The good news keeps rolling in for Premier Gold Mines in the form of high-grade drill assay results.

On the heels of a successful exploration campaign last year, which saw the Thunder Bay exploration outfit advance work on three key gold projects in northwestern Ontario, Premier is poised to do great things in 2010.

The miner received a nice investor bump this past fall when their Red Lake joint venture partner, Goldcorp, announced construction this year of a high-speed underground tram to connect two mines through the heart of that prolific gold camp.

The tram is being placed on their exploration property, Rahill-Bonanza, that sits in the middle of a five-kilometre stretch between Goldcorp’s Red Lake Gold Mine and its soon-to-be developed Bruce Channel Mine.

The plan is to use the tram as an underground drilling platform to test high potential areas on a property, in which Premier holds a 49 per cent interest.

"The exploration potential that opens up is huge," said Premier president/CEO Ewan Downie, who saw his company’s stock surge to trade at more than $4 a share in early January.

"All the infrastructure is there, permitting is in place for two mines and we are in a good situation to move into production if and when we delineate something that’s good enough to go into their (Goldcorp’s processing) mill."

Seeing Premier’s stock rise doesn’t completely satisfy Downie, when he makes comparisons to their peer group in emerging mid-tier companies. "We still trade at a pretty significant discount."

Downie said there’s a market perception, "somewhat justified," that Premier is riding Goldcorp’s coattails as their Red Lake exploration arm.

They have a property near Geraldton where they hope to outlined a very large gold deposit and enable them to step out of Goldcorp’s shadow.

Premier follows a pretty simple ‘in-the-shadow-of-the-headframe’ strategy, acquiring and joint venturing on properties that are smack dab in the middle of proven reserves. Their three main exploration projects; Rahill-Bonanza, Hardrock and PQ North are situated near active or past producing mines.

At their prized Hardrock project, Premier is leading the charge in one of Canada’s fastest growing gold camps. Located south of Geraldton at the intersection of Highway 11 and 519, Premier’s 15-kilometre long package of properties contain eight closed-up mines that operated between the late 1930s and late 1960s.

Almost three-million ounces of gold collectively came out of these deposits that were known to be open at depth. They were shallow by today’s standards, only extending down about 600 metres when mining ceased in 1968. Hardrock remains Premier’s biggest push for 2010. Half their $18 million exploration budget is earmarked to outline open pit and underground potential in Geraldton.

Premier has a 70 per cent stake at Hardrock with partner Goldstone Resources. The company began drilling an area, now known as the EP Zone, then explored it to the west where an unexpected high-grade gold zone was discovered, now called the NN Zone.

"It’s now almost joined with the EP Zone," Downie said hoping the discovery will result in one big open pit.

This discovery delayed the release of an NI 43-101 resource calculation report until February.

"We’ve had some spectacular holes in NN and it may be our highest-grade open pit zone," said Downie.

Later this year, Premier expects to release an upgraded open pit resource based on this infilling and step-out drilling. They also expect to have enough underground drilling to put together a below-ground resource. By year’s end, the company expects to be at the scoping study level and moving toward a feasibility study.

"Three different pits is what we envision," said Downie.

When Premier finalized the deal for the property from Barrick Gold in 2008, the land was known to contain about one-million ounces of gold. Most of the near-surface, high grade gold was mined and low gold prices in the late 1960s made mining uneconomical.

"We think the depth potential is where a lot of ounces will be built in the future," said Downie.

In January, Premier announced deep drilling struck broad zones of high-grade gold in the North Zone at Hardrock with intersects of 10.05-grams per tonne gold across 24.2 metres, 8.41-grams per tonne across 22.9 metres.

"It’s been a pleasant surprise. It’s better than what we were hoping for," said Downie, who has successfully made a deal with Canaccord Financial to issue $32 million worth of common shares, at $4 per share, on a ‘bought deal’ basis. To raise additional gross proceeds of up to 15 per cent Premier granted Canaccord an over allotment option to purchase additional shares, bringing the total to $36.8 million, if fully exercised.

When asked whether Premier will see Hardrock through to production, Downie pauses and laughs.

"We’d either build it or hopefully it will be a project that might make other companies look seriously at Premier."

Premier’s other key project is the wholly-owned PQ North, 300 kilometres northeast of Red Lake, which contains two gold discoveries.