Issue link: http://resourceworld.uberflip.com/i/294363
www.resourceworld.com 25 A P R I L / M A Y 2 0 1 4 With a change in management and a share consolidation last fall, Premium Explora- tion Inc. [PEM-TSXV; PMMEF-OTC] has kept the same projects but changed its busi- ness strategy. Plans now call for placing its 100%-owned Friday-Petsite gold deposit in Idaho County, Idaho into production as soon as possible. The Friday-Petsite deposit, which re- mains open to expansion, hosts indicated NI-43-101 compliant resources 20.1 mil- lion tonnes grading 1.00 g/t gold (647,500 oz) and 20.9 million tonnes of 0.88 g/t gold (590,000 oz) in the inferred resources category. A 15-hole drilling program was recently completed to establish a small high-grade resource that could be placed into production later this year. The recent drilling focused on the upper high-grade zone in support of a preliminary economic study of the high-grade portions within the Friday deposit and is designed to ex- tend the high-grade mineralization found in drill holes detailed in previous press re- leases. Three holes targeted the deep gold zone and 12 holes tested the upper gold zone. Highlights include hole PFR2014- 1 which returned 14.35 g/t gold over 1.37 metres (4.49 feet); 13.6 g/t gold over 1.22 metres (3.28 feet) and 2.67 g/t gold over 11.67 metres (38.29 feet). Drill hole PFR2014-3, an infill hole, intersected two zones that returned 3.51 metres grading 2.16 g/t gold (39.32-42.82 metres) as well as 5.49 metres of 12.00 g/t gold, including 1.83 metres of 30.65 g/t gold. "In my opinion, these results continue to support a mineable resource at the Friday deposit," said John Ryan, President and CEO, "and we look forward to receiving the remainder of the assay results and moving this project forward." Ryan, a mining engineer, told Resource World that the high-grade ore will be mined at a rate of 150 tpd and trucked to the New Jersey flotation mill near Kellogg, Idaho, to produce doré bars. Trucking costs are about US $40/tonne. Mining will be done on a contract basis, estimated to be approximate- ly US $210/tonne. Ore would be accessed underground via a decline. There will be limited permitting required as the ground is privately owned (patented claims). The near-term cash flow from high- grade underground mining will help fi- nance the transition to an open pit mining operation to economically mine the lower grade gold zones. Ryan said he expects capital costs, including driving the de- cline, to be about US $4.4 million. The Friday-Petsite gold deposit is part of the Idaho gold project that also includes the Buffalo Gulch and Deadwood depos- its. Buffalo Gulch has historic non-NI 43- 101 compliant indicated resources of 4.8 million tonnes grading 0.80 g/t gold. The Deadwood deposit has historic non-NI 43- 101 compliant indicated resources of 1.6 million tonnes of 0.75 g/t gold with 0.7 million tonnes of 0.75 g/t gold inferred. Both the Buffalo Gulch and Deadwood mineralized zones are open for expansion. Premium Exploration's re-permitting of Buffalo Gulch for planned heap leach production is expected to take two years. More exploration is planned and 11 drill pads have been permitted. The company also holds the Chrome Mountain platinum-palladium-rhodium- gold project in the Stillwater Complex of Montana situated approximately 1,500 metres from the producing East Boulder Mine. n Premium Exploration plans near-term Idaho production By Ellsworth Dickson MINING "A 15-hole drilling program was recently completed to establish a small high-grade resource that could be placed into production later."