Premium Exploration Inc.
TSX VENTURE : PEM
OTCQX : PMMEF

Premium Exploration Inc.

December 01, 2011 14:20 ET

Premium Exploration Makes Multiple New Gold Discoveries at Idaho Gold Project

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Dec. 1, 2011) - Premium Exploration Inc. (TSX VENTURE:PEM)(OTCQX:PMMEF) ("Premium" or the "Company") is pleased to announce that the first six of nine holes drilled in the 35 km2 Deadwood Zone have resulted in four widely-spaced gold discoveries in host rocks identical to the Friday Zone. These discoveries are located 12 km north of the Friday Zone, which hosts a current NI 43-101 compliant resource of 343,000 oz indicated (11.8 Mt @ 0.90 g/t Au) and 879,000 oz inferred (26.4 Mt @ 1.04 g/t Au) at a 0.5 g/t cut-off along 1,400m of a 5,000m coincident geophysical and gold-in-soil trend.

Key Points:

  • Encountered gold-bearing host rocks and structures identical to the Friday Zone in multiple locations throughout the Deadwood Zone.
  • Premium has now made eight gold discoveries along 20 km of the Idaho Gold Project ("IGP"). Geological similarities between all zones and at all scales suggest that these zones are related to the same mineralizing event and, as a result, are potentially connected along trend and at depth.
  • DW2011-1,3,4,5,6 intercepted three separate mineralised zones and together demonstrate potential continuity along 1.3 km of strike length.
  • DW2011-2 discovered a high-grade vein system, intersecting gold-bearing host rocks identical to those found at the Friday Zone in close proximity to the historic Grangeville Mine ~4 km from DW2011-1,3,4,5,and 6

"We are very pleased to have confirmed the existence of the regional gold bearing system in multiple locations at Deadwood. The discoveries confirm we are on track with our exploration strategy and provide us with an excellent starting point for follow-up drilling to unlock Deadwood's potential." stated Michael Ostenson VP Exploration.

Central Deadwood Discoveries

Drill-holes DW2011-1,3,4,5, and DW2011-6 were spaced over 1.3 km along trend in the central Deadwood Zone on a 12 km long coincident geophysical and gold-in-soil trend. For an updated Plan View Map of Deadwood Zone please click http://bit.ly/DWdrillingnov2011.

Central Intercept #1

DW2011-1: 1.0 g/t gold over 1.8 m as well as
0.3 g/t gold over 3.7 m

DW2011-3: 0.3 g/t gold over 7.0 m as well as
0.5 g/t gold over 4.9 m

The first two holes were collared from the same location with one being drilled west and the second being drilled east in order to locate the preferred structural corridor for gold mineralization. Drilling encountered alternating intervals of older gneiss/schist and granite of the Idaho Batholith.

As with all mineralized zones discovered at the Idaho Gold Project to date, gold mineralization is associated with a low sulfidation system primarily hosted within sheared and brecciated granites of the Idaho Batholith accompanied by sericite alteration, silica flooding and disseminated pyrite.

The granite of the Idaho Batholith is now interpreted as being the preferred host rock for gold mineralization at the IGP. It covers a vast regional extent in central Idaho and also hosts gold mineralization at Midas Gold's Golden Meadows Project located approximately 90 km due south along a large structural and geological trend coincident with Premium's Idaho Gold Project.

DW2011-5: Central Intercept #2

DW2011-5: 1.4 g/t gold over 3.1 m within

0.9 g/t gold over 7.6 m within
0.5 g/t gold over 18.0 m as well as
1.2 g/t gold over 4.6 m within
0.8 g/t gold over 10.1 m

DW2011-4,6: Central Intercept #3

DW2011-4: 1.6 g/t gold over 2.7 m within

1.0 g/t gold over 8.5 m within
0.7 g/t gold over 17.1 m within
0.3 g/t gold over 100.9 m

DW2011-6: 0.3 g/t gold over 13.1 m as well as
1.3 g/t gold over 0.9 m

These drill-holes are located 800m to 1,300m, respectively, along trend to the north of DW2011-1 & 3.

The anomalous gold mineralization encountered in DW2011-1,3,4,5, and 6 is interpreted to have intercepted the outer edge of a potentially large zone of mineralization, similar to the anomalous mineralization surrounding the Friday-Petsite resource.

Early on in the development of the Friday-Petsite resource many drill-holes encountered anomalous gold mineralization in very close proximity to higher-grade material within a broad envelope of low grade. The new discoveries along the Deadwood zone may reflect the same type of situation where anomalous gold mineralization is proximal to a much larger zone of mineralization.

Example: Corebox Section 01010 where PZ64 encounters sporadic intercepts of: 2.01 g/t over 9.0 m, 0.67 g/t over 7.62m, and 0.90 g/t over 6 meters. This hole is very close to the Friday-Petsite indicated and inferred resources where drill-holes PFR2010-5, 6, & 21 encountered 0.9 g/t over 267m, 0.5 g/t over 226m, and 1.5 g/t over 330.4m respectively. To view Corebox Section 01010 please click http://bit.ly/CoreboxFP3DModel and click on the "Section" tab.

DW2011-2: Grangeville Vein System Intercept #4

DW2011-2: 4.5 g/t gold over 2.7 m as well as

11.2 g/t gold over 0.6 m within
2.0 g/t gold over 4.6 m as well as
3.5 g/t gold over 0.6 m

This drill-hole was targeted on a potential cross-cutting structural vein system interpreted by geophysics near the historic Grangeville Mine in the eastern portion of the Deadwood Zone. The historic Grangeville Mine was focused on an east-west approximately 10 meter thick sheered and brecciated quartz vein system with historically reported grades of up to 15 g/t gold.

A new vein system was discovered proximal to the Grangeville zone and is interpreted to strike in a parallel east-west orientation. This previously unknown vein system consists of three brecciated quartz veins and demonstrates the potential of these higher grade cross-cutting targets along the Idaho Gold Project.

Cross-cutting east-west vein systems have been historically mined in a number of locations. These vein systems intersect the north-south Orogrande Shear Zone and potentially represent a high-grade component to the main low-grade bulk tonnage target.

Deadwood Zone Follow Up Drilling:

First pass drilling in multiple locations along the Deadwood Zone has revealed a structural environment and gold bearing host rocks identical to the Friday Zone. The key to unlocking the potential to host Friday-like deposits is by predicting the trend of the gold bearing host rocks, structures, and cross-cutting dilatant zones.

Gold bearing structures with cross-cutting dilatant zones are the optimum targets where gold deposition is typically enhanced in both size and grade. The Friday-Petsite resource is interpreted to be hosted within one of these complex structural intersections.

A comprehensive structural study of the Idaho Gold Project has been initiated with the object of relating the gold bearing structures to the airborne geophysics, gold-in-soil trends, and known deposits.

The focus of this work will identify locations of potential dilatant zones and provide information that can be used to guide the remainder of the Company's 25,000 meter drill program.

Premium's vision is to discover multiple deposits along its 30 km Idaho Gold Project (180 km2), a re-emerging gold district in Idaho, USA. Approximately 24,000 m have been drilled since the Company's first program in mid-2009, resulting in 8 gold discoveries along 20 km of strike of the IGP while encountering gold mineralization in 99.9% of all drilling; results are in line with the Company's objectives.

Drill-Hole Zone From (m) To (m) Interval (m) Au g/t
DW2011-1 Deadwood 35.1 36.9 1.8 1.0
as well as 72.9 76.5 3.7 0.3
DW2011-2 Deadwood 170.1 172.8 2.7 4.5
as well as 194.5 195.1 0.6 11.2
within 191.1 195.7 4.6 2.0
as well as 492.9 493.5 0.6 3.5
DW2011-3 Deadwood 98.8 105.8 7.0 0.3
as well as 112.5 117.4 4.9 0.5
DW2011-4 Deadwood 339.9 342.6 2.7 1.6
within 336.8 345.3 8.5 1.0
within 336.8 353.9 17.1 0.7
within 267.6 368.5 100.9 0.3
DW2011-5 Deadwood 70.1 73.2 3.1 1.4
within 68.3 75.9 7.6 0.9
within 68.3 86.3 18.0 0.5
as well as 171.6 176.2 4.6 1.2
within 166.1 176.2 10.1 0.8
DW2011-6 Deadwood 98.8 111.9 13.1 0.3
as well as 219.5 220.4 0.9 1.3

*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 unknown at this time.

The Company wishes to state that potential additional resources are conceptual in nature only, and that there has been insufficient exploration to define an increased mineral resource outside of the current NI 43-101 compliant resource. Furthermore, it is uncertain if further exploration will result in additional mineral resources. Estimates for potential additional resources are reported as exploration targets based on the presence of step-out mineralized drill holes, known mineralized zones open along strike and depth and geophysically anomalous areas from data received by the Company.

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 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)(OTCQX:PMMEF) 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. 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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