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UPDATE - Premier Gold Resources affected by illegal gangs



Premier Gold Resources (LON:PGR) has pushed back the start of fieldwork operations due to unsafe conditions caused by local gangs, who have threatened its employees in Kyrgyzstan.

The AIM-listed company said factions of local gangs have tried to hold up the work programme at the Cholokkaindy gold licence illegally – an issue that is now being dealt with by the Deputy Prime Minister of Kyrgyzstan.

Premier Gold has taken steps to resolve the situation, but will not be able to commence work on the licence to establish a maiden gold resource as hoped due to safety concerns.

The company said it now cannot be certain of reaching operational objectives outlined for the 2013 field season, with the harsh winter just around the corner.

Chief executive Richard Nolan: “The company's primary objective is to resolve the local issues in order that activity on Cholokkaindy can commence safely, either before the first snow fall, or immediately at the outset of the next weather window beginning in Q2 [second quarter] next year.

“We are in regular contact with our representatives in the Kyrgyz Republic who are working with the government to resolve the issues.

“Premier Gold has repeatedly been impressed by the Kyrgyz government's encouragement of investment in the mining sector and we are confident that they are affording the company all the necessary support required to resume activity as soon as possible.”

He added that the geological team is working on refining the data and prioritising drill targets so that it is well set when the board decides it is safe to start fieldwork operations.

Sanlam Securities stuck by its ‘speculative buy’ recommendation, with a target price of 0.29p.

“This is an annoyance and delays are always costly,” said analyst Charlie Long.

“On the plus side, Premier has a relatively modest overhead and it could be that positive drill results will be better received next field season than in Q4 [fourth quarter] 2013 this year.

“Drilling this season is still a possibility but time is running out to resolve the issue.”

Premier Gold shares fell 23% to 0.172p on the news.

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