Premium Exploration Inc.
TSX VENTURE : PEM

Premium Exploration Inc.

July 19, 2011 16:26 ET

Premium Exploration Drills 1.0 g/t Gold Over 118 Meters and Increases Strike Length of Mineralization at the Friday Zone by 44%

VANCOUVER, BRITISH COLUMBIA--(Marketwire - July 19, 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 to announce results and highlights from the 25,000 m drill program currently underway:

  • Increased the mineralized strike length of the Main Zone/Lower Block Zone 85 m north and 265 m south, for a total mineralized strike length of 1,150 m, a 44% increase since the start of Phase-Four
  • Drill highlights include PFR2011-8: 1.0 g/t gold over 117.7 m including 2.9 g/t gold over 9.1 m
  • Threedrills are active on the property; one at the Friday Zone and two in the highly prospective Deadwood Zone
  • 3,209.3 m (13%) of the 25,000 m program is now reported, with 6,220.6 m (25%) drilled to date

"The 44% increase in the strike length of the Main Zone to the north and south demonstrates the additional size potential of the Friday Deposit along strike," stated Michael Ostenson, P.GEO., VP Exploration.

This provides the Company with a framework to return with tighter spaced infill drill-holes, where we can drill to the west across mineralization in an effort to delineate the width of the mineralization."

Friday-Petsite Drilling North:

  • PFR2011-8 intercepted: 1.0 g/t gold over 117.7 m including 2.9 g/t gold over 9.1 m

Drill-hole PFR2011-8 was drilled 85 meters along strike to the north of the Main Zone. It was drilled northwest starting in the footwall, intersected the Friday Fault, and drilled across mineralization of the hanging wall which is consistent with the Main Zone.

This drilling extends the strike length of the Main Zone/Lower Block 85 meters north, a 10% increase, and mineralization between the North Zone and the Main Zone is now interpreted to be continuous. Step-out drilling is continuing along the north-northwest trend of the zone.

Drill-Hole Zone From (m) To (m) Interval (m) Au g/t
PFR2011-8 Friday 92.7 210.4 117.7 1.0
181.1 190.2 9.1 2.9
187.5 190.2 2.7 6.8

*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 estimate to be 65-75% of the drilled interval.

Friday-Petsite Drilling South:

Step-out drilling is designed to locate the Friday Fault along strike to the south in order to demonstrate the size potential of the deposit. The Friday Fault is the eastern bounding fault of the Orogrande Shear Zone, which hosts the bulk of the mineraliastion defined on the project to date. At this time Premium is drilling to the east in order to locate the Friday Fault along strike to the south of the current resource area. Infill drilling between the step-outs is planned. These infill holes will be drilled to the west, across mineralization, in an effort to delineate the overall width of the mineralization.

  • PFR2011-7 intercepted 0.5 g/t gold over 40.8 m as well as 0.5 g/t gold over 19.2 m
  • PFR2011-9 intercepted 1.0 g/t gold over 10.1 m within 0.5 g/t gold over 48.5 m

Both drill-holes were step-outs drilled east as a fan from the same collar (-55 and -75). Both encountered gold mineralization consistent with the Friday-Petsite resource, intersected the Friday Fault, and terminated in country rock. PFR2011-7 was drilled to a depth of 334.1 m and PFR2011-9 to a depth of 235.3 m.

This drilling extends the strike length of the Main Zone/Lower Block 265 meters south and mineralization between South Zone and the Main Zone is now interpreted to be continuous. Combined with the 85 meter extension north, this gives the total Lower Block strike length an increase of 44% and demonstrates the additional size potential of the deposit along strike.

The Main Zone of the Friday-Petsite NI 43-101 resource contains; 343,000 indicated oz in 11.8 Mt grading 0.90 g/t Au (0.5 g/t cut-off) and 779,000 inferred oz in 22.5 Mt grading 1.08 g/t Au (0.5 g/t cut-off). Mineralization is associated with the Friday Fault.

Drill-Hole Zone From (m) To (m) Interval (m) Au g/t
PFR2011-7 Friday 8.5 27.7 19.2 0.5
88.1 128.9 40.8 0.5
PFR2011-9 Friday 157.0 205.5 48.5 0.5
170.4 180.5 10.1 1.0

*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 estimate to be 25-50% of the drilled interval.

To view Sections, please click: http://bit.ly/LongSectionSolids_Jul, http://bit.ly/PFR2011_7-9, http://bit.ly/PF2011_8 or visit Corebox by clicking: http://bit.ly/CoreboxFP3DModel. Plan view maps can be viewed at: http://bit.ly/Phase4FP_Jul18ResultsToDate, http://bit.ly/Phase4FP_Jul19ResultsToDate.

Exploration Update:

  • Drill #1: Friday Zone Step-out drill-hole PFR2011-13 in progress
  • Drill #2: Deadwood Zone drill-hole DW2011-3 In progress
  • Drill #3: Deadwood Zone drill-hole DW2011-2 In progress

One drill is conducting step-out drilling along the Friday Fault in the Friday-Petsite Resource Zone. This drilling is being done to demonstrate the size potential of the Friday-Petsite resource along strike to the north and south.

The most efficient and cost effective way to demonstrate this is a two-hole fan drilled to the east along strike to define the location of the Friday Fault and associated gold mineralization. Follow up drilling with holes drilled to the west and across mineralization are planned for the future.

Two drills are located in the Deadwood Zone focused on making new discoveries. The Deadwood Zone is located between the Buffalo Gulch Zone to the north and the Friday Zone to the south along the Idaho Gold Project.

A 12 km gold-in-soil trend extends along the Buffalo Gulch and Deadwood Zones and correlates with the 30 km Orogrande Shear Zone, a regional structure identified by geophysics. There are numerous additional gold-in-soil anomalies that correlate with numerous cross-cutting structures, historic mines, and prospects throughout the 35 km2 Deadwood Zone.

DW2011-3 is located along the western side of the Orogrande Shear Zone structure interpreted by airborne geophysics and correlating gold-in-soil anomalies. There also a historic mine known as the Black Lady located 500 m southwest of DW2011-3 along the regional structure.

DW2011-2 is located on the east side of the Deadwood Zone and is targeted on a cross-cutting structure interpreted by airborne geophysics and also hosts the historic Grangeville Mine.

Premium's strategy of drilling structures identified by geophysics with correlating gold-in-soil anomalies has led to:

  • Four discoveries along the 30 km property in under 15,000 meters of drilling
  • An increase in the Friday-Petsite resource from 549,000 inferred oz in 15 Mt grading 1.1 g/t Au (0.5 g/t Au cut-off) to 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) in 10,000 meters of drilling

NI 43-101

Premium's current NI 43-101 on the Friday-Petsite Zone along the Company's Idaho Gold Project, was prepared for Premium by Mark I. Pfau, MSc. of Tellurian Exploration, Inc. Mr. Pfau is an Independent Qualified Person as defined under NI 43-101. The technical report has an effective date of March 28, 2011 and was filed on SEDAR on May 12, 2011

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 2011 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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