Premium Exploration Inc.

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Idaho Gold Project – Friday Zone

The Friday Zone hosts the Friday-Petsite deposit with a large bulk tonnage potential*.  The deposits remain open along strike and depth.

Highlights:

  • Growing Friday-Petsite Pit-Constrained Resource:
  • Indicated:          629,000 oz   (21.5 Mt @ 0.91 g/t Au with 0.4 g/t cut-off)
  • Inferred:            146,000 oz   (5.9 Mt @ 0.77 g/t Au with 0.4 g/t cut-off)
  • Structurally controlled mineralization associated with east-bounding Friday Fault identified by geophysics
  • Friday Fault has 5 km of strike potential defined by gold-in-soil & geophysics
  • Current resources located along 1 km of potential 5 km strike length
  • Friday Zone is coincident with the main north-south trending 30 km Orogrande Shear Zone identified by gold-in-soil and geophysics which links the  Buffalo Gulch, Deadwood, Friday, Monday and X Zones together

Property Maps (Phase 4)

Photo Gallery

Growing Resources

The 2009 Phase-One program successfully confirmed a new geologic model for the Idaho Gold Project. Phase-Two was designed to test the down-dip potential of the existing resource (15.17 Mt grading 1.1 g/t Au at 0.5 g/t Au cut-off).

Upon discovering down-dip mineralization in Phase-Two with drill hole PFR2009-10, which returned 2.6 g/t Au over 198 m including 9.2 g/t Au over 29.3 m, the goal of the  Phase-Three drill program was to double the existing mineral inventory.

During the Phase-Four drill program, Premium released the first economically driven resource estimate for the Friday gold deposit August 16th 2012.

The Phase-Four 25,000 meter drill program along the Idaho Gold Project is focused on step-out drilling to the north and south along strike of the Friday-Petsite deposit to reveal the true size potential. To date the program successfully identified an additional 700m of potential strike length. The additional strike length is the target of infilling in the 2012 season.

Geology & Deposit Type

Mineralization in the Friday Zone is hosted within sheared and altered Granodiorite/Quartz Monzonite breccias and muscovite/sericite schists.  The aleration type is Phyllic; sericite alteration with disseminated pyrite.   Other secondary minerals include arsenopyrite, lollingite (iron arsenide), galena, and chalcopyrite.  Gold is finely disseminated and also occurs as native in networks of small quartz-carbonate veinlets.  The deposit is predominately sulphide with a shallow oxide cap up to 20 meters in depth from surface.

Mineral Resource Estimate for the Friday-Petsite Deposit Reported within a Lerchs-Grossman Pit (effective date May 31, 2012)

The first economically driven pit-constrained resource estimate for the Friday-Petsite gold deposit is based on legacy data and Premium Exploration 2009-2010 drilling.

The indicated and inferred mineral resource estimates are contained within a resource-limiting open-pit shell along 1000 meters of strike in two zones; Main Zone and North Zone.

Indicated:          629,000 oz Au (21.5 Mt averaging 0.91 g/t Au with a 0.4 g/t Au cut-off)
Inferred:            146,000 oz Au (5.9 Mt averaging 0.77 g/t Au with a 0.4 g/t Au cut-off)

Mineralization delineated by Premium in between the North and Main Zones as well as directly adjacent to the north, south, and beneath the pit shell remains as a quantity and grade of a potential mineral deposit and should not be considered a mineral resource. The potential mineral deposit may be included in future resource estimates if additional drilling proves such estimates in accordance with NI 43-101.

Additional step-out drilling completed in 2011 along the Friday zone extends the mineralization to the north, south, and at depth of the mineral resources for a total mineralized strike length of 1700 meters and continues to remain open along strike and depth. The drill holes, being widely spaced, were not included in this resource estimation.

Later in 2012, Premium Exploration plans to conduct an infill drill program. Subject to financing and permitting, drilling will also focus in areas where prior drilling has indicated the potential for extension of mineralization which is supported by airborne geophysical and gold-in-soil anomalies.

Mineral Resource Estimation Parameters

The mineral resource estimate is based on a geologic block model consisting of four mineralized domains and one domain representing an unmineralized dacite dyke.  Gold grade estimation was carried out by the ordinary kriging method using 3 metre downhole drill composites.  Gold grades were capped prior to compositing at levels ranging from 10 to 20 g/t according to domain.

Classified blocks have been constrained by a Lerch-Grossman optimized pit shell using a gold price of $1,400 per ounce.  Block dimensions were 10 x 20 x 10 metres with the longest dimension oriented N-S.  Density values assigned to the domains are based on 637 bulk density measurements of drill core.  The mineral resource is reported at a base case lower cut-off of 0.4 g/t gold.  The resource is also presented  at a range of cut-offs from 0.3 to 0.7 g/t gold to provide additional information of resource sensitivity to changing cut-off.

Metallurgical Testing

Metallurgical testing on bottle-tests was conducted by SGS Minerals Services of Lakefield, Ontario.

Results indicate that gold and silver react very well to cyanidation with excellent recoveries:

  • Gold:    75% – 93%
  • Silver:  17% – 81%

A total of 13 metallurgical samples were taken from fresh HQ size drill-core throughout the deposit to provide a representative combination of various intensities of alteration, brecciation/shearing, and sulfide mineralization in a range of gold grades.  All 13 samples are non-oxidized sulfide.

  • Gold recoveries up to 93% in the lower region of the Main Zone
  • Gold recoveries up to 90% confirms historic results in the upper region of the Main Zone
  • 86% average gold recovery from samples taken throughout the deposit

Composites were from 1.5m to 2.0m in length and taken from holes drilled by Premium Exploration between 2009 and 2011 at various depths along strike of the deposit.

1 kg samples were ground to 10 mesh (2mm) and subjected to bottle-role cyanidation for 30 hours.  Gold head grades ranged from 0.35 g/t Au to 5.92 g/t Au.

Cyanidation Testwork:

Analysis was carried out by SGS Minerals Services of Lakefield, Ontario. One kilogram of each sample was ground in a laboratory rod mill to a K80 targeting 60 µm. The mill discharges were placed in glass bottle and the pulp density adjusted to 50% solids (w/w) with fresh water. The samples were leached under the following conditions:

After 30 hours, the samples were filtered collecting a pregnant leach solution, and a residue. The residue was washed several times with water, dried, and duplicate 30 g aliquots of the dried residue were riffled out for determination of gold and silver content by fire assay. The pregnant leach solution was submitted for gold and silver assay.

 

Quality Assurance/Quality Control

Premium Exploration maintains a QA/QC program using best industry practices at the Friday-Petsite Property. 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). 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 Persons

The May 31st 2012 mineral resource estimate was prepared by Mr. Ronald Simpson, P.Geo, President of Geosim Services Inc., an independent “Qualified Person” under National Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI 43-101”).

Disclaimer

* The Company wishes to state that the potential additional resources are conceptual in nature only, and that there has been insufficient exploration to define an increased mineral 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.