Premium Exploration

Gold-Silver

The Nueva Galicia Project is host to 10 high-grade silver-gold ore shoots exposed at surface. Based on detailed historic sampling of the shoot most extensively mined during Spanish colonial times, Tajitos, it is concluded that 150,000 oz of gold equivalent (using a ratio of 60:1) was extracted from Tajitos, which Premium believes demonstrates the potential mineralization of the remaining shoots.

In addition to the high grade gold-silver veins, the property shows potential for additional mineralization and is located just 40 km from Rochester Resources producing Mina Real Mine.

Highlights:

• Ten high grade ore shoots, one of which historically produced 150,000 oz gold equivalent (60:1 ratio)
• 7.84 g/t gold and 814 g/t silver over 2.6 m, including 14.79 g/t gold and 1280 g/t silver over 0.73 m
• 8.79 g/t Au, 1309.7 g/t Ag over 1.52m from 18.9m depth

Location and Access

Nueva Galicia is accessible by road and is situated three kilometers from Compostela (pop. 15,000), 29 kilometers south east of the Nayarit State capital, Tepic, 130 kilometers (80 miles) northeast of the port of Puerto Vallarta and 190 kilometers west of Guadalajara, Mexico’s second largest city. Paved highways and electric power lines pass within four kilometers of the western boundary, and within one kilometer of the southern boundary of the property. An operating railway line provides access to the centre of the property and water is available year round to the property.

Land Status

The Nueva Galicia Project consists of approximately 18,125 hectares. Premium maintains an option to earn a 100% interest in the property by making staged cash and share payments over four years.

Mineralization

Nueva Galicia Project hosts to several parallel epithermal precious metal vein systems aligned along a structural corridor over a distance of 10 kilometers and up to three kilometers wide. Three parallel vein systems have been mapped in detail for a total of 4500 meters to date. Some veins at Nueva Galicia have been traced continuously over 300 meters along strike and over vertical distances of up to 250 meters. The mineralization is exposed over a vertical range of 650 meters. Mineralization consists of silver sulphides and native gold and electrum in quartz veins, stockworks and breccias. Ore shoots contain bonanza-grade silver mineralization with high gold content locally. A section of the Project is covered by thin Pliocene (post-mineralization) basalt flows, and it is anticipated that there is good potential to locate more mineralization below these cover rocks.

The high-grade silver and gold-bearing quartz veins of the low-sulfidation epithermal quartz-adularia type, are hosted by rhyolitic pyroclastic rocks of Tertiary age. Native gold, electrum, silver sulfides and manganese and iron oxides are present within vertical to steeply-dipping quartz veins and adjacent stringers, stockworks and breccias. Bladed quartz is present locally, indicating preservation of the upper part of the epithermal system where boiling occurred, and which is typically above bonanza-grade mineralization. Low-angle quartz-breccia structures, possibly listric faults, have also been recognized, and these structures are also mineralized. These structures present the potential for the addition of bulk-mineable, low-grade mineralization which may also contain high-grade shoots.

In addition, Nueva Galicia was worked on a small scale during Spanish colonial times. The Tajitos ore shoot, which was mined by the Spaniards, was sampled by the Mexican Geological Survey for a survey which studied 14 of 18 old mine workings present at Nueva Galica, in 1983. The mine, which was extensively sampled (98 samples from five levels) returned grades of up to 22.4 g/t Au 1300.0 g/t Ag over widths from 0.8m to 1.7m along a strike length of 320m, a vertical distance of 145m, with an average grade of 7.95 g/t gold and 284 g/t silver (13.63 g/t gold equivalent) over 0.80m.. A 10 tonne per day mill operated at the El Monte mine during the 1930’s. Adjacent to the property, Cream Minerals is currently exploring Nuevo Milenio and reports a 43-101 compliant inferred mineral resource of 13,120,000 tonnes for a total of 268,000 ounces gold and 30,340,000 ounces silver in both high-grade veins and low-grade disseminated deposits.

Forty kilometers northeast, Rochester Resources is operating at its high-grade gold/silver Mina Real mine. Mineralization at Mina Real is very similar to that at Nueva Galicia. Mill recovery rates are anticipated to average approximately 95% for gold and 90% for silver. Mining, milling and trucking costs at Mina Real are estimated at less than $75/tonne.

Nueva Galicia is a strongly mineralized epithermal vein system that contains high-grade to bonanza silver and gold values over significant strike lengths and vertical distances. The entire system, within Premium’s claims, extends for over 10 km and hosts exposed mineralization. Premium believes that the Spaniards only scratched the surface here, and has been confirming the high-grade sampling results during the Phase I-2,000m drill and exploration program.