE EQUIPMENT USAGE AND AVAILABILITY
Premier Gold Mines Limited – Mercedes Mine

Mercedes - Mine Equipment Units 2015 2016 2017

Trucks - Operator Equipment Efficiency (OEE) % 41 46 56
Availability % 81 79 86
Utilization % 62 62 66
Production Efficiency % 82 94 99
Productivity (Annual Average) t/h 14 8 9

Drills Horizontal- OEE % 15 20 16

Availability % 75 76 85
Utilization % 23 27 25
Production Efficiency % 86 95 73
Productivity (Annual Average) t/h 41 26 61

Excavator 3.5 yd³ - OEE % 23 18 24

Availability % 74 72 84
Utilization % 45 36 35
Production Efficiency % 69 72 84
Productivity (Annual Average) t/h 24 13 21

Excavator 6.0 yd³ - OEE % 33 28 39

Availability % 75 73 79
Utilization % 70 62 59
Production Efficiency % 63 62 84
Productivity (Annual Average) t/h 0 0 21

Drills Support - OEE % NA 17 18

Availability % 72 78 82
Utilization % 31 35 28
Production Efficiency % NA 62 76
Productivity (Annual Average) t/h 0 0 61

OPEN PIT MINE INFRASTRUCTURE

There is no current infrastructure in place for the Rey de Oro open pit. The key requirement
for the pit will be access roads and a rock dump area. The pit is too small to require any
significant infrastructure.
 MINE PRODUCTION
PRODUCTION HISTORY
The Mercedes Mine commenced commercial production in November 2011. Mine production
since that time is shown in Table 16-9.

TABLE 16-9 MERCEDES MINE PRODUCTION

Premier Gold Mines Limited – Mercedes Mine

Processed Processed Processed Waste Capital

Tonnes Au Grade Ag Grade Produced Au Produced Produced Development
Year (000) (g/t) (g/t) Oz (000) Ag Oz (000) (000) (m)
2011 8* 23 257
2012 603 6.43 78.4 116 490 83 5,344
2013 671 6.16 79.4 129 615 158 4,687
2014 682 5.09 55.9 105 398 161 4,373
2015 713 3.96 43.3 84 383 182 3,190
2016 688 4.45 47.6 93 425 94 2,355
2017 684 3.93 37.6 83 338 269 1,859
Total 4,041 4.96 56.4 611 2,649 947 21,808

Notes:
*Only Gold Equivalent Ounces Reported

For 2017, the average daily production rates for each mine area are shown below:
 Mercedes (Corona de Oro, Brecha Hill, Brecha Hill Norte): 750 tpd to 850 tpd of ore
 Barrancas: 300 tpd to 400 tpd of ore
 Lagunas: 300 tpd to 400 tpd of ore
 Diluvio/Lupita: 350 tpd to 450 tpd of ore
 Rey de Oro: 0 tpd to 100 tpd of ore (underground only)

2017 MINE VS. MILL PRODUCTION RECONCILIATION

RPA reviewed the 2017 mine production statistics with respect to gold grades by deposit and
overall. RPA did not complete the same review for silver as the silver is a small part of the
ore value.

The tonnage and gold grade by month for 2017 for the mine, as a whole, compared to the
processed grade is shown in Figure 16-11. For the year 2017, the tonnage milled is only
0.3% lower than mined tonnage, the milled grade is 4% higher than mined grade delivered,
and the ounces processed are approximately 3% higher than what the mine reported.
 FIGURE 16-11 2017 MINE VS. MILL TONNES AND GRADE

In 2017, approximately 32% of the ore tonnes mined were outside of the Mineral Reserve
blocks, and approximately 17% of the gold ounces mined were outside of the Mineral
Reserve blocks. This situation can occur in underground precious metal mines. MMM
appears to have improved its knowledge of the gold mineralization characteristics in the mine
areas. In comparison, in 2016, approximately 41% of the ore tonnes mined were outside of
the Mineral Reserve blocks, and approximately 33% of the gold ounces mined were outside
of the Mineral Reserve blocks.

LOM PRODUCTION SCHEDULE

The Mercedes Mine prepares a LOM plan on a regular basis, and in recent periods, there
has been a focus on revisions to the LOM plan in response to current metal prices and
economic conditions. RPA reviewed the 2018 LOM plan supplied by MMM, and this LOM
plan is described in this section. The LOM production equals the total tonnes, grades, and
ounces listed in the Mineral Reserve statement. All mined ore is expected to be delivered
directly to the mill with minimum stockpiling required.

The LOM was prepared in early 2018, following the completion of the Mineral Reserve
estimation. The Mercedes LOM was generated for each mine area (Mercedes, Barrancas-
Lagunas, Lupita, Diluvio, and Rey de Oro) on a monthly time frame. The Rey de Oro open pit
is included in the LOM. The open pit production schedule extends over a 22-month period
 with ore production rates of 50 tpd to 300 tpd (average 200 tpd) and waste production rates
up to 1,970 tpd, starting in 2020 and ending in 2021. The LOM plan for the mine is
summarized in Table 16-10 and the LOM plan for the process plant is summarized in Table
16-11.

TABLE 16-10 2018 LIFE OF MINE PRODUCTION PLAN

Premier Gold Mines Limited – Mercedes Mine

Category Units Totals 2018 2019 2020 2021 2022

UG Ore Tonnes t 000 3,176 618 704 652 661 540
UG Waste Tonnes t 000 276 113 63 54 33 13
UG Au Grade g/t 4.0 4.3 4.4 4.0 3.6 3.6
UG Ag Grade g/t 24.3 29.7 29.8 29.9 18.8 10.7
UG Au Oz oz 000 406 85 100 83 76 62
UG Ag Oz oz 000 2,477 589 675 628 399 186
Development OPEX m 000 79 18 17 15 16 13
Development CAPEX Hz m 000 4.7 1.9 2.2 0.6 0.01 0
Development CAPEX V m 000 0.6 0.5 0.04 0 0 0

OP Ore Tonnes t 000 114 0 0 58 56 0

OP Waste Tonnes t 000 913 0 0 499 414 0
OP Au Grade g/t 3.1 0.0 0.0 3.2 3.0 0.0
OP Ag Grade g/t 21.3 0.0 0.0 25.3 17.2 0.0
OP Au Oz oz 000 11 0 0 6 5 0
OP Ag Oz oz 000 78 0 0 47 31 0

Total Ore Tonnes t 000 3,290 618 704 710 717 540
Total Waste Tonnes t 000 1,189 113 63 553 447 13
Total Au Grade g/t 3.9 4.3 4.4 3.9 3.5 3.6
Total Ag Grade g/t 24.2 29.7 29.8 29.6 18.6 10.7
Total Au Oz oz 000 417 85 100 89 81 62
Total Ag Oz oz 000 2,555 589 675 675 430 186
 TABLE 16-11 2018 LIFE OF MINE PRODUCTION PLAN - PROCESSING
Premier Gold Mines Limited – Mercedes Mine

Category Units Totals 2018 2019 2020 2021 2022

Total Process Tonnes t 000 3,290 618 704 710 717 540
Au Head Grade g/t 3.9 4.3 4.4 3.9 3.5 3.6
Ag Head Grade g/t 24.2 29.7 29.8 29.6 18.6 10.7
Au Contained Oz oz 000 417 85 100 89 81 62
Ag Contained Oz oz 000 2,555 589 675 675 430 186
Au Recovery % 95 95 95 95 95 95
Ag Recovery % 40 40 40 40 40 40
Au Recovered Oz oz 000 417 85 100 89 81 62
Ag Recovered Oz oz 000 2,555 589 675 675 430 186

RPA is of the opinion that the operation could be maintained at a rate of approximately
700,000 tpa to 720,000 tpa for a three-year period based on current Proven and Probable
Mineral Reserves (2019 to 2021). In 2018, the production rate will be mine constrained at
618,000 tpa as the new Lupita-Diluvio operations ramp up and the limited remaining Mineral
Reserves in 2022 are expected to be insufficient to maintain the 700,000 tpa rate of
production.
 m

17 RECOVERY METHODS
The processing facilities at Mercedes use conventional milling with Merrill-Crowe recovery of
precious metals as shown in the flowsheet in Figure 17-1. The plant processes approximately
2,000 tpd. The plant consists of:
 Three stage crushing
 Single stage grinding and classification with cyclones
 Gravity concentration
 Agitated cyanide leaching
 Counter-current-decantation (CCD) thickener wash circuit
 Merrill-Crowe precious metal recovery circuit
 Cyanide detoxification of tailings
 Refinery

CRUSHING
Run of Mine (ROM) stockpiles ahead of the crusher are used to blend different grades of ore.
ROM ore is transported to the crusher dump hopper. From the dump hopper the ore
discharges onto a vibrating grizzly feeder that feeds the ore into the jaw crusher. The jaw
crusher product discharges onto the crusher discharge belt feeder and onto a transfer
conveyor that transports the crushed ore to the coarse ore bin.

A hydraulic rock breaker mounted on a mobile backhoe is used at the crusher dump pocket
to break oversize ROM ore.

FINE CRUSHING AND CONVEYING

A reclaim feeder transfers crushed ore from the coarse ore bin to the reclaim conveyor. The
reclaim conveyer transports the primary crushed ore to the secondary screen. Secondary
screen undersize material (final product) discharges to the screen undersize conveyor which
transports it to the fine ore bin. Oversize material from the secondary is crushed in the
secondary crusher. The discharge from the secondary crusher is routed to the tertiary
screen.

Oversize material from the tertiary screen discharges into the tertiary crusher surge bin.
Tertiary screen undersize (final product) discharges onto the screen undersize collection
Premier Gold Mines Limited – Mercedes Mine, Project # 2907
Technical Report NI 43-101 – April 18, 2018 Page 17-
1
 m

conveyor. Undersize material from the secondary and tertiary screens is combined and
conveyed to the fine ore bin.

The fine ore bin is a 3,500 t live and 5,275 t total capacity bin measuring 16 m diameter and
16 m high. Ore is withdrawn from the bin by two 1,220 mm wide fine ore bin reclaim belt
feeders.

GRINDING AND CLASSIFICATION

The grinding circuit reduces the crushed ore from a particle size distribution of 80% passing
(P80) 12.5 mm (1/2 in.) to P80 45 µm.

A single ball mill measuring 5.03 m in diameter and 8.84 m long, powered by a 3,430 kW
motor is operated in closed circuit with hydrocyclones. The reclaim belt feeders from the fine
ore bin discharge crushed ore to the ball mill feed. The ball mill discharges to the cyclone
feed sump. Slurry is pumped from the sump using variable speed horizontal centrifugal slurry
pumps to five operating 254 mm (10 in.) hydrocyclones. A portion of the cyclone underflow
flows by gravity to the gravity concentration circuit. The remainder of the slurry from the
cyclone underflow is combined with the tailings from the gravity concentration circuit and
returned to the ball mill for further grinding. Overflow from the cyclones is the final product
from the grinding circuit. The slurry flows by gravity to the pre-leach thickener.

Pebble lime is added to the ball mill feed conveyor to adjust pH of the slurry. Sodium cyanide
solution is added into the cyclone feed sump.

GRAVITY CONCENTRATION
Approximately 25% of the hydrocyclone underflow is directed to a 762 mm diameter bowl
style gravity concentrator. Tailings from the gravity concentrator are returned to the ball mill
circuit. Gravity concentrate flows by gravity to a magnetic separator and shaking table circuit.
Nonmagnetic concentrate material is further upgraded on a shaking table. Middlings from the
shaking table are recirculated to the table feed while the tailings are pumped back to the ball
mill circuit. The table concentrate is dried in an electric oven prior to smelting. The
concentrate is direct smelted to produce a final doré product.

Premier Gold Mines Limited – Mercedes Mine, Project # 2907

Technical Report NI 43-101 – April 18, 2018 Page 17-2
PRE-LEACH THICKENER
Flocculant and dilution water are added to a 16.4 m diameter high rate thickener feed to aid
in settling the solids and, in turn, establishing the liquid/solids separation process. A variable
speed thickener underflow pump is adjusted to either thickener underflow density or
thickener solids loading. Underflow from the pre-leach thickener is pumped at approximately
50% solids to the leach circuit. Overflow from the pre-leach thickener is pumped to the
clarification circuit.

LEACH CIRCUIT AND COUNTER CURRENT DECANTATION

The leach circuit consists of a series of four 9.3 m diameter by 9.9 m high agitated tanks.
Each tank has a working volume of 581 m³. The slurry is leached in cyanide solution to
extract gold and silver from the ore. The four leach tanks provide approximately 24 hours of
retention time at 50% solids. Cyanide solution may be added to the first, third, or fourth tanks.
Low pressure air is piped to all tanks. Slurry advances by gravity from leach tank to leach
tank, starting at leach tank one and exiting leach tank four.

After leaching, the slurry continues to flow by gravity and reports to a series of four high
capacity 16.4 m diameter CCD thickeners for washing of the leach tailings to remove soluble
gold and silver. CCD thickener underflow slurry is advanced by pumping from thickener to
thickener, starting in CCD number one and exiting the last CCD thickener. The slurry density
in the CCD thickeners is maintained at 60% solids by weight. From the final CCD thickener
the underflow slurry flows by gravity to the cyanide recovery thickener. Overflow from the
cyanide recovery thickener, along with barren solution from the Merrill-Crowe plant, are
pumped to the last CCD thickener dilution box where it combines with barren solution to be
used as wash water. CCD thickener overflow flows by gravity in a flow that is counter current
to the underflow slurry, starting at the last CCD thickener and ending at the first CCD
thickener. From CCD number one, the overflow solution is pumped to the Merrill-Crowe
circuit.

CYANIDE RECOVERY THICKENER

Underflow from the last stage of CCD reports to a high capacity, 16.4 m diameter cyanide
recovery thickener. Flocculant and dilution water are added to the thickener feed to aid in
settling. The withdrawal rate of settled solids is controlled by a variable speed, thickener
underflow pump to maintain either thickener underflow density or thickener solids loading.
The thickener underflow pump sends the cyanide recovery slurry to the detoxification circuit,
while overflow from the cyanide recovery thickener is pumped back to the CCD circuit as
wash water.
TAILINGS DETOXIFICATION
In the tailings detoxification circuit, weak acid dissociable (WAD) residual cyanide is oxidized
to the relatively non-toxic form of cyanate by the sulphur dioxide-air process using sodium
metabisulphite and air. Copper sulphate is added as a catalyst for the reaction. Milk of lime
is also added to maintain a slurry pH in the range of 8.0 to 8.5. The stable iron cyanide
complexes are precipitated from solution as insoluble ferro-cyanide complexes. Cyanide
levels are reduced to environmentally acceptable, non-toxic levels.

Two 7.5 m diameter by 8.5 m high agitated tanks are provided as the detoxification reactors.
Each tank provides a residence time of approximately 1.5 hours. Underflow from the cyanide
recovery thickener is diluted to approximately 35% solids by weight in the cyanide
detoxification tank using overflow solution from the tailings thickener. Slurry discharging from
the detoxification circuit flows by gravity to a high capacity, 16.4 m diameter tailings
thickener. Flocculant and dilution water are added to the thickener feed to aid in settling.

The tailings thickener underflow is the final tailing from the plant. The slurry is pumped to a
TSF or pumped to the mine for use as backfill in the underground mine. Overflow from the
tailings thickener is pumped back to the detoxification circuit for dilution water or to the
reclaim water tank.

MERRILL-CROWE
Gold and silver are recovered from pregnant solution by zinc cementation of metal ions using
zinc dust in a Merrill-Crowe process. The process of recovering silver and gold by the Merrill-
Crowe process includes:
 Clarification and filtering of pregnant solution to remove suspended solids
 De-aeration of pregnant solution to reduce the dissolved oxygen concentration
 Recovering gold and silver from the solution by addition of zinc dust using the
cementation process that is commonly called zinc “precipitation”
 Filtering and drying of precipitate

Mercedes returns a portion of the pregnant solution from CCD thickener number one to the
grinding circuit for use as dilution water. This enriches the pregnant solution to achieve
higher concentrations of precious metals which improves the performance of the Merrill-
Crowe circuit and improves recovery of the metals from the pregnant solution. The precious
metal recovery circuit is designed to process approximately 155,000 ounces of gold and
594,834 ounces of
silver annually. Barren solution exiting the Merrill-Crowe circuit flows into a barren solution
tank for re-use in the process.

REFINERY
The zinc precipitate and gravity concentrate are independently batch processed in retort
furnaces to vaporize and recover mercury which may be present in the precipitate. Two
mercury retorts are provided. The dry precipitate and/or the gravity concentrate are mixed
with fluxing agents and charged to a diesel fired, indirect fired crucible melting furnace for
smelting. The metal, containing the gold and silver and minor impurities, is poured into bar
molds to produce doré. The doré is shipped off site for further refining. The impurities are
collected in slag that rises to the top of the molten metal and separated from the precious
metal. The slag is returned to the grinding circuit for re-processing.
 FINE
ROM STATIONARY GRIZZLY ORE BIN
SURGE CYCLONE
STOCKPILE 100 t
BIN CLUSTER
FRONT END LOADER MINE
CRUSHER
TRUCK
DUMP COARSE
HOPPER SECONDARY TERTIARY
ORE BIN
SCREEN SCREEN
VIBRATING
GRIZZLY PRIMARY
FEEDER CRUSHER
GRAVITY FEED
SECONDARY SCALPING SCREEN
TERTIARY
CRUSHER CRUSHER

COARSE ORE RECLAIM

FEEDER No.1 GRAVITY
BALL MILL CONC.
CONCENTRATOR
RECLAIM TAIL
CONVEYOR
GEMINI TABLE

TRASH SCREEN
PASTE PLANT
FILTRATE SOLUTION
SUPER-SAC

CCD
LEACHING CYANIDE RECLAIM
PRELEACH THICKENER 4 RECOVERY SOLUTION
THICKENER TANK
DETOX
1

CCD 4

LEACH TANKS TAILINGS

CCD 3 THICKENER

CCD 2 4 DETOX TANKS

CCD 1 MINE WASTE PLANT

MERILL-CROWE
1 HOPPER
CLARIFICATION FILTER 23 EVAP. PRECIPITATION

7- CLARIFIER

6 EVAP.
REFINNING AND SMELTING TAIL POND

ATM

ATM
EVENT POND
UNCLARIFIED PREGNANT
SOLUTION TANK VACCUM
DEAERATOR
PUMP

PRECIP. FILTER RETORT DORÉ

MANUAL
SLAG CONE
CRUSHER

FLUX MIXER
FLUX SLAG
BARREN SOLUTION
TANK SLAG
MELTING FURNACE
SCREEN

SLAG JAW
CRUSHER

Figure 17-1

Premier Gold Mines Limited a

c
a
Mercedes Gold-Silver n.
Mine Sonora State, Mexico c
Process Flowsheet o
m
April 2018 Source: Yamana Gold Inc., 2009.
 m

18 PROJECT INFRASTRUCTURE
Mercedes has all required infrastructure necessary for a mining complex including:
 A conventional mill consisting of three-stage crushing, grinding, with a Carbon-in-
Leach (CIL) circuit, a cyanide destruction circuit, and a Merrill-Crowe process that
produces gold doré. The processing plant has a current nominal capacity of 2,200
tpd.
 Mine and mill infrastructure including office buildings, shops, and equipment.
 A TSF with plans for further expansion.
 Local water supplies from the mines and dewatering wells.
 Electric power from the national grid; via a 65-km long, 115 kV line to the mine site.
 Mine ventilation fans and ventilation systems.
 Haulage roads from the mines to the plant.
 Stockpile areas.
 Maintenance facilities.
 Administrative office facilities.
 Core storage and exploration offices.
 Security gates and manned security posts at mine entries.
 Access road network connecting the mine infrastructure to the town site and to public
roads.

ACCESS ROADS
Access to the Mine property is by paved road. At the turn off from the paved road, there is a
manned gate to control access to the property and a fence to control entry. From the first
gate to the main gate is a distance of approximately ten kilometres. The main entry gate is
manned by armed security guards.

There is a network of roads on the property to access the various facilities around the plant
as well as the paste plant, man camp, maintenance areas, and the Lagunas, Barrancas,
Diluvio, Lupita, and Klondike portals.

ELECTRICAL ENERGY SUPPLY

The electric power supply to Mercedes is a dedicated 115 kV line approximately 65 km long.
The line begins at the CFE sub-station (the national electrical energy provider in Mexico) in

Premier Gold Mines Limited – Mercedes Mine, Project # 2907

Technical Report NI 43-101 – April 18, 2018 Page 18-1
Magdalen. The main substation at Mercedes has two 115 kV to 13.8 kV transformers with
one as a standby in case of emergency.

The installed capacity is approximately 14 MW. The line has a contracted capacity of 20 MW
and a technical capacity of 30 MW. In 2016, total power consumed was 74,929 MW.

OFFICES AND OTHER FACILITIES

Lockers and shower and change room facilities (mine dry) are provided for the miners in the
surface mine facility design. Separate staff and women’s dry facilities are also provided.

Office space for underground management, engineering, supervision, and clerical staff are
included in the surface facilities. A lamp room, safety room, and meeting rooms are also
provided.

PASTE BACKFILL PLANT

A paste plant was designed by Golder PasteTec to be capable of mixing the combined
tailings and aggregate with binder at a utilization rate of approximately 60%, yielding a
nominal output rate of 94 tonnes per hour (t/h) of paste backfill at 78 wt% solids content. The
plant is located as close as possible to the midpoint along the strike of the Corona orebody,
and it is in a convenient location to allow road access to the plant as well as to the other
deposits. A relatively small amount of excavation was needed in the selected area to provide
a level surface on which to place the plant and required stockpiles.

Minus 16 mm (-5/8 in.) crushed and screened waste rock is delivered to an open stockpile
located at the paste plant for use in the preparation of backfill and underground roadbed. The
aggregate storage capacity at the plant has been set to a nominal 2,000 tonnes, which would
provide a sufficient supply for just less than two and a half days of backfilling operations. All
of the material for these purposes will come from underground waste rock production.

Paste backfill is delivered to the underground workings either directly into two boreholes at
the Corona deposit, or by ready mix truck to boreholes at Casa Blanca, Breccia Hill,
Barrancas, and Klondike.
For the base case stope height of 24 m and the average stope width (average width at
Mercedes is 3.7 m), a paste backfill design strength of approximately 90 kPa to 110 kPa was
recommended by Golder PasteTec. In several areas at Mercedes, there are two mining
horizons, resulting in a backfilled sill in the upper horizon, which must be undermined at the
top of the lower horizon. This will take place in both the open stoping and CAF areas. The
stopes below the sill are mined with upholes drilled from the extraction drift, and thus no
personnel entry is required below the undermined backfill. A paste backfill design strength of
2 MPa is recommended for backfill which will later be undermined. In all cases where backfill
must act as a working surface for equipment, a backfill strength of 750 kPa was
recommended. For open stopes, this can be placed as a higher strength top cap of
approximately 1.0 m to 1.5 m in thickness.

BATCH PLANT
There is a batch plant on site for the preparation of shotcrete and for concrete as required.

STOCKPILE AREAS
There are ore and waste stockpile areas at Mercedes, Klondike, and Barrancas. The
stockpiles at Klondike and Barrancas are smaller short term areas where ore from
underground is dumped by trucks and then reloaded into highway style dump trucks to be
hauled to the stockpile area at Mercedes.

Ore is managed at the Mercedes stockpile area with ore dumped into separate areas
depending upon the grade. There is no segregation based on the ore source. The ore is
sorted into:

 Waste – less than 1.5 g/t

 Marginal – 1.5 to 2.9 g/t
 Ore – greater than 3.0 g/t

The desired blend of materials is relayed to the mill by geology and the loader operator takes
material from the designated grade piles to feed the jaw crusher.

At the end of 2017, the ore stockpile tonnage was 2,224 t grading 2.38 g/t Au and 25 g/t Ag,
compared to 47,600 t in June 2013. There is a minor amount of marginal material in the ore
stockpile. RPA recommends that the stockpile tonnage be included in the Mineral Reserve
statement.

SURFACE MAINTENANCE FACILITIES

Surface shops for heavy equipment maintenance are located near the portal at Mercedes
and include concrete floors, offices, and roofs for overhead protection.

The Klondike shops are smaller than those at Mercedes but have concrete floors and a roof.
At Barrancas, maintenance is done at an open area adjacent to the portal.

TAILINGS STORAGE FACILITY

The Mercedes TSF and related facilities are shown in Figure 18-1. The TSF is developed by
cutting native material within the TSF basin and placing cut material as rock fill on the basin
sides and embankment. The initial TSF was constructed in two phases. Phase 1 was
constructed to an elevation of 1,204 m and provided storage capacity for tailings and storm
water for approximately 2.5 years of operation. For Phase 2, the impoundment and
embankment were raised to an elevation of 1,213 m. The initial impoundment was sized to
contain 2.55 Mt of tailings, plus free water and storm water resulting from a 1,000-yr, 24-hr
storm event (300 mm).

The existing TSF provides storage capacity until 2018.

Golder was commissioned in 2016 to design a new TSF adjacent to the existing tailings dam.
A location for the new TSF has been chosen in an adjacent draw, located to the southwest of
the existing TSF. The new TSF will be built in two phases. The capacity of the first phase will
be 670,000 m3 and the second phase capacity will be 1,120,000 m3. This capacity is
sufficient for approximately 4.9 years of production. The design of the new TSF will be similar
to the existing TSF design as described below:
 The existing TSF is located in the upper reaches of a small natural basin. Peripheral
areas that could contribute storm water runoff to the TSF are limited in extent. As
such, no perimeter or upstream surface-water diversion structures were required.

 The existing TSF has a synthetic geomembrane liner underlain by a low-permeability

liner bedding fill layer to cushion the liner and eliminate the potential for seepage of
residual process solutions. Fine-grained materials suitable for liner bedding layer fill
construction were not identified at Mercedes.
  Hydrogeological exploration of the existing TSF area indicates that depth to
groundwater beneath the TSF exceeds 60 m and that the foundation of the TSF is
composed of undeformed conglomeratic sandstone and pyroclastic units of the
Baucarit Formation. The foundation rock fracture density is low, and the hydraulic
conductivity of the foundation units ranges from 10.6 cm/sec to 10.8 cm/sec. Based
on these considerations, the foundation of the TSF will provide geologic containment
of potential impoundment leakage.

 The liner system consists of a 60 mil (1.5 mm) high-density polyethylene (HDPE)
geomembrane liner on a prepared foundation of compacted native soil materials with
no permeability specification.

 To facilitate consolidation of the tailings mass, an underdrain was constructed on the

impoundment liner at the bottom of the TSF. Seepage is routed to a rock-filled
underdrain sump located at the inside base of the TSF embankment. The underdrain
sump is fitted with an HDPE pipe riser and seepage reclaim pump. Seepage is
discharged into the tailings impoundment and recovered for reuses by way of the
process-water reclaim system.

The ore processing rate is targeted at 2,200 tpd. Tailings are assumed to be delivered to the
tailings impoundment at an average rate of 2,200 tpd (92 t/h) at 60% solids by weight. The
water content of the tailings is estimated to be 35 m3/hr. For evaluation of storage capacity, a
tailings dry density of 1.44 t/m 3 was assumed. Slurry consolidation testing suggests a
maximum density of 1.6 t/m3.

Deposition is managed by conventional subarea deposition techniques to cycle the discharge

location and produce relatively thin lifts of tailings solids on the resulting tailings. Subsequent
exposure to evaporation will facilitate consolidation of the tailings and attainment of the target
density of 1.44 t/m3.

The tailings delivery system consists of a tailings header pipe and a series of tailings
discharge spigots. Tailings are deposited from the crest of the embankment and around the
impoundment perimeter to generate a surface slope that concentrates all free water in the
area of the reclaim water intake. Cycling tailings deposition around the impoundment
perimeter will also result in thin-lift deposition and facilitate evaporation of entrained water
and consolidation of the tailings solids.

Process water and storm water are recovered via a floating pump. A pressure pipe is
required to lift water out of the impoundment to embankment crest level. Thereafter, reclaim
water can flow by gravity to the process plant.
WATER BALANCE
The three major consumers of water at Mercedes are the plant (67%), the offices (17%), and
the man camp (16%). The project consumes approximately 9,000 m3 to 15,000 m3 per
month. Water sources are the tailings dam, wells, and dewatering from the mining areas.

Mercedes is located in an arid climate, however, the water sources have been able to
provide sufficient water to the operation to date.

STABILITY EVALUATION
A two-dimensional limit equilibrium tailings embankment stability analysis was performed with
the computer program SLIDE Version 5.038 (Rocscience, 2000) for the existing TSF. The
stability analysis included static and pseudostatic analyses of the tailings embankment.
Circular failure analyses were conducted using Bishop’s modified method (Bishop, 1955).
Both local and global (overall) circular failure analyses were performed.

In all cases, factors of safety indicate the tailings disposal facility is stable. The minimum
static field of slope (FOS) is 1.56 while under seismic loading, and the minimum FOS is 1.28.

The Mine footprint is shown in Figure 18-1.

1
8-
7

Figure 18-1

Premier Gold Mines Limited a

c
Mercedes Gold-Silver Mine a
Sono ra State, Mexico n.
c
Site Plan o
m
April 2018 Source: Premier Gold Mine Inc., 2018.
 m

19 MARKET STUDIES AND CONTRACTS

MARKETS
The principal commodities at Mercedes are freely traded at prices that are widely known, so
prospects for sale of any production are virtually assured. RPA agrees with the Premier
selection of a gold price of US$1,200 per ounce and a silver price of US$17 for the Base
Case economic analysis. Doré sales are made through an established third party North
American refiner.

CONTRACTS
Mercedes is an operating mine and process facility and has contracts in place for the provision
of various services and supplies including but not limited to:
 Diesel and Fuel – Abastecedora De Combustibles Del Noroeste (Petroil)
 Power - Comisión Federal de Electricidad (CFM)
 Cement - Cutcsa Minas Y Tramos Carreteros, S.A. De C.V.
 Underground Mine Development – COMINVI, S.A. De C.V. (COMINVI)
 Shotcrete – RO-K, S.A. De C.V. (RO-K)
 Explosives – Explosivos Del Pitic, S.A. De C.V. (Austin)
 Cyanide – The Chemours Company Mexico S De RL De C.V. (CHEMOURS)
 Catering – Administración De Servicios de Alojamiento, S.A. de C.V. (PROMESA)
 Security – NSU Protección, S.A. De C.V. (SHIELD)
 Diamond drilling – SPM Perforacion, S.A. de C.V. (SPM)
 Personnel Transportation – Inmobiliaraia Millan, S.A. de C.V. (Transportes Millan)

RPA did not review the contracts but considers the amount of contracting to be within industry
norms for Mexican operations based on our experience in Mexico.

Premier Gold Mines Limited – Mercedes Mine, Project # 2907

Technical Report NI 43-101 – April 18, 2018 Page 19-
20 ENVIRONMENTAL STUDIES, PERMITTING,
AND SOCIAL OR COMMUNITY IMPACT
The Mercedes operation is in production and operating within the environmental framework
of Premier. Premier operates under a corporate responsibility program which includes
corporate responsibility, community relations, environment, and health and safety.

PROJECT PERMITTING
The key environmental permits for the Mercedes operation are listed in Table 20-1.

TABLE 20-1 KEY ENVIRONMENTAL PERMITS

Premier Gold Mines Limited – Mercedes Mine

LICENCES Agency Date

MIA Mercedes SEMARNAT Resolutivo/ Apr-2018
MIA Ampliación Mercedes SEMARNAT Resolutivo / Dec-2018
MIA Barrancas SEMARNAT Resolutivo/ Sep-2021
MIA Diluvio - Lupita SEMARNAT Resolutivo/ Nov-2025
MIA LSTE SEMARNAT Resolutivo/ Jul-2060
MIA Presa de Jales 2 SEMARNAT Resolutivo/ Jun-2027
Número de Registro Ambiental (NRA) SEMARNAT NRA MMMSP2602211
Registro como generador de residuos peligrosos SEMARNAT Registro/ Dec-2010
Licencia Ambiental Única (LAU) SEMARNAT LAU/ Feb-2013
Permiso de descarga de agua residual CONAGUA Permiso/ Nov-2012
Plan de Manejo de Gran Generador de Residuos SEMARNAT Entrega/ Jun-2013
Plan de Manejo de Residuos Mineros SEMARNAT Entrega/ Oct-2013
Cédula de Operación Anual (COA) SEMARNAT Entrega/ Jun-2013
Permiso Para Comprar Explosivos SEDENA 4344-SONORA/ Dec-2018
Permiso en Materia de Seguridad Radiológica CNSNS CESIO-137(3701)/ Agos-2021
Vigencia de Certificanciones – ISO 14001 IQS Sep-2018
Vigencia de Distintivos - ESR CEMEFI Mar-2018
Aprobación Programa Interno de Protección Civil Gobierno Feb-2018
Reconocimiento – Highly Protected Risk (HPR) FM Global No date
 m

SOCIAL OR COMMUNITY REQUIREMENTS

Premier has a complete and strong Community Program in the Community of Cucurpe,
Sonora approximately 22 km west of the Mercedes Mine. Although the mine site is located
within private land, previously purchased from a local rancher, previous owner Yamana
established different social and economic programs at the Community of Cucurpe.

In 2017, the main activities consisted of:

 Open Doors Program
o This program aimed to establish, in a clear and transparent manner, better
communication between Premier and local communities (Cucurpe and
Magdalena). Employees and their families, students and community
representatives visited the Mercedes Mine to learn more about the Company’s
vision, values, and safety procedures environmental management policies.

 Education
o At Cucurpe, there are three levels of education: Kindergarten, Elementary,
and Middle-High School. Premier has a direct contact with the three schools
and the main support from Premier consists of providing school and sport
supplies benefiting the children.
o Also, Premier supports a scholarship program to benefit the students that
attend Elementary School, Middle School, and College.

 Social Activities
o Premier organized different classes involving physical, art and cooking
activities for the people in Cucurpe.

 Infrastructure-Highway and Roads

o Premier has participated on improving the pavement and the local roads along
with the Local Highway Department.

In 2017, the most important social programs included:

 Open Doors Program
o A total of three visits were hosted at the Mercedes Mine. The visits were from
High School-College Institutions from Magdalena.

 Volunteering Program
o As part of this program, gifts from Mercedes employees and the company
were given to children in regional orphanages as part of the 2017 Volunteer
Christmas Program.
o Helped to construct altars at the Cucurpe School to honour the “Day of the
Dead”, a tradition in México.
o Participated in the parade in Cucurpe to remember the Mexican Revolution,
with assistance from the Fire Brigade.

 Education

Premier Gold Mines Limited – Mercedes Mine, Project # 2907

Technical Report NI 43-101 – April 18, 2018 Page 20-2
 o Premier continued providing school, cleaning and sport material to the three
local schools.

 Corporate Social Responsibility

o Premier received the ESR badge from the Centro Mexicano para la
Filantropía (CEMEFI), which is a private, nonprofit membership association
based in Mexico City that seeks to promote a culture of philanthropy and
social responsibility in Mexico.

MINE CLOSURE REQUIREMENTS

Mexican law requires only a conceptual plan that meets legal guidelines for implementation.
Mercedes has defined the post-closure land uses as ranching and wildlife, which correspond
to the original land use prior to mining activities in the area. All mine waste facilities, mine
openings, plant areas, processing areas, buildings, storm water and water treatment
facilities, storage areas, stockpiles, and borrow areas will be closed so that there are no
potential safety or health hazards for ranchers, cattle, and wildlife. Mercedes has also
defined the exit strategy as walk-away mine closure to the extent feasible, which is consistent
with the current practice of hauling out domestic and hazardous wastes rather than
establishing onsite landfills. Mercedes intends to remove wastes and demolition debris to the
extent possible to minimize the number of facilities requiring long-term care and
maintenance.

Final reforestation of areas disturbed by infrastructure will be implemented.

Within the context of restoration measures and remediation practices, the following are
summarized below:
 Activities designed to degrade and permanently confine the dumps.
 Reinstate the use and ecological productivity of the land to conditions similar to prior
to the development of the Mine.
 Planting to encourage colonization and generation of organic matter.
 Management of restored areas.
 Reseeding practices.
 Monitoring

An approximate closure schedule was developed by Golder based on the connections

between, and the durations of, the various closure activities. The closure schedule was
prepared assuming that the work will be distributed sequentially throughout the closure
construction period to ensure constant progress, and minimize possible delays due to activity
dependencies. The duration of the closure period is approximately seven years, based on the
facilities existing in January 2018. The post-closure care period was assumed to be 23 years.

The total cost of the closure and post-closure of Mercedes was estimated at approximately
$15,200,000. The direct costs for closure and post closure were estimated at $9,500,000 and
$565,000 (calculated using present value methods), respectively. Indirect costs include
engineering, design and construction, contingency, insurance; contractor profit, and contract
administration. The indirect costs were estimated at $5,135,000. The final cost includes the
direct and indirect cost of the closure construction and the post-closure care periods. In
general, the costs of the closure of Mercedes are driven by the earthwork and removal
activities. These two categories correspond to more than 65% of the direct costs.
 m

21 CAPITAL AND OPERATING COSTS

CAPITAL COSTS
CURRENT CAPITAL COSTS
Annual capital cost data for the Mercedes Mine during 2015 to 2017 is shown in Table 21-1.
Exploration costs increased during this period but other operating-related capital items were
reduced substantially as a result of Premier acquiring the Mine from Yamana in 2016.

TABLE 21-1 2015 TO 2017 CAPITAL EXPENDITURES

Premier Gold Mines Limited – Mercedes Mine

Summary Units 2015 2016 2017

Building & Infrastructure US$ 000 3,264 1,431 458
Hardware & Software US$ 000 92 91 1,014
Machinery & Equipment US$ 000 42 1,913 2,787
Vehicles US$ 000 42 97 165
Underground Mine Development US$ 000 10,830 7,251 4,642
Technical Studies US$ 000 0 415 120
Subtotal Sustaining Capex US$ 000 14,270 11,198 9,816
Expansionary Mine Development1 US$ 000 5,112 2,888 3,707
Tailings Dam Expansion US$ 000 2,523 0 213
Open Pit Pre-Stripping US$ 000 0 0 0
Subtotal Expansionary Capex US$ 000 7,634 2,888 3,920
Exploration Capex US$ 000 3,043 4,242 4,779
Total US$ 000 24,948 18,328 17,885

Note:
1
UG Mine Development where production is forecasted at least one year in advance or greater.

LOM CAPITAL COST ESTIMATES

The capital expenditures in the LOM for ongoing operations total $38.4 million as
summarized in Table 21-2 and show further reductions in capital costs as is normal for an
operation near the end of its planned operational life. MMM intends, however, to spend $4.8
million in exploration annually from 2018 to 2020.

Premier Gold Mines Limited – Mercedes Mine, Project # 2907

Technical Report NI 43-101 – April 18, 2018 Page 21-
1
 m

TABLE 21-2 LOM CAPITAL COST ESTIMATE

Premier Gold Mines Limited – Mercedes Mine

Summary Units 2018 2019 2020 2021 2022 Total

Building & Infrastructure US$ 000 1,205 691 0 0 0 1,896
Hardware & Software US$ 000 161 0 0 0 0 161
Machinery & Equipment US$ 000 1,428 92 62 0 0 1,582
Vehicles US$ 000 181 67 0 0 0 248
Underground Mine Development US$ 000 3,789 6,380 0 0 0 10,169
Technical Studies US$ 000 0 0 0 0 0 0
Subtotal Sustaining Capital Cost US$ 000 6,764 7,231 62 0 0 14,056
Expansionary Mine Development1 US$ 000 2,019 1,237 0 0 0 3,255
Tailings Dam Expansion US$ 000 3,486 0 0 0 0 3,486
Open Pit Pre-Stripping US$ 000 834 2,503 0 0 0 3,337
Subtotal Expansionary Capital Cost US$ 000 6,339 3,740 0 0 0 10,078
Exploration Capital Cost US$ 000 4,770 4,770 4,770 0 0 14,311
Total US$ 000 17,873 15,740 4,832 0 0 38,446

Note:
1
UG Mine Development where production is forecasted at least one year in advance or greater.

It is vital for MMM to construct and commission the new TSF in order to prevent disruptions
in the mine schedule. MMM stated that government authorization is expected in Q1 2018 and
that the new TSF will be operational in early Q4 2018. A breakdown of the new TSF
construction costs is shown in Table 21-3.

Premier Gold Mines Limited – Mercedes Mine, Project # 2907

Technical Report NI 43-101 – April 18, 2018 Page 21-2
 TABLE 21-3 2018 TSF EXPANSION CAPITAL COST ESTIMATE
Premier Gold Mines Limited – Mercedes Mine

Summary Units Source 2018 Total

Mob/Demob US$ 000 Golder 25.0
Earthworks US$ 000 Golder 2,286.1
Geomembrane Installation US$ 000 Golder 70.4
Concrete and Miscellaneous US$ 000 Golder 2.4
Subtotal Before Contingency US$ 000 2,383.8
Contingency US$ 000 Golder 500.0
Subtotal Civil Works and Construction US$ 000 2,883.8
Pumps/Return Water Piping US$ 000 Premier 200.0
Geomembrane/Piping US$ 000 Premier 135.0
Electrical Installation US$ 000 Premier 79.2
Quality Control – Compaction & Installation of Liner US$ 000 Oestec De Mex. 108.0
Topographic Control US$ 000 Precision GPS 80.0
Subtotal Other Capital Cost US$ 000 602.2
Total US$ 000 3,486.0

OPERATING COSTS
CURRENT OPERATING COSTS
Annual operating cost data for the Mercedes Mine for 2016 and 2017 are shown in Table 21-
4. Operating costs for the 2017 year were approximately 4% under budget on a cost per
tonne basis.

TABLE 21-4 2016 AND 2017 OPERATING COSTS

Premier Gold Mines Limited – Mercedes Mine

2016 2017
Actual Budget Var. Actual Budget Var.
Item
(US$ 000) (US$ 000) (%) (US$ 000) (US$ 000) (%)
Drilling 5,023 5,126 -2% 4,849 4,933 -2%
Blasting 3,883 4,959 -22% 3,400 3,670 -7%
Loading 3,993 4,574 -13% 3,936 3,722 6%
Hauling 3,916 2,695 45% 4,268 2,969 44%
Geology 1,551 1,429 8% 2,054 1,720 19%
Administration 3,794 3,729 2% 3,936 4,152 -5%
Fortification 11,087 7,155 55% 8,344 10,200 -18%
Backfill 3,893 4,916 -21% 1,723 3,915 -56%
Services 6,234 7,659 -19% 5,977 6,654 -10%
Mine Subtotal 43,374 42,243 3% 38,490 41,936 -8%

Crushing 1369 1,037 -32% 1,493 1,073 39%

Grinding 3885 4,114 6% 4,793 3,821 25%
Leaching 1180 1,380 14% 1,130 1,567 -28%
CCD 563 1,284 56% 484 468 4%
Filtration 1283 1,579 -9% 1,429 1,460 -2%
 Gravity & Refining 77 15 -404% 740 979 -24%
Tailings 475 780 39% 636 716 -11%
Laboratory 1155 968 -19% 1,037 908 14%
Other 3874 4,699 18% 3,122 3,377 -8%
Process Subtotal 13,860 15,858 13% 14,865 14,369 3%

Safety 915 939 -3% 743 782 -5%

Environmental 368 508 -28% 431 462 -7%
Purchasing 406 465 -13% 369 374 -1%
Health 351 297 18% 296 308 -4%
IT 575 522 10% 771 607 27%
Security 1,194 1,405 -15% 1,243 1,311 -5%
General Management 738 353 109% 613 364 68%
D&G 779 833 -7% 413 287 44%
Warehouse 715 602 19% 721 671 8%
General Administration 1,145 1,362 -16% 1,160 1,203 -4%
Community 68 63 8% 45 59 -23%
G&A Subtotal 7,254 7,350 -1% 6,804 6,428 6%

Controller 791 924 -14% 964 847 14%

Human Resources 817 827 -1% 808 768 5%
Legal 376 260 45% 305 331 -8%
Overhead Subtotal 1,984 2,011 -1% 2,077 1,945 7%

Stockpile1 331 0% (24) 0%

Metal in Concentrate1 231 0% 6 0%
Refining Charges1 30 0% 24 0%
Other Subtotal 592 0% 6 0%

Total 67,065 67,462 -1% 62,242 64,677 -4%

Note: 1Not forecasted as line item in budget.
LOM OPERATING COST ESTIMATE
LOM operating cost estimates are shown in Table 21-5. RPA notes that they do not include
the Special Mining Duty (7.5% of mine EBITDA) and the Extraordinary Mining Duty (0.5% of
the value of precious metals at the mine gate).

TABLE 21-5 LOM OPERATING COST ESTIMATE

Premier Gold Mines Limited – Mercedes Mine

Cost
Category Units 2017A 2018E 2019E 2020E 2021E 2022E
Mine US$ 000 38,490 31,712 40,254 30,214 31,594 24,681
Open Pit US$ 000 - - - 1,670 1,410 -
Underground US$ 000 - 31,712 40,254 28,544 30,184 24,681
Plant US$ 000 14,865 12,088 15,176 13,683 18,347 13,701
G&A US$ 000 6,804 6,942 7,024 7,204 7,186 7,186
Overhead US$ 000 2,077 1,870 1,917 1,986 762 762
SP/MIC US$ 000 (18)
Refining US$ 000 24
Total US$ 000 62,242 52,612 64,371 53,087 57,889 46,330

The unit operating costs for the LOM are summarized in Table 21-6. A mining contractor will
be employed to mine the Rey de Oro open pit material in 2020 and 2021. A unit mining cost
of $3.00/t was used for the open pit mining.

TABLE 21-6 LOM UNIT OPERATING COST ESTIMATE

Premier Gold Mines Limited – Mercedes Mine

Cost Activity Units 2015 2016 2017 2018 2019 2020 2021 2022
Mine Total US$/t ore mined 78 57 53 51 57 42 44 46
Open Pit US$/t ore mined - - - 29 25 -
Underground US$/t ore mined 78 57 53 51 57 44 46 46
Plant US$/t processed 23 20 22 20 22 19 26 25
G&A US$/t processed 19 13 13 14 13 13 11 15

MANPOWER ANALYSIS
Current manpower for the operation is summarized in Table 21-7. The manpower
requirements for the LOM are summarized in Table 21-8.
 TABLE 21-7 2017 MERCEDES MANPOWER
Premier Gold Mines Limited – Mercedes Mine

Owner Contractors
Dec-17 Dec-17 2017 Totals
Department Description Summary Budget Actual Budget Actual Budget Actual
Mining
Mine Operations 181 164 315 287 496 451
Mine Maintenance and Services 43 47 43 47
Paste Plant 26 22 26 22
Geology 29 22 29 22
Engineering 21 15 21 15
Mining Subtotal 300 270 315 287 615 557

Process Plant 105 95 105 95

General & Administration

Management and New Projects 5 3 5 3
Health, Safety, Environmental, & Security 20 19 20 19
Accounting (IT, Human Resources, Legal) 26 26 26 26
Purchasing/Warehouse 19 15 19 15
G&A Subtotal 70 63 70 63
Project Totals 475 428 315 287 790 715

TABLE 21-8 LOM MANPOWER

Premier Gold Mines Limited – Mercedes Mine

2018 2019 2020 2021 2022

Total Head Count 744 744 545 542 37
Owner 449 449 449 430 37
Contractors 295 295 96 112 0

Mine 576 576 377 393 26

Owner 281 281 281 281 26
Contractors 295 295 96 112 0

Plant 99 99 99 99 10
Owner 99 99 99 99 10
Contractors - - - - -

G&A and Others 69 69 69 50 1

Owner 69 69 69 50 1
Contractors - - - - -
 m

22 ECONOMIC ANALYSIS
Under NI 43-101 rules, producing issuers may exclude the information required for Section
22 Economic Analysis on properties currently in production, unless the technical report
includes a material expansion of current production. RPA notes that Premier is a producing
issuer, the Mercedes Mine is currently in production, and a material expansion is not being
planned. RPA has performed an economic analysis of the Mercedes Mine using the
estimates presented in this report and confirms that the outcome is a positive cash flow,
including estimates of corporate income tax plus special and extraordinary mining duties, that
supports the statement of Mineral Reserves,

Premier Gold Mines Limited – Mercedes Mine, Project # 2907

Technical Report NI 43-101 – April 18, 2018 Page 22-
23 ADJACENT PROPERTIES
There are no adjacent properties relevant to this report.
24 OTHER RELEVANT DATA AND
INFORMATION
No additional information or explanation is necessary to make this Technical Report
understandable and not misleading.
25 INTERPRETATION AND CONCLUSIONS
Based on the site visit, discussions with personnel at the Mine, and available information, RPA
offers the following conclusions:

GEOLOGY AND MINERAL RESOURCES

 Gold-silver mineralization on the Mercedes property is hosted within epithermal low
sulphidation (adularia-sericite) veins, stockwork, and breccia zones. Over 16.5 km
gold-silver-bearing epithermal low sulphidation veins have been identified within or
marginal to the andesite-filled basins on the property.

 The geological models employed by MMM geologists are reasonably well understood,
and are well supported by field observations in both outcrop and drill core.

 Sampling and assaying are adequately completed and have been carried out using
industry standard QA/QC practices. These practices include, but are not limited to,
sampling, assaying, chain of custody of the samples, sample storage, use of third-
party laboratories, standards, blanks, and duplicates.

 The practices and procedures used to generate the Mercedes database are
acceptable to support Mineral Resource and Mineral Reserve estimation.

 Interpretations of the geology and the 3D wireframes of the estimation domains

appear to be reasonable.

 With the exception of a minimum thickness, the Mineral Resource estimates have
been prepared using appropriate methodology and assumptions including:
o Treatment of high grade assays;
o Composite length;
o Search parameters;
o Bulk density;
o Interpolation;
o Cut-off grade;
o Classification.

 The Mineral Resources conform to CIM (2014) definitions and comply with all
disclosure requirements for Mineral Resources set out in NI 43-101.

 MMM geologists consider that there is excellent geological potential for locating
additional resources at the Mercedes property. The proposed exploration budget for
2018 at Mercedes contains 171 drill holes totalling 39,500 m of diamond drilling at an
estimated expenditure of US$5.96 million. The plan includes drilling to expand
existing resources, to define near-mine targets, and to generate large potential
targets property wide. RPA concurs with this initiative.
 m

MINERAL RESERVES AND MINING

 The Mineral Reserves are being estimated by MMM personnel in an appropriate
manner using current mining software and procedures consistent with industry
standards.

 The Mineral Reserves conform to CIM definitions and comply with all disclosure
requirements for Mineral Reserves set out in NI 43-101.

 The selected mining method of mechanized CAF stoping is appropriate for the
deposits.

 Based on the current Mineral Reserves, a total of 3.3 Mt grading 3.94 g/t Au and 24.2
g/t Ag will be mined over a mine life of 4.5 years (2018 to 2022).

METALLURGY AND MINERAL PROCESSING

 The processing plant results in high recoveries for both gold and silver. The staff is
proactive at constantly improving the operation and the actual precious metal
recoveries are close to the estimates used for budgeting purposes. The average gold
recovery increased by over 1.0% from 2016 to 2017.

Premier Gold Mines Limited – Mercedes Mine, Project # 2907

Technical Report NI 43-101 – April 18, 2018 Page 25-
2
 m

26 RECOMMENDATIONS
RPA has the following recommendations:

GEOLOGY AND MINERAL RESOURCES

 Collect more field duplicate samples with grades above the cut-off grade or
discontinue this practice.

 Replace standards CDN-ME-1204 and CDN-GS-7G to see if performance improves.

 Send three to five percent of the pulps analyzed by the mine laboratory to a second
laboratory as an accuracy check.

 Construct mineralization wireframes using a minimum mineable thickness and

incorporate any necessary dilution to allow appropriate mining dimensions and
potentially economic extraction.

 Reconcile the high yield threshold parameters with mined areas to determine if the
grades are being underestimated in restricted areas.

 Remove isolated remnants and zones remaining after the Mineral Reserve
conversion process if they are deemed not to be economically viable.

MINERAL RESERVES AND LIFE OF MINE PLAN

 Review mine operating costs and cut-off grade calculations to ensure that cut-off
grades are based on actual cost experience.

 Advance mine development planning for Marianas and El Taraicito deposits to extend
the life of the older Mercedes and Barrancas-Lagunas mines.

 Include stockpiled ore material in future Mineral Reserve estimates.

METALLURGY AND MINERAL PROCESSING

 Continue to be proactive in improving the operations.

 Complete a detailed evaluation of available data to determine whether gold and/or

silver recovery is a function of the metal recoveries. If so, the correlations may be
used to provide more accurate estimates for budgeting purposes.

Premier Gold Mines Limited – Mercedes Mine, Project # 2907

Technical Report NI 43-101 – April 18, 2018 Page 26-
27 REFERENCES
Altman, K.A., Collins. S.E., and Moore, C.M., 2017, Technical Report on the Mercedes Gold-
Silver Mine, Sonora State, Mexico, a NI 43-101 Technical Report for Premier Gold Mines
Limited, dated April 28, 2017.

Altman, K.A., Collins. S.E., and Moore, C.M., 2016, Technical Report on the Mercedes Gold-
Silver Mine, Sonora State, Mexico, a NI 43-101 Technical Report for Yamana Gold Inc.,
dated September 6, 2016.

Altman, K.A., Collins. S.E., and Moore, C.M., 2016, Technical Report on the Mercedes Gold-
Silver Mine, Sonora State, Mexico, a NI 43-101 Technical Report for Premier Gold Mines
Limited, dated September 6, 2016.

Buchanan, L. 2016, Mercedes Operations Overview, prepared for Yamana Gold Inc. July,
2016.

Golder Associates Inc., 2014, Conceptual Closure Plan - Mercedes Mine, Sonora, Mexico,
prepared for Yamana Gold Inc., July 1, 2014.

Hawksworth, M., Beltran C., Marsden, H., 2016, Exploration Potential – July 21, 2016 Update
prepared for Yamana Gold Inc., July 16, 2016.

Hawksworth, M., Ramos, A., Trotman, R., Burkett, S. 2009, Geology and Epithermal Au-Ag
Vein Mineralization of the Mercedes Area, Sonora, Mexico, Geology Tour Report
prepared for Yamana Gold Inc., February 22, 2009.

Hawksworth, M., Walker, G., P. G., Welhener, H., P. E., 2008, Mercedes Project, Sonora,
Mexico, Mineral Resource Estimate and Summary of Exploration Work conducted
between 1999 and September 10, 2008, In-house report for Yamana Gold Inc.,
November 18, 2008.

Hernandez, G., Hawksworth, M., P. G., Walker, G., P. G., 2012, Mercedes Project Update,
In- house report prepared for Yamana Gold Inc., March 2012.

M3 Engineering, 2010, Feasibility Study Mercedes Project Report M3-PN09027 Rev 1

prepared for Yamana Gold Inc., March 15, 2010.

Moore, C.M., and Bergen, R.D., 2014, Technical Report on the Mercedes Gold-Silver Mine,
Sonora State, Mexico, a NI 43-101 Technical Report for Yamana Gold Inc., dated
February 25, 2014. Updated as of May 31, 2014.

Sanchez-Mejorada, Velasco y Ribe, 2015, Legal Opinion on Land and Permitting, prepared
for Yamana Gold Inc., November 10, 2015.
28 DATE AND SIGNATURE PAGE
This report titled “Technical Report on the Mercedes Gold-Silver Mine, Sonora State, Mexico”
and dated April 18, 2018 was prepared and signed by the following authors:

(Signed and Sealed) “Kathleen Ann Altman”

Dated at Lakewood, CO
April 18, 2018 Kathleen Ann Altman, Ph.D., P.E.
Principal Metallurgist

(Signed and Sealed) “Grant A. Malensek”

Dated at Lakewood, CO
April 18, 2018 Grant Malensek, P. Eng./[Link].
Principal Engineer - Valuations

(Signed and Sealed) “Chester M. Moore”

Dated at Toronto, ON
April 18, 2018 Chester M. Moore, [Link].
Principal Geologist
29 CERTIFICATE OF QUALIFIED PERSON
KATHLEEN ANN ALTMAN
I Kathleen Ann Altman, Ph.D., P.E., as an author of this report entitled “Technical Report on
the Mercedes Gold-Silver Mine, Sonora State, Mexico” prepared for Premier Gold Mines
Limited and dated April 18, 2018, do hereby certify that:

1. I am Principal Metallurgist with RPA (USA) Ltd. of Suite 505, 143 Union Boulevard,
Lakewood, Co., USA 80228.

2. I am a graduate of the Colorado School of Mines in 1980 with a B.S. in Metallurgical

Engineering. I am a graduate of the University of Nevada, Reno Mackay School of Mines
with an M.S. in Metallurgical Engineering in 1994 and a Ph.D. in Metallurgical
Engineering in 1999.

3. I am registered as a Professional Engineer in the State of Colorado (Reg. #37556) and a

Qualified Professional Member of the Mining and Metallurgical Society of America
(Member #01321QP). I have worked as a metallurgical engineer for a total of 37 years
since my graduation. My relevant experience for the purpose of the Technical Report is:
 Review and report as a metallurgical consultant on numerous mining operations and
projects around the world for due diligence and regulatory requirements.
 I have worked for operating companies, including the Climax Molybdenum Company,
Barrick Goldstrike, and FMC Gold in a series of positions of increasing responsibility.
 I have worked as a consulting engineer on mining projects for approximately 20 years
in roles such a process engineer, process manager, project engineer, area manager,
study manager, and project manager. Projects have included scoping, prefeasibility
and feasibility studies, basic engineering, detailed engineering and start-up and
commissioning of new projects.
 I was the Newmont Professor for Extractive Mineral Process Engineering in the
Mining Engineering Department of the Mackay School of Earth Sciences and
Engineering at the University of Nevada, Reno from 2005 to 2009.

4. I have read the definition of "qualified person" set out in National Instrument 43-101 (NI 43-
101) and certify that by reason of my education, affiliation with a professional association
(as defined in NI 43-101) and past relevant work experience, I fulfill the requirements to
be a "qualified person" for the purposes of NI 43-101.

5. I did not visit the Mercedes Mine.

6. I am responsible for Sections 13 and 17 of the Technical Report and those parts of
Sections 1, 25, and 26 dealing with metallurgical testing and mineral processing.

7. I am independent of the Issuer applying the test set out in Section 1.5 of NI 43-101.

8. I have prepared previous Technical Reports dated September 6, 2016 and April 28, 2017
on the property that is the subject of the Technical Report.
 m

9. I have read NI 43-101, and the Technical Report has been prepared in compliance with
NI 43-101 and Form 43-101F1.

10. At the effective date of the Technical Report, to the best of my knowledge, information,
and belief, the Technical Report contains all scientific and technical information that is
required to be disclosed to make the Technical Report not misleading.

Dated this 18th day of April, 2018

(Signed and Sealed) “Kathleen Ann Altman”

Kathleen Ann Altman, Ph.D., P.E.

Premier Gold Mines Limited – Mercedes Mine, Project # 2907

Technical Report NI 43-101 – April 18, 2018 Page 29-2
GRANT A. MALENSEK
I, Grant A. Malensek, [Link]./[Link]., as an author of this report entitled “Technical Report on
the Mercedes Gold-Silver Mine, Sonora State, Mexico” prepared for Premier Gold Mines
Limited and dated April 18, 2018, do hereby certify that:

1. I am Principal Engineer – Valuations with RPA (USA) Ltd. of 143 Union Boulevard, Suite
505, Lakewood, Colorado, USA 80228.

2. I am a graduate of the University of British Columbia, Vancouver, British Columbia,

Canada in 1987 with a [Link]. degree in Geological Sciences. I am also a graduate from
the Colorado School of Mines, Golden, Colorado, U.S.A., in 1997 with a M.E. degree in
Geological Engineering. I also obtained a Business Certificate in Finance from the
University of Denver, Denver, Colorado, U.S.A., in 2011.

3. I am a Registered Professional Engineer/Professional Geologist with the Engineers and

Geoscientists of British Columbia (#23905). I have worked as a mining valuation
specialist for a total of 21 years since my graduation from CSM. My relevant experience
for the purpose of the Technical Report is:
 Review and report as a consultant on numerous exploration, development and
production mining projects around the world for due diligence and regulatory
requirements;
 Mine technical and economic analyses involving precious, base, and ferrous metal
projects/operations located in, but not limited to, the United States, Canada, Mexico,
Papua New Guinea, Indonesia, Peru, Chile, Bolivia, Colombia, Venezuela, French
Guiana, and Ghana.

4. I have read the definition of "qualified person" set out in National Instrument 43-101 (NI 43-
101) and certify that by reason of my education, affiliation with a professional association
(as defined in NI 43-101) and past relevant work experience, I fulfill the requirements to
be a "qualified person" for the purposes of NI 43-101.

5. I visited the Mercedes Mine on January 24, 25, and 26, 2018.

6. I am responsible for Sections 15, 16, 18, 19, 21, and 22 and the parts of Sections 1, 25,
and 26 dealing with mining, Mineral Reserves, infrastructure, and costs.

7. I am independent of the Issuer applying the test set out in Section 1.5 of NI 43-101.

8. I have read NI 43-101, and the Technical Report has been prepared in compliance with
NI 43-101 and Form 43-101F1.

9. At the effective date of the Technical Report, to the best of my knowledge, information,
and belief, the Technical Report contains all scientific and technical information that is
required to be disclosed to make the Technical Report not misleading.

Dated this 18th day of April, 2018

(Signed and Sealed) “Grant A. Malensek”

Grant A. Malensek, [Link]./[Link].

CHESTER M. MOORE
I, Chester M. Moore as an author of this report entitled “Technical Report on the Mercedes
Gold-Silver Mine, Sonora State, Mexico” prepared for Premier Gold Mines Limited and dated
April 28, 2017, do hereby certify that:

1. I am Principal Geologist with Roscoe Postle Associates Inc. of Suite 501, 55 University
Ave Toronto, ON, M5J 2H7.

2. I am a graduate of the University of Toronto, Toronto, Ontario in 1972 with a Bachelor of

Applied Science degree in Geological Engineering.

3. I am registered as a Professional Engineer in the Province of Ontario (Reg. #32455016).

I have worked as a geologist for over 40 years since my graduation. My relevant
experience for the purpose of the Technical Report is:
 Mineral Resource and Reserve estimation, feasibility studies, due diligence, corporate
review and audit on exploration projects and mining operations world wide
 Various advanced exploration and mine geology positions at base metal and gold
mining operations in Ontario, Manitoba, and Saskatchewan
 Director, Mineral Reserve Estimation and Reporting at the corporate offices of a
former major Canadian base metal producer

4. I have read the definition of "qualified person" set out in National Instrument 43-101 (NI43-
101) and certify that by reason of my education, affiliation with a professional association
(as defined in NI43-101) and past relevant work experience, I fulfill the requirements to
be a "qualified person" for the purposes of NI43-101.

5. I visited the Mercedes Mine on January 24, 25, and 26, 2018.

6. I am responsible for overall preparation of the Technical Report and in particular for
Sections 2 to 12, 14, 20, 23, 24, and 27, and those parts of Sections 1, 25, and 26
dealing with geology, Mineral Resources, and environment.

7. I am independent of the Issuer applying the test set out in Section 1.5 of National
Instrument 43-101.

8. I am a co-author of previous technical reports on the Mercedes gold-silver mining

operation dated February 25, 2014, May 31, 2014, and September 6, 2016.

9. I have read National Instrument 43-101, and the Technical Report has been prepared in
compliance with National Instrument 43-101 and Form 43-101F1.

10. At the effective date of the Technical Report, to the best of my knowledge, information,
and belief, the Technical Report contains all scientific and technical information that is
required to be disclosed to make the Technical Report not misleading.

Dated this 18th day of April, 2018

(Signed and Sealed) “Chester M. Moore”

Chester M. Moore, P. Eng.