The El Niño underground mine at South Arturo, in Nevada, has achieved commercial production, TSX-listed Premier Gold reported on Monday.

The milestone was reached ahead of schedule and on budget, the 40%-owner said of the project that it owns together with Barrick Gold and Newmont Goldcorp’s Nevada Gold Mines.

Premier reported that high-grade ore was being processed at the Goldstrike facility, located 8 km to the south.

“Based on current projections, overall gold production from South Arturo is expected to surpass expectations, which called solely for pre-production ore, for the year,” the miner said.

The company previously guided that its share of gold from South Arturo would be between 5 000 oz and 10 000 oz this year, the proceeds of which would be used as a reduction in development capital. Premier’s proportionate share of development capital at South Arturo for 2019 was budgeted at $39-million.

El Nino is a high-grade underground deposit situated down plunge of the Phase 2 pit, where mining was concluded in 2017. 

Development of the Phase 1 pit is ongoing. This is a second mine being constructed at South Arturo and is targeted for production in the second half of next year.

Meanwhile, Premier also reported that new definition and step-out drilling results from the ongoing 2019 campaign at South Arturo were showing better-than-projected outcomes.

“Initial production supports this and emphasises the continued opportunity to expand high-grade mineralisation on the property.”

Premier said multiple drill programme were being completed including in-fill and step-out drilling from the underground drill stations at the El Niño mine, geotechnical drilling at the proposed Phase 3 pit project and drilling at the East Dee target.

The miner said that work continued to advance the potential for processing run-of-mine (heap leach) material from Phase 1, currently being stockpiled, and Phase 3.

In an ongoing effort to advance the Phase 3 pit project into future mine planning, geotechnical and geo-metallurgical drilling were being performed. The programme continued to expand mineralisation within the deeper high-grade breccia target in addition to potential heap leach ore in the upper parts of the deposit.