North American gold exploration and development company, Premier Gold Mines (TSX:PG) , has confirmed an increase of its indicated open-pit resource estimate at the Hardrock gold deposit near Geraldton in Northwestern Ontario by 69%. 

Taking the resource increase into consideration, the company’s overall indicated resources now stand at 4.87 million ounces, which shows a boost of 1.63 million ounces or 50%. On the inferred side, the company reduced the number of overall inferred ounces by 1.04 million ounces or 27% to 2.74 million.As far as resources amenable to open-pit mining, that’s where the 69% or 1.62 million ounce increase comes in, with an increase to 3.97 million ounces.

Ewan Downie, Premier’s President and CEO, commented “Ongoing drilling and engineering work has provided a better understanding of the characteristics of the Hardrock deposit, resulting once again in the delivery of solid results.”

Based on Premier’s news, Cantor Fitzgerald analyst, Rob Chang, viewed the latest news as positive for the company in a note to clients, highlighting that the open pit indicated resource was accompanied by a coincident increase in resource grade.

And sure enough, according to the company’s press release, the open -pit indicated resources have a grading of 1.47 grams per tonne gold, a definite increase from the 1.18 g/t gold modeled in the company’s January 2014 PEA.

According to Downie, “[t]his updated mineral resource estimate clearly demonstrates an increase in the quality and quantity of the deposit. ”

For his part, Chang notes that with the latest increase in resource estimate “[w]e continue to believe in management’s ability to execute and reiterate our Buy recommendation and $3.85 target price.”

From here, Premier will be adding an additional 35,000 meters of diamond drilling in 2014 in order to convert the final open-pit inferred resource ounces into indicated ounces prior to the completion of the company’s Feasibility Study. Should all go according to plan, Premier Gold Mines will release the study in the first half of 2015.

On the back of the news on Tuesday, Premier Gold was up 7.46% to $3.17.

Securities disclosure: I, Vivien Diniz, hold no investment interest in any of the companies mentioned.