Premium Exploration Inc.

Premium Exploration Inc.

December 04, 2007 13:40 ET

Premium Exploration Initiates an Exploration Program and the Mine Permitting Process at its Buffalo Gulch Project Joint Venture

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Dec. 4, 2007) - Premium Exploration, Inc. (TSX VENTURE:PEM) ("Premium" or the "Company") ( is pleased to announce initiation of the permitting process of the proposed Buffalo Gulch gold mine located in the State of Idaho, United States of America. In addition to the permitting, Premium conducted a soil sampling program to delineate gold mineralization associated with the North Orogrande Shear Zone south of the proposed Buffalo Gulch pit. Geophysical surveys consisting of a resistivity and IP (Induced Polarization) surveys conducted by a previous operator were successful in delineating the strike of the North Orogrande Shear Zone. Limited historic soil sampling returned anomalous gold values in soil coincident with the geophysical surveys and remained "open" to the south. The current sampling will test for mineralization south of the known anomaly.

The historic IP survey detected two conductors associated with the North Orogrande Shear Zone, one conductor is below eastern edge of the proposed pit, while the second conductor is directly south of the proposed pit. The geologic interpretation predicts gold vein structures associated with the North Orogrande Shear Zone, similar to the gold vein structure intersected on the South Orogrande Shear Zone at the Friday property. Historic drilling (within the last 10 years) on the Friday property intercepted gold mineralization up to 70 feet (21.3 m) averaging 0.289 oz/ton (9.9 g/tonne) which included 5 feet (1.5m) assaying 2.183 oz/ton (74.85 g/tonne). Permitting for drill testing of the IP anomaly under the Buffalo Gulch pit is underway.

In November 2007 the Company had a four man field team on site at Buffalo Gulch conducting the following activities:

- Staked an additional 34 claims to the south of the existing Buffalo Gulch property covering all of the open ground between the North Orogrande Shear Zone and the Central Orogrande Shear Zone which is controlled by the Premium's joint venture partner Clearwater Mining Corporation ("CMC").

- A 500 sample soil geochemical program on along the North Orogrande Shear zone south of the Buffalo Gulch deposit to the 34 newly staked claims. Soil samples were taken on a grid with 100 meter (328 feet) line spacing and 25 meter (82 feet) sample spacing, covering approximately 180 hectares (445 acres). The samples have been sent to ACME Labs, based in Vancouver, BC for assaying, and results are expected in January 2008. The program was designed to delineate the southern extent of the gold mineralization on the Buffalo Gulch property. The soil sampling will assist in defining additional drill targets south of the currently defined Buffalo Gulch Deposit. It is expected, pending receipt of the necessary permits and approvals, that additional drilling will be conducted at Buffalo Gulch during the 2008 exploration field season.

- Previous operators of the Buffalo Gulch Deposit had received all of the necessary permits for the construction and operation of an open pit gold mine at Buffalo Gulch from the various United States federal and state regulatory agencies. Premium is converting to digital format the original Plan of Operations for the Buffalo Gulch Gold Mine and will initiate the permitting process this week by meeting with representatives of the United States Bureau of Land Management in Idaho.

About the North Orogrande Shear Zone and the Pre-Production Buffalo Gulch Gold Deposit:

The North Orogrande Shear Zone is comprised of 107 unpatented quartz lode mining claims, and the pre-production Buffalo Gulch gold deposit is located approximately in the middle of this zone. This gold deposit was permitted by Bema Gold Corporation in 1991 to be placed into production as an open pit gold mine, but was mothballed by Bema just prior to mine construction due to low gold prices. Several historic pre-feasibility studies indicated that this deposit was potentially viable as an open pit gold mine at a gold price of $450 per ounce. A qualified person has not done sufficient work to classify the historical estimates as current mineral resources nor is the issuer treating the historical estimate as current mineral resources. The pre-feasibility studies have not been examined by a qualified person and updated with current costs nor is the issuer treating the pre-feasibility studies as current and the historical pre-feasibility study should not be relied on.

Premium believes that the Buffalo Gulch deposit is geologically comparable to the Friday / Petsite gold deposit (PLEASE SEE PEM NEWS RELEASE DATED October 22, 2007) that it is acquiring from CMC located in the South Orogrande Shear Zone. Like the Friday / Petsite gold deposit the Buffalo Gulch gold deposit is open north and south along strike and at depth for further exploration and expansion.

About the High Grade Gold Vein Target Associated with the North Orogrande Shear Zone:

The Orogrande Shear Zone is a gold mineralization belt that is 26 miles long in strike length and has 219 mapped prospects, including both lode and placer mines. The streams paralleling the entire Orogrande Shear Zone have been extensively placer mined. The Orogrande Shear Zone is comprised of the following three sections: the North, South and Central Shear Zones There have been multiple historic drill intercepts of high grade gold mineralization on the South Orogrande Shear Zone in past drill programs conducted by Cyprus Amax Minerals, Canden Capital Corporation and Beartooth Platinum Corporation. This historic drilling has identified a discrete high grade gold zone that appears to run alongside or as part of the Orogrande Shear. However, this exploration work to date has not established the extent of the high grade zone Past geophysical surveys on the North Orogrande Shear Zone identify a prominent IP anomaly in this portion of the Orogrande Shear Zone that runs parallel and adjacent to the Buffalo Gulch Gold deposit. Premium believes that this IP anomaly may represent a high grade gold vein target similar to the one intercepted in the historic drill testing conducted on the South Orogrande Shear Zone. To date, no drilling has been designed to test the source of this prominent IP anomaly, which Premium intends to drill upon receipt of the necessary permits and approvals to do so.

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.

About Premium Exploration, Inc.

Premium Exploration, Inc. is a precious metals exploration company focused on exploration of precious metals prospects in North America. Premium's goal is to discover precious metal deposits that are strategically located in areas that would allow their profitable extraction, with minimal political, social or environmental risks. Current holdings are in Mexico and the United States. To maximize the possibility of realizing this goal, Premium's exploration team continues to review early-stage projects located within under-explored precious metal belts that host multi-million ounce deposits. By acquiring prospects internally and financing some of them through joint venture partners, Premium is able to maximize the potential for discovery while mitigating risk and increasing shareholder value. Additional information may be found on our website at

Premium Exploration's Projects
Loca- Land
Project tion Commodity Position Targets Highlights
Chrome Montana Pt-Pd-Rh 970 hectares Platinum, palla- One km from
Mountain USA (2,397 acres) dium and rhodium producing plat-
100% owned within chromat- inum and pall-
layers of the adium mine.
Stillwater Comp- Drilling under-
lex & Shear- way funded by
hosted gold and US$5,000,000
PGM joint venture
with Beartooth
Nueva Nayarit Au-Ag 18,125 hect- High grade veins Over four km of
Galicia Mexico ares (44,780 and breccias veins mapped to
acres) date. Phase I
Option to 2000 meter drill
earn 100% program under-
way. Initial

- 7.84 g/t Au &
814 g/t Ag
over 2.60 met-
ers true width

- 2.32 g/t Au &
226 g/t Ag
over 4.00 met-
ers true width
San Jalisco Ag 1,136 hect- High-grade veins Phase I explor-
Pedro Mexico ares (2,800 and bulk-tonnage ation high-
Analco acres) breccias lights:
Option to
earn 100% - 1,390.7 g/t Ag
over 3.15 met-
ers true width

- 534.5 g/t Ag
and 0.787 g/t
Au over 3.5
meters true
Dos Nayarit Au-Ag 3,230 hect- Veins and bulk Quartz stockwork
Amigos Mexico ares (7,985 tonnage gold/ mapped over 500m
acres) silver x 400m
Option to
earn 100%
Rosam- Nayarit Au-Ag 300 hectares Bulk-tonnage Quartz stockwork
orada Mexico (740 acres) gold/silver mapped over
Option to 1000m x 300m
earn 100%

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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