Premium Exploration Inc.
TSX VENTURE : PEM

Premium Exploration Inc.

May 25, 2011 16:00 ET

Premium Exploration: Exploration Update along 30 Km Emerging Gold District

VANCOUVER, BRITISH COLUMBIA--(Marketwire - May 25, 2011) - Premium Exploration Inc. (TSX VENTURE:PEM) ("Premium" or "the Company") is making gold discoveries; the Company's goal is to discover multiple gold deposits along its 30 km property, an emerging gold district in Idaho, USA.

The Company is pleased to announce the start of the 2011 exploration field season; gold-in-soil sampling underway, claims staking, and drilling in progress.

District-Wide Phase-Four Exploration Program Highlights:

  • 3,091 Meters of the +25,000 Meter Drill Program
  • 9 drill holes have encountered alteration & sulphide mineralization
  • 550 Gold-in-Soil samples of the +10,000 sample campaign
  • 30% increase in land position to 172.6 km2

"We are pleased with the progress of Phase-Four Exploration;drilling has intersected favourable zones, gold-in-soil sampling is underway, and additional claims have been staked making our property package one of the largest in Idaho," Stated Michael Ostenson, P.Geo., VP Exploration of Premium Exploration. "Drills will be mobilized shortly to the promising Deadwood Zone to begin another year of making new discoveries."

Premium's strategy of drilling structures identified by geophysics and gold-in soil trends has led to 3 gold discoveries and significant resource development; 343,000 indicated and 779,000 inferred gold ounces are hosted in just 0.8 km of structure at the Idaho Gold Project to date. This represents less than 1% of the +60 km of parallel and cross-cutting structures identified on the property.

Drilling Update:

Buffalo Gulch Zone

  • 2 drill-holes in 332.5 meters
  • Both holes encountered alteration & sulphide mineralization consistent with the "OSZ"
  • Drill to return once weather conditions improve

The target zone at Buffalo Gulch is 4 km of the 12 km correlating Gold-in-Soil and Airborne Geophysical anomalies along the main 30 km trend.

Drilling at Buffalo Gulch is designed to test the same geological model tested at the Friday Zone, 20 km south along the 30 km trend, which resulted in 100% success in drilling and increased the Friday-Petsite deposit from 549,000 oz inferred to 880,000 inferred and 343,000 oz indicated gold in Phase-Three.

A historic indicated resource of 110,000 oz gold in 4.8 Mt at 0.8 g/t with 0.4 g/t Au cut-off is hosted along 0.5 km of the 4 km trend and remains open. The last operator in the 1990's focused on defining near-surface oxide mineralization. Targeting gold-in-soil anomalies, they defined the near-surface oxide deposit via shallow, vertical RC drilling and did not investigate potential high-grade structural mineralization at depth; Premium's new geological model.

For the Buffalo Gulch Zone Drill Plan Map, please click: http://bit.ly/Drilling_BuffaloGulch2011.

Friday Zone

  • 7 drill-holes in 2,758.3 meters
  • All drill-holes encountered alteration & sulphide mineralization consistent with the "OSZ"
  • 2 drill-holes in progress:
    • 1 located along the Friday Fault to the south of the Friday-Petsite resource zone
    • 1 located along the Friday Fault to the north of the Friday-Petsite resource zone

Drilling is designed to locate and intersect the Friday Fault at depth, along strike to the north and south to test 5km of potential strike length identified by gold-in-soils and geophysics.

The first 7 holes are located within the current Friday-Petsite resource footprint. Upon successfully locating the Friday Fault at depth (Lower Block), Premium intends to continue stepping out along strike, out of the resource footprint.

343,000 oz gold Indicated (11.8 Mt @ 0.90 g/t Au with 0.5 g/t Au cut-off) and 879,000 oz gold Inferred (26.4 Mt @ 1.04 g/t Au with 0.5 g/t Au cut-off) are hosted along 1.4 km of structure to date; 343,000 oz gold Indicated and 779,000 oz inferred in just 0.8 km.

For the Friday Zone Drill Plan Map, please click: http://bitly.com/Phase4_FridayZoneDrilling.

Field Season Update:

Gold-In-Soil Sampling:

A total of 550 gold-in-soil samples in the +10,000 sampling program have been taken along the western portion of the Deadwood Zone to further refine drill targets planned for the Phase-Four drill program.

This first stage of sampling is focused on the new "Lucky Strike Structure" previously announced March 29th 2011. The second stage of the gold-in-soil sampling program will be focused to the west and south of the Friday-Petsite resource following the OSZ south to the X Zone.

In-situ gold-in-soil sampling along the Idaho Gold Project has been shown to be a key exploration tool and an excellent representation of the underlying bedrock as the region is un-glaciated.

Claim Staking:

A total of 623 new claims have been staked bringing the Idaho Gold Project land position to 2,127 un-patented lode claims and 5 patented claims for a total of 2,132 claims. The total area has been increased by 30% to 172.6 square km.

For the New Land Position Map, please click: http://bit.ly/GIS_NewClaims.

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.

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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