FEASIBILITY WORK
 

The FS was completed by Lycopodium Engineering Pty Ltd (“Lycopodium”) and Cube Consulting Pty Ltd (“Cube”) based on 3.5 and 4.5 million tonnes per annum plant throughput scenarios supported by open pit mining activities.

In addition to previous Pre-Feasibility Study “PFS” work, the Moto Group has spent in excess of US$5M in the 15 months to November 2007 on technical design and evaluation work associated with the FS. Expenditure on resource definition and technical drilling for FS purposes totals over US$13M.

Probable Mineral Reserves of 37.8 Mt at 3.2 g/t Au for 3.9 Moz are planned to be mined and processed over an 8½ year mine life on the basis of a 4.5 Mtpa throughput.

Key Findings of the Feasibility Study

In order to maximize the Project’s return on capital, improve pay-back period, minimize cash operating cost and maximize asset utilization/exploitation, Premier has decided that the 4.5 Mtpa scenario as detailed in the FS currently represents the preferred option. Key points of the study include:

• extensive re-scoping of the PFS project dimensions;
• confirmation and further clarification of technical findings from the PFS;
• Probable Mineral Reserves of  37.8 Mt at 3.2 g/t Au for 3.9 Moz;
• total gold production of 3.3 Moz over 8½ years;
• a nominal output of 400,000 ounces of gold per annum;
• project financials evaluated using gold revenue of US$600 /oz and 100% equity basis;
• generation of annual pre-tax operating cash flows averaging US$120M;
• average cash operating costs of US$294 /oz produced;
• payback period of approximately 4½ years for initial capital and infrastructure cost expenditures, excluding expenditures to date;
• sensitivity analysis indicating reduction in payback period to 3 years for a gold revenue price of US$750/oz; and
• capital and infrastructure cost estimates total US$483M including US$80M hydro-electric power station, US$78M initial mining fleet & US$47M construction contingency.

Source:  Refer to Qualified Persons section for details of Qualified Persons (TSX) or Competent Persons (AIM) with respect to the quotation of Mineral Reserves and/or Mineral Resources.

Exploitation of Resource Base and Future Direction

The FS evaluated the Project’s Indicated Mineral Resources of 77.8 Mt at 2.8 g/t Au for 7.0 Moz and did not take into account an additional Inferred Mineral Resource base of 98.9 Mt at 3.8 g/t Au for 12.1 Moz.

Since the completion of the PFS in August 2006, the conversion rate of Inferred to Indicated Mineral Resources has been close to 100% within the key deposits.

The Premier Gold Project is located in the north-east of the DRC and is a joint venture between L’Office des Mines d’Or de Kilo-Premier (“OKIMO”)(30%), Border Energy Pty Ltd (a Premier wholly-owned subsidiary)(60%) and Orgaman sprl (10%).

Estimated processing operating costs (including general and administration) are estimated for the three types of plant feed - US$11.75 /tonne oxide, $15.38 /tonne transition and US$13.93 /tonne primary ore.

Surface mining operating costs averaged US$1.58 /tonne over the mine life on an owner mining operating basis. The cost of mining ore incorporated a premium over the unit cost of mining waste. Costs include provision for ongoing rehabilitation of mining areas.

Working capital and ‘first-fill’ consumables stock values have not been returned at end of mine life. Salvage values of equipment, plant and other high value items have not been included. Site closure costs are excluded, although progressive rehabilitation costs for mining areas have been included in operating cost estimates. This is consistent with the findings of the FS indicating that the Project has significant potential to extend past the evaluated mine life.

Project sunk costs to the end of September 2007 have been included for purpose of taxation calculation but do not feature directly in the calculation of total capital expenditure for the project.

DRC corporate taxes and precious metal royalties have been included, as well as major levies for expatriate labour costs. Accelerated depreciation provisions allowed under DRC legislation have been incorporated where applicable.

* Note: US$497m includes provision of US$14m for pre-production mining expenditure related to project development. 

Premier continues to wait for the formal publication of the report of a commission set up to review 60 mining agreements entered into by the para-statal companies of the DRC Government and the timetable for its release remains unclear.   As far as Premier is aware, the Commission's report may include recommendations, which will apply to most mining companies, that certain financial terms of the partnerships be renegotiated.

Given the solid foundation presented by the FS, Premier proposes to work with its joint venture partners to determine the best way to progress and enhance the economics of the Project in the best interests of shareholders.

Premier wishes to thank the government of the Democratic Republic of Congo and OKIMO for its ongoing support and looks forward to working with all stakeholders to successfully develop the Premier Gold Project.  The successful development of the Project will result in significant benefits to all the stakeholders, including the state and the local community, and will add to the reputation of the Democratic Republic of Congo as a major participant in the international resources sector.

The Board of Premier would also like to thank the Premier staff for their contributions in bringing this Feasibility Study to fruition. In particular the Board would especially like to thank Klaus Eckhof and Andrew Dinning for their valued contributions.

Klaus has informed the Board that with the Feasibility Study completed, he would like to step down as President and CEO and as a Director of Premier.  The Board also announced that in addition to his duties as Chief Operating Officer, Andrew Dinning will also assume the duties of President upon Klaus' resignation.