Premium Exploration Inc., Enters Letter of Intent to Joint Venture Buffalo Gulch Gold Deposit
FOR IMMEDIATE RELEASE NOVEMBER 15, 2007
PREMIUM EXPLORATION ENTERS INTO LETTER OF INTENT TO JOINT VENTURE THE PRE-PRODUCTION BUFFALO GULCH GOLD DEPOSIT
VANCOUVER, BRITISH COLUMBIA (Marketwire - November 15, 2007) - Premium Exploration, Inc. (TSX VENTURE:PEM) (”Premium” or the “Company”) (http://www.premiumexploration.com/) is pleased to announce that it has entered into a letter of intent to enter into a joint venture with Clearwater Mining Corporation (”CMC”) to explore and develop the Northern Extension of the Orogrande Shear Zone, located in the State of Idaho, United States of America. The 7 mile Northern Extension of the Orogrande Shear Zone contains the following two gold mineralization prospects:
- The pre-production Buffalo Gulch gold deposit located approximately in the middle of the Northern Extension of the Orogrande Shear 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 indicate that this deposit is potentially viable as an open pit gold mine at a gold price of $450 per ounce. On November 14, 2007 the price of gold closed at $813.90 per ounce. Premium believes that the Buffalo Gulch deposit is geologically comparable to the 531,890 ounce Friday / Petsite inferred gold resource that it is acquiring from CMC located in the Southern Orogrande Shear Zone. Both the Buffalo Gulch and Friday / Petsite gold deposits are open north and south along strike and at depth for further exploration and expansion.
- A potential high grade gold vein structure that appears to follow the complete strike length of the Northern Extension of the Orogrande Shear Zone. As described in our news release dated October 22, 2007, Premium previously entered into a letter of intent to acquire a 100% interest in the Southern Extension of the Orogrande Shear Zone from CMC. Assay results from the core drilling intercepts on the high grade gold vein structure associated with the Southern Extension of the Orogrande Shear have returned results grading up to 70 feet of gold mineralization averaging 9 g/ton, including 5 feet of 67.89 g/ton. With this Joint Venture, Premium now controls both the North and South ends of the 26 mile long shear zone, while CMC retains control over the Central Orogrande Shear Zone.
About the Pre-Production Buffalo Gulch Gold Deposit:
The pre-production Buffalo Gulch gold deposit is comprised of 73 unpatented quartz lode mining claims. The claims are controlled through direct ownership and one master agreement with three underlying agreements, in which ownership interests take the form of a leasehold interest, assignment interest or optioned interest.
The Buffalo Gulch deposit was defined by exploration programs conducted by Bema Gold Corporation, Idaho Consolidated Minerals Corporation and its successor Beartooth Platinum Corporation. The exploration programs on the property included extensive soil sampling, geophysical surveys and drill programs defining a disseminated gold deposit containing both oxide and sulfide mineralization. The gold deposit is open to the north and the south and at depth into sulfide mineralization. To date deep drilling has not been conducted in order to test the extent of the sulfide mineralization. Only 10% of the surface geochemical gold-in-soils anomaly appears to have been drill tested by previous operators, and Premium believes that substantial potential exists to significantly increase the scale of this gold deposit. The gold mineralization at Buffalo Gulch has been the subject of an extensive metallurgical testing program, beginning with bottle-roll cyanidation leach tests in 1986, culminating in two pilot-scale heap leach test pads that were constructed and operated in 1987 and 1989, respectively. Based on this work, previous operators calculated “mineable reserves” of 4,800,000 tons of oxide ore, containing approximately 100,000 ounces of gold at a low stripping ratio of 0.88 waste to ore. This information has not been corroborated by Premium, nor does it meet the standards for 43-101 compliance, but it is provided for historical perspective. As discussed above, this deposit previously 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 currently in the process of updating the Buffalo Gulch Plan of Operations in preparation for re-permitting the mine by submitting the necessary permit applications to the various state and federal government agencies in order to place this deposit into production.
About the High Grade Gold Vein Target Associated with the Northern Extension of the 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 and crossing the Orogrande Shear Zone have been extensively placer mined. The Orogrande Shear Zone is comprised of the following three sections: the Northern Extension, the Southern Extension and the Central Shear Zone. With the execution of this Letter of Intent Premium now controls the Northern and Southern Extensions of the Orogrande Shear Zone, while CMC has retained control of the Central Orogrande Shear Zone. Historic exploration drilling conducted by Bema Gold, Cyprus Amax Minerals, Canden Capital Corporation and Beartooth Platinum Corporation on the Southern Extension of the Orogrande Shear Zone has identified a discrete high grade gold zone that appears to run alongside or as part of the Orogrande Shear. This exploration work to date has not established the extent of the high grade zone.
Past geophysical surveys on the Northern Extension of the Orogrande Shear Zone identify a prominent IP anomaly in the portion of the Orogrande Shear Zone that runs parallel and adjacent to the Buffalo Gulch Gold deposit. To date, no drilling has been conducted on this prominent IP anomaly. Premium believes that this IP anomaly represents a high grade gold vein target similar to the one located in the historic drill testing conducted on the Southern Extension of the Orogrande Shear Zone that Premium is acquiring from CMC. Currently, Premium is preparing the permit application to undertake drilling to test for the source of the IP anomaly which may be associated with high grade gold mineralization. This drilling will commence upon receipt of permits from the controlling governmental authorities.
Significant Terms and Conditions of the Joint Venture Letter of Intent:
Under this Joint Venture Premium can acquire a 50% interest in the North Orogrande Shear Zone by completing to the following:
- Upon signing the definitive agreement Premium shall pay to CMC 500,000 common shares of Premium.
- At the start of the second year of the joint venture agreement Premium shall pay to CMC an additional 500,000 common shares of Premium.
- Funding all costs associated with re-permitting the Buffalo Gulch Gold Deposit to operate as a gold mine.
- Funding the various payments to the underlying property vendors of Buffalo Gulch.
- Funding the annual claim maintenance fees to the United States Bureau of Land Management of the Idaho Department of Lands.
Furthermore, upon completing a multi-year exploration program on the property that increases the historical gold mineralization calculations and takes said resource to a bankable feasibility study Premium will earn an additional 20% interest in the property.
Pursuant of the Letter of Intent Clearwater Mining Corporation shall have the option to earn back up to a 70% interest in the Joint Venture by making a cash payment to Premium equaling 1.5 times the funds spent by Premium on permitting costs associated with the proposed Buffalo Gulch Mine and any incurred exploration costs to date on the North Orogrande Shear Zone, along with funding construction of the proposed Buffalo Gulch mine to produce no less than two thousand tons per day (2,000/tpd) of ore.
In addition to the terms and conditions of the Letter of Intent the parties will agree upon an appropriate legal structure for the joint venture in the definitive joint venture agreement. It is anticipated that the joint venture will be formed as an Idaho limited liability company, using Clearwater Mining Corporation’s wholly owned subsidiary, Elk City Mining, LLC, as the legal vehicle for the joint venture. Entering into the Joint Venture on the North Orogrande Shear Zone by Premium is subject to all customary due diligence procedures, execution of final definitive acquisition agreements and approval of the TSX Venture Exchange as applicable. No finder’s fees were paid as part of this transaction. The transaction is a non-arms length transaction in that Ellen Steiner, wife of Del Steiner, President and CEO of Premium is a minority, non-controlling shareholder of Clearwater Mining Corporation.
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 in North America, with an acquisitions focus on Mexico. 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 http://www.premiumexploration.com/.
|
Premium Exploration’s Projects |
|||||
|
Project |
Location |
Commodity |
Land Position |
Targets |
Highlights |
|
Chrome Mountain |
Montana USA |
Pt-Pd-Rh
|
970 hectares (2,397 acres) 100% owned |
Platinum, palladium and rhodium within chromitite layers of the Stillwater Complex & shear-hosted gold and PGM | One km from producing platinum and palladium mine. Drilling underway funded by US$5,000,000 joint venture with Beartooth Platinum. |
|
Nueva Galicia |
Nayarit México |
Au-Ag |
18,125 hectares (44,780 acres) Option to earn 100% |
High grade veins and breccias. | Over four km of veins mapped to date. Phase I 2000 meter drill program underway. Initial results:
|
|
San Pedro Analco |
Jalisco México |
Ag |
1,136 hectares (2,800 acres) Option to earn 100% |
High-grade veins and bulk-tonnage breccias | Phase I exploration highlights:
|
|
Dos Amigos |
Nayarit México |
Au-Ag |
3,230 hectares (7,985 acres) Option to earn 100% |
Veins and bulk-tonnage gold/silver | Quartz stockwork mapped over 500m x 400m |
|
Rosamorada |
Nayarit México |
Au-Ag |
300 hectares (740 acres) Option to earn 100% |
Bulk-tonnage gold/silver | Quartz stockwork mapped over 1000m x 300m |
7.84 g/t Au & 814 g/t Ag over 2.60 meters true widthContact Information:
Premium Exploration, Inc.
Brett Delaney / Christine Kopr
Investor Relations
(604) 682-0243
Email:
info@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 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.