Premium Exploration Inc.

Premium Exploration Inc.

March 25, 2008 15:10 ET

Premium Exploration, Inc. Drills up to 10.2 g/t Au and 1,309.7 g/t Ag on Nueva Galicia Property in Nayarit, Mexico

VANCOUVER, BRITISH COLUMBIA--(Marketwire - March 25, 2008) - Premium Exploration, Inc. (TSX VENTURE:PEM) ("Premium") is pleased to provide an update on its exploration activities at the Nueva Galicia gold-silver project in Nayarit State, Mexico. Assay results have been received for drilling completed at Nueva Galicia from October-December 2007. Results include high grade gold and silver intercepts.

Exploration Highlights:

- 10.2 g/t Au, 309.8 g/t Ag over 2.8m from 12.6m depth (NG-07-012)

- 8.79 g/t Au, 1309.7 g/t Ag over 1.52m from 18.9m depth (NG-07-013)

- Upgraded Hydracore 25 drill owned by Premium, and contracted a second larger drill The NSMAT geophysical program is expected to commence shortly the survey preparation work is now complete.

"Premium is pleased with these results which continue to define the geological structure. We are looking forward to completing the ongoing geophysics that will identify drill targets for a two drill program," says Del Steiner President and CEO.

Diamond Drill Program at Nueva Galicia

Thirteen diamond drill holes totalling 605 meters were completed in 2007 and results for the first seven drill holes (NG-07-001 to NG-07-007) were released previously. This press release details results for the next six drill holes in the program (NG-07-008 to NG-07-013) completed between October-December 2007 for a total of 319.16m (Summarised in Table 1). A total of 45 core samples were collected, including blanks and duplicates.

Two drill holes were completed at the Buenos Aires showing; one drilled down dip and a second drilled along strike from previously reported high grade drill intercepts in NG-07-001 and NG-07-002. Drill hole NG-07-008 was drilled 40m down dip of NG-07-001, intersecting a 1.5m true width structure of quartz veined fault breccias starting at 38.05m, downhole depth. Drill hole NG-07-009, drilled 40m south along strike from NG-07-001 and NG-07-002, intersected historic mine workings at 9.75m and was abandoned.

Diamond drilling also explored the Buenos Aires trend 250m along strike at La Cholita: Four diamond drill holes for 209.74m tested the area of high-grade surface samples including 219 g/t Au & 586 g/t Ag chip sample across 1.5m (Radius Gold Inc.). Drillhole NG-07-010, drilled under the chip sample at the main Cholita workings, encountered a low angle fault and failed to intersect the target zone. Drillhole NG-07-011, drilled up-dip of NG-07-010, intersected a 1.5m wide structure with quartz veining, from 18.9m, downhole depth. Drill holes NG-07-012 and NG-07-013 collared 35m southeast along strike, under the Cholita 2 adit, tested historic surface chip samples containing 1.87 g/t Au and 182 g/t Ag. NG-07-012 intersected a 5.4m wide structure starting at 13.21m, with good recovery. NG-07-013, drilled underneath drillhole NG-07-012, intersected a 4.05m wide structure starting at 18.9m downhole, with very poor recovery due to unconsolidated wallrocks consisting of granular quartz grains. The La Cholita structure is steeply dipping. All widths quoted are true widths.

Diamond drilling resumed after the Christmas break, in January 2008, at the Tajitos showing located 550m south of the Buenos Aires showing. Tajitos is the most extensively mined historical working on the property. Sampling of the underground workings returned grades of up to 22.4 g/t Au, 1,300 g/t Ag, over widths between 0.8-1.7m along a strike length of 320m and a vertical distance of 145m, with an average grade of 7.95 g/t Au and 284 g/t Ag (13.63 g/t gold equivalent) over 0.80m. Diamond drilling at Tajitos to date comprises three diamond drill holes for 107.28 metres, drilled in May-July 2007 and reported previously, and two drill holes for 78.69 metres drilled in January 2008. NG-07-006X extended a previously collared drillhole to target depth (abandoned at the onset of the last wet season), and NG-08-014 was collared 55m southeast along strike on the same structure. Hole numbering in 2008 follows directly on from 2007 ie. NG-07-013 is followed by NG-08-014.

Drill Results:

Buenos Aires: NG-07-008, NG-07-009 Drillhole NG-07-008 intersected silver mineralization in the main structure comprising a 1.5m wide (true width) quartz vein, and in hangingwall stringers. Significant results in the footwall include 0.38 g/t Au, 173.5 g/t Ag over a width of 2.86 metres starting at 77.14m, and a second zone with 0.1 g/t Au, 50 g/t Ag over 0.8m starting at 80.0m.

Drillhole NG-07-009 failed to reach target depth after intersecting a void associated with a stope. No core samples were taken.

La Cholita: NG-07-010 to NG-07-013 Drillhole NG-07-010 encountered a fault and failed to intersect the target structure. A narrow zone of hangingwall quartz veining was intersected at 39.45m downhole depth, with a with of 0.6m assaying 1.07 g/t Au, 52 g/t Ag.

Drillhole NG-07-011, drilled up dip from hole NG-07-010, intersected a 1.5m wide quartz vein structure (true width) starting at 18.9m down hole depth, characterized by a quartz-rich, sandy zone with poor core recovery. This upper zone returned weakly anomalous grades 0.12 g/t Au, 47 g/t Ag over 1.48m starting at 18.9m. A narrow lower zone was intersected at 42.11m, with a width of 0.25m assaying 1.85 g/t Au, 76 g/t Ag.

Drillhole NG-07-012 intersected a 5.4m true width structure starting at 13.21m, with good core recovery, and mineralized hangingwall and footwall. High grade mineralization was intersected over a 2.8m downhole width (not true thickness) starting at 12.6m depth, assaying 10.2 g/t Au, 309.8 g/t Ag.

Drillhole NG-07-013, drilled down dip of hole 12, intersected a 4.05m true width structure starting at 18.9m, and had very poor recovery due to running sands. High grade mineralization was intersected, including 1.52m at 8.79 g/t Au, 1309.7 g/t Ag from 18.9m, and 5.05m at 0.89 g/t Au, 131.9 g/t Ag from 21.95m. The 1.53m gap in sampling between the significant intercepts is due to core loss.

Tajitos: NG-07-006X, NG-08-014 Drill hole NG-07-006X extended Hole 6 (abandoned at 20.98m at the start of the wet season in the 2007), to test surface mineralization identified by previous explorers. Assay results are pending.

Drillhole NG-08-014 tested 56m from NG-07-006X along strike on the Tajitos trend. Drilling intersected hangingwall stringers from 17.65-17.75m, above massive quartz veining at 19.73-19.81m and 22.71-22.84m. A wide fault breccia was intersected between 22.8-33m. The drill hole was terminated in poor ground conditions, with poor recoveries throughout. Assay results are pending.

Table 1: Nueva Galicia Diamond Drilling Significant Assay Summary

Hole Sample
Number Number From To Width Au g/t Ag g/t
NG-07-008 699504 77.14 77.65 0.51 0.02 179
NG-07-008 699505 77.65 78.5 0.85 0.03 7.00
NG-07-008 699506 78.5 80.0 1.50 0.71 266
Composite: 77.14 80.0 2.86 0.38 173.5
NG-07-008 699508 80.0 80.8 0.80 0.10 50.0
NG-07-010 699518 39.45 40.05 0.60 1.07 52.0
NG-07-011 699524 42.11 42.36 0.25 1.85 76.0
NG-07-012 699525 12.6 13.21 0.61 0.03 577
NG-07-012 699526 13.21 14.28 1.07 1.10 173
NG-07-012 699527 14.28 14.82 0.54 36.9 339
NG-07-012 699528 14.82 15.4 0.58 13.0 254
Composite: 12.6 15.4 2.80 10.2 309.8
NG-07-012 699532 17.7 18.52 0.82 0.62 46.0
NG-07-013 699537 18.9 19.46 0.56 18.1 3327
NG-07-013 699538 19.46 20.42 0.96 3.35 133
Composite: 18.9 20.42 1.52 8.79 1309.7
NG-07-013 699539 21.95 22.8 0.85 0.25 33.0
NG-07-013 699540 22.8 23.25 0.45 0.81 38.0
NG-07-013 699541 23.25 24.99 1.74 1.57 210
NG-07-013 699542 24.99 27.0 2.01 0.60 127
Composite: 21.95 27.00 5.05 0.89 131.9

Ground conditions were generally very poor at Buenos Aires and La Cholita due to the sandy, vuggy and generally broken nature of the mineralized structures. At Tajitos, the target structure was anticipated to be more competent due to higher iron content and a less intensely clay altered hangingwall structure observed in surface outcrops. Unfortunately ground conditions proved to be similarly poor at Tajitos, and recoveries were again poor, despite the use of an experienced drill contractor, and the use of specialised drilling fluids.

Surface Rock Sampling at Nueva Galicia

Composite chip and grab samples were collected at a number of showings across the Nueva Galicia project area during October-December 2007. Fire assay results are still pending for 50 of the 90 surface geochemistry samples taken. Refer to release dated Jan 16,2008 for the first 40 results received.

NSAMT Geophysical Survey Contracted for Nueva Galicia

Premium has contracted Zonge Engineering and Research Corporation of Tucson, Arizona to conduct an NSAMT (Natural Source Audio Magneto Telluric) geophysical survey over the core area of ongoing drilling at Nueva Galicia. A surveyed grid totalling 12 line km was completed in preparation for the program, anticipated to commence mid-March. The NSAMT survey method is an exploration tool that has been used successfully to delineate structure, silicification and quartz veins in epithermal systems such as Nueva Galicia. The survey will give information on the location and width of structures (veins, silicified zones and faults) at depth and will assist in the of definition drill targets.


A program of Quality Assurance, Quality Control was implemented in October 2007, comprising duplicate sampling and the insertion of blanks samples. Of a total of 45 core samples collected from Holes 8-13 (NG-07-008 to NG-07-013), 15.5% were QAQC samples comprising 5 blanks and 2 duplicates. Quality assurance samples were inserted prior to shipping to the lab. Results suggest lab assays are within acceptable accuracy limits.

Drill core and rock samples were analysed by ACME Analytical Laboratories Ltd. (ACME). Samples were prepared in their Guadalajara, Mexico facility, and pulps sent to Vancouver, Canada for assaying. ACME is currently registered with ISO 9001: 2000 accreditation. The laboratory conducts internal quality checks; including standards and replicate analyses.

All drill core was analysed using the ICP assay method. Drill core within the target zone, which has coarse 'nuggety' gold, was processed using metallics (screen) fire assaying, in order to improve the accuracy of the results.

Qualified Person

Mr. Wilf Struck, P.Eng., geologic consultant to the Company, is the Qualified Person ("QP") responsible for the technical disclosure in this press release, in accordance with National Instrument 43-101.

This press release contains certain "Forward-Looking Statements" within the meaning of Section 21E of the United States Security Exchange Act of 1934, and involve 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.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

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