Orogrande Shear Zone - Buffalo Gulch

Gold

Buffalo Gulch is located within the 26 mile long Orogrande Shear Zone. Gold was originally discovered near Elk City, Idaho in 1861 and the Orogrande Shear zone has produced approximately 4,000,000 oz of gold and currently hosts 213 registered mineral workings. Premium Exploration entered a Letter of Intent to joint venture with Clearwater Mining Company to earn a 50% interest in the property.

Extensive soil sampling, geophysical surveys and drill programs have defined a disseminated gold deposit containing both oxide and sulfide mineralization. The gold deposit is open along strike and at depth into sulfide mineralization. To date, deep drilling has not been conducted to test the extent of the sulfide mineralization and only 10% of the surface geochemical anomaly appears to have been drill tested by previous operators. Premium believes that substantial potential exists to significantly increase the scale of this gold deposit.

Geological interpretation compares similarities between that gold vein structure associated with the north Orogrande Shear zone the high-grade gold vein structure intersected on the southern extension of Orogrande Shear zone, where initial drilling returned 21.3m averaging 9.9 g/ton gold mineralization, including 1.5m of 67.89 g/ton.

Based on extensive metallurgical testing program, previous operators calculated a non 43-101 compliant “mineable reserve” 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. The property previously received all of the necessary permits for the construction and operation of an open pit gold mine from the various United States federal and state regulatory agencies in 1991, all of which have been kept current to date.

To date, no drilling has been conducted on this prominent IP anomaly. 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. Drilling will commence upon receipt of the permits.