Premium Exploration Inc.
TSX VENTURE : PEM

Premium Exploration Inc.

May 31, 2011 16:48 ET

Premium Exploration Discovers More Gold 20 km from 1st Discovery

VANCOUVER, BRITISH COLUMBIA--(Marketwire - May 31, 2011) - Premium Exploration Inc. (TSX VENTURE:PEM) ("Premium" or "the Company") is making gold discoveries. The Company's goal is to discover multiple deposits along its 30 km property, an emerging gold district in Idaho, USA.

The Company is pleased a to announce drill results and the 4th gold discovery. The discovery is 20 km along strike to the north from the initial discoveries on the Idaho Gold Project.

Highlights

  • Gold mineralization encountered in two zones 20 km apart along a 30 km regional gold trend utilizing the same geological model & exploration strategy
  • Both mineralized zones are interpreted to be associated with the 30 km regional gold trend
  • Buffalo Gulch Zone comprises 4 km of a 12 km gold-in-soil trend that correlates with the 30 km regional gold trend
  • Drilling at Buffalo Gulch intercepted a new target in addition to previously defined mineralization consistent with the oxide portion of the historic deposit
  • Step-out drilling at the Friday Zone extended mineralization 100 meters south along strike
  • Drilling to commence soon at the Deadwood Zone utilizing the same exploration strategy

"We are in the right place for making multiple discoveries; there are over 20 historic workings, 18 km of historic placer mining, 15 km of gold-in-soils and existing deposits along the main 30 km structure identified by geophysics. This is the size of the systems being discovered in the Yukon," stated Michael Ostenson, P.GEO & VP Exploration. "When we drill structures we make discoveries and Premium has over 100 drill sites permitted along +60 km of structure."

Buffalo Gulch Zone Drilling:

Drill-hole BG2011-1intersected0.5 g/t gold over 26.2 meters of oxide mineralization consistent with the historic 111,000 oz indicated resource (4.8 Mt grading 0.8 g/t Au @ 0.4 g/t cut-off). It demonstrates the continued growth potential of the deposit.

It also intersected 1.3 g/t gold over 4.6 meterswithin the sulphides. It intersected an interpreted mineralized structure identified by IP Dipole-Dipole geophysics and is considered secondary to a much larger structure nearby. More drilling is required. BG2011-1 was drilled vertically to a total depth of 266.7 meters and terminated in anomalous mineralization.

Drill-HoleZoneFrom (m)To (m)Interval (m)Au g/t
BG2011-1Buffalo Gulch77.4103.626.20.5
88.192.74.61.3
BG2011-2Buffalo Gulch44.565.821.30.5

*The gold grade calculation is a weighted mean with no top cut, and no bottom cut. The grade calculation includes internal waste and low grade sections.*True Widths for BG2011-1 are estimated to be 65-75% of the drilled interval from 77.4m to 103.6m and the unknown for the interval from 88.1m to 92.7m. The True width for the drilled interval in BG2011-2 is estimated to be 20-30%.

Intersecting an interpreted gold mineralized structure in the sulphides precisely where it was identified by geophysics, supports the new geological model at the Buffalo Gulch Zone.

With structurally controlled mineralization and grades improving with depth, the potential for a sulphide system similar to the Friday-Zone exists at depth.

Drill-hole BG2011-2 intersected 0.5 g/t gold over 21.3 meterswithin the oxide portion of the Buffalo Gulch historic resource. It did not reach the structural target identified by the IP geophysics as it was halted due to weather conditions. This hole was drilled to the east at a -60 degree dip to a total depth of 65.8 meters terminating in mineralization.

Due to the heavy rain and snow the BLM requested Premium Exploration to suspend drilling until conditions improve. At this time conditions have improved and the drill will be returning soon to complete this hole and test other promising targets along the Buffalo Gulch Zone.

The target zone at Buffalo Gulch comprises 4 km of the 12 km correlating gold-in-soil and airborne geophysical anomalies along the 30 km trend. Previous operators defined the historic resource drilling 0.5 km of strike along the gold-in-soil trend. They defined the deposit via shallow, vertical RC drilling and did not investigate potential high-grade structural mineralization at depth or along strike.

Friday Zone Drilling:

Step-out drilling encountered gold mineralization 100 meters south along strike of the Main Zone of the the Friday-Petsite resource. It demonstrates the continued growth potential of the current NI 43-101 estimate: 343,000 indicated oz in 11.8 Mt grading 0.90 g/t Au (0.5 g/t cut-off) and 879,000 inferred oz in 26.4 Mt grading 1.04 g/t Au (0.5 g/t cut-off).

Drill-HoleZoneFrom (m)To (m)Interval (m)Au g/t
PFR2011-1Friday21.057.636.61.0
PFR2011-2Friday75.9101.725.81.0

* The gold grade calculation is a weighted mean with no top cut, and no bottom cut. The grade calculation includes internal waste and low grade sections.*True Widths are estimated to be between 40% and 60% of the drilled interval.

Drill-holes PFR2011-1 and PFR2011-2 were drilled as a fan to confirm the orientation and depth of mineralization. Both holes were drilled from the same collar to the east with PFR2011-1 at a -60 degree dip and PFR2011-2 at a -80 degree dip. The orientation and depth of mineralization is consistent with the Friday-Petsite resource and is considered to be continuous with the Friday-Petsite resource.

For the Buffalo Gulch Zone cross-section, please click: http://bit.ly/2011_BG_Section_1_2. For the Friday Zone Cross-Section, please click: http://bit.ly/2011_FP_Section_1_2 and for the Long Section, please click: http://bit.ly/2011_FP_LongSection. The Friday Zone 3D model can also be viewed at Corebox at http://bit.ly/CoreboxFP3DModel.

Disclaimer: All estimates of historic gold resources arehistorical 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 Corporation, a subsidiary of Bema Gold, are different from current CIM classes, however, they might be comparable to the CIM inferred or indicated resource classes. Previous operators defined the historic resource drilling 0.5 km of the gold-in-soil trend. They defined the deposit via shallow, vertical RC drilling and did not investigate potential high-grade structural mineralization at depth.

Quality Assurance

The Company has implemented a rigorous QA/QC program using best industry practices at the Friday-Petsite Property. As described in the Company's News Releases of July 9th, 2009 and December 29th, 2009 the program includes chain of custody of samples, drill core sawn in half and shipped in sealed bags, blind duplicates, blank samples and certified standards are inserted in the sample stream. The samples are then boxed and couriered to Acme Analytical Laboratories of Vancouver, B.C. a lab certified for the provision of assays and geochemical analyses (ISO 9001:2008). In Phase-Three, as with Phase-Two and Phase-One, samples with gold values greater than 10 g/t are re-analyzed via the metallic screen procedure. Samples with visible gold were also analyzed initially using the metallic screen analysis, as were the samples immediately preceding and following the sample with visible gold. ALS Chemex is the check laboratory for the program.

Qualified Person

The 2010 Phase-Four 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 Exploration Inc. (TSX VENTURE:PEM) is focused on gold exploration at its district-sized Idaho Gold Project along the Orogrande Shear Zone in North-Central Idaho, USA. The "OSZ" is a +30 km regionally-significant trending structure with multiple known zones of gold mineralization, similar to many large gold belts, like the Carlin Trend in Nevada. Armed with a proven exploration strategy, advancing gold resources, and 30 Km of drill-ready targets, Premium is well positioned to create shareholder value through exploration and the development of this emerging gold district. 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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