Premium Exploration Inc.
TSX VENTURE : PEM

Premium Exploration Inc.

November 23, 2010 09:00 ET

Premium Exploration: Buffalo Gulch Ground Mag Anomaly Correlates with Soil Geochemistry & Airborne Survey 16-Km from Friday-Petsite Where Correlating Methodology Results in 100% Drilling Success

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Nov. 23, 2010) - Premium Exploration Inc. (TSX VENTURE:PEM) –

  • 1.5-km Ground Magnetic Geophysical anomaly correlates with 4.0-km soil geochemical anomaly, and historic shallow drilling defining a 110,000 oz historic indicated gold resource* at Buffalo Gulch
  • Correlating methodology has resulted in 100% drill target intercept success in Phase-Three drill program at the Friday-Petsite Project 16-km south of Buffalo Gulch Project
  • Successful drilling at Buffalo Gulch utilizing this methodology would make a positive impact endorsing the geological model linking mineralization at Buffalo Gulch 16-km north of the Friday-Petsite

Premium Exploration Inc. is pleased to announce that the 1.5-km Ground Magnetic Geophysical Survey at the Buffalo Gulch Project identified an anomaly that correlates with a north-south trending 4.0-km soil geochemical anomaly, historic shallow drilling defining 110,000 oz historic indicated gold resource*, and the recent 30-km MAG & EM Airborne Survey conducted over the entire length of the Orogrande Shear Zone ("OSZ"). This correlating methodology has resulted in 100% drill target intercept success in the ongoing 10,000 meter Phase-Three drill program at the Friday-Petsite Project located 16-Km south of Buffalo Gulch along the 30-km OSZ in Idaho, under Premium's control.

Premium geologists interpret the high/low ground magnetic signature to correlate with the 56k EM Airborne Survey representing the west-bounding fault of the Orogrande Shear Zone, known as the Monday Fault at the Friday-Petsite Project.

Both the Buffalo Gulch and Friday-Petsite Projects have ground magnetic anomalies that correlate with the zone of conductivity revealed in the airborne survey, gold in soil anomalies, and drilling. Premium intends to apply this new concept at the Buffalo Gulch Project to identify structures which could result in the discovery of similar structurally controlled, high-grade sulphide mineralization at depth.

Click http://bit.ly/BGComparisonMap for the Buffalo Gulch Correlation Map, http://bit.ly/OSZAirborne for the OSZ Airborne Geophysical Survey and http://bit.ly/FPCorrelation the Friday-Petsite Correlation Map.

Successful drilling at Buffalo Gulch utilizing correlating methodology would make a substantial positive impact towards endorsing the geological model linking mineralization at Buffalo Gulch 16-km north of the Friday-Petsite and district development.

Due to the this correlation along the OSZ in multiple zones, Premium has followed up with a 3-km Dipole-Dipole Geophysical Survey at the Buffalo Gulch and Deadwood projects in order to help refine drill targets for the upcoming Phase-Four drill program in 2011. Results are anticipated early 2011.

Buffalo Gulch Project:

  • Defined by a 4 km north-south trending gold-in-soil geochemical anomaly with only a small portion of the geochemical anomaly being drill tested by previous operators
  • 1.5 km's of IP and 1.5 km's of Ground Magnetic Geophysics reveal a potential structure interpreted as the OSZ
  • The existing oxide deposit, as delineated by previous operators, is open along strike, depth, and into sulphide mineralization
  • To date, no drilling at depth beyond 150 meters has been conducted to test high-grade sulphide potential
  • Both the soil geochemical and geophysical anomalies correlate with the recently released airborne geophysical image
  • Historically permitted as an open-pit mine for Bema Gold in 1991 but did not reach production

Buffalo Gulch is the most northern project along the 30-km Orogrande Shear Zone in central Idaho under Premium's control and hosts a historic 110,000 oz indicated gold resource* that was once fully permitted for open-pit production in 1991 by Bema Gold Inc.

*The historic resources as calculated by the Bema Gold subsidiary "Idaho Gold Corporation" were prepared prior to the introduction of NI43-101, but were carried out in accordance with established practice at that time. Idaho Gold estimated "proven and probable geologic reserves" of oxide material to a depth of 220 feet as 4.839 million short tons at a grade of 0.023 ounce/ton containing 110,759 troy ounces of gold*.

*The resource estimate was reviewed by Micon International in 2004, and they concluded that the Buffalo Gulch property had historical Mineral Resources of about 5 million tons averaging 0.023 oz/ton Au (4.5 million tonnes at 0.8 g/t Au), comparable to an indicated resource. No cut-off grade was provided.

* Estimates of gold resources are historical in nature, predate and are noncompliant with NI 43-101. Premium is not treating the historical estimate as current mineral resources or reserves. Premium has not undertaken any independent investigation of the resource estimates nor has it independently analyzed the results of the previous exploration work in order to verify the resources, and therefore the historical estimates should not be relied upon. The historical classes used by Idaho Gold are different from current CIM classes, however, they might be comparable to the CIM inferred or indicated resource classes.

Orogrande Shear Zone District Development Overview:

Development is ongoing at the bulk-tonnage Friday-Petsite Project, the most advanced of several known mineralized zones located at the southern end of the 30 km of the OSZ and represents 4% of the OSZ under Premium's control while the Buffalo Gulch project is the northernmost project located 16 Km's north of the Friday-Petsite.

The Friday-Petsite Zone is located along the east-bounding fault of the OSZ. Drilling at the Friday-Petsite is co-incident with a 3.0 km long by 800 meter wide gold-in-soil anomaly and a correlating ground magnetic geophysical survey outlining 3.0-Km's of immediate local structure.

Premium has had 100% drill target intercept success in conjunction with ground-magnetic geophysics and soil sampling at the Friday-Petsite Project. Intercepts have ranged from lows of 0.5 g/t Au to highs of 2.6 g/t Au, in some cases over +100 meter intervals, as with PFR2009_10: 2.6 g/t Au over 198 meters including 3.8 g/t Au over 121 meters and 5 g/t over 75 meters.

Premium intends to utilize the same methodology to refine targets for a much larger Phase-Four exploration program along the Orogrande Shear Zone in Q1-2011.

Qualified Person

The 2010 Phase-Three exploration program is being directed by Michael Ostenson, P.Geo., VP Exploration of Premium Exploration Inc. Mr. Ostenson is a Qualified Person as defined by NI 43-101. Mr. Ostenson prepared, and approves of the content in this release.

About Premium Exploration Inc.

Premium is focused on the exploration and development of its district-sized land package along the Orogrande Shear Zone "OSZ" to fulfill its vision of developing a new mining district in North America. The OSZ is a 30 km-plus regionally-significant trending structure that correlates with multiple known zones of gold mineralization and has structural control to its gold mineralization, characteristics similar to many large gold belts, such as the Carlin Trend of Nevada. Development is ongoing at the bulk-tonnage Friday-Petsite Project, the most advanced of several known mineralized zones located along the OSZ and represents 4% of the OSZ under Premium's control. For additional information, please visit us at www.premiumexploration.com.

This press release contains certain "Forward-Looking Statements" within the meaning of Section 21E of the United States Security Exchange Act of 1934, and involves a number of risks and uncertainties. Important factors that could cause actual results to differ materially from the Company's expectations are disclosed in the Company's documents filed from time to time with the TSX Venture Exchange and the British Columbia Securities Commission. All statements, other than of historical fact, included herein are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements. 

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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